Bloomberg News

Dish Tells Judge Ad-Free TV Suits Should Be in New York

July 03, 2012

Dish Network Corp. (DISH:US), the third largest pay-television provider, told a judge that lawsuits over its service allowing viewers to watch ad-free TV should be heard in New York instead of Los Angeles, where the major broadcast networks filed their complaints.

U.S. District Judge Laura Taylor Swain in Manhattan heard arguments last night on whether the lawsuit by Dish, filed in New York against the television networks, should continue. In May, Swain ordered a temporary halt to the networks’ suits filed in California. She said she plans to rule on where the cases will be heard “within a week.”

“This controversy belongs in New York,” Peter Bicks, a lawyer for Dish, told the judge yesterday. Dish said the cases should be in in New York because its complaint was the first filed and its contracts with the networks require litigation to be heard there. “Dish is standing by the contract provisions,” Bicks said.

TV broadcasters including CBS Corp. (CBS:US), Comcast Corp. (CMCSA:US)’s NBC and News Corp. (NWSA:US)’s Fox sued Dish in May, claiming that its new Auto Hop digital video-recording feature, which allows viewers to automatically skip through commercials on recorded programs, infringes their copyrights and breaches Dish’s contracts with them. At issue is the broadcasters’ advertising revenue.

Dish’s service “will ultimately destroy the advertiser- supported ecosystem that provides consumers with the choice to enjoy free over-the-air varied, high-quality prime time broadcast programs,” Fox said in its complaint. The networks seek an injunction to shut down the service.

‘True’ Plaintiffs

The networks argued that the cases should be heard in Los Angeles because the violation of their copyrights and contracts makes them the “true” plaintiffs. They said Dish filed its complaint first because it knew it was about to be sued, and that its suit should be dismissed as an “improper anticipatory” filing. The Dish complaint was stamped 29 minutes before the first of three suits was filed in Los Angeles.

“Dish admitted it filed its declaratory judgment suit because it was operating under the threat of imminent litigation,” Richard Stone, a lawyer for Fox, told the judge.

Paul LiCalsi, a lawyer for CBS and NBC, said in court that Dish’s complaint “serves no useful purpose” and should be dismissed. “It misses crucial issues,” he said.

Stifle Innovation

The networks are trying to stifle innovation, Dish said in its complaint. Auto Hop “complies with Dish’s bargained-for contractual rights,” it said. Dish added that it pays the networks “hundreds of millions of dollars per year in retransmission fees, collected from its subscriber base, for the right to rebroadcast these signals.”

It seeks a judicial ruling that it didn’t violate contracts or copyrights.

Dish, based in Englewood, Colorado, introduced its new DVR, the Hopper, in March. It can record all the major networks’ primetime shows and store them for eight days after their initial broadcast. Auto Hop, introduced in May, allows viewers, with the touch of a button, to skip all the ads automatically, without having to manually fast-forward through them.

Fox said in its complaint that the Hopper is a “bootleg” video-on-demand service and that its contracts for such services with Dish “include prohibiting fast-forwarding through commercials.”

Comcast and DirecTV (DTV:US) are the largest U.S. pay-TV providers.

Manhattan Venue

Mitch Stoltz of the Electronic Frontier Foundation said Dish may prefer a Manhattan venue because of a New York-based appeals court ruling in 2008. Under that decision, pay- television providers may offer digital video-recording services to their customers without being held liable for copyright infringement.

The fourth major broadcast network, Walt Disney Co. (DIS:US)’s ABC, didn’t sue in Los Angeles. It is a defendant in Dish’s complaint in New York. Kevin Baine, a lawyer for ABC, told the judge that the company doesn’t object to litigating in Los Angeles.

The Los Angeles cases are Fox Broadcasting v. Dish Network LLC, 12-4529; NBC Studios LLC v. Dish Network Corp., 12-4536; and CBS Broadcasting Inc. v. Dish Network Corp., 12-4551, U.S. District Court, Central District of California (Los Angeles). The New York case is Dish Network LLC v. American Broadcasting Cos., 12-04155, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Don Jeffrey in New York federal court at djeffrey1@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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  • DISH
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  • CBS
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