copyrighted programming rather than to create original programming or content. The QA copies
in no way altered their originals with new expression, meaning or message. The commercial
purpose of the QA copies weighed against fair use, as well as the creative nature of the
copyrighted works. With respect to market harm, the court found the record reflected that there
was a market for the right to copy and use Fox programs, given that Fox licensed copies of its
programming to third parties like Hulu, Netflix and Amazon. Although there was no
demonstrable existing market for the intermediate copies themselves, there was no material issue
of disputed fact that Fox, as a normal course of business, monetized the right to copy its
programming, whether directly (charging for the direct use of copies) or indirectly (allowing the
use of copies as a part of a comprehensive licensing agreement). The fact that Dish’s use of the
QA copies was sui generis and had never been attempted before by any other entity did not, in
the court’s mind, mean that it had no intrinsic value. Accordingly, the court ruled that Dish’s
unauthorized use of QA copies would impair Fox’s ability to monetize that use, not only as to
Dish but also as to any other future technology creator that made analogous use of such copies,
and thus did not constitute fair use.^231
The court therefore granted summary judgment in favor of Dish on the copyright
infringement claim as to the AutoHop feature, and granted summary judgment in favor of Fox as
to Dish’s liability for direct infringement for creation of the QA copies.^232
Finally, the court turned to Fox’s claims for direct and secondary liability of the
reproduction right and the distribution right for offering the Hopper Transfers service. The court
noted that Dish’s control over the Hopper Transfers process was significantly less than its control
over the PTAT process. Dish subscribers, not Dish, made and transferred the Hopper Transfers
copies using Dish’s equipment. Any potential distribution or performance was also by Dish
subscribers, not Dish, so Dish was not liable for direct infringement by offering Hopper
Transfers.^233
Nor could Dish be secondarily liable because subscribers’ creation of Hopper Transfers
copies was a fair use. The court noted that Hopper Transfers was a technology that permitted
non-commercial time shifting and place shifting of recordings already validly possessed by
subscribers, which is paradigmatic fair use under existing law (citing the Ninth Circuit’s
Diamond Multimedia^234 case).^235 As with PTAT, where the subscriber engaged in the volitional
(^231) Id. at 75-77.
(^232) Id. at 79. Fox sought statutory damages, compensatory damages in the form of reasonable royalties, and
disgorgement of profits based on infringement by the QA copies. The court ruled that, although all such
remedies are available under the copyright statute and potentially available if Fox prevailed at trial as to
damages, it granted Dish’s motion for summary judgment that Fox could not recover disgorgement of profits.
The court noted that the QA copies facilitated one of the services that Dish offered its subscribers in order to
convince them to subscribe. Fox had not demonstrated, however, that it could separate out Dish’s profits that
flowed from the use of the AutoHop feature, let alone those that emanated solely from the limited-time use of
the QA copies. Id. at 91.
(^233) Id. at 82.
(^234) Recording Indus. Ass’n of Am. v. Diamond Multimedia Sys., 180 F.3d 1072, 1079 (9th Cir. 1999).
(^235) Fox v. Dish, 2015 U.S. Dist. LEXIS 23496 at *82-83.