Fox Broad. Co. v. Dish Network LLC

160 F.Supp.3d 1139

114 U.S.P.Q.2d 1100

FOX BROADCASTING COMPANY, et al., Plaintiffs,

v.DISH NETWORK LLC, et al., Defendants.

Case No. CV 12–4529 DMG (SHx).

United States District Court, C.D. California.

Signed Jan. 12, 2015.

Filed Jan. 20, 2015.

Amy M. Gallegos, Andrew Jackson Thomas, David R. Singer, Richard Lee Stone, Jenner and Block LLP, Los Angeles, CA, for Plaintiffs.

Jeremiah J. Burke, Susan K. Jamison, Coblentz Patch Duffy and Bass LLP, Annette L. Hurst, Orrick Herrington and Sutcliffe LLP, Mark Alan Lemley, Michael H. Page, Durie Tangri LLP, San Francisco, CA, E. Joshua Rosenkranz, Elyse D. Echtman, Lisa T. Simpson, Peter A. Bicks, Orrick Herrington and Sutcliffe LLP, New York, NY, William A. Molinski, Orrick Herrington and Sutcliffe LLP, Los Angeles, CA, for Defendants.

ORDER RE: PLAINTIFF FOX BROADCASTING COMPANY'S MOTION FOR PARTIAL SUMMARY JUDGMENT AND DEFENDANT DISH NETWORK LLC'S MOTION FOR SUMMARY JUDGMENT [372, 383] [UNDER SEAL]

DOLLY M. GEE, District Judge.

This matter is before the Court on the parties' motions for summary judgment. The parties appeared for a hearing on their motions on October 17, 2014. The Court has duly considered the parties' written submissions presented in support of and in opposition to the motions, as well as oral argument. For the reasons discussed below, Plaintiffs' motion for partial summary judgment is GRANTED in part and DENIED in part and Defendants' motion for summary judgment is GRANTED in part and DENIED in part.

I.PROCEDURAL BACKGROUND

On May 24, 2012, Plaintiffs Fox Broadcasting Company, Inc., Twentieth Century Fox Film Corp., and Fox Television Holdings, Inc. (“Fox”) filed a Complaint against Defendants DISH Network LLC, DISH Network Corporation, and EchoStar Technologies LLC (“DISH”) alleging copyright infringement and breach of contract. [Doc. # 1.] Specifically, Fox alleged that DISH's PrimeTime Anytime (“PTAT”) service and the AutoHop Sling Adapter feature copied and streamed Fox's programming over the Internet in violation of copyright law and DISH's contractual agreements with Fox. [Doc. # 1 at 3–4.]

On August 22, 2012, Fox filed a Motion for a Preliminary Injunction requesting that the Court enjoin DISH from offering, operating, distributing, or selling both the original and current iterations of PTAT and AutoHop. [Doc. # 41.] On November 7, 2012, this Court denied the motion. [Doc. # 109.] Fox appealed the ruling to the Ninth Circuit Court of Appeals. [Doc. # 110.] On February 21, 2013, Fox filed a First Amended Complaint (“FAC”) adding DISH's new 2013 services (DISH Anywhere with Sling technology and Hopper Transfers) to the list of offending services. [Doc. # 135.] On February 22, 2013, Fox filed another Motion for Preliminary Injunction seeking to enjoin DISH from offering those additional services. [Doc. # 129.] On September 23, 2013, this Court also denied that motion. [Doc. # 196.] Fox again appealed the decision to the Ninth Circuit. [Doc. # 205.] The Ninth Circuit affirmed both of the District Court's decisions. [Doc. 218, 356.]

On August 22, 2014, Fox moved for partial summary judgment on its claims that DISH (1) is infringing Fox's exclusive right to publicly perform its copyright works by streaming them over the Internet using DISH Anywhere; (2) is breaching the 2010 Letter Agreement by retransmitting Fox's programming over the Internet using DISH Anywhere; (3) is breaching the parties' 2002 Retransmission Consent Agreement (“2002 RTC Agreement”) by distributing Fox's programming on a “video-on-demand or similar basis” using PTAT; (4) is breaching the parties' 2002 RTC Agreement by authorizing DISH's subscribers to copy Fox's programming for viewing outside their homes with its Hopper Transfers service; (5) breached the 2002 RTC Agreement by making copies of Fox's programming in connection with the operation of the AutoHop service; and (6) infringed Fox's exclusive right to reproduce its copyrighted works by making copies of Fox's programming in connection with the operation of the AutoHop service. [Doc. 383, 439, 479.] DISH moves for summary judgment on all of Fox's copyright and contract claims. [Doc. 372, 373, 495.]

