In their effort to halt Dish Network’s ad-skipping feature, the broadcast networks have won a key initial round: Their legal battle can proceed in California.
A federal judge in New York rejected Dish Network’s effort to have the dispute first litigated in that city, rather than Los Angeles, and declined to issue a judgment declaring that Dish’s AutoHop feature does not breach contracts with the networks or infringe on copyrights.The dispute over AutoHop has huge ramifications for the networks, which argue that such technology threatens to undercut their ad-dependent business model.
Fox, NBC and CBS filed suits against Dish on May 24 in Los Angeles federal court, seeking to stop AutoHop, but just hours before, Dish filed its own suit in New York, seeking a declaratory judgment that would validate its service, which allows customers to skip commercials with greater ease than do other DVRs. The broadcasters argued that Dish, seeking a more preferable forum, filed its suit in haste.
Swain had issued a temporary restraining order last month that halted the broadcasters’ suits until she could hear Dish’s claims July 2.
But in her written opinion, Swain agreed that Dish’s complaint was a “place-holder” suit and wrote that it was filed “in anticipation of coercive litigation and designed principally to secure Dish’s preferred forum over any other forum selected by the natural plaintiffs.” She noted that Dish’s suit is “a mere 13 pages long, fails to name the parties who hold the copyrights, lists neither the relevant copyrights nor the contractual provisions at issue and contains only the most cursory description of the allegedly offending services.”
The California court could be more favorable territory for the networks, although Swain refused to dismiss some claims that may end up back in her court. ABC, for instance, has not sued Dish in California but was named in Dish’s suit in New York. But Swain called on the parties to use their “best efforts” to coordinate discover on both coasts “so as to avoid duplication and inefficiency.”
In a statement, Fox said that it is “pleased that the court has determined that Fox, as the true victim and plaintiff here, should have the right to proceed in its chosen forum in the 9th Circuit.”
The network added, “Now we move on to the real issue at hand — demonstrating that Dish Network has created and marketed a product with the clear goal of breaching its license with Fox, violating copyrights and destroying the fundamental underpinnings of the broadcast television business — which damages not only Fox and the other major networks but also the hundreds of local stations around the country.”
In its own statement, Dish Network once again defended the legality of its service. “Regardless of the venue, we look forward to proceeding with this case, recognizing that it has been 28 years since the Supreme Court’s Betamax decision held that a viewer, in the privacy of their home, could record a television show to watch later,” said R. Stanton Dodge, the company’s exec VP and general counsel. “The court ruled that ‘time-shifting’ constituted a fair use of copyrighted television programming. Those Betamax users could permissibly fast-forward through commercials on recorded shows — just as DVR users do today. Dish will stand behind consumers and their right to skip commercials, something they have been doing since the invention of the remote control.”
According to court documents, Dish now will have 20 days to respond to the broadcasters’ complaint.