Court Says Broadcasters Can't Use Copyright To Block Commercial Skipping

from the good-court-rulings dept

Wed, Jul 24th 2013 11:18am — Mike Masnick

This morning there was a huge victory for common sense in the Ninth Circuit appeals court ruling in the Fox v. Dish case over Dish's AutoHopper technology. As you may recall, pretty much all the major broadcasters sued Dish a year ago, claiming that its AutoHopper technology with the PrimeTime Anytime feature -- which would record the entire primetime lineup, and allow Dish customers to watch everything (starting the next day) while automatically skipping the commercials -- was infringement (and breach of contract). As we noted at the time, the broadcasters' arguments made very little sense. The basis of the argument was that skipping commercials is a form of copyright infringement. We couldn't see how skipping commercials violated the copyright in any way at all, and while Fox pretended it won the initial ruling at the district court level, the reality was that Dish won big.

Fox immediately appealed, and Dish has won big yet again with this latest ruling, which is a huge victory for common sense. The court makes a number of important findings, nearly all of them good and sensible. To be specific, the nature of this ruling was over whether or not the broadcasters could get an injunction to block Dish from offering this technology while the case was ongoing, but the court rejected it, saying that the broadcasters "did not demonstrate a likelihood of success." This means the full trial can still go forward, but the technology can still be offered during that trial. However, the fact that both the district court and the appeals court have clearly stated that they don't see a likelihood of the broadcasters succeeding shows that the broadcasters are likely to be wasting a lot of time and money only to lose.

The key point in this case: skipping commercials is not copyright infringement. For years, Hollywood has tried to claim that skipping commercials is a form of copyright infringement. All the way back in 2002, a TV exec claimed that skipping commercials was a "theft" (even merely going to the bathroom during a commercial). A couple years later they even tried to get Congress to pass a law explicitly banning commercial skipping (sponsored by Orrin Hatch, of course). Without that, they've just been pretending that commercial skipping must be illegal. In court, the TV networks have argued that anything that hurts their business model must be illegal.

Thankfully, the court laughs at this argument, as it should. Among other things, it notes that since the broadcaster doesn't even hold the copyright on the commercial, the commercial skipping issue isn't their copyright issue at all. Furthermore, because it's already been established (thank you Betamax case) that recording a show for the purpose of time shifting is perfectly legal fair use, then removing the commercials from such a show is also fair use:

Yet, as the district court held, commercial-skipping does not implicate Fox’s copyright interest because Fox owns the copyrights to the television programs, not to the ads aired in the commercial breaks. If recording an entire copyrighted program is a fair use, the fact that viewers do not watch the ads not copyrighted by Fox cannot transform the recording into a copyright violation. Indeed, a recording made with PrimeTime Anytime still includes commercials; AutoHop simply skips those recorded commercials unless a viewer manually rewinds or fast-forwards into a commercial break. Thus, any analysis of the market harm should exclude consideration of AutoHop because ad-skipping does not implicate Fox’s copyright interests.

To get to this point, the court reinforces two other important rulings: obviously, the Sony Betamax ruling, which it cites repeatedly to remind the broadcasters that recording shows for time shifting is perfectly legal. While this ruling is well known, recent cases have been trying to chip away at that ruling, so having the court reaffirm some key aspects of that ruling is definitely very important. Perhaps more important, is that the court reaffirms the famed Cablevision case, that said a remote DVR is not infringing in part because the recording is done at the user's discretion. That ruling is from the Second Circuit, and just recently we've seen some maximalists trying to argue that pretty much every other circuit would disagree with that ruling. Except... here the Ninth Circuit seems to have no problem with it.

In this case, the district court determined that Fox had demonstrated ownership of the copyrights of some of the shows. The court then focused on who made the copies of Fox programs using PrimeTime Anytime: Dish or its customers. The district court noted that the Second Circuit had considered a similar question in Cartoon Network LP v. CSC Holdings, Inc. (“Cablevision”), 536 F.3d 121 (2d Cir. 2008). The Second Circuit concluded that Cablevision’s remote-storage DVR system did not directly infringe the plaintiffs’ copyrights. Unlike a typical DVR system, in which a customer’s remote sends signals to the set-top box in her home, users of Cablevision’s remote-storage DVR system sent signals to Cablevision’s central facility, where a copy of the program the viewer selected was created and stored on Cablevision’s central servers. Id. at 125, 130. The question was “who made this copy” – the viewer or Cablevision? Id. at 130. The Second Circuit held that much like a VCR user makes the copy, so did the Cablevision customer.

