                FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT


FOX BROADCASTING COMPANY,                No. 12-57048
INC.; TWENTIETH CENTURY FOX
FILM CORPORATION; FOX                      D.C. No.
TELEVISION HOLDINGS, INC.,              2:12-cv-04529-
              Plaintiffs-Appellants,       DMG-SH

                 v.
                                           OPINION
DISH NETWORK L.L.C.; DISH
NETWORK CORPORATION,
           Defendants-Appellees.


      Appeal from the United States District Court
         for the Central District of California
        Dolly M. Gee, District Judge, Presiding

                Argued and Submitted
          June 4, 2013—Pasadena, California

                  Filed July 24, 2013

    Before: Sidney R. Thomas, Barry G. Silverman,
        and Raymond C. Fisher, Circuit Judges.

               Opinion by Judge Thomas
2        FOX BROADCASTING CO. V. DISH NETWORK

                           SUMMARY*


             Copyright / Preliminary Injunction

   The panel affirmed the district court’s denial of a
broadcaster’s request for a preliminary injunction against a
pay television provider’s products that skipped over
commercials.

    The panel held that the district court did not abuse its
discretion in holding that the broadcaster failed to
demonstrate a likelihood of success on its copyright
infringement and breach of contract claims regarding the
television provider’s implementation of the commercial-
skipping products. As to a direct copyright infringement
claim, the record did not establish that the provider, rather
than its customers, made copies of television programs for
viewing. The broadcaster did not establish a likelihood of
success on its claim of secondary infringement because,
although it established a prima facie case of direct
infringement by customers, the television provider showed
that it was likely to succeed on its affirmative defense that the
customers’ copying was a “fair use.” Applying a “very
deferential” standard of review, the panel concluded that the
district court did not abuse its discretion in denying a
preliminary injunction based on the alleged contract breaches.

   The panel also held that the broadcaster failed to
demonstrate a likelihood of irreparable harm from the


  *
    This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
        FOX BROADCASTING CO. V. DISH NETWORK               3

provider’s creation of television-show copies used to perfect
the functioning of one of its commercial-skipping products.


                        COUNSEL

Paul M. Smith (argued), Jenner & Block LLP, New York,
New York; Richard L. Stone, Andrew J. Thomas, David R.
Singer, and Amy M. Gallegos, Jenner & Block LLP, Los
Angeles, California, for Plaintiffs-Appellants.

E. Joshua Rosenkranz (argued), Peter A. Bicks, Elyse D.
Echtman, and Lisa T. Simpson, Orrick, Herrington &
Sutcliffe LLP, New York, New York; Annette L. Hurst and
William A. Molinski, Orrick, Herrington & Sutcliffe LLP,
San Francisco, California; Mark A. Lemley and Michael H.
Page, Durie Tangri LLP, San Francisco, California, for
Defendants-Appellees.

Robert A. Long, Jennifer A. Johnson, and David M. Zionts,
Covington & Burling LLP, Washington, D.C., for Amici
Curiae ABC Television Affiliates Association et al.

Jeffrey A. Lamken and Robert K. Kry, MoloLamken LLP,
Washington, D.C., for Amicus Curiae Cablevision Systems
Corp.

Mark J. Prak, Charles F. Marshall, Julia C. Ambrose, and
Laura S. Chipman, Brooks, Pierce, McLendon, Humphrey &
Leonard, LLP, Raleigh, North Carolina; Jane E. Mago,
Jerianne Timmerman, Bart Stringham, and Benjamin F. P.
Ivins, National Association of Broadcasters, Washington,
D.C., for Amicus Curiae National Association of
Broadcasters.
4       FOX BROADCASTING CO. V. DISH NETWORK

Kelly M. Klaus and Jonathan H. Blavin, Munger, Tolles &
Olson LLP, Los Angeles, California, for Amici Curiae
Paramount Pictures Corp. et al.

Seth D. Greenstein and Robert S. Schwartz, Constantine
Cannon LLP, Washington, D.C., for Amici Curiae Computer
& Communications Industry Association et al.

Mitchell L. Stoltz and Corynne McSherry, Electronic Frontier
Foundation, San Francisco, California; John Bergmayer,
Public Knowledge, Washington, D.C.; Betsy Rosenblatt,
Organization for Transformative Works, New York, New
York, for Amici Curiae Electronic Frontier Foundation et al.

Jason Schultz, Samuelson Law, Technology & Public Policy
Clinic, University of California, Berkeley, School of Law,
Berkeley, California, for Amici Curiae law scholars and
professors.


