Ninth Circuit Refuses to Block Dish Network’s Ad-Skipping Technology

The Dish Network satellite service recently scored a significant victory before the Ninth Circuit Court of Appeals. The panel denied Fox Broadcasting’s appeal to overturn a lower court decision denying an injunction to stop Dish from offering its “AutoHop,” “Hopper” and “PrimeTime Anytime” services, which provide commercial free content to users.

The Ninth Circuit concluded that Fox had not demonstrated a likelihood of success on its copyright infringement claims.

“Infringement of the reproduction right requires ‘copying by the defendant,” the opinion states. “Fox argues that because Dish participates in the operation of PrimeTime Anytime on a daily basis, Dish made the copies, either alone or concurrently with its users. However, operating a system used to make copies at the user’s command does not mean that the system operator, rather than the user, caused copies to be made. Here, Dish’s program creates the copy only in response to the user’s command.”

The Ninth Circuit also rejected Fox’s argument that Dish could be held liable for contributory infringement, finding that the customers’ recording of the content constituted fair use. In so ruling, the appeals court relied heavily on Sony Pictures, Inc. v. Universal Studios, Inc., 464 U.S. 417 (1984), in which the Supreme Court held that “time-shifting” is a fair use recording of copyrighted broadcast content.

“If recording an entire copyrighted program is a fair use, the fact that viewers do not watch the ads not copyrighted by Fox cannot transform the recording into a copyright violation. Indeed, a recording made with PrimeTime Anytime still includes commercials; AutoHop simply skips those recorded commercials unless a viewer manually rewinds or fast-forwards into a commercial break. Thus, any analysis of the market harm should exclude consideration of AutoHop because ad-skipping does not implicate Fox’s copyright interests,” the panel concluded.

This case, along with the litigation against start-up Aereo, Inc., highlights the growing tension between broadcast networks and service providers. While new technology provides consumers with more options for viewing content, it also threatens the long-standing business model of the networks.

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