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No.

13-56818
IN THE
United States Court of Appeals
for the Ninth Circuit
__________________________________________
FOX BROADCASTING COMPANY, TWENTIETH CENTURY FOX FILM CORP.,
AND FOX TELEVISION HOLDINGS, INC.,
Plaintiffs-Appellants,
v.
DISHNETWORK L.L.C., DISHNETWORK CORP.,
AND ECHOSTAR TECHNOLOGIES L.L.C.,
Defendants-Appellees.
__________________________________________
Appeal from the United States District Court for the Central District of California
Case No. 12-cv-04529, The Honorable Dolly M. Gee
BRIEF OF DEFENDANTS-APPELLEES
Annette L. Hurst
William A. Molinski
ORRICK, HERRINGTON &SUTCLIFFE LLP
405 Howard Street
San Francisco, CA 91045
Mark A. Lemley
Michael Page
DURIE TANGRI LLP
217 Leidesdorff Street
San Francisco, CA 94111
E. Joshua Rosenkranz
Peter A. Bicks
Elyse D. Echtman
Lisa T. Simpson
ORRICK, HERRINGTON &SUTCLIFFE LLP
51 West 52nd Street
New York, NY 10019
Counsel for Defendants-Appellees
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No. 13-56818
IN THE
United States Court of Appeals
for the Ninth Circuit
__________________________________________
FOX BROADCASTING COMPANY, TWENTIETH CENTURY FOX FILM CORP.,
AND FOX TELEVISION HOLDINGS, INC.,
Plaintiffs-Appellants,
v.
DISHNETWORK L.L.C., DISHNETWORK CORP.,
AND ECHOSTAR TECHNOLOGIES L.L.C.,
Defendants-Appellees.
__________________________________________
Appeal from the United States District Court for the Central District of California
Case No. 12-cv-04529, The Honorable Dolly M. Gee
BRIEF OF DEFENDANTS-APPELLEES
Annette L. Hurst
William A. Molinski
ORRICK, HERRINGTON &SUTCLIFFE LLP
405 Howard Street
San Francisco, CA 91045
Mark A. Lemley
Michael Page
DURIE TANGRI LLP
217 Leidesdorff Street
San Francisco, CA 94111
E. Joshua Rosenkranz
Peter A. Bicks
Elyse D. Echtman
Lisa T. Simpson
ORRICK, HERRINGTON &SUTCLIFFE LLP
51 West 52nd Street
New York, NY 10019
Counsel for Defendants-Appellees
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i
CORPORATE DISCLOSURE STATEMENT
DISH Network L.L.C. is a wholly owned subsidiary of DISH DBS
Corporation, a corporation with publicly traded debt. DISH DBS Corporation is a
wholly owned subsidiary of DISH Orbital Corporation. DISH Orbital Corporation
is a wholly owned subsidiary of DISH Network Corporation, a corporation with
publicly traded equity (NASDAQ: DISH).
EchoStar Technologies L.L.C. is a wholly owned subsidiary of EchoStar
Corporation, a publicly traded company (NASDAQ: SATS).
E. Joshua Rosenkranz
Peter A. Bicks
Elyse D. Echtman
Lisa T. Simpson
ORRICK, HERRINGTON &SUTCLIFFE LLP
51 West 52nd Street
New York, NY 10019
Mark A. Lemley
Michael Page
DURIE TANGRI LLP
217 Leidesdorff Street
San Francisco, CA 94111
February 14, 2014
s/ Annette L. Hurst
Annette L. Hurst
William A. Molinski
ORRICK, HERRINGTON &SUTCLIFFE LLP
405 Howard Street
San Francisco, CA 94105
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TABLE OF CONTENTS
Page
CORPORATE DISCLOSURE STATEMENT.........................................................i
TABLE OF AUTHORITIES...................................................................................iv
INTRODUCTION....................................................................................................1
QUESTIONS PRESENTED.....................................................................................4
STATEMENT OF THE CASE.................................................................................5
Fox Authorizes DISH to Transmit Its Signal to Customers...........................5
Fox Challenges Two DISH Features: Sling and Hopper Transfers ..............5
Both Types of Place-shifting Technology Hit the Market in 2005................8
DISH Buys Sling and Integrates Sling Technology with DISH
Products................................................................................................9
The Parties Negotiate the October 2010 Agreement....................................10
DISH Continues to Create, Market, and Sell Products with Sling
Without Foxs Objection....................................................................12
After Seven Years of Waiting, Fox Sues, Then Waits Another Nine
Months Before Seeking to Enjoin the Place-Shifting Features .........12
The District Court Denies Foxs Second Preliminary Injunction
Motion................................................................................................13
SUMMARY OF ARGUMENT..............................................................................14
STANDARD OF REVIEW....................................................................................18
ARGUMENT..........................................................................................................18
I. THE DISTRICT COURT WAS CORRECTAND CERTAINLY
DID NOT ABUSE ITS DISCRETIONIN CONCLUDING THAT
FOX FAILED TO DEMONSTRATE A LIKELIHOOD OF
IRREPARABLE HARM..............................................................................18
A. The District Court Correctly Stated and Applied the Law of
Irreparable Harm. ...............................................................................19
1. The district court did not apply categorical rules. ...................21
2. The district court did not apply a heightened standard of
proof. ........................................................................................26
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B. The District Court Did Not Abuse Its Discretion in
Distinguishing Other Cases Where Fox Presented the Same
Evidence of Harm...............................................................................33
C. The District Court Made No Factual Errors, Much Less Clear
Errors. .................................................................................................35
1. The district court did not clearly err in finding that Fox
failed to show irreparable harm to distributor
relationships. ............................................................................36
2. The district court did not clearly err in finding that Fox
failed to prove that any loss of advertising revenue defied
calculation. ...............................................................................41
II. FOX IS UNLIKELY TO SUCCEED ON THE MERITS. ..........................43
A. Fox Waived Its Copyright Claim Against Hopper Transfers and
in Any Event Cannot Prevail on a Copyright Claim Merely By
Showing a Breach of Contract. ..........................................................44
B. Foxs Theory of Direct Copyright Infringement Is Flawed...............46
1. Users, not DISH, are the ones who use Sling to send
signals to computers and mobile devices.................................47
2. As Fox has previously admitted, Sling is not a public
performance. ............................................................................52
C. Fox Is Unlikely to Succeed on Its Contract Claims. ..........................55
III. FOX CANNOT ESTABLISH THE OTHER FACTORS REQUIRED
FOR INJUNCTIVE RELIEF. ......................................................................58
CONCLUSION.......................................................................................................60
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TABLE OF AUTHORITIES
Page(s)
CASES
ActiveVideo Networks, Inc. v. Verizon Commcns, Inc.,
694 F.3d 1312 (Fed. Cir. 2012) ..........................................................................31
Am. Trucking Assns, Inc. v. City of L.A.,
559 F.3d 1046 (9th Cir. 2009) ............................................................................36
Am. Broad. Cos., Inc. v. Aereo, Inc.,
712 F.3d 676 (2d Cir. 2013) .........................................................................52, 53
Anderson v. United States,
612 F.2d 1112 (9th Cir. 1980) ............................................................................59
Cartoon Network LP v. CSC Holdings, Inc.,
536 F.3d 121 (2d Cir. 2008) ...............................................................................52
Columbia Pictures Indus., Inc. v. Profl Real Estate Investors, Inc.,
866 F.2d 278 (9th Cir. 1989) ..............................................................................52
eBay, Inc. v. MercExchange, L.L.C.,
547 U.S. 338 (2006)..........................................................................14, 19, 20, 21
Flexible Lifeline Sys., Inc. v. Precision Lift, Inc.,
654 F.3d 989 (9th Cir. 2011) ..............................................................................20
Flynt Distrib. Co. v. Harvey,
734 F.2d 1389 (9th Cir. 1984) ............................................................................55
Fox Broad. Co. v. DISH Network, L.L.C.,
905 F. Supp. 2d 1088 (C.D. Cal. 2012)..............................................................13
Fox Broad. Co. v. DISH Network, L.L.C.,
No. 12-57048, 2014 WL 260572 (9th Cir. Jan. 24, 2014) ...............13, 48, 51, 56
Fox Television Stations, Inc. v. BarryDriller Content Sys., PLC,
915 F. Supp. 2d 1138 (C.D. Cal. 2012)............................................22, 35, 50, 54
Fox Television Stations, Inc. v. FilmOn X,
No. 13-758, 2013 U.S. Dist. LEXIS 126543 (D.D.C. Sept. 5, 2013) ..........54, 55
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v
Gen. Motors Corp. v. Harry Browns, LLC,
563 F.3d 312 (8th Cir. 2009) ..............................................................................59
Hearst Stations, Inc. v. Aereo, Inc.,
No. 13-11649, 2013 U.S. Dist. LEXIS 146825 (D. Mass. Oct. 8, 2013)...........54
IBJ Schroder Bank & Trust Co. v. Resolution Trust Corp.,
26 F.3d 370 (2d Cir. 1994) .................................................................................58
Kerr Corp. v. N. Am. Dental Wholesalers, Inc.,
SACV 11-0313, 2011 WL 2269991 (C.D. Cal. June 9, 2011)...........................32
Los Angeles Meml Coliseum Commn v. Natl Football League,
634 F.2d 1197 (9th Cir. 1980) ............................................................................30
M.R. v. Dreyfus,
697 F.3d 706 (9th Cir. 2012) ..............................................................................18
MercExchange, L.L.C. v. eBay, Inc.,
500 F. Supp. 2d 556 (E.D. Va. 2007) .................................................................31
Oakland Tribune, Inc. v. Chronicle Publg Co.,
762 F.2d 1374 (9th Cir. 1985) ............................................................................31
On Command Video Corp. v. Columbia Pictures Indus.,
777 F. Supp. 787 (N.D. Cal. 1991).....................................................................50
Perfect 10, Inc. v. Amazon.com, Inc.,
508 F.3d 1146 (9th Cir. 2007) ......................................................................49, 51
Playboy Enters., Inc. v. Netscape Commcns Corp.,
55 F. Supp. 2d 1070 (C.D. Cal. 1999)................................................................32
Playmakers LLC v. ESPN, Inc.,
376 F.3d 894 (9th Cir. 2004) ..............................................................................18
Polymer Techs., Inc. v. Bridwell,
103 F.3d 970 (Fed. Cir. 1996) ............................................................................31
Recording Indus. Assn of Am. v. Diamond Multimedia Sys. Inc.,
180 F.3d 1072 (9th Cir. 1999) ........................................................................6, 51
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S.O.S., Inc. v. Payday, Inc.,
886 F.2d 1081 (9th Cir. 1989) ............................................................................45
Salinger v. Colting,
607 F.3d 68 (2d Cir. 2010) ...........................................................................20, 21
Sony Corp. of Am. v. Universal City Studios, Inc.,
464 U.S. 417 (1984)........................................................................................6, 51
Sports Form, Inc. v. United Press Intl, Inc.,
686 F.2d 750 (9th Cir. 1982) ........................................................................34, 40
Stuhlbarg Intl Sales Co. v. John D. Brush and Co.,
240 F.3d 832 (9th Cir. 2001) ..............................................................................18
Sun Microsystems, Inc. v. Microsoft Corp.,
188 F.3d 1115 (9th Cir. 1999) ................................................................15, 16, 45
Sw. Voter Registration Educ. Project v. Shelley,
344 F.3d 914 (9th Cir. 2003) ..............................................................................36
United States v. Hinkson,
585 F.3d 1247 (9th Cir. 2009) ......................................................................35, 40
Warner Bros. Entmt, Inc. v. WTV Sys., Inc.,
824 F. Supp. 2d 1003 (C.D. Cal. 2011)..................................................22, 35, 50
Winter v. Natural Resources Defense Council,
557 U.S. 7 (2008)..........................................................................................14, 19
WNET Thirteen v. Aereo, Inc.,
712 F.3d 676 (2d Cir. 2013) ..............................................................................54
Worldwide Church of God v. Phila. Church of God, Inc.,
227 F.3d 1110 (9th Cir. 2000) ............................................................................45
WPIX, Inc. v. ivi, Inc.,
691 F.3d 275 (2d Cir. 2012) .........................................................................22, 35
STATUTES
17 U.S.C. 101........................................................................................................52
17 U.S.C. 106............................................................................................16, 45, 46
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17 U.S.C. 110........................................................................................................56
17 U.S.C. 119........................................................................................................47
17 U.S.C. 122........................................................................................................47
17 U.S.C. 501........................................................................................................45
OTHER AUTHORITIES
Reply Br. for Petrs, Am. Broad. Cos., Inc. v. Aereo, Inc.,
No. 13-461 (U.S. Dec. 23, 2013), 2013 WL 6729880 .................................53, 55
Pet. for Rehg, Am. Broad. Cos. v. Aereo Inc.,
722 F.3d 500 (2d Cir. 2013) (No. 12-2807-cv) (Apr. 15, 2013) ........................54
Nielsen, Any Way You Watch It: Nielsen to Incorporate Mobile Viewing Into TV
Ratings and Dynamic Digital Ratings (Oct. 28, 2013),
http://www.nielsen.com/us/en/newswire/2013/any-way-you-watch-it-nielsen-
to-incorporate-mobile-viewing.html...................................................................43
Nimmer on Copyright (2013) .................................................................................46
Patry on Copyright (2013) .......................................................................................46
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INTRODUCTION
1
Where were you when we landed on the moon? When we found out who
shot J.R.? You were probably in your living room, glued to your television set. Or
else you missed it.
