Spanski v. Telewizja Polska: Copyright

The D.C. Circuit held that a foreign broadcaster who directs infringing video-on-demand performances to viewers in the United States commits a domestic violation of the Copyright Act.

Spanski Enterprises, Inc. v. Telewizja Polska, S.A., 883 F.3d 904 (D.C. Cir. 2018), No. 17-7051, decided March 2, 2018, answered a question the federal appellate courts had never squarely confronted: can a foreign broadcaster be held liable under the U.S. Copyright Act when it streams infringing content from servers abroad to viewers who watch in the United States? Writing for the D.C. Circuit, Judge David Tatel held that it can. Because the public performance was completed on American screens, applying the Copyright Act was a permissible domestic application of the statute, not an impermissible extraterritorial reach. The court affirmed a damages award of more than three million dollars.

At a glance

Case: Spanski Enterprises, Inc. v. Telewizja Polska, S.A., 883 F.3d 904 (D.C. Cir. 2018), No. 17-7051
Decided: March 2, 2018; opinion by Judge Tatel
Issue: Whether the Copyright Act reaches a foreign broadcaster whose video-on-demand stream originates abroad but is performed on screens in the United States
Holding: Holding a foreign actor liable for an infringing public performance completed in the United States is a permissible domestic application of the Copyright Act, not an extraterritorial one
Disposition: Affirmed, including a willfulness finding and $3,060,000 in statutory damages

A licensing deal, a disabled geoblock

Telewizja Polska (TV Polska) is Poland’s national public broadcaster and the producer of Polish-language television programming, including the international channel TVP Polonia. Spanski Enterprises, a Canadian company, held the exclusive license to publicly perform and distribute that programming throughout North and South America (the Western Hemisphere rights). To honor that exclusivity, TV Polska operated its online video-on-demand catalog with geoblocking technology designed to prevent users in the Western Hemisphere from streaming content licensed to Spanski.

The system failed. More precisely, it was defeated. In late 2011, Spanski discovered that fifty-one episodes of programming in which it held exclusive rights could be streamed by viewers in the United States, the geoblocking having been removed. Spanski sued in the District of Columbia. The district court found that TV Polska had infringed Spanski’s exclusive public-performance right, that the infringement was willful, and awarded $60,000 per episode for fifty-one episodes, a total of $3,060,000. TV Polska appealed, contending principally that holding a Polish company liable for conduct emanating from servers in Poland was an impermissible extraterritorial application of U.S. copyright law.

The presumption against extraterritoriality and the RJR Nabisco test

The Copyright Act, like most federal statutes, carries a presumption against extraterritorial application. The Supreme Court’s decision in RJR Nabisco, Inc. v. European Community (2016) supplies the governing two-step analysis. First, a court asks whether the statute gives a clear, affirmative indication that it applies extraterritorially; if not, the presumption holds. Second (and this is the step that decided Spanski), the court asks whether the case nonetheless involves a permissible domestic application of the statute by identifying the statute’s “focus” and determining whether the conduct relevant to that focus occurred in the United States.

At step one, the parties agreed that the Copyright Act has no extraterritorial application, and the court assumed they were correct rather than deciding the point, citing the Fourth Circuit’s Tire Engineering & Distribution, LLC v. Shandong Linglong Rubber Co. and the Ninth Circuit’s en banc Subafilms, Ltd. v. MGM-Pathe Communications Co. The decisive question was therefore the second one: where did the conduct relevant to the Act’s focus take place? The court identified that focus as policing infringement and protecting the exclusivity of the rights the Act guarantees. The relevant exclusive right was the right of public performance under 17 U.S.C. § 106(4), and a performance, the court reasoned, occurs where the work is shown to the public. Although TV Polska uploaded and formatted the episodes in Poland, the infringing performances “occurred on the computer screens in the United States on which the episodes’ ‘images’ were ‘show[n].’” That the transmitting servers sat in Poland did not change the location of the performance any more than the location of a broadcast tower changes where a television program is watched. The conduct relevant to the statute’s focus (the completed public performance) occurred domestically, making the application of the Act a permissible domestic one.

Volitional conduct: who performed?

