• by Wendy Davis  @wendyndavis, December 5, 2014

A federal judge abused her discretion by holding FilmOn X and its CEO in contempt for streaming television programs to Web users' smartphones, laptops and tablets, the company argues in papers filed Friday with the 2nd Circuit Court of Appeals.

FilmOn and CEO Alki David make the argument as part of their appeal of U.S. District Court Judge Naomi Reice Buchwald's July order holding them in contempt and ordering them to pay around $150,000.

Buchwald found FilmOn in contempt for continuing to operate its streaming service after the U.S. Supreme Court ruled that a similar service offered by Aereo infringed TV broadcasters' copyrights. The judge ruled that FilmOn's streams violated a 2012 injunction that she entered against an earlier incarnation of FilmOn.

That matter, which dates to 2010, also stemmed from allegations that FilmOn infringed copyright by streaming programs online. But when that case first came through the courts, FilmOn hadn't yet started using the multiple-antenna technology at the center of the lawsuits involving Aereo.

That more recent technology drew on individual mini-antennas to capture programs and stream them to users on an antenna-to-user basis. Unlike FilmOn's original system, the multiple-antenna technology was considered legal in New York, Vermont and Connecticut until this June, on the theory that each stream was a “private” performance.

But in late June, the Supreme Court ruled that Aereo's transmissions were public performances regardless of the company's back-end technology. The Supreme Court said in its ruling that Aereo resembled a cable system, and therefore couldn't transmit programs without a license.

Aereo suspended operations three days after that decision, but FilmOn didn't stop using its multiple-antenna system to stream television programs until around July 8 — nine days after Aereo did so. In the interim, FilmOn X issued a press release touting a new streaming technology that it called the “teleporter.”

In early July, TV broadcasters asked Buchwald to rule that FilmOn and its CEO were in contempt for violating the 2012 injunction, which prohibits FilmOn from infringing broadcasters' copyrights “by any means.”

Buchwald granted that request, holding FilmOn and David in contempt for continuing to operate after the Supreme Court's ruling against Aereo. The judge imposed sanctions of $90,000 to $100,000 for every day that FilmOn streamed programs after Aereo ceased doing so. She also ordered the company to pay attorneys for the TV networks around $56,000.

FilmOn now argues that it believed in good faith that the 2012 injunction didn't clearly prohibit it from using either the multiple-antenna technology, or the even newer “teleporter” technology.

The company also argues that it honestly believed it was entitled to a cable license as a result of the Supreme Court ruling. FilmOn applied for a cable license this summer and also argued to Buchwald that it wasn't in contempt because it was entitled to a compulsory license.

Buchwald rejected that argument in July. She said in her order that even though the Supreme Court analogized Aereo (and, implicitly, FilmOn) to cable systems, the ruling didn't transform the companies into them.

FilmOn is now asking the 2nd Circuit to vacate Buchwald's contempt order.

“The ambiguity of the injunction ... and FilmOn.com's good faith belief that it was not infringing plaintiffs' intellectual property preclude a finding of contempt,” the company argues.

David also is asking the appellate court to vacate the portion of the ruling holding him in contempt. “Mr. David's role as CEO may bind FilmOn.com, but it does not mean he is personally liable for everything FilmOn.com is deemed to have done,” he argues.