Fox v. Dish Hopper: Court Skeptical of ‘Irreparable Damages’

PASADENA, CALIF.— An attorney for Fox implored a trio of federal judges to kibosh Dish’s hopper, which can be set to automatically record primetime broadcast TV programming and skip the commercials. Richard Stone, arguing for Fox, said the district court that initially denied the injunction against Dish abused its discretion by departing from precedent set in previous streaming cases.

“The court could only deny injunction by departing from six cases that held unauthorized streaming of live television over the Internet created a multitude of likely irreparable harms.” Stone told Judges Marsha S. Berzon, John T. Noonan, Jr., and Dana M. Sabraw of the Ninth Circuit Court of Appeals in Pasadena on Monday.

“In four of those cases, the irreparable harm was found in the exact same record that we have here, including the same senior Fox executives’ testimony. And in all of those cases, the same licensed alternatives existed. Nonetheless, each court found there was irreparable harm,” Stone said, referring to the case argued in the Second Circuit.

Stone argued that there was proof of “abusive discretion,” which can occur in misapplication of the law, or illogical, implausible “clearly erroneous” findings of fact. Stone said there was proof because there was an unbroken line of authority “on the same exact record [with] the same witnesses…”

Judge Berzon interrupted Stone and said it wasn’t the same exact record because the previous technologies were different from Dish’s.

“Did any of those cases involve an instance where there was a license of….getting the material to the customer? That was licensed, right?” Berzon asked.

Stone said that wasn’t the case.

“But here there was a license?” she said.

“Right,” Stone said.

“So it’s not on the same record, right there,” Berzon said.

Stone said that his case presented a stronger record “because the license here, unlike those cases, expressly prohibits the conduct.”

Judge Berzon then inferred the dispute was a contractual matter.

“I learned that you don’t issue injunctions in contract cases,” she said.

Berzon said both parties appeared to be ignoring the contract issue.

Stone said contracts can be enjoined in limited circumstances, citing four factors in eBay, in which the Supreme Court found that injunction should not be granted automatically for patent infringement. The four factors include: Irreparable harm, legal remedies incapable of compensating for that harm, that the harm is sufficiently substantial, and that the public interest would not be harmed by an injunction.

Stone also noted that in the Ninth Circuit, if a party exceeded the scope of a copyright license, it would be deemed infringement, which historically has been enjoined.

“We have these other cases in which there was no license, in all of which the court found there was irreparable harm from the same conduct, that is, unauthorized streaming of broadcast television over the Internet,” he said.

Berzon noted that the contract between Dish and Fox meant that “you knew exactly who was getting what was unauthorized,” in which case, damages could indeed be estimated and were therefore not “irreparable.”

Stone said the lower court—the U.S. District Court for the Central District of California—tried to use that as a distinguishing factor, but that it was implausible because, and Aereo were all subscription services.

Judge Berzon interrupted and asked why she should be bound by those cases. The Supreme Court last month reversed a lower court decision denying an injunction against Aereo, which retransmitted broadcast TV signals for a monthly fee.

Stone reiterated the, et al, precedents.

“If you have this line of authority, the court needs to have a reason based in law and logic to depart from that line of authority,” he said.

Berzon said, “One of them could be, I think they’re wrong.”

“You have to have a reason based in law, otherwise you have capriciousness,” Stone replied. In addition, he said, “the license here actually prohibits the exploitation over the Internet.”

Berzon countered.

“But there’s dispute over that as well,” she said.

Stone then invoked copyright law.

“All rights are reserved unless granted,” Stone said.

Judge Sabraw noted that copyright was a “merits-based argument, and the district court focused on irreparable harm, so isn’t that a significant distinction? [Judge Dolly Gee] set aside the merits and focused simply on the irreparable harm standard.”

Sabraw persisted on the issue of irreparable harm. Stone persisted on the issue of the prohibition within the contract. Berzon persisted on the dispute about that point.

When Stone’s time expired, Josh Rosencranz for Dish said the district court determined that the Hopper was materially the same as the Slingbox, which has been around since 2005.

“With the SlingBox, you get this piece of hardware that has a chip in it. It’s the same exact chip that exists in the [Dish] DVR,” he said. “Now, you also have to download the software. You also have to do that with the SlingBox as well.”

Rosencranz said Time Warner, Comcast and DirecTV also have likewise DVRs. He said Fox came to the court without demonstrating harm from the technology over the nine years Slingbox has existed.

The district court case is in discovery, with summary judgments coming up in late August, and a trial early next year.

Also see…
June 25, 2014, “Broadcasters Prevail in Aereo
“Aereo performs petitioners works publicly within the meaning of the transmit clause of the Copyright Act,” Amy Howe said in Bloomberg’s live blog of the U.S. Supreme Court.

July 24, 2013, “Judge: Dish May Have Breached Fox Contract
Fox has more of a chance demonstrating that Dish breached its contract rather than violated copyright law with the Hopper, according to a court opinion released today.

November 12, 2012:Fox Appeals to Stop the Hop
Fox’s legal team wasted no time in appealing a federal judge’s decision last week to let Dish keep on skipping broadcast TV commercials.

November 8, 2012:Judge Lets Dish Keep On Hopping
In May, as the networks prepared to sue, news of those impending lawsuits leaked. Within 24 hours, Bloomberg said Dish countersued in U.S. District Court in Manhattan.