Fox Broadcasting Co. v. Dish Network, LLC (C.D. Cal. January 12, 2015) is a copyright case in which the United States District Court for the Central District of California, by granting partial summary judgment, denied most parts of the copyright claims presented by Fox Broadcasting Company (Fox) against Dish Network (Dish) for its service, a DVR-like device that allowed users to record programming that could be accessed later through any Internet-connected device (Dish Anywhere). The service offered by Dish also allowed users to record any or all Fox's (and the four major broadcast networks) prime-time programs (Prime Time Any Time or PTAT) and to automatically skips commercials (AutoHop).
Fox argued that Dish Network was guilty of copyright infringement and breach of contract. The district court held that Dish Anywhere did not infringe Fox's public performance right because the service only could be used by subscribers to get access to their own recordings. The recording action and the later transmission depended on the subscribers' engagement in a volitional action. Therefore, there was no direct infringement from Dish. Neither was there a secondary infringement of the company because Dish's users did not publicly perform by using Dish Anywhere.
Dish had a license from Fox that allowed it to transmit Fox's programing to its subscribers. When a user transmits programing from one device to another, he or she accesses something that is already in his or her possession from a different device, and this action is not a public performance within the meaning of the statute. The court held that PTAT did not directly infringe Fox's reproduction right because Dish did not engage in a volitional conduct. The recording was made in exclusive response to the user's command. Also, the court ruled that PTAT used by Dish's subscribers was fair use according Sony case.
Most, but not all, of Fox's claims were dismissed; ultimately an agreement was reached whereby AutoHop would only become available for Fox stations seven days after a program is transmitted; terms of the settlement were not disclosed.
Background According to the courts' previous holdings, and the summary judgment decision the factual background was as follows:
Procedural background On May 24, 2012, Fox sued Dish for copyright infringement and breach of contract. On August 22, 2012, Fox filled a motion for a preliminary injunction to enjoin Dish from operating, distributing, selling, or offering Dish Anywhere, PTAT, AutoHop and any comparable features. On November 7, 2012, the district court denied the motion. Fox appealed the ruling to the 9th Circuit. On July 25, 2013, 9th Circuit affirmed. Fox's petition for rehearing and rehearing en banc was denied. On January 12, 2015, the District court granted partial summary judgment.
Challenged products and features
Hopper In 2012, Dish started offering a Set-top box (STB) with digital video recorder (DVR) feature and video on demand (VOD) feature called the Hopper.
Dish Anywhere (Hopper with Sling) In January 2013, Dish implemented the next generation Hopper, Hopper with Sling, that allows consumers to view television content from their home STBs over the Internet by use of a device that communicates with any Internet connected device. This technology allows the user watch television on their laptops, tablets or smartphones via a remote access to the recorded programing. To access to this service the subscribers must log into the company page or download an application for their tablet or smartphone. The service only is available to subscribers in good-standing.
PrimeTime Anytime (PTAT) PrimeTime Anytime (PTAT) is the Dish service, available since March 15, 2012, that allows subscribers to automatically record all prime time programs from the four major broadcasting networks (ABC, CBS, NBC, and Fox). Users can determine whether or not to activate the PTAT functions, but the start time and the end time of the recordings and the programming schedules of the day are determined by Dish. All recordings are done on the user's Hopper. PTAT recordings are automatically deleted after several days (the default setting was 8 days).
AutoHop In May 2012, Dish launched a new feature of hopper, called AutoHop, which enabled a user who recorded prime time programs with PTAT to automatically skip all commercials included in those programs. The user could opt to enable the AutoHop feature which would automatically skip all commercials. Dish transmitted the marking data, data that told the Hopper when the commercials began and ended, to PTAT users every day. The data were manually generated and examined by Dish's employees in order to assure its accuracy and quality; to do this Dish copied Fox's programs (QA copies) and used them internally. Regardless of AutoHop function, the Hopper retained all commercials until the TV program would be deleted when its retention period had expired. The AutoHop function offered users the ability to manually rewind or fast-forward the recordings that included the commercials.
Hopper Transfers Hopper Transfers allows DISH subscribers to transfer copies of recordings from a DVR to a tablet or smartphone for later viewing at any location with or without an Internet connection. Copies will not play if the device has not contacted the DISH Anywhere site for 30 days.
