filmon osc opinion and order

Upload: april-petersen

Post on 14-Apr-2018

216 views

Category:

Documents


0 download

TRANSCRIPT

  • 7/29/2019 FilmOn OSC Opinion and Order

    1/23

    1

    UNI TED STATES DI STRI CT COURTSOUTHERN DI STRI CT OF NEW YORK- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - XCBS BROADCASTI NG I NC. , et al . ,

    Pl ai nt i f f s,

    - agai nst -

    FI LMON. COM, I NC. ,

    Def endant .- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - XNAOMI REICE BUCHWALD

    UNITED STATES DISTRICT JUDGE

    MEMORANDUM & ORDER

    10 Ci v. 7532 ( NRB)

    On Oct ober 1, 2010, pl ai nt i f f s CBS Br oadcast i ng I nc. , NBC

    St udi os, I nc. , Uni ver sal Net wor k Tel evi si on, LLC, NBC Subsi di ar y

    ( KNBC- TV) , I nc. , Twent i et h Cent ur y Fox Fi l m Cor por at i on, Fox

    Tel evi si on St at i ons, I nc. , ABC Hol di ng Company I nc. , and Di sney

    Ent er pr i ses, I nc. , al l br oadcast t el evi si on net wor ks

    ( col l ect i vel y, pl ai nt i f f s) , br ought t hi s act i on agai nst

    def endant Fi l mOn. com, I nc. , al l egi ng i nf r i ngement of t hei r

    copyr i ght s i n var i ous pr ogr ams exhi bi t ed over t hei r br oadcast

    t el evi si on st at i ons. The case was cl osed by ent r y of t he

    Consent Or der of J udgment and Permanent I nj unct i on dat ed August

    8, 2012 ( dkt . no. 49) .

    On J ul y 8, 2013, pl ai nt i f f CBS Br oadcast i ng I nc. ( CBS)

    moved thi s Cour t by order t o show cause t o compel t he compl i ance

    of Fi l mOn. com, I nc. and i t s Chi ef Execut i ve Of f i cer , Al ki vi ades

    Davi d ( col l ect i vel y, Fi l mOn) wi t h cer t ai n pr ovi si ons of t he

    par t i es set t l ement agr eement , and f or an or der hol di ng Fi l mOn

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 1 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    2/23

    2

    i n ci vi l cont empt f or i t s al l eged vi ol at i on of t he Consent Or der

    of J udgment and Per manent I nj unct i on. For t he r easons t hat

    f ol l ow, we gr ant pl ai nt i f f s mot i ons.

    BACKGROUND1

    A.Factual BackgroundI n Sept ember 2010, Fi l mOn l aunched a f or - pr of i t servi ce

    whi ch capt ur ed over - t he- ai r di gi t al t er r est r i al si gnal s

    br oadcast by tel evi si on st at i ons, i ncl udi ng t hose owned by

    pl ai nt i f f s, t r ansmi t t ed t hose si gnal s t o i t s ser ver s, and t hen

    st r eamed t hem l i ve over t he i nt er net t o i t s subscri ber s.

    ( Compl . , dkt . no. 1, 19. ) At t hat t i me, t he pr i nci pal way i n

    whi ch Fi l mOn subscr i ber s vi ewed pl ai nt i f f s copyr i ght ed

    progr ammi ng was by downl oadi ng and i nst al l i ng t he Fi l mOn HDi

    pl ayer appl i cat i on f r om Fi l mOn s websi t e, whi ch al l owed

    1 The f ol l owi ng f act s ar e der i ved f r om t he Memor andum of Pl ai nt i f f s i n Suppor tof t he Or der t o Show Cause ( Pl . Cont empt Br . ) ; t he Decl ar at i on of C. Scot tMorr ow i n Suppor t of Pl ai nt i f f s Appl i cat i on f or an Or der t o Show Cause f orCont empt ( Morr ow Cont empt Decl . ) and the exhi bi t s annexed ther eto;Def endant s Memor andum of Law i n Opposi t i on t o OSC Re: Cont empt Mot i on ( Def .Contempt Opp. ) ; Memor andum of CBS i n Support of Mot i on t o Compel Compl i ancewi t h Sect i on 5. 3 of t he Set t l ement Agr eement ( Pl . 5. 3 Br . ) ; t he Decl ar at i onof C. Scot t Morr ow i n Support of Pl ai nt i f f s Mot i on t o Compel Compl i ance wi t hSect i on 5. 3 of t he Set t l ement Agreement ( Morr ow 5. 3 Decl . ) and t he exhi bi t sannexed t heret o; Non- Par t y Al ki vi ades Davi d s Memorandum of Law i n Opposi t i on

    t o Pl ai nt i f f s Mot i on t o Compel Compl i ance wi t h Sect i on 5. 3 of t he Set t l ementAgr eement ( Davi d 5. 3 Opp. ) ; Memorandum of CBS i n Support of Pl ai nt i f f sMot i on to Compel Compl i ance wi t h Fi nanci al Ter ms of Set t l ement Agreement( Pl . Fi n. Br . ) ; Decl ar at i on of C. Scot t Mor r ow i n Suppor t of Pl ai nt i f f sMot i on to Compel Compl i ance wi t h Fi nanci al Ter ms of Set t l ement Agreement( Morr ow Fi n. Decl . ) and t he exhi bi t s annexed t her et o; Memorandum i nOpposi t i on t o Pl ai nt i f f s Mot i on t o Compel Compl i ance wi t h Fi nanci al Ter ms ofSet t l ement Agr eement ( Def . Fi n. Opp. ) ; and t he Decl arat i on of Al ki vi adesDavi d i n Opposi t i on t o Mot i on Re: Cont empt and Mot i ons Re: Compl i ance wi t ht he Set t l ement Agreement ( Davi d Decl . ) .

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 2 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    3/23

    3

    subscr i bers t o access t he pr ogr ammi ng on t hei r comput ers or

    mobi l e devi ces. ( I d. 22. )

    On Oct ober 10, 2010, pl ai nt i f f s i ni t i at ed t he above-

    capt i oned act i on, al l egi ng t hat Fi l mOn was st r eami ng t hei r

    br oadcast pr ogr ammi ng wi t hout t hei r aut hor i zat i on, t her eby

    i nf r i ngi ng t hei r excl usi ve copyr i ght s i n t he pr ogr ammi ng under

    Sect i ons 106( 1) - ( 5) of t he Copyr i ght Act . ( I d. 1- 5. )

    Pl ai nt i f f s sought monet ary damages and a per manent i nj unct i on

    agai nst Fi l mOn s r et r ansmi ssi on ser vi ce. ( I d. )

    On November 8, 2010, pl ai nt i f f s moved f or an order t o show

    cause why t hi s Cour t shoul d not ent er a pr el i mi nar y i nj unct i on

    agai nst Fi l mOn t o pr ohi bi t i t f r om st r eami ng t he br oadcast s of

    any t el evi si on st at i ons owned or associ at ed wi t h pl ai nt i f f s, and

    a t empor ar y rest r ai ni ng or der agai nst such act s ( dkt . no. 10) .

