Fox Television Stations, Inc. v. Aereokiller, LLC , 851 F.3d 1002 ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
FOX TELEVISION STATIONS, INC; No. 15-56420
TWENTIETH CENTURY FOX FILM
CORPORATION; FOX BROADCASTING D.C. No.
COMPANY, INC.; NBC UNIVERSAL 2:12-cv-06921-
MEDIA, LLC; UNIVERSAL NETWORK GW-JC
TELEVISION, LLC; OPEN 4 BUSINESS
PRODUCTIONS, LLC; NBC
SUBSIDIARY (KNBC-TV) INC; OPINION
AMERICAN BROADCASTING
COMPANIES, INC.; ABC HOLDING
COMPANY, INC.; DISNEY
ENTERPRISES, INC.; CBS
BROADCASTING INC.; CBS STUDIOS
INC.; BIG TICKET TELEVISION, INC.;
TELEMUNDO NETWORK GROUP LLC;
WNJU-TV BROADCASTING LLC,
Plaintiffs-Appellants,
v.
AEREOKILLER, LLC; ALKIVIADES
DAVID; FILMON.TV NETWORKS, INC.;
FILMON.TV, INC.; FILMON.COM, INC.;
FILMON X, LLC; DOES, 1–3,
inclusive,
Defendants-Appellees.
2 FOX TELEVISION STATIONS V. AEREOKILLER
Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding
Argued and Submitted August 4, 2016
Pasadena, California
Filed March 21, 2017
Before: Diarmuid F. O’Scannlain, Johnnie B. Rawlinson,
and Consuelo M. Callahan, Circuit Judges.
Opinion by Judge O’Scannlain
SUMMARY*
Copyright
Reversing the district court’s partial summary judgment
in favor of defendants, the panel held that a service that
captures copyrighted works broadcast over the air, and then
retransmits them to paying subscribers over the Internet
without the consent of the copyright holders, is not a “cable
system” eligible for a compulsory license under the Copyright
Act.
Under § 111 of the Act, a “cable system” is eligible for a
so-called compulsory license that allows it to retransmit “a
performance or display of a work” that had originally been
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
FOX TELEVISION STATIONS V. AEREOKILLER 3
broadcast by someone else—even if such material is
copyrighted— without having to secure the consent of the
copyright holder. So long as the cable system pays a
statutory fee to the Copyright Office and complies with other
regulations, it is protected from infringement liability.
The panel concluded that § 111 was ambiguous on the
question presented. Deferring to the Copyright Office’s
interpretation, the panel held that Internet-based
retransmission services are not eligible for the compulsory
license that § 111 makes available to “cable systems.”
COUNSEL
Neal Kumar Katyal (argued), Frederick Liu, and Matthew A.
Shapiro, Hogan Lovells US LLP, Washington, D.C.; Thomas
P. Schmidt, Hogan Lovells US LLP, New York, New York;
Paul Smith, Jenner & Block LLP, New York, New York;
Julie A. Shepard and Richard L. Stone, Jenner & Block LLP,
Los Angeles, California; Eric D. Mason, James S. Blackburn,
John C. Ulin, and Ronald L. Johnston, Arnold & Porter LLP,
Los Angeles, California; Murad Hussain and Robert Alan
Garrett, Arnold & Porter LLP, Washington, D.C.; for
Plaintiffs-Appellants.
Ryan Geoffrey Baker (argued) and Scott M. Malzahn, Baker
Marquart LLP, Los Angeles, California, for Defendants-
Appellees.
Rodney A. Smolla, Wilmington, Delaware, for Amicus
Curiae The Media Institute.
4 FOX TELEVISION STATIONS V. AEREOKILLER
Mark S. Chenoweth and Cory L. Andrews, Washington Legal
Foundation, Washington, D.C., for Amicus Curiae
Washington Legal Foundation.David B. Dreyfus, Directors
Guild of America, Inc., Los Angeles, California; Anthony R.
Segall, Writers Guild of America, West, Inc., Los Angeles,
California;
Benjamin F. P. Ivins and Rick Kaplan, National Association
of Broadcasters, Washington, D.C.; James R. Sigel and
Joseph R. Palmore, Morrison & Foerster LLP, Washington,
D.C.; Paul Goldstein, Morrison & Foerster LLP, San
Francisco, California; for Amicus Curiae National
Association of Broadcasters.
Ralph Oman, Pravel Professorial Lecturer in Intellectual
Property and Patent Law, George Washington University
Law School, Washington, D.C., as and for Amicus Curiae
The Former Register of Copyrights of the United States of
America.
Geoffrey Manne, International Center for Law and
Economics, Portland, Oregon; Sam Kazman and Hans Bader,
Competitive Enterprise Institute, Washington, D.C.; for
Amici Curiae The Competitive Enterprise Institute and The
International Center for Law and Economics.