                        OPINION

THOMAS, Circuit Judge:

    Dish Network offers two marsupial-inspired products:
the “Hopper,” which “hops” over commercials, and a
companion box known as a “Joey.” Fox Broadcasting
Company claims these products are contractually out of
bounds and constitute copyright infringement. The district
court denied the broadcaster’s request for a preliminary
injunction. We have jurisdiction under 28 U.S.C. § 1292, and
we affirm.
        FOX BROADCASTING CO. V. DISH NETWORK                 5

                              I

    Plaintiffs Fox Broadcasting Company, Twentieth Century
Fox Film Corp., and Fox Television Holdings, Inc.
(collectively, “Fox”) own the copyrights to television shows
that air on the Fox television network. Its primetime lineup
includes shows such as Glee, Bones, The Simpsons, and
Family Guy. Fox contracts with cable and satellite television
service providers to retransmit Fox’s broadcast signal for the
customers of these providers, known as multichannel video
programming distributors. Some such distributors also offer
Fox programming via video on demand. Fox separately
licenses its shows to companies such as Hulu, Apple, Netflix,
and Amazon, which sell Fox programs online or stream them
over the Internet.

    One distributor that Fox contracts with is Dish Network,
the third-largest pay television service provider in the United
States. Dish retransmits Fox’s broadcast signal under a 2002
contract with Dish’s former parent company and current
technology vendor, EchoStar Technologies. Among other
things, the contract provides that Dish shall not “distribute”
Fox programs on an “interactive, time-delayed, video-on-
demand or similar basis,” though Dish may “connect[] its
Subscribers’ video replay equipment.” Dish also cannot
“record, copy, duplicate and/or authorize the recording,
copying, duplication (other than by consumers for private
home use) or retransmission” of any part of Fox’s signal.

    Fox and Dish have amended this contract several times,
most recently in a 2010 letter agreement. Under that
agreement, Dish could provide Fox Video On Demand to its
subscribers, but Dish had to “disable fast forward
functionality during all advertisements”; the contract stated
6        FOX BROADCASTING CO. V. DISH NETWORK

“such fast-forward disabling is a necessary condition to
distribution of the Fox broadcast content via [video on
demand].” The 2010 agreement also forbids Fox and Dish
from attempting to “frustrate or circumvent” the contractual
rights.

    In March 2012, Dish released to its customers the Hopper,
a set-top box with digital video recorder (DVR) and video on
demand capabilities. The Hopper provides service to up to
four televisions in a home using companion boxes (known as
Joeys) wired to each television. Dish customers can also
watch Hopper content on their computers and mobile devices
using a product called the Sling Adapter.

    At the same time it released the Hopper, Dish introduced
a feature called PrimeTime Anytime that works only on the
Hopper. PrimeTime Anytime allows a subscriber to set a
single timer to record any and all primetime programming on
the four major broadcast networks (including Fox) every
night of the week. To enable PrimeTime Anytime, a Hopper
user presses the “*” button on the remote control to reach the
PrimeTime Anytime setup screen. The user selects “Enable,”
and a new menu appears where the viewer can disable
recordings of certain networks on certain days of the week
and change the length of time that the shows are saved
(between two and eight days). By default, PrimeTime
Anytime records primetime shows on all four networks each
night of the week and saves all recordings for eight days.1


    1
    Prior to July 2012, a viewer who enabled PrimeTime Anytime could
not deselect any networks or days of the week, and could not save
recordings for fewer than eight days. The district court “examine[d] the
propriety of the Hopper features in their current form, as Dish has stated
that it has no plans to return to its pre-July 20, 2012 practices.” Fox
         FOX BROADCASTING CO. V. DISH NETWORK                      7

    Dish determines the start and end time of the PrimeTime
Anytime recordings each night and sometimes alters these
times to record programming outside the traditional
primetime window of 8 p.m. to 11 p.m. Eastern and Pacific
time Monday through Saturday and 7 p.m. to 11 p.m. on
Sunday (Primetime starts and ends one hour earlier in the
Mountain and Central time zones.). For instance, Dish
altered the times to accommodate Olympic programming on
NBC in summer 2012. If at least half of a program falls
within the primetime window, Dish includes the entire show
in the PrimeTime Anytime recording.

    A user may start watching recorded programs
immediately after PrimeTime Anytime starts recording. The
user must enable PrimeTime Anytime at least 15 minutes
before the primetime recording begins and can cancel a
PrimeTime Anytime recording up to 15 minutes before the
recording begins; after that, a user can no longer cancel that
day’s PrimeTime Anytime recording.

