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Court Finds Video Service to Be in Contempt of Injunction Against Copyright Infringement

In a September 10, 2013 ruling, Judge Naomi Reice Buchwald granted plaintiff CBS Broadcasting Inc.'s motion for civil contempt against Filmon.com, Inc., and ordered Filmon.com to comply with the permanent consent injunction to which it had previously agreed.  Judge Buchwald also ordered Filmon.com to complete a payment of $1,350,000, and awarded the costs of the enforcement motion. 

The action arose out of CBS's and other broadcasting networks' claims that Filmon.com's retransmission of their broadcast signals to its customers constituted copyright infringement.  After CBS filed a motion for a preliminary injunction, and the parties engaged in discovery, the parties reached a settlement that "was conditioned upon this Court's entry of a stipulated consent judgment and permanent injunction prohibiting FilmOn from further infringing plaintiffs' copyrights."  The Court entered the consent injunction in July 2012.

By January 2013, CBS and other plaintiffs began to allege various violations of the injunction, including the lack of a promised payment, Filmon.com's principal's continuing disparagement of CBS, and, most significantly, Filmon.com's launch of a new video on demand service that plaintiffs contend violate their copyrights.  After the parties were unable to resolve their differences, CBS sought an order of contempt.

With regard to the unpaid $1,350,000 owed under the settlement agreement, Filmon.com argued that its performance was excused because on of the plaintiffs had falsely disparaged it in arguing that Filmon.com's new streaming service, which relies on a dedicated television antenna for each subscriber, continues to violate the plaintiff's copyrights.  Although the Second Circuit recently sided with with Filmon.com's position in a related case involving a similar service, Judge Buchwald rejected Filmon.com's argument because at the time it refused to make the payment, there was no binding precedent indicating that the supposedly disparaging comments were in fact false.

After the entry of the injunction, Filmon.com offered a traditional video streaming service (in addition to the antenna-based system).  CBS argued that the traditional video service violated the injunction, and Filmon.com defended by contending that it had licensed the retransmission rights from a third party, and so did not violate the injunction.  Judge Buchwald rejected Filmon.com's argument, writing that Filmon.com "has offered no evidence whatsoever that they have validly acquired the right to stream plaintiffs' copyrighted programming."  The Court thus found Filmon.com in contempt of the injunction.

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