David M. Lamb, Jordan A. Feirman, and Anthony J. Dreyer,
Skadden Arps Slate Meagher & Flom LLP, New York, New
York, for Amici Curiae National Football League, The Office
of the Commissioner of Baseball DBA Major League
Baseball, and The PGA Tour, Inc.
J. Matthew Williams and Jay A. Rosenthal, Mitchell
Silberberg & Knupp LLP, Washington, D.C., for Amici
FOX TELEVISION STATIONS V. AEREOKILLER 5
Curiae The American Society of Composers, Authors and
Publishers; Broadcast Music, Inc.; The National Music
Publishers’ Association; The Recording Industry Association
of America; The Recording Academy; and SESAC, Inc.
Susan Cleary, Vice President & General Counsel,
Independent Film & Television Alliance, Los Angeles,
California; David J. Feder and Kelly M. Klaus, Munger
Tolles & Olson LLP, Los Angeles, California; for Amici
Curiae Paramount Pictures Corporation, Warner Bros.
Entertainment Inc., and Independent Film & Television
Alliance.
Duncan W. Crabtree-Ireland and Danielle S. Van Lier, SAG-
AFTRA, Los Angeles, California; David B. Dreyfus,
Directors Guild of America, Inc., Los Angeles, California;
Anthony R. Segall, Writers Guild of America, West, Inc., Los
Angeles, California; for Amici Curiae Screen Actors Guild-
America Federation of Television and Radio Artists;
Directors Guild of America, Inc.; and Writers Guild of
America, West, Inc.
Brandon Butler; Alexandra Wilson, Law Student; Glushko-
Samuelson Intellectual Property Clinic, American University
Washington College of Law, Washington, D.C.; for Amicus
Curiae Consumer Federation of America.
Brandon Butler; Darlene Tzou, Law Student; Glushko-
Samuelson Intellectual Property Clinic, American University
Washington College of Law, Washington, D.C.; for Amicus
Curiae National Federation of the Blind.
Mitchell L. Stoltz, Electronic Frontier Foundation, San
Francisco, California; Brian Quinn, Jeffrey T. Pearlman, and
6 FOX TELEVISION STATIONS V. AEREOKILLER
Phillip R. Malone, Mills Legal Clinic, Juelsgaard Intellectual
Property and Innovation Clinic, Stanford, California; for
Amici Curiae Electronic Frontier Foundation and Public
Knowledge.
OPINION
O’SCANNLAIN, Circuit Judge:
We must decide whether a service that captures
copyrighted works broadcast over the air, and then
retransmits them to paying subscribers over the Internet
without the consent of the copyright holders, is a “cable
system” eligible for a compulsory license under the Copyright
Act.
I
A
The Copyright Act of 1976 gives copyright holders six
“exclusive rights,” including the exclusive right “to perform”
copyrighted works “publicly.” 17 U.S.C. § 106(4). The Act
provides that “[a]nyone who violates any of the exclusive
rights of the copyright owner . . . is an infringer.” Id.
§ 501(a). This case concerns an important limitation on the
Act’s provision for exclusive rights.
Under § 111 of the Act, a “cable system” is eligible for a
so-called compulsory license that allows it to retransmit “a
performance or display of a work” that had originally been
broadcast by someone else—even if such material is
copyrighted—without having to secure the consent of the
FOX TELEVISION STATIONS V. AEREOKILLER 7
copyright holder. Id. § 111(c). So long as the cable system
pays a statutory fee to the Copyright Office and complies
with certain other regulations, it is protected from
infringement liability. Id. § 111(c)–(d). Compulsory licenses
are highly coveted, in no small part because, according to the
Copyright Office, the royalty payments the Act requires cable
companies to pay are “de minimis” when compared to the
gross receipts and revenues the cable industry collects, a gap
suggesting that the government-set rates fall well below
market levels. U.S. Copyright Office, Satellite Home Viewer
Extension and Reauthorization Act § 109 Report 43 (2008)
(“SHVERA Report”); see also id. at 70.
This lawsuit pits a group of broadcast stations and
copyright holders (collectively, “Fox”) against an entity now
known as FilmOn X (“FilmOn”). FilmOn operates a service
that uses antennas to capture over-the-air broadcast
programming, much of it copyrighted, and then uses the
Internet to retransmit such programming to paying
subscribers, all without the consent or authorization of the
copyright holders. The Supreme Court recently held that
such a service does “perform” the retransmitted works
“publicly,” and hence infringes the copyright holders’
exclusive performance rights. American Broad. Cos. v.
