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FilmOn Founder Plans to Sue CBS, CNET for Distributing Piracy Software

FilmOn Founder Plans to Sue CBS, CNET for Distributing Piracy Software

FilmOn founder Alki David charges CNET, a subsidiary of CBS, with the distribution of “illegal software” that allows users to circumvent DRM technology in violation of the Copyright Act as well as other software that lets users illegally stream and download copyrighted material. Countersuit is in response to claims by CBS and other TV broadcasters that FilmOn illegally retransmits copyrighted programming.

Updated 01/02/11 to include quote from FilmOn founder Alki David.

In one of the more bizarre twists of copyright infringement lawsuits, FilmOn founder Alki David, accused by CBS of illegally transmitting its TV station broadcasts, said he plans to countersue because its subsidiary, CNET, engages in the “illegal distribution of DRM [digital rights management] removal software as well as the illegal distribution of file sharing software with malicious intent to infringe on copyright.”

At first glance the lawsuit seems laughable, but David makes a rather convincing argument.

“CNET, a subsidiary of CBS Interactive, which is a division of CBS, has for several years now been distributing BitTorrent software online,” David says in an online video posted on YouTube last week. “That’s right piracy. CBS through its subsidiary CNET has distributed over 1 billion illegal file-sharing softwares [sic] as well as DRM cracking softwares [sic].”

FilmOn.com allows subscribers who pay $9.99 a month to access live HD TV feeds online. TV broadcasters claim he’s retransmitting copyrighted programming without their consent, and last month successfully convinced a judge to issue a temporary injunction.

Although the Copyright Act requires broadcasters to license retransmission broadcasts of their content to cable systems and broadcast satellites, the networks argue that Section 111 of  the Copyright Act doesn’t apply to streaming internet services.

This where David seems to make a rather confusing argument. On the one hand he says that he is a cable system and eligible for a compulsory license, but on the other he says that he is not and therefore his secondary transmission is exempt from the Copyright Act.

“Mr. David is clearly not feeling very good about his prospects in the court system.  He is hardly an expert on intellectual property rights,” CBS said in response to David’s YouTube video. “CNET respects such rights, and meanwhile the court has issued a temporary restraining order against Mr. David and his company. We continue to think that the court is the best venue to determine the outcome of this case, one in which unauthorized use of our content has been distributed illegally.”

There’s no mention of when David plans to countersue, but he does make an interesting counterclaim about CNET, and therefore CBS, engaging in some illegal behavior of its own. For the Copyright Act expressly forbids the distribution of DRM circumvention software and CNET clearly makes this type available on its site, some even boasting high “Editors Rating” marks.

From the Copyright Act:

(2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that â€”

(A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title;

(B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title; or

(C) is marketed by that person or another acting in concert with that person with that person’s knowledge for use in circumventing a technological measure that effectively controls access to a work protected under this title.

In fact, earlier this year US District Court Judge Marilyn Hall Patel issued a permanent injunction against Real Networks DVD-backup software RealDVD. She declared that RealDVD, in order to make backup copies, would likely violate the Digital Millennium Copyright Act and the Content Scramble System (CSS) license.

The MPAA maintains that making even one backupcopy of a DVD is illegal, arguing that the price of a DVD is predicated on the “notion of certain use rights associated with certain price points,” and that it would have to change the price of DVDs (certainly upwards) if people wanted to be able to make copies.

The Librarian of Congress at the US Copyright Office has clarified some of the exceptions to this rule, but only laid out allowable purposes for circumventing the Content Scrambling System protecting DVDs, and not the lawful distribution of the software that does so.

David also highlights the plethora of software on CNET that allows users to stream and watch copyrighted content in much the same way that FilmOn does, and yet remain accessible to the public.

It is an interesting bout of hypocrisy. One has to be either for illegal streaming or against it, especially if you plan on suing people for daring to do the latter, and nice to see David point this out. One can’t say that it’s illegal to rebroadcast copyrighted programming and then offer software that explicitly allows you to do just that.

The counterclaim may not help lift the injunction on FilmOn and prevent it from being shutdown, but at least he’s showing the world CBS’ double standard when it comes to copyright infringement.

I think David’s real problem is trying to charge people $9.99 for a streaming service when so many free alternatives exist. Any time you try make a buck by using other people’s content without their permission you can rest assured you’ll wind up in court.

Stay tuned.

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Update:

Filmon Founder Alki David told me in an email exchange that my criticism that it unfairly profits from the use of other peoples content is unfounded, that it only began charging users the $9.95 monthly subscription fee AFTER discussions with the TV networks.

“When FilmOn got the temp injunction, at the time we were not charging the $9.95,” he writes. “We took a decision to not charge till after discussing with the Networks. Who led by CBS have been relentless in trying to top us.”

The plot thickens indeed.