Net challenges decision on DVR-like commercial skipping service

In an appeal to a federal judge’s ruling, Fox Broadcasting says it is not “crying wolf” about the potential disruption to the broadcast business that may come from Dish Network’s DVR-like feature that automatically skips commercials.

In a brief filed with the Ninth Circuit Court of Appeals on Thursday, Fox challenged U.S. District Court Judge Dolly Gee’s reasoning and even logic when she rejected their request for a preliminary injunction last month to halt Dish’s AutoHop, as well as the service to which it is connected, PrimeTime Anytime. The networks are trying to halt the service, fearing it will undercut their business model, as it allows a consumer to opt to record an entire night’s worth of programming on all four networks in one fell swoop and then decide what to watch. AutoHop is a feature that makes the shows available with the commercials cut out.

“This appeal does not challenge VCRs, DVRs or viewers’ ability to select and record programs for later viewing (“time shifting”),” Fox said in its brief. “Nor does it challenge viewers’ ability to fast-forward through commercials when they watch programs they selected and recorded with DVRs. What it does challenge is Dish’s wholesale copying of Fox’s copyrighted programming in order to offer its subscribers an on-demand library of commercial-free programs, in violation of copyright law and its contractual obligations.”

Fox’s legal team said that Gee erred on several fronts.

Fox said her ruling that Dish was not liable for direct infringement was based on a misreading of a 2008 appellate decision that upheld Cablevision’s use of a remote DVR, largely on grounds that the viewer was still determining which copies to be made.

Dish subscribers have to press a button to sign up for PrimeTime Anytime, and Gee wrote that it was “ultimately a user” that enabled the service. But Fox said that Dish still controls a host of other factors, including what networks would be included, which shows will be recorded and how long each recording is available before it is deleted. Fox added that under Gee’s standard, “Any infringing service can now escape direct liability as long as its customers ‘press a button’ to sign up.”

Fox also challenged Gee’s ruling that Dish did not breach its contract with the network, which includes provisions restricting the offering of Fox programming in a service like video-on-demand. Fox said that PrimeTime Anytime, by offering a “library” of recently aired programs for “on demand” viewing, “squarely fits Dish’s own definition of VOD.”

Gee did find that the AutoHop service infringed on Fox copyrights and breached its contract, as Dish has to make its own copies of programming to make it work. But Gee still stopped short of granting the preliminary injunction because she determined that the harm to Fox flowed not from those copies but from other aspects of the technology.

“This reasoning was legally and logically erroneous,” Fox said.

Fox also disputed Gee’s rejection of its claims for secondary infringement, arguing that she relied on the Supreme Court’s ruling in the landmark 1984 Sony Betamax case that consumers making their own copies of TV shows to watch later constituted a “fair use.” The VCR, Fox said, “is not even close” to PrimeTime Anytime.

Fox was represented by Jenner & Block.

The network noted in the brief that Moody’s had warned that if AutoHop was deployed and widely used, it could “destabilize the entire television ecosystem.”

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