Aereo, Inc., 134 S. Ct. 2498, 2503 (2014). Fox sued FilmOn
for copyright infringement in 2012; in its most recent
defense, FilmOn claims that it is a “cable system” eligible for
a compulsory license under § 111.
The relevant provision of the Copyright Act defines
“cable system” as follows:
A “cable system” is a facility, located in any
State, territory, trust territory, or possession of
8 FOX TELEVISION STATIONS V. AEREOKILLER
the United States, that in whole or in part
receives signals transmitted or programs
broadcast by one or more television broadcast
stations licensed by the Federal
Communications Commission, and makes
secondary transmissions of such signals or
programs by wires, cables, microwave, or
other communications channels to subscribing
members of the public who pay for such
service. For purposes of determining the
royalty fee under subsection (d)(1), two or
more cable systems in contiguous
communities under common ownership or
control or operating from one headend shall
be considered as one system.
17 U.S.C. § 111(f)(3). The parties offer dueling
interpretations § 111, each grounded in various aspects of its
text, its perceived purposes, and slices of its legislative
history.
B
The district court granted partial summary judgment to
FilmOn, agreeing with it that it qualified as a “cable system”
and was therefore potentially entitled to a compulsory license.
The district court based its conclusion on what it took to be
the plain meaning of § 111, as well as the Supreme Court’s
Aereo decision, which had analogized Internet-based
retransmission services to cable companies in the course of
deciding that Internet retransmissions count as
“performances” under the Act’s Transmit Clause, 17 U.S.C.
§ 101.
FOX TELEVISION STATIONS V. AEREOKILLER 9
Recognizing that its ruling “involve[s] a controlling
question of law as to which there is substantial ground for
difference of opinion,” however, the district court authorized
an immediate appeal from its decision. We granted Fox’s
petition for permission to appeal.1
II
“We review de novo both the district court’s grant of
summary judgment and its holdings on questions of statutory
interpretation.” Phoenix Mem’l Hosp. v. Sebelius, 622 F.3d
1219, 1224 (9th Cir. 2010). But before turning to the parties’
interpretations of § 111, it is crucial to point out that we do
not confront §111’s compulsory licensing scheme on a blank
slate, because there is an agency interpretation in the
background. The Copyright Office—the agency charged with
implementing the Copyright Act—has for many years
maintained that Internet-based retransmission services are not
“cable systems” and hence are not eligible for compulsory
licenses under § 111. Thus, when FilmOn attempted to pay
the government-prescribed fee for retransmitting copyrighted
1
As of this writing, at least seven federal courts have weighed in on
whether Internet-based retransmission services count as “cable systems”
under § 111. The district court here is the only one to conclude that they
do. A panel of the Second Circuit unanimously said no. WPIX, Inc. v. ivi,
Inc., 691 F.3d 275, 276 (2d Cir. 2012) (ivi II ). So have five district
courts: three in the Southern District of New York, one in the District for
the District of Columbia, and one in the Northern District of Illinois.
WPIX, Inc. v. ivi, Inc., 765 F. Supp. 2d 594, 600 (S.D.N.Y. 2011) (ivi I);
Fox Television Stations, Inc. v. FilmOn X LLC, 150 F. Supp. 3d 1, 7
(D.D.C. 2015); Filmon X, LLC v. Window to the World Commc’ns, Inc.,
No. 13 C 8451, 2016 WL 1161276, at *7 (N.D. Ill. Mar. 23, 2016); CBS
Broad. Inc. v. FilmOn.com, Inc., No. 10 CIV. 7532 NRB, 2014 WL
3702568, at *4 (S.D.N.Y. July 24, 2014); Am. Broad. Cos., Inc. v. Aereo,
Inc., No. 12-CV-1540, 2014 WL 5393867, at *3 (S.D.N.Y. Oct. 23, 2014).
10 FOX TELEVISION STATIONS V. AEREOKILLER
broadcast programming, the Office refused to accept
FilmOn’s filings, citing its position that Internet-based
retransmission services are not covered by § 111.
Fox and FilmOn each claim that the plain meaning of
§ 111 resolves this case in its favor. We will first discuss
Fox’s interpretation, then FilmOn’s, and only then—if we
conclude that the meaning of § 111 is ambiguous on the
question presented—will we consider the views of the
Copyright Office.
III
A
Fox maintains that § 111’s “plain text makes clear that the
relevant ‘facility’ comprises the entire retransmission
service—both the service’s means of receiving broadcast
signals and its means of making secondary transmissions to
the paying subscribers.” The Copyright Office has not
endorsed this interpretation. Nevertheless, under Fox’s
reading, FilmOn would necessarily be excluded from § 111’s
definition of “cable system” because FilmOn retransmits
broadcast signals over the Internet, and yet the Internet “is in
no sense under [its] ownership or control.” Indeed, FilmOn
concedes that it “uses a communications channel beyond its
facility” to make secondary transmissions. “That concession,”
says Fox, “should decide this case.”
