The 9th U.S. Circuit Court of Appeals has rejected Twenty-First Century Fox’s effort to stop Dish Network from selling its AutoHop service (part of “The Hopper”) that let viewers skip over commercials on primetime broadcast shows.
The Court upheld a lower court judge’s refusal to temporarily halt sales of Dish’s Hopper. AutoHop is available on shows recorded with Dish’s PrimeTime Anytime feature, which lets subscribers record Fox, ABC, CBS and NBC primetime programs with one click, and replay them commercial-free starting the day after they broadcast. Recordings can be saved for eight days.
Fox and other networks have complained that AutoHop infringes their copyrights, and could reduce revenue from advertisers who are fearful that subscribers might fast-forward past their commercials if it is made so easy. CBS and NBC, like Fox, also sued Dish last year in California over the Hopper.
Twenty-First Century Fox spokesman Scott Grogin told Reuters: “This is not about consumer choice or advances in technology. It is about a company devising an unlicensed, unauthorized service. We will review all of our options and proceed accordingly.”
Last November, U.S. District Judge Dolly Gee in LA said Fox did not deserve a preliminary injunction to stop sales of products featuring AutoHop or PrimeTime Anytime. She said Fox failed to show that it would likely prevail on its copyright infringement and breach of contract claims, or otherwise face irreparable harm if sales were to continue.
Writing for a three-judge 9th Circuit panel, Circuit Judge Sidney Thomas agreed that the copyright claims might fail because it is “the user, not Dish” who makes the alleged illegal copies of Fox programs such as “Glee” and “The Simpsons.”
He said the breach of contract issue was a “much closer call” given Dish’s 2010 agreement to disable fast-forwarding through commercials in VOD programs, noted Reuters.
But applying a “very deferential” standard of review, he said Gee “did not clearly err” in concluding that PrimeTime Anytime more closely resembled a DVR.
RBR-TVBR observation: The decision will likely spur other MVPDs to offer similar services to stay competitive with Dish’s offering. Nonetheless, broadcasters are going to include these estimated ad-skipping losses into their retransmission negotiations with Dish as the contracts come up for renewal.