TV Polska’s fallback argument was that even if the performances occurred in the United States, it did not perform them: the U.S. viewers did, by clicking play. The Copyright Act, the broadcaster urged, should reach only the proximate human actor, and that actor sat in America beyond TV Polska’s control.

The court rejected the attempt to offload responsibility onto end users, and it did so on the statute’s text rather than by resolving the volitional-conduct debate. “Nowhere,” the court wrote, “does the Act state that a work so shown is performed only if a third-party end user plays no role in the showing.” Because TV Polska “show[ed]” the fifty-one episodes “to the public” through its video-on-demand system, it violated Spanski’s public performance right. The court then leaned on American Broadcasting Cos. v. Aereo, Inc., 573 U.S. 431 (2014), reasoning that a viewer’s decision to access a program does not relieve the broadcaster of liability, and that TV Polska, by selecting as well as transmitting the content, played an even more active role than Aereo had.

Notably, the D.C. Circuit did not adopt the volitional-conduct requirement that several other circuits apply to shield passive conduits. It observed that “[o]ur court has yet to decide whether to read such a volitional conduct or proximate cause requirement into the Copyright Act, and we need not do so today,” because TV Polska’s conduct constituted infringement under Aereo “whatever the scope of any such requirement might otherwise be.” The district court had found that TV Polska employees took volitional action by removing the “minus America” restriction, and the D.C. Circuit upheld that factual finding as not clearly erroneous, but the legal question of whether the Act contains a volition element remained open in the circuit.

Willfulness and the damages award

The court also affirmed the finding of willful infringement, which supported the enhanced per-work statutory damages. The record showed that TV Polska had affirmatively disabled the geoblocking for the fifty-one episodes and then took purposeful steps to conceal what it had done. That combination (deliberate removal of the protective technology plus after-the-fact concealment) comfortably established willfulness, and the $60,000-per-episode award, well within the statutory range for willful infringement, was not an abuse of discretion. The total of $3,060,000 stood.

Open questions

How “directed” must a foreign transmission be? Spanski involved an on-demand system that delivered specific episodes to U.S. requesters; the analysis may differ for passive availability or incidental spillover across borders.
Does the same logic extend to other exclusive rights (distribution or reproduction) whose “focus” may not be as cleanly located at the point of receipt as a public performance is?
How will courts treat defendants who lack any U.S. presence or assets, where the liability theory is sound but enforcement of a judgment is doubtful?

Implications

Receipt location can anchor liability. A foreign actor cannot escape the Copyright Act simply by placing its servers abroad if the infringing performance is completed on U.S. screens.
Geoblocking is now a legal, not just technical, safeguard. Disabling or failing to maintain territorial restrictions can expose a foreign rights-holder to direct infringement liability in the United States.
The user’s click is not a shield. Video-on-demand providers that choose what to make available and to whom are direct performers, not neutral conduits. The D.C. Circuit reached that result under Aereo without deciding whether the Copyright Act contains a volitional-conduct requirement, so that question stays open in the circuit.
The RJR Nabisco focus test is the battleground. Cross-border copyright disputes increasingly turn on identifying the statutory “focus” and locating the relevant conduct, rather than on the residence of the defendant.

Frequently asked questions

Did Spanski make U.S. copyright law apply extraterritorially? No. The parties agreed that the Copyright Act has no extraterritorial application, and the D.C. Circuit assumed they were correct rather than deciding the question. It found instead that this was a domestic application, because the public performance (the conduct relevant to the statute’s focus) was completed on screens in the United States, even though the transmitting servers were in Poland.

Why was Telewizja Polska the infringer rather than the U.S. viewers? The court held that TV Polska itself performed the works by operating the video-on-demand system, controlling its content, and removing the geoblocking that had prevented U.S. access. Nothing in the Act, the court reasoned, says a work is performed only if the end user plays no role in the showing, and under Aereo a viewer’s click does not relieve the broadcaster. The court expressly declined to decide whether the Copyright Act contains a volitional-conduct requirement at all, holding that TV Polska’s conduct infringed whatever the scope of any such requirement.

How were the damages calculated? The district court awarded statutory damages of $60,000 for each of the fifty-one infringed episodes, for a total of $3,060,000, after finding the infringement willful. The D.C. Circuit reviewed the willfulness finding for clear error and the award for abuse of discretion, and affirmed both.