Federal Judge Rules in Favor of Aereo-Like Streaming Service Over Big Networks

FilmOn may have just dealt a big blow to the likes of Fox, NBC, ABC and CBS

Film On Alki David

TV streaming company FilmOn just stole a summary judgment right out from under the big boys — at least for now.

U.S. District Court Judge George Wu ruled in favor of the company in its case against Fox Television, NBCUniversal, ABC and CBS — among other big broadcasters — finding that the TV streaming company could “potentially” be entitled to a compulsory license of broadcasters’ copyrighted programming, should it meet certain requirements.

While nothing is final, Wu has authorized an immediate appeal of the case to the Ninth Circuit Court of Appeals, thus denying the large group of plaintiffs’ calls for a summary judgment against FilmOn’s compulsory license eligibility.

In the meantime, Wu is maintaining the current injunction upon FilmOn, which is owned by billionaire Alki David.

Wu noted in his opinion that current laws and statutes do not draw a clear enough differentiation between traditional broadcasting and services such as FilmOn to issue a decision.

In other words, this confusing new world does not have clearly defined-enough rules from Congress, the Copyright Office, or the Federal Communications Commission to simply deny FilmOn’s request to essentially establish itself as a cable company — its current claim in the post-Aereo world it operates in.

The ruling comes less than one year after the better-known Aereo Inc. was shut down after a lengthy up-and-down legal battle against the very same broadcasters.

Aereo’s product — which produced the first cloud-based individual antennae and DVR and launched in more than a dozen U.S. cities — did not sit well with traditional broadcasters and media companies, who battled it tooth and nail via litigation and in the press.

But ultimately it was the Supreme Court that brought the forward-thinking company down. Aereo agreed to pay CBS Corp. and other broadcasters $950,000 over copyright claims totaling more than $99 million. Aero filed for Chapter 11 bankruptcy in November.

Despite that ruling, Wu believes that FilmOn’s operation differs significantly enough from Aereo’s to prevent him from shutting down the licensing process at this point.

Wu cited both the well-known predecessor its case in his opinion:

“Because the Supreme Court was not answering the question at issue in this case, Aereo III does not control the result here,” he wrote, referring to FilmOn’s latest posturing as a cable company. “It is, however, about as close a statement directly in Defendants’ favor as could be made, and the decision’s reasoning continues the trajectory started in Fortnightly and seen again in the satellite decisions: courts consistently reject the argument that technological changes affect the balance of rights as between broadcasters and retransmitters in the wake of technological innovation.”

“Instead, courts have left such rebalancing to Congress,” Wu continued. “By contrast, one entity has consistently acted and opined in favor of the broadcasters and against the compulsory license: the Copyright Office.”

A representative for Fox responded to the ruling in a statement Thursday: “This advisory opinion contravenes all legal precedent. The court only found that FilmOn could potentially qualify for a compulsory license, and we do not believe that is a possibility. The injunction barring Film On from retransmitting broadcast programming over the internet still remains in place and the full burden of proof still lies with FilmOn. We will of course appeal and fully expect to prevail. ”

Pamela Chelin contributed to this report.