    On November 22, 2010, we hear d oral ar gument and grant ed

    pl ai nt i f f s appl i cat i on f or a t empor ar y r est r ai ni ng or der

    ( TRO) ( dkt . no. 8) . Al t hough we set br i ef i ng deadl i nes on t he

    mot i on f or a pr el i mi nar y i nj unct i on on t hat dat e ( see i d. ) ,

    br i ef i ng was ul t i mat el y st ayed pendi ng t he compl et i on of

    di scover y ( dkt . no. 38) .

    I n J ul y 2012, t he par t i es r eached an agr eement t o resol ve

    t he act i on, t he f ul l t er ms and condi t i ons of whi ch wer e set

    f or t h i n a set t l ement agr eement dat ed J ul y 31, 2012. ( See

    Set t l ement Agr eement , Morr ow Fi n. Decl . Ex. 1 ( t he Set t l ement

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 3 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    4/23

    4

    Agr eement ) . ) I n r el evant par t , t he Set t l ement Agr eement , whi ch

    r ef er s t o Fi l mOn. com, I nc. and Davi d col l ect i vel y as Fi l mOn

    ( Set t l ement Agr eement 1) , pr ovi ded t he f ol l owi ng:

    Sect i on 4. 3. Wi t hi n seven ( 7) cal endar days oft he Ef f ect i ve Dat e [ J ul y 31, 2012] , Fi l mOn shal ldel i ver t o counsel f or t he Pl ai nt i f f s t he sum of$1. 6 mi l l i on. . . . I f Pl ai nt i f f s counsel have notr ecei ved compl et e payment of t he $1. 6 mi l l i on sumwi t hi n t he t i me speci f i ed her ei n, t hen t hePl ai nt i f f s may br i ng a cl ai m f or breach i naccor dance wi t h t he pr ovi si ons of t hi s Agr eement ormay, i n t hei r sol e and unr evi ewabl e di scr et i on,decl are t hi s Agr eement nul l and voi d.

    Sect i on 4. 4. The Cour t shal l r et ai n cont i nui ngj ur i sdi ct i on over t he Par t i es and t he abovecapt i oned act i on t o enf orce t hi s Agr eement and t heSt i pul at ed Consent J udgment and Per manent I nj unct i onent er ed i n connect i on t her ewi t h.

    Sect i on 4. 6. Fi l mOn agr ees t hat t hey and al l oft hei r t hen- cur r ent of f i cer s, di r ector s, agent s,servant s, and empl oyees, and al l per sons i n act i veconcer t wi t h or i n act i ve par t i ci pat i on wi t h orunder t he cont r ol of or cont r ol l i ng or i n pr i vi t ywi t h Fi l mOn, wi l l not vi ol at e ( or f ai l t o t ake anyact i ons t hat woul d be r equi r ed t o compl y wi t h) t het er ms of t he Per manent I nj unct i on.

    Sect i on 5. 3. Wi t hi n seven ( 7) days of t heEf f ect i ve Dat e, Davi d shal l cause hi s counsel t oexecut e and f i l e wi t h t he Uni t ed St at es Di st r i ctCour t f or t he Cent r al Di st r i ct of Cal i f or ni a aSt i pul at i on of Di smi ssal wi t h pr ej udi ce of al l oft he cl ai ms i n t he mat t er of Al ki vi ades Davi d, et al .v. CBS I nt er act i ve I nc. , et ano. , No. 11 Ci v. 9437( DSF) ( C. D. Cal ) ( t he Cal i f or ni a acti on) , t hatDavi d asser t ed or t hat coul d have been asser t edagai nst CBS I nt er act i ve I nc. . . . Davi d shal l notf und t he Cal i f or ni a act i on i n any way on or af t ert he Ef f ect i ve Dat e. Wi t hi n f our t een ( 14) cal endardays of t he Ef f ect i ve Dat e and at al l t i mest her eaf t er , Davi d shal l nei t her par t i ci pat e i n, nor

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 4 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    5/23

    5

    suppor t , nor pr omot e, nor encour age par t i ci pat i on i nt he Cal i f or ni a act i on i n any way.

    Sect i on 6. 2. The Par t i es expr essl y agr ee t hatt he Uni t ed St at es Di st r i ct Cour t f or t he Sout her n

    Di st r i ct of New Yor k shal l r et ai n cont i nui ngj ur i sdi ct i on over t he Par t i es and t he Act i on f orpur poses of enf orci ng t hi s Agr eement and theSt i pul at ed Consent J udgment and PermanentI nj unct i on, and t hat al l act i ons or pr oceedi ngsar i si ng i n connect i on wi t h t hi s Agr eement shal l bet r i ed and l i t i gat ed excl usi vel y i n t he Uni t ed St at esDi st r i ct Cour t f or t he Sout her n Di st r i ct of NewYor k.

    Sect i on 12. I n t he event of a di sput e ar i si ngout of or r el at i ng t o t he t er ms of t hi s Agr eement ort he St i pul at ed Consent J udgment and PermanentI nj unct i on . . . , t he pr evai l i ng par t y shal l beent i t l ed t o r ecover i t s r easonabl e at t or neys f eesand cost s.

    Sect i on 13. Thi s Agr eement . . . cont ai ns t heent i r e agr eement of t he Par t i es r el at i ng t o thesubj ect mat t er s addr essed her ei n and may not bemodi f i ed or amended except by a f ur t her document i nwr i t i ng and si gned by t he Par t i es. I n execut i ngt hi s Agr eement and maki ng t he set t l ement cont ai nedher ei n, none of t he Par t i es i s r el yi ng upon anypr omi se, r epr esent at i on or st at ement not cont ai nedwi t hi n t hi s Agr eement .