    All PrimeTime Anytime recordings are stored locally on
a customer’s Hopper for the preselected number of days
(typically eight), at which time they are automatically
deleted. Before that time, a customer cannot actually delete
or save a PrimeTime Anytime recording. Rather, if the
customer selects “Save” or “Save Series” from the
PrimeTime Anytime menu, an icon is created in the
customer’s “My Recordings” folder, but the icon is simply
linked to the PrimeTime Anytime recording until the time of
automatic deletion, at which time a duplicate copy is created.
Similarly, if a customer “deletes” a show recorded through


Broad. Co. v. Dish Network, LLC, 905 F. Supp. 2d 1088, 1094 n.6 (C.D.
Cal. 2012).
8       FOX BROADCASTING CO. V. DISH NETWORK

PrimeTime Anytime, the icon for that show disappears from
the user’s graphical user interface, but the recording remains
on the customer’s hard drive until it is automatically deleted.

    Dish customers can also use the Hopper to access pay-
per-view movies via video on demand, but Dish does not
offer video on demand from any of the four broadcast
networks, including Fox. Video on demand recordings are
stored on the user’s hard drive in a file directory separate
from the PrimeTime Anytime and DVR recordings.

    In May 2012, Dish started offering a new feature,
AutoHop, that allows users to automatically skip
commercials. AutoHop is only available on shows recorded
using PrimeTime Anytime, typically on the morning after the
live broadcast. It is not available for all primetime programs.
When a user plays back a PrimeTime Anytime recording, if
AutoHop is available, a pop-up screen appears that allows the
user to select the option to “automatically skip over”
commercial breaks. By default, AutoHop is not selected.

     If a customer enables AutoHop, the viewer sees only the
first and last few seconds of each commercial break. A red
kangaroo icon appears in the corner of the screen to
demonstrate that AutoHop is skipping commercials. Unlike
the 30-second skip feature available on many DVRs, once a
user has enabled AutoHop, the user does not press anything
to skip through commercials. AutoHop does not delete
commercials from the recording. Customers can see the
commercials if they manually rewind or fast-forward into a
commercial break.

   To create the AutoHop functionality, Dish technicians in
Cheyenne, Wyoming manually view Fox’s primetime
        FOX BROADCASTING CO. V. DISH NETWORK                     9

programing each night and technologically mark the
beginning and end of each commercial. The program content
is not altered in any way. The electronically marked files are
then uplinked in Wyoming and eventually transmitted to
subscribers in an “announcement” file that Dish makes
available to subscribers after the show has aired.
Simultaneously with the uplink, three “beta Hoppers” record
the Fox primetime block for transmissions in Kentucky,
Pennsylvania, and Florida to test the marking announcement.
These copies remain at the uplink facility and are used to
make sure the commercials have been accurately marked and
that no portion of the program has been cut off.

    Fox sued Dish for copyright infringement and breach of
contract and sought a preliminary injunction. The district
court denied the motion. Fox Broad. Co. v. Dish Network,
LLC, 905 F. Supp. 2d 1088 (C.D. Cal. 2012). It held that Fox
did not demonstrate a likelihood of success on most of its
copyright infringement and contract claims. The exceptions
were Fox’s claims regarding the quality assurance copies. In
making these copies, the court held, Dish likely breached its
contract with Fox and directly infringed Fox’s reproduction
rights. Id. at 1102–06, 1108. Nonetheless, the court held that
Fox was not entitled to an injunction because it failed to
establish that it would likely suffer “irreparable harm” as a
result of those copies. Id. at 1109–11.

    To obtain a preliminary injunction, Fox must demonstrate
that (1) it is likely to succeed on the merits, (2) it is likely to
suffer irreparable harm in the absence of preliminary relief,
(3) the balance of equities tips in its favor, and (4) an
10        FOX BROADCASTING CO. V. DISH NETWORK

injunction is in the public interest. Winter v. Natural Res.
Def. Council, Inc., 555 U.S. 7, 20 (2008).2

    We review the denial of a preliminary injunction for an
abuse of discretion. Perfect 10, Inc. v. Amazon.com, Inc.,
508 F.3d 1146, 1157 (9th Cir. 2007). Factual findings are
reviewed for clear error, and legal conclusions are reviewed
de novo. Id. We do not reverse “simply because the
appellate court 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 Int’l, Inc., 686 F.2d 750, 752 (9th Cir.
1982); see also United States v. Hinkson, 585 F.3d 1247,
1261–62 (9th Cir. 2009) (en banc).

