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Auto Hop and Aereo cases put broadcasters on the defensive

If broadcasters thought they were sure to win two federal court cases that have caused them grave concern regarding content exclusivity, they were in for a surprise. Judges in both cases put broadcasters on the defensive last week with two high profile rulings.

Dish’s Auto Hop technology, which allows subscribers to easily skip commercials on the second day after a network program airs, was before a federal judge last week only hours after lawsuits were filed by both the networks and Dish.

In a case filed by Fox, U.S. District Judge Laura T. Swain granted Dish’s request for a temporary restraining order, ruling that Fox, along with NBC and CBS, must show cause why their suits should proceed while Dish’s request for a declaratory judgment that its Auto Hop feature does not violate copyright laws is heard.

The case will resume July 2. Dish’s general counsel, R. Stanton Dodge, said he was pleased that the New York federal court has entered a temporary restraining order against Fox until the court decides whether the suits filed by Fox, CBS and NBC in California should be enjoined in favor of Dish’s suit in New York.

“Dish looks forward to presenting its case and prevailing on the merits,” Dodge said.

In a countersuit, Dish said it was suing because “the major television networks have threatened it with litigation” intended to stop the use of Auto Hop.

In its lawsuit, Fox said Dish’s “PrimeTime Anytime” service—which includes the Auto Hop feature—is a “bootleg broadcast video-on-demand service” that “makes an unauthorized copy of the entire primetime broadcast for all four major networks every night.”

In the separate Aereo case, a hearing was underway last week in New York City to allow another federal judge to grasp the issues.

Aereo, whose major investor includes media mogul Barry Diller, rents users in the New York City area individual, remote-based mini antennas and a DVR to deliver the over-the-air programming to the Internet. Aereo does not pay the networks or stations for retransmission, which has led to the broadcasters suing to stop the new service.

When asked if Aereo is more or less harmful to broadcasters than the advent of standard DVRs, Martin Franks, CBS executive vice president planning for policy and government affairs, told the court, “I just don’t know.”

To succeed in obtaining a preliminary injunction against Aereo, the broadcasters have to show a likelihood of success on the merits of the claims and the prospect of irreparable injury.

The networks have been arguing that if an injunction isn’t granted, it will lead to TV viewers ditching cable and satellite services, an activity known as “cord cutting.” That, of course, would lead to a loss of revenue for the broadcasters.

The judge addressed the broadcasters’ insistence that any customer who cancels his or her cable service to sign up with Aereo is a problem. How does subtracting one subscriber impact advertising?, the judge wanted to know. Franks admitted it would take a substantial number of defections to have a real impact.

The judge took the Aereo case under advisement and will rule soon on the question of a preliminary injunction.