January’s Central District of California ruling on Fox Broadcasting’s claims against the DISH Network clarifies some of the ambiguity surrounding second screen cross-device programming distribution and copyright infringement. Since 2012, DISH has offered its “DISH Anywhere” service which provides DVR capability for ad skipping and sling functionality, which permits subscribers to access live and recorded programming from their set top box and “sling” it to their other peripheral devices (i.e. laptop, tablet, Smartphone, etc…). This scenario is typically referred to as the “Second Screen,” thereby enabling consumers to access programming whenever and wherever they want to consume it.
For background, the DISH Anywhere service consists of a complex system of software applications, peripheral devices, set top boxes and DISH’s back-end servers, allowing consumers to copy recordings saved on their set top box DVR to their peripheral device and play them back at any location, at any time, even if the peripheral device is not connected to the Internet. The AutoHop feature allows subscribers to skip commercials during play-back of the programming.
Fox filed a lawsuit against the DISH Network alleging that the sling unauthorized copying and distribution of content in violation of Fox’s copyrights. Specifically, Fox claimed DISH violated Fox’s exclusive right of public performance for its programming (16 U.S.C. 106(4)). The Court references the “Transmit Clause” of the US Copyright Act for public performance violations which requires (1) a transmission or other communication, (2) a performance of the work, and (3) to the public. While DISH had, pursuant to its license agreement with Fox, the right for an initial public performance (i.e. transmission of programming from its satellites to the consumers’ set top boxes), the court considered the more pressing “second screen” question; whether the DISH Anywhere and Sling Technology constitute a public performance in violation of Fox’s exclusive copyrights?
Refuting Fox’s argument, the Court rejected the application of American Broadcasting Companies v. Aereo, Inc. (134 S. Ct, at 2501) which held Aereo’s streaming service of broadcast television over the Internet constituted a public performance because Aereo ‘s “community antenna television” service made them act like a cable company (which conduct had been expressly covered under the 1976 amendments to the US Copyright Act). Distinguishing DISH’s conduct, the satellite service provider held a license to the initial transmission of the programming to subscribers via satellite. The Court noted that in DISH’s case, the consumer was the actor whom gained access to his/her own home set top box to authorize recorded content on that device, as opposed to Aereo, which streamed a subscriber-specific copy of the programming from Aereo’s own hard drives. The Court held that since programming was legitimately stored on the set top box, the transformative use of DISH’s external servers and equipment to ensure the content travels between devices at the request of the subscriber did not constitute a public performance.
Most importantly, however, the Court held that DISH did not engage in any volitional conduct to implicate direct infringement because the consumer initiated the process, selected the content and received the transmission. The Court refuted the question of DISH’s contributory infringement by stating that since the user has legitimate possession of the programming on his/her set top box, and since they are only re-transmitting to himself/herself or someone in his household using an authenticated device, this act is not considered a public performance.
While the Court did rule partially for Fox in that it determined DISH engaged in unauthorized copying for quality control purposes and also violated its license agreement with Fox under a breach of contract theory (which limited the transmission to the set top box), this case has far reaching implications for copyright owners, consumers, advertisers and content distributors as it enables consumers to utilize their second screen to autonomously consume programming that they legitimately possess.
For advertisers, the time-shifting capabilities of the DVR technology in conjunction with sling, essentially allows consumers to continue to watch commercial-free programming on any device they own. As a result, Content owners and advertisers are going to have to learn how to engage consumers more effectively through product and brand integration to avoid being marginalized on the second screen.