    Applying this deferential standard of review, we hold that
the district court did not abuse its discretion in holding that
Fox did not demonstrate a likelihood of success on its
copyright infringement and breach of contract claims
regarding Dish’s implementation of PrimeTime Anytime and
AutoHop. Furthermore, the district court did not err in
holding that Fox did not demonstrate a likelihood of
irreparable harm from Dish’s creation of the “quality
assurance” copies used to perfect the functioning of
AutoHop.




 2
   Alternatively, a plaintiff may obtain an injunction if it demonstrates (1)
serious questions going to the merits, (2) a balance of hardships that tips
sharply towards the plaintiff, (3) a likelihood of irreparable injury, and (4)
the injunction is in the public interest. Alliance for the Wild Rockies v.
Cottrell, 632 F.3d 1127, 1135 (9th Cir. 2011). Because Fox does not
argue that the balance of hardships tips sharply in its favor, we do not
consider its claims under this standard.
        FOX BROADCASTING CO. V. DISH NETWORK                11

                              II

                              A

    The district court did not abuse its discretion in holding
that Fox was unlikely to succeed on its claim of direct
copyright infringement regarding PrimeTime Anytime. “To
establish a claim of copyright infringement by reproduction,
the plaintiff must show ownership of the copyright and
copying by the defendant.” Kelly v. Arriba Soft Corp.,
336 F.3d 811, 817 (9th Cir. 2003); see also 17 U.S.C.
§§ 106(1), 501(a).

    In this case, the district court determined that Fox had
demonstrated ownership of the copyrights of some of the
shows. The court then focused on who made the copies of
Fox programs using PrimeTime Anytime: Dish or its
customers. The district court noted that the Second Circuit
had considered a similar question in Cartoon Network LP v.
CSC Holdings, Inc. (“Cablevision”), 536 F.3d 121 (2d Cir.
2008). The Second Circuit concluded that Cablevision’s
remote-storage DVR system did not directly infringe the
plaintiffs’ copyrights. Unlike a typical DVR system, in
which a customer’s remote sends signals to the set-top box in
her home, users of Cablevision’s remote-storage DVR system
sent signals to Cablevision’s central facility, where a copy of
the program the viewer selected was created and stored on
Cablevision’s central servers. Id. at 125, 130. The question
was “who made this copy” – the viewer or Cablevision? Id.
at 130. The Second Circuit held that much like a VCR user
makes the copy, so did the Cablevision customer. Id. at 131.

    In this case, the district court found that “Dish exercises
a degree of discretion over the copying process beyond that
12      FOX BROADCASTING CO. V. DISH NETWORK

which was present in Cablevision.” Fox Broad., 905 F. Supp.
2d at 1102. It pointed to the facts that Dish decides how long
copies are available for viewing, Dish maintains the authority
to modify the start and end times of the primetime block, and
a user cannot stop a copy from being made once the recording
has started. Id. at 1101–02. Yet the court held that “at this
stage of the proceedings,” it was “not satisfied” that
PrimeTime Anytime had “crossed over the line that leads to
direct liability.” Id. at 1102. The court held that the “user,
not Dish, must take the initial step of enabling” PrimeTime
Anytime. Id. “The user, then, and not Dish, is ‘the most
significant and important cause’ of the copy.” Id. (quoting
Prosser & Keeton on Torts § 42).

     The district court did not abuse its discretion in
concluding that Fox had not established a likelihood of
success on this claim. Infringement of the reproduction right
requires “copying by the defendant,” Kelly, 336 F.3d at 817
(emphasis added), which comprises a requirement that the
defendant cause the copying. See Cablevision, 536 F.3d at
130 (explaining that direct infringement claim turned on “who
made” the copies). Fox argues that because Dish participates
in the operation of PrimeTime Anytime on a daily basis, Dish
made the copies, either alone or concurrently with its users.
However, operating a system used to make copies at the
user’s command does not mean that the system operator,
rather than the user, caused copies to be made. Here, Dish’s
program creates the copy only in response to the user’s
command. Therefore, the district court did not err in
concluding that the user, not Dish, makes the copy.

    That Dish decides how long copies are available for
viewing, modifies the start and end times of the primetime
block, and prevents a user from stopping a recording might be
        FOX BROADCASTING CO. V. DISH NETWORK                  13

relevant to a secondary or perhaps even a direct infringement
claim. Cf. Cablevision, 536 F.3d at 132–33 (finding that
factors evidencing Cablevision’s control over copying
process seemed “more relevant to the question of contributory
liability” but reserving the question “whether one’s
contribution to the creation of an infringing copy may be so
great that it warrants holding that party directly liable for the
infringement, even though another party has actually made
the copy”). But these facts do not establish that Dish made
the copies. Therefore, the district court did not err in holding
that Fox did not establish a likelihood of success on its direct
infringement claim.

