WASHINGTON — A federal appeals court has declined to block the “AutoHop” ad-skipping function on Dish Network’s Hopper digital video recorder, upholding a district court's denial of a preliminary injunction.
Fox has claimed that the Hopper violates copyright law, as well as satellite-TV provider Dish’s carriage pact with the broadcaster. It had asked the 9th U.S. Circuit Court of Appeals to reverse a California federal district court’s refusal to grant the injunction while the underlying lawsuit is being decided.
A three-judge panel from the 9th Circuit held that "the district court did not abuse its discretion in holding that the broadcaster failed to demonstrate a likelihood of success on its copyright infringement and breach of contract claims regarding the television provider’s implementation of the commercial-skipping products."
The decision was made not on the merits of the case, but the court did provide some language that both Dish and Fox can point to.
Both Dish and the district court had asserted that a 2nd U.S. Circuit Court of Appeals decision in the Cablevision Systems Remote-Storage DVR case, which held that remote DVR functionality is not a performance subject to copyright, applied to AutoHop. In language that squares with that assertion, Judge Sidney Thomas wrote: "Dish’s program creates the copy only in response to the user’s command. Therefore, the district court did not err in concluding that the user, not Dish, makes the copy … If recording an entire copyrighted program is a fair use [Sony Betamax case], the fact that viewers do not watch the ads not copyrighted by Fox cannot transform the recording into a copyright violation."
In language that Fox can point to in its breach of contract claim, Thomas also wrote: "We express no view on whether, after a fully developed record and arguments, the district court’s construction of ‘distribute’ will prove to be the correct one."
However, he added: "We are, however, dubious of Dish’s position that PrimeTime Anytime [an automatic broadcast-network primetime recording feature] is not ‘similar’ to ‘interactive, time-delayed [or] video-on-demand’ programming, the distribution of which is expressly prohibited by the 2002 contract. Dish has convinced us that PrimeTime Anytime is not identical to video-on-demand but is at a loss to explain why it is not similar, and at oral argument, when pressed, Dish could not provide even a single example of what would be considered similar under the contract if not this.
“The contract is written broadly, and Fox has a good argument that PrimeTime Anytime is ‘similar,’ even though not exactly the same, as time-delayed or video-on-demand programming," Thomas concluded.
Fox was not happy with the decision.
"We are disappointed in the court’s ruling, even though the bar to secure a preliminary injunction is very high," Fox said in a statement. "This is not about consumer choice or advances in technology. It is about a company devising an unlicensed, unauthorized service that clearly infringes our copyrights and violates our contract. We will review all of our options and proceed accordingly."
That could include seeking full court review of the three-judge panel decision.
“Dish is pleased that the 9th Circuit Court of Appeals has affirmed the district court’s 2012 order denying Fox’s preliminary injunction motion,” Dish executive vice president and general counsel R. Stanton Dodge said. “In so doing, the courts continue to reject Fox’s efforts to deny our customers’ access to PrimeTime Anytime and AutoHop — key features of the Hopper Whole-Home HD DVR. This decision is a victory for American consumers, and we are proud to have stood by their side in this important fight over the fundamental rights of consumer choice and control."