## Facts

- Home Box Office, Inc. (HBO), a subsidiary of Time Inc., distributed a subscription television service transmitted via Multipoint Distribution Service (MDS) microwave channels from the Empire State Building.
- HBO’s service consisted of programs copyrighted by HBO and programs for which HBO held licensed performance rights (e.g., films and sporting events).
- HBO delivered the MDS signal through contracted “affiliates,” who received the signal at buildings using specialized equipment and resold the service to individual residents for a monthly fee.
- Orth-O-Vision, Inc. (Orth-O-Vision) served as an HBO affiliate distributing HBO’s service to residential subscribers in Queens, New York.
- A dispute arose regarding the affiliate relationship and payment obligations; Orth-O-Vision allegedly continued receiving and distributing HBO’s signal without compensating HBO.
- Orth-O-Vision sued asserting antitrust and contract-based claims (with state claims asserted under pendent jurisdiction).
- HBO and Time counterclaimed alleging violations of the Federal Communications Act, copyright infringement, theft of services under New York law, and common-law unfair competition, and sought injunctive relief to stop further unauthorized use.

## Issues

1. Whether Orth-O-Vision’s continued interception and redistribution of HBO’s subscription MDS programming without authorization constituted actionable misconduct under copyright law, the Federal Communications Act, New York theft-of-services law, and common-law unfair competition.
2. Whether, and to what extent, 17 U.S.C. § 301 preempted state-law theories (theft of services and unfair competition) arising from unauthorized reception and use of subscription programming.
3. Whether HBO and Time were entitled on summary judgment to permanent injunctive relief restraining future unauthorized reception and distribution of HBO’s subscription program service.

## Decision

- The court granted HBO and Time’s motion for partial summary judgment to the extent supported by the record.
- The court granted a permanent injunction restraining Orth-O-Vision from appropriating HBO’s subscription program service, including by unauthorized reception and redistribution.
- The court concluded that undisputed facts showed Orth-O-Vision continued receiving and distributing the subscription service without authorization or payment.
- The court rejected the argument that federal copyright law necessarily displaced all related state-law protection for the unauthorized appropriation of a subscription transmission as a service.

## Legal Principles

- Summary judgment is appropriate where no genuine dispute of material fact exists and the movant is entitled to judgment as a matter of law; undisputed evidence of unauthorized reception and retransmission of a subscription service can satisfy that standard.
- Copyright law protects copyrighted works embodied in subscription programming, and unauthorized redistribution can support injunctive relief to prevent continuing or future violations.
- Under 17 U.S.C. § 301, state-law claims are preempted if they assert rights equivalent to exclusive rights within the subject matter of copyright; state-law theories may proceed when they target distinct interests, such as wrongful appropriation of a paid transmission service.
- Permanent injunctive relief may be warranted where ongoing unauthorized reception and redistribution threatens continuing harm not adequately remedied by damages, including harm to a subscription distribution model and to licensed distribution rights.

## Conclusion

The court held that a former affiliate could not continue intercepting and distributing a subscription microwave television service without authorization and compensation, granted partial summary judgment for HBO and Time on overlapping federal and state theories, and entered a permanent injunction barring future unauthorized appropriation of the subscription program service.


Orth-O-Vision, Inc. v. Home Box Office, Inc., 474 F. Supp. 672 (S.D.N.Y. 1979)