Advanced Copyright Law on the Internet

5. The Section 111 Compulsory License for Cable Systems

Section 111 of the Copyright Act makes available a statutory license permitting cable
systems to publicly perform and retransmit signals of copyrighted television programming to its
subscribers, provided they pay royalties at government-regulated rates and abide by the statute’s
procedures. However, the Section 111 statutory license has been ruled not applicable to
retransmission of broadcast programming via Internet streaming.

(a) WPIX v. ivi

In WPIX, Inc. v. ivi, Inc.^3307 the defendant ivi captured and retransmitted the plaintiff
WPIX’s copyrighted television programming live and over the Internet to paying ivi subscribers
who had downloaded ivi’s “TV player” on their computers for a monthly subscription of $4.99.
For an additional $0.99 per month, subscribers were able to record, pause, fast-forward, and
rewind ivi’s streams. In response to a lawsuit for copyright infringement, ivi claimed that it was
a cable system entitled to the compulsory license under Section 111. A district court in New
York rejected that argument and issued a preliminary injunction against ivi. On appeal, the
Second Circuit affirmed, concluding (in accordance with the Copyright Office) that the
compulsory license of Section 111 applies only to localized retransmission services regulated as
cable systems by the FCC, and that Internet retransmission services are not cable systems and
accordingly do not qualify for that license.^3308

(b) CBS v. FilmOn

In this case, discussed in further detail in Section II.B.15 above, FilmOn argued that in
light of the Supreme Court’s findings in Aereo (discussed in Section II.B.10 above), it qualified
as a cable system and was entitled to the benefits and responsibility of the compulsory license
scheme under Section 111 of the Copyright Act. The court rejected this, noting that the Supreme
Court’s statements that Aereo (and, by extension, FilmOn, which used technology identical to
Aereo) was very similar to a cable system were not the same as a judicial finding that Aereo and
its technological peers are, in fact, cable companies entitled to retransmission licenses under
Section 111.^3309 The district court further noted that the Supreme Court’s Aereo decision did not
mention, let alone abrogate, WPIX, Inc. v. ivi, Inc.,^3310 which established the law in the Second
Circuit that Internet retransmission services do not constitute cable systems under Section

111.^3311

(^3307) 691 F.3d 275 (2d Cir. 2012).
(^3308) Id. at 277, 282-84.
(^3309) CBS Broadcasting Inc. v. FilmOn.com, Inc., 2014 U.S. Dist. LEXIS 101894 at 11 (S.D.N.Y. July 24, 2014).
“Defendant may argue that the Supreme Court’s language in Aereo implies that FilmOn may be entitled to a
license under § 111, but an implication is not a holding.” Id.
(^3310) 691 F.3d 275 (2d Cir. 2012).
(^3311) FilmOn, 2014 U.S. Dist. LEXIS 101894 at 6, 11-12.