Spanski Enterprises, Inc. v. Telewizja Polska, S.A. ( 2018 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 7, 2017 Decided March 2, 2018
No. 17-7051
SPANSKI ENTERPRISES, INC.,
APPELLEE
v.
TELEWIZJA POLSKA, S.A.,
APPELLANT
Appeal from the United States District Court
for the District of Columbia
(No. 1:12-cv-00957)
Andrew L. Deutsch argued the cause for appellant. With
him on the briefs was Mary E. Gately.
Jonathan Zavin argued the cause and filed the briefs for
appellee. Walter E. Steimel Jr. entered an appearance.
Megan Barbero, Attorney, U.S. Department of Justice,
argued the cause for amicus curiae United States of America
in support of appellee. With her on the brief were Mark R.
Freeman, Attorney, and Sarang Vijay Damle, General
Counsel, U.S. Copyright Office.
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Thomas G. Hentoff and Connor S. Sullivan were on the
brief for amici curiae Disney Enterprises, Inc., et al. in support
of appellee.
Before: TATEL, GRIFFITH, and WILKINS, Circuit Judges.
Opinion for the Court filed by Circuit Judge TATEL.
TATEL, Circuit Judge: When the owner of a foreign
website, acting abroad, uploads video content in which another
party holds exclusive United States public performance rights
under the Copyright Act and then directs the uploaded content
to United States viewers upon their request, does it commit an
infringing “performance” under the Act? If so, is it protected
from liability by the principle—unquestioned here—that the
Act has no extraterritorial application? Answering these
questions “yes” and “no,” the district court concluded that
Polish broadcaster Telewizja Polska was, by transmitting fifty-
one episodes of certain Polish-language television programs
into the United States via its online video-on-demand system,
liable for infringing copyrights held by a company, Spanski
Enterprises, Inc., that enjoys exclusive North and South
American performance rights in the episodes. Telewizja Polska
appeals this determination, as well as the district court’s
imposition of statutory damages of $60,000 per episode, for a
total of $3,060,000. For the reasons that follow, we affirm as to
both liability and damages.
I.
Appellant Telewizja Polska, S.A. (“TV Polska”), Poland’s
national public television broadcaster, owns, operates, and
creates content for several Polish-language television channels,
including one now called TVP Polonia. TV Polska entered into
a licensing agreement with Canadian corporation Spanski
Enterprises, Inc. (“Spanski”), appellee here, granting it North
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and South American broadcasting rights in TVP Polonia
content. Following a legal dispute over the scope of these
rights, the parties signed a 2009 settlement agreement
establishing that Spanski has the exclusive right to perform
TVP Polonia content, including over the internet, in North and
South America.
In order to protect Spanski’s exclusive rights, TV Polska—
which makes its programming publicly available through a
video-on-demand feature on its website—employs technology
that prevents internet users in North and South America from
accessing TVP Polonia content though its website. Known as
geoblocking, this technology allows a website owner to
digitally embed territorial access restrictions into uploaded
content. When an internet-enabled device attempts to access
restricted content, the geoblocking system compares the
device’s unique internet protocol (IP) address to a third-party
database that reveals which IP addresses are associated with
which countries. If the device’s IP address is associated with a
country subject to restricted access, the device cannot access
the content.
Two groups of TV Polska employees are responsible for
ensuring that each episode uploaded to the website is
programmed to include the appropriate territorial restrictions.
The first group—the audiovisual technicians working in what
TV Polska calls its “Workflow System”—converts each
episode into one or more digital video formats in accordance
with episode-specific instructions they receive from the second
group, the program editors working in TV Polska’s “Content
Management System.” For example, such instructions might
direct a technician working on a particular episode to create one
format that is pay-per-view and one that is not or, as in this
case, to create only formats that are geoblocked from specified
countries. Even if a technician ignores an instruction to create
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a geoblocked format for a given episode in the Workflow
System, though, a device with an IP address associated with a
given country can access the episode only if the instructions
generated in the Content Management System also specify that
access from that country is permitted. In other words, an
episode is geoblocked either if the technicians working in the
Workflow System create only territorially restricted digital
formats of that episode or if the program editors assign the
episode a territorial restriction in the Content Management
System. During the period relevant here, the default territorial
access setting assigned to each TVP Polonia episode in the
Content Management System was “minus America,” meaning
that the episode would be automatically geoblocked from
devices with North or South American IP addresses unless a
program editor affirmatively selected a different instruction
from a drop-down menu, regardless of what the technicians did
in the Workflow System.
In late 2011, Spanski’s attorneys discovered that certain
TVP Polonia content was not properly geoblocked, leaving it
available to North and South American internet users through
TV Polska’s video-on-demand system. This content included
fifty-one individual episodes that Spanski had registered with
the United States Copyright Office and in which it held valid
and exclusive United States copyrights. From December 2011
to March 2012, Spanski’s attorneys and website developer,
between them, viewed each of these fifty-one episodes, at least
in part, on TV Polska’s website.