[....] The district court did not abuse its discretion in concluding that Fox had not established a likelihood of success on this claim. Infringement of the reproduction right requires “copying by the defendant,” Kelly, 336 F.3d at 817 (emphasis added), which comprises a requirement that the defendant cause the copying. See Cablevision, 536 F.3d at 130 (explaining that direct infringement claim turned on “who made” the copies). Fox argues that because Dish participates in the operation of PrimeTime Anytime on a daily basis, Dish made the copies, either alone or concurrently with its users. However, operating a system used to make copies at the user’s command does not mean that the system operator, rather than the user, caused copies to be made. Here, Dish’s program creates the copy only in response to the user’s command. Therefore, the district court did not err in concluding that the user, not Dish, makes the copy.

Looks like other courts aren't quite so down on the Cablevision ruling after all...

The appeals court also does a full fair use analysis (given the above) and finds that there's a very strong fair use argument by Dish. It basically follows the Betamax ruling, noting that home recording and time shifting are noncommercial uses and covered by fair use. On the fourth factor -- the question on the "impact of the market," the court points out that the only real "impact" would be because of the commercial skipping, and as already established, Fox has no copyright interest in the commercials.

However, the record before the district court establishes that the market harm that Fox and its amici allege results from the automatic commercial-skipping, not the recording of programs through PrimeTime Anytime. Indeed, Fox often charges no additional license fees for providers to offer Fox’s licensed video on demand, so long as providers disable fast-forwarding. This indicates that the ease of skipping commercials, rather than the on-demand availability of Fox programs, causes any market harm. And as we have discussed, the commercialskipping does not implicate any copyright interest.

There was, also, a slightly lesser issue of whether or not this whole setup violates Dish's contract with Fox, and once again, the court sides with the district court's ruling. It basically notes that part of the contract claim is really no different than the copyright claim, and they already explained why that's bogus. The other contract claims fall aside based on similar arguments.

There's also a much more narrow issue of whether or not the "quality assurance" copies that Dish makes for itself (to test if the commercial skipping is working properly) violates the contract. This was the one point where the district court sorta kinda went against Dish (and why Fox ridiculously declared victory when the original ruling came out). Here, again, the court rules very narrowly that these copies might infringe on Fox's copyright, but that there's no irreparable harm from those recordings, since they're just used for quality assurance.

Basically, this is yet another complete win for Dish, with the appeals court confirming everything the district court had to say, and highlighting the importance of both the Betamax ruling and the Cablevision ruling in ensuring that basic innovations like the VCR, DVR and the Dish AuthoHopper can continue to advance the public's enjoyment of television content.

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Filed Under: autohopper, broadcasters, commercial skipping, copyright, fair use, primetime anytime, remote dvr
Companies: cablevision, dish, fox

29 Comments

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Akari Mizunashi (profile), 24 Jul 2013 @ 11:22am

I see common sense has failed on both sides, once again.

At what point in these lawsuits is a court going to recognize customers are paying for the content twice. First, the ads, which are being delivered on a paid service.

Dish isn't free.

As for Fox, if they don't want people skipping ads, then perhaps not fill an hour block with near 22 minutes of them.

All that's going to happen now is Fox (et al) will demand more money from Dish to carry their channel and Dish will raise the price to pay for the increase and the court costs.

Oligopolies should be illegal.
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silverscarcat (profile), 24 Jul 2013 @ 11:26am

Hmm...
I think I just heard AJ and ootb's heads explode.
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crade (profile), 24 Jul 2013 @ 11:32am

Why would they want to block it with copyright when they have anti-circumvention? Anti circumvention is the catch all that will always allow them to force people to obey them.. Just put some token DRM in the signal, claim it is to prevent skipping commercials, then going to the bathroom is circumvention.. Why buy the law if you aren't going to use it?
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Anonymous Coward, 24 Jul 2013 @ 11:48am

If they didn't want us skipping commercials, then they should make the commercials watchable in the first place.

