Broadcasters were delighted when ivi Inc., which streamed broadcast television programming live and for-profit over the Internet without consent, got slapped down by the Second Circuit Court of Appeals, which upheld an order from a lower court in New York barring the firm’s actions.  The company had claimed that it qualified as a cable system under §111 of the Copyright Act and argued it could circumvent broadcasters’  exclusive rights to authorize public display of their protected content under a statutory exception allowing cable systems to retransmit signals of copyrighted programs to subscribers provided that they paid a royalty fee of roughly $100 a year.

At issue in the Aug. 27 ruling by Judge Denny Chin was whether ivi, Inc. could be considered a cable system under §111 of the Copyright Act, so it could defend itself against these claims of copyright infringement and qualify for a compulsory license.  A two-prong test to determine if an Internet service could be considered a cable system was used in Chevron USA, Inc.  v. Natural Res. Def. Council Inc.  First, the court looks to see if the the statutory text of §111 is ambiguous, and if it were, a court then reviews legislative history in context.  The Second Circuit found the statutory text ambiguous, and through review of  legislative history, determined the measure was intended to support local rather than nationwide systems. The judge noted, “Congress has not codified a statutory provision for Internet retransmissions, nor has it included the ‘Internet’ as an acceptable communication channel under § 111.7.”  Further, the court commented that Congress expressly could have included Internet transmissions, as it did with microwave retransmissions. With all factors considered, Judge Chin and his appellate colleagues ruled the lower court had kept within bounds and upheld the broadcasters-requested order, granted in February by a lower court in New York, barring ivi’s streaming of their copyrighted content.

There’s another case akin to ivi, involving the firm Aereo and its case will be reviewed soon; it hopes to survive broadcaster challenges on the basis that its retransmissions are unique and nonpublic.  Aereo claims it only sends copies of captured signals to the user who created them. You can read that case here or THR’s take on it all here.