    ( I d. ) Davi d si gned t he Set t l ement Agr eement bot h i ndi vi dual l y

    and i n hi s capaci t y as CEO of Fi l mOn. ( I d. at 11. )

    The Set t l ement Agreement was condi t i oned upon t hi s Cour t s

    ent r y of a st i pul ated consent j udgment and per manent i nj unct i on

    prohi bi t i ng Fi l mOn f rom f ur t her i nf r i ngi ng pl ai nt i f f s

    copyr i ght s. ( Set t l ement Agr eement , 4. 1. ) Accor di ngl y, on

    August 8, 2012, we ent er ed t he part i es St i pul ated Consent

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 5 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    6/23

    6

    J udgment and Permanent I nj unct i on ( dkt . no. 49) ( t he

    I nj unct i on) , whi ch per manent l y enj oi ned Fi l mOn:

    i t s af f i l i at ed compani es, and al l of i t s of f i cer s,di r ect or s, agent s, ser vant s, and empl oyees, and al lnat ur al and cor por at e per sons i n act i ve concer t orpar t i ci pat i on or i n pr i vi t y wi t h any of t hem . . .f r om i nf r i ngi ng, by any means, di r ectl y or i ndi r ectl y,any of pl ai nt i f f s excl usi ve r i ght s under Secti on106( 1) - ( 5) of t he Copyr i ght Act , i ncl udi ng but notl i mi t ed t o t hr ough t he st r eami ng over mobi l e t el ephonesyst ems and/ or t he I nt er net of any of t he br oadcastt el evi si on pr ogr ammi ng i n whi ch any Pl ai nt i f f owns acopyr i ght .

    ( I nj unct i on 1. ) The I nj unct i on f ur t her pr ovi ded t hat

    vi ol at i on of i t s pr ovi si ons woul d expose Fi l mOn and al l ot her

    per sons bound by i t s pr ovi si ons t o al l appl i cabl e penal t i es,

    i ncl udi ng cont empt of Cour t . ( I d. 2. ) Fi nal l y, i t pr ovi ded

    t hat [ t ] hi s Cour t shal l r et ai n cont i nui ng j ur i sdi cti on over t he

    Par t i es and t he act i on f or pur poses of enf or ci ng t h[ e]

    St i pul at ed Consent J udgment and Per manent I nj unct i on and/ or

    enf or ci ng t he Par t i es Set t l ement Agr eement . ( I d. 4; see

    al so Set t l ement Agr eement , Morr ow Decl . Ex. 1, 4. 4. )

    B.Events Giving Rise to the Instant MotionsBy l et t er dat ed J anuar y 30, 2013, pl ai nt i f f s counsel

    br ought t o t he Cour t s at t ent i on cer t ai n i nf or mat i on about

    Fi l mOn s f ai l ur e t o del i ver t he f ul l payment due t o t hem under

    sect i on 4. 3 of t he Set t l ement Agr eement . As pl ai nt i f f s counsel

    i nf ormed us, on August 3, 2012, f ormer counsel f or Fi l mOn

    not i f i ed t hem t hat due t o unexpect ed i nt er nat i onal t ax and

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 6 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    7/23

    7

    account i ng compl i cat i ons, Fi l mOn woul d not be abl e to obt ai n

    t he f unds necessar y t o make t he $1. 6 mi l l i on payment due on

    August 7, 2012. ( Mor r ow Fi n. Decl . Ex. 2, at 1. ) Counsel f or

    Fi l mOn expl ai ned t hat t hat , [ w] hi l e Mr . Davi d i s per sonal l y

    ext r emel y wel l - si t uat ed f i nanci al l y, Fi l mOn. com, I nc. i s i n no

    posi t i on t o make any sor t of payment t o speak of and r equest ed

    t hat t he par t i es agr ee t o an al t er nat i ve payment schedul e

    per mi t t i ng Fi l mOn t o compl et e payment by December 1, 2012.

    ( I d. ) St r angel y, Davi d wr ot e t o pl ai nt i f f s counsel on August

    6, 2012 t o advi se t hem t hat Fi l mOn was pl anni ng t o l aunch a

    br oadcast st at i on i n Los Angel es f or whi ch i t woul d spend

    appr oxi matel y $50 mi l l i on t o pr omot e. ( Mor r ow Fi n. Decl . Ex. 3,

    at 1. )

    Fi l mOn s counsel ul t i mat el y del i ver ed a si ngl e payment of

    $250, 000 t o pl ai nt i f f s counsel on August 7, 2012. ( Pl . Fi n.

    Br . at 2. ) Al t hough pl ai nt i f f s counsel di d not accept or

    ot herwi se respond t o Fi l mOn s proposed al t ernat i ve payment

    schedul e, pl ai nt i f f s counsel accept ed t he i ni t i al $250, 000

    payment . Fi l mOn made no f ur t her payments bef or e December 1,

    2012, or at any t i me t her eaf t er . ( I d. ) To dat e, pl ai nt i f f s

    have not r ecei ved t he r emai ni ng $1, 350, 000 due t o t hem under

    sect i on 4. 3. ( I d. )

    I n addi t i on t o t he J anuar y 30, 2013 l et t er on behal f of al l

    pl ai nt i f f s, counsel f or CBS separ at el y wr ot e t o t hi s Cour t t o

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 7 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    8/23

    8

    addr ess Davi d s f ai l ur e t o r emove f r om t he I nt er net cer t ai n

    i nf l ammatory vi deos and other mater i al whi ch t hey al l ege

    cont i nues t o encour age par t i ci pat i on i n t he Cal i f or ni a act i on

    agai nst CBS I nt er act i ve, i n vi ol at i on of sect i on 5. 3 of t he

    Set t l ement Agr eement . ( See Pl . 5. 3 Br . at 2. ) Speci f i cal l y,

    pl ai nt i f f s i dent i f i ed a vi deo of Davi d st i l l avai l abl e at t he

    websi t e www. cbsyousuck. com, i n whi ch he reci t es t he f ol l owi ng:

    Has your song, movi e, sof t war e, l i t er ar y wor k, or evena phot ogr aph been i l l egal l y di st r i but ed on t heI nt er net t hr ough t he sof t war e Li mewi r e? Wel l , i f i t

    has, pl ease si gn t he f or m bel ow. You ar e cor di al l yi nvi t ed t o j oi n t hi s cl ass act i on l awsui t agai nst CNET2f or di st r i but i ng t he sof t war e wi t h mal i ci ous i nt ent t oi nf r i nge on your copyr i ght . The damages ar e i n t hemany bi l l i ons of dol l ar s and you coul d be a par t oft hat award.

    ht t p: / / www. cbsyousuck. com ( l ast vi si t ed Sept ember 9, 2013) . The

    phr ase LEGAL FEES ALREADY PAI D appear s as an over l ay t o t he

    vi deo. ( I d. ; see Mor r ow 5. 3 Decl . Ex. 1, at 1. ) Pl ai nt i f f s

    have si nce i dent i f i ed f ur t her mat er i al whi ch t hey al l ege

    vi ol at es sect i on 5. 3 on t he f ol l owi ng websi t es:

    ht t p: / / www. yout ube. com/ wat ch?v=1onY5- NvGf 0&f eat ure=pl cp;

    ht t p: / / www. yout ube. com/ wat ch?v=exZzv7I BVcg&f eat ure=pl cp;

    ht t p: / / www. yout ube. com/ wat ch?v=HggFApQauds&f eature=pl cp;

    ht t p: / / www. t wi t t er . com/ cbsyousuck.