I'm not going to sit there and allow myself to
1) be tortured by bad covers of 15-40 year old songs (oh cool, I loved this song... when it wasn't sung by middle aged office drones or about food)
2) be insulted by bad stereotypes people still believe (i.e. men are so stupid, even their bratty 4-year old daughters are smarter than them)
3) be grossed out (did I really need to see morbidly obese men with floppy moobs shirtless while I'm trying to eat?)
All in the name of generating a few cents of ad revenue.

I reject the idea of indoctrination in any form, especially if it's something as shallow as "watch commercials or die."
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DannyB (profile), 24 Jul 2013 @ 11:54am

Re:
Monopolies should also be illegal.

Fox and other cable channels can raise their rates to cable companies and Dish, and they will pass the increase to the customers.

In the end, consumers will find alternatives. The cable channels will be left crying and wondering what happened? They never saw this coming. Congress should do something! Etc., etc. But going back further in time...

Just like the MPAA members. But going back further in time...

Just like the RIAA members. But going back further in time...

Just like the horse and buggy makers. But going back further in time...

Just like the dinosaurs wondering why mammals survived by being better adapted. But going back further in time...

Just like Jack Valenti musing the dinosaurs would survive if they would just legislate copyright on asteroids and tar pits.
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DannyB (profile), 24 Jul 2013 @ 11:55am

Re: Hmm...
Considering how many times their heads have exploded, they need to be careful or they won't have anything left in their heads.
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DannyB (profile), 24 Jul 2013 @ 11:58am

Re:
They might end up so preoccupied with anything other than keeping consumers happy and glued to the TV that they end up looking around and wondering where everyone went?

Sort of like the movie theaters.

There are entertainment alternatives. Lots of them.

Some they have not even heard of or imagined yet, like video games, or this new intarwebs thingy.
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DannyB (profile), 24 Jul 2013 @ 12:01pm

Re:
They are so stuck in the cable tv mentality that it will never occur to them that tv ads could be individually targeted. (Yes, guess what millennium we are in and what new tech is available.)

There's got to be somebody, somewhere, that wants to see a commercial of a morbidly obese man with floppy moobs shirtless.
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ahow628 (profile), 24 Jul 2013 @ 12:09pm

Thank god...
MythTV box is SAFE!
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Squirrel Brains (profile), 24 Jul 2013 @ 12:12pm

Would the equation change if there was a broadcast right (brought to you by, say, an international broadcast treaty)? Commercial skipping could be viewed as creating some sort of derivative work (in the same way editing Monty Python down to fit 30 minutes is creating a derivative work).
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jupiterkansas (profile), 24 Jul 2013 @ 12:29pm

Re: Re: Hmm...
TOO LATE!
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Peter Dow, 24 Jul 2013 @ 12:37pm

If Fox won, how would it apply to printed stuff?
Would it mean an author could sue all the Fox executives for not reading their book? Or buying their book, but skipping a couple of chapters?
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Anonymous Coward, 24 Jul 2013 @ 1:00pm

Re: If Fox won, how would it apply to printed stuff?
If FOX had won there would be a lot of holes in copyright all of a sudden. Most of it would revolve around how FOX could ever get paid damages for a crime essentially committed against third parties! It would certainly cause more ads in any other publication like printed stuff since ads would have to be declared some kind of property of the publisher.
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Anonymous Coward, 24 Jul 2013 @ 1:16pm

"This means the full trial can still go forward, but the courts, but the technology can still be offered during that trial. "

I don't see why "but the courts" is in this sentence. Maybe I'm tired, maybe you accidentally a word or two.
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Anonymous Coward, 24 Jul 2013 @ 2:07pm

What does it do about the in program pop ups with sound?
Yeah I thought so.
Sadly there are too many induhviduals (thanks and a tip of the hat to Scott Adams) involved and the mass IQ is receding to the point that moron is now the norm.
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John Fenderson (profile), 24 Jul 2013 @ 2:08pm

Re:
I suppose, but I think it's a stretch to call the commercials part of the "work". The work is the show, the commercials are a separate thing. Removing the commercials is not creating a derivative work at all.
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John Fenderson (profile), 24 Jul 2013 @ 2:10pm

Re:
What does it do about the in program pop ups with sound?

Nothing, of course. But I have to give the popups credit for positive change: they (with or without sound) are one of the main reasons I simply stopped watching TV completely. They piss me off enough that it's impossible to enjoy the show.
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Internet Zen Master (profile), 24 Jul 2013 @ 2:19pm

Re:
Honestly, I have no issue with the "Fast-forwarding may be disabled during this program" kind of thing they have for shows on demand. My only gripe with that is networks have started pulling the same shit video streaming companies do online: play the exact same commercial over and over at every commercial break.

