The Hopper – DVR Legal Issues

Dish Network recently launched a new DVR called “The Hopper”. This new DVR has a few neat features. You can set up “Joey” boxes on your other TVs and stream anything recorded on your Hopper to any of up to 4 other TVs. You can also set it to record all Primetime Network shows for 2 weeks. So everything on ABC, CBS, FOX and NBC from 8-11 pm every night is available to watch on demand.

However, one last feature is raising the eyebrows of the networks and content production companies. They have started a feature called “auto hop”. What this does is that Dish will automatically take out the commercial for you if you turn this feature on. Available after 1AM the morning after the recordings are made (presumably so Dish can go through, find the commercials, and send out the jump points to their DVRs), no longer do viewers have to hit the 30 seconds skip button, or fast-forward through ads during their favorite shows.

The networks are mad because if this technology is widely adopted, advertisers would realize their ads aren’t being seen (to an even larger extent than they aren’t being seen now). They have filed suits (FOX, CBS, NBC) to stop the use of this product, and Dish filed its own motion seeking a declaration from the court that the product is legal.

There are a ton of meaty copyright issues here. How does this differ from normal DVRs? Does copyright to a program include the ads during a broadcast? How come viewers can skip commercials but not Dish? Is this just protection of a lost business model or a legitimate claim of copyright infringement?

A quick boring lesson in copyright law. There are essentially two types of copyright infringement, Direct and Secondary. Direct, as it sounds is when you are violating copyrights (like making a copy of something and selling it). Secondary is when you enable another to violate copyright, most often through a product or service of yours. To further muddy things, there are two types of secondary infringement – Vicarious and Contributory. Vicarious is when you have the right and ability to stop infringement (like a mall that has a store selling counterfeit goods), while Contributory is when your product is used to violate (think Grokster or various P2P programs).

DVRs and Copies of Television Programming

The legality of a viewer recording a copy of a TV show to their home DVR is based on case law going back to VCRs (and Betamax!) in the Sony v Universal case of the 80s.  In this case, Sony made Betamax machines which allowed people to record TV programs to videocassettes. Universal sued claiming copyright infringement. The court found that a consumer making a copy of something they could have watched for free, and simply watching it at a different time (what came to be known as time-shifting, which still describes what DVRs do) is a fair use for the consumer. Thus, while technically there is a copy being made, which would normally be an infringement, this an exception of Fair Use, and is allowed.

When one considers the nature of a televised copyrighted audiovisual work … and that time-shifting merely enables a viewer to see such a work which he had been invited to witness in its entirety free of charge, the fact … that the entire work is reproduced … does not have its ordinary effect of militating against a finding of fair use.

Consumers of the product therefore were protected. What about Sony as a secondary contributor? The court noted that it is important to not stall technology that has uses for legal purposes, even if it can be used illegally. Since videotapes could be used to create home videos, or competition to the major movie studios, this technology was cleared.

[There must be] a balance between a copyright holder’s legitimate demand for effective – not merely symbolic – protection of the statutory monopoly, and the rights of others freely to engage in substantially unrelated areas of commerce. Accordingly, the sale of copying equipment, like the sale of other articles of commerce, does not constitute contributory infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it need merely be capable of substantial noninfringing uses….

On a side note, this is often what P2P software companies try to argue about their products. Yes, you can download music illegally, but you can share totally legal stuff like free software! This can be a protection, but what often happens is that they adversities the illegal benefits of their product, and thus are guilty of inducement, or suggesting that you violate copyright.

Thus, this case created a precedent that home viewers can create copies of shows for home use (not for profit), and the companies creating those copying technologies are generally safe, as long as there is a legal purpose for those technologies.

Streaming DVRs

As technology progressed, new features were added and litigated. Recently, Cablevision a cable company introduced a product that acted as a DVR, but stored the shows on the company’s servers and then streamed the programming to the consumer when they decided to watch it. This meant no home DVR was recording the show.

The content producers sued claiming Cablevision was violating their rights by making a copy of a copyrighted work, and then putting out a public performance of a copyrighted work. The Court again sided the technology producer. They claimed that since a user was directing the copy to be made, this again was a legal copy, and that since the one copy was going to one customer, the transmission to the home user from the company’s hard drive was not a public performance.

The Hopper

Now we come to Dish’s new product. It seems to me that this case will turn on the factors the Courts have focused on in the past, but one new aspect will be addressed (which is exciting as a copyright nerd).

  • Who is making the recording?
The courts have protected the DVR companies in the past when the user is the one requesting the recording be made. Even when Cablevision stored the recording, the fact that the customer requested it protected them from liability. Here, is the customer requesting the recording? According to the ad, The Hopper records all the primetime networks every night. Is the user really “requesting” this, even if they choose the “Primetime” option? How does the fact that Dish sends the jump points back to the DVR (which stores the video) factor in?
  • What is included in the copyrighted work?

The networks obviously have copyright protection in their programming. However, does this extend to the commercials that appear between the shows? I can see an argument that the entirety of what is coming off their broadcast is their programming. Will the court accept that? Before, using traditional DVRs, customers saved the “entire” program, ads and all. Even if they chose to skip them, they still were saving them. Here, the ads are cut out. Is that a derivative work? Or an unlawful reproduction of the original programming?

Conclusion

In the end, this will be a big decision for the networks. If allowed, new models for advertisers will have to be created. You will probably see much more product placement, in-show type advertising. Further, one expert hinted that you could see permanent bottom-third style ads (like those pop ups on Youtube, or the ticker on CNN) instead of commercial breaks. However, should we be protecting an old business model just for the sake of propping up an industry? Perhaps this will force new revenue models that some have said are long overdue.

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One thought on “The Hopper – DVR Legal Issues”

  1. Why don’t CBS, FOX, and NBC exec want consumers to enjoy commercial-free TV? It’s what we want! I’m a customer and employee of Dish, and I think AutoHop is great because you can easily watch commercial-free TV. A well known consumer advocacy group, Public Knowledge, agrees that people should have the right to control how they watch TV. They’re taking a stand for consumers by creating a petition that tells CBS, FOX, and NBC media to keep their hands out of your living room and DVR. Sign their petition to keep control of how you watch TV http://bit.ly/KFdn1Q

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