Spanski then sued TV Polska in federal district court,
asserting its exclusive right under the Copyright Act, 17 U.S.C.
§ 101 et seq., to “perform” the fifty-one episodes “publicly,”
id. § 106(4). Following a five-day bench trial, the district court
found that “the 51 episodes copyrighted by [Spanski] were
available and viewed in the [United States] via [TV Polska’s]
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website” during the period of infringement, see Spanski
Enterprises, Inc. v. Telewizja Polska S.A., 222 F. Supp. 3d 95,
105 (D.D.C. 2016), and that “[t]here [was] no evidence that a
failure in [TV Polska’s] geoblocking system” caused the
episodes to become available, id. at 108. Rather, the district
court found, the episodes became available in the United States
because “[TV Polska] employees took . . . volitional action[]”
by removing the episodes’ default “minus America” territorial
restriction in the Content Management System and creating
non-geoblocked digital formats of the episodes in the
Workflow System. Id. at 106.
Based largely on these findings, the district court held TV
Polska liable under the Copyright Act for infringing Spanski’s
exclusive United States performance rights in the fifty-one
episodes. Id. at 111–12. Observing that Spanski’s rights under
the Act were “not in dispute,” id. at 110, the court ruled that
even if “the Copyright Act requires volitional conduct by the
Defendant for direct infringement to have occurred,” id. at 112,
TV Polska had satisfied that requirement by streaming
copyrighted content to United States viewers through its
website, id. at 111–12. Finally, although assuming that the
Copyright Act imposes no liability for infringements that occur
abroad, the court concluded that the infringement here “was not
wholly extraterritorial” because the episodes at issue were
viewed within the United States. Id. at 112 n.3 (internal
quotation marks omitted).
With liability settled, the district court turned to the issue
of damages. Typically, an infringer’s per-work liability under
the Copyright Act’s statutory damages provision is capped at
$30,000, see 17 U.S.C. § 504(c)(1), but the cap increases to
$150,000 where the “infringement was committed willfully,”
id. § 504(c)(2). Here, the district court found, contrary to the
sworn denials of “[t]he person in charge of [TV Polska’s]
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geoblocking system,” that TV Polska technicians had created
episode formats that lacked geoblocking, Spanski Enterprises,
222 F. Supp. 3d at 106, saw “no evidence that a format could
be created accidentally,” id. at 107, and concluded that TV
Polska “acted willfully and intentionally to infringe [Spanski’s]
copyright,” id. at 106. Further bolstering its inference of intent,
the district court found that TV Polska had tried to cover its
tracks by abruptly deleting several of the episodes’ non-
geoblocked formats and then retrospectively altering certain
work logs, introduced as evidence, to give the incorrect
impression that the episodes had appeared exclusively in
geoblocked formats all along. Id. at 107–08.
Having thus established TV Polska’s eligibility for
increased statutory damages, the district court ordered it to pay
Spanski $60,000 per infringed episode, for a total of
$3,060,000. Spanski Enterprises, Inc. v. Telewizja Polska S.A.,
No. 12-cv-957, 2017 WL 598465, at *1 (D.D.C. Feb. 14,
2017). This substantial figure was appropriate, the court
concluded, because TV Polska’s violation was willful and in
need of deterrence, it had a “history of infringing [Spanski’s]
copyright,” its deletion of certain records from the relevant
period made it impossible to estimate Spanski’s actual
damages, and it had committed “egregious” manipulation of
the evidence. Id. at *2.
TV Polska appeals the district court’s conclusions as to
both liability and damages. “We review the district court’s
findings of fact for clear error, but resolve issues of law de
novo,” Massachusetts v. Microsoft Corp., 373 F.3d 1199, 1207
(D.C. Cir. 2004) (en banc) (citations omitted), and we review
the statutory damages award for abuse of discretion, see, e.g.,
Bryant v. Media Right Productions, Inc., 603 F.3d 135, 143 (2d
Cir. 2010); Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc.,
772 F.2d 505, 520 (9th Cir. 1985). The United States has filed
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an amicus brief in support of Spanski on the issue of liability,
as has a group of entertainment producers and distributors.
II.
Liability under the Copyright Act attaches where one party
infringes another’s valid copyright. See 17 U.S.C. § 504(a); see
also Feist Publications, Inc. v. Rural Telephone Service Co.,
499 U.S. 340, 361 (1991) (listing elements of liability as one
party’s “ownership of a valid copyright” and another party’s
infringing act). TV Polska contests neither the validity nor the
scope of Spanski’s rights under the Copyright Act, arguing
instead that the district court improperly concluded that it had
infringed those rights.
Before considering TV Polska’s legal claims, we address
its single challenge to the district court’s factual findings as to
its conduct, namely, that the court clearly erred in finding that
its employees “must have volitionally acted to remove
territorial restrictions from the 51 Episodes.” Appellant’s Br.
