Foreign Broadcaster Infringed US Copyright Through Online Streaming

by McDermott Will & Emery

McDermott Will & Emery

Addressing for the first time the issue of whether the US Copyright Act governs a performance that originated abroad but is accessible by viewers in the United States, the US Court of Appeals for the District of Columbia held that it does, affirming the district court’s liability finding and its damages award of more than $3 million. Spanski Enterprises v. Telewizja Polska, S.A., Case No. 17-7051 (DC Cir., Mar. 2, 2018) (Tatel, J).

Telewizja Polska, S.A. (TV Polska), a Polish television broadcaster and owner, operator and creator of the television episodes at issue in this case (TVP Polonia Content), entered into a license granting Spanski Enterprises, Inc., the exclusive right to perform the TVP Polonia Content in North and South America, including via the internet. In accordance with this agreement, TV Polska used geoblocking technology to ensure that internet users in North and South America could not access TVP Polonia Content through its video-on-demand website. Spanski discovered, however, that some of the content (specifically, 51 episodes that Spanski had registered with the US Copyright Office) was not effectively geoblocked and was therefore accessible in North and South America via TV Polska’s streaming website.

Spanski sued for copyright infringement, alleging that TV Polska violated Spanski’s exclusive public performance rights in the 51 episodes. The district court found that TV Polska infringed Spanski’s copyrights and awarded damages of $60,000 per infringed episode ($3.06 million total), doubling the statutory damages cap of $30,000 per infringed work based in part on its finding that TV Polska acted willfully to infringe Spanski’s copyrights and had made it impossible to determine the actual damages by deleting certain records and altering evidence. TV Polska appealed.

TV Polska challenged the district court’s finding that its employees intentionally removed the geoblocking technology and argued that, regardless, it would be the viewer(s) (and not TV Polska) that were liable for any infringement. Alternatively, TV Polska argued that the Copyright Act did not apply extraterritorially to conduct that occurred in Poland, and thus any liability finding would be an impermissible extension of US copyright law.

The DC Circuit rejected TV Polska’s arguments, citing the Supreme Court of the United States case American Broadcasting Cos. v. Aereo, Inc. (2014) (IP Update, Vol. 17, No. 7) for the principle that both the broadcaster and the viewer “publically perform” the copyrighted work and can both be liable for copyright infringement. Further, the Court determined that the US Copyright Act applied because “the conduct relevant to the statute’s focus occurred in the United States . . . even if other conduct occurred abroad.” The Copyright Act aims to protect copyright holders’ exclusive rights, including the public performance right. Accordingly, the US Copyright Act governed the performance of the TVP Polonia Content episodes, because the performance(s) occurred on US screens via online streaming, regardless of the fact that the content was uploaded in Poland. “Given the ease of transnational internet transmissions,” to hold otherwise “would leave the door open to widespread infringement, rendering copyright in works capable of online transmission largely nugatory,” the Court reasoned. 

The Court likewise rejected TV Polska’s challenge to the damages award, finding no basis to disrupt the district court’s conclusion as to the number of episodes infringed or that the conduct was willful. 

Practice Note: This case underscores the importance of effective geoblocking by streaming services. A party that owns rights in one country may be liable for failing to block users in another country, where someone else holds the right.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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