                               B

    The district court did not abuse its discretion in
concluding that Fox was unlikely to succeed on its claim of
secondary copyright infringement for the PrimeTime
Anytime and AutoHop programs. “Secondary liability for
copyright infringement does not exist in the absence of direct
infringement by a third party.” A&M Records, Inc. v.
Napster, Inc., 239 F.3d 1004, 1013 n.2 (9th Cir. 2001).
Therefore, to establish secondary liability, Fox must establish
that Dish’s users are infringing. There is no dispute that Fox
has established a prima facie case of direct infringement by
Dish customers because Fox owns the copyrights to its shows
and the users make copies. Thus, the burden shifts to Dish to
demonstrate that it is likely to succeed on its affirmative
defense that its customers’ copying was a “fair use.” Perfect
10, 508 F.3d at 1158. Dish has met this burden.

   As the district court recognized, the Supreme Court’s
analysis in Sony Corp. of Am. v. Universal City Studios, Inc.,
464 U.S. 417 (1984), provides strong guidance in assessing
14      FOX BROADCASTING CO. V. DISH NETWORK

whether Dish customers’ copying of Fox programs is a “fair
use.” In Sony, the Supreme Court held that Sony was not
liable for secondary infringement for manufacturing Betamax
VCRs because customers used the machines primarily for
time-shifting, “the practice of recording a program to view it
once at a later time, and thereafter erasing it.” Id. at 423. The
Court held that “even the unauthorized home time-shifting of
respondents’ programs is legitimate fair use.” Id. at 442.

     Fox and its amici argue that Dish customers use
PrimeTime Anytime and AutoHop for purposes other than
time-shifting – namely, commercial-skipping and library-
building. These uses were briefly discussed in Sony, in which
the Court recognized that some Betamax customers used the
device to avoid viewing advertisements and accumulate
libraries of tapes. In Sony, about 25 percent of Betamax users
fast-forwarded through commercials. Id. at 452 n.36.
Additionally, a “substantial number of interviewees had
accumulated libraries of tapes.” Id. at 423. One user owned
about 100 tapes and bought his Betamax intending to “build
a library of cassettes,” but this “proved too expensive.” Id. at
423 n.3. Because the Betamax was primarily used for time-
shifting, the Court in Sony never expressly decided whether
commercial-skipping and library-building were fair uses. Cf.
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
545 U.S. 913, 931 (2005) (explaining that “[a]lthough Sony’s
advertisements urged consumers to buy the VCR to ‘record
favorite shows’ or ‘build a library’ of recorded programs,
neither of these uses was necessarily infringing” (citations
omitted)).

    Yet, as the district court held, commercial-skipping does
not implicate Fox’s copyright interest because Fox owns the
copyrights to the television programs, not to the ads aired in
        FOX BROADCASTING CO. V. DISH NETWORK                 15

the commercial breaks. If recording an entire copyrighted
program is a fair use, the fact that viewers do not watch the
ads not copyrighted by Fox cannot transform the recording
into a copyright violation. Indeed, a recording made with
PrimeTime Anytime still includes commercials; AutoHop
simply skips those recorded commercials unless a viewer
manually rewinds or fast-forwards into a commercial break.
Thus, any analysis of the market harm should exclude
consideration of AutoHop because ad-skipping does not
implicate Fox’s copyright interests.

    Analyzing PrimeTime Anytime under the fair use factors,
Dish has demonstrated a likelihood of success on its
customers’ fair use defense. As for the first factor, the
“purpose and character of the use, including whether such use
is of a commercial nature or is for nonprofit educational
purposes,” 17 U.S.C. § 107(1), Dish customers’ home
viewing is noncommercial under Sony, which held that “time-
shifting for private home use” was a “noncommercial,
nonprofit activity,” 464 U.S. at 449. Here, the district court
found that PrimeTime Anytime is used for time-shifting, and
that the Hopper is available only to private consumers. Fox
Broad., 905 F. Supp. 2d at 1098.

    Sony also governs the analysis of the second and third
factors, the “nature of the copyrighted work” and “the amount
and substantiality of the portion used in relation to the
copyrighted work as a whole,” 17 U.S.C. §§ 107(2), (3).
Sony held that “when one considers the nature of a televised
copyrighted audiovisual work, and that time-shifting merely
enables a viewer to see such a work which he had been
invited to witness in its entirety free of charge, the fact that
the entire work is reproduced, does not have its ordinary
effect of militating against a finding of fair use.” 464 U.S. at
16        FOX BROADCASTING CO. V. DISH NETWORK

449–50 (citations omitted). The same analysis applies here,
and thus the fact that Dish users copy Fox’s entire
copyrighted broadcasts does not have its ordinary effect of
militating against a finding of fair use.