II.FACTUAL BACKGROUND¹

A. The Parties and Affiliates

Fox is one of the four major commercial networks that broadcast television over the airwaves in the United States. Declaration of Michael Biard in Support of Plaintiffs' Opposition to Defendants' Motion for Summary Judgment (“Biard Opp. Decl.”) at ¶ 4. [Doc. # 535.] In addition to broadcasting the Fox programs over the airwaves, Fox enters into retransmission consent (“RTC”) agreements with various cable television systems, satellite television services, and other multichannel video programming distributors (“MVPDs”) such as DISH, which retransmit Fox's broadcast signal and the Fox programs to their subscribers. Declaration of Sherry Brennan in Support of Plaintiffs' Opposition to Defendants' Motion for Summary Judgment (“Brennan Decl.”) at ¶ 11. [Doc. # 537.] Fox separately licenses to cable, satellite, and other MVPD service providers the right to air video-on-demand (“VOD”). Id. at ¶ 17(a). Fox also enters into agreements with companies like Hulu, Netflix, Amazon, and Apple to offer the right to stream Fox programming to subscribers over the Internet on their computers and mobile devices, with or without commercials, depending on the nature of the licensing agreement and the user's subscription. Id. at ¶ 17(b)-(g). Fox also licenses older seasons of its programming to subscription VOD services such as Netflix and Amazon Prime. Defendants' Reply to Plaintiffs' Statement of Additional Facts (“DISH Reply SAMF”) at ¶ 25. [Doc. # 522].

Fox holds the copyright for many of the programs broadcast on the Fox Network, including American Dad, Bob's Burgers, Family Guy, Glee, King of the Hill, New Girl, The Simpsons, and Sleepy Hollow, among others.² Defendants' Statement of Genuine Disputes and Undisputed Facts in Support of Opposition to Plaintiffs' Partial Motion for Summary Judgment (“DISH GDMF”) at ¶ 1 [Doc. # 456.]; Declaration of Mary McGuire in Support of Plaintiffs' Motion for Partial Summary Judgment at ¶¶ 2, 7–8, Ex. A. [Doc. # 387.]

The majority of Fox's revenues come from advertising sales. DISH Reply SAMF at ¶ 27. To maintain ratings and launch new programs, Fox engages in substantial self-promotion and advertising for its own programs. Id. at ¶ 36. Over the past fiscal year, 14% of the total commercial spots that appeared during Fox Network programming were Fox Network's own advertisements. Id. at ¶ ¶ 40–41. Fox itself is, in fact, the single largest advertiser on the Fox network. Id. Fox owns the copyrights for the clips from Fox programs used in these promotional advertisements. Id. at ¶ 39; Declaration of Mary McGuire in Support of Plaintiffs' Opposition to Defendants' Motion for Summary Judgment at ¶¶ 8–9. [Doc. # 437–1.]

DISH is the nation's third-largest pay television provider, delivering satellite services to millions of households nationwide. Defendants' Reply to Plaintiffs' Statement of Genuine Disputes of Material Fact in Support of Motion for Summary Judgment (“DISH Reply GDMF”) at ¶ 120. [Doc. # 521]. DISH is currently a party to RTC Agreements with each of the four major broadcast television networks, including Fox, which allows it to retransmit the content shown on the local affiliate stations that are owned and operated by those networks. Declaration of David Shull in Support of Defendants' Motion for Summary Judgment (“Shull Decl.”) at ¶ 10. [Doc. # 499.] DISH pays [Redacted] dollars each year for those rights. Id. DISH has offered its subscribers Digital Video Recording (“DVR”) since May of 1999. Declaration of Dan Minnick in Support of Defendants' Motion for Summary Judgment (“Minnick Decl.”) at ¶ 5. [Doc. # 501.]

EchoStar Technologies LLC (“EchoStar”) is a technology vendor closely affiliated with DISH that, among other things, supplies DISH with satellite television and retransmission services, the set-top boxes (“STBs”) and DVRs that DISH sells and leases to its customers, and technology support service. Minnick Decl. at ¶ 1. EchoStar is not the same entity as EchoStar Satellite Corporation, DISH's predecessor. See n. 3, infra. DISH has a “SlingService Services Agreement” with Sling Media, Inc., which is owned by EchoStar. DISH GDMF at ¶ 34.

B. The Agreements

Under Fox and DISH's agreements, DISH has the right to retransmit Fox programming to its subscribers via satellite. DISH Reply GDMF at ¶ 129. DISH's right to broadcast Fox programming by satellite is governed by an RTC Agreement entered into by the parties³ on July 1, 2002 (the “2002 RTC Agreement”) that has subsequently been amended and extended numerous times (in 2004, 2005, 2006, 2007, 2009, and 2010). Shull Decl., Ex. 1 [Doc. # 499–1]; Biard Opp. Decl. ¶ 11, Ex. 15.

1. The 2002 RTC Agreement

The relevant provisions of the 2002 RTC Agreement are:

2. Retransmission Consent.... [Redacted]

3(d). Carriage of Stations ... [DISH] acknowledges that it shall have no right to distribute all or any portion of the programming contained in any Analog signal on an interactive, time-delayed, video-on-demand or similar basis; provided that Fox acknowledges that the foregoing shall not restrict [DISH's] practice of connecting its Subscribers' video replay equipment.

9(a). Copyright and Trademark Licenses ... “[DISH] shall not, for pay or otherwise, record, copy, duplicate and/or authorize the recording, copying, duplication (other than by consumers for private home use) or retransmission of any portion of any Station's Analog Signal without prior written permission of the Station, except as is specifically permitted by this Agreement.”

2. The 2004 Agreement

On October 1, 2004, the parties entered into another agreement (the “2004 Agreement”). Shull Decl. ¶ 17, Exh. 2. The relevant provision of that Agreement is:

29. Limitation of Liability ... [Redacted]

3. The 2010 Letter Agreement

The 2002 RTC Agreement was amended most...