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UPDATE: You Can Still Hop Through Commercials

Posted in Patent Law

By Lisa Y. Wang

In April, we published an article about Fox Broadcasting Co. v. Dish Networks, LLC, where Fox Broadcasting was requesting a preliminary injunction against Dish Network, claiming that were engaged in copyright infringement by offering their Auto Hop on Dish Networks’ DVRs. As of that date, a judge declined to issue a preliminary injunction and Fox had appealed to the Ninth Circuit Court of Appeals. On July, 24, 2013, the Ninth Circuit rejected Fox’s appeal, and affirmed the district court’s refusal to enjoin Dish Network’s features. It affirmed the lower court’s reasoning that the consumer is the party causing a copy to be made, and not Dish Network. So if you subscribe to Dish Network and have the Auto Hop and "PrimeTime Anytime" features, no need to panic and switch cable/satellite providers, you can still watch your favorite television shows, commercial-free, without even touching the fast-forward button.

The Ninth Circuit confirmed that DVR recording is protected fair use, and since Fox did not have any copyright interest in the advertisements (the only content that was being skipped), it could not show that it was irreparably harmed by the features.   However, it may be a bit premature for Dish Network to break out the champagne, despite Dish’s executive vice-president’s statement that, "This decision is a victory for American consumers."   That is because this decision was made using the very high legal standard required to justify a preliminary injunction, and the deferential standard of review applied to denials of preliminary injunctions. 

A preliminary injunction is a remedy that requires a defendant to take, or refrain from taking, a specific action, prior to a trial on the merits, but based on an underlying lawsuit. It is often referred to as an "extraordinary remedy" because you are essentially granting relief to a party pre-litigation, without giving the enjoined party the chance to conduct discovery, put forth their side of the case, etc . . As a result, a party seeking a preliminary injunction has a pretty high bar to meet.

Before an injunction can be granted, a plaintiff must prove a few things, including (1) there is no adequate remedy at law (meaning that money compensation is not sufficient), (2) there is a serious risk of immediate irreparable harm absent injunctive relief, (3) a likelihood that he or she will prevail on the merits of the underlying controversy, and (4) the plaintiff is more likely to be harmed if an injunction is not issued, than defendant would be if the injunction is granted (the so-called "balance of hardships"). The plaintiff essentially has to try a mini-version of the case in front of the judge and courts often apply all these factors on a "sliding scale."  In other words, if the plaintiff can prove that the likelihood of success is very high, their showing of irreparable harm does not need to be as strong. Likewise, if the injunction’s burden on the defendant is low, but the plaintiff would be greatly harmed without the injunction, the plaintiff would only need to show a fair ground for litigation.  

It is not easy to get an injunction and logically this makes sense because sometimes an injunction gives the plaintiffs the exact remedy they wanted (if they’re not interested in money).  Accordingly, the law sets a high bar for granting "extraordinary" equitable remedy and typically a bond is required so that if the injunction is wrongfully granted, the defendant has some kind of redress.  

Given the above factors, it’s not surprising that the judge denied Fox’s appeal for a preliminary injunction. The questions of law are by no means a "slam dunk" for Fox, complicated copyright questions rarely are, especially when they involve a new technology like this one. In addition, the harm to Dish Network and its subscribers would be great as the injunction could force Dish Network to disable the AutoHop and "PrimeTime Anytime" features and affect millions of its customers and lose millions of dollars.   So for now, Dish Network and its subscribers can continue "hopping" their way through prime time.