The VCR solved the problem. If you could not be on your couch for The
Cosby Show, you could just pop in a tape, set the VCR to record, and watch it later.
The VCR enabled what is called time-shifting. It enabled place-shifting, too.
You could tape Cosby on the living room VCR and watch it on the bedroom VCR.
Or you could bring the tape to the babysitting gig or on vacation and watch it on a
VCR there.
This appeal is about an updated version of place-shifting. It is also a rerun
of an old plot. Every time a technological advancement makes TV watching more
convenient for consumers, the broadcasters sue, insisting that the advance will be
the death of them. And each time their predictions of harm turn out to be
laughably wrong.
The pattern began in the early 1980s, when the entertainment industry
protested that home-recording technology would decimate the entire business.
Motion Picture Association of America President Jack Valenti famously testified

1
We cite Foxs Opening Brief as OB; the Excerpts of Record as ER; and
Supplemental Excerpts of Record as SER. District court docket entries are cited
as Dkt.
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that the VCR is to the American film producer and the American public as the
Boston strangler is to the woman home alone. Dkt. No. 64, at 24 (Decl. of R.
Rapp). The Supreme Court rejected the legal argument and the VCR turned out to
be a boon for the entertainment industry. Id. at 25-26.
This appeal presents moreand equally baselesshyperventilating about
the future effects of the latest generation of digital video recorders (DVRs). This
Court has already affirmed the denial of one preliminary injunction about some
features. Fox now appeals the denial of a second preliminary injunction in the
same caseon a motion that Fox did not bother bringing until nine months after
filing the lawsuit. This appeal challenges two place-shifting features, Sling and
Hopper Transfers, on DISHs DVRs.
Both capabilities are nine years old. A company called Sling Media brought
the Sling feature to market in 2005. It gives the customer the capability to watch
live or pre-recorded TV shows on her computer or mobile device, through an
internet connection to her set-top box. DISH bought Sling Media for $380 million
in 2007, and has offered Sling to customers ever since. Hopper Transfers is a
portability feature, which customers use to transfer a copy of a recorded show from
a DVR to an iPad. DISH first offered this sort of portable-recording functionality
to its customers also in 2005.
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Sling and Hopper Transfers both make it easier to watch your shows where
and when you want. Everybody wins: Customers get more convenience, DISH
gets more satisfied customers, and networks get more eyeballs.
Suddenly, eight years after Sling and portability were introduced, Fox filed
this motion claiming that DISHs latest version of these features was likely to
cause it irreparable harm in the coming months. It adduced not a shred of evidence
that it had already suffered harm. Not a hint of lost goodwill or an anecdote about
compromised royalty negotiations or revenue streams. This might be
understandable if Fox had rushed into court the moment Sling and portable
recordings hit the market. But eight years? If place-shifting really caused Fox
harm, Fox should be able to prove it.
Instead of evidence of actual harm over the past years, Fox offered five
hypotheses of future harm. It submitted them through two virtually identical
declarations from Fox executives. Fox is not ashamed to say that it recycled these
declarations from other cases, against other defendants, concerning different
technologies, before different judges. In this case, DISH submitted case-specific
expert reports, one from an economist who studies the television industry and
another from an electronics expert who testified that similar place-shifting
technology permeates the marketplace. The district court analyzed the record and
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found DISHs showing more persuasive. The district courts conclusions were
correct, and certainly not clearly erroneous.
Foxs main attack on appeal is an assertion that the opinion applies sweeping
categorical rules and a heightened standard of proof. Fox must be reading the
wrong opinion. The opinion in the Excerpts of Record states the law flawlessly, as
Fox admits, and then lists factor after factor in support of its conclusion that Fox
failed to carry its burden as to each claimed harm. Nothing categorical about it.
As to the heightened evidentiary burden, the district court rejected each claimed
harm with ample citations to the evidence. Contrary to Foxs assertion (at 7), no
one move[d] the goalposts dramatically. The goalposts are where they have
been since eBay. Fox just could not move the ball.
QUESTIONS PRESENTED
1. As Fox concedes, the district court correctly stated the law on
irreparable harm. It then carefully analyzed the record and the relevant case law
and rejected each of Foxs predictions of irreparable harm as speculative,
unsupported by record evidence or remediable by money damages (or both). Did
the district court act within its discretion in denying a preliminary injunction?
2. The place-shifting features do not operate unless DISH customers
activate them and tell them what to do. And there is nothing public about a one-
to-one signal from a customers set-top box at home to her mobile device. Should
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this Court affirm on the alternative ground that Fox is unlikely to succeed on the
merits?
3. More than | | | | | | | | | families already use Sling technology, DISH
has invested hundreds of millions of dollars in it, and numerous other providers
offer comparable place-shifting technologies without complaint from Fox. Should
this Court affirm on the alternative ground that Fox cannot meet the remaining
requirements for a preliminary injunction?
STATEMENT OF THE CASE
Fox Authorizes DISH to Transmit Its Signal to Customers
DISH is a multichannel video programming distributor (MVPD), which
simply means that, like a cable company, it packages numerous broadcast and pay-
television channels for customers. ER 421. In order to include broadcast
programming in its offerings, DISH enters into contracts called retransmission
consent agreements. ER 421-22. DISHs current retransmission agreement with
Fox dates back to 2002 (the 2002 RTC Agreement). ER 423. Over the six years
preceding this lawsuit, DISH paid Fox almost | | | | | | | | | for retransmission
rights. ER 422. DISHs customers, in turn, pay subscription fees to watch Fox
programming and other shows. ER 421.
Fox Challenges Two DISH Features: Sling and Hopper Transfers
This appeal concerns DISHs latest generation DVR, called the Hopper
with Sling. ER 907. The Hopper integrates multiple technical functions into one
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set-top box. It is a satellite receiver. It is also a DVR, which enables what the
Supreme Court has referred to as time-shifting of television viewing. Sony
Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 423 (1984). It also has
several features that give DISH customers the power to place-shift (or space-
shift, as it was previously called) their television viewing. See Recording Indus.
Assn of Am. v. Diamond Multimedia Sys. Inc., 180 F.3d 1072, 1079 (9th
Cir. 1999). Among them are the two features relevant here, called Sling
2
and
Hopper Transfers.
Some customers would rather not purchase additional televisions for the
home. And some prefer to watch a program while they are on the porch or on the
road. The two place-shifting features that are at issue in this case are for them.
ER 845-46. Say, Grandma did not record the latest episode of Glee for the visit of
her teen granddaughter. Sling and Hopper Transfers save the day. With these
features, the granddaughter can use her iPad to watch shows recorded on her
Hopper back home. This type of place-shifting is hardly new: Even in the 1970s,

2
Fox refers to the Sling technology as DISH Anywhere. DISH Anywhere,
however, encompasses not just Sling, but also features and services that have
nothing to do with this dispute. It includes, for example, authorized online access
to programming through the DISH website. We use the accurate terminology to
describe the specific features Fox is challenging.
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TV viewers could record TV content on VHS or Betamax tapes and bring them to
Grandmas house. ER 188.
Sling is like a portal to your TV screen. It basically takes what is playing on
your TV and transforms the signal so that it can play on your desktop computer,
laptop, or mobile device. Once enabled by the user, Sling gives the customer the
ability to view a live or pre-recorded program from the Hopper on another device
with an internet connection, whether in the next room or the next state. ER 928-
29. But you need an internet connection for Sling to work. Id. Hopper Transfers
is a different way of place-shifting, for situations when you dont have an internet
connection, such as in the backyard, on an airplane, or even on a deserted island.
Hopper Transfers gives customers the power to use their iPads like they could once
use an ejectable VCR tape. ER 931. Specifically, it is a software feature that
provides you the capability to transfer a Hopper DVR recording to a mobile device
and view it on that device. Id.
Neither Sling nor Hopper Transfers is unique to DISH. DIRECTVs
Nomad, TiVos Stream, Sonys Location Free, Monsoon Medias
Vulkano, and Elgatos EyeTV are all internet-based place-shifting products.
ER 173-74. And both DIRECTV and TiVo beat DISH to the market with features
for transferring recorded programs to mobile devices. ER 851-52.
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At least on DISH devices, these place-shifting features are customer-
controlled, just like a VCR or DVR. The equipment is entirely within the
possession and control of the customer. Nothing happens automatically. DISH
cannot initiate a Sling session or transfer a program to a tablet. ER 180-81. For
each, the DISH customer takes multiple steps to set up the feature, choose the
show, and direct the device to place-shift. ER 187-88.
Both Types of Place-shifting Technology Hit the Market in 2005
Sling Media, Inc. first introduced Sling technology in June 2005 with the
launch of a product called the Slingbox, which has been continuously available
ever since. ER 925; ER 855-56. The Slingbox is a stand-alone device that
connects to any audiovisual equipment, including TVs, set-top boxes, DVRs, and
DVD players. ER 926. Also in 2005, DISH introduced a product called
PocketDISH, with portable-recording functionality comparable to Hopper
Transfers. ER 932. The PocketDISH is a handheld video viewer. Id. By
connecting it to a DVR, a DISH customer could transfer recorded programming
onto the PocketDISH for mobile viewing. Id. The PocketDISH was released to
compete with several other portable video devices that had just hit the market. ER
1307-08.