27. The only support it musters for this position, however, is
evidence that some of the episodes at issue had been uploaded
in both geoblocked and non-geoblocked formats and that
several of the non-geoblocked formats were created only after
the period of infringement. These isolated points are nowhere
near sufficient to undermine the district court’s considered
factual findings, which rested on record evidence that the fifty-
one episodes had been viewed in the United States and Canada
via the TV Polska website, Spanski Enterprises, 222 F. Supp.
3d at 103–05, that this could have occurred only if there was “a
failure of the geoblocking system[] or a volitional step by a [TV
Polska] employee to give access,” id. at 103, and that the record
contained “no evidence that a failure in [TV Polska’s]
geoblocking system caused the infringement,” id. at 108.
 8
TV Polska is left, then, with its argument that its conduct
did not constitute infringement as a matter of law. According
to TV Polska, maintaining a fully automated video-on-demand
service cannot constitute a copyright violation because the end
user, who ultimately selects which content to view, is alone
liable for any infringement. Alternatively, it argues that
because its conduct occurred exclusively in Poland, imposing
Copyright Act liability on the basis of that conduct would
amount to an impermissible extraterritorial application of the
Act. We consider these arguments in turn and, like the district
court, reject both.
A.
In support of its first argument—that the transmission of
copyrighted content through an online video-on-demand
system does not constitute infringement—TV Polska insists
that “[p]roof that a defendant’s alleged infringing conduct was
volitional is a clear requirement of any claim for direct
infringement,” Appellant’s Br. 24, and that such volitional
conduct is absent where, as here, a website owner “operates an
automatic content delivery system that is not itself infringing,
the user, not [the website owner], selects the content it will
view or receive and actuates the delivery system, and the user
request is not processed by [the website owner’s] employees,”
id. at 25.
This argument cannot be squared with the text of the
Copyright Act. Among the privileges a copyright holder enjoys
under the Act is the exclusive right “to perform [its]
copyrighted work publicly.” 17 U.S.C. § 106(4). To “perform”
an audiovisual work means “to show its images in any
sequence or to make the sounds accompanying it audible.” Id.
§ 101. To do so publicly means, as relevant, to “transmit or
otherwise communicate a performance or display of the work
. . . to the public, by means of any device or process, whether
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the members of the public capable of receiving the
performance or display receive it in the same place or in
separate places and at the same time or at different times.” Id.;
see also id. (“To ‘transmit’ a performance or display is to
communicate it by any device or process whereby images or
sounds are received beyond the place from which they are
sent.”). Nowhere does the Act state that a work so shown is
performed only if a third-party end user plays no role in the
showing. Here, because TV Polska “show[ed]” the fifty-one
copyrighted episodes “to the public” through its video-on-
demand system—“a[] device or process” that rendered
“members of the public capable of receiving the performance
. . . in separate places and . . . at different times,” id.—it has
violated Spanski’s undisputed public performance right.
Even if the statute’s text left any room for doubt, the
Supreme Court’s recent decision in American Broadcasting
Cos. v. Aereo, Inc., 134 S. Ct. 2498 (2014), confirms that TV
Polska has committed an infringing performance. In that case,
the Court held that Aereo, Inc., which ran a service that would,
at a user’s request, direct antennae to capture broadcast
television signals and retransmit them over the internet to the
user’s computer, id. at 2503, infringed the television
broadcasters’ public performance rights under the Copyright
Act, id. at 2511. In so holding, the Court relied on the Act’s
capacious definition of public performance—to reiterate, the
“transmi[ssion] . . . to the public” of a work’s “images in any
sequence,” 17 U.S.C. § 101—which Congress added in 1976
specifically to reject two prior Supreme Court decisions
holding that community antenna television systems (which,
like Aereo, captured signals from broadcasters and transmitted
them to end users) were insufficiently similar to traditional
broadcasters to publicly “perform” copyrighted material. See
Aereo, 134 S. Ct. at 2504–06. Under the Act’s post-1976
definition, the Court held, “both the broadcaster and the viewer
10
of a television program ‘perform,’ because they both show the
program’s images and make audible the program’s sounds.” Id.
at 2506. Likewise, the Court further observed, an intermediary
such as Aereo publicly performs even where its conduct
consists only of capturing and retransmitting a broadcast “in
automatic response” to an end user’s request. Id. at 2507.
Aereo thus forecloses TV Polska’s argument that the
automated nature of its video-on-demand system or the end
user’s role in selecting which content to access insulates it from
Copyright Act liability. Indeed, TV Polska played a more
active role in performing infringing content than did Aereo. If
an automated antenna system that, like Aereo, indiscriminately
retransmits third-party content upon a user’s request commits
an infringing performance where that content happens to be
under copyright, then a video-on-demand system, like TV
Polska’s, that transmits copyrighted episodes purposely
selected and uploaded by the system operator surely does the
same. Even the Aereo dissent recognized as much. See id. at
2513 (Scalia, J., dissenting) (“Video-on-demand services . . .
respond automatically to user input, but they differ in one
crucial respect: They choose the content . . . . That selection and
arrangement by the service provider constitutes a volitional act
directed to specific copyrighted works and thus serves as a
basis for direct liability.”).
