Friday, March 22, 2013, by Virginia Wooten
Automatically skipping over advertisements may sound like heaven to many television viewers, but for the major television networks this ad-skipping technology seems like a potential nightmare. As of February 2013, Fox Broadcasting Company is seeking a preliminary injunction against the second-generation of Dish Network’s Hopper technology. It is important to note that this is not the first time Fox has brought suit against Dish’s Hopper technology. Back in May of 2012, Fox brought a suit against Dish for alleged copyright violations by the first-generation of Dish’s Hopper technology, which Fox lost on the district court level. Currently, Fox is appealing to the U.S. Court of Appeals in San Francisco, California.
The first-generation Dish Hopper utilized a DVR technology named the “AutoHop” feature to allow users to automatically skip over commercial advertisements. While Autohop is beneficial for many television viewers, Fox claimed this feature threatened to devalue advertisements for television networks and decrease the networks’ profits from advertisement sales. In comparison, the second-generation Dish Hopper has an “on-the-go” feature that allows customers to watch recorded or live television from mobile devices, like smartphones or tablets. With the unveiling of this second-generation technology, Fox hopes it can convince the court that Dish is violating both contracts with Fox and copyrights owned by Fox.
As more companies continue to improve and modify DVR systems, these entities must be aware of the line between what is allowable and what is infringement.
In allegations in the first lawsuit, Fox claimed that Dish Network committed direct copyright infringement, derivative copyright infringement, and breaches of contract. Fox alleged that the copies made by the Dish equipment directly infringed on their exclusive rights as copyright holders. Fox also contended that Dish was vicariously liable for the infringement by its subscribers who use the Dish technology. As in the Sony Betamax case, however, the court found that the recordings were mere time shifting by Hopper users and not direct copyright violations. Although most consider Fox the loser in this first case, the network did have a small victory in that the court favored them in the last part of a fair use analysis for the “effect of the use on the market.” This favorable analysis, however, regarded a copy that the Dish Hopper makes for quality assurance and not for customers, so the victory remains a small, if not, insignificant one.
In 1999, DVR increasingly began to take over the home recording market that VCRs had once dominated. DVRs are now a common occurrence in most homes across the United States, and companies continue to introduce better DVR technology to compete for a larger portion of the market. Dish’s ad-skipping and on-the-go DVR are a few of many new products being introduced to customers, and Fox has expressed fear that these technologies may create incentives for other companies to use DVR technology that infringes on copyrights owned by television networks. As more companies continue to improve and modify DVR systems, these entities must be aware of the line between what is allowable and what is infringement. Although this debate may soon be settled in the courtroom, companies should also look at alternatives, such as modifying contracts, to avoid these potential copyright battles in court.