Fox employees were aware of these place-shifting technologies from the
start. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | ER 1421-22. That was eight years ago. Fox did
not sue.
Foxs praise presaged a veritable tidal wave of immediate industry and
media applause for Sling. The Slingbox won an Emmy Award in January 2007 for
Outstanding Achievement in Advanced Media Technology for the Creation of
Non-Traditional Programs or Platforms. ER 1313. The same year, PC Magazine,
engadget, and Laptop Magazine all named it one of the best new products.
ER 926. No one could have doubted that Sling would attract a significant
consumer following. That was all seven years ago. Fox did not sue.
DISH Buys Sling and Integrates Sling Technology with DISH Products
In October 2007, DISH bought Sling Media for $380 million. ER 924.
Promptly thereafter, DISH informed Fox | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | ER 1474-75. Fox expressed no
concernand filed no lawsuit.
Just over a year later, DISH followed through with its plan, announcing the
release of its ViP 922 DVR. ER 926. The 922 was the first Slingloaded DVR
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that is, the first integrated satellite receiver, DVR, and Sling all-in-one. Id. The
praise continued. It won the Best of CES Award in the Home Video category.
ER 927. That was in 2009. Still no complaint, and no suit, from Fox. That same
year, the U.S. Copyright Office weighed in, praising Sling as technology that uses
the Internet to make existing licensed programming available to individuals for
personal use in a controlled fashion and without the need for an additional license.
ER 1210.
Responding to Slings growing popularity, DISH introduced the Sling
Adapter in 2010, a stand-alone piece of equipment that customers could connect
with certain DISH DVRs. ER 927. By the end of 2010, DISH customers could
enjoy Sling technology in a variety of waysby purchasing a Slingloaded DVR,
by purchasing the Sling Adapter to add to a non-Slingloaded DVR, or by
purchasing a Slingbox from Best Buy. Fox lodged no objection to any of these
Sling optionsand did not sue.
The Parties Negotiate the October 2010 Agreement
In mid-2010, DISH and Fox began to negotiate an extension to the 2002
RTC Agreement, ER 424, ultimately yielding what the parties call the October
2010 Agreement. Before the negotiations, Fox | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Id. The response: True, | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Id. It never did.
Foxs first draft of the 2010 agreement said nothing about place-shifting
technology. Fox included only an Other Technologies provision that barred
DISH from | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | ER 424. This language said nothing about what subscribers could do
with the programming they had already paid to have delivered to their homes.
Indeed, DISHs lead negotiator on the October 2010 Agreement | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | ER 425. Fox does not deny this.
Just to be sure, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | ER 425-26. Fox had no problem with this language.
Id. And | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | a joint
press release that would tout DISHs ViP 922 as the worlds only DVR with
built-in Sling functionality and PC Magazines Editors Choice, ER 427, 447,
487 (emphasis added).
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DISH Continues to Create, Market, and Sell Products with SlingWithout
Foxs Objection
In January 2012, DISH announced a DVR called the Hopper Whole-Home
HD DVR, which went on the market in March 2012. ER 924. While it did not
have Sling functionality built in, it was easy to add it simply by plugging in a fully
compatible Sling Adapter, ER 927, and meanwhile DISH continued to offer the
Slingloaded ViP 922 to its customers, ER 926. The next year, DISH introduced
the Hopper with Sling. ER 924-25. This latest Hopper has built-in Sling
functionality, just like the ViP 922. ER 925. It also has the Hopper Transfers
portable-recording feature. ER 924-25.
After Seven Years of Waiting, Fox Sues, Then Waits Another Nine Months
Before Seeking to Enjoin the Place-Shifting Features
In May 2012, Fox filed this suit. Its complaint challenged two of the
Hoppers recording and commercial-skipping featurescalled PrimeTime
Anytime and AutoHop. SER 15-20. The complaint also described DISHs Sling
functionality, alleging that DISHs Sling Adapter redistributes and streams FOXs
programming over the Internet in violation of copyright law and DISHs
agreements with Fox. SER 3-4; see SER 15, 16, 19. Fox did not think that Sling
presented any risk of imminent harm: It waited nine more months before filing
this preliminary injunction motion.
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Not that Fox was shy about seeking emergency relief. Fox filed a first
preliminary injunction motion in August 2012, seeking to enjoin the other two
Hopper features. But the Sling Adapter was conspicuously absent from the
motion. The district court denied Foxs first motion, Fox Broad. Co. v. DISH
Network, L.L.C., 905 F. Supp. 2d 1088 (C.D. Cal. 2012), and this Court affirmed,
Fox Broad. Co. v. DISH Network, L.L.C., No. 12-57048, 2014 WL 260572, at *1
(9th Cir. Jan. 24, 2014). Fox sought en banc review, but did not attract a single
vote. Id.
Only after losing its first preliminary injunction motion did Fox file a second
one seeking to enjoin place-shifting technology. ER 284, 286. By that point,
DISH had incorporated Sling functionality into the Hopper, as it had done years
before with the ViP 922. But Fox did not limit its motion to the Hopper. It argued
that any offering of Sling functionality to DISH subscribers was impermissible,
ER 222-23, and it sought to enjoin any DISH device that [r]etransmit[s], or
13uthorize[es] subscribers to retransmit, Foxs live broadcast signal over the
Internet. ER 223. Fox also amended its complaint to challenge Hopper
Transfers, ER 1879-80, and moved to enjoin that feature, as well. ER 223.
The District Court Denies Foxs Second Preliminary Injunction Motion
The district court denied the motion, finding that Fox failed to establish a
likelihood of irreparable harm. ER 304-12. Fox had advanced five theories of
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harm. The district court separately analyzed the evidence on each and rejected
each in turn: (1) harm to its negotiations with other content distributors, which the
court rejected at ER 306-07; (2) loss of revenue from other online platforms,
rejected at ER 307-08; (3) loss of control over its copyrighted works, rejected at
ER 308-09; (4) piracy and security concerns, rejected at ER 309-10; and (5) loss of
advertising revenue, rejected at ER 310-11. We describe the district courts
analysis below (at 35-43), particularly with regard to the only two theories(1)
and (5)on which Fox challenges the district courts factual findings.
SUMMARY OF ARGUMENT
I.A. Fox does not dispute that the district court properly articulated the law
under eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 338 (2006), and Winter v.
Natural Resources Defense Council, 557 U.S. 7 (2008), and correctly identified the
traditional principles of equity governing the decision whether to grant or deny
injunctive relief, eBay, 547 U.S. at 394. Instead, it contends that the district court
applied impermissible categorical rules and a heightened evidentiary standard in
rejecting Foxs hypothesized future harms as speculative, calculable, or both. Fox
is wrong. The district court carefully evaluated the record and rejected Foxs
showing on multiple grounds, each of which was amply supported by DISHs
countervailing evidence.
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B. The district court did not abuse its discretion in distinguishing other
cases in which Fox presented the same evidence of harm. Foxs delay in moving
for an injunction, DISHs countervailing evidence, the relationship between the
parties, DISHs ability to pay any eventual damage award, and key distinctions
between the business models in the cases all justify a different result.
C. The district court made no factual errors, much less clear ones. The
district court was correct to reject Foxs theory that DISHs features would harm
its negotiations with other distributors. Fox offered no compelling evidence that
other [distributors] will demand rights that are yet to be established rather than wait
to see the result of this litigation. ER 307. And, in any event, DISHs expert
explained that any such harm would be calculable.
Nor did the district court err in rejecting Foxs claims of harm to advertising
revenue. Foxs argument is that Nielsens ratings do not measure viewing outside
of the home, so Fox will not receive credit for DISH customers who place-shift.
DISHs expert skewered this contention by identifying ratings systems that do
account for such viewers, making any harm calculable.
II.A. Fox cannot prevail on its copyright claim merely by showing that
DISH exceeded the scope of its contractual license. It is black-letter law that
before [the plaintiff] can gain the benefits of copyright enforcement, it must
definitively establish that the rights it claims were violated are copyright, not
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contractual rights. Sun Microsystems, Inc. v. Microsoft Corp., 188 F.3d 1115,
1122 (9th Cir. 1999).
B. Fox cannot prevail on its theory of direct infringement without showing
that when DISH customers use Sling to send their programming to their own
mobile devices, DISH is perform[ing] the copyrighted work publicly. 17 U.S.C.
106(4). But Foxs theory is doubly flawed. First, DISH customers, not DISH,
are the ones who use Sling to send content to their mobile devices. So DISH
cannot be liable as a direct infringer under the Copyright Act. DISH is responsible
for the initial transmission of Foxs content, and that transmission is fully
authorized. The customer does the rest. Thus, this case cannot be distinguished
from Fox I, in which this Court rejected Foxs contention that DISH is doing the
copying when its customers use the Hoppers time-shifting features. When it
comes to Sling, DISH does nothing more than provide customers their own
equipment for sending their content to themselves if they choose to do so.
Whether the equipment is used by consumers for time-shifting or place-shifting
does not matter. This cannot be direct infringement by DISH.
Second, as Foxs counsel admitted in oral argument in another case, Sling is
also not a public performance within the meaning of 106. What Fox has
recognized in other courts, but forgotten here, is that it is quintessentially private
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when a customer uses Sling to send a signal to herself. Fox reads the words to the
public out of the statute.
C. Foxs contract claims are meritless. By offering Hopper Transfers,
DISH does not authorize the copying of Fox programming. In any event, the
contract expressly permits copying by consumers for private home use, which is
all Hopper Transfers does.
Foxs contract challenge to Sling fares no better. By offering Sling, DISH
does not authorize the retransmission of Foxs signal. Again, merely offering
customers place-shifting features does not constitute authorization to place-shift
Fox programming. Nor, by offering Sling, does DISH | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | DISH does not do the
place-shifting when its customers use Slingits customers do.
III. Fox cannot establish that the balance of hardships or public interest tip
in its favor either. DISH invested hundreds of millions of dollars bringing Sling to
its customers, and Fox now seeks relief that would alter the status quo by forcing
DISH to remove it from customers homes. Such extraordinary relief is
unwarranted, particularly in light of Foxs eight-year delay in seeking injunctive
relief and the considerable public benefits of place-shifting technology.
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STANDARD OF REVIEW
[R]eview of an order denying a preliminary injunction is limited and
deferential. Playmakers LLC v. ESPN, Inc., 376 F.3d 894, 896 (9th Cir. 2004)
(internal quotation marks omitted). The district court should not be reversed unless
it abused its discretion or based its decision on an erroneous legal standard or on
clearly erroneous findings of fact. Id.
The district court denied Foxs motion because it found, as a factual matter,
that Foxs theories of irreparable injury either are not likely to occur, or are
remediable with money damages. As Fox acknowledges (OB 40), this Court must
affirm as long as these determinations are not illogical, implausible, or without
support. M.R. v. Dreyfus, 697 F.3d 706, 725 (9th Cir. 2012); Stuhlbarg Intl Sales
Co. v. John D. Brush and Co., 240 F.3d 832, 841 (9th Cir. 2001).
