In a setback to TV networks, Dish Network has won a ruling that neither its service letting subscribers watch live TV shows on mobile devices nor its AutoHop ad-skipping service infringe copyrights.
A federal judge in Los Angeles rejected claims by Fox Broadcasting that Dish Anywhere is equivalent to Aereo's streaming-TV service, which the Supreme Court in June found illegally sent live programs to its subscribers without broadcasters' permission.
The ruling, the first to apply the Aereo decision to networks' other legal fights seeking compensation when programs are transferred beyond the set- top box, hands a victory to distributors that provide new ways for consumers to watch TV shows on mobile devices.
U.S. District Judge Dolly Gee, in a Jan. 12 decision unsealed Tuesday, said the Dish technology, unlike Aereo, isn't a public transmission and doesn't violate copyright law. The Dish subscriber is already in legal possession of the program and controls the transmission to a mobile device through a set-top box at home, according to the judge's ruling.
"The ultimate function of Dish Anywhere is to transmit programming that is already legitimately on a user's in-home hardware to a user's internet-connected mobile device," the judge said in her decision.
Fox said it's disappointed about the issues that weren't decided in its favor and pleased that the court agreed with some of its copyright-infringement claims.
Fox, a unit of Twenty-First Century Fox, had initially sued Dish in 2012, alleging its PrimeTime Anytime service, which can automatically record all four networks' prime time shows every night, and its AutoHop service, which lets subscribers watch the recorded shows with the advertisements stripped out, violated its copyright and breached their license agreement.
CBS and Comcast's NBC Universal filed similar lawsuits at the same time. Fox added Dish's "on-the-go" features to the lawsuit the next year.
The case, which was scheduled to go to trial in February, was put on hold last week at the request of the companies. They said in a Feb. 15 filing that the issues at stake in the lawsuit were "highly likely" to be resolved as they negotiate a new transmission agreement this year.
"Consumers are the winners today, as the court sided with them on the key copyright issues in this case," R. Stanton Dodge, Dish's general counsel, said in a statement. "This decision has far reaching significance, because it is the first to apply the Supreme Court's opinion in Aereo to other technology."
The judge also ruled that Dish's PrimeTime Anytime and AutoHop don't infringe Fox's copyrights. The copies the Hopper makes of the shows is "fair use" under U.S. Supreme Court's 1984 decision in the Sony Betamax case. She said any business Fox might lose in the secondary market for its programs because of the service was "too speculative."
Fox and the other networks have argued that allowing viewers to watch recorded prime time shows with the ads removed undermines their business model because it reduces the value of their shows to advertisers on whom they depend to make money. Dish subscribers can't watch live prime-time TV without the ads, only the ad-free recorded shows the following day.
The judge agreed with Fox that copies of its programs that Dish used to test the quality of its AutoHop service violated the broadcaster's copyright. She also agreed that the Hopper transfers, that lets subscribers copy recorded programs to their tablets and mobile phones, violates a contract clause limiting such copies to private home use.
"While we are still disappointed the court felt that PrimeTime Anytime and AutoHop do not violate our copyrights or contract, Dish has been largely disabling AutoHop anyway," Fox said in a statement.
Dish and CBS last year agreed to a new transmission deal under which the AutoHop ad-skipping function won't be available for seven days after the initial broadcast of CBS's programs.
In a separate deal last year with Walt Disney Co., the owner of ABC, Dish agreed to disable AutoHop for Disney programs for three days after their air date.