Fox’s theory is not implausible. As Fox points out, and
as FilmOn does not dispute, “[a] traditional cable system is a
‘facility’ in this sense: It . . . retransmits [broadcast] signals
directly to its subscribers over a transmission path fully
within its control.” Nevertheless, we cannot conclude that the
FOX TELEVISION STATIONS V. AEREOKILLER 11
statute compels the conclusion that to qualify as a “cable
system,” a retransmission service must encompass or have
control over the means it uses to transmit material to paying
subscribers.
The most important difficulty with Fox’s interpretation is
that it finds insufficient support in the text of the statute.
Recall the relevant language: to be a “cable system,” a facility
must “make[] secondary transmissions of [broadcast] signals
or programs by wires, cables, microwave, or other
communications channels.” 17 U.S.C. § 111(f)(3) (emphasis
added). Nothing in that language on its face compels the
conclusion that the facility must control the retransmission
medium—the wires, cables, microwaves, or other
communications channels—that it relies on to deliver its
retransmissions. Fox does not cite any specialized or
technical meaning, and as a matter of ordinary interpretation,
the text could certainly be read the other way. Cf. Black’s
Law Dictionary 182 (5th ed. 1979) (defining “by” as
“[t]hrough the means, act, agency, or instrumentality of”).
For instance, someone who deposits a letter in a mailbox
could certainly be said to “transmit” his letter “by mail,” even
though he does not control the mail system that actually
delivers his letter to its recipient. Likewise, it would be
reasonable to say that someone “makes a transmission” of
money “by wire” when he initiates an electronic funds
transfer through Western Union, even though he does not
have any possession or control over the wires that transport
his money to its destination. (Indeed, the British soldiers
Paul Revere warned of were certainly making their advance
“by sea,” even though they in no sense controlled the Charles
River. Henry Wadsworth Longfellow, The Landlord’s Tale:
Paul Revere’s Ride, reprinted in Henry Wadsworth
12 FOX TELEVISION STATIONS V. AEREOKILLER
Longfellow: Poems and Other Writings 362, 362 (J.D.
McClatchy ed., 2000).)
In addition, § 111(a)(3) specifically discusses a scenario
in which one entity selects the content or recipients of a
secondary transmission, while a different entity supplies the
communications channel. According to that provision, a
“carrier” who “provid[es] wires, cables, or other
communications channels for the use of others” is not liable
for copyright infringement, while the upstream entity who
exercises “control over the content or selection of the primary
transmission or over the particular recipients of the secondary
transmission” may be liable. 17 U.S.C. § 111(a)(3). Section
111(a)(3), therefore, suggests that a facility may be said to
make secondary transmissions even if it does not exercise
ownership or control over the communications channel it
uses. If that is true, then FilmOn’s lack of ownership or
control over the Internet does not necessarily exclude it from
the class of facilities that “make[] secondary transmissions
. . . by wires, cables, microwave, or other communications
channels.” Id. § 111(f)(3).
B
Although Fox’s plain-meaning construction has not
convinced us, Fox can prevail if we defer to the views of the
Copyright Office. FilmOn urges us not to do so because,
FilmOn insists, the plain meaning of § 111 supports its
position. FilmOn strives mightily to demonstrate that the
plain meaning of § 111 unambiguously entitles it to a
compulsory license.
FilmOn first argues that § 111 “should be interpreted in
a technology agnostic manner.” FilmOn would have us read
FOX TELEVISION STATIONS V. AEREOKILLER 13
§ 111 as making compulsory licenses available to any facility
that retransmits broadcast signals or programming, no matter
its technological features or characteristics. That position is
a poor fit with § 111’s text and structure. First of all, if
Congress had intended § 111 to service the entire secondary
transmission community, doling out statutory licenses
without regard to the technological makeup of its members,
it would have been easy enough for Congress to say so (and
in fact, Congress came very close to doing just that in the
Transmit Clause, 17 U.S.C. § 101, as we discuss in the next
paragraph). Instead, Congress specified that § 111 applies
only to “cable systems,” and it defined “cable system” in a
detailed, if arguably ambiguous, way. Second, and relatedly,
if Congress meant § 111 to sweep in secondary transmission
services with indifference to their technological profile, then
it was strange for Congress to have provided separate
compulsory license provisions—§§ 119 and 122—for
broadcast retransmissions by satellite carriers. 17 U.S.C.
§§ 119, 122. The way to prevent discrimination on the basis
of technology, one might say, is to stop discriminating on the
basis of technology. Congress chose a different course.
