CBS Broadcasting Inc. v. FilmOn.com, Inc.
814 F.3d 91
| 2d Cir. | 2016Background
- FilmOn (FilmOn.com, Inc. and affiliated FilmOn X) operated Internet streaming services that retransmitted broadcast television programming without licenses; plaintiffs (major U.S. broadcast networks) sued for copyright infringement and the parties entered a 2012 settlement that the district court entered as a consent judgment and permanent injunction forbidding infringement.
- The Injunction barred FilmOn, its affiliates and officers from infringing plaintiffs’ exclusive rights under 17 U.S.C. § 106, including streaming over the Internet; violations exposed FilmOn to contempt and other penalties.
- After the injunction, FilmOn offered VOD and later deployed a “Teleporter” remote‑storage/streaming technology intended to mirror Cablevision/Aereo‑style remote DVRs; the district court found the VOD use contemptuous in 2013 and imposed a $10,000/day prospective sanction schedule for further violations.
- The Supreme Court decided Aereo (Aereo III) holding that Aereo’s remote‑storage/streaming constituted public performances and thus infringed the broadcasters’ rights; Aereo III undermined FilmOn’s legal basis for deploying Teleporter within the Second Circuit.
- FilmOn nevertheless deployed the Teleporter system in the Second Circuit for several days after Aereo III; plaintiffs moved to show cause, the district court held FilmOn and CEO Alkiviades David in civil contempt, fined FilmOn $90,000 (calculated from the prior $10,000/day schedule) and awarded attorneys’ fees.
- The Second Circuit affirmed: the injunction was clear, FilmOn’s noncompliance was shown by clear and convincing evidence, FilmOn lacked a diligent, reasonable attempt to seek court clarification, David could have prevented the violation, the $90,000 sanction was civil/coercive, and fee recovery was authorized by the settlement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Injunction was clear and unambiguous | Injunction clearly barred unauthorized streaming of plaintiffs’ copyrighted works; Aereo III only reinforced clarity | Injunction ambiguous because rights were in flux after Aereo III and FilmOn reasonably could have believed Section 111 licensing might allow Teleporter use | Injunction was clear and unambiguous; Aereo III made prohibition on Teleporter use within Second Circuit even clearer |
| Whether proof of noncompliance was clear and convincing | FilmOn admitted deploying Teleporter in the Second Circuit after Aereo III; this established noncompliance | FilmOn argued legal uncertainty and attempted compliance via license applications | Proof was clear and convincing (FilmOn admitted deployment) |
| Whether FilmOn (and CEO David) diligently attempted to comply | Plaintiffs: FilmOn failed to seek court clarification and continued operations despite Aereo III and prior contempt | FilmOn: acted reasonably in light of legal uncertainty and sought Section 111 licensing | FilmOn did not diligently seek modification/clarification and unreasonably continued deployment; David had authority and failed to prevent violation; both held in contempt |
| Nature and amount of sanctions; whether criminal contempt | Plaintiffs: sanctions are civil/coercive, based on prior $10k/day schedule and aimed at future compliance | FilmOn: sanctions function as punitive/ criminal and required jury protections | Sanctions were civil and coercive (opportunity to purge existed via prior orders); $90,000 not so punitive as to require criminal procedures |
| Entitlement to attorneys’ fees | Plaintiffs: settlement provides prevailing‑party fee shift for disputes relating to the Injunction | FilmOn: challenges fee award as abuse of discretion | Award affirmed: plain settlement term authorized fees and district court did not abuse discretion |
Key Cases Cited
- Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir.) (describing remote storage DVR not a public performance)
- WNET, Thirteen v. Aereo, Inc., 712 F.3d 676 (2d Cir.) (applied Cablevision reasoning to Aereo technology)
- American Broadcasting Cos. v. Aereo, Inc., 134 S. Ct. 2498 (U.S.) (Supreme Court held Aereo’s service performed copyrighted works publicly)
- WPIX, Inc. v. ivi, Inc., 691 F.3d 275 (2d Cir.) (Internet retransmission services are not cable systems under §111)
- Int'l Union, United Mine Workers v. Bagwell, 512 U.S. 821 (U.S.) (distinguishing civil coercive contempt from criminal contempt; purge opportunity requirement)