Appeals Court Upholds Rejection of Fox’s Request for AutoHop Injunction
The 9th U.S Circuit Court of Appeals denied Fox an injunction against the AutoHop features of Dish Network’s Hopper DVR, upholding a previous decision in a lower court. Fox claimed that the PrimeTime Anytime feature breaches contract and infringes Fox’s copyrights (CED Aug 28 p5). Fox was denied the injunction by the U.S. District Court in Los Angeles in November. The unanimous ruling was issued by judges Sidney Thomas, Barry Silverman and Raymond Fisher.
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Dish creates marking announcements to signal to AutoHop when to skip commercials, Thomas said in his opinion Wednesday. Dish tests the accuracy of the marking announcements “using copies recorded through PrimeTime Anytime,” it said. The copies remain at a Dish facility “and are used for quality assurance purposes only,” it said. In refusing to enjoin Dish from creating these copies, the district court “correctly concluded that the harms Fox identified … did not flow from the quality assurance copies themselves, but from the entire AutoHop program,” it said. The record demonstrates that the AutoHop announcement files “are created using an entirely separate process and the quality assurance copies are used only to test whether this process is working,” it said.
Fox didn’t demonstrate a likelihood of success on its breach of contract claims, the opinion said. The record doesn’t indicate Dish launched PrimeTime Anytime “because it was unwilling to comply with the requirements to offer Fox’s licensed video on demand service, rather than because Dish lacked the technological capability to do so,” it said.
Fox is 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.” Fox said it will review its options.
The decision is a defeat for Fox and for other broadcasters, said Stifel Nicolaus analysts. The ruling allows Dish to continue offering customers its ad-skipping services “pending further judicial review of Fox’s copyright claims on the merits,” they said in a research note. The decision could encourage other pay-TV providers to offer similar services, they said. Fox can appeal the current decision to the full 9th Circuit or directly to the Supreme Court, they said. “We suspect broadcasters are factoring potential ad-skipping losses into their demands for retransmission consent payments from Dish."
The innovation ecosystem can benefit from the ruling, the Computer & Communications Industry Association said in a statement. The court recognized that the copyright regulatory system “used to control access to information when it advances creativity and the public interest, should not be used to protect old business models,” CCIA said. The “narrow view” of fair use advocated by Fox “would have crushed innovations from DVR technology to a wide range of new private copying technologies,” the group said.
The 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,” Dish said in a statement.