    2 CNET Net works, I nc. and CBS I nt er act i ve I nc. are co- def endant s i n t heCal i f or ni a act i on f r om whi ch Davi d was r equi r ed t o wi t hdr aw pur suant t osect i on 5. 3 of t he Set t l ement Agr eement . See Compl . , Al ki vi ades Davi d, etal . v. CBS I nt er act i ve I nc. , et ano. , No. 11 Ci v. 9437 ( DSF) ( C. D. Cal Nov.14, 2011) ( dkt . no. 1) .

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 8 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    9/23

    9

    Fi nal l y, pl ai nt i f f s al l ege t hat Fi l mOn s r ecent l y l aunched

    vi deo on demand ( VOD) ser vi ce i nf r i nges pl ai nt i f f s copyr i ght s

    i n t hei r br oadcast t el evi si on pr ogr ammi ng i n vi ol at i on of t he

    I nj unct i on. The VOD ser vi ce pr ovi des subscr i ber s wi t h access t o

    an ar chi ve of pr evi ousl y t el evi sed pr ogr ams f or st r eami ng on

    demand, or at t he t i me of t hei r choosi ng, vi a the websi t e

    www. f i l mon. com and t he company s associ at ed i Phone and Andr oi d

    appl i cat i ons. ( Pl . Cont empt Br . at 2. )

    On March 20, 2013, upon l ear ni ng about t he VOD ser vi ce,

    counsel f or CBS wr ot e t o def ense counsel t o i nf or m hi m t hat

    Fi l mOn was maki ng such cont ent avai l abl e wi t hout pl ai nt i f f s

    consent , and t o demand t hat Fi l mOn i mmedi at el y remove t he

    copyr i ght ed pr ogr ammi ng f r om i t s websi t e. ( Morr ow Cont empt

    Decl . Ex. 3, at 1- 2. ) Def ense counsel r esponded by l et t er dat ed

    Mar ch 26, 2013, cl ai mi ng t hat t he VOD servi ce di d not vi ol at e

    t he I nj unct i on because Fi l mOn had acqui r ed val i d l i censes to t he

    pr ogr ammi ng f r om an uni dent i f i ed t hi r d par t y pr ovi der . ( Mor r ow

    Cont empt Decl . Ex. 4, at 1- 2. ) Pl ai nt i f f s r equest ed t hat

    def ense counsel i dent i f y t he t hi r d par t y f r om whom Fi l mOn

    pur por t edl y l i censed pl ai nt i f f s copyr i ght ed pr ogr ammi ng and

    pr oduce copi es of such l i censi ng agr eement s t o pl ai nt i f f s

    counsel , but t o dat e, Fi l mOn has done nei t her . Pl ai nt i f f s

    mai nt ai n t hat no such t hi r d par t y pr ovi der wi t h t he aut hor i t y t o

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 9 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    10/23

    10

    l i cense t hei r copyr i ght ed cont ent f or VOD use exi st s. ( Pl .

    Cont empt Br . at 2. )

    The par t i es have made ef f or t s t o r esol ve t he above i ssues

    i nf or mal l y, but t o no avai l . Thus, on J ul y 2, 2013, pl ai nt i f f s

    moved to compel Fi l mOn s and Davi d s compl i ance wi t h the

    f i nanci al t er ms of t he Set t l ement Agr eement , and wi t h sect i on

    5. 3 of t hat Agr eement . They f ur t her moved t hi s Cour t f or an

    order t o show cause why Fi l mOn shoul d not be f ound i n ci vi l

    cont empt f or i t s vi ol at i on of t he I nj unct i on. Fi l mOn submi t t ed

    i t s opposi t i on paper s on J ul y 15, 2013, and pl ai nt i f f s r epl i ed

    on J ul y 29, 2013. We hel d oral ar gument on t he pendi ng mot i ons

    on August 15, 2013 ( or al argument ) . 3

    DISCUSSION

    A.Motion to Compel Compliance with Financial Terms ofSettlement Agreement

    Pl ai nt i f f s have moved t o compel Fi l mon s compl i ance wi t h

    sect i on 4. 3 of t he Set t l ement Agr eement . ( Pl . Fi n. Br . at 1. )

    Fi l mOn and Davi d, as a si gnat ory and as Fi l mOn s CEO, do not

    di sput e t hat t hey f ai l ed t o del i ver t he f ul l $1. 6 mi l l i on sum

    due t o pl ai nt i f f s counsel on or bef or e August 7, 2012. ( See

    Set t l ement Agr eement 4. 3; see al so i d. 9 ( The par t i es each

    agr ee t o per f or m al l act s and execut e, del i ver and f i l e al l

    document s necessary t o car r y out t he pr ovi si ons, pur poses and

    3 Ref er ences pr eceded by Tr . r ef er t o t he t r anscr i pt of oral ar gument .

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 10 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    11/23

    11

    i nt ent of t hi s Agr eement . ) I nst ead, t hey advance t wo

    ar gument s whi ch t hey asser t r el i eve t hem of t he obl i gat i on t o

    compl y. 4 Fi r st , t hey ar gue t hat def ense counsel s August 3, 2012

    l et t er pr oposi ng an al t er nat e payment schedul e const i t ut ed an

    of f er , whi ch pl ai nt i f f s accept ed by retai ni ng t he $250, 000

    par t i al payment , t her eby modi f yi ng t he f i nanci al t er ms of t he

    Set t l ement Agr eement . ( Def . Fi n. Opp. at 1; see Tr . at 15- 16. )

    As a mat t er of cont r act l aw, t hat ar gument i s unavai l i ng f or

    sever al r easons. The Set t l ement Agr eement i t sel f precl udes

    modi f i cat i on of i t s t er ms ot her t han by a wr i t t en document

    si gned by al l par t i es, whi ch no one suggest s exi st s. ( See

    Set t l ement Agreement 13. ) Moreover , under New York l aw, 5 a

    wr i t t en cont r act cont ai ni ng an i nt egr at i on cl ause cannot be

    modi f i ed except as pr ovi ded t her ei n. See N. Y. Gen. Obl i g. L.

