Less than 48 hours after a New York Federal District Court Judge declined to honor its request for summary judgment in a case focused on copyright infringement brought against the operation by the nation’s “Big Four” broadcast TV networks, Locast on September 2 suspended its operations.
Now, that suspension has become a permanent cessation of business activities, thanks to a ruling Wednesday from the 93-year-old judge overseeing the case.
On Wednesday (9/15), Judge Louis L. Stanton put his signature to a Permanent Injunction Order that effectively bars Locast from continuing its “non-profit” business operations.
The order is against defendants and counterclaim plaintiffs David Goodfriend, founder of Locast, and his Sports Fans Coalition NY LLC. And, it is a victory for joint plaintiffs ABC, FOX, CBS and NBC.
The Order cements Article C, paragraph 6 of a December 17, 2019 agreement that states the following:
If the Court determines that Mr. Goodfriend and SFCNY do not qualify for the Exemption, the Parties agree that the Court should immediately enter a Permanent Injunction barring Mr. Goodfriend and SFCNY, along with their officers, agents, servants, employees, attorneys, and other persons who are in active concert or participation with Mr. Goodfriend, SFCNY, or their officers, agents, servants, employees, or attorneys (if they receive actual notice pursuant to Rule 65(d) (2) of the Federal Rules of Civil Procedure) from operating Locast.
Importantly, the agreement does not bar Goodfriend and SFCNY from applying for a stay of the Permanent Injunction pending appeal. At the same time, the broadcasters can oppose any such stay.
Whether Goodfriend plans to appeal is now the biggest question regarding any rebirth of Locast.
Locast’s swift demise, following a rapid rise in its market roster, was triggered by an August 31 decision by Stanton to move forward with a trial, less an out-of-court settlement between Locast and the FOX, CBS, ABC and NBC television networks.
The decision to proceed with a trial was prompted by two key issues Stanton had. One was “interruptions” in programming, which Locast agreed to stop only after Stanton’s decision, that served as donation pledge opportunities. In Stanton’s view, these interruptions suggested that Locast was indeed a fee-based service, since access to the over-the-air channels was paused.
While Locast insisted it was a non-profit and simply offering free-to-air signals to viewers within a DMA with IP-distributed channels, Locast counted on user contributions to not only maintain its current services but to build out new markets. That latter fact was another problem for Stanton.
“There are considerable costs for equipment, bandwidth, and operational support that helps run Locast,” the service explained. “These costs will only go up as we expand our service to new markets, as well as when more and more people cut the cord to become new Locasters.”
Given the rate at which Locast was expanding, being prohibited from using the funds to grow was likely the biggest dagger thrown at Goodfriend and his associates.