TV Polska offers two reasons for distinguishing Aereo.
Neither is persuasive.
First, TV Polska points out that, unlike Aereo, which
transmitted third-party content, it transmitted only content that
it had itself created. But this distinction has no bearing on what
it means “to show” a work’s “images” to “the public,” 17
U.S.C. § 101, whatever the work’s origin. Moreover, TV
Polska makes no argument that Spanski’s status as licensee of
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the fifty-one episodes, rather than their creator, affects the
scope of its rights under the Copyright Act.
Next, TV Polska seems to suggest that Aereo’s
interpretation of the Copyright Act was a one-time deal, good
for that case only. In support, it emphasizes that in finding an
infringing performance, the Court relied on “Aereo’s
overwhelming likeness to the cable companies” targeted by the
amendments that introduced the Act’s public performance
definition. Aereo, 134 S. Ct. at 2507. And, it goes on, the Court
declined to opine on how that definition might apply “[i]n other
cases involving different kinds of service or technology
providers.” Id. This argument suffers from several fundamental
defects.
To begin with, as every first-year law student learns, a
judicial decision resolves only the case before it, so it is
unsurprising that the Court declined to hypothesize about how
its holding would apply to future cases. See Karl N. Llewellyn,
The Bramble Bush: The Classic Lectures on the Law and Law
School 39 (Oxford University Press 2008) (1930) (“The court
can decide only the particular dispute which is before it. . . .
When it speaks to the question before it, it announces law . . . .”
(italics omitted)). Such judicial restraint, though, hardly means
that Aereo’s holding has no applicability outside that case’s
narrow factual circumstances. As our first-year law student
also learns, judicial opinions establish precedential principles
that apply to materially similar factual scenarios arising in
future cases. See id. at 34 (“[T]he decision plus the opinion go
far to show what this court that speaks will do again upon like
facts . . . .”). In Aereo, after reviewing the Copyright Act’s
legislative history, the Court concluded that a viewer’s decision
to access an infringing television program did not relieve a
broadcaster from liability for “show[ing] the program’s images
and mak[ing] audible the program’s sounds.” Aereo, 134 S. Ct.
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at 2506. TV Polska offers no reason why this principle fails to
capture its conduct as well. Indeed, as we have just explained,
if there is an especially salient distinction between TV Polska’s
conduct and Aereo’s, it is that TV Polska, by selecting as well
as transmitting copyrighted content, played an even more
active role in broadcasting infringing performances than did
Aereo.
Undaunted, TV Polska argues that literal application of the
Copyright Act’s public performance definition would result in
virtually limitless liability. Of course, any website that allows
third parties to post content—say, YouTube, Facebook, or even
the comments section in the Washington Post online—has the
capacity to publicly show infringing content. And any internet
service provider—say, Comcast or AT&T—that merely allows
users to connect to the internet likewise has a hand in
communicating infringing performances to the public. Does
Twitter unwittingly commit infringement, for example,
whenever its users impermissibly post copyrighted images? Or
does T-Mobile commit infringement when it allows its
customers to access such posts?
Congress has already provided statutory protection against
some of these potential ramifications. See 17 U.S.C. § 512
(providing statutory defenses for service providers charged
with infringement). Several courts have likewise responded to
the risk of sweeping liability by requiring copyright plaintiffs
to establish “some element of volition” on the part of the
alleged infringer or some close causal nexus between the
alleged infringer’s conduct and the violation of the plaintiff’s
rights. Religious Technology Center v. Netcom On-Line
Communication Services, Inc., 907 F. Supp. 1361, 1370 (N.D.
Cal. 1995). Where adopted, this “volitional-conduct
requirement” protects website owners and internet service
providers that merely “serv[e] as . . . passive conduit[s] for
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copyrighted material.” BWP Media USA, Inc. v. T & S Software
Associates, Inc., 852 F.3d 436, 439 (5th Cir. 2017); see id. at
442 (no liability for defendant that “hosts the [online] forum on
which infringing content was posted” by others); Perfect 10,
Inc. v. Giganews, Inc., 847 F.3d 657, 668 (9th Cir. 2017) (no
liability for defendant whose “actions were akin to ‘passively
storing material at the direction of users in order to make that
material available to other users upon request’” (quoting
CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544, 555 (4th
Cir. 2004))); Parker v. Google, Inc., 242 F. App’x 833, 836–
37 (3d Cir. 2007) (no liability for defendant that maintained an
online bulletin board on which third parties posted infringing
content).