    Finally, we consider the “effect of the use upon the
potential market for or value of the copyrighted work.”
17 U.S.C. § 107(4). This is the “most important element of
fair use.” Harper & Row Publishers, Inc. v. Nation Enters.,
471 U.S. 539, 566 (1985). Because Dish customers’ taping
is “for a noncommercial purpose,” the likelihood of future
market harm is not presumed but “must be demonstrated.”
Sony, 464 U.S. at 451. Fox “need only show that if the
challenged use ‘should become widespread, it would
adversely affect the potential market for the copyrighted
work.’” Harper & Row, 471 U.S. at 568 (quoting Sony,
464 U.S. at 451 (emphasis added by Harper & Row Court)).

    Because Fox licenses its programs to distributors such as
Hulu and Apple, the market harm analysis is somewhat
different than in Sony, where no such secondary market
existed for the copyright-holders’ programs.3 However, the
record before the district court establishes that the market
harm that Fox and its amici allege results from the automatic
commercial-skipping, not the recording of programs through
PrimeTime Anytime. Indeed, Fox often charges no additional
license fees for providers to offer Fox’s licensed video on
demand, so long as providers disable fast-forwarding. This
indicates that the ease of skipping commercials, rather than
the on-demand availability of Fox programs, causes any


  3
    Instead, the Sony plaintiffs argued in part that the Betamax would
reduce the audience for live television and movies, a fear the district court
described as lacking “factual basis.” 464 U.S. at 453.
        FOX BROADCASTING CO. V. DISH NETWORK                  17

market harm. And as we have discussed, the commercial-
skipping does not implicate any copyright interest.

     In arguing otherwise, Fox points to the district court’s
market harm analysis in a different section of its opinion.
However, that analysis is not relevant to determining whether
PrimeTime Anytime causes market harm because that portion
of the opinion addresses a different question: whether the
“quality assurance” copies used to test AutoHop would harm
the market for Fox to license copies of its shows. Because
the quality assurance copies were used to perfect AutoHop,
the district court assessed whether AutoHop caused market
harm and found that Dish “harms Fox’s opportunity to
negotiate a value for [authorized] copies and also inhibits
Fox’s ability to enter into similar licensing agreements with
others in the future by making the copies less valuable.” Fox
Broad., 905 F. Supp. 2d at 1105. However, the court’s
analysis of the market harm caused by the quality assurance
copies does not affect the assessment of whether Dish
customers’ copying of programs potentially causes market
harm because the district court correctly found that AutoHop,
standing alone, does not infringe.

    Therefore, the district court did not abuse its discretion in
concluding that Fox was unlikely to succeed on its secondary
infringement claim.

                               C

    The question of whether Dish has breached its contract
with Fox is much closer. However, applying our very
deferential standard of review, we conclude that the district
court did not abuse its discretion in denying a preliminary
injunction based on the alleged contract breaches.
18      FOX BROADCASTING CO. V. DISH NETWORK

   Fox first argues that Dish breached the portion of the
2002 contract that states:

       EchoStar [now Dish] shall not, for pay or
       otherwise, record, copy, duplicate and/or
       authorize the recording, copying, duplication
       (other than by consumers for private home
       use) or retransmission of any portion of any
       Station’s Analog Signal without prior written
       permission of the Station, except as is
       specifically permitted by this Agreement.

    Fox’s argument as to why Dish allegedly breached this
clause is the same as its argument that Dish directly infringed
its copyrights. It does not argue that the contract’s use of
“record, copy, duplicate” has a different meaning than the
Copyright Act’s definition of “reproduce.” Given that Dish
did not directly infringe Fox’s copyrights, the district court
properly concluded that Fox is unlikely to succeed on its
claim that Dish breached this clause.