    4 Rel yi ng on sect i ons 4. 3 and 6. 2 of t he Set t l ement Agr eement , Fi l mOn f ur t herasser t s t hat pl ai nt i f f s mot i on i s pr ocedur al l y i mpr oper because t hosesecti ons requi r e t hat pl ai nt i f f s f i l e a separ at e br each of cont r act cl ai m t ocompel compl i ance. ( Def . Fi n. Opp. at 8- 9. ) However , Fi l mOn s argument i sr ef ut ed by a pl ai n r eadi ng of t hose sect i ons, quoted bel ow, whi ch per mi t , butdo not r equi r e, a separ at e act i on t o be f i l ed upon Fi l mOn s f ai l ur e t odel i ver f ul l payment by t he agr eed upon dat e. ( See Set t l ement Agreement 4. 3 ( I f Pl ai nt i f f s counsel have not r ecei ved compl et e payment of t he $1. 6mi l l i on sum wi t hi n t he t i me speci f i ed her ei n, t hen t he Pl ai nt i f f s may br i ng acl ai m f or br each i n accor dance wi t h t he pr ovi si ons of t hi s Agr eement )( emphasi s added) ; see i d. 6. 2 ( The Par t i es expr essl y agr ee t hat t he Uni t edSt at es Di st r i ct Cour t f or t he Sout her n Di st r i ct of New Yor k shal l r et ai n

    cont i nui ng j ur i sdi ct i on over t he Par t i es and t he Act i on f or pur poses ofenf orci ng t hi s Agreement and t he St i pul at ed Consent J udgment and Per manentI nj unct i on, and t hat al l act i ons or pr oceedi ngs ar i si ng i n connect i on wi t ht hi s Agr eement shal l be t r i ed and l i t i gat ed excl usi vel y i n t he Uni t ed St at esDi st r i ct Cour t f or t he Sout her n Di st r i ct of New Yor k. The af or ement i onedchoi ce of venue . . . . ) ( emphasi s added) . )5The Set t l ement Agreement r equi r es t hat al l quest i ons wi t h r espect t o t he

    const r ucti on of i t s pr ovi si ons, and t he r i ght s and l i abi l i t i es of t he par t i est her eto, be governed by and const r ued i n accordance wi t h the l aws of t heState of New Yor k. ( See Set t l ement Agreement 12. )

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 11 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    12/23

    12

    15- 301( 1) ( a wr i t t en agr eement . . . whi ch cont ai ns a pr ovi si on

    t o t he ef f ect t hat i t cannot be changed or al l y, cannot be

    changed by an execut ory agr eement unl ess such execut ory

    agr eement i s i n wr i t i ng and si gned) ; see al so Bozet ar ni k v.

    Mahl and, 195 F. 3d 77, 83 ( 2d Ci r . 1999) . Thus, pl ai nt i f f s

    accept ance of par t i al payment coul d not , on i t s own, modi f y t he

    t er ms of t he Set t l ement Agr eement . Mor eover , f r om a pol i cy

    perspect i ve, accedi ng t o Fi l mOn s ar gument woul d undermi ne t he

    enf or ceabi l i t y of cont r act s gener al l y, as i t woul d per mi t a

    par t y to ent er i nt o a bi ndi ng cont r act and l at er modi f y i t s

    t er ms uni l at er al l y.

    Fi l mOn al so submi t s t hat i t s f ul l per f or mance under t he

    f i nanci al t erms of t he Set t l ement Agreement was excused when t he

    Fox pl ai nt i f f s br eached t he Agr eement s i mpl i ed covenant of good

    f ai t h and f ai r deal i ng. ( Def . Fi n. Opp. at 6- 8. ) Fi l mOn poi nt s

    t o l et t er s Fox wr ote i n Oct ober 2012 t o var i ous compani es,

    i ncl udi ng Lenovo, Appl e, Mi crosof t , and Googl e, t o i nf or m t hem

    of i t s bel i ef t hat Fi l mOn was r et r ansmi t t i ng i t s br oadcast

    si gnal s wi t hout aut hor i zat i on, i n vi ol at i on of t he I nj uncti on i n

    t hi s act i on. ( I d. ) However , Fi l mOn mai nt ai ns t hat , because t he

    servi ce i t empl oyed at t he t i me al l owed subscr i ber s t o access

    t hei r own uni que, r emot el y- l ocat ed ant enna, enabl i ng t hem t o

    cr eate uni que copi es of t he br oadcast pr ogr ammi ng, t he

    t echnol ogy about whi ch Fox compl ai ned was separat e and di st i nct

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 12 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    13/23

    13

    f r om t hat cont empl at ed by t he I nj unct i on, and i ndeed had been

    deemed non- i nf r i ngi ng wi t hi n t he Second Ci r cui t . ( Def . Fi n.

    Opp. at 2; see Davi d Decl . 2. ) Thus, Fi l mOn cont ends, Fox

    mi sr epr esent ed i t s per f ormance under t he Set t l ement Agr eement by

    publ i cl y condemni ng a t echnol ogy whi ch i t knew t o be l awf ul ,

    t her eby br eachi ng t he i mpl i ed covenant by engag[ i ng] i n a

    cour se of act i on ai med at depr i vi ng Fi l mOn of t he benef i t of t he

    Agr eement . ( Def . Fi n. Opp. at 2. )

    We f i nd t hat argument unpersuasi ve because t here i s ampl e

    r eason t o concl ude t hat Fox had a good f ai t h basi s t o bel i eve

    t hat Fi l mOn s t echnol ogy vi ol at ed t he I nj unct i on. As an i ni t i al

    mat t er , t he I nj unct i on cl ear l y pr ohi bi t s Fi l mOn f r om

    i nf r i ngi ng, by any means, di r ect l y or i ndi r ect l y, any of

    pl ai nt i f f s copyr i ght s i n t hei r br oadcast t el evi si on

    pr ogr ammi ng. ( I nj unct i on 1. ) I t s scope i s i n no way l i mi t ed

    t o t he pr eci se f or m of i nf r i ngement t hat pr eci pi t at ed t he f i l i ng

    of t hi s l awsui t .

    Fur t her mor e, at t he t i me Fox wr ot e the l et t er s at i ssue,

    t he st at e of t he l aw wi t h r espect t o the r et r ansmi ssi on of

    t el evi si on br oadcast si gnal s was i n f l ux. Whi l e J udge Al i son

    Nathan of t he Sout hern Di st r i ct of New Yor k had deni ed t he

    net wor ks mot i on t o pr el i mi nar i l y enj oi n an ant enna- based

    r et r ansmi ssi on ser vi ce i n Am. Br oadcast i ng Cos. , I nc. , et al . v.

    Aer eo, I nc. , et al . , 874 F. Supp. 2d 373, 405 ( S. D. N. Y. 2012) ,

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 13 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    14/23

    14

    on J ul y 11, 2012, t he Second Ci r cui t had not yet r ul ed, and i n

    f act di d not af f i r m t hat deni al unt i l Apr i l 1, 2013, some si x

    mont hs af t er Fox s l et t er s. See WNET, Thi r t een v. Aer eo, I nc. ,

    712 F. 3d 676 ( 2d Ci r . 2013) ; see al so WNET, Thi r t een v. Aer eo,

    I nc. , Nos. 12- 2786, 12- 2807, 2013 WL 3657978, at *1 ( 2d Ci r .