Our court has yet to decide whether to read such a
volitional conduct or proximate cause requirement into the
Copyright Act, and we need not do so today. TV Polska’s
conduct—“us[ing] its own equipment” to “allow[] [users] to
watch television programs, many of which are copyrighted,”
by transmitting content upon a user’s request, Aereo, 134 S. Ct.
at 2506—constitutes infringement under Aereo’s binding
authority, whatever the scope of any such requirement might
otherwise be.
Finally, TV Polska cites two Supreme Court cases, Sony
Corp. of America v. Universal City Studios, Inc., 464 U.S. 417
(1984), and Metro-Goldwyn-Mayer Studios Inc. v. Grokster,
Ltd., 545 U.S. 913 (2005), which, in its view, insulate it from
liability. But neither opinion has any clear relevance to this
case. In Sony and Grokster, copyright holders sought to impose
liability on the manufacturers or distributors of technology that
enabled third parties to commit infringement. Sony involved
the Betamax video tape recorder—for readers under thirty, a
device that allowed users to record a television program for
future viewing; Grokster involved certain peer-to-peer file-
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sharing software. In both cases, the Court concluded that
distributing a product that enables infringement “does not
constitute contributory infringement if the product is . . .
capable of substantial noninfringing uses,” Sony, 464 U.S. at
442, unless infringement is the product’s “principal object,”
Grokster, 545 U.S. at 926. According to TV Polska, its video-
on-demand system “is broadly capable of uses that do not
infringe any rights of [Spanski],” Appellant’s Br. 29, and was
not created principally to induce infringement. This argument
is beside the point. The district court did not hold TV Polska
liable for infringement merely because it maintained a video-
on-demand system. Rather, the court concluded—and we
agree—that TV Polska’s own use of this system to
communicate infringing performances amounted to actionable
conduct under the Copyright Act.
B.
This brings us to TV Polska’s argument that even if it did
infringe Spanski’s copyright, holding it liable for that
infringement would constitute an impermissible extraterritorial
application of the Act because it did nothing in the United
States. Whether an infringing performance that originates
abroad but that ultimately reaches viewers in the United States
can be actionable under the Copyright Act is a question of first
impression in the federal appellate courts.
The Supreme Court recently described “a two-step
framework for analyzing” whether a statutory violation that, at
least in part, takes place abroad gives rise to liability. RJR
Nabisco, Inc. v. European Community, 136 S. Ct. 2090, 2101
(2016). A court first asks “whether the statute gives a clear,
affirmative indication that it applies extraterritorially.” Id.
Here, the parties agree that the Copyright Act has no
extraterritorial application, and we assume they are correct. See
Tire Engineering & Distribution, LLC v. Shandong Linglong
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Rubber Co., 682 F.3d 292, 306 (4th Cir. 2012) (per curiam)
(“As a general matter, the Copyright Act is considered to have
no extraterritorial reach.”); Subafilms, Ltd. v. MGM-Pathe
Communications Co., 24 F.3d 1088, 1094 (9th Cir. 1994) (en
banc) (“[T]he copyright laws do not apply extraterritorially
. . . .”). We therefore move to the second step, which requires
us to determine whether this case, notwithstanding its
extraterritorial elements, “involves a permissible domestic
application” of the Copyright Act. RJR Nabisco, 136 S. Ct. at
2101. “[W]e do this,” the Court has explained, “by looking to
the statute’s ‘focus,’” id., described as “the objects of the
statute’s solicitude,” or what it is “that the statute seeks to
‘regulate’” or protect, Morrison v. National Australia Bank
Ltd., 561 U.S. 247, 267 (2010). “If the conduct relevant to the
statute’s focus occurred in the United States, then the case
involves a permissible domestic application even if other
conduct occurred abroad; but if the conduct relevant to the
focus occurred in a foreign country, then the case involves an
impermissible extraterritorial application regardless of any
other conduct that occurred in U.S. territory.” RJR Nabisco,
136 S. Ct. at 2101.
The Supreme Court recently modeled the “focus” inquiry
in Morrison v. National Australia Bank Ltd., 561 U.S. 247
(2010). There, the Court considered whether an Australian
bank could be held liable for securities fraud under the
Securities Exchange Act of 1934 for the overvaluation of its
shares—traded on no American exchange—stemming from
misrepresentations made by a Florida-based mortgage-
servicing company it had acquired. Id. at 251–53. After
determining that the relevant statutory provision had no
extraterritorial application, id. at 265, the Court asked whether
the fact that the alleged fraud derived from misrepresentations
made in the United States meant that the shareholders who had
brought the suit sought to apply the statute domestically, id. at
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266–70. Observing that the statute punished “only deceptive
conduct ‘in connection with the purchase or sale of any security
registered on a national securities exchange or any security not
so registered,’” id. at 266 (quoting 15 U.S.C. § 78j(b)), the
Court concluded that “[t]hose purchase-and-sale transactions
are the objects of the statute’s solicitude,” id. at 267.
