In Ruling Over DISH's Autohopper, Details Show Fox Lost On Nearly All Important Issues

from the just-the-qa-copy? dept

Last week, we wrote about the ruling in the lawsuit Fox filed against DISH over its Autohopper feature -- which automatically skips commercials on TV shows it records as part of its "Prime Time Any Time" feature (recording all prime time TV from the four major networks to the local DVR hard drive). As we noted, the judge refused to issue an injunction, but both sides claimed victory. Reading between the lines we said it appeared that Fox mostly lost, and its only wins were pretty small. The (slightly redacted) ruling has now been released and it confirms that prediction.

Fox is definitely the loser here. In fact, it looks like our original statements about the case, when it was first filed, turned out to be accurate. Fox's claims that recording the entire prime time lineup is a "bootleg" copy was a direct challenge to the ruling in the Betamax case, and the judge here relied heavily on that ruling in rejecting Fox's arguments. Furthermore, in our original analysis, we pointed out that the ruling about Cablevision's remote DVR should apply here as well, since the key issue there was who pressed the button -- and with "Prime Time Any Time" (PTAT) and the Autohopper technology, it's still the consumer doing it. The court is having none of that:
Here, the parties agree that the Hopper is only available to private consumers and the evidence does not suggest that consumers use the PTAT copies for anything other than time-shifting in their homes or on mobile devices. In fact, Fox has identified no specific theory under which individual PTAT users could themselves be liable for copyright infringement without circumventing Sony. In the absence of any evidence of such direct infringement on the part of PTAT users, Dish cannot be responsible for "intentionally inducing or encouraging direct infringement," or for "profiting from direct infringement while declining to exercise a right to stop or limit it." Grokster, 545 U.S. at 930. In Grokster, unlike this case, owners of a peer-to-peer file-sharing program were liable for derivative copyright infringement because they knowingly and intentionally induced users to copy and distribute copyrighted works over the network, which indisputably constituted infringement on the part of the users. Id. at 939-41. Here, the record is devoid of any facts suggesting direct infringement by PTAT users. Fox has therefore failed to establish a likelihood of success or to raise serious questions on the merits of its derivative infringement claims.
Shorter version: no, Fox can't do an end-run around the ruling that made it clear that the VCR was legal. Users here aren't really doing anything different (time shifting programming) as was found legal in the Sony Betamax case. Basically, it's a reminder that basic time shifting isn't infringement. Since nothing the end-user does is infringing here, it completely demolishes Fox's ridiculous theory that DISH is "inducing" infringement by removing commercials. All in all a good finding.

So how is it that Fox claimed victory? It's something of a minor side issue, and I'm not even convinced the court got this one right either. Basically, as part of the process of making sure that its Autohopper (commercial skipping) feature is working properly, DISH also records the prime time lineup itself and has people monitoring to see if the automated Autohopper is correctly finding the beginnings and endings of commercial breaks. If the machine is messing up, the human monitor can try to "correct" the timing. It's a "quality assurance" effort. And it's that copy that the court says might be infringing (and potentially a violation of the contract between the two parties). Leaving aside the contract issue, even the copyright claim here seems questionable. The key case here is the Sega v. Accolade case in which the court said that a copy made in process -- an "intermediate" copy -- which was not actually used in the final product, could be protected by fair use.

The court then does a four factor fair use analysis though, as with most fair use analyses, how you apply the factors can lead you to a very different conclusion. The key one here is the final factor -- the "effect of the use on the market." The court finds this one to favor Fox:
Here, the QA copies are used to perfect the functioning of AutoHop, a service that, standing alone, does not infringe. The record shows, however, that a market exists for the right to copy and use the Fox Programs: Fox licenses copies of its programs to companies including Hulu, Netflix, iTunes, and Amazon to offer viewers the Fox Programs in various formats. .... In fact, the record suggests that Dish chose to offer AutoHop to its subscribers in order to compete with other providers who pay for the rights to use copies of the Fox Programs through licensing agreements. Unlike these providers, however, Dish does not pay for the right to copy the Fox Programs for any purpose. By making an unauthorized copy for which it has not paid and using it for AutoHop, Dish harms Fox's opportunity to negotiate a value for those copies and also inhibits Fox's ability to enter into similar licensing agreements with others in the future by making the copies less valuable. Therefore, the Court finds that the fourth factor also militates against finding that the QA copies constitute a "fair use" under the Copyright Act.
I don't quite get this analysis though. Because, remember, we're just talking about the QA copies here, not the final product that consumers use. So I don't actually see how the above applies. Those QA copies aren't being used to compete against Hulu, Netflix, iTunes or Amazon. And I don't see how anyone could conclude that Fox would license special QA copies only for DISH to see how its ad skipper is working. So the analysis here just seems off. If the court has already decided that the final product isn't infringing, how is it that this temporary copy -- used only to check on quality control of the ad skipping -- which itself is not infringing -- suddenly becomes infringing. It seems like DISH could make a strong argument on appeal that this part of the ruling doesn't make much sense.


