period. Services that offered older seasons of Fox programming could not be in competition
with recordings that were available only for up to eight days after a program aired. Similarly, the
commercial-free programming Fox licensed to third parties was only potentially in competition
with PTAT for up to eight days after a show aired, and then only for the group of people who
both subscribed to Dish and used PTAT. Even in the unlikely event it were possible to
demonstrate that Dish subscribers were less likely to purchase Fox programming on Amazon, or
that potential Microsoft or Vudu customers would eschew those services in favor of Dish (which
the record did not demonstrate beyond conjecture), it would be highly speculative and likely
impossible to demonstrate that PTAT in particular, as opposed to other Dish features and
services, would be the likely cause of market harm, or likely to be in the future. Accordingly, the
court concluded that Dish subscribers’ use of PTAT was fair use under Sony, and Dish was not
liable for contributory infringement. The court therefore ruled that Dish did not directly or
secondarily infringe Fox’s right of reproduction or distribution by offering PTAT to its
subscribers and therefore granted Dish summary judgment on those claims.^229 (The court also
ruled that Dish did not directly or secondarily infringe Fox’s right of public performance by
offering PTAT to its subscribers. See the discussion in Section II.B.16 below.)
The court then turned to whether Dish had direct liability for the QA copies of Fox
programming that it made (until July 20, 2012) to ensure that AutoHop functioned properly on
PTAT recordings made by Dish subscribers. Dish argued that the AutoHop service was non-
infringing and the QA copies were fair use because they were intermediate copies that allowed
for testing and development of new, non-infringing technology without affecting any licensing
market in which Fox participated or reasonably would participate. In rebuttal, Fox first
challenged whether AutoHop was infringing, arguing that the Ninth Circuit had upheld the ruling
that it was not infringing on the ground that, if recording an entire copyrighted program was a
fair use, the fact that viewers did not watch the ads not copyrighted by Fox could not transform
the recording into a copyright violation. Since that ruling, Fox presented uncontroverted
evidence that it aired a significant number of commercials advertising its own programming, and
that it owned copyrights for the clips used in those commercials. Fox argued that fact changed
the analysis regarding whether AutoHop was non-infringing. The district court ruled, however,
that it did not. The Ninth Circuit’s observation was merely a point of emphasis to show how
unlikely it would be for Fox to prevail on its claim that AutoHop infringed its copyrights – if
Sony permits a consumer to record an entire copyrighted program under fair use, there could not
be less protection for a consumer who declined to watch an ad that was not even copyrighted by
Fox. The linchpin of the copyright infringement analysis was whether Dish had infringed Fox’s
rights of reproduction and distribution. AutoHop neither copied nor distributed anything – it
skipped ads. Absent unauthorized copying or distribution, it was immaterial for purposes of the
copyright infringement claim that the ads being skipped were Fox’s own commercials.^230
Nevertheless, the court reaffirmed its previous ruling from the preliminary injunction
stage that creation of the QA copies was not a fair use. The QA copies were not transformative,
because they were simply used to allow users to automatically skip commercials in the
(^229) Id. at 63-68.
(^230) Id. at 72-74.