Accordingly, “the focus of the Exchange Act is not upon the
place where the deception originated, but upon purchases and
sales of securities in the United States.” Id. at 266.
Guided by the Supreme Court’s methodology, we identify
the “conduct relevant to the [Copyright Act’s] focus,” RJR
Nabisco, 136 S. Ct. at 2101, by asking precisely what it is that
the Act regulates. The answer is clear: the Act grants copyright
holders several “exclusive rights”—among them, the right “to
perform [a] copyrighted work publicly,” 17 U.S.C. § 106(4)—
and effectuates those rights by prohibiting “infringement,” or
the “violat[ion]” of those “exclusive rights,” id. § 501. The
Copyright Act “focuses,” then, on policing infringement or, put
another way, on protecting the exclusivity of the rights it
guarantees. Here, although it was in Poland that TV Polska
uploaded and digitally formatted the fifty-one episodes, the
infringing performances—and consequent violation of
Spanski’s copyrights—occurred on the computer screens in the
United States on which the episodes’ “images” were
“show[n].” Id. § 101. Accordingly, because “the conduct
relevant to the statute’s focus occurred in the United States,”
this case “involves a permissible domestic application” of the
Copyright Act, “even if other conduct occurred abroad.” RJR
Nabisco, 136 S. Ct. at 2101.
Characterizing the statute’s focus differently, TV Polska
points to Aereo’s discussion of the Act’s 1976 amendments as
establishing that “the ‘focus’ of the Copyright Act’s public
performance provisions is prohibition of unauthorized
17
retransmissions by cable TV systems.” Reply Br. 16. TV
Polska misunderstands the “focus” inquiry: instead of asking
what components of an otherwise actionable statutory violation
must occur within the United States to bring it within the Act’s
domestic sweep, TV Polska rehashes its unsuccessful argument
as to what sort of conduct violates the Copyright Act in the first
place. Given our conclusion that TV Polska’s broadcasts would
have been actionable had they been entirely domestic, the
relevant question is whether the ultimate performance of those
broadcasts on computer screens in the United States was
“relevant to [the Copyright Act’s] focus.” RJR Nabisco, 136 S.
Ct. at 2101. TV Polska offers no reason to question our
understanding that it was.
Alternatively, TV Polska argues that even if the Copyright
Act’s focus includes, as we have concluded, the infringing
performance itself, Aereo establishes that its performance
occurred abroad. As TV Polska sees it, Aereo’s observation
that under the Act “both the broadcaster and the viewer of a
television program ‘perform’” that program, Aereo, 134 S. Ct.
at 2506, means that, in the context of an international
transmission, there are two performances—one by the
broadcaster at the foreign point of origin and one by the user at
the domestic point of reception. TV Polska overreads Aereo,
which asks only whether Aereo performed “when a subscriber
watche[d] a show using Aereo’s system.” Id. at 2504. Under
TV Polska’s reading, a broadcaster would commit an
infringing performance merely by transmitting a copyrighted
work into the void, regardless of whether those transmissions
ever result in the work’s “images” being “show[n]” to even a
single viewer. 17 U.S.C. § 101. Given that the Act defines
“perform” (in relevant part) to require such a showing, see id.,
we think Aereo is better read to establish only that a broadcaster
and a viewer can both be liable for the same performance, i.e.,
the infringing display of copyrighted images on the viewer’s
18
screen. In this case, the infringing performance occurred in the
United States.
Congress had good reason to allow domestic copyright
holders to enforce their rights against foreign broadcasters who
direct infringing performances into the United States. Given
the ease of transnational internet transmissions, a statutory
scheme that affords copyright holders no protection from such
broadcasters would leave the door open to widespread
infringement, rendering copyright in works capable of online
transmission largely nugatory.
In its amicus brief, the United States offers two examples
that helpfully illustrate this point. First, it points out that under
such a scheme, “large-scale criminal copyright pirates could
avoid United States copyright liability simply by locating their
servers outside the United States.” United States Br. 14.
Second, “television stations in San Diego and El Paso could
eliminate the need to obtain U.S. copyright licenses simply by
moving their broadcast antennae to Tijuana and Ciudad
Juarez.” Id. at 14–15. We agree with the United States that
“Congress could not have intended the public-performance
right to be susceptible to such ready evasion.” Id. at 15.
TV Polska offers little response to these troubling
consequences of its position, claiming only that foreign
enforcement authorities can address such cases. But nothing in
the Copyright Act even hints that Congress intended to rely on
the uncertain cooperation of foreign governments to ensure that
copyright holders are able to enjoy their exclusive statutory
rights while in the United States. Nor do we see any relevance
to the Supreme Court’s statement in RJR Nabisco, Inc. v.
European Community, 136 S. Ct. 2090 (2016), that “a potential
for international controversy . . . militates against recognizing
foreign-injury claims without clear direction from Congress,”
19
id. at 2107; see also Reply Br. 18. The violation of a copyright
holder’s exclusive performance right inside the United States,
after all, represents a domestic injury.
