DirecTV faces setback in dubious antipiracy campaign. Good.

DirecTV lost an important case on Tuesday. Programmers, security researchers, and anyone who believes in a limited government won.

In a 2-1 split decision, the 9th Circuit Court of Appeals tossed out a default judgment against a pair of alleged DirecTV television pirates, saying an "unauthorized decryption device" law the company invoked against them does not apply. That law promises statutory damages of $100,000 per violation.

(Credit: DirectTV.com)

The two defendants, Hoa Huynh and Cody Oliver, may eventually be held liable for copyright infringement or lesser violations, of course. But now DirecTV will have to fight harder for it, and the legal risk to legitimate researchers has been reduced.

The reason this could be an important decision is because it strikes at the heart of DirecTV's dubious strategy of treating purchasers of smart-card programmers as if they were necessarily criminals themselves.

In a dragnet of cases filed over many years, DirecTV has been suing people who dared to buy smart-card programmers. Those can, it's true, be used to repair pirate access cards disabled by DirecTV countermeasures (this type of card is sometimes called an "unlooper").

They also have perfectly benign uses. ISO 7818 smart cards are simply cards with both memory and a set of simple circuits. Many European countries use these or similar systems for payment cards. New York, San Francisco and Washington, D.C., use "contactless" smart cards to store subway fares. Electronic voting, medical records and cryptographic key storage are other common uses.

Obviously, to use a smart card, you need to program it. Sites like HackersCatalog.com sell ISO 7818 smart-card readers and programmers for between $50 and $70.

So why is DirecTV hassling people who buy smart cards? Well, they managed to obtain the customer lists from vendors--including one named "White Viper"--and then apparently assumed that every customer must necessarily be a criminal. The company sent more than 170,000 demand letters (demanding a check for at least $3,500) and filed lawsuits against more than 25,000 people nationwide.

The tactics DirecTV used were disturbing. An affidavit prepared by former DirecTV investigator John Fisher says: "On one occasion, I learned from some other investigators that (DirecTV) was trying to obtain a settlement from a letter recipient who had bought a plastic pouch that could be used to carry a smart card programmer."

Another Fisher excerpt: "I had finally fully realized that the end user campaign was an elaborate extortion racket. The letters were full of lies or misrepresentations and we investigators were required to coerce people into paying money for stealing services when we had no proof whether they had done so or not."

This principle, that the mere act of buying a smart-card programmer should not be viewed as evidence of illicit activity, is an important one to uphold. Using DirecTV's logic, anyone who downloaded a debugger could be viewed as likely to have bypassed copy protection technology. Disassemblers and tools like "objdump" should be viewed with suspicion as well.

Now, I'm not arguing that we should be applauding blatant DirecTV piracy. Neither is the Electronic Frontier Foundation, which entered this case on the side of the defendants. If DirecTV can prove that Huynh and Oliver were watching TV shows for free, they should pay reasonable damages. But they shouldn't face six-figure fines for merely buying a smart-card programmer.

P.S.: The case revolved around Section 605(e)(4) of the Federal Communications Act, which has been in place since at least 1988. It says:

Any person who manufactures, assembles, modifies, imports, exports, sells, or distributes any electronic, mechanical, or other device or equipment, knowing or having reason to know that the device or equipment is primarily of assistance in the unauthorized decryption of satellite cable programming, or direct-to-home satellite services, or is intended for any other activity prohibited by subsection (a) of this section, shall be fined not more than $500,000 for each violation, or imprisoned for not more than 5 years for each violation, or both. For purposes of all penalties and remedies established for violations of this paragraph, the prohibited activity established herein as it applies to each such device shall be deemed a separate violation.

DirecTV had argued that 605(e)(4) applied to someone who merely inserted a pirated access card into a receiver, therefore "assembling" it. That's what the 9th Circuit rejected.

P.P.S.: I note this particular decision didn't make its way onto DirecTV's "Anti-Fraud and Anti-Piracy Enforcement Actions" Web site.

[inachu]

hyp·o·crit·i·cal, adjective

I find it very hypocritical of DirecTV who was spun off from Hughes Network Systems whos main creators/inventors themselves were in their homes garage hardware hackers.

So if this is the route that DirecTV is going to take then should the founders of HNS be imprisoned and or fined as well?

[perfectblue97]

A Million and one uses

It's a good thing that this case was thrown out. It could potentially have made criminals out of anybody who used a system like this for legitimate purposes. It could potentially have criminalized any school board that used such a system for prepay lunch card, or any business that used them as employee security cards.

Man, it's scary just to think how much damage a directTV win could have done. It would be like criminalizing the sale of nails on the grounds that they could be used to make nail bombs.

[Apolune]

Time to change the ad campaign

Instead of "somebody up there loves me," how about "somebody up there's watching?"

If I subscribed to DirecTV, that relationship would certainy be ended at once. The company's overreach is disgusting and terrifying.

[paulsecic]

I'll never subscribe DDTV

they're overpriced....

[mbmpdx]

Will avoid DTV like the plague ...

Although we can maybe assume it has been some years since they were last participating in such "practices", when is DTV to be put on trial for doing this to consumers?

[syberlink]

programmers were not the only ones sued

In April of 1997, Directv took away programming which people had paid for and were sued by 31 state attorney general's. Some of the customers in 1997 bought another access card to protect there programming from that theft of service. Then in 2003, Directv sued these customers for attempting to stop that theft by saying that these customers never paid for service when in fact they had paid. Because these 1997 customers did not have the thousands to defend themselves, they had to settle or go broke fighting. This group were exercising the right to protect there programming from theft and had every right to do so. Now that right has been taken from them and should they take programming away from customers again, these people can do nothing to protect themselves with out being sued. People should never have to give away there rights to protect from theft. People should always have the right to