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2 YEARS

'Chicken Little' vs. 'Populist Hyperbole': Fox, Dish Trade Barbs in AutoHop Lawsuit

As the war of rhetoric heats up over ad-skipping, CBS' own battle with Dish will be traveling to New York.

Fox Vs. Dish Network Split - H 2012

In late August, Fox Broadcasting asked a California judge to enjoin Dish Network from offering its advertising-skipping DVR services known as "AutoHop" and "PrimeTime Anytime."

This has put Dish in somewhat of a funny position. On one hand, the Charlie Ergen-led company wants consumers to believe that they are getting great technology that's worth signing up for their satellite service. But on the other hand, Dish doesn't want to go too far in proclaiming any revolution in TV viewing lest a judge see "irreparable harm" in the form of the carcasses of TV executives who take metaphorical bullets in this revolution.

Thus, the stage has been set for some showy legal arguments. In the past week, both sides have been trotting out witnesses and attempting to demonstrate the other is lying through their teeth. Will a "souped-up" DVR kill the TV business? The VCR didn't, says Dish. Will the AutoHop actually lead to more commercial viewing? That's certifiably insane, suggests Fox.

Read Dish's opposition to the injunction.

Fox's injunction request was grounded on the notion that the new ad-zapper breaches "contracts and infringes Fox's copyrights on a massive scale, night after night," and if not stopped, would "cut the legs out from under the advertiser-supported broadcast television business model."

In reaction, Dish has made several points in opposition to what it calls "unsubstantiated fear-mongering."

One of the first is that ad-skipping has been around a long time. The DVR was introduced in 1999. The VCR came in the 1980s. Dish quotes former MPAA President Jack Valenti claiming the relationship of the VCR to the entertainment industry was as the "Boston Strangler to a woman at home alone."

"This was wrong in so many respects," says Dish in its opposition to the injunction. "One was that widespread adoption of the VCR turned out to be a huge boon for the entertainment industry, providing it with a new and lucrative distribution channel for content in the form of videocassette rentals and sales."

Read Fox's reply to Dish's opposition.

Dish also points to an amazing study by one of its experts -- a marketing professor at MIT who says that 57 percent of American households still have VCRs!

The defendant says that the broadcasters should not fear the DVR. "The American love affair with television remains strong," says the company, pointing to all sorts of statistics how Americans' viewing habits indicate they are becoming couch potatoes now more than ever.

Another point that Dish makes in the battle is that all of its DVRs -- not just the AutoHop -- are capable of allowing consumers to record Fox's entire primetime schedule every night and then fast-forward through ads during playback. Dish says that under Fox's interpretation of the law, "all of Dish's existing DVRs were suddenly prohibited" by its 2010 agreement, one of the contracts at issue in the case. "Plainly Dish never agreed to such a term, would not have done so, and Fox has never asserted otherwise."

As for Fox, Dish believes that the broadcaster is unfairly trying to game the system. According to the opposition, "Fox relies upon what it says are new markets in internet streaming and VOD content in an effort to convert a fair use into foul -- or perhaps it is fowl, since Fox's claims certainly have the ring of Chicken Little."

Fox hits back with its own hard-hitting reply.

Read what Dish's expert at MIT has to say about TV viewing habits.

"Dish's opposition is a study in populist hyperbole and misdirection," says the broadcaster. "Fox is not seeking to take anything away from consumers, or to overturn the consumer time shifting allowed by Sony [Supreme Court decision]...Fox is only trying to stop Dish from making and distributing unauthorized copies of its programs to create, in Dish's words, '[a]n on demand library of approximately 100 hours of primetime shows' that in conjunction with AutoHop becomes, again in Dish's words, 'commercial-free TV' in violation of Dish's license and copyright laws."

Fox then attempts to have Dish hang itself by words and actions in other ways.

Spending tens of millions of dollars to chase what its president refers to as the "Holy Grail of television," claiming the displacement of Hulu, and speaking about the entire television "ecosystem," would not make sense, says Fox, if Dish was merely rolling out an improved personal DVR time setter.

And Fox expresses some amazement at their adversaries' points.

"Dish uses two experts to try to convince the Court that, contrary to all of Dish's statements and marketing, a commercial-skipping, commercial-free, on demand library of shows will somehow lead to more commercial watching."

Fox also makes fun of Dish's stranger arguments, such as an attempt to use the Family Home Movie Act of 2005 as a blessing for commercial-skipping. That legislation was meant to exempt from copyright laws technologies that allowed DVD makers to sanitize content of dirty language and nudity. "The statute says nothing about commercial-skipping and, indeed, Congress expressly designed the statute not to apply to commercial-skipping technologies," says Fox.

The fight continues.

Meanwhile, one of the other pending lawsuits over the AutoHop is bouncing around...again.

On May 24, Dish's technology triggered a litigation parade as Dish, Fox, CBS and NBC each filed lawsuits.

Dish filed first in New York court, beating the broadcasters by less than a half hour, which quickly led a NY judge to issue a temporary restraining order barring the other lawsuits from proceeding in California. Then, at a hearing in New York, the broadcasters succeeded in showing that Dish had filed an unfair anticipatory lawsuit, meaning Fox, CBS and NBC were each free to proceed in California.

However, a California judge in the CBS case has just decided that the applicable contract between the parties had a forum clause that means it should be adjudicated in New York. So the case is now traveling back. Talk about time- and place-shifting.

E-mail: eriq.gardner@thr.com; Twitter: @eriqgardner