    J ul y 16, 2013) ( denyi ng pl ai nt i f f s pet i t i on f or r ehear i ng en

    banc) . Thus, as of Oct ober 2012, t here was no bi ndi ng Second

    Ci r cui t pr ecedent concer ni ng t he l egal i t y of Fi l mOn s

    t echnol ogy. 6 Cont r ar y t o Fi l mOn s asser t i ons, i t s ant enna- based

    t echnol ogy was not cl ear l y oper at [ i ng] wi t hi n t he par amet er s

    est abl i shed by l eadi ng Second Ci r cui t pr ecedent at t he t i me

    t hat Fox sent t he l et t er s at i ssue, and we f i nd t hat Fox di d not

    i n f act mi sr epr esent Fi l mOn s per f ormance under t he Set t l ement

    Agr eement .

    Nor do we accept t he ar gument t hat Fox s f ai l ur e t o br i ng

    an enf or cement act i on agai nst Fi l mOn i ndi cat es t hat i t di d not

    t r ul y bel i eve Fi l mOn s ant enna- based t echnol ogy i nf r i nged i t s

    copyr i ght s. ( Def . Fi n. Opp. at 2; see Tr . at 19- 20. ) No

    pr ovi si on i n t he Set t l ement Agr eement r equi r es pl ai nt i f f s t o

    br i ng sui t i n or der t o enf or ce i t s t er ms or t hose of t he

    6 Mor eover , on Febr uar y 22, 2011, t hi s Cour t gr ant ed pl ai nt i f f s mot i on f or apr el i mi nar y i nj uncti on i n WPI X, I nc. et al . v. i vi , I nc. , 765 F. Supp. 2d594, 622 ( S. D. N. Y. 2011) . The conduct enj oi ned i n t hat case was si mi l ar t ot hat used by Fi l mOn at t he t i me t he part i es ent ered i nto the Set t l ementAgreement ; i vi was capt uri ng over- t he- ai r br oadcast s of network pr ogr ammi ngand si mul t aneousl y st r eami ng those si gnal s over t he i nt er net t o i t ssubscr i ber s. See i d. at 598 and n. 2.

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 14 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    15/23

    15

    I nj unct i on agai nst Fi l mOn. Mor eover , i t was not unr easonabl e

    f or Fox t o awai t t he out come of t he appeal i n Aer eo, whi ch i t

    coul d ant i ci pat e woul d hel p cl ar i f y t he l aw, at l east wi t hi n t he

    Second Ci r cui t .

    Not abl y, pl ai nt i f f s have br ought sui t i n cour t s out si de of

    t he Second Ci r cui t wher e t he i ssue r emai ns unr esol ved. See,

    e. g. , Fox Tel evi si on St at i ons, I nc. , et al . v. Fi l mOn X LLC, et

    al . , No. 13- cv- 00758- RMC, 2013 WL 4763414, at *19 (D. D. C. Sept .

    5, 2013) ( gr ant i ng i nj unct i on) ; Fox Tel evi si on St at i ons, I nc. ,

    et al . v. Bar r yDr i l l er Cont ent Sys. , PLC, et al . , 915 F. Supp.

    2d 1138, 1150- 51 ( C. D. Cal . 2012) ( gr ant i ng i nj unct i on) , appeal

    docket ed sub nom. , Fox Tel evi si on St at i ons, I nc. v. Aer eoki l l er ,

    LLC, et al . , Nos. 13- 55156, 13- 55157, 13- 55226, 13- 55228 ( 9t h

    Ci r . f i l ed J an. 25, 2013) . The Di st r i ct Cour t s f or t he Di st r i ct

    of Col umbi a and t he Cent r al Di st r i ct of Cal i f or ni a have bot h

    r esol ved t he i ssue i n pl ai nt i f f s f avor ; t he Cent r al Di str i ct of

    Cal i f or ni a case i s cur r ent l y pendi ng bef or e t he Cour t of Appeal s

    f or t he Ni nt h Ci r cui t , wher e or al argument was hel d on August

    27, 2013. I ndeed, Fox s i nf r i ngement sui t agai nst Bar r yDr i l l er

    Cont ent Syst ems had been f i l ed bef or e i t wr ot e t he l et t er s at

    i ssue her e, t her eby af f i r mi ng and publ i ci zi ng i t s bel i ef t hat

    Fi l mOn s servi ce was unl awf ul . See Compl . , Fox Tel evi si on

    St at i ons, I nc. , et al . v. Bar r yDr i l l er Cont ent Sys. , PLC, et

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 15 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    16/23

    16

    al . , No. CV- 12- 6921- GW( J Cx) , 2012 WL 3581895 ( C. D. Cal . f i l ed

    Aug. 10, 2012) .

    I n sum, none of t he above argument s per suades us t hat Fox

    di d not honest l y bel i eve Fi l mOn was maki ng i t s copyr i ght ed

    pr ogr ammi ng avai l abl e t o subscr i ber s i n vi ol at i on of t he

    I nj unct i on. As a r esul t , we concl ude t hat Fox di d not breach

    t he i mpl i ed covenant , and Fi l mOn i s not excused f r om i t s

    obl i gat i on t o pay pl ai nt i f f s t he f ul l amount due t o t hem under

    t he f i nanci al t er ms of t he Set t l ement Agr eement . 7

    B.Motion to Compel Compliance with Section 5.3 of SettlementAgreement

    CBS next seeks an or der compel l i ng Davi d to remove cer t ai n

    i nf l ammat or y vi deos and ot her mat er i al f r om websi t es he

    cont r ol s, consi st ent wi t h hi s obl i gat i ons under sect i on 5. 3 of

    t he Set t l ement Agreement .

    Davi d does not chal l enge t he enf or ceabi l i t y of sect i on 5. 3,

    nor does he di sput e t hat t he vi deo cur r ent l y accessi bl e at

    but t on 3 on www. cbsyousuck. com suppor t [ s] , promot e[ s] , or

    encour age[ s] par t i ci pat i on i n t he Cal i f or ni a act i on wi t hi n t he

    meani ng of sect i on 5. 3. Rat her , he ar gues t hat sect i on 5. 3 was

    7 Fur t her , we not e that Fi l mOn was ef f ect i vel y i n br each of sect i on 4. 3 of t heSet t l ement Agreement as of August 8, 2012. Thus, even assumi ng arguendo t hatFox breached t he i mpl i ed covenant on Oct ober 30, 2012, when t he l et t ers ati ssue wer e sent , t hat br each woul d not have excused Fi l mOn s f ai l ur e t oper f or m mont hs ear l i er . Cf . Ver sat i l e Housewar es & Gar deni ng Sys. , I nc. v.