TV Polska argues that even if the government’s concerns
are well taken, they lose their force in situations where, as here,
the foreign infringers “are lawful copyright owners in their
home countries,” Reply Br. 22, or where, again as here, the
domestic copyright holder is protected by contract and so need
not invoke statutory law to protect its interests, id. at 24. TV
Polska, however, offers no legal grounding for these proposed
distinctions. Nor do we see any logical connection between the
scope of a broadcaster and copyright holder’s respective rights
and the question of whether the direction of an infringing
performance into the United States from abroad is domestic or
extraterritorial.
Attempting to turn the table on the United States, TV
Polska argues that treating its conduct as a domestic violation
of the Copyright Act would leave any casual internet user
anywhere in the world open to liability for uploading
copyrighted content to a foreign website whenever anyone in
the United States happens to stumble upon it. Indeed, given that
“intent is not an element of [copyright] infringement,” Costello
Publishing Co. v. Rotelle, 670 F.2d 1035, 1044 (D.C. Cir.
1981), TV Polska argues, liability could attach where, even
though a foreign website owner conscientiously geoblocks the
copyrighted material it posts to its website, an American user
manages to circumvent the territorial restrictions and views the
content domestically. Although we have no occasion to
prejudge such situations, we note that foreign defendants in
such cases may well have alternative defenses against liability,
such as a lack of proximate causation between the foreign
conduct and the domestic performance or an American court’s
lack of personal jurisdiction over the foreign infringer. See,
20
e.g., Rano v. Sipa Press, Inc., 987 F.2d 580, 588 (9th Cir. 1993)
(rejecting view of personal jurisdiction that would “render . . .
foreign owners of art who sell their products to publications[]
amenable to personal jurisdiction [on copyright claims] in
every state in which their art eventually is displayed”). For
present purposes, we need hold only that a foreign broadcaster
that, as here, directs infringing performances into the United
States from abroad commits a domestic violation of the
Copyright Act.
Finally, the decisions TV Polska cites for the proposition
that “acts committed abroad cannot form the basis for a U.S.
copyright infringement suit,” Appellant’s Br. 33, hold nothing
of the sort. Instead, they indicate only that infringements that,
unlike the performances at issue here, occur abroad cannot in
most cases generate Copyright Act liability. See Subafilms, 24
F.3d at 1098 (extraterritoriality doctrine barred liability for
distribution of allegedly infringing videos abroad); Luar Music
Corp. v. Universal Music Group, Inc., 861 F. Supp. 2d 30, 38–
40 (D.P.R. 2012) (extraterritoriality doctrine barred liability for
releasing an allegedly infringing sound recording abroad).
Indeed, Spanski and the United States point to multiple district
court decisions holding, as do we, that an infringing
performance that originates abroad but terminates in the United
States constitutes a domestic Copyright Act violation. See, e.g.,
Crunchyroll, Inc. v. Pledge, No. C 11-2334, 2014 WL
1347492, at *17 (N.D. Cal. Mar. 31, 2014) (defendant who
copied and uploaded copyrighted television episodes while in
United Kingdom could be liable where those episodes were
transmitted to United States viewers); United Feature
Syndicate, Inc. v. Miller Features Syndicate, Inc., 216 F. Supp.
2d 198, 225 (S.D.N.Y. 2002) (rejecting Canadian website
owner’s extraterritoriality defense because infringing material
posted on the site was viewed in the United States).
21
In passing the Copyright Act, Congress bestowed on
copyright holders a specific set of rights. Holding foreign
actors liable for conduct that results in the domestic
infringement of those rights effectuates the Act’s guarantees
and fully coheres with principles of extraterritoriality as
articulated by the Supreme Court.
III.
Having concluded that the district court properly held TV
Polska liable for copyright infringement, we turn to TV
Polska’s challenges to the $3,060,000 damages award. Recall
that the district court found TV Polska eligible for statutory
damages of $60,000 per episode because its infringement was
“willful,” and that it based the total damages award on its
finding that TV Polska infringed all fifty-one episodes. Spanski
Enterprises, 2017 WL 598465, at *2. TV Polska challenges
both the willfulness finding and the finding as to the number of
episodes it infringed. Mindful that “an appellant seeking
reversal of a trial court’s findings of fact in a bench trial faces
a daunting task,” Overby v. National Ass’n of Letter Carriers,
595 F.3d 1290, 1293 (D.C. Cir. 2010), prevailing only if no
reasonable factfinder could have reached the district court’s
conclusion, id. at 1294, we reject both challenges.
