FilmOn, CEO David in Contempt of Court, Could Have Implications For Aereo, Attorneys Say

"FilmOn was aware that its operations, based on the Supreme Court’s determination, infringed plaintiffs’ copyrights, yet defendant continued to purposefully broadcast content within the Second Circuit until it got caught,” said Buchwald in the order finding FilmOn in contempt. FilmOn will appeal the contempt order, David told us in an email Friday, calling Buchwald “an idiot” and alleging she should have recused herself from the case. “Judge Buchwald is unqualified and wrong,” David said.

Buchwald disputed an argument made both by FilmOn and Aereo in its own U.S. District Court case that the high court’s Aereo opinion means streaming Internet retransmission services should be treated like cable systems. Statements in the opinion that Aereo is very similar to a cable system are “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] of the Copyright Act,” said Buchwald. “Defendant attaches far too much importance to the Court’s analogizing,” she said. This echoes statements made by the U.S. Copyright Office in a letter rejecting Aereo’s application for a compulsory license last week.

Aereo and FilmOn have also both argued that the high court decision invalidated a previous 2nd U.S. Circuit Court of Appeals decision involving streaming TV service ivi (CD Aug 28 p4), which said such systems were not eligible for compulsory licenses. However, since the Aereo majority opinion doesn’t mention ivi, it can’t be overturned by Aereo and is still the governing law, Buchwald said. “The detailed analysis and ultimate decision of the Second Circuit is not rendered moot by the Supreme Court’s use of an analogy in answering an entirely different question,” she said.

Buchwald’s decisions aren’t binding on fellow U.S. District Court Judge Alison Nathan, who will decide whether Aereo’s case that it should be treated as a cable system should be heard, several broadcast attorneys who aren’t involved in the cases told us. However, Buchwald’s view of the matter suggests that other judges could see it the same way, said Fletcher Heald appellate attorney Harry Cole in an interview. “It’s not a good sign for Aereo,” said broadcast attorney Jack Goodman, a former NAB general counsel.

Other judges are also likely to take a dim view of David’s appeal of the contempt finding, Cole said. Because contempt rulings have to do with following the court’s rules, judges are traditionally reluctant to challenge another’s finding of contempt, he said. FilmOn has also been found in contempt for violating injunctions before, once in Buchwald’s court and separately in the U.S. Court of Appeals for the D.C. Circuit, according to the court order.

FilmOn has also withdrawn its appeals of injunction rulings that went against it in the D.C. Circuit and in the 9th U.S. Circuit Court of Appeals, according to court filings. Both appeals had been held in abeyance awaiting the Supreme Court’s decisions. By withdrawing the appeals, FilmOn is likely signaling its intent to continue the cases on their merits in the lower courts, Cole said. However, that could lead to serious consequences if the cases aren’t resolved in their favor, several attorneys told us. If those cases are resolved against FilmOn —- or Aereo, for its own court proceedings -- the companies could face millions of dollars in copyright infringement fees, said Dorsey and Whitney copyright attorney Bruce Ewing. Even if Aereo and FilmOn are successful at being declared cable companies, “what are they going to do about past liability?” Ewing asked.