distribution under the copyright statute requires actual dissemination of a copy that changes
hands. PTAT was a system for automatically recording programming as it was being received
by a subscriber’s set-top box, inside the subscriber’s home. Those recordings were therefore not
distributed, delivered, or transmitted to any other location or person using PTAT alone. The
court also rejected Fox’s argument that the mere “making available” of Fox’s programming to
subscribers was sufficient to constitute a distribution. The district court observed that, while
neither the Ninth Circuit nor any other circuit court had addressed the “make available” theory of
distribution under the copyright statute, it had been considered by a number of courts, and the
great majority of courts that had considered the question had stopped short of fully endorsing the
“make available” right. The district court found those cases persuasive and concluded that
Dish’s act of merely “making available” copyrighted programming to its subscribers through
PTAT did not amount to distribution without actual dissemination.^227
The court then turned to whether Dish could have secondary liability for PTAT use by
Dish subscribers. To adjudicate that issue, the court had to determine whether such subscribers’
use of PTAT constituted direct infringement or was a fair use. The court concluded that the
subscribers’ use of PTAT for time shifting was indeed a fair use. The court began by noting that
the immunity of Sony is not absolute, and a challenge to a noncommercial use of a copyrighted
work requires proof that either the particular use is harmful, or that if it should become
widespread, there is some meaningful likelihood it would adversely affect the potential market
for the copyrighted work. As of the time of the preliminary injunction request, the record
established that any market harm resulted from the automatic commercial skipping and not
simply the recording of programs through PTAT. However, at this later stage in the litigation,
Fox had produced additional evidence of a secondary market for its programming. In addition to
licensing the right to stream live its programming to certain MVPDs, Fox licensed third parties
such as Apple, Amazon, Vudu and Microsoft the right to distribute its programs in a
commercial-free, downloadable format, available the day after a program aired and viewable on
mobile devices, personal computers, or certain Internet-connected televisions. Fox also licensed
older seasons of its programming to subscription video-on-demand services such as Netflix and
Amazon Prime.^228
The court therefore concluded that the record then before it established that a market for
Fox programming on demand existed beyond the value of the advertisements. Nonetheless, the
record did not create a triable issue as to the likelihood of future harm to that market. While Fox
had provided some evidence that PTAT co-existed with services like Hulu that offered streaming
of Fox programming with commercials, and that PTAT may help Dish attract subscribers, it had
not demonstrated that any of this was genuinely likely to cause harm to the secondary market for
Fox programming that went beyond the speculative, such that the question should be presented
to a jury. Only Dish subscribers had access to PTAT, and those subscribers also had access to a
litany of other services, including the ability to record prime time programming manually using
more traditional DVR technology. Furthermore, PTAT recordings were available only for up to
eight days, unless the subscriber made the effort to save them in a special folder for a longer
(^227) Id. at 59-61.
(^228) Id. at 61-64.