Contracts Fox claimed Dish breached three clauses of their contract; the first two clauses were in the Retransmission Consent (RTC) Agreement of 2002, and the last clause was in the Letter Agreement about VOD in 2010. EchoStar [now Dish] shall not, for pay or otherwise, record, copy, duplicate and/or authorize the recording, copying, duplication (other than by consumers for private home use) or retransmission of any portion of any Station's Analog Signal without prior written permission of the Station, except as is specifically permitted by this Agreement (No copying provision). EchoStar acknowledges and agrees that it shall have no right to distribute all or any portion of the programming contained in any Analog Signal on an interactive, time-delayed, video-on-demand or similar basis; provided that Fox acknowledges that the foregoing shall not restrict EchoStar's practice of connecting its Subscribers' video replay equipment ... (No-Distribution provision). DISH will disable fast forward functionality during all advertisements; FBC and DISH may include a pre-roll announcement prior to each show regarding the fast-forward disabling. DISH and FBC will discuss in good faith the timing of DISH's implementation of such fast-forward disabling and messaging to consumers; provided that DISH acknowledges and agrees that such fast-forward disabling is a necessary condition to distribution of the Fox broadcast content via VOD. Dish did not offer Fox's programs via its VOD service.
Judicial opinions The first district court opinion denied Fox's preliminary injunction. The Ninth Circuit reviewed the district court's decision with a very deferential standard of review, and affirmed. The second district court decision granted to Dish partial summary judgment.
District Court for the Central District of California denied preliminary injunction On November 7, 2012, the district court denied Fox's motion for preliminary injunction finding that 1) PTAT and AutoHop neither infringed on the copyright nor committed breach of contract; and 2) although QA copies constituted copyright infringement and breach of contract, the harm from the copies was not irreparable. For further discussion and details see the district court opinion.
Copyright infringement Regarding the copies on the Hopper, Fox argued that Dish directly infringed on the copyright holders exclusive right to reproduction because Dish had an impermissible degree of control over the copying process of PTAT. The Court found that while Dish was substantially involved in the copying process on the users' PTAT, the involvement was not different from precedent non-infringement cases of Cartoon Network, LP v. CSC Holdings, Inc. and CoStar v. LoopNet, in which prior courts judged that the individual users, and not the service providers were liable for infringing copies. The Court concluded that the person who copied Fox's program on the user's PTAT was the user who initiated the command and not Dish.
The defendant, Dish, argued that the QA copies constituted fair use of . Referring to Sega v. Accolade, Dish argued that the copies were fair use because they were ultimately used for the user's fair use purpose (In Sega, the Ninth Circuit had judged that copying code for reverse engineering purpose was "intermediate copying," and protected by fair use.). The Court denied Dish's argument because the purpose and the effects on the economy of QA copies were fundamentally different from those of reverse engineering. The Court examined the four factors of fair use as follows: Purpose and Character of the Use: the commercial purpose and non-transformative uses of the QA copies weighs against a finding of fair use. Nature of the Copyrighted Work: the creative nature of the Fox's copyrighted works weighted against a finding of fair use. Amount and Substantiality of Use: while the QA copies were used for the limited purpose of ensuring that the marking data is correct and were not distributed to the users, Dish entirely duplicated the Fox's programs. So, this factor weighted against a finding of fair use (but considerably less than the other three factors). Effect of the Use on the Market: Fox licensed copies of its programs to other companies (e.g. Hulu, Netflix, iTunes, and Amazon) to offer its works to subscriber of those companies. The Court discussed that Dish offered AutoHop to its users in order to compete with those companies without providing payment for the license; the Court held that in doing so Dish harmed Fox's opportunity to negotiate with Dish or Fox's ability to enter into a similar licensing agreement with others in the future by making the copies less valuable. In consideration of these factors, the Court concluded that QA copies did not constitute fair use and the Court found that Fox was likely to succeed on the merits of this infringement claim. However, the Court also found that Fox failed to demonstrate the irreparable harm necessary to garner the preliminary injunction. The Court noted that the amount of money for licensing to other companies would show that the harm resulted from the QA copies was also compensable.<br/ >
Additionally, Fox alleged that Dish infringed Fox's distribution right through use of PTAT copies and AutoHop. However, mentioning that all copying were conducted on the user's PTAT without "change hands" and that the only thing distributed from Dish to the users was the marking data, the Court denied Fox's claim. Citing Sony Corp. of America v. Universal City Studios, Inc., the Court concluded that the users' copying at home for the time shift purpose did not infringe Fox's copyright. Then, Dish's secondary liability was also denied.
Breach of contract Fox asserted that QA copies and PTAT violated the RTC Agreement. The Court, as similar to their copyright infringement analysis, reasoned that while QA copies breached the contract, PTAT did not constitute the breach of the contract.