Willfulness
TV Polska attempts to evade clear-error review by arguing
that a de novo standard ought to apply because the Federal
Circuit employs such a standard when reviewing a district
court’s willfulness finding in patent infringement cases. See
Bard Peripheral Vascular, Inc. v. W.L. Gore & Associates,
Inc., 682 F.3d 1003, 1006–07 (Fed. Cir. 2012). TV Polska
overlooks that the Federal Circuit case law limits the
application of this review standard to an objective component
of the willfulness inquiry under patent law that the Supreme
22
Court has recently abrogated. See Halo Electronics, Inc. v.
Pulse Electronics, Inc., 136 S. Ct. 1923, 1930, 1932–34 (2016).
The district court here made a factual finding as to TV Polska’s
subjective intent. Like most factual findings, we review this
one for clear error. See Microsoft Corp., 373 F.3d at 1207
(reviewing factual findings for clear error); see also, e.g.,
Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101, 112 (2d Cir.
2001) (“We review . . . findings of willfulness [under the
Copyright Act] under the same deferential . . . standard that
applies to factual determinations pertinent to liability.”).
The district court found that TV Polska deliberately
removed geoblocking from the fifty-one episodes at issue, was
aware of Spanski’s exclusive right to broadcast those episodes
in the United States, and took purposeful after-the-fact steps to
hide its conduct. See Spanski Enterprises, 222 F. Supp. 3d at
106–08. It requires no great leap from these factual predicates
to arrive at the conclusion that TV Polska knew that its conduct
was infringing. Cf. United States v. Bailey, 622 F.3d 1, 5 (D.C.
Cir. 2010) (clear error standard requires reviewing court to
“give due weight to inferences drawn from . . . facts by the
district court”).
TV Polska points to testimony by a Deputy Director in its
Technology Department who professed ignorance as to United
States copyright law. It also argues that neither the licensing
agreement nor Spanski itself gave it express notice that Spanski
held copyright in the licensed episodes. But TV Polska pressed
both points at trial, and the district court found them
unpersuasive. TV Polska has given us no basis for upsetting the
district court’s reasonable finding, based on ample evidence of
misconduct, that TV Polska knew it was up to no good. And to
the extent TV Polska argues that the district court committed
legal error by supposedly concluding that willfulness requires
only “intentional conduct that amounts to infringement,”
23
Appellant’s Br. 41, rather than the specific intent to violate
protected rights, it fails to account for the district court’s
express finding that TV Polska “could not have been ignorant
to the fact it was infringing [Spanski’s] copyright.” Spanski
Enterprises, 222 F. Supp. 3d at 113 (emphasis added).
Number of Episodes Infringed
TV Polska concedes that thirty-six of the fifty-one
episodes were viewed in the United States, but contends that
the district court clearly erred in finding that the remaining
fifteen were similarly viewed. The district court based its
finding principally on the testimony of one of Spanski’s
attorneys, who kept a contemporaneous log of the episodes—
including the fifty-one at issue here—he had viewed on the TV
Polska website. At trial, the lawyer testified that during the
infringement period he “streamed each” of the fifty-one
episodes on his computer in New York “to make sure they were
available” on the website. Trial Tr. 200 (Feb. 23, 2016), Joint
Appendix (J.A.) 481.
Attempting to undermine the force of the lawyer’s
testimony, TV Polska highlights his statement that he had no
specific recollection at the time of trial—four years after the
fact—of having watched all fifty-one episodes, as well as his
inability to say that he “definitely” checked each episode to
ensure that it was streaming. Id. at 201, J.A. 482. It further
observes that the lawyer’s testimony suggests that he entered
some of the episodes into his log before ensuring that those
episodes could actually be streamed. To be sure, these points
of uncertainty might well be powerful at trial. But TV Polska
made these arguments to the district court, and that court
concluded that although the witness “may not have had specific
recollections of viewing each individual episode,” his
testimony, taken together with other evidence including
24
contemporaneous screenshots from the TV Polska website and
testimony from one of Spanski’s contractors, “was sufficient to
show that the [fifty-one] episodes were available for viewing
and viewed in the [United States].” Spanski Enterprises, 222 F.
Supp. 3d at 103. Perhaps we would arrive at a different
conclusion were we considering the lawyer’s testimony in the
first instance, or perhaps not. The critical point is that the
district court, which heard the testimony firsthand, arrived at a
supportable conclusion that we have no basis for upsetting. Cf.
United States v. Jones, 744 F.3d 1362, 1367 (D.C. Cir. 2014)
(“We give especially strong deference to [a district court’s]
credibility determinations . . . .”).
IV.
To sum up, then, we hold that where a foreign broadcaster
uploads copyrighted content to its website and directs that
content onto a computer screen in the United States at a user’s
request, the broadcaster commits an actionable domestic
violation of the Copyright Act. Consistent with this view of the
law, the district court, based on its supportable factual findings,
found TV Polska liable for infringing Spanski’s copyrights in
the fifty-one episodes and concluded that damages of $60,000
per episode were appropriate in light of the circumstances.
Seeing no basis for upsetting these considered judgments, we
affirm as to both liability and damages.
So ordered.