In a crucial ruling today, the Ninth Circuit Court of Appeals has affirmed that a major TV network can't use copyright to limit consumer choice.
Last year, Fox Broadcasting Company, with the support of other broadcast networks, sued Dish for its "Hopper" DVR and its "Auto Hop" feature, which automatically skips over commercials. According to the Fox, the Hopper automatically records eight days' worth of prime time programming on the four major networks that subscribers can play back on request. Beginning a few hours after the broadcast, viewers can choose to watch a program without ads. As we observed when the it started, this litigation was yet another in a long and ignominious series of efforts by content owners to use copyright law to control the features of personal electronic devices, and to capture for themselves the value of new technologies no matter who invents them.
Happily, this effort has been unsuccessful. In November 2012, the district refused to enjoin Dish’s operation. The court found that (1) Dish can’t be held directly liable for the conduct of its customers (according to the volitional conduct doctrine, the person who causes the copy to be made is the direct infringer, not the service that merely facilitates it); and (2) Dish can’t be held indirectly either because time-shifting is a protected fair use and the networks can’t challenge commercial skipping because they don’t have a copyright interest in the commercials.
Fox appealed to the Ninth Circuit. As EFF noted in an amicus brief we filed supporting Dish, Fox advanced a range of theories that, if adopted, would have not only harmed Dish and its customers, but undermined the fundamental copyright balance and, as a result, the public interest in innovation. Both the volitional conduct (which the networks call “a loophole”) and fair use doctrines help ensure that technology makers can develop and offer new tools and services without fear of crippling liability where those tools and services are capable of substantial non-infringing uses.
In a win for add-on innovation, the Ninth Circuit firmly rejected Fox’s strained view of the law. With respect to ad-skipping, the Court agreed with the district court that the networks don’t have a copyright claims since they don’t own the ads. As for the use of the service for time-shifting, following clear Supreme Court precedent, the Ninth Circuit affirmed that such noncommercial activity is a non-infringing fair use.
The case is not over—a legal battle remains over whether Fox should collect damages for copies Dish made for quality assurance. Let’s hope this ruling encourages Fox to wise up and divert the money it is spending on lawyers toward collaborating with, rather than fighting, the new and innovative services its customers want.