Reader Comments (rss)

(Flattened / Threaded)

  •  
    identicon
    Anonymous Coward, Nov 13th, 2012 @ 1:20pm

    Wow. Huge loss.

    FYI, I can't download this one either. I get this message: "Firefox can't find the server at embed.docstoc.com."

     

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  •  
    identicon
    Lord Binky, Nov 13th, 2012 @ 1:21pm

    If the copy itself isn't distributed in any way, then it is in no way even similar to the digital distribution licence agreements that other services pay for.

    MAYBE, if the QC copies were loaded to the Autohopper and not recorded by the Autohopper, it would start showing similarities. But that's a stupid business move to spend money on transmitting so much data that could just be an updated list of skip timings for a show.

     

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  •  
    identicon
    out_of_the_blue, Nov 13th, 2012 @ 1:23pm

    Here's how the item should be written up:

    http://www.theregister.co.uk/2012/11/09/ad_block/

    "The US ruling that automatically stripping out the ads doesn't cause TV broadcasters irreparable harm might be legally accurate, but logistically it's nonsense and a decision we might all live to regret."

     

    reply to this | link to this | view in chronology ]

    •  
      icon
      Mike Masnick (profile), Nov 13th, 2012 @ 1:26pm

      Re: Here's how the item should be written up:

      "The US ruling that automatically stripping out the ads doesn't cause TV broadcasters irreparable harm might be legally accurate, but logistically it's nonsense and a decision we might all live to regret."

      Kinda funny you'd say that since on other posts (today even) you've been arguing that advertising is an evil form of doing business.

      So which is it? Do we need to leave advertising untouched for the lovely TV networks, or is advertising on sites like mine clear evidence of evil?

       

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      •  
        identicon
        into_the_black, Nov 13th, 2012 @ 1:33pm

        Re: Re: Here's how the item should be written up:

        Both. Poor TV networks NEED that income to survive. Rich, evil, Google puppet Masnick needs nothing but ad-hom attacks, shallow analysis, and evil to survive.

         

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      •  
        icon
        weneedhelp (profile), Nov 13th, 2012 @ 1:59pm

        Re: Re: Here's how the item should be written up:

        "So which is it?"

        With these guys you are damned if you do and if you dont.

        You could sprout angel wings and they will find something to rag on you.

         

        reply to this | link to this | view in chronology ]

        •  
          identicon
          Anonymous Coward, Nov 13th, 2012 @ 4:41pm

          Re: Re: Re: Here's how the item should be written up:

          Of course, because depending on what you believe, Lucifer was an angel before falling from grace.

           

          reply to this | link to this | view in chronology ]

      •  
        icon
        Ninja (profile), Nov 14th, 2012 @ 5:43am

        Re: Re: Here's how the item should be written up:

        You don't bitch about people using ad block either which is basically what Fox is so mad about. Personally I tend to block most ads, specially after I found malware on a few (if Ad Block doesn't block them, no script does). My way to support TD was to buy the watercooler thing, maybe Fox should also be focusing in adding value to their costumers just like hopper does?

         

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    •  
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      Chosen Reject (profile), Nov 13th, 2012 @ 1:29pm

      Re: Here's how the item should be written up:

      Make up your mind. Just the other day you were saying we should all be using noscript to block ads. Now you're saying we're all going to regret it. Or were you really just saying we should block Googles ads?

       

      reply to this | link to this | view in chronology ]

      •  
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        Chris Rhodes (profile), Nov 13th, 2012 @ 2:34pm

        Re: Re: Here's how the item should be written up:

        He's saying that he's an idiot who trolls this page for no other reason than he wants to complain about something, anything, as loudly as possible.

         

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  •  
    identicon
    Loki, Nov 13th, 2012 @ 9:50pm

    As I've said before, and I'll say again, the industries biggest problem is not piracy, it is that they are really competing against themselves. While I often enjoy commercials for their entertainment value (and I remember a time when the commercials were often better than many of the new shows that were being produced) commercials have never, and will never, sway me (some of the best commercials I've ever seen are for products/services I have never and will never use/switch to, and those occasions when I have used or switched to a product/service they had nothing to do with advertising).

    What commercials have done is largely gotten me to watch television pretty much all together. With hundreds of DVD to watch, video services like Netflicks, or internet sites like YouTube (TedTalks in particular often keeps me occupied for hours) I see no need to waste time or money on programming that constantly interrupts my viewing and increases my viewing time that I could be spending on other things.

    Something like this might actually encourage me to start actually watching TV again, but given the way the networks want to be bitches, I probably won't make use of the service even if they lost the case 100%

     

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