Undeterred, FilmOn relies on the Supreme Court’s recent
decision in Aereo, which, FilmOn insists, “recognized section
111’s technology agnosticism.” But Aereo did nothing of the
sort. Aereo dealt with an altogether different provision of the
Copyright Act, the Transmit Clause, which defines the scope
of a copyright holder’s exclusive right by delineating the
class of activities that count as public performances and
hence infringe such right. See 17 U.S.C. § 101.
Significantly, the Transmit Clause refers in sweeping terms
to transmissions or communications made “by means of any
device or process,” and broadly defined “device” and
“process” to mean “one now known or later developed.”
14 FOX TELEVISION STATIONS V. AEREOKILLER
17 U.S.C. § 101 (emphasis added). The glaring textual
differences between § 101 and § 111 render the Aereo
decision of very little help to FilmOn’s plain-meaning
argument. Moreover, it would be perfectly coherent to pair
a broad reading of the Transmit Clause with a narrow reading
of the compulsory license provision, insofar as both such
readings would work in tandem to bolster the property
interests of copyright holders. Nothing in § 111 or Aereo
makes such a reading unreasonable.
We also cannot accept FilmOn’s assertion that it clearly
satisfies § 111’s requirement that a cable system make
secondary transmissions by “wires, cables, microwave, or
other communications channels.” 17 U.S.C. § 111(f)(3)
(emphasis added). It is far from clear whether the Internet
counts as one of the “other communications channels”
envisioned by § 111. For instance, Fox’s expert explained
that “a communications channel in electrical engineering
terms has the characteristics set forth by Claude Shannon in
his seminal paper, ‘Communication In The Presence of
Noise.’ The defining characteristics of a communications
channel are bandwidth, noise and throughput. The Internet is
not a communications channel.”2
Moreover, it would be perfectly reasonable to interpret
“other communications channels” according to the ejusdem
generis canon, which instructs that “when a statute sets out a
2
Strikingly, FilmOn also relies on the work of Claude Shannon, but
offers its own more favorable, but still highly technical, interpretation of
“communications channel.” Far from illuminating § 111’s plain meaning,
however, FilmOn’s decision to serve up a rival technical definition
suggests that this is an issue better left to an expert agency than a federal
court.
FOX TELEVISION STATIONS V. AEREOKILLER 15
series of specific items ending with a general term, that
general term is confined to covering subjects comparable to
the specifics it follows.” Hall St. Associates, L.L.C. v. Mattel,
Inc., 552 U.S. 576, 586 (2008). Invoking such canon, one
could reasonably conclude that the “other communications
channels” must share characteristics such as bandwidth,
throughput, and noise; alternatively, one could conclude, as
the Copyright Office does, that such channels must be
“inherently localized transmission media of limited
availability.” Either interpretation would imply that the
Internet is not an “other communications channel” under
§ 111. We cannot conclude that § 111 unambiguously
requires otherwise.
Nor can we conclude that the Copyright Act’s broad
purposes compel the conclusion that Internet-based
retransmission services are eligible for compulsory licenses
under § 111. Rather, we see powerful arguments that such a
reading could very well undermine the balance of interests
Congress attempted to strike when it designed § 111. That is
especially so when § 111 is viewed in the context of its
enactment.
In brief, when Congress passed the Copyright Act of
1976, it overturned two earlier Supreme Court decisions
which had held that cable systems were not liable for
copyright infringement on the theory that they did not
actually “perform” the works they retransmitted at all.
Teleprompter Corp. v. Columbia Broad. Sys., Inc., 415 U.S.
394, 408 (1974); Fortnightly Corp. v. United Artists
Television, 392 U.S. 390, 399 (1968). Congress therefore
acted to restore a measure of protection to copyright owners.
At the same time, however, Congress recognized that cable
systems served an important public good, by enabling
16 FOX TELEVISION STATIONS V. AEREOKILLER
geographically distant and isolated communities to receive
over-the-air broadcasts that would otherwise not reach them.
But in 1976 the cable industry was a fledgling one; cable
systems had little market power and little ability to overcome
the considerable transaction costs they would incur if they
had to negotiate individual licenses directly with copyright
owners. Congress responded to these economic conditions by
enacting § 111, which relieved cable systems of the need to
sit down with every copyright holder before retransmitting
their copyrighted broadcast works. Section 111 also helped
protect the infrastructure investments cable systems have
undertaken in the years prior to the Act. And the broadcast
companies and copyright owners benefitted to some extent as
well, insofar as they could now reach viewers they would not
otherwise have been able to access. Fundamentally, however,
§ 111 was Congress’s attempt to balance the socially useful
role cable systems had come to play, on the one hand, against
the property interests and creative incentives of copyright
holders, on the other.
