In a blow to broadcasters’ efforts to slow the march of ad-skipping technology, a federal appeals court today rejected an appeal by 21st Century Fox in its case against Dish Network’s "Hopper" device.
Reuters reports: "The 9th U.S. Circuit Court of Appeals upheld a lower court judge’s refusal to temporarily halt sales of Dish’s Hopper, which contains the ad-skipping feature known as AutoHop, and a related ‘marsupial-inspired’ product called the Joey."
AutoHop was introduced last year and is offered on programming recorded using Dish’s PrimeTime Anytime feature, which "lets subscribers record Fox, ABC, CBS and NBC prime-time programs with one click, and replay them commercial-free starting the day after they broadcast. Recordings can be saved for eight days," Reuters reports.
Broadcasters have argued that AutoHop amounts to copyright infringment and threatens their ad-based business model. With about 14 million subscribers, Dish is the nation’s second-largest satellite provider.
"Last November, U.S. District Judge Dolly Gee in Los Angeles said the parent of the Fox Broadcasting Co network did not deserve a preliminary injunction to stop sales of products featuring AutoHop or PrimeTime Anytime," the story reports. "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."
The report adds: "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 ‘video on demand’ programs."
The story adds: "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."
In today’s ruling, the court did not address the merits of the Fox case, the piece notes.
The report adds: "Wednesday’s decision could ‘encourage other pay-TV providers to offer similar services,’ wrote Christopher King, an analyst at Stifel Nicolaus. ‘We suspect broadcasters are factoring potential ad-skipping losses into their demands for retransmission-content payments from Dish.’"
CBS and NBC have also sued Dish over the Hopper.