D.C. Circuit tunes in to streaming content copyright issues

October 24, 2018
Patterson Thuente IP

Streaming media has opened up a vast landscape of previously unavailable content for many. It’s also triggered an array of novel copyright infringement questions. In a case involving the streaming of content originating abroad into the United States, the D.C. Circuit Court of Appeals has tackled two previously unsettled questions about the scope of infringement liability under the Copyright Act.

The cast

Telewizja Polska, S.A. (TV Polska), a Polish broadcaster, entered into a licensing agreement with Spanski Enterprises, Inc. The agreement gave Spanski the exclusive right to perform the content of one of TV Polska’s channels in North and South America. TV Polska used geoblocking technology to prevent users in those regions from accessing the content via its website.

In 2011, Spanski discovered that 51 episodes of content they had registered with the U.S. Copyright Office weren’t properly blocked and were available to North and South American viewers through TV Polska’s video-on-demand (VOD) system. It sued TV Polska under the Copyright Act. The trial court found TV Polska liable for infringement, imposing statutory damages of more than $3 million. TV Polska appealed.

The foreign market

TV Polska asserted that it couldn’t be held liable for infringement because it didn’t do anything in the United States. The question of whether an infringing performance that originates abroad but reaches U.S. viewers can be actionable under the Copyright Act had not yet been addressed by a federal appellate court.

Applying the U.S. Supreme Court’s two-part test for determining whether a statutory violation that occurs abroad creates liability, the D.C. Circuit focused on the second step — whether the case, notwithstanding its extraterritorial elements, involves a permissible domestic application of the statute. A case does so, the court explained, only if the conduct relevant to the law’s focus occurred in the United States.

The appeals court determined that the Copyright Act focuses on protecting the exclusivity of the rights the statute guarantees. Although TV Polska uploaded and digitally formatted the episodes in Poland, the infringing performance — and violation of the copyrights — took place on computer screens in the United States.

Thus, the court concluded, the case involved a permissible domestic application of the Copyright Act, even if other conduct occurred abroad. To hold otherwise, given the ease of transnational Internet transmissions, would leave the door open to widespread infringement and render copyright in works capable of online transmission “largely nugatory.”

The sequel

The appeals court also considered TV Polska’s argument that allegedly infringing conduct must be “volitional” to support a claim for direct infringement. TV Polska contended that the automated nature of its VOD system or the end user’s role in selecting the content to access insulated it from liability.

The court rejected that argument. A copyright holder has the exclusive right to perform its copyrighted work publicly, and the Copyright Act imposes liability when a defendant makes it possible for “members of the public” to receive the performance of copyrighted content. Because TV Polska showed the episodes to the public through a VOD system that allowed members of the public to receive the performance, it violated Spanski’s public performance right.

Notably, the court declined to decide whether the Copyright Act requires volitional conduct, finding it unnecessary for this case. TV Polska used its own equipment to allow users to watch programs, many of which were copyrighted, by transmitting content on request. This conduct constituted infringement “whatever the scope of any such requirement might otherwise be.”

To be continued

The D.C. Circuit is the first federal appeals court to hold that U.S. copyright law applies to performances originating abroad but viewable in the United States. The ruling should make it harder for copyright infringers to avoid liability by moving to another country. But other federal appeals courts have found that infringement liability requires volitional conduct, while the Department of Justice has argued against such a requirement. The ultimate determination of both issues may yet come. •

Spanski Enterprises, Inc. v. Telewizja Polska, S.A., No. 17-7051, March 2, 2018, D.C. Cir.

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