One could reasonably conclude that extending § 111 to
Internet-based retransmission services would not further, and
might in fact jeopardize, the values just described. For one,
cable systems serve limited geographic communities, but an
Internet-based service has no geographic boundary—it can
retransmit works across the globe instantaneously—meaning
that Internet-based retransmission poses a more serious threat
to the value and integrity of copyrighted works. Such threat
is exacerbated insofar as Internet retransmissions are more
vulnerable than traditional cable to unauthorized copying and
other acts of piracy. For another, many copyright owners are
capable of transmitting their works over the Internet on their
own; they do not need to rely on third parties to do so, as they
had to rely on cable companies if they wanted to reach the
FOX TELEVISION STATIONS V. AEREOKILLER 17
isolated, distant communities cable systems traditionally
served. Relatedly, compared to cable systems and satellite
carriers, Internet-based retransmission services have not
needed to make the same sort of investments in a delivery
platform infrastructure. Finally, there is no evidence that
Internet-based services lack market power or face prohibitive
transaction costs of the sort that justified the compulsory
license for cable systems.
To be sure, we agree with FilmOn that there are important
values on its side of the equation as well. Still, our
conclusion from this discussion is a predictable one: the array
of competing interests at stake does not unambiguously
counsel for or against a broad reading of § 111.
Additionally, throughout its brief FilmOn invokes the
statute’s legislative history. Unsurprisingly, however, there
is plenty of legislative history to go around, as Fox and the
Copyright Office make extensive use of it as well. At best,
we think the legislative history is a wash; it certainly does not
compel the conclusion that § 111 must be interpreted to be
“technology agnostic,” or that Internet-based retransmission
services must be deemed “cable systems.” To the extent the
legislative history provides relevant evidence of § 111’s
meaning, we would defer to the Copyright Office’s
interpretation of it, seeing as the Copyright Office has a much
more intimate relationship with Congress and is
institutionally better equipped than we are to sift through and
to make sense of the vast and heterogeneous expanse that is
the Act’s legislative history.
Finally, we note two additional reasons to reject FilmOn’s
argument that § 111 must be read to encompass Internet-
based retransmission services.
18 FOX TELEVISION STATIONS V. AEREOKILLER
As courts have explained in the past, compulsory licenses
represent a “limited exception to the copyright holder’s
exclusive right to decide who shall make use of his [work],”
and courts should not “expand the scope of the compulsory
license provision beyond what Congress intended . . . nor
interpret it in such a way as to frustrate that purpose.” Fame
Publishing Co. v. Ala. Custom Tape, Inc., 507 F.2d 667, 670
(5th Cir. 1975). Such canon supports a narrow construction
of § 111.
Additionally, as Fox points out, interpreting § 111 so as
to include Internet-based retransmission services would risk
putting the United States in violation of certain of its treaty
obligations. An age-old canon of construction instructs that
“an act of Congress ought never to be construed to violate the
law of nations if any other possible construction remains.”
Murray v. Schooner Charming Betsy, 6 U.S. 64, 118 (1804).
FilmOn does not have a satisfactory answer to this argument.
For the foregoing reasons, we cannot accept FilmOn’s
argument that § 111 must be read in such a way as to make
Internet-based retransmission services eligible for
compulsory licenses. All of that being said, however, we
would not go so far as to conclude that it would be clearly
impermissible to say that FilmOn qualifies for a compulsory
license under § 111. The text of § 111 is written in broad
terms, and both sides can make plausible arguments about the
statute’s purposes and legislative history. Hence, although
we do not believe the interpretive scales are in equipoise, we
do not foreclose the possibility that the statute could
reasonably be read to include Internet-based retransmission
services.
IV
FOX TELEVISION STATIONS V. AEREOKILLER 19
Because the statute does not speak clearly to the precise
question before us, we must decide how much weight to give
the views of the Copyright Office. The Copyright Office has
published its views on the meaning of § 111 through a few
different channels. We group them into two broad categories.
First, in 1992 and again in 1997 the Office engaged in
notice-and-comment rulemaking in order to decide whether
burgeoning retransmission technologies—specifically,
satellite and microwave retransmission systems—could be
classified as “cable systems” under § 111. The 1992 and
1997 rulemakings did not purport to consider Internet-based
retransmission services. In the final rules’ preambles,
however, the Office stated broadly “that a provider of
broadcast signals [must] be an inherently localized
transmission media of limited availability to qualify as a
cable system.” Cable Compulsory Licenses: Definition of
Cable Systems, 62 Fed. Reg. 18,705-02, 18,707 (April 17,
1997) (codified at 37 C.F.R. pt. 201); see also Cable
Compulsory License; Definition of Cable System, 57 Fed.
Reg. 3284-01, 3292 (Jan. 29, 1992) (codified at 37 C.F.R. pt.
