A Blip in the Transmission: Part 2

The second factor, whether there is a serious threat of irreparable harm, was, comparatively speaking, much more easily considered. While there is no assumption of harm for copyright claims in the 10th Circuit, the nature of a copyright claim does tend to make it easier for plaintiffs to prove this factor. Aereo argued that any financial damage they might have done to the plaintiffs were essentially insignificant, but the court found that appeal wanting, noting that one of the purposes of copyright is ensuring the exclusive control of the copyright material, so that the owner can ensure that the content’s value is not tainted or diluted by unauthorized use, such as the creation of inferior quality copies, or interference in potential business relationships based on the content. As a result, the court felt that this factor also weighed in favor of granting the injunction.

The third and fourth factors only merited truncated discussion. The court first examined the balance of harms and, although noting that Aereo did face a loss of business should the injunction be entered, in all likelihood, their entire business model was based on copyright infringement.  The loss of such a business was not grounds to prevent a preliminary injunction from being entered. The court then examined the public interest, noting that the public’s interest was in seeing the law of copyrights upheld. Our next post will deal with the scope of injunction, the bond, and Aereo’s attempt to transfer venue.

 

Fox Broadcasting v. Dish Network

Recent developments in broadcasting technology have changed the way that people watch television. Unsurprisingly, however, there has been some push back from traditional broadcasters, who see their business model as being under siege from these new innovations. We have written about one such case in our last couple posts. The recent case of Fox Broadcasting v. Dish Network is one example of this type of clash.

The defendant, Dish Network, had recently introduced a service, “Autohop”, that allowed customers to fast-forward through commercials on certain shows they had digitally recorded previously. Fox Broadcasting, which derives a great deal of its revenue through the sale of ad time, sued Dish Network in the Federal  district court in Central California, claiming a breach of the contract between Fox Broadcasting and Dish Network, as well as copyright infringement. Fox also sought preliminary injunction to stop the Autohop service while the case was still pending.

The district court used the four-factor test for determining whether or not a preliminary injunction was warranted, and ultimately decided that it was not. The first factor, whether Fox had established a likelihood of success on the merits of the case, was likely the most dispositive. This factor turned on whether or not it was DirectTV, or the consumer, that was party that made the digital copy of Fox’s programming for later viewing. In order for Fox’s copyright infringement case to be likely to succeed, it would have to show that it was DirectTV making those copies, and thus directly infringing its copyright. In support of its position, Fox argued that since it was DirectTV that operated the system that made the copies possible, and set rules such as how long the copies would last in the memory, as well as editing the start and end times of the recorded shows, that it should be judged to be directly responsible for making the copies. The district court disagreed with this assessment, and instead ruled that this fact pattern was more akin to a person making a copy of a show on a VCR, and that it is the end user who is making the copies, and who be most likely liable for a direct infringement suit.

The court next turned to whether or not Fox could show a likelihood that DirectTV had was liable for secondary copyright infringement by facilitating the direct copying of its users. As there was no real question that the users in question were copying Fox’s copyright material, the burden shifted to DirectTV to show that the users were protected by fair use. The long-held precedent is that a person is entitled, under the doctrine of fair use, to record a program for the purpose of time-shifting. Fox argued, however, that fair use did not allow customers to skip commercials or build a library of recorded programs. When the Betamax case was decided, the technology had not yet reached the point where either of purposes was feasible and so that court had not ruled on whether they were permissible under fair use or not. As to the matter of skipping commercials, the court was not sympathetic to Fox’s argument, noting that, although Fox owned the copyright to the television shows being recorded, it did not own the copyright to the commercials being skipped, and could not sue for copyright infringement under that theory.

The court then examining DirectTV’s AutoHop program under the Fair Use factors. First, the use was noncommercial; it was done by private consumers for their own viewing convenience, not as a commercial activity. Next the court looked at the “nature of the work” and “amount of substantiality of the work shown”, ultimately concluding that, even though the users in question copied the entirety of the material copyrighted by Fox, they had been invited to watch this event free of charge, and merely copied the work in order to make its viewing more convenient. Finally, the court looked at the last factor, how the use would affect the market for this work, which they ultimately concluded would not be adversely affected by the commercial skipping technology. Next week’s blog post will focus on the next steps that the court took in coming to the conclusion.