The Second Circuit Court of Appeals has upheld a preliminary injunction against streaming service ivi, which means it can't retransmit TV station signals over the Internet.
"Continued live retransmissions of copyrighted television programming over the Internet without consent would...threaten to destabilize the entire industry," the court said.
The United States District Court for the Southern District of New York had granted the injunction on the grounds that programmers were likely to win their challenge on the argument that Ivi was not a cable system entitled to a compulsory license, and that those programmers, which included the major studios, networks and broadcast groups, would suffer irreparable harm.
The federal appeals found no reason to reverse that decision.
The Second Circuit said that absent a stay, programmers would be discouraged from creating "some of the world's most recognized and valuable programming," including "important local news" and political information. The appeals court saw a domino affect that went beyond broadcasters. "The strength of plaintiffs'
negotiating platform and business model would decline," it said. "The quantity and quality of efforts put into creating television programming, retransmission and advertising revenues, distribution models and schedules -- all would be adversely affected," it added, but did not stop there. "These harms would extend to other copyright
holders of television programming.
As to Ivi not being a cable service, the court relied on Copyright Office expertise, deferring to that office's long-standing interpretation that "Internet retransmission services are not cable systems."
While it said the statute wasn't clear, the court said it would have to give the benefit of the doubt to the Copyright Office under the Chevron doctrine, in which the court will generally give deference to agency expertise.
"We hold that the district court did not abuse its discretion in granting a preliminary injunction to plaintiffs, and the judgment of the district court is Affirmed," the Second Circuit concluded.
""This confirms that Congress never intended to allow Internet providers to retransmit broadcast programming without the consent of copyright owners," said National Association of Broadcasters spokesman Dennis Wharton in a statement.
Among those filing for the injunction wre NBC, CBS, Fox, ABC, The CW, PBS, Tribune, Univision, and Fischer, as well as the commissioner of baseball and studios associated with the major nets/owned station groups.
"We are very pleased the Court recognized that ivi's unauthorized streaming of our copyrighted content would substantially diminish the value of television programming," said ABC, NBC, CBS and Fox in a statement.