   Second, Fox argues that Dish breached the following
provision in the 2002 contract:

       EchoStar acknowledges and agrees that it
       shall have no right to distribute all or any
       portion of the programming contained in any
       Analog Signal on an interactive, time-delayed,
       video-on-demand or similar basis; provided
       that Fox acknowledges that the foregoing
       shall not restrict EchoStar’s practice of
       connecting its Subscribers’ video replay
       equipment . . . .
         FOX BROADCASTING CO. V. DISH NETWORK                         19

    The district court construed the contract term “distribute”
to be analogous to the same word in the Copyright Act,
17 U.S.C. § 106(3). It held that distribution under the
Copyright Act required a copyrighted work to “chang[e]
hands,” Fox Broad., 905 F. Supp. 2d at 1106, and Dish
engaged in no distribution because the PrimeTime Anytime
copies “are made by users, remain in private homes, and do
not change hands,” id. at 1107. Therefore, it held, Fox was
unlikely to prevail on its claim that Dish breached this
contract provision.4

    On appeal, Fox challenges this construction of
“distribute,” essentially arguing that the prohibition against
“distribut[ing]” Fox programming constitutes an agreement
that Dish would not make Fox programming available to its
subscribers. Fox’s interpretation is plausible, but so is the
district court’s. While the district court would not be justified
in holding that the meaning of the term “distribute” was
unambiguous or that, as a matter of law, any ambiguous terms
in the contract should be interpreted by looking to the
Copyright Act, we do not read the district court’s opinion as
resting its decision on such grounds. In the proceedings
below, the parties did not argue about the meaning of
“distribute.” Absent any argument or extrinsic evidence on
this term, the district court did not err by looking to the
Copyright Act to interpret “distribute.” We express no view
on whether, after a fully developed record and arguments, the



   4
     Fox also argued below that Dish violated its right “to distribute
copies . . . of the copyrighted work to the public” under 17 U.S.C.
§ 106(3). The district court held that Fox was unlikely to succeed on this
claim. Fox Broad., 905 F. Supp. 2d at 1106. Fox has not challenged this
ruling on appeal.
20      FOX BROADCASTING CO. V. DISH NETWORK

district court’s construction of “distribute” will prove to be
the correct one.

    We are, however, dubious of Dish’s position that
PrimeTime Anytime is not “similar” to “interactive,
time-delayed, [or] video-on-demand” programming, the
distribution of which is expressly prohibited by the 2002
contract. Dish has convinced us that PrimeTime Anytime is
not identical to video-on-demand but is at a loss to explain
why it is not similar, and at oral argument, when pressed,
Dish could not provide even a single example of what would
be considered similar under the contract if not this. The
contract is written broadly, and Fox has a good argument that
PrimeTime Anytime is “similar,” even though not exactly the
same, as time-delayed or video-on-demand programming.

     Third, Fox argues that Dish breached a provision of a
2010 letter agreement that modified the 2002 contract. The
letter agreement permitted Dish to offer Fox’s licensed video
on demand (VOD) service so long as Dish disabled fast-
forwarding during commercials:

           DISH will disable fast forward
       functionality during all advertisements; FBC
       and DISH may include a pre-roll
       announcement prior to each show regarding
       the fast-forward disabling. DISH and FBC
       will discuss in good faith the timing of
       DISH’s implementation of such fast-forward
       disabling and messaging to consumers;
       provided that DISH acknowledges and agrees
       that such fast-forward disabling is a
       necessary condition to distribution of the Fox
        FOX BROADCASTING CO. V. DISH NETWORK               21

       broadcast content via VOD.          (Emphasis
       added.)

    The district court held that if PrimeTime Anytime is video
on demand, then Dish clearly breached the contract. The
court found this dispute “especially challenging because
[PrimeTime Anytime] is, in some ways, a hybrid of DVR and
VOD likely not contemplated by either party when the 2010
Agreement was drafted.” Fox Broad., 905 F. Supp. 2d at
1109. But the district court concluded that PrimeTime
Anytime was “more akin” to DVR than to video on demand.
Id.

    Because the district court based its interpretation on
extrinsic evidence, we review its holding for clear error.
Miller v. Safeco Title Ins. Co., 758 F.2d 364, 367 (9th Cir.
1985). The district court’s finding that PrimeTime Anytime
was more akin to a DVR than to video on demand was not
clearly erroneous. Because, unlike the relevant clause of the
2002 contract, this provision of the 2010 letter agreement
does not preclude Dish from enabling fast-forwarding on
services that are “similar” to video on demand, the district
court did not abuse its discretion in concluding that Fox was
unlikely to succeed on its breach of contract claim.

    The fact that a Dish attorney referred to PrimeTime
Anytime as a “video-on-demand service” in a trademark
application supports Fox’s claim that the parties would have
understood PrimeTime Anytime to be akin to video on
demand. Providing further support are Dish promotional
materials that repeatedly referred to PrimeTime Anytime
providing “On Demand access” or an “on demand library.”
However, Dish introduced evidence that programming
distributors such as itself and DirecTV have used the phrase
22      FOX BROADCASTING CO. V. DISH NETWORK

“on demand” to refer to DVR recordings, which are clearly
not video on demand. And the district court relied in part on
the fact that a viewer must enable PrimeTime Anytime before
a show airs to view it later, which is an important feature
distinguishing DVR from video on demand. Fox. Broad.,
905 F. Supp. 2d at 1109. Therefore, in light of the record
before it, the district court did not clearly err in concluding
that PrimeTime Anytime was more like DVR than video on
demand.

