Court Rejects Copyright Infringement Immunity Defense in Locast Case

On August 31, a U.S. District Court rejected the affirmative defense that the Locast service that retransmits over-the-air broadcast TV signals to viewers via Internet livestreaming is exempt from liability for copyright infringement. Section 111(a)(5) of the Copyright Act exempts from liability secondary transmissions or displays by a government body or other nonprofit organization "without any purpose of direct or indirect commercial advantage, and without charge to the recipients of the secondary transmission other than assessments necessary to defray the actual and reasonable costs of maintaining and operating the secondary transmission service." The Locast service is offered by a non-profit entity, and it offers free access to streams of broadcast channel content, subject to a fifteen-second commercial every fifteen minutes. Users who donate $5 or more per month or who claim financial hardship can receive uninterrupted access. 

In ABC, Inc. v. Goodfriend, the U.S. District Court for the Southern District of New York concluded that Locast was not offered without charges other than those necessary to defray the actual reasonable costs for its service. The District Court characterized the user donations as "charges" for avoiding interrupted service. It also found that Locast generated far more money in 2020 from those user charges than was necessary to defray its service costs. Additionally, the District Court rejected the idea that reinvesting money to expand service fit within the statutory exemption since Congress could have expressly allowed for costs of expanding service – but it chose not to. 

The District Court's order addressed only the legal question about the affirmative defense based on Section 111(a)(5), so it did not directly address infringement liability or any other issues. Thus, the case is not over at the District Court. And as of this blog post, there is no word yet as to whether the order will be appealed.