Geoblocking is the practice of digitally embedding territorial access restrictions into content distributed across the Internet. At a time when the European Union is legislating anti-geoblocking regulations, it appears the U.S. is going in the opposite direction. In Spanski Ents., Inc. v. Telewizja Polska, S.A.,[1] on March 2, 2018, the Court of Appeals for the District of Columbia held that where an exclusive licensing agreement required geoblocking of content, the content provider could not then circumvent the license, and therefore escape copyright liability, just because the content was derived outside the U.S.
The facts are as follows.
Telewizja Polska is Poland’s national public television broadcaster, and creates Polish-language content for distribution worldwide. Spanski, a Canadian corporation, entered into an exclusive licensing agreement with Polska whereby Spanski would have all broadcasting and performance rights in North and South America. In order to protect Spanski’s broadcast rights, Polska was required to employ geoblocking technology into its content distributed to Spanski. However, internally, Polska made two sets of the broadcasts – one geoblocked version, and one non-geoblocked version. The geoblocked version was given to Spanski for its distribution and performance rights under the exclusive license, while the non-geoblocked version was used by Polska on its own video-on-demand online site. There were a total of 51 episodes which were made and which are at-issue in this case. Spanski, in the meantime, had applied and nearly received copyright registrations for all of these 51 episodes. Now, note the peculiarity here with the parties: Polska was the original content provider, and hence the original copyright owner in Poland, while Spanski was the content distributor, but the registered copyright owner in the U.S.
The mechanics of geoblocking usually involve a content provider to compare a particular device’s Internet protocol (IP) address to a list of IP addresses associated with a particular country. If the device’s location (i.e., IP address) is in a country with geoblocking in place, that device is then unable to access the content.
The D.C. Circuit panel was composed of Judges Tatel, Griffith, and Wilkins, with Judge Tatel writing for the court. Judge Tatel, noting the district court’s ruling, was skeptical about Polska’s claim that the episodes were formatted without geoblocking as an “accident”:
[There was] no evidence that a format could [possibly] be created accidentally.[] Polska “acted willfully and intentionally to infringe Spanski’s copyright.” [In fact,] 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.[2]
Polska tried arguing that the end user, not the provider, was liable for copyright infringement. Judge Tatel disagreed, stating that the Copyright Act gives to copyright holders the exclusive right of performance. That right, as to the U.S., was held by Spanski. Further, he noted in Aereo:
[Aereo] confirms that 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 . . . (emphasis added).[3]
Polska also tried arguing that Aereo involved third-party content, whereas here, the content was Polska’s own original content. Judge Tatel also disagreed because the Copyright Act does not make this distinction – if content infringes another’s performance right, it is infringement.
Polska’s final argument was that even if its non-geoblocking acts were infringing, liability would be an extraterritorial application of the U.S. Copyright Act. Judge Tatel was unconvinced:
The [Copyright] Act grants copyright holders several “exclusive rights” – among them, the right “to perform a copyrighted work publicly.[4] . . . The Copyright Act “focuses,” [] 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.[5]
Polska was liable for the damages $60,000 per episode, amounting to $3.06 million. The D.C. Circuit affirmed both infringement and damages findings of the district court.
Certainly this case upholds the basis contract law principles that underlie the exclusive license between Polska and Spanski. Yet, this case is really more than that. Spanski exposes the tensions between free information and intellectual property rights. Because copyright law is jurisdiction-based, proper licensing of trans-border content is absolutely essential in protecting the underlying copyright registrations. Geoblocking technology is helpful to content providers in protecting those copyrights, as well as liability under the licensing schemes. However, net neutrality protects all Internet content equally, and geoblocking is in many ways contrary to this idea. And, of course, other technologies (e.g., VPNs) can get around geoblocking, as some VPN providers are ramping up their marketing campaigns in the backdrop of FCC repealing net neutrality rules. Newer geoblocking technologies will be developed which will continue to create tensions with copyright law, in addition to geoblocking legislation, both pro- and anti-, being proposed in governments around the world. What is for certain is the debate over geoblocking is far from over.
[1] ___F.3d___ (D.C. Cir. 2018) (slip op.), aff’g 222 F. Supp. 3d 95 (D.D.C. 2016).
[2] Id. (slip op. at 6).
[3] Id. (slip op. at 9). See also Am. Broadcasting Cos. v. Aereo, Inc., 573 U.S.___, 134 S. Ct. 2498, 2503 (2014).
[4] See 17 U.S.C. §106(4).
[5] See Spanski, supra (slip op. at 16).