What the Dish Deal Means for the Legality of Ad Hoppers

Written by Christi Hayes and Fact Checked by The Law Dictionary Staff  

Recently, Dish Network came to agreements with a number of the major television networks concerning its popular but controversial ad-skipping feature. The "Hopper," which allows consumers to automatically skip over televised ads, was a violation of copyright and commercial laws according to the major networks. Although a number of courts had largely sided with Dish and upheld the legality of the ad-skipping feature, Dish recently negotiated settlements with the major networks to disable the ad-skipping feature in some instances in exchange for benefits provided by the networks. Let's take a look at the significance of the Dish deals and what the future of ad-skipping is in a legal context.

Dish Network settles litigation

The major networks contended that because they owned the copyrights to the shows on their networks that Dish was in violation of copyright law by allowing consumers to skip over ads when they were played back on a Dish DVR. Dish's "Hopper" feature allowed customers to simply enable the feature, whereby commercial breaks would be skipped over automatically. Because the major networks make most of their profits from ad revenue, the "Hopper" feature was seen as a threat to their bottom lines.

Recently, the major networks came to agreements with Dish Network to settle the lawsuits. While each network came to its own agreement with Dish, the agreements all ensure that Dish disables its ad-skipping feature for a certain period of time after shows first air (usually three to seven days) in exchange for access to coveted licensing agreements. The agreements mean that the ad-skipping feature will remain in place, although it will be significantly watered down in terms of capabilities.

What the courts say

The courts had largely sided with Dish on the issue of whether or not its ad-skipping software was legal. In 2013, for example, the United States Court of Appeals for the Ninth Circuit ruled that ad-skipping technology was legal under the fair use doctrine of copyright law. That ruling was largely based on the 1984 Supreme Court Betamax ruling that concluded that recording television shows for personal use was legal. The Ninth Circuit court's ruling eventually led to similar rulings by a District Court in New York. Despite those rulings, the major networks continued to pursue their lawsuit against Dish. While the agreements between Dish and the major networks put to rest the issue for now, the court victories for Dish seem to suggest the ad-skipping technology is here to stay and something that the major networks will have a difficult time keeping control of in the future.

The rapidly advancing pace of technology means that copyright concerns are coming up against what consumers are increasingly demanding. The Dish Deal shows how courts are more than willing to side with consumers against major companies' desire to protect their bottom lines. However, while the future looks bright for ad-skipping technology, the settlements show that the issue is one that is far from resolved and will likely return to the courts in some form in the future.

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