    Thi l l Logi st i cs , I nc. , 819 F. Supp. 2d 230, 237 ( S. D. N. Y. 2011) ( not i ng t hatunder New Yor k l aw, a part y cl ai mi ng br each of cont r act must pr ove, i nt eral i a, t hat i t has i n al l respects compl i ed wi t h [ i t s] obl i gat i ons) .

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 16 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    17/23

    17

    dr af t ed t o appl y onl y pr ospect i vel y, t her eby render i ng any vi deo

    he cr eated bef ore t he Set t l ement Agr eement s ef f ect i ve date

    out si de i t s scope. ( See Davi d 5. 3 Opp. at 3. ) However , t hat

    argument mi sr eads t he l anguage of sect i on 5. 3. The pr ovi si on

    cl ear l y st at es t hat [ w] i t hi n 14 cal endar days of t he Ef f ect i ve

    dat e and at al l t i mes t her eaf t er , Davi d must nei t her

    par t i ci pat e i n, nor suppor t , nor pr omot e, nor encour age

    par t i ci pat i on i n t he Cal i f or ni a Act i on i n any way. ( Set t l ement

    Agr eement 5. 3. ) Based on i t s pl ai n meani ng, t hat l anguage i s

    cl ear l y i nt ended t o pr event Davi d f r om engagi ng i n any act i vi t y

    whi ch encour ages or ot her wi se suppor t s par t i ci pat i on i n t he

    Cal i f or ni a act i on i n an ongoi ng f ashi on, r egar dl ess of whet her

    t he act i vi t y began bef or e or af t er t he ef f ect i ve dat e of t he

    Set t l ement Agr eement . I ndeed, si nce t he vi deo accessi bl e at

    www. cbsyousuck. com ser ved as i nspi r at i on f or t he i ncl usi on of

    sect i on 5. 3, i t woul d be i l l ogi cal t o excl ude i t f r om t he

    pr ovi si on s scope si mpl y because i t pr edates t he Agr eement s

    ef f ect i ve dat e. Our i nt er pr et at i on appl i es wi t h par t i cul ar

    f or ce t o i nf l ammat or y vi deos post ed onl i ne whi ch, unl ess t aken

    down, r emai n publ i cl y accessi bl e i n per pet ui t y. I t i s t he

    publ i c s cont i nui ng access t o t he vi deo, and not Davi d s one

    t i me cr eat i on of i t , whi ch causes t he har m addr essed i n sect i on

    5. 3.

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 17 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    18/23

    18

    Davi d f ur t her ar gues t hat sect i on 5. 3 does not r equi r e hi m

    t o af f i r mat i vel y r emove mat er i al whose exi st ence pr edat es t he

    ef f ect i ve date of t he Set t l ement Agr eement , and compl ai ns t hat

    r equi r i ng hi m t o l ocat e al l such mat er i al woul d pl ace an undue

    bur den upon hi m. ( Davi d 5. 3 Opp. at 3. ) We di sagr ee. Cour t s

    possess br oad di scret i on t o requi r e a par t y t o take af f i r mat i ve

    st eps when such st eps are r equi r ed t o br i ng t hat par t y i nt o

    compl i ance wi t h a cour t or der . See Per f ect Fi t I ndus. , I nc. v.

    Acme Qui l t i ng Co. , I nc. , 673 F. 2d 53, 56- 57 ( 2d Ci r . 1981) ,

    cer t . deni ed, 459 U. S. 832 ( 1982) ; see al so Cl i ssur as v. Ci t y

    Uni v. of New Yor k, No. 02 Ci v. 8310 ( SAS) , 02 Ci v. 8138 ( SAS) ,

    2005 WL 3288097, at *2 ( S. D. N. Y. Dec. 2, 2005) . I t i s per f ect l y

    r easonabl e t o or der Davi d t o br i ng hi msel f i nt o compl i ance wi t h

    sect i on 5. 3 by r equi r i ng hi m t o r emove al l vi deos wi t hi n hi s

    cont r ol whi ch vi ol at e t he pr ovi si on.

    Moreover , i t sur el y i mposes no undue bur den on Davi d t o

    r equi r e hi m t o remove cont ent whi ch CBS has speci f i cal l y

    i dent i f i ed and l ocat ed f or hi m. I ndeed, Davi d i s t he i ndi vi dual

    most capabl e of ensur i ng the removal of t he mat er i al at i ssue,

    gi ven t hat t he websi t es CBS i dent i f i es ar e wi t hi n hi s cont r ol

    and he possesses t he abi l i t y, whi ch CBS l acks, t o r emove vi deo

    cont ent f r om t hem at hi s di scr et i on.

    For t hose reasons, we gr ant CBS s mot i on t o compel Davi d s

    compl i ance wi t h sect i on 5. 3 of t he Set t l ement Agr eement .

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 18 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    19/23

    19

    C.Motion to Hold FilmOn in Contempt of Court for Violation ofPermanent Injunction

    Fi nal l y, CBS al l eges t hat Fi l mOn s VOD servi ce makes

    pl ai nt i f f s copyr i ght ed pr ogr ams avai l abl e f or st r eami ng t o

    Fi l mOn subscr i bers who vi si t www. f i l mon. com or use t he company s

    i Phone and Andr oi d appl i cat i ons, whi ch f al l s wi t hi n t he

    I nj unct i on s pr ohi bi t i on of st r eami ng over mobi l e tel ephone

    syst ems and t he I nt er net t he br oadcast t el evi si on pr ogr ammi ng i n

    whi ch Pl ai nt i f f s own t he copyr i ght s. ( I nj unct i on 1. ) Thus,

    t hey move f or an order hol di ng Fi l mOn and Davi d, as i t s CEO, i n

    cont empt of Cour t f or vi ol at i ng t he t er ms of t he I nj unct i on.

    A par t y may be hel d i n ci vi l cont empt f or f ai l ur e t o

    compl y wi t h a cour t or der i f ( 1) t he or der t he cont emnor f ai l ed

    t o compl y wi t h i s cl ear and unambi guous; ( 2) t he pr oof of

    noncompl i ance i s cl ear and convi nci ng; and (3) t he cont emnor has

    not di l i gent l y at t empt ed t o compl y i n a reasonabl e manner .

    Ut i ca Col l ege v. Gordon, 389 Fed. App x 71, 72 ( 2d Ci r . 2010)

    ( quot i ng Paramedi cs El ect r omedi ci na Comer ci al , Lt da v. GE Med.

    Sys. I nf o. Techs. , I nc. , 369 F. 3d 645, 655 ( 2d Ci r . 2004) ) .

