FilmOn X, Rival to Aereo, Argues to Appellate Court That Its “Innovation” Is Legal

Aereo Judge
Oliver Munday

As the broadcast networks have so far tried and failed to shut down Aereo in east coast federal courts, they have had success in curbing a similar startup in the west.

The latest chapter came on Tuesday, as Beverly Hills-based FilmOn X sought to overturn a district court’s preliminary injunction, which bars it from offering digital streams of broadcast signals, made possible via remote antennas assigned to each subscriber. The company is perhaps just as well known for its former name, Aereokiller, given to it by its colorful founder, Alki David.

An attorney for the company, Ryan Baker of Baker Marquart, argued to a three-judge panel of the 9th Circuit Court of Appeals that it should adopt the same rationale that the 2nd Circuit did earlier this year in allowing Aereo to continue.

Users of FilmOn X’s service get a “discrete, unique antenna” that make the transmissions of the broadcast signals private, and not a violation of the public performance clause of the Copyright Act of 1976, Baker said. He suggested that it was little different than a consumer going to Best Buy to buy an antenna to make such digital streams possible, only this time subscribers who rent the remote devices “have the option to pay a lot less per month.”

But one of the appellate judges, Brian M. Cogan, gave a wry reading of FilmOn X, calling it “pretty darn clever” and calling it “innovation arrived at for the sole purpose of avoiding the statute.”

Nevertheless, Baker said that FilmOn X still “complies with the literal terms of the statute,” noting that the transmit clause of the Copyright Act makes a distinction between public and private performances. “It is innovation,” he said.

Late last year, U.S. District Judge George Wu granted an injunction preventing FilmOn from transmitting the station signals in California and other states, although he refused to extend the ban nationwide. In his decision, Wu ruled that what FilmOn was doing was a public performance, even if there were one-to-one transmissions to private homes.

Paul Smith of Jenner & Block, representing Fox, argued that the Copyright Act even contemplates such “unique transmissions,” and that Congress’ intent was that they would still be public performances.

“They are in the live transmission business, exactly like a cable company,” he said.

Robert Garrett of Arnold & Porter, representing NBC Universal, noted that Congress wrote in a clause that a public performance includes one that is transmitted “by means of any device or process.” He said that as new technologies have come on the scene, like satellite and telco services, they have been required to obtain licenses to transmit broadcast signals.

Yet Judge Diarmuid Fionntain O’Scannlain noted that was before a 2008 2nd Circuit decision upholding the legality of Cablevision’s remote DVR, paving the way for the creation of Aereo.

That Cablevision decision, Garrett said, was “wrong.”

“Alright,” O’Scannlain said, chuckling at the abrupt answer.

He questioned where the line was drawn from when a transmission goes from private to public.

The FilmOn X case has potential implications as to whether the Supreme Court decides to review the issue of unauthorized transmissions of broadcast signals. If the 9th Circuit sides with the networks, it would set up a split in the appellate circuits, making such a review all the more likely. But Fox may seek a high court review of the 2nd Circuit’s Aereo decision before an opinion is issued in the FilmOn case.