United States Court of Appeals, District of Columbia Circuit
December 7, 2017
from the United States District Court for the District of
Columbia (No. 1:12-cv-00957)
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.
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.
G. Hentoff and Connor S. Sullivan were on the brief for amici
curiae Disney Enterprises, Inc., et al. in support of
Before: Tatel, Griffith, and Wilkins, Circuit Judges.
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
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 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.
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.
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 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.
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.
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] 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.
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).
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] 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.
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 ...