its web site, and provided the site and facilities for the direct infringement. The court found that
the site was, by virtue of its design to deal solely in music files from iTunes, not capable of
substantial noninfringing uses. The court also ruled ReDigi to be vicariously liable because it
exercised complete control over its web site content, user access, and sales, and benefitted
financially from every infringing sale when it collected 60% of each transaction fee.^265 The
court rejected ReDigi’s fair use defense because its web site made commercial use of the music
files and did nothing to transform them, and ReDigi’s sales were likely to undercut the market
for or value of the copyrighted works.^266
For the reasons set forth in Section III.F.1 below, the court rejected ReDigi’s assertion
that the first sale doctrine permitted users to resell their digital music files on ReDigi’s web site.
(x) Hearst Stations v. AereoThis case was apparently the first one within the First Circuit to present the question
whether a plaintiff claiming direct infringement must show volitional conduct on the part of the
defendant. The court agreed with decisions in the Second, Third, and Fourth Circuits ruling that
volitional conduct is required. The facts and rulings of this case are discussed in Section II.B.13
below.
(y) In Re Autohop Litigation (Dish Network v. American
Broadcasting)
In In re Autohop Litigation,^267 Dish Network brought a declaratory judgment action
against several broadcasting companies seeking a declaration that its PrimeTime Anytime
(PTAT) and AutoHop services (which are described in Section II.A.4(u) above) did not infringe
the plaintiffs’ copyrights. Several of the plaintiffs affiliated with ABC (including Disney) moved
for a preliminary injunction preventing Dish from offering its PTAT and AutoHop services to its
subscribers. The plaintiffs argued that Dish was liable for directly infringing their copyrights in
their primetime programs by virtue of its involvement in creating the key system settings and
options subscribers could choose for recording broadcasts via PTAT. The plaintiffs argued that
Dish did not simply and automatically obey subscriber commands because the start and stop
times of recordings were set by Dish and Dish prevented a subscriber from stopping a recording
once it was in progress. The plaintiffs pointed out that Dish did not limit the copying to the
programs that the subscriber intended to watch and argued that Dish had control over the content
of the programming because its agents allegedly consulted an electronic program guide to
determine which programs fell into primetime and which should be recorded.^268
(^265) Id. at 658-60.
(^266) Id. at 653-54.
(^267) 2013 U.S. Dist. LEXIS 143492 (S.D.N.Y. Oct. 1, 2013). The opinion states in its caption that it is related to
Dish Network, L.L.C. v. American Broadcasting Cos.
(^268) Id. at *1-2, 16-19.