201) (“Examination of the overall operation of section 111
proves that the compulsory license applies only to localized
retransmission services.”). Everyone acknowledges that the
foregoing interpretation of “cable system” would rule out
Internet-based retransmission services like FilmOn. But the
parties disagree sharply about whether such interpretation
should have any bearing on our analysis.
That brings us to the second batch of Copyright Office
interpretations relevant to this litigation. Since 1997, the
Office has on at least four occasions specifically and
unequivocally said that, in its view, Internet-based
retransmission services are not “cable systems” under § 111,
20 FOX TELEVISION STATIONS V. AEREOKILLER
but it has not done so in connection with any rulemaking.
Instead, the Office has communicated its position largely
through official reports and testimony before Congress.
A
The first question is whether Chevron or Skidmore
provides the proper framework to structure our analysis.3 The
parties debate this issue at length. It has divided our
colleagues as well: while the Second Circuit said Chevron
deference is appropriate, ivi II, 691 F.3d at 279, district courts
in the Southern District of New York, the District of
Columbia, and the Northern District of Illinois all applied the
less deferential Skidmore framework instead, ivi I, 765 F.
Supp. 2d at 604–05; Fox Television Stations, 150 F. Supp. 3d
at 27; Window to the World Commc’ns, 2016 WL 1161276,
at *12. Notably, each of the courts applying Skidmore had no
trouble accepting the Office’s position when all was said and
done.
3
Under Chevron, “[w]hen a court reviews an agency’s construction
of the statute which it administers, it is confronted with two questions.”
Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837, 842
(1984). First, we must determine “whether Congress has directly spoken
to the precise question at issue.” Id. We have already concluded that
Congress has not done so. Our second question then becomes merely
“whether the agency’s answer is based on a permissible construction of
the statute.” Id. at 843.
The Skidmore framework is less deferential. Under Skidmore, the
weight we give to an agency interpretation “will depend upon the
thoroughness evident in its consideration, the validity of its reasoning, its
consistency with earlier and later pronouncements, and all those factors
which give it power to persuade, if lacking power to control.” Skidmore
v. Swift & Co., 323 U.S. 134, 140 (1944).
FOX TELEVISION STATIONS V. AEREOKILLER 21
To resolve this issue, we would be required to rule on
constitutional questions that could have outsized
consequences relative to this case—such as determining
whether the Library of Congress is a legislative or executive
agency.4 However, it is clear the Copyright Office is entitled
to at least Skidmore deference. E.g., Alaska Stock, LLC v.
Houghton Mifflin Harcourt Pub. Co., 747 F.3d 673, 684–85
(9th Cir. 2014) (“[W]e defer to the Copyright Office’s views
. . . to the extent that those interpretations have the power to
persuade.”). And, whether Chevron or Skidmore applies
ultimately does not affect the conclusion we reach. We
therefore adhere to the “well established principle . . . [that]
the Court will not decide a constitutional question if there is
some other ground upon which to dispose of the case” and
will proceed under the Skidmore framework. See Bond v.
U.S., 134 S. Ct. 2077, 2087 (2014) (citing Escambia County
v. McMillan, 466 U.S. 48, 51 (1984) (per curiam)).
B
Under Skidmore, and having already determined that the
meaning of § 111 is ambiguous on the precise question before
4
The Copyright Office is housed within the Library of Congress, and
it is not clear whether the Library of Congress is part of the executive or
legislative branch. Compare U.S. v. Brooks, 945 F. Supp. 830, 834 (E.D.
Pa. 1996) (“[T]he Copyright Office is part of the legislative branch.”),
with Intercollegiate Broad. Sys., Inc. v. Copyright Royalty Bd., 684 F.3d
1332, 1341–42 (D.C. Cir. 2012) (discussing why the Library of Congress
“is undoubtedly a ‘component of the Executive Branch’”). If the Library
of Congress is part of the legislative branch, then the Librarian’s “power
to appoint all of the officers who execute the copyright laws” may run
afoul of the Appointments Clause of the Constitution. See John Duffy et
al., Copyright’s Constitutional Chameleon, Concurring Opinions (May 17,
2013), https://concurringopinions.com/archives/2013/05/copyrights-
constitutional-chameleon.html#more-74811.
22 FOX TELEVISION STATIONS V. AEREOKILLER
us, we must now ask whether the Copyright Office’s
interpretation is persuasive and reasonable. To do so we
review “the thoroughness evident in its consideration, the
validity of its reasoning, [and] its consistency with earlier and
later pronouncements.” U.S. v. Mead Corp., 533 U.S. 218,
228 (2001) (citing Skidmore, 323 U.S. at 140).