ARGUMENT
I. THE DISTRICT COURT WAS CORRECTAND CERTAINLY DID
NOT ABUSE ITS DISCRETIONIN CONCLUDING THAT FOX
FAILED TO DEMONSTRATE A LIKELIHOOD OF IRREPARABLE
HARM.
Fox offers no sound reason for this court to substitute its judgment for the
district courts. The district court correctly stated the law, as Fox concedes, and
did not adopt the categorical rules or heightened standard Fox claims to see in
the opinion. See I.A. The district court also carefullyand correctly
distinguished this case from other cases Fox cited, which as the Court explained,
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were different cases, alleging different acts of infringement, by different
defendants, with different relationships to the accuser, on different facts, presented
to different fact-findersall entitled to exercise their own discretion. See I.B.
Ultimately, Fox tries the path of most resistance: lengthy sections arguing that the
district court got the facts wrongalbeit only on two of Foxs five claims of harm.
But far from being clearly erroneous, each of the challenged findings was clearly
right. See I.C.
A. The District Court Correctly Stated and Applied the Law of
Irreparable Harm.
Foxs main argument on appeal is that the district court applied an
erroneous legal standard regarding irreparable harm. OB 23 (capitalization
omitted). But the argument gets off to an inauspicious start, because Fox admits
that the district court correctly described the Supreme Court decisions in eBay,
Inc. v. MercExchange, L.L.C., 547 U.S. 338 (2006), and Winter v. Natural Res.
Def. Council, 557 U.S. 7 (2008), and also correctly captured how the Ninth
Circuit has applied eBay, OB 23.
The district court consumed two pages laying out the legal principles it was
applying. ER 304-06. It started with an unobjectionable rendering of the Supreme
Courts holding in eBay: Although historically a showing of a reasonable
likelihood of success on a copyright infringement claim raised a presumption of
irreparable harm, that presumption no longer exists. ER 304. That, as Fox
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concedes (at 23), is what the Supreme Court meant when it rejected a rule that an
injunction should automatically follow[] a determination that a copyright has been
infringed. eBay, 547 U.S. at 394; see Flexible Lifeline Sys., Inc. v. Precision Lift,
Inc., 654 F.3d 989, 994-98 (9th Cir. 2011). The Supreme Court held that the
decision whether to grant or deny injunctive relief rests within the equitable
discretion of the district courts, but that courts should exercise such discretion
consistent with the traditional principles of equity. eBay, 547 U.S. at 392-93.
The district court then described the traditional principles of equity that
govern here. See ER 305. Fox does not dispute any principles that the district
court articulated nor suggest that the district court missed any. The district court
then addressed each distinct claim of harm, assessing the evidence and arguments
on both sides of the ledger. ER 306-11. It applied the undisputed law to the facts
of this case, preliminarily resolving factual disputes, ultimately to find that [o]n
the present record, Fox has not met its burden of showing that such harm is
likely in the absence of an injunction between now and trial. ER 311-12. This is
a model of what eBay requires.
Foxs challenge to the district courts opinion starts (at 25-28) with an
exegesis of an eBay concurrence and another Circuits opinion about The Catcher
in the Rye. See Salinger v. Colting, 607 F.3d 68, 81 (2d Cir. 2010). Both opinions
recognize that injunctive relief has often been awarded in cases concerning
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infringement of intellectual property and explain that eBay does not undermine
traditional principles of equity in such cases. eBay, 547 U.S. at 395 (Roberts, C.J.,
concurring); Salinger, 607 F.3d at 82. Both also acknowledge that historical
practice does not entitle a patentee to [an] injunction or justify a general rule
that such injunctions should issue. eBay, 547 U.S. at 395 (Roberts, C.J.,
concurring); Salinger, 607 F.3d at 82. In other words, they recognize that
presumptions do not run either way after eBay. Fox does not explain what else it
expects the reader to glean from its account of these opinions. They certainly do
nothing to undermine the district courts articulation of the law.
Beyond that, Fox asserts two types of legal errorsthat the district court
impermissibly applied categorical rules, e.g., OB 28, and a heightened
standard, OB 37. Both are meritless.
1. The district court did not apply categorical rules.
Fox argues that the district court effectively created [two] categorical rules
of law that will disqualify from interim injunctive relief any copyright owner that
has exploited its works through licensing agreements with third parties or through
a contract with the alleged infringer. OB 23-24. The operative word is
effectively. Fox does not quote one sentence from the opinion below that
bespeaks a categorical rule. Rather, Foxs argument appears to be that some of
the facts that informed the district courts opinion can arise in other casesand if
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they do they will yield the same result and therefore be effectively categorical.
The problem is that the district court did not treat any single fact as dispositive in
this case, and certainly did not suggest that it would reach the same conclusion in
every other case containing that fact. If it had adopted either categorical rule Fox
discerns, it would have written a much shorter opinion.
The keystone of Foxs argument is a premise and conclusion it attributed to
the district court. The premise: [T]he district court recognized that harm to Foxs
business relationships with other distributors, loss of control over the dissemination
of its copyrighted works, and loss of advertising revenue all would qualify as
irreparable harm under well-settled precedents. OB 28-29 (emphasis added). The
conclusion: But the court then held those rules inapplicable to Fox because Fox
has an existing contractual relationship with Dish. OB 29 (citing ER 307-09)
(emphasis added). That is doubly wrong. The district court did not suggest that
these sorts of harms would qualify as irreparable harm under well-settled
precedents. OB 28-29 (emphasis added). It held that these sorts of harms can,
under certain circumstances, constitute irreparable harm, citing the various cases
Fox invokes here. ER 305 (emphasis added) (citing WPIX, Inc. v. ivi, Inc., 691
F.3d 275, 285-86 (2d Cir. 2012); Fox Television Stations, Inc. v. BarryDriller
Content Sys., PLC, 915 F. Supp. 2d 1138, 1147 (C.D. Cal. 2012); Warner Bros.
Entmt, Inc. v. WTV Sys., Inc., 824 F. Supp. 2d 1003, 1012 (C.D. Cal. 2011)). The
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courts whole point ( la eBay) was that there were no categorical rules either way.
So it obviously did not find any rules inapplicable to Fox. OB 29. Rather, as
noted above, the court found that Fox has not met its burden [o]n the present
record. ER 311-12 (emphasis added).
Let us begin with how the district court addressed the existing contractual
relationship with Dish when it discussed Foxs allegations of harm to negotiations
with other cable and satellite TV companies. That was not even close to a
categorical rule. The district court relied explicitly on DISHs expert testimony
proving that there was a robust market for exactly the functionality provided by
Sling and Hopper Transfers. ER 307. The court found that any damages could be
calculated based on reference to this market. Id. It then rejected, as a factual
matter, Foxs unsubstantiated suggestion that other providers would demand
concessions, explaining that Fox presents no compelling evidence that other
MVPDs will demand rights that are yet to be established rather than wait to see the
result of this litigation. Id.
The court did not even mention Foxs contractual relationship with DISH
until it turned to rebutting Foxs argument that the court should find irreparable
harm here because other courts found that Fox had suffered irreparable harm in
other cases. ER 307. The district court distinguished those holdings because those
cases concerned services that captured television signals and resold them without
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any license at all. Id. In contrast, DISHs features, the court found, were just
add-on[s] to an existing relationship: Fox authorized DISH to distribute its
programming to DISH subscribers, and DISH subscribers, who pay for the
programming, were the only ones who could view it using Sling or Hopper
Transfers. Different case, different result. There is nothing categorical about it.
The same goes for Foxs second imagined categorical rule: that injunctive
relief is always unavailable to any party who has licensed its works to other
distributors. OB 31 (capitalization omitted). Fox purports to find this categorical
rule in the district courts discussion of Foxs claim that DISHs features will harm
revenues from other distribution platforms, such as iTunes and Amazon. ER 307-
08. As evidence of a categorical rule, Fox points to, but never quotes, one sentence
about possible benchmarks. OB 31 (quoting one word from ER 308). The
sentence reads: Fox does not explain why its own Digital Download contracts
with companies like Apple could not serve as benchmarks in calculating any
damages caused by Sling and Hopper Transfers. ER 308. Even considered in
isolation, that looks nothing like a categorical rule. It is just a common sense
observation that one way to calculate damages is to look at what Fox charges for
what Fox contends are similar offeringsand that Fox does not explain why
such an approach will not work here.
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The sentence is even more innocuous when considered in context. It is
mixed in with no fewer than four other independent rationales for rejecting Foxs
claimed harm: (1) a robust market for features similar to those offered by DISH
could provide benchmarks for valuation of the rights at issue; (2) Fox had not
demonstrated precisely how its revenue could be harmed by a shift away from a
service Fox offered for free; (3) it was unclear, considering the similar products on
the market, that DISHs features would harm Fox; and (4) these sorts of features
have historically increased viewership, 25uthori[ing] viewer loyalty and
25uthoriz[ing] revenue. ER 308. There is nothing categorical about this multi-
factor analysis.
In the end, it is Fox who is proposing categorical rules. It asserts that
[u]ltimately, what is at issue is Foxs ability as a copyright owner to control how
and when its works are disseminated to consumers. OB 32. Fox devotes five
pages to the overriding importance of this right, arguing (1) that interference with
the right invariably causes injury that is difficult to quantify, OB 33 (emphasis
added); and (2) that money damages alone do not support or enforce a copyright
owners right to exclude, OB 33-34. If those assertions are enough to justify an
injunction, then a copyright owner could presumptively secure an injunction in any
casewhich is, of course, directly contrary to eBay.
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2. The district court did not apply a heightened standard of
proof.
Foxs second asserted legal error is that the district court applied a
heightened standard of proof when it rejected Foxs conclusory executive
declarations as speculative. OB 37. Here, again, Fox does not point to a sentence
in the district courts opinion propounding a heightened standard. To the
contrary, the district court applied the very legal standards Fox articulates.
To begin, Fox notes that the district court acknowledged in its Order [that]
a showing of present actual harm is not necessary to satisfy the irreparable harm
requirement for injunctive relief. Id. Yet, in the next breath, Fox seems to fault
the district court for observing that DISHs place-shifting technology has not
already harmed Fox. Id. (quoting ER 311). Of course, as the district court
understood, the fact that no harm materialized in the first eight years is certainly
relevant to Foxs prognostication that harm is likely to materialize between now
and trial. ER 311. Even discounting all those years, it is also relevant that Fox
showed up to oral argument in April 2013 unable to point to any actual harm that
had materialized in the 11 months since it filed this suit. ER 293.
Foxs main complaint, however, relates to what it characterizes as the
district courts conclusion that Foxs testimony about likely future harms was
inherently speculative. OB 37 (quoting ER 311). Once again, Fox plucks a
single wordspeculativefrom the district courts opinion. Id. Fox supplies
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the word inherently. The relevant sentence is actually a response to Foxs
argument that the testimony of DISHs expert, Rapp, is speculative: Fox
criticizes the Rapp declaration as speculative, but Rapps assessment of the facts is
no more speculative than [Fox executive Sherry] Brennans. ER 311. Fox
objects on the ground that [a] prediction of future harm based on firsthand
experience and common sense inferences from undisputed facts is not speculative.
OB 38.