     Finally, Fox argues that Dish breached the portion of the
2010 letter agreement that provides that neither party may
“take any action whatsoever intended to frustrate or
circumvent, or attempt to frustrate or circumvent, the
protections granted to the other Party pursuant to any
provision in this Letter Agreement.” Contrary to Fox’s
argument, the record does not indicate that Dish launched
PrimeTime Anytime because it was unwilling to comply with
the requirements to offer Fox’s licensed video on demand
service, rather than because Dish lacked the technological
capability to do so. On this record, Fox has not demonstrated
it is likely to succeed on this claim.

   Therefore, the district court did not abuse its discretion in
concluding that Fox did not demonstrate a likelihood of
success on its breach of contract claims.

                              III

    The district court held that Dish likely directly infringed
Fox’s copyrights and breached the no-copying clause of the
2002 contract by making “quality assurance” copies to test
the functioning of the AutoHop program. However, it
ultimately concluded that Fox did not demonstrate a
        FOX BROADCASTING CO. V. DISH NETWORK               23

likelihood of irreparable harm absent an injunction.
Assuming, without deciding, that the district court correctly
decided that Fox was likely to succeed on the merits of this
claim, we agree with the district court that Fox did not
demonstrate a likelihood of irreparable harm resulting from
these copies.

    These copies were made as part of Dish’s process of
implementing the AutoHop program. As we have noted,
Dish creates marking announcements to signal to AutoHop
when to skip commercials. It then tests the accuracy of the
marking announcements using copies recorded through
PrimeTime Anytime. These copies remain at a Dish facility
and are used for “quality assurance” purposes only. A
technician working for Dish then plays back each recording,
enables AutoHop, and fast-forwards through each show
segment just until the point of each commercial break to
ensure AutoHop is working properly. If the marking
announcements are correct, AutoHop is made available to
Dish customers at 3 a.m. Eastern time on the morning
following the live broadcast.

    In refusing to enjoin Dish from creating these copies, the
district court correctly concluded that the harms Fox
identified – including “loss of control over its copyrighted
works and loss of advertising revenue” – did not “flow from”
the quality assurance copies themselves, but from the entire
AutoHop program. Fox Broad., 905 F. Supp. 2d at 1110–11.
While a plaintiff need not “show that the action sought to be
enjoined is the exclusive cause of the injury,” M.R. v.
Dreyfus, 697 F.3d 706, 728 (9th Cir. 2011), the district court
did not err in concluding that the quality assurance copies
were not a cause of Fox’s alleged harm. That Dish used the
copies in the process of implementing AutoHop does not
24       FOX BROADCASTING CO. V. DISH NETWORK

suggest that those copies were integral to AutoHop’s
functioning. Rather, the record demonstrates that the
AutoHop announcement files are created using an entirely
separate process and the quality assurance copies are used
only to test whether this process is working.5

    Furthermore, the district court did not err in holding that
monetary damages could compensate Fox for its losses from
the copies. See, e.g., L.A. Mem’l Coliseum Comm’n v. Nat’l
Football League, 634 F.2d 1197, 1202 (9th Cir. 1980)
(“[M]onetary injury is not normally considered irreparable.”).
To be sure, Fox does not license copies of its programs for
distributors to create ad-skipping software. However, the
lack of a licensing agreement that directly corresponds to
Dish’s copying of Fox programs does not mean it would be
difficult to calculate damages. Fox’s existing licensing
agreements could, at the very least, constitute a starting point
or an aid in calculating damages.

                                IV

    Given our “limited and deferential” review of preliminary
injunction appeals, Sw. Voter Registration Educ. Project v.
Shelley, 344 F.3d 914, 918 (9th Cir.2003) (en banc) (per
curiam), and without determining the ultimate merits of the
case, Am. Trucking Ass'ns, Inc. v. City of L.A., 559 F.3d




  5
    Indeed, Dish has temporarily stopped making the quality assurance
copies pending the outcome of this appeal.
           FOX BROADCASTING CO. V. DISH NETWORK             25

1046, 1052 (9th Cir. 2009), we conclude that the district court
did not abuse its discretion in declining to grant Fox a
preliminary injunction.6

      AFFIRMED.




 6
     The parties’ motions for judicial notice are DENIED.
