Fox Broadcasting Company will get another chance next week to stop Dish Network from using its AutoHop feature, which automatically skips ads when programs are recorded on its Hopper digital video recorder (DVR).
In November, a federal district court judge in California denied Fox’s motion for a preliminary injunction against Dish’s ad-skipping device and its PrimeTime Anytime service, thereby refusing to block the service the satellite broadcaster launched last spring.
The case, which illustrates the conflicts that often arise between technological innovation and the law, revolves around a video-on-demand service offered by Dish. PrimeTime Anytime allows subscribers to record the full prime time broadcast schedule for the four major networks, and the AutoHop feature allows them to digitally record the programming free of commercials.
Fox, which immediately filed an appeal, did not appear disheartened by the ruling. While it lost the preliminary injunction fight—at least temporarily—Fox said it saw in the judge’s ruling indications that in the end it would prevail with its claims that Dish has infringed its copyrights and breached provisions of its contract.
“As reported, the court denied Fox’s request for a preliminary injunction,” Fox said in a statement when the ruling was issued. “But we are gratified the court found the copies Dish makes for its AutoHop service constitute copyright infringement and breach the parties’ contract.”
But Dish, too, claimed victory, asserting that the ad-skipping “Hopper” and its PrimeTime Anytime service are improvements on existing technology and fall under the “fair use” provisions of copyright law. “The ruling underscores the U.S. Supreme Court’s Betamax decision, with the Court confirming a consumer’s right to enjoy television as they want, when they want, including the reasonable right to skip commercials, if they so choose,” Dish executive vice president and general counsel R. Stanton Dodge said in a statement.
How could both sides claim victory? Judge Dolly Gee’s ruling [PDF] did indeed side with Dish in that she refused to grant an injunction and halt the use of Dish’s AutoHop DVR service. She also rejected Fox’s claim that it would likely prevail with claims that Dish is liable for infringement committed by its subscribers. The Hopper, she wrote, is only available to private consumers, and there is no evidence that they use if for anything other than “time-shifting” in their homes or on mobile devices. Dish therefore cannot be responsible for inducing infringement or profiting from direct infringement, she wrote.
But Fox can afford to hold out some hope as it hops down the appellate road. The judge also indicated that some of Dish’s features could be construed as directly infringing Fox’s copyrights. The determining factor, she said, would be whether Dish exercises control over the copying process. And she cited features, such as the satellite company deciding when primetime recordings occur, that may be interpreted as a significant degree of control.
She also didn’t buy Dish’s arguments that “fair use” applies in this case—especially where it concerns the economic impact of the Hopper on Fox’s copyrights. She noted that Fox licenses copies of its programs to Netflix, Hulu, iTunes, and Amazon.
“By making an unauthorized copy for which it has not paid and using it for AutoHop, Dish harms Fox’s opportunity to negotiate a value for those copies and also inhibits Fox’s ability to enter into similar licensing agreements with others in the future by making the copies less valuable,” she wrote. Gee also indicated that Fox would likely succeed in showing that copies Dish makes to ensure that the AutoHop feature works properly violate its contract.
In the end, however, the judge said Fox failed to show it will suffer irreparable harm from those “quality assurance” copies. She therefore denied Fox’s preliminary injunction motion.
Fox, which said in its statement that the court “erred” in finding that Fox’s damages were not suitable for a preliminary injunction, is scheduled to file its brief in an appeal of the ruling to the Ninth Circuit by the end of next week.
See also: “Streaming TV Services Headed to Court Over Copyright Claims,” CorpCounsel, September 2012.
