Chin said that while the statute is unclear on whether online retransmission services constitute cable systems, the intent of Congress is clear: to address reception issues in remote areas and heighten access to over-the-air TV signals. He said the interpretation of the agency which oversees the compulsory licensing scheme, the federal Copyright Office, eliminates any question.
"The Copyright Office has maintained that §111's compulsory license for cable systems is intended for localized retransmission services; under this interpretation, Internet retransmission services are not entitled to a §111 license," Chin wrote. "Internet retransmission services cannot constitute cable systems under §111 because they provide nationwide—and arguably global —services."
Chin said that without an injunction, broadcasters would sustain severe damage.
"The strength of plaintiffs' negotiating platform and business model would decline," Chin wrote. "The quantity and quality of efforts put into creating television programming, retransmission and advertising revenues, distribution models and schedules—all would be adversely affected."
Chin also said the public would ultimately be ill-served by permitting ivi to continue streaming the programs.
"The public has a compelling interest in protecting copyright owners' marketable rights to their work and the economic incentive to continue creating television programming," Chin wrote. "Inadequate protections for copyright owners can threaten the very store of knowledge to be accessed; encouraging the production of creative work thus ultimately serves the public's interest in promoting the accessibility of such works."
He added that "plaintiffs' desire to create original television programming surely would be dampened if their creative works could be copied and streamed over the Internet in derogation of their exclusive property rights."
Lawrence Graham of Black Lowe & Graham in Seattle argued the appeal for the defendants.
"Frankly I am stunned they decided this the way they did," he said. "It is a baffling opinion."
Robert Alan Garrett of Arnold & Porter in Washington, D.C., who argued for the plaintiffs, was not available for comment.
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