Spanski v Telewizja Polska: domestic copyright infringement from abroad

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 appealed 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.

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”) granting it North 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.

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, to “perform” the fifty-one episodes “publicly,”. 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 website” during the period of infringement, and that “there was no evidence that a failure in TV Polska’s geoblocking system” caused the episodes to become available. 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.

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. Observing that Spanski’s rights under the Act were “not in dispute,” the court ruled that even if “the Copyright Act requires volitional conduct by the Defendant for direct infringement to have occurred,” TV Polska had satisfied that requirement by streaming copyrighted content to United States viewers through its website. 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.

TV Polska appealed the district court’s conclusions as to both liability and damages. The United States has filed an amicus brief in support of Spanski on the issue of liability, as has a group of entertainment producers and distributors. TV Polska contested 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.

First, TV Polska points out that it transmitted only content that it had itself created. Moreover, TV Polska makes no argument that Spanski’s status as licensee of the fifty-one episodes, rather than their creator, affects the scope of its rights under the Copyright Act. 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 the appeal court agreed – that TV Polska’s own use of this system to communicate infringing performances amounted to actionable conduct under the Copyright Act.

TV Polska’s also argued that even if it did infringe Spanski’s copyright, holding it liable for that infringement would constitute an impermissible extraterritorial application of the Copyright Act because it did nothing in the United States. The Copyright Act has no extraterritorial application. “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.”

The Copyright Act grants copyright holders several “exclusive rights” – among them, the right “to perform a copyrighted work publicly,” – and effectuates those rights by prohibiting “infringement,” or the “violation” of those “exclusive rights”. 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 “shown.” 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.”

Alternatively, TV Polska argued that even if the Copyright Act’s focus includes the infringing performance itself, its performance occurred abroad. As TV Polska sees it, 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. According to 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 “shown” to even a single viewer.

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 this case, the infringing performance occurred in the United States.

TV Polska offered response, claiming only that foreign enforcement authorities can address such cases. The violation of a copyright holder’s exclusive performance right inside the United States, after all, represents a domestic injury. TV Polska argued 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”, or where, again as here, the domestic copyright holder is protected by contract and so need not invoke statutory law to protect its interests.

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.

To sum up, the court held 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, the appeal affirmed as to both liability and damages.