    Upon f i ndi ng t hat a par t y i s i n ci vi l cont empt , t hi s Cour t

    r et ai ns br oad di scret i on t o f ashi on an appr opr i at e coer ci ve

    r emedy . . . based on t he natur e of t he harm and t he pr obabl e

    ef f ect of al t er nat i ve sanct i ons. Ci t y of New Yor k v.

    Venkat aram, No. 06 Ci v. 6578 ( NRB) , 2012 WL 2921876, at *3 ( J ul y

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 19 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    20/23

    20

    18, 2012) ( quot i ng Equal Empl oyment Oppor t uni t y Comm n v. Local

    28 of t he Sheet Met al Worker s I nt l Ass n, 247 F. 3d 333, 336 ( 2d

    Ci r . 2001) .

    Pl ai nt i f f s move f or cont empt based sol el y on t he VOD

    servi ce, whi ch Fi l mOn concedes f al l s wi t hi n t he br oad scope of

    t he I nj unct i on s cl ear and unambi guous pr ohi bi t i on on st r eami ng

    over mobi l e t el ephone syst ems and t he I nt er net . Tr . at 4- 5;

    ( see Davi d Decl . 2- 3, 11- 12 ( di st i ngui shi ng bet ween Fi l mOn s

    ant enna- based servi ce, whi ch was desi gned t o not vi ol ate t he

    i nj unct i on, and Fi l mOn s VOD ser vi ce, whi ch ut i l i zes mor e

    t r adi t i onal st r eami ng t echnol ogy) . ) Thus, t he onl y i ssues f or

    r esol ut i on ar e whet her Fi l mOn has compl i ed wi t h t he I nj unct i on

    or made di l i gent at t empt s t o do so.

    To t hat end, Fi l mOn submi t s t hat i t does not i nf r i nge

    pl ai nt i f f s copyr i ght s because i t has acqui r ed t he r i ght s t o

    di spl ay cont ent f eat ur ed i n i t s VOD ser vi ce f r om t hi r d par t i es,

    whi ch have r epr esent ed t o Fi l mOn t hat t hey have t he val i d r i ght s

    t o l i cense. ( Davi d Decl . 3. ) However , Fi l mOn has

    per si st ent l y decl i ned t o i dent i f y t he t hi r d par t y f r om whom i t

    pur por t edl y obt ai ned t hose r i ght s, despi t e havi ng had ampl e

    oppor t uni t y t o do so. No such i nf or mat i on was pr ovi ded i n

    r esponse t o pl ai nt i f f s Mar ch 20, 2013 cease and desi st l et t er s,

    i n whi ch Fi l mOn asser t ed t hat t hey had acqui r ed val i d r i ght s t o

    di spl ay t he cont ent ci t ed i n [ t he] l et t er s. ( Mor r ow Cont empt

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 20 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    21/23

    21

    Decl . Ex. 4, at 1. ) Fi l mOn f ur t her f ai l ed t o i dent i f y t he t hi r d

    par t y pr ovi der or pr ovi de copi es of t he l i censi ng agr eement s i n

    r esponse t o t he f i l i ng of pl ai nt i f f s mot i on f or cont empt .

    Fi nal l y, at or al ar gument , we or der ed Fi l mOn to pr oduce t he

    l i censi ng agr eement s t o pl ai nt i f f s on or bef or e August 21, 2013,

    but t hey have f ai l ed t o pr oduce t hem despi t e t hat cour t or der .

    Moreover , al t hough def ense counsel has repeatedl y i ndi cated t hat

    he woul d di scl ose t he t hi r d par t y pr ovi der s i dent i t y subj ect t o

    a pr ot ect i ve or der , he has not done so, despi t e t he ent r y of a

    pr ot ect i ve or der i n t hi s case on J une 3, 2011, mor e than t wo

    year s ago ( dkt . no. 35) .

    I n sum, Fi l mOn has of f ered no evi dence what soever t hat t hey

    have val i dl y acqui red t he r i ght t o st r eam pl ai nt i f f s

    copyr i ght ed pr ogr ammi ng. Because pl ai nt i f f s asser t t hat t her e

    i s no t hi r d par t y pr ovi der wi t h aut hor i t y t o l i cense i t s

    copyr i ght ed pr ogr ammi ng ( see Pl . Cont empt Br . at 2) , we can onl y

    assume t hat no such l i censi ng agr eement s exi st , and any

    r epr esent at i ons t o t he cont r ary can hardl y be deemed t o have

    been made i n good f ai t h. ( Def . Cont empt Opp. at 4. ) For

    t hose reasons, we f i nd Fi l mOn and Davi d i n cont empt f or

    vi ol at i ng t he St i pul at ed Consent J udgment and Per manent

    I nj uncti on.

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 21 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    22/23

    CONCLUSION

    Based on the foregoing, we gran t p l a i n t i f f s ' motions tocompel FilmOn' s compliance with sec t ion 5.3 and the r e levan tf inanc ia l terms of the Set t l ement Agreement and f ind FilmOn inc i v i l contempt of cour t fo r i t s v io l a t i on of the In j unc t ion .FilmOn and David are hereby ordered to for thwi t h de l ive r top l a i n t i f f s ' counsel the sum of $1,350,000, plus i n t e r e s t a t thes ta tu tory r a t e , the cos t s of col lec t ion , and reasonablea t to rneys ' fees . P l a i n t i f f s ' counsel s ha l l submit on not ice aproposed form o f judgment to t h i s Court on o r before September17, 2013. FilmOn's counte r proposa l , i f any, s ha l l be f i l ed nol a t e r than September 20, 2013. The Clerk of the Court i sdi rec ted to t e rmina te the motions pending a t docket nos . 54, 65,and 68.

    SO ORDERED.

    DATED: New York, New YorkSeptember 10, 2013

    L ( 2 ~ = 4 ~ dNAOMI REICE BUCHWALDUNITED STATES DISTRICT JUDGE

    22

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 22 of 23

  • 7/29/2019 FilmOn OSC Opinion and Order

    23/23

    Copies the foregoing Order have been mailed on s date

    399New

    to fol lowing:Counsel for Pla in t i f f sPeter L. Zimroth,

    d & Por ter , LLPPark Avenue, NY 10022

    Robert Alan Garre t t , Esq.an R. Katz, Esq.C. Scot t Morrow, Esq.Arnold & Por ter , LLP555 Twelf th Stree t , N.W.Washington, D.C. 20004Counsel for DefendantRyan G. Baker, Esq. Baker Marquart LLP 10990 Wilshire Blvd. , Fourth Fl . Los Angeles, CA 90024

    23

    Case 1:10-cv-07532-NRB Document 74 Filed 09/10/13 Page 23 of 23