FilmOn Appeals Contempt Finding In New York

Streaming video company FilmOn is appealing an order holding the company in contempt and directing it to pay around $150,000 in sanctions and legal bills.

FilmOn, backed by billionaire Alki David, filed the paperwork this week to appeal U.S. District Court Judge Naomi Reice Buchwald's ruling to the 2nd Circuit Court of Appeals. Buchwald held FilmOn in contempt last month, ruling that the company violated a prior court order by continuing to stream broadcast television programs after the U.S. Supreme Court ruled that FilmOn's rival, Aereo, infringed copyright.

FilmOn doesn't state in court papers what its grounds for appeal. But FilmOn's lawyer, Ryan Baker, argued in a hearing in Manhattan last month that FilmOn isn't infringing copyright because it has applied for -- and thinks it's entitled to -- a compulsory cable license.

Buchwald rejected that argument and fined the company $90,000 -- $10,000 per day for each day it operated after June 28, when Aereo suspended service. She also ordered FilmOn to pay attorneys for the TV networks around $56,000 -- which was less than the $101,000 they had requested.

“Our decision to reduce the fee amount is based on our view that what may be a reasonable sum to charge clients for attorneys' services is not necessarily equivalent to a reasonable fee to compel a losing party to pay to its adversary,” she wrote in an order slashing the fees.

The contempt dispute marked the most recent battle in a fight dating to 2010, when a coalition of broadcasters first sued FilmOn. That case resulted in an injunction prohibiting FilmOn from infringing broadcasters' copyrights.

At the time, FilmOn wasn't using the same dime-sized antenna technology as Aereo. But after Aereo emerged, FilmOn said that it too would use multiple antennas to capture and stream over-the-air broadcasts.

The broadcasters said that both companies infringed copyright by publicly transmitting programs without licenses. Aereo and FilmOn argued that their multiple antenna system offered “private” performances, because the streams were made on an antenna-to-user basis.

A lawsuit by broadcasters against Aereo went to the Supreme Court in June. That court ruled that Aereo resembled a cable system and therefore couldn't transmit television shows without a license.

After that decision came out, Aereo and FilmOn revised their positions. They now argue that their live streams don't infringe copyright because they're “cable systems” and entitled to a compulsory license.

But Buchwald said in her order that FilmOn “attaches far too much importance to the Court’s analogizing.” She wrote last month: “A series of statements that Aereo (and, by extension, FilmOn) ... is very similar to a cable system is not the same as a judicial finding that Aereo and its technological peers are, in fact, cable companies entitled to retransmission licenses.” 

Aereo, also, is trying to convince judges that it's now entitled to a cable license. The company is expected to file new court papers on Friday, asking U.S. District Court Judge Alison Nathan in Manhattan to rule in its favor on that question.

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