Fox seems to mean that the district court, as a matter of law, was required to
credit Foxs evidence, just because it was based on a witnesss purported firsthand
experience and assertions of common sense. That cannot be. Assessment of
the specific evidence and the body of contrary evidence in the context of the
specific case is the classic exercise that eBay entrusts to the district court. That is
especially true here. These particular declarations practically begged for a back of
the hand. Though Sling and portable recordings had been around for eight years
including in DISHs devicesFox adduced no evidence of imminent harm from
DISHs latest Hopper beyond two declarations from Fox executives, one from
Sherry Brennan and a virtual carbon copy from Mike Biard. ER 225-38, 1795-
1804. These declarations amounted to little more than, Trust us. Weve been
around. We know what will happen. Worse yet, Fox shamelessly admits that
these declarations were not even written about Sling and Hopper Transfersor any
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other sort of place-shifting device, for that matterand were not prepared for this
case. They were recycled from other cases involving other technology where Fox
presented a virtually identical declaration from Brennan. OB 42. Instead of
dismissing these declarations out of hand, the district court considered them on the
merits, but found them unpersuasive in light of all the other evidence.
In asserting that the district court rejected Foxs predictions because of a
heightened standard, Fox ignores all the reasons the district court gave for rejecting
the predictions on the merits.
Countervailing evidence of harm. First and foremost, Fox neglects to
mention the evidence DISH presented. ER 312. The evidence was qualitatively
and quantitatively superior to Foxs. It came from Richard Rapp, an expert
economist, not a self-interested executive. ER 842-85. Rather than saying, Trust
me, Rapp backed up his predictions with reams of industry reports and
documents. He addressed Brennans theories of harm point by point and
dispatched each with concrete evidence about the very technologies in question.
For example, DISHs experts skewered Brennans blithe, and unsupported,
assertion that earlier Sling devices were niche products that were not heavily
marketed. ER 232. Rapp presented over ten pages of products and services with
essentially the same functionality as the place-shifting features of DISHs Hopper
with Sling DVR [that] have been available for years. ER 849-63. DISHs
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electronics expert confirmed the ubiquity of similar technology. ER 180-84, 192-
97. And Rapp explained precisely why this mattered: It undercut the showing of
irreparable harm because it demonstrated that DISH had introduced no new
capabilities to the market, and because the availability of place-shifting
capabilities from distributors and networks creates benchmarks for the valuation of
any alleged harmful effects. ER 850.
Similarly, DISH refuted Brennans assertion that DISH has generated piracy
risks. All Brennan said was: Dishs contracts with Fox do not contain any
procedures or standards to protect Fox content from piracy when it is streamed
over the Internet or copied onto iPads, and Dish is under no enforceable obligation
to adhere to such procedures and standards. ER 238. Fox does not specify what
procedures and standards it thought necessary. ER 883. But DISH responded
with specific procedures and standards it actually employs that fully guard against
piracy. It provided testimony explaining how Sling encrypts data, restricts access
through password protection, and limits usage to one viewer at a time. ER 930.
That testimony also detailed how Hopper Transfers prevents users from making
any further copy after transferring a show to the iPad and prevents a consumer
from copying shows in bulk and transferring the iPad to someone else, by
automatically making the transferred shows inaccessible when the iPad has not
connected to its companion Hopper for 30 days. ER 930-32. We describe some
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further instances of DISHs refuting Brennans professed theories of harm below
(at 36-43), in addressing Foxs specific assertions of erroneous fact finding.
Adequacy of legal remedies. Fox also lost because it failed to demonstrate
inadequacy of legal remedies. Los Angeles Meml Coliseum Commn v. Natl
Football League, 634 F.2d 1197, 1202 (9th Cir. 1980). This might be another
story, the district court observed, if Fox had demonstrated that the harms it
predicted could not be calculated or if DISH were incapable of paying a damages
award. ER 311. But the district court repeatedly found that the claimed harms
could readily be calculated, ER 307, 308, 309, 310-11, as the Rapp declaration
confirmed, ER 865-82.
That is where the evidence of DISHs contractual relationship with Fox and
Foxs market activity came innot as a categorical rule, see supra at 21-24, but as
concrete evidence of the adequacy of legal remedies. The district court had before
it the best evidence one could imagine that these parties know exactly how to
quantify the value of rights in Foxs content, and that DISH has the wherewithal to
pay: the parties preexisting contractual relationship. DISH has paid Fox over
| | | | | | | | | | | | so far over the course of this contract for rights that the parties
reduced to dollar amounts. This defined and monetized relationship counsels
against injunctive relief. ER 307, 309.
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The district court also had the best evidence that the parties could quantify
the value of place-shifting features: Fox equates DISH technology with other
offerings and it has no trouble putting a price tag on those technologies. Courts
consistently rely on this sort of evidence as proof that harm can be quantified. See,
e.g., ActiveVideo Networks, Inc. v. Verizon Commcns, Inc., 694 F.3d 1312, 1339-
40 (Fed. Cir. 2012) (damages clearly quantifiable where VOD technology
provider sought to broadly and extensively license [its] technology); Polymer
Techs., Inc. v. Bridwell, 103 F.3d 970, 974 (Fed. Cir. 1996) (pattern of granting
licenses evidence of lack of irreparable harm); MercExchange, L.L.C. v. eBay,
Inc., 500 F. Supp. 2d 556, 569-73 (E.D. Va. 2007) (willingness to license
undercuts irreparable harm).
Delay and approval. Finally, there is the problem of Foxs delay. Fox
cannot credibly claim it needs emergency relief when it sat for eight years
watching Sling and portable-recording progress in the marketplace before seeking
an injunction. ER 311. Plaintiffs long delay before seeking a preliminary
injunction is reason enough to deny the relief, because it implies a lack of
urgency and irreparable harm. Oakland Tribune, Inc. v. Chronicle Publg Co.,
762 F.2d 1374, 1377 (9th Cir. 1985). Before coming to court to disable Sling
functionality for more than | | | | | | | families that have come to rely on it, Fox
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should at a minimum explain how this latest incarnation of place-shifting
technology differs from all of the others it found unobjectionable.
Here, the delay is compounded by Foxs explicit approvaleven praiseof
Sling. It is not like Sling was a secret. ER 926, 1395, 1400-13. It won an Emmy.
ER 1313| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ER 1421. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
and Fox did not breathe a word of objection. ER 1474-75. Most recently, Foxs
lawyersthe same lawyers filing Foxs brief herestood up at the Second Circuit
and declared that Sling would not be a public performance (contrary to what they
assert in this appeal). ER 1337.
Even if the years of delay leading up to this lawsuit could be excused, the
delay after Fox filed this suit is inexcusable. Fox moved to enjoin other DVR
featuresbut not the ones at issue now. It waited nine months to seek this
preliminary injunctionalmost twice as long as the delays that have justified
denying relief in other cases. See, e.g., Kerr Corp. v. N. Am. Dental Wholesalers,
Inc., SACV 11-0313, 2011 WL 2269991, at *3 (C.D. Cal. June 9, 2011) (five-
month delay); Playboy Enters., Inc. v. Netscape Commcns Corp., 55 F. Supp. 2d
1070, 1080, 1090 (C.D. Cal. 1999) (five-month delay).
Fox frets that [t]he district courts standard puts copyright plaintiffs in
an awkward Catch-22 situation. OB 39. Plaintiffs who move quickly will
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be denied injunctive relief because the harm is deemed speculative. But if they
wait for the harm to materialize, they will be accused of wait[ing] too long to
take action. OB 39-40. But Fox is in this predicament because it did not move
quickly and still could not produce evidence of actual harm or evidence that any
such harm will materialize. This is not a Catch-22. Its Evidence 101.
* * *
In the end, Fox did not lose because the district court adopted categorical
rules or a heightened standard. Fox did not lose because of a sweeping
departure from precedent. OB 5. Fox lost because DISH presented concrete
expert evidence exposing Foxs retread declarations as hollow. It lost because it
did not even try to demonstrate that its claimed harm was incapable of calculation,
given that it was setting licensing prices for conduct that it characterized as the
same. It lost because it sat on its hands. Each of these factors individually would
justify rejecting Foxs testimony. But all of them together present an unassailable
case in support of the district courts exercise of discretion.
B. The District Court Did Not Abuse Its Discretion in Distinguishing
Other Cases Where Fox Presented the Same Evidence of Harm.
All this amply addresses Foxs leitmotif that [o]ther courts that have
addressed similar, unauthorized Internet streaming and distribution of television
programming have reached the opposite conclusion, OB 7, even in the face
virtually identical Fox declarations, OB 42. Fox asserts that [o]n this record, it
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was clear error and an abuse of discretion for the district court to inexplicably
reach the opposite result of its sister courts. OB 44. Of course, the essence of
discretion is that different courts are allowed to reach different conclusions on
similar facts. See Sports Form, Inc. v. United Press Intl, Inc., 686 F.2d 750, 752
(9th Cir. 1982). But the more important point is that far from being
inexplicabl[e], the district court explainedrepeatedly and at lengthexactly
why it found those cases distinguishable. ER 307, 309, 311-12.
First, unlike here, the defendants in those cases presented little or no
evidence to refute the plaintiffs claims regarding irreparable harm. ER 311.
Naturally, courts treat undisputed factual assertions differently than factual
assertions that have been decimated by an avalanche of countervailing evidence.
Second, as the district court pointed out, those cases did not have the delay
factor that is so damning here. ER 311. In those cases, the court could not say, as
the district court did here, that the challenged features have been available on the
market since 2005 with no evidence that [it] has already harmed its business.
ER 311. Nor was there evidence of Fox lauding the challenged features or
renouncing its copyright infringement theory in open court.
Third, virtually identical declarations are worthless when there is nothing
similar about those other cases. Fox invokes cases concerning totally different
technologies and business models. In one case, the court found that the defendant
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simply captured and retransmitted a broadcasters copyrighted television
programming and sold it to paying subscribers without paying the plaintiff a
dime. ivi, 691 F.3d at 285. In another, the court found that defendants bought a
DVD of television programming and stream[ed] the content of the DVD to
paying customers, also without paying the copyright owner anything for the right
to transmit. WTV Sys., 824 F. Supp. 2d at 1006-07. Neither concerns the sorts of
one-to-one personal place-shifting technologies at issue in this case.
Fourth, as the district court noted, in those cases, unlike here, there was a
likelihood that the defendants would ultimately be unable to satisfy a substantial
damages award, which would have left them with no remedy. ER 311; see
BarryDriller, 915 F. Supp. 2d at 1147 ([I]t is unlikely that Defendants start-up
companies would be likely to be able to satisfy the damages award.); ivi, 691 F.3d
at 286 (ivi would be unable to pay any substantial damages award should
plaintiffs prevail.).
C. The District Court Made No Factual Errors, Much Less Clear
Errors.
Fox challenges the district courts analysis of two of the five categories of
claimed harm. Fox acknowledges (at 40) that this Court may not reverse the
district courts findings unless they are illogical, implausible, or without support
in inferences that may be drawn from facts in the record. United States v.
Hinkson, 585 F.3d 1247, 1251 (9th Cir. 2009) (en banc). Yet, Fox merely reargues
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the merits in the hopes of persuading this Court to reach a different conclusion,
which is beyond this Courts limited and deferential review. Sw. Voter
Registration Educ. Project v. Shelley, 344 F.3d 914, 918 (9th Cir. 2003) (en banc)
(per curiam); see Am. Trucking Assns, Inc. v. City of L.A., 559 F.3d 1046, 1052
(9th Cir. 2009) (appellate review does not extend to the underlying merits of the
case) (internal quotation marks omitted).
