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Fox Presses Appellate Panel to Stop Dish’s Ad-Skipping Features

Fox argues AutoHop "classic example of irreparable harm"

An federal appellate panel on Tuesday raised questions of just how different Dish Network’s automatic ad-skipping feature, AutoHop, and nightly recording PrimeTime Anytime were from a regular DVR, as Fox Broadcasting sought to put a halt to the satcaster’s offerings that broadcast networks say threaten to upend their business models.

Judge Raymond C. Fisher, noting that he uses a DVR to record weeks worth of episodes of “The Daily Show with Jon Stewart” and “Masterpiece Theater,” some of which he never watches, asked Fox’s attorney Paul Smith why Dish’s offerings weren’t just the same kind of “time-shifting.”

With a feature like PrimeTime Anytime, Fisher noted, the consumer is “making a decision as a viewer what I want on my recording device.”

But Smith said that it was “only in a limited sense,” as it is Dish Network employees who are in control of the technology, setting up a service in which “all you do it turn it on one time and they do everything for you.” PrimeTime Anytime records entire night’s worth of programming automatically from the networks, and Dish customers decide what to watch and keep.

Fox is challenging U.S. District Judge Dolly M. Gee’s decision last year not to issue a preliminary injunction to halt Dish’s offerings. Dish contends that its services are merely an enhanced DVR, and that the networks have not in the past challenged such things as one-minute ad skipping features on remote controls and the ability of Tivo users to record an entire night’s worth of programming.

Smith, of Jenner & Block, said that what Dish is offering is not a DVR but a video-on-demand service. While Fox and the networks are claiming copyright infringement, in oral arguments before the 9th Circuit panel in Pasadena, Smith instead emphasized that Dish was in violation of a retransmission agreement from 2002 and a 2011 supplement in which it pledged to offer only a video-on-demand service that disabled the fast-forward function during the commercials.

Dish’s attorney, Josh Rosenkranz of Orrick, challenged whether Fox could obtain a preliminary injunction on a contract claim if it had not proven copyright infringement. In her decision, Gee found that while AutoHop does not infringe on copyright, there is infringement when Dish employees make copies of Fox programs to make sure that its Hopper features meet quality standards. Nevertheless, she found that Fox had not shown that harms from this copying was “irreparable,” and refused to issue a preliminary injunction.

Rosenkranz said that Dish has made a “voluntary decision” to stop the quality assurance copying for the time being as legal issues are resolved, but he defended it as a “fair use.” Fox’s contract, however, has a contract clause that prohibits unauthorized copying, and Rosenkranz suggested that Dish would be argue its rights under that agreement if the case goes to trial.

He defended Dish’s offerings, noting that consumers were in control of whether PrimeTime Anytime was activated, or whether the AutoHop feature was turned on.

A problem with Fox’s infringement claims, he said, is that the network has “no copyright interest” in the commercial spots it shows.

Fox “has no more right to make us watch the commercials than the L.A. Times does to make us read the inserts in the Sunday paper,” Rosenkranz said.

Smith, however, said that the case is a “classic example of irreparable harm for copyright purposes,” and suggested that even if the networks would have a hard time showing exactly how much they stand to lose, the threat to commercial supported television was apparent.

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