First, the Office’s decision to reject Internet-based
retransmission services because they do not use a localized
retransmission medium finds sufficient support in the text,
structure, and basic purposes of the Copyright Act. Such
interpretation aligns with § 111’s many instances of location-
sensitive language, including “headends,” 17 U.S.C.
§ 111(f)(3), “contiguous communities,” id., and “distant
signal equivalent,” id. §§ 111(d)(1)(B)–(C), (d)(1)(E)–(F),
(f)(5). As the Office points out—and as FilmOn does not
dispute—such references “would have no meaning when
applied to . . . nationwide retransmission facilities.” 56 Fed.
Reg. at 31,588. Nor does FilmOn dispute the Office’s claim
that “at the time Congress created the cable compulsory
license, the FCC regulated the cable industry as a highly
localized medium of limited availability, suggesting that
Congress, cognizant of the FCC’s regulations and the market
realities, fashioned a compulsory license with a local rather
than a national scope.” 62 Fed. Reg. at 18,707.
Furthermore, confining “cable systems” to localized
retransmission media is a sensible way to construe the phrase
“other communications channels” so that it does not sweep in
every possible retransmission technology. The Office’s
position is not rigidly originalist, as its ability to
accommodate Satellite Master Antenna Television systems
demonstrates. Rather, it is a plausible attempt to maintain the
balance Congress struck between the public’s interest in ever-
FOX TELEVISION STATIONS V. AEREOKILLER 23
improved access to broadcast television and the property
rights of copyright holders. “The interpretation makes
considerable sense in terms of the statute’s basic objectives,”
Barnhart, 535 U.S. at 219, as well as its text.
The Office has maintained a consistent position on this
issue since it first expressed its views in 1992. 57 Fed. Reg.
at 3292; 62 Fed. Reg. at 18,707. In articulating its position
the agency has consistently referenced the statute’s text,
structure, and legislative history. E.g., 57 Fed. Reg. at 3292;
see also id. at 3290 (endorsing the view that “the terms of
section 111, when considered as a whole, make it obvious
that the license is directed to localized transmission services,”
and that § 111 “do[es] not have any application to a
nationwide retransmission service such as satellite carriers.”).
Since 1997, the Office has on at least four occasions
explicitly concluded that Internet-based retransmission
services are not “cable systems” under § 111.
Lest there be any doubt, we note that for years Congress
has indisputably been aware of the Office’s position that
Internet-based services are ineligible under § 111, and yet
“Congress has frequently amended or reenacted the relevant
provisions without change.” Barnhart, 535 U.S. at 220. As
the district court for the District of Columbia recounted:
Congress has been fully aware of
the Copyright Office’s longstanding
interpretation. Despite this awareness,
Congress has neither amended the text of
§ 111 nor enacted a separate compulsory-
licensing scheme to include Internet-based
retransmission services. However, Congress
has repeatedly amended the statute in other
24 FOX TELEVISION STATIONS V. AEREOKILLER
respects. For example, it amended the cable
system definition to include the term
‘microwave’ and enacted the licensing
scheme for satellite providers. As recently as
2014, . . . Congress amended the Copyright
Act without rejecting or altering the Copyright
Office’s interpretation.
Fox Television Stations, 150 F. Supp. 3d at 26–27 (internal
citations omitted); see also ivi I, 765 F. Supp. 2d at 616
(same). “These circumstances provide further evidence—if
more is needed—that Congress intended the Agency’s
interpretation, or at least understood the interpretation as
statutorily permissible.” Barnhart, 535 U.S. at 220; see also
Greenhorn Farms v. Espy, 39 F.3d 963, 965 (9th Cir. 1994).5
The Office’s position is longstanding, consistently held,
and was arrived at after careful consideration; and it
addresses a complex question important to the administration
of the Copyright Act. Not only that, but Congress has
effectively acquiesced in it. We are persuaded that all of this
more than suffices under Skidmore. See Mead, 533 U.S. at
228.
5
Similarly, when the Office denied satellite carriers a § 111 license
on grounds that they do not use a localized retransmission medium,
Congress responded by enacting a new compulsory license provision in
§ 119. By contrast, when the Office denied Multichannel Multipoint
Distribution Service (“MMDS”) a § 111 license—even though MMDS
comports with the localized-retransmission requirement, see 57 Fed. Reg.
at 3293–94—Congress responded by amending § 111. Such differential
treatment maps onto the Office’s view that § 111 embraces only those
retransmission services that utilize inherently localized media.
FOX TELEVISION STATIONS V. AEREOKILLER 25
V
FilmOn and other Internet-based retransmission services
are neither clearly eligible nor clearly ineligible for the
compulsory license § 111 makes available to “cable systems.”
The Copyright Office says they are not eligible. Because the
Office’s views are persuasive, and because they are
reasonable, we defer to them. The judgment of the district
court is therefore
REVERSED.