Another day, another good ruling on copyright. Yesterday, we had the 9th Circuit ruling saying that Costco can buy watches abroad and sell them in the US and it's not copyright infringement
(and, in fact, may be copyright misuse to allege otherwise), and late last night (just as the State of the Union was going on), a district court in California released a redacted version of a ruling (that was actually made last week) that said that Dish's Hopper technology does not infringe on copyrights
. We've been covering this case
for a while. Dish offered up a technology that would automatically record prime time TV shows and then skip over the commercials, and the various networks all sued. While Dish has unfortunately negotiated away this innovation in deals with CBS
, the case involving Fox was still moving forward (the NBC version of the case was put on hold pending the Fox version).
The latest ruling
is not a complete victory for Dish, but it is a complete victory on the copyright issues
. Where Dish may run into trouble is on contractual agreements. But, this ruling is definitely a win for copyright. There are a few different issues and different parts of Dish's offering that were under scrutiny here, so let's break them out (as the court does). The first issue, was that Fox claimed that the Supreme Court's Aereo ruling
now meant that Dish was engaging in a public performance with its Dish Anywhere offering. But the court doesn't buy it. First, it notes that, even under the "looks like a duck" Aereo test, Dish's service doesn't look enough like a duck.
The Aereo Court cited three points of comparison that established Aereo’s
“overwhelming likeness” to traditional cable providers: (1) Aereo sold a service that
allowed subscribers to watch television programs almost as they were being broadcast;
(2) Aereo used its own equipment, housed in a centralized warehouse, outside of its
users’ homes; and (3) by means of its technology (antennas, transcoders, and servers),
Aereo’s system received programs that had been released to the public and carried them
by private channels to the additional viewers....
DISH Anywhere also allows subscribers to watch television programs almost as
they are being broadcast.... DISH Anywhere depends on
equipment and technology both inside and outside of the user’s home....
DISH does not, however, receive programs that have been released to the public
and then carry them by private channels to additional viewers in the same sense that
Aereo did. DISH has a license for the analogous initial retransmission of the
programming to users via satellite.... Aereo streamed a
subscriber-specific copy of its programing from Aereo’s hard drive to the subscriber’s
screen via individual satellite when the subscriber requested it, whereas DISH Anywhere
can only be used by a subscriber to gain access to her own home STB/DVR and the
authorized recorded content on that box.... Any subsequent transfer of the programming by
DISH Anywhere takes place after the subscriber has validly received it, whereas Aereo
transmitted its programming to subscribers directly, without a license to do so.
.... The ultimate function of DISH Anywhere is to transmit
programming that is already legitimately on a user’s in-home hardware to a user’s
Internet-connected mobile device. Relying on external servers and equipment to ensure
that content travels between those devices properly does not transform that service into a
traditional cable company. Aereo’s holding that entities bearing an “overwhelming
likeness” to cable companies publicly perform within the meaning of the Transmit Clause
does not extend to DISH Anywhere.
From there, the court takes on the question of "volitional conduct" -- which many thought would be the key point on which Aereo would turn, until the Supreme Court decided to go swimming with ducks. The key part being who is actually making the copies
(or whose conduct is making the copies) and are they
infringing. And, as in the Cablevision case (on remote DVRs), the court notes that it's the user doing the key action, not Dish, the company:
process depends to some extent on external equipment and services provided by DISH,
but it is the user who initiates the process, selects the content, and receives the
transmission. No DISH employee actively responds to the user’s specific request or
directly intervenes in the process of sending the programming between the devices.... DISH subscribers, not DISH,
engage in the volitional conduct necessary for any direct infringement.
Okay, but what about secondary infringement? Does Dish somehow push its subscribers to infringe? Nope. Once again, because there's no public
performance, and thus no infringement. Again, the court relies on the distinctions with the Aereo ruling, and how nothing involved with Dish is infringing. Dish has a license for the content. Users are able to make use of that content on their own home device thanks to the Sony Betamax ruling, and thus, where's the infringement?
When an individual DISH subscriber transmits programming rightfully in her
possession to another device, that transmission does not travel to “a large number of
people who are unknown to each other.” The transmission travels either to the subscriber
herself or to someone in her household using an authenticated device. This is simply not
a “public” performance within the meaning of the Transmit Clause. Because DISH
Anywhere subscribers do not directly infringe the public performance right, DISH cannot
be liable for secondary infringement.
Next up was the "Prime Time Any Time" (PTAT) technology that automatically recorded all the prime time shows for subscribers to watch over the following week. Fox had already lost
on this point two years ago, but it tried to bring it back from the dead under Aereo. No dice. The court, again, finds that the volitional conduct remains with the subscriber:
Fox contends that Aereo has altered the test for direct infringement by rejecting the
argument that only the subscriber who pushes the button initiating the infringing process
is liable for direct infringement.... As discussed above, Aereo did not
fundamentally alter the volitional conduct requirement for direct infringement. More
than one actor may be liable for direct infringement, but there must still be some
volitional conduct for direct liability. A system that operates automatically at a user’s command to make a recording does not in itself render the system’s provider a volitional
actor for purposes of direct copyright infringement.... While DISH has set certain parameters and controls for
PTAT, PTAT is essentially a more targeted version of a DVR that is set to make block
recordings or recordings of an entire season of a show. The ability to set a DVR and then
leave it to automatically record without having to select individual programs or set it
repeatedly for each recording occasion is not unique to PTAT, and is not enough to show
direct infringement by the service provider.
Separately (and importantly) the court rejects Fox's argument that merely "making available" a work is "distribution." This is a big fight
in the copyright world, with copyright system maximalists and defenders insisting that "making available" is synonymous with distribution under the law. The court says no:
PTAT does not “distribute” Fox’s programming or “transmit” any public
performance under the meaning of the Copyright Act. Distribution under the Copyright
Act requires “actual dissemination of a copy” that “changes hands.”...
On appeal of this Court’s denial of its request for a preliminary injunction, Fox
argued (in the contract breach context) that “distribute” simply means to “make
available.”.... While neither the Ninth Circuit nor any
other circuit court has addressed the “make available” theory of distribution under the
Copyright Act, it has been considered by a number of courts, and “[t]he great majority of
courts that have considered the question . . . have stopped short of fully endorsing the
‘make available’ right.”... This Court finds these cases persuasive and concludes
that DISH’s act of merely “making available” copyrighted programming to its
subscribers through PTAT does not amount to distribution without actual dissemination.
The court also rejects Fox's claims that PTAT shouldn't be seen as fair use because it impacts Fox's market for licensing its programs to various internet services. The court points out that this argument "is simply too speculative to defeat a finding of fair use by a time-shifting technology which enables consumers' non-commercial private use of recorded programming."
The only copyright "victory" for Fox is the same as the ruling from two years ago: the court says that various Quality Assurance (QA) copies that Dish employees made of programming did infringe the reproduction right, but that's a really, really minor side issue and doesn't really impact the overall service at all.
Fox has already said it's disappointed in the ruling, which means there's a decent chance for an appeal... if Dish doesn't cave in and work out an agreement like it did with CBS and ABC. And, of course, as a district court ruling, this ruling doesn't provide much of a precedent for anywhere else, but it's still nice to see a good ruling come out.