For those of us who had to suffer those irritating [although brilliantly marketed] Head-On! commercials, imagine that for 18-22 minutes split into 3-5 minute intervals during your favorite show.

Suddenly the whole post ad-break recap for some of the current drama tv shows makes a whole lot more sense (even if they were initially intended to hook viewers who had just walked into the room).
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Karl (profile), 24 Jul 2013 @ 2:31pm

Re:
Just put some token DRM in the signal, claim it is to prevent skipping commercials, then going to the bathroom is circumvention..

The programs are not delivered to the Dish Network with all of the commercials already programmed in, so it would be impossible for Fox to do this. (And programming in the commercials themselves would be economic suicide on Fox's part, since this is how Dish makes its money.)

If something like this were to be done, it would have to be done by the broadcaster (Dish in this case). Since they're the ones that are offering the service to skip commercials, that's unlikely.

Also, Dish does not actually own any of the copyrights in question, so it's unlikely they'd be able to enforce DRM anti-circumvention restrictions. Of course, the anti-circumvention laws don't specify that they have to be put there by the copyright holder (or even with the copyright holder's permission), so who knows how that would go in court.
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Anonymous, 24 Jul 2013 @ 2:32pm

"Common sense" and "Ninth Circuit" don't usually go together.
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Karl (profile), 24 Jul 2013 @ 2:33pm

Re:
maybe you accidentally a word or two.

I see what you did there.
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crade (profile), 24 Jul 2013 @ 2:39pm

Re: Re:
I have no real problem with DRM, including "fast forward is disabled". It just doesn't deserve legal protection. It isn't limited to "though shalt not fast forward", it's a general license to control people's actions in any way they want.
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crade (profile), 24 Jul 2013 @ 2:46pm

Re: Re:
Impossible? lol, you are assuming the law makes the least bit of sense :) DRM doesn't have to be the least bit effective, it only has to claim to protect something. Add a "begin commercial" and "end commercial" flag to your program, add some stupid key to lock it to specific hardware and give out the key to approved hw vendors if they obey your flag, anyone else is illegal, done.
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crade (profile), 24 Jul 2013 @ 2:52pm

Re: Re: Re:
Sorry, I mean add the flag to your signal before and after commercials.. and some sort of token encryption maybe like they use to scramble porn for the unapproved..

It's really not hard, the requirement is only to put up a token attempt and not to actually succede.
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Beech, 24 Jul 2013 @ 4:03pm

So, now Fox is trying to argue that NOT watching copyrighted content without permission is violating copyright? We already know that WATCHING content without permission is infringement...so i guess now we're in trouble if we watch content or not, according to fox anyway
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Bergman (profile), 25 Jul 2013 @ 5:41am

Re:
If Fox had won this lawsuit, then you could stand on the sidewalk outside of the Fox corporate offices with a stack of advertising pamphlets and a printed t-shirt asking people to take a pamphlet.

If they didn't take one AND read it, you could then sue them for copyright infringement. You wouldn't have to even know their names, just record video of them looking your way while driving by, video their license plate, and sue John Doe, finding out their name from the DMV.

Sometimes I wonder if these corporate lawyer types ever THINK about the world they're building...
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John Fenderson (profile), 25 Jul 2013 @ 10:02am

Re: Re:
They are so stuck in the cable tv mentality that it will never occur to them that tv ads could be individually targeted.

Please stop giving them ideas.
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Allan Alexander, 25 Jul 2013 @ 10:54am

Infringement
Ok I think we should sue FOX and any other network who shows a movie in the evening and it has been edited to death, Example, 48 Hours (which is a great show) with Eddie Murphy and Nick Nolte just to mention one of many. These shows are hard to enjoy when due to language etc. there is something bleeped out every 5-10 min. I submit that this is fraud since the show is not being shown the way it should be, and if you are going to edit the C**P out of it then you should not be allowed to show it on network TV.
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ahow628 (profile), 27 Jul 2013 @ 8:54am

Re: Re: If Fox won, how would it apply to printed stuff?
It would certainly cause more ads in any other publication like printed stuff since ads would have to be declared some kind of property of the publisher.

I'm sure the ad companies would LOVE that.
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