Ninth Circuit Refuses to Stop Dish on the Basis of Aereo

by Sheldon Mak & Anderson on July 24, 2014

DISH copyright As we reported in August 2013, the Dish Network satellite service scored a victory before the Ninth Circuit Court of Appeals when the panel denied Fox Broadcasting’s appeal against various features of Dish’s service.

Fox alleged that Dish was violating Fox’s copyrights in its programming.

Just last week we reported on how Fox’s lawyer cited the Supreme Court’s recent decision in the Aereo case in another hearing before the Ninth Circuit at which Fox argued that the district court had erred in refusing to grant the injunction.

See Also:  Supreme Court Rules that Aereo Violates Copyright Law

Now, the Ninth Circuit has ruled that the district court committed no legal error and made no clearly erroneous findings of facts in its ruling.

As described in the Ninth Circuit’s opinion,

Dish Network offers two marsupial-inspired products: the “Hopper,” which “hops” over commercials, and a companion box known as a “Joey.” Fox Broadcasting Company claims these products are contractually out of bounds and constitute copyright infringement.

Fox and its affiliated companies own the rights to shows like Glee, Family Guy, and The Simpsons.

Fox has contracts with cable and satellite distributors, including Dish.  Under the original Dish contract,

Dish shall not “distribute” Fox programs on an “interactive, time-delayed, video-on-demand or similar basis, though Dish may “connect its Subscribers’ video replay equipment.”  Dish also cannot “record, copy, duplicate and/or authorize the recording, copying, duplication (other than by consumers for private home use) or retransmission” of any part of Fox’s signal.

Under a 2010 amendment to this contract, Dish may provide video on demand services but is required to “disable fast forward functionality during all advertisements.”

In 2012, Dish started offering a new feature, AutoHop, allowing users to automatically skip commercials.

To create the AutoHop functionality, Dish technicians in Cheyenne, Wyoming manually view Fox’s primetime programing each night and technologically mark the beginning and end of each commercial. The program content is not altered in any way. The electronically marked files are then uplinked in Wyoming and eventually transmitted to subscribers in an “announcement” file that Dish makes available to subscribers after the show has aired. Simultaneously with the uplink, three “beta Hoppers” record the Fox primetime block for transmissions in Kentucky, Pennsylvania, and Florida to test the marking announcement. These copies remain at the uplink facility and are used to make sure the commercials have been accurately marked and that no portion of the program has been cut off.

Fox sued Dish for copyright infringement and breach of contract and sought a preliminary injunction.  The district court denied the motion, holding that Fox failed to demonstrate a likelihood of success on most of its claims.

See Also: Copyright FAQ  "What Is Considered Fair Use?"

The court did find that the “quality assurance” copies described above were likely a breach of contract and an infringement of Fox’s copyrights, but that Fox failed to show it was likely to suffer irreparable harm as a result of these copies.

The Court of Appeals noted that the district court had found that the end users, and not Dish, took the initial steps of enabling Prime Time Anytime feature and thus that the users, and not Dish, were “the most significant and important cause” of the copying.

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.”

The court rejected Fox’s argument that Dish made the copies, either alone or concurrently with its users:

[O]perating 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.

The Court of Appeals also found that the district court did not abuse its discretion in concluding that Fox was unlikely to prevail on its claim of secondary copyright infringement.

[A]s 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.

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At Sheldon Mak & Anderson, we recognize that innovation is your competitive edge - and it needs protection. Recognized as one of the country's "Best Law Firms" by U.S. News & World Report and Best Lawyers® –  Sheldon Mak & Anderson has been a leader in intellectual property law for more than 30 years and specializes in patents, trademarks, copyrights, trade secrets, IP litigation, international patent and trademark prosecution, licensing, alternative dispute resolution and green technology. Contact us today for a free initial consultation at (855) UR- IDEAS or (855) 874-3327.

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Photo Attribution:  “SuperDISH121.jpg” is Public Domain.

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trade secretsSouth Korean Company Attempts to Steal Trade Secrets from DuPont

The US Department of Justice said that Toray Chemical Korea, Inc. agreed to pay the penalty and cooperate with a US government investigation of its activities.

Toray also agreed to implement an improved compliance and ethics program for its company. In return, the Department of Justice agreed to drop the case in two years if Toray abides by its agreement.

The criminal complaint against Toray was filed at the same time as the deferred prosecution agreement.

DuPont and Toray have also agreed to resolve any potential civil claims DuPont might have for attempted trade secret theft.

The Justice Department said that Toray, formerly doing business as Woongjin Chemical Co. Ltd., attempted to steal trade secrets from DuPont so that it could develop a product to compete with DuPont’s Nomex fiber.

Nomex is a fire-resistant material used in firefighting gear (such as the hood shown in the photo) and other applications.

The US Attorney’s office said that during 2011 Woongjin sought to improve its own Arawin fiber product by hiring, and attempting to hire, former DuPont employees as consultants.

See also: Trade Secrets Gain Protection Worldwide

 

The office said that two former DuPont employees met with Woongjin management in South Korea.  The managers asked the former employees to reveal details about DuPont’s processes.

One of the former employees offered to obtain the information from a current DuPont employee when he returned to the US.  However, he apparently did not actually do so.

A Woongjin executive reportedly also told an employee to obtain a sample of the short-cut fiber, called “floc,” used to make Nomex paper, by either legal or illegal means.

DuPont became aware of these efforts and contacted federal authorities.  FBI agents then interviewed the former DuPont employees who had met with Woongjin.

If you have questions about seeking a criminal investigation of trade secret theft, contact our office for a free initial consultation with one of our trade secret lawyers.

 

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At Sheldon Mak & Anderson, we recognize that innovation is your competitive edge - and it needs protection. Recognized as one of the country's "Best Law Firms" by U.S. News & World Report and Best Lawyers® –  Sheldon Mak & Anderson has been a leader in intellectual property law for more than 30 years and specializes in patents, trademarks, copyrights, trade secrets, IP litigation, international patent and trademark prosecution, licensing, alternative dispute resolution and green technology. Contact us today for a free initial consultation at (855) UR- IDEAS or (855) 874-3327.

Disclaimer: We fully comply with all laws related to attorney marketing and this posting is considered an advertisement.

Photo Attribution: “2007 Toronto Fire Service” by Sherurcij is licensed by Creative Commons Attribution 2.5 Generic.

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