was dealt a blow when the U.S. Court of Appeals for the 11th Circuit in Atlanta ruled against them in a long-running copyright suit. The suit was brought against the company's DISH network by the affiliate associations of the ABC, CBS, FOX and NBC.
The ruling may result in the loss of broadcast-network programming to a portion of DISH subscribers and could result in customer defections to other services.
In 1998, broadcasters sued EchoStar, saying that it violated regulations governing homes that were not served by local broadcast signals as related to the Satellite Home Viewer Act (SHVA). In 2003, the company was ordered to turn off ineligible subscribers.
In a unanimous ruling, the three judges of the appeals court late Tuesday hammered EchoStar for its lack of compliance and "pattern" and "practice" of "violating the Act in everyway imaginable" and says the Copyright Act instructs that when such practices are found, a court "shall order a permanent injunction" barring the secondary transmission by the satellite carrier. It is unclear when an injunction might be ordered.
"As if the magnitude of its ineligible subscriber base were insufficiently disconcerting, we have found no indication that EchoStar was ever interested in complying with the Act," the court said in its ruling. It later reads that "we have no trouble concluding that EchoStar has engaged in a "nationwide pattern and practice of delivering a primary transmission made by a network station...to subscribers who are not eligible to receive the transmission under this section."
EchoStar said in a statement that it "is disappointed in the Court of Appeals ruling" and also questioned the law saying "While consumers are free to choose to read the
New York Times
San Francisco Chronicle
or any other newspaper regardless of where in the United States they live, broadcasters successfully orchestrated passage of special interest legislation which prohibits consumers from watching network channels originating in other markets, except in limited circumstances."
It also said that it has reached settlement agreements over the years with hundreds of the approximately 800 ABC, NBC, CBS and FOX stations across the country, including all ABC-, NBC- and CBS-owned and operated stations. "We were not able to reach settlement agreements with FOX Network or the station groups owning the remaining stations."
"This opinion affirms the importance of localism in television, and vindicates an eight-year effort by TV broadcasters to stop EchoStar's blatant and massive abuse of copyright law," said National Association of Broadcasters CEO David Rehr, in a statement.
EchoStar has been spending a lot of time in court lately. A Texas jury found against the company last month in a suit claiming unfair use of
digital video-recording technology. The jury awarded TiVo $73 million for lost profits and royalties, finding EchoStar violated a patent governing simultaneous operations in digital video recorders.
On Thursday EchoStar shares were down 5 cents to $30.05.