Fair Use in Copyright: Time Shifting and Dish Network AutoHop

In Dish Network LLC v. American Broadcasting Cos et al, a U.S. District Judge in Manhattan, Laura Taylor Swain, granted a motion by Fox to dismiss copyright and contract claims by Dish. The claims result from Dish’s new AutoHop feature, which allows viewers to skip commercials. In order to achieve a more favorable ruling, Dish filed preemptively in New York, only hours before claims by CBS, Fox, and NBC were filed in California. Dish’s New York dispute involves ABC, CBS, Fox, and NBC.

After the judge’s ruling, the issue will be tried in both New York and California on several different issues. Dish’s claims against Fox, and copyright claims against CBS and NBC were all dismissed to be heard in California. Dish’s contract claims against CBS and NBC, however, will proceed in New York since the companies failed to assert those claims in California. All claims by Dish against ABC also remain in New York.

Dish filed the suit in New York District Court primarily to preempt suits by CBS, Fox, and NBC in California. In fact, the networks filed suits against Dish in Los Angeles only hours after the New York case was filed. The networks are concerned that Dish’s ad-skipping feature will result in a severe decline in advertising and believe that it violates their copyrights and licensing agreements with Dish.

In court, Dish argued that the case should be tried in New York since they filed first and the contracts with ABC and CBS required it. Dish’s New York filing sought a declaratory ruling that their AutoHop service does not violate copyright law, but the judge said Dish did not specify the copyright or licensing agreements that may have been violated. The judge also said that part of the claim belonged in California and that Dish filed primarily to avoid a case there. As a result, the judge believed Dish’s filing was improperly anticipatory and dismissed some of the claims. The judge also ordered the parties to coordinate the trials to avoid inefficiencies.

Dish likely tried to have the case litigated in New York partly because of a favorable Second Circuit ruling in Manhattan. In Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008), the court granted summary judgment for Cablevision that their proposed RS-DVR system did not infringe as reproductions or public performances. In examining the potential audience, the court found that single subscribers using a DVR did not constitute a Public Performance. Presumably, Dish thought this ruling made New York a more favorable venue to hear the copyright issues that arise from their DVR’s AutoHop capability.

In the trial, Dish will also rely on the Supreme Court’s ruling in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). Known as the “Betamax Case,” the Supreme Court decision ruled that individual time shifting or recording complete television programs constitutes fair use. The court held that VCR manufacturers could not be held liable for infringement, and the case has been at the center of recent technological copyright issues like file sharing. While there is a clear parallel between VCRs and DVRs, Dish’s case is complicated by the AutoHop’s alteration of the broadcast since, in the original Betamax ruling, the court noted that the entire work was merely reproduced at a different time in its entirety. Dish has maintained, however, that the AutoHop does not alter the broadcast signal or delete commercials. According to Dish, the AutoHop skips commercials by fast-forwarding them, not by removing them.