Wednesday, September 12, 2007
Court of Appeal Limits DirecTV’s Remedies Against ‘Pirates’
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals ruled yesterday that satellite programming providers may not pursue charges of assembling and modifying piracy devices under the Federal Communications Act against individuals who adapt receivers to illegally intercept signals for their own use.
In an opinion by Judge Betty B. Fletcher involving two suits brought by DirecTV, Inc. against alleged signal pirates, the court affirmed decisions by Judges Charles R. Breyer and Saundra B. Armstrong of the U.S. District Court for the Northern District of California that Sec. 605(e)(4) of the communications act, which prohibits assembly and modification of piracy devices, does not apply to end-users who illegally modify and install signal access cards into their receivers.
The court recited that DirecTV furnishes encrypted programming via satellite to customers who have purchased both the programming and necessary equipment. Customers must acquire a satellite dish, an integrated receiver decoder, and an access card.
The dish receives the encrypted signals and transmits them to the receiver, which decrypts them and sends them to the customerís television. Software in the card directs the receiver to decrypt only the signals conforming to the customerís subscription package.
Individuals, commonly known as ìpirates,î have managed to decrypt and gain access to all of DirecTVís programming without paying by reprogramming or replacing legitimate cards with illicit technology. DirecTV fights pirates by transmitting electronic countermeasures that send the access software of illegally modified cards into a loop, disabling them.
Once the measures have ìloopedî an illegal card, its receiver cannot access DirecTV programming unless the card is reprogrammed.
DirecTV filed suits against Hoa Huynh and Cody Oliver, alleging that they had each purchased an unlooper and used it to illegally modify cards. An ìunlooper,î is a printed circuit board that restores functionality to a disabled card by resolving the software loop.
Most unloopers are currently configured exclusively to pirate DirecTVís signal. Based on this allegation, DirecTV claimed that Huynh and Oliver illegally modified and assembled piracy devices in violation of Sec. 605(e)(4) of the communications act, illegally intercepted DirecTVís signals in violation of 18 U.S.C. ß 2520(a), and illegally intercepted and published or divulged signal contents under sec. 605(a) of the communications act.
Huynh and Oliver both failed to respond to the pleadings, and DirecTV moved for default judgments. The district judges granted the motions as to illegal interception under 18 U.S.C. ß 2520(a), but declined to grant judgment on the other counts.
Armstrong declined to grant judgment against Oliver on the basis that the lack of any allegation that he had sold or distributed pirating devices meant that DirecTV had pled insufficient facts to establish a violation.
Similarly, Breyer ruled in favor of Huynh, holding that a decision to the contrary would destroy the distinction drawn by Congress between assembling or modifying a pirate device for sale under Sec. 605(e)(4), and intercepting and publishing or divulging signal contents under Sec. 605(a).
DirecTV appealed the district judgesí decisions not to impose liability for modification or assembly of a pirate device, but the Ninth Circuit affirmed the decisions of the district judges. It agreed with the district judges that a ruling that a ruling that mere insertion of cards into receivers constituted assembly of a pirate device and, citing the legitimate necessity of cards in receivers, rejected the argument that modification of the cards constituted modification of a piracy device.
The court further affirmed the decisions of the district judges on the basis that DirecTV had pled legal conclusions in its complaints, rather than factual allegations, and that the communications act, when read as a whole, indicated that congress intended to create a two-tier system by which sec. 605(e)(4) was intended to target marketers of piracy devices who introduced such products into the stream of commerce ñ not mere end-users.
Judge Michael Daly Hawkins joined Fletcher in her opinion. Visiting Senior Judge Eugene E. Siler Jr. of the Sixth Circuit dissented, arguing that if Congress had intended to limit the reach of Sec. 605(e)(4) to commercial use, it would have said so.
The case is DirecTV, Inc. v. Huynh, 05-16361.
Copyright 2007, Metropolitan News Company