1. The district court did not clearly err in finding that Fox
failed to show irreparable harm to distributor relationships.
Foxs first factual argument is that the district court was wrong to conclude
that Foxs predictions of harm to distributor relationships fell short. OB 40-49.
Specifically, Fox is concerned about 36uthorize[ions] with MVPDs (such as
Time Warner) and other distributors who want to stream video (such as iTunes).
Here is the sort of hypothetical negotiation Fox is worried about with, say, Cox
Communications:
Cox: Of course, well want to continue offering place-shifting functionality.
Fox: Sorry, you cant. Not without an additional license fee.
Cox: But DISH does it for free.
Fox: Yes, and were suing DISH for it.
Cox: Well, the very fact that DISH is doing it makes those rights less
valuable. So I want a concession.
From there the conversation can take two courses:
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Scenario 1: Lost value
Fox: OK, well knock $50,000 off our demand.
Scenario 2: Lost goodwill
Fox: No dice. You must pay for those rights.
Cox: Fine, but Im annoyed.
We say hypothetical, because Fox produced no evidence that it had ever
had such a conversation in the eight years in which Sling and portable DVR
recordings have been on the market. And despite Foxs assertion that it expects to
negotiate dozens of new contracts with MVPDs and other distributors in the next
12-18 months, OB 41, Fox produced no evidence that it had had any such
conversation in the 11 months from the time it sued until oral argument on its
preliminary injunction motion. That is reason enough to sustain the district courts
conclusion that the harm is unlikely to materialize.
More importantly, the district court was justified in concluding that, if any
harm materializes, damages are calculable. ER 307. The district court
catalogued the variety of similar technologies on the market, noting the testimony
that [m]ost major MVPDs launched [place-shifting] for tablets and phones, as
well as computers, in the past few years. ER 306 (quoting ER 859). It then
observed that, because many [place-shifting] services are already on the market,
any possible loss in bargaining power is either unlikely or can easily be measured.
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Id. In other words, there is already an industry norm and to the extent that Fox has
to start making concessions because of DISHs conduct, the effect can be
measured. Obviously, Fox will know every time it has to say, OK, well knock
$X off our demand. And it will also be able to figure out if its prices for
streaming rights start plummeting even without such a conversation.
Fox acknowledges that this last finding is fully supported by expert
testimony. OB 46 (citing ER 874-75). Nevertheless, Fox complains that the
finding is illogical and implausible. OB 44 (capitalization omitted). Fox tries to
capture the illogic in a rhetorical question: [W]hy would a distributor pay for a
license, or agree to burdensome conditions, if its direct competitor is freely
exploiting the exact same rights with no strings attached? OB 45. There is at
least one simple answer. The competitor might agree to a license as this case plays
out to avoid the risk and expense of litigation. As Rapp explained, Foxs lawsuit
would be enough to prevent DISHs competitors from claim[ing] compensation.
ER 874. And if the competitor does demand a price concession, the damage is
easily calculable. It is all logical.
Fox next asserts that [t]he district courts findings regarding harm to Foxs
distributor relationships are clearly erroneous because they are not supported by
evidence. OB 46. But in the next sentence, Fox concedes that [t]he court relied
on the declaration of Richard Rapp. Id. The multiple citations to Rapps
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declaration throughout the relevant section of the opinion (ER 306-07) confirm that
the district court found support for every one of the findings summarized above.
Fox does not dispute the accuracy of any of the courts citations to Rapp. It
just quibbles with a couple of points that it claims Rapp does not cover. First, Fox
asserts that Mr. Rapp never refutes that Foxs goodwill is being damaged,
OB 46presumably by the annoyance generated in Scenario 2 above. Fox is
wrong. Rapp explained: That Fox brought this action against DISH should be a
complete answer to the conjecture that DISHs competitors will blame Fox.
ER 874. Not that the district court needed an expert to tell it how absurd Foxs
suggestion is. Surely, Fox is not worried it would lose the customer: Cox is not
going to stop carrying Glee (and every other Fox show) just because Fox refuses to
make a DISH-related price concession.
The second quibble (at 48) relates to the district courts observation that
Fox presents no compelling evidence that other MVPDs will demand rights that
are yet to be established rather than wait to see the result of this litigation before
altering their contracts with Fox. ER 307. Fox asserts that its witnesses clearly
explained that during the coming yeari.e., before trial| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | OB 48. The
court was not required to credit that prediction, particularly because Rapp
predicted the opposite: These Hopper with Sling DVR features that support
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viewing on alternative devices have little potential for harming Foxs relationships
with, or revenues generated from, distributors and advertisers. ER 847.
Anyway, the district court did not need Rapp to say what was evident from
the record. Fox could not point to a single negotiation in the eight years that
preceded the filing of the complaint where anyone demanded a price concession
over place-shifting, nor a single negotiation in the 11 months after the filing of the
complaint, where anyone demanded a DISH-specific concession. So it was proper
for the district court to dismiss the conjecture that those conversations were about
to start happening.
In the end, Foxs whole argument about the absence of record support is but
a veiled assertion that the district court erred in crediting Rapp over Foxs
executives. Fox extols its executives as veteran negotiators who know[] the
business models of Fox and its distributors, OB 40-41, in contrast to Rapp who
has never worked a day in the television distribution business, OB 46. But that
choice lies firmly within the discretion of the district court, and could not be a
basis for appeal, even if Fox could persuade this Court that it would have arrived
at a different result if it had applied the law to the facts of the case. Sports Form,
Inc. v. United Press Intl, Inc., 686 F.2d 750, 752 (9th Cir. 1982); see Hinkson, 585
F.3d at 1261-62.
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Foxs final argument on the distributor relationship is that the district court
abused its discretion by completely ignoring Mr. Biards declaration. OB 49.
The court did not ignore Biard. It mentioned him twice. ER 302, 303. That was
twice as many times as Fox mentioned him in the irreparable harm sections of its
PI papers (where he makes only one appearancein the reply). As Foxs own
treatment of Biard demonstrates, Biard added nothing to the irreparable harm mix.
Even on appeal, Fox describes Biard as merely corroborat[ing] and bolster[ing]
Brennan. OB 49. Everything the court said about Brennan applies with equal
force to Biard.
2. The district court did not clearly err in finding that Fox
failed to prove that any loss of advertising revenue defied
calculation.
Foxs theory of lost ad revenues was based on its assertion that the major
metric on which Fox sets its advertising rateNielsens C3 metricdoes not
measure out-of-home viewing. ER 310. From that premise, Fox argued that it
would never be able to demonstrate how much more in advertising dollars it should
get for DISHs place-shifting features. The district court found that Foxs
prediction of falling advertising value without the ability to accurately calculate
damages is not adequately supported by the record. ER 310-11. It gave two
independent reasons. Fox unpersuasively challenges each.
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The district courts first reason was that other entities compensate for that
gap [in Nielsen data] and adequately capture trends in television viewing and, by
extension, advertising value. ER 310 (citing ER 866-67). Fox argues that the
testimony on which the district court reliedagain from Rappwas not
sufficiently detailed to explain[] how that viewership of Dishs features can
be measured. OB 52. And Fox then stretches this argument into an assertion that
it is undisputed that these harms are not currently quantifiable. OB 54.
Rapps whole point was that the advertising Nielsen misses is quantifiable. The
district court was entitled to accept that testimony at the preliminary injunction
phase, particularly because Fox had the burden of proof and it offered no testimony
that the data Rapp referenced could not do the job.
Fox also asserts that the district courts first response was irrelevant, because
the issue is not whether someone, somewhere is capable of measuring the use of
DISHs place-shifting features to view[] Fox Programs, but only whether the
viewing of those programs on mobile devices are counted by Nielsens C3 rating.
OB 52. Fox is missing the district courts point. Whether Nielsen counts that
viewing might support Foxs assertion that it suffers harm through lost ad revenue.
But the courts point was that Fox must also prove that the harm is irreparable. As
long as someone, somewhere is capable of measuring it, the loss is not
irreparable.
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The district courts second reason for rejecting Foxs argument was that
Nielsen has announced it will measure viewership delivered through online
connections beginning in fall 2013. ER 310 (citing ER 867). Thus, advertising
data entities were ready and willing to adapt to the new landscape of mobile
viewing. Id. Fox does not deny that Rapp supported these findings. It faults Rapp
for relying on hearsay. But as an expert, Rapp is allowed to do so. Fed. R.
Evid. 703.
Fox also peers behind Rapps declaration, insisting that a cited article does
not fully support the timing of Nielsens measurement, and at most reports
Nielsons pledge to measure TV viewership on mobile devices at some
unspecified time in the future. OB 53-54. But the district court was entitled to
rely on Rapps testimony and not flyspeck based on the one source he decided to
cite. And besides, Rapp was right. Nielsen, Any Way You Watch It: Nielsen to
Incorporate Mobile Viewing Into TV Ratings and Dynamic Digital Ratings
(Oct. 28, 2013), http://www.nielsen.com/us/en/newswire/2013/any-way-you-
watch-it-nielsen-to-incorporate-mobile-viewing.html.
II. FOX IS UNLIKELY TO SUCCEED ON THE MERITS.
This Court can affirm without reaching the merits. But there are several
alternative grounds for affirmance on the merits of Foxs copyright claims. As an
initial matter, Fox asserts that it can prevail on a copyright claim simply by proving
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a breach of contractwhich is its only basis for now asserting that Hopper
Transfers is infringing. That is wrong. Infra II.A. So, too, is Foxs theory of
direct infringement as to Sling. Infra II.B. Foxs breach of contract arguments,
which are inappropriate for injunctive relief, are also meritless. Infra II.C.
A. Fox Waived Its Copyright Claim Against Hopper Transfers and
in Any Event Cannot Prevail on a Copyright Claim Merely By
Showing a Breach of Contract.
Foxs opening argument on copyright infringement is that it can prove its
copyright claim merely by demonstrating that DISH violated a contract. OB 55-
56. That is its sole basis for arguing that DISH infringes by including the Hopper
Transfers features. But Fox did not press a copyright claim on Hopper Transfers in
its briefing below. See ER 11-28; ER 1521-26. And at oral argument it confirmed
as [r]ight the district courts understanding that the Hopper Transfers part of
the claim relates to contract breach and defense counsels understanding that
there is no copyright claim being moved on when it relates to Hopper Transfers.
ER 59.
In any event, Foxs argument is absurd. A plaintiff cannot bypass the
elements of copyright infringement simply by proving breach of a contract, any
more than it can use a contract to bypass the elements of an antitrust violation. A
copyright claim has two elements: (1) that the plaintiff owns a copyright; and (2)
an invasion of one of the exclusive rights enumerated in 106 of the Copyright
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Act. See Worldwide Church of God v. Phila. Church of God, Inc., 227 F.3d 1110,
1114-15 (9th Cir. 2000). As the copyright owner of certain programs, Fox has the
exclusive right, for example, to reproduce the copyrighted work, 17 U.S.C.
106(1), to distribute copies of it, id. 106(3), and to perform the copyrighted
work publicly, id. 106(4). DISH is simply not an infringer, within the
meaning of the Copyright Act, unless it violates any of the exclusive rights.
17 U.S.C. 501(a).
That is not to say that the language of a contract is always irrelevant in
copyright cases. A contract can become relevant to a copyright claim if the
defendant asserts a license as an affirmative defense to the infringement claim.
That was why the contract was relevant in each of the cases Fox cites. OB 55.
But, as is evident in each of those cases, a license is only a defense; it does not
magically erase the elements of a copyright claim. Worldwide Church of God, 227
F.3d at 1114.
This Court has repeatedly admonished that the breach of a license by itself
cannot establish copyright infringement: [B]efore [the plaintiff] can gain the
benefit of copyright enforcement, it must definitively establish that the rights it
claims were violated are copyright, not contractual rights. Sun Microsystems,
Inc. v. Microsoft Corp., 188 F.3d 1115, 1122 (9th Cir. 1999) (emphasis added); see
also S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1089 & n. 11 (9th Cir. 1989)
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(concluding that the defendant exceeded the scope of its license and then
remanding for resolution of the underlying question of whether [the defendants]
uses, unshielded by the contract, infringed [the plaintiffs] copyright). It is black-
letter law: To be actionable as infringement, the conduct must implicate one of
the copyright owners enumerated rights. 3 Nimmer on Copyright 10.15[A][2]
n.10 (2013); see 2 Patry on Copyright 5:118 (2013) (same). There are no
shortcuts.
Fox does not argue that DISH engaged in any of those acts of infringement
with respect to Hopper Transfers. And for good reason. Fox has no argument that
DISH is copying or publicly performing Glee when the user transfers a show from
one device to another in the privacy of her own home. Thus, even if it had
preserved the copyright argument, Fox could not prove copyright infringement as
to Hopper Transfers, periodregardless of what the contract says.
B. Foxs Theory of Direct Copyright Infringement Is Flawed.
With respect to Sling, Foxs copyright theory is direct infringement. It
cannot prevail on this theory without showing that when DISH customers use Sling
to send their programming to their own mobile devices, DISH is perform[ing] the
copyrighted work publicly. 17 U.S.C. 106(4). Foxs position is doubly flawed.
First, DISH is not the one sending a program when a customer uses Sling. Second,
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even if DISH were doing so, using Sling to send a program from a customer to
herself is obviously not engaging in a public performance.
1. Users, not DISH, are the ones who use Sling to send signals
to computers and mobile devices.
Let us be clear on who does what when a customer uses Sling. DISH
transmits Foxs shows by satellite to the customers set-top box. There is no
dispute that this transmission is authorized. DISH pays | | | | | | | | | | | | for the
right to take Foxs over-the-air broadcasts and beam them by satellite to its
customers; and DISH has a statutory license to make that retransmission. 17
U.S.C. 119, 122. But, once the set-top box receives the signal for, say, The
Simpsons, DISHs work is done.
From there, nothing else happens unless the customer intervenes to activate
a second signalfrom the set-top box to her laptop or mobile device. She must
open the Sling software application, navigate the guide screens, and select the
show (or the recording) to be sent. ER 180-81. That second signal to the iPad is
not even in the same format as the satellite transmission from the satellite to the
set-top box. The Sling microchip takes the satellite signal (or DVR recording) and
converts it to a new format so that the program can travel using internet protocols.
Then, the Sling software creates a secure point-to-point tunnel for the Sling chip to
deliver that content to the laptop or iPad. ER 928-29.
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Foxs direct infringement theory depends on the proposition that DISHand
not the consumercaused that second signal to occur. Fox made that same
argument to this Court in Fox I with respect to PrimeTime Anytime recordings
and the argument fails here for the same reason it failed before. The PrimeTime
Anytime feature provides customers a shortcut to program their DVRs to record
the primetime programming on up to four major broadcast networks and up to
seven nights a week. Fox I, 2014 WL 260572 at *4-7. Fox argued that DISH was
liable for direct infringement because DISH supplied the hardware and software
for the recording functionality and engaged in all sorts of activities to support it. In
rejecting Foxs argument, this Court observed that the question on direct liability is
who cause[d] the copying. Id. at *5. DISHs decision to offer the feature to its
customers, the Court explained, is not enough for direct liability. Because Dishs
program creates the copy only in response to the users command, the user, not
Dish, makes the copy. Id. DISH therefore could not be a direct infringer.
The analysis is no different when a DISH subscriber decides to place-shift
The Simpsons using Sling. Here, too, once DISH sends the initialand
indisputably authorizedtransmission of The Simpsons to the customers set-top
box, it is the user, not DISH, who decides whether to place-shift it. This
subscriber-initiated event is completely independent of the initial satellite
transmission, and DISH causes none of it. Without her command, there is no
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second signal. So DISH did nothing that Fox can complain about. Under Fox I,
and other cases, this simply cannot be direct infringement. See Perfect 10, Inc. v.
Amazon.com, Inc., 508 F.3d 1146, 1161 (9th Cir. 2007).
Fox seems to acknowledge this simple reality with respect to Slingbox (on
the market since 2005) and other competing place-shifting technologies. These
devices can be attached to any video source (including a Hopper), and Fox has no
objection. Presumably, that is because Fox acknowledges that the company that
supplied the technology is not sending anything from the set-top box to the iPad or
laptop. Fox offers no principle or case that would make otherwise lawful behavior
(of place-shifting from a set-top box to an iPad) unlawful simply because a
defendant also engages in another concededly lawful act (transmitting the
authorized signal by satellite to the set-top box): Two rights do not make a wrong.
Foxs only argument for distinguishing this case from Fox I is this: It is
well settled in this Circuit that when the issue is the public performance right, it
does not matter who presses the button. OB 58. To be clear, Fox does not mean
that this Circuit has held that. Fox cites only district court cases for the
proposition that when a service delivers video content over a wire (such as the
Internet) that consumers can access by turning on a device (such as a computer)
and selecting something to watch, the servicenot the consumeris doing the
transmitting. OB 59.
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Foxs cases say no such thing. Each involves a defendant who acquired a
copy or captured a video signal meant for the private noncommercial use of the
viewer, and instead that defendant made a commercial use of that copy (or
signal)by selling it to the viewers in another formwithout ever paying for that
right. See Warner Bros. Entmt Inc. v. WTV Sys., Inc., 824 F. Supp. 2d 1003,
1006-07 (C.D. Cal. 2011) (DVD copies of movies purchased and transmitted
without authorization from data center to customers); On Command Video Corp. v.
Columbia Pictures Indus., 777 F. Supp. 787, 789-90 (N.D. Cal. 1991) (video
cassette copies purchased and transmitted without authorization from VCRs in
hotel equipment room to hotel rooms); Fox Television Stations, Inc. v.
BarryDriller Content Sys., PLC, 915 F. Supp. 2d 1138, 1140 (C.D. Cal. 2012)
(broadcast television captured by centralized pool of antennas then transmitted
without authorization over the internet).
The trouble in those cases was that those services initial (and only)
transmissions, unlike DISHs initial transmission, were completely unauthorized.
But none of Foxs cases addresses what happens when a defendant pays for the
commercial right to transmit and exercises it, then the subscriber engages in a
separate private noncommercial act to use that content. These cases do not answer
the question of whether a party can be held responsible for direct infringement
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when its only allegedly unlawful act is providing customers with their own
software and equipment to engage in a private noncommercial use.
But other cases do answer this question. They make clear that supplying
equipment to consumers who can use it to perform is not the same as doing, or
authorizing, the act under 106. Sony Corp. of Am. v. Universal City Studios, Inc.,
464 U.S. 417, 786 (1984). The rule holds whether the means is a VCR, a DVR, or
a Sling adapter. Id. (marketing and selling a VCR does not amount to authorizing
copying); Fox I, 2014 WL 260572 at *4-7 (offering time-shifting features is not
equivalent to copying); see Recording Indus. Assn of Am. v. Diamond Multimedia
Sys., Inc., 180 F.3d 1072, 1079 (9th Cir. 1999) (holding that changing formats for
use on mobile MP3 player is lawful, observing that The Rio merely makes copies
in order to render portable, or space-shift, those files that already reside on a
users hard drive. Such copying is paradigmatic noncommercial personal use
entirely consistent with the purposes of the Act) (citation omitted). This Court
has even applied the principle to internet hyperlinks: HTML instructions that
direct a users browser to a website publishers computer that stores [a]
photographic image . [are] not equivalent to showing a copy. Perfect 10, 508
F.3d at 1161. This is an easy case under Sony, Fox I, and Perfect 10. When a
customer decides to use Sling, the customer is the one sending the program. DISH,
therefore, cannot be liable for direct infringement.
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2. As Fox has previously admitted, Sling is not a public
performance.
Even if DISH were the one sending the second signal, Foxs infringement
theory must fail because such place-shifting does not amount to a public
performance under 106(4). Under the so-called transmit clause, transmitting is
not a public performance unless a transmission is made to the public.
17 U.S.C. 101. But there is nothing public when a single customer sends
something to himself. It is quintessentially private. As this Court has explained,
public performance at least involves sending out some sort of signal via a device
or process to be received by the public at a place beyond the place from which it is
sent. Columbia Pictures Indus., Inc. v. Profl Real Estate Investors, Inc.,
866 F.2d 278, 281 (9th Cir. 1989) (emphasis added). It is undisputed that Sling
place-shifting is a single, discrete signal, with a potential audience limited to
members of a single subscribing household who have already paid for that content.
Such private events cannot be public performances under the copyright law. See
Cartoon Network LP v. CSC Holdings, Inc., 536 F.3d 121, 136 (2d Cir. 2008). To
conclude otherwise is to read the words to the public out of the statute.
Outside this case, Fox has been taking that position to every court that will
listen. As noted above (at 32), Fox said it to the Second Circuit in late 2012 when
it argued American Broadcasting Cos., Inc. v. Aereo, Inc., 712 F.3d 676 (2d Cir.
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2013). Sling was not at issue, but it came up anyway in an exchange between
Judge John Gleeson (sitting by designation) and Foxs counsel:
Judge Gleeson: Are you familiar with the device called the Slingbox?
Mr. Smith: I am, your Honor, yes.
Judge Gleeson: Now, if I were able to afford one, it would allow me
to be able to take a broadcast and convert it to something on my
laptop.
Mr. Smith: It would allow you to take a broadcast and send it on to
the internet to one of your devices, yes.
Judge Gleeson: That wouldnt be a public performance, my viewing
of it on my laptop would not be a public performance?
Mr. Smith: The use of Slingbox may or may not involve some
copyright infringement. It would not be a public performance, thats
correct.
Judge Gleeson: The potential audience is just me.
Mr. Smith: Thats correct.
ER 1336-37 (emphasis added).
Then, just four days after filing its opening brief in this case, Fox told the
United States Supreme Court, in its reply in support of certiorari in the Aereo case
that it is Aereos business modeland not distinct technologies that allow
individuals to access content they have already paid forthat is at issue here.
Aereo and those technologies do not stand or fall together. Reply Br. for Petrs at
4, Am. Broad. Cos., Inc. v. Aereo, Inc., No. 13-461 (U.S. Dec. 23, 2013), 2013 WL
6729880, at *4 (emphasis added). It made the same point in yet another way in its
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rehearing petition, assuring the Second Circuit that holding that Aereo is a public
performance does not mean that all retransmissions of over-the-air broadcasts,
such as from an individuals living room into a bedroom, would be to the
public. Pet. for Rehg at 9 n.5, Am. Broad. Cos. v. Aereo Inc., 722 F.3d 500 (2d
Cir. 2013) (No. 12-2807-cv) (Apr. 15, 2013) (emphasis added).
Ordinarily, one would chalk up the conflicting positions between Aereo and
this case to different teams of lawyers addressing the issue at different times. But
these were the same lawyers discussing the same issues for the same client at the
same timeoften only days apart.
Despite all these public assertions about limits on the public performance
right, Fox now argues that this case is the same as Aereo (and its 54uthorize54er
BarryDriller). OB 60-61. As noted above (at 49-50), the defendants in those cases
capture television signals with a pool of small antennas housed at a remote
centralized location. They do not pay for the content. And then they transmit the
content over the internet to any viewer willing to pay subscription fees.
BarryDriller, 915 F. Supp. 2d at 1140-41. Two cases have found that this business
model is not a public performance, WNET Thirteen v. Aereo, Inc., 712 F.3d 676,
696 (2d Cir. 2013); Hearst Stations, Inc. v. Aereo, Inc., No. 13-11649, 2013 U.S.
Dist. LEXIS 146825, at *14-15 (D. Mass. Oct. 8, 2013), and two others have
disagreed, BarryDriller, 915 F. Supp. 2d at 1143, 1146; Fox Television Stations,
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Inc. v. FilmOn X, No. 13-758, 2013 U.S. Dist. LEXIS 126543, at *42-43 (D.D.C.
Sept. 5, 2013), leading to a Supreme Court showdown this Term. Even if Fox and
the other networks prevail in that case, that result will not, as Fox has elsewhere
admitted, affect Sling. Reply Br. for Petrs at 4, Am. Broad. Cos. v. Aereo, Inc.,
2013 WL 6729880, at *4.
What Fox recognizes before every other court is that if personal one-to-one
place-shifting is not private, then nothing is. Foxs reading here cannot be right
because the statutes text clearly contemplates that some transmissions will be to
the public and some will not. That position reads the words to the public right
out of the statute. But those words cannot be ignored, so Foxs reading fails. And
because Sling plainly is one-to-one and private, Foxs claim fails too.
C. Fox Is Unlikely to Succeed on Its Contract Claims.
Fox devotes a scant two paragraphs to its contract claims. OB 56. They
merit so little space because it is almost impossible to secure injunctive relief on a
contract claim, Flynt Distrib. Co. v. Harvey, 734 F.2d 1389, 1395-96 (9th Cir.
1984), and because the contract claims are so weak, both as to Hopper Transfers
and Sling.
Hopper Transfers. Fox argues (at 56) that Hopper Transfers breaches the
provision stating that DISH shall not authorize the copying of Fox
programming. But DISH does not authorize its customers to copy Glee simply
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by supplying equipment that they can use to transfer it to another device any more
than a VCR manufacturer authorizes consumers to copy particular shows merely
by providing the machinery with which to tape it. That was why the district court
and this Court both rejected the argument that Fox made in Fox I, based on the
same provision, that DISH was copying programs by providing the PrimeTime
Anytime feature that consumers activate. Fox I, 2014 WL 260572, at *8.
Moreover, the very same sentence permits copying by consumers for
private home use, ER 434, which is all Hopper Transfers provides DISH
customers with the ability to do. Fox seems to be arguing (at 56) that private
home use means something like private use inside of the home. But home in
this context does not mean where you live. Just as you can do homework in the
library and restaurants can serve home cooking, the word here is simply designed
to signify private noncommercial uses, as distinguished from public or commercial
ones. This dichotomy parallels the homestyle exemption in the Copyright Act,
which provides that the public performance right is not violated by television
viewing in a public place on a single receiving device of a type customarily used
for private viewing. In other words, your lap is not a public place just because it
is sitting in an airport with a laptop on it. 17 U.S.C. 110(5).
Sling. Fox claims that Sling violates two provisions in the parties contracts.
It is wrong on bothand for some of the same reasons.
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Fox first maintains (at 56) that DISH is violating a provision in the 2002
RTC Agreement that prohibits DISH from 57uthorize[ing] the retransmission
of Foxs signal. ER 434. This is incorrect under the same authorization
principle noted immediately above: DISH is not authorizing any particular show
to be sent to any particular place just by supplying Sling functionality.
Fox is also reading the contract incorrectly. While the signal being sent
from the consumers set-top box to her iPad is distinct from DISHs satellite
transmission to the set-top box, see supra at 46-48, it is not a retransmission
within the meaning of the contract. Sections 119 and 122 of the Copyright Act
grant DISH (and other satellite and cable companies) a compulsory license to
retransmit Foxs signal (and those of other broadcast networks), so long as DISH
satisfies certain conditions and works out mutually satisfactory terms in a
Retransmission Consent Agreement, which it has. The retransmission that the
statute refers to, and that the contract has in mind, is a multicast transmission
provided to numerous customers. That provision merely forbids DISH to authorize
another provider to retransmit Foxs signal to others. In other words, the provision
prohibits DISH from sublicensing its license. It does not prohibit DISH from
furnishing customers with devices that they can use to send the signals from their
set-top boxes to themselves.
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That is why its own executives admitted in private internal correspondence
that Fox | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
ER 1477. It is also undoubtedly why Fox did not sue in the five years after DISH
acquired Sling in 2007, despite the fact that the 2002 Agreement was in effect at all
times. Foxs conduct is the best reflection of its understanding of the 2002
Agreement. See IBJ Schroder Bank & Trust Co. v. Resolution Trust Corp., 26
F.3d 370, 374 (2d Cir. 1994) (internal quotation marks omitted).
For similar reasons, Sling does not violate the language in the October 2010
Agreement providing that | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | ER 455. This provision prohibits DISH from substituting
the internet for its satellite system as its means of delivering Foxs broadcasts to
subscribers. As explained above (at 46-50), it is inapplicable to these features
because DISH does not do the place-shifting when customers use Sling and Hopper
Transfersits customers do. And as discussed above (at 10-11), the parties
included the next sentence of the agreement to protect these customers | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The
provision simply does not prohibit Sling or Hopper Transfers.
III. FOX CANNOT ESTABLISH THE OTHER FACTORS REQUIRED
FOR INJUNCTIVE RELIEF.
The balance of the hardships weighs heavily against injunctive relief.
Again, Fox is done in by its extraordinary delay. Sling technology has been used
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59
by DISHs customers for years. Sling Media has sold | | | | | | | | | | | | | | Slingboxes
and Sling Adapters, and DISH has distributed | | | | | | | | | ViP 922 Slingloaded
DVRs. ER 927-28. Foxs proposed injunction would essentially require DISH to
rip Slingboxes, Sling Adapters, and Slingloaded DVRs out of its customers
homes. ER 909. Thus, Fox asks not to preserve the status quo, but to alter it
dramatically. Mandatory injunctions like this should not be issued unless the
facts and law clearly favor the moving party and are not granted unless extreme
or very serious damage will result. Anderson v. United States, 612 F.2d 1112,
1114-15 (9th Cir. 1980). Fox does not come close to this showing.
The public interest also favors DISH. Sling and Hopper Transfers are
important technological innovations, facilitating consumer choice, connectivity,
mobility, and speech. Against this, Fox asserts nothing but the abstract public
interest in preventing copyright infringement. Fox is out for Fox, and Fox alone.
Its attempts to hamper technological innovation and curb consumer choice are
against the public interest. See Gen. Motors Corp. v. Harry Browns, LLC, 563
F.3d 312, 321 (8th Cir. 2009) (noting public interest in consumer choice).
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CONCLUSION
For the foregoing reasons, this Court should affinn the district court's order
denying Fox's request for a preliminary injunction.
Annette L. Hurst
William A. Molinski
ORRICK, HERRlNGTON & SUTCLIFFE LLP
405 Howard Street
San Francisco, CA 94105
Mark A. Lemley
Michael Page
DURIE T ANGRI LLP
217 Leidesdorff Street
San Francisco, CA 94111
E.,Ypshua Rosen]p;afiz
~ t e r A Bicks/,.. ..
Elyse D. Echtman
Lisa T. Simpson
ORRICK, HERRINGTON & SUTCLIFFE LLP
51 West 52nd Street
New York, NY 10019
Counsel for Defendants-Appellees
60
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STATEMENT REGARDING ORAL ARGUMENT
Pursuant to Federal Rule of Appellate Procedure 34(a), Appellees submit
that oral argument is not necessary to decide the issues in this case. But, should
the Court grant Appellants request, Appellees ask that the Court afford them
argument time as well.
Dated: February 14, 2014 Respectfully submitted,
s/ Annette L. Hurst
Annette L. Hurst
ORRICK, HERRINGTON &SUTCLIFFE LLP
405 Howard Street
San Francisco, CA 94105
Counsel for Defendants-Appellees
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CERTIFICATE OF RELATED CASES
Pursuant to Ninth Circuit Rule 28-2.6, I state that there are no related cases
pending in this Court.
The parties have litigated one prior appeal in this case, Fox Broad. Co. v.
DISH Network L.L.C., No. 12-57048. That appeal also concerned the denial of a
motion by Plaintiffs-Appellants to enjoin certain features Defendants-Appellees
offer in the DVRs they provide to their customers. In both motions, Plaintiffs-
Appellants invoke 17 U.S.C. 106 of the Copyright Act and the same provisions
of the parties contractual agreements. This Courts amended judgment affirming
the district court was filed on January 24, 2014, and the mandate issued February
4, 2014.
Dated: February 14, 2014 Respectfully submitted,
s/ Annette L. Hurst
Annette L. Hurst
ORRICK, HERRINGTON &SUTCLIFFE LLP
405 Howard Street
San Francisco, CA 94105
Counsel for Defendants-Appellees
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CERTIFICATE OF COMPLIANCE
1. This brief complies with the type-volume limitation of Fed. R. App. P.
32(a)(7)(B) because this brief contains 13,939 words, excluding the parts of the
brief exempted by Fed. R. App. P. 32(a)(7)(B)(iii).
2. This brief complies with the typeface requirements of Fed. R. App. P.
32(a)(5) and the type style requirements of Fed. R. App. P. 32(a)(6) because this
brief has been prepared in a proportionally spaced typeface using Microsoft Word
14 point Times New Roman font.
Dated: February 14, 2014 Respectfully submitted,
s/ Annette L. Hurst
Annette L. Hurst
ORRICK, HERRINGTON &SUTCLIFFE LLP
405 Howard Street
San Francisco, CA 94105
Counsel for Defendants-Appellees
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CERTIFICATE OF SERVICE
I hereby certify that I electronically filed the foregoing with the Clerk of the
Court for the United States Court of Appeals for the Ninth Circuit by using the
appellate CM/ECF system on February 14, 2014, which will accomplish service on
all counsel who are registered to receive service via CM/ECF.
I further certify that on February 14, 2014, a copy of the foregoing was
served by U.S. mail on:
Paul M. Smith via U.S. mail
JENNER &BLOCK LLP
1099 New York Avenue, NW
Suite 900
Washington, DC 20001
Respectfully submitted,
s/ Annette L. Hurst
Annette L. Hurst
ORRICK, HERRINGTON &SUTCLIFFE LLP
405 Howard Street
San Francisco, CA 94105
Counsel for Defendants-Appellees
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