In a blow to the broadcast networks, a federal judge ruled on Thursday that online video distributor FilmOn is “potentially entitled” to a compulsory license that would enable it to legally stream television shows.
But U.S. District Court Judge George Wu in the Central District of California acknowledged in a written decision that the legal issues were “close” and that a federal appellate court in New York ruled several years ago that Web-based services were not entitled to compulsory cable licenses.
Wu authorized the broadcast networks to seek immediate review of his ruling from the 9th Circuit Court of Appeals. He also left in place an injunction that prohibits FilmOn from streaming copyrighted material.
FilmOn has argued that it's entitled to a compulsory license since last summer, shortly after the Supreme Court ruled that rival service Aereo infringed copyright.
The Supreme Court said in its ruling that Aereo couldn't stream shows without a license because its system was comparable to that of a cable company. After that ruling came out, both Aereo and FilmOn applied to the Copyright Office for cable licenses.
The Copyright Office tentatively rejected both companies' applications, stating that Internet transmissions of broadcast television are outside the scope of the license.
In 2012, the 2nd Circuit Court of Appeals in New York ruled that ivi TV -- which streamed television programs over the Internet -- wasn't entitled to a compulsory license under Section 111 of the Copyright Act. But ivi TV transmitted shows to people nationwide, while FilmOn says its system only streamed shows available over-the-air in subscribers' home markets.
That difference could be key, because the 2nd Circuit said in its decision that the compulsory license system was only intended for systems that operated in a restricted geographic market.