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

from the just-the-qa-copy? dept

Tue, Nov 13th 2012 12:27pm — Mike Masnick

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.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: autohopper, copyright, time shifting
Companies: dish, fox

12 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Anonymous Coward, 13 Nov 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."
[ link to this | view in thread ]
Lord Binky, 13 Nov 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.
[ link to this | view in thread ]
out_of_the_blue, 13 Nov 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."
[ link to this | view in thread ]
Mike Masnick (profile), 13 Nov 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?
[ link to this | view in thread ]
Chosen Reject (profile), 13 Nov 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?
[ link to this | view in thread ]
into_the_black, 13 Nov 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.
[ link to this | view in thread ]
weneedhelp (profile), 13 Nov 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.
[ link to this | view in thread ]
Chris Rhodes (profile), 13 Nov 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.
[ link to this | view in thread ]
Anonymous Coward, 13 Nov 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.
[ link to this | view in thread ]
Loki, 13 Nov 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%
[ link to this | view in thread ]
Ninja (profile), 14 Nov 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?
[ link to this | view in thread ]
Zephyrs Textile, 1 Oct 2014 @ 12:47am
Zephyrs Textile manufacturer and exporter of
Using pure cotton and various blends of cotton and polyester yarns.
We are exporting these to several retail chains, hotels, importers and wholesalers in EU, Middle East and USA. Continuous production has enabled us to serve both the large and small customers, successfully.
An experience of 15 years made us compete by prices and quality.
Firm supervision of each order distinguishes us from our competitors. To our pride, we are now serving our own competitors in china.

http://zephyrstextile.com
[ link to this | view in thread ]