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DISH Seeks Change in Trial Venue

Zacks Equity Research

Recently, a legal representative of satellite TV provider DISH Network Corporation (DISH) has appealed before a New York District Court judge to change its venue for trial – over the company’s new ad-skipping feature – from Los Angeles to New York. The court case was filed by major broadcasters against DISH for illegally using the new AutoHop technology, which allows users to skip commercials during TV shows. Legal representatives of the TV network majors have decided to pursue the infringement case in Los Angeles, thus resulting in a fight over the trial venue.

It all began in May this year, when DISH Network launched a new technology called Auto Hop, which allows users to skip commercials at the time of watching recorded TV-shows. Introduction of such technology has created a lot of tension among major TV broadcasters like Walt Disney Co.’s (DIS) ABC, CBS Corporation (CBS), News Corp. (NWSA) owned Fox network and Comcast Corp. (CMCSA) owned NBC Universal. The broadcast networks claim that the new feature not only violates copyright laws but also significantly jeopardizes their advertisement revenue. The end result was that all the four major TV network companies filed a lawsuit against Dish Network.

However, DISH Network believes that they have not infringed any copyright law as the new service is similar to the DVR service that provides flexible viewing of TV shows at their own preferred time. Moreover, skipping of advertisement is possible only during recorded programs and not at the time of live broadcast of the show, hence the technology does not violate any contract agreement with the broadcasters. Furthermore, the company sued the four major broadcasting companies seeking a declaratory judgment on its new product.

The courtroom trial venue between DISH Network and other TV network majors is expected to be finalized next week.

Currently, DISH Networkhas a Zacks #3 Rank, implying a short-term Hold rating on the stock. We are also maintaining our long-term Neutral recommendation on the company’s shares.

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