On January 24th, the Ninth Circuit denied a petition for rehearing en banc in Fox Broadcasting v. Dish Networks. The decision was, however, amended slightly from the original opinion, released last July.
Fox Broadcasting v. Dish Network involved satellite television provider Dish’s Hopper, a set-top device with digital video recording (DVR) and video on demand (VOD) capabilities. Relevant to this discussion, Dish began providing its Hopper customers with a service called “PrimeTime Anytime” (PTAT). PTAT, when enabled, automatically recorded all primetime (8 p.m.-11 p.m.) programming from the four broadcast networks (ABC, CBS, NBC, and Fox). The recordings are saved locally on a customer’s Hopper for a predetermined amount of time (typically 8 days), after which they are automatically deleted.
Fox sued for copyright infringement, alleging, in part, that Dish directly infringed its reproduction right when it made PTAT copies of Fox television programs. Fox sought a preliminary injunction
The District Court in Dish concluded that “at this stage of the proceedings, the Court is not satisfied that PTAT has crossed over the line that leads to direct liability. Despite Dish’s involvement in the copying process, the fact remains that the user, not Dish, must take the initial step of enabling PTAT after deciding that he or she wants to initiate the recording. The user, then, and not Dish, is the ‘most significant and important cause’ of the copy.” This, despite the fact that Dish designed, houses, and maintains the system that creates the copies. The court also did not consider the following facts indicative of causation:
- “Dish decides which networks are available on PTAT and has defaulted the PTAT settings to record all four networks.”
- “Dish also decides the length of time each copy is available for viewing: PTAT recordings are automatically deleted after expiration of a certain number of days, and a user may neither delete nor preserve the original PTAT copy before that time.”
- “Dish decides when primetime recordings start and end each night, and it maintains the authority to modify those times according to the particular programs airing that night. Additionally, the user cannot stop a copy from being made during the copying process, but must wait until the recording ends before disabling the link.”
The Ninth Circuit affirmed this result, saying “the district court did not err in holding that Fox did not establish a likelihood of success on its direct infringement claim.”
The “volitional conduct” test relied upon by both courts is idiosyncratic within the larger contours of tort law, and neither court explains why it decided to extend the test so far beyond previous applications. I’ve detailed some criticisms of the opinion when the original decision was released last summer. But today I want to head overseas and look at a recent case where a court got it right.
In 2012, an Australian court considered a very similar question. Telecom service provider Optus created “TV Now”, a service that enables customers to watch and record television broadcasts through a mobile device or personal computer. It was sued by a group of sports leagues for infringing its copyright in broadcast football games. The trial court judge held that Optus was not liable for infringement, relying in part on the US court decision in Cablevision and analogizing the service to a VCR or DVR. The decision was appealed.
The primary issue on appeal was “who ‘does’ the act of copying.” The appellate court said “the rival contenders are Optus, the subscriber, or Optus and the subscriber jointly.”
The court first considers the case that the copies were made solely by the subscriber. This approach is based on the premise that “Optus makes available to a subscriber a facility (a service) which enables the subscriber as and when he or she is so minded to use that facility to record broadcasts and later to view them. The copies that are made are the result of the subscriber’s use of the facility though the actual making of them requires Optus’ technology to function as it was designed to.” This is the position taken by the trial court judge, which said that to “make” a copy means “’to create’ by selecting what is to be recorded and by initiating a process utilising technology or equipment that records the broadcast”, a conception the court here said “robs the entirely automated copying process of any significance beyond that of being the vehicle which does the making of copies.”
Besides the analogy of Optus as a DVR operated by a subscriber, the trial court judge also saw the subscriber choosing to copy as “the last ‘volitional act’ in the sequence of acts leading to a copy being made and, for that reason, is significant in determining the identity of the maker.” The appellate court found these arguments less than compelling.
It noted too the trial court’s citation to Cablevision and the “volitional conduct concept.” However, the court viewed this concept as relevant only when there is a need to distinguish between direct and contributory liability—which is the case in U.S. jurisprudence but not under Australian law. The court added, referring to the academic criticism of the Cablevision decision, “It equally is not apparent to us why a person who designs and operates a wholly automated copying system ought as of course not be treated as a ‘maker’ of an infringing copy where the system itself is configured designedly so as to respond to a third party command to make that copy.”
The court concluded:
[W]e consider that Optus’ role in the making of a copy – ie in capturing the broadcast and then in embodying its images and sounds in the hard disk – is so pervasive that, even though entirely automated, it cannot be disregarded when the “person” who does the act of copying is to be identified. The system performs the very functions for which it was created by Optus. Even if one were to require volitional conduct proximate to the copying, Optus’ creating and keeping in constant readiness the TV Now system would satisfy that requirement. It should also be emphasised that the recording is made by reason of Optus’ system remaining “up” and available to implement the subscriber’s request at the time when its recording controllers poll the user database and receive a response indicating that a recording has been requested. What Optus actually does has –
a nexus sufficiently close and causal to the illegal copying that one could conclude that the machine owner … trespassed on the exclusive domain of the copyright owners: CoStar Group Inc v LoopNet Inc, 373 F3d 544 at 550 (4th Circ. 2004).
… Put shortly Optus is not merely making available its system to another who uses it to copy a broadcast. Rather it captures, copies, stores and makes available for reward, a programme for later viewing by another.
The real question for the court was whether Optus alone is liable or whether Optus and the subscriber are jointly liable. And here, the court indicated that the latter was most likely (since only Optus was named as a defendant, it was not strictly necessary for the court to resolve the question of the subscriber’s liability.) Said the court:
If one focussed not only upon the automated service which is held out as able to produce, and which actually produces, the copies but also on the causative agency that is responsible for the copies being made at all, the need for a more complex characterisation is suggested. The subscriber, by selecting the programme to be copied and by confirming that it is to be copied, can properly be said to be the person who instigates the copying. Yet it is Optus which effects it. Without the concerted actions of both there would be no copy made of a football match for the subscriber. Without the subscriber’s involvement, nothing would be created; without Optus’ involvement nothing would be copied. They have needed to act in concert to produce – they each have contributed to – a commonly desired outcome. The subscriber’s contributing acts were envisaged by the contractual terms and conditions. How they were to be done were indicated by the prompts given on the Optus TV Now TV guide page. The common design – the production of the selected programme for transmission to the subscriber – informed the solicitation and the taking of a subscription by the subscriber; it was immanent in the service to be provided.
The Australian court’s conclusion seems to hew more closely to general principles of tort law. Though the issue is settled, for now, in the Ninth Circuit, the Second Circuit is set to take up the issue soon in a parallel case involving the same Dish services and the other three major broadcast networks. Last October, the Southern District Court of New York denied a preliminary injunction against Dish in part because it agreed that the customer, not Dish, made the PTAT copies. That decision has been appealed, and oral arguments are set for next week.