Bloomberg News

Ivi TV Loses Bid to Overturn Court-Ordered Shutdown

August 27, 2012

Ivi Inc. lost its bid to overturn a court-ordered shutdown of its business of capturing over-the-air television signals and transmitting them to online subscribers.

A lower-court judge was correct in granting TV broadcasters such as CBS Corp. (CBS:US) a preliminary order last year that put Ivi out of business, a panel of federal appeals judges ruled today in New York.

“The district court did not abuse its discretion in finding that plaintiffs were likely to succeed on the merits of the case,” the judges said.

TV, film and sports companies including Walt Disney Co. (DIS:US)’s ABC, Comcast Corp. (CMCSA:US)’s NBC and News Corp. (NWSA:US)’s Fox sued Seattle-based Ivi and its founder, Todd Weaver, in September 2010. The broadcasters said capturing TV signals in cities including New York and Los Angeles and retransmitting them to Ivi’s subscribers constituted copyright infringement.

U.S. District Judge Naomi Buchwald granted the preliminary injunction in February 2011. She said the TV companies showed they probably will win the suit. Oral arguments in the appeal were heard in May.

“We’re gratified with the court’s decision,” Dennis Wharton, a spokesman for the National Association of Broadcasters, said in a phone interview. “This sends a strong signal that copyrighted material on the broadcast airwaves deserves protection.”

Not Final

“This is not the final chapter to this story,” Hal Bringman, a spokesman for Ivi, said in an e-mail.

Ivi argued that under Section 111 of the U.S. Copyright Act it qualifies as a cable TV provider and thus is entitled to a license from the U.S. Federal Communications Commission to retransmit broadcast signals. It also said the networks and TV stations hadn’t proved they were harmed by the service.

“The Copyright Office has consistently concluded that Internet retransmission services are not cable systems and do not qualify for Section 111 compulsory licenses,” the judges said in their opinion. “The Copyright Office’s position is reasonable and persuasive.”

The appeals judges also said the district court was correct in finding that the broadcasters would be harmed without a preliminary injunction.

Ad Revenue

“Ivi’s live retransmission of plaintiffs’ copyrighted programming over the Internet would substantially diminish the value of the programming,” the judges wrote. Advertising revenue might decline, they said.

Other plaintiffs include Twentieth Century Fox Film, WPIX Inc., WNET.org, Major League Baseball and Telemundo Network Group.

This year the networks sued New York-based Aereo Inc., which also captures over-the-air TV signals and retransmits them to subscribers online. In July, U.S. District Judge Alison Nathan refused to grant the networks’ motion for a preliminary injunction that would have shut down the service.

The appeals case is WPIX v. Ivi, 11-0788, U.S. Court of Appeals for the Second Circuit (Manhattan). The lower-court case is WPIX v. Ivi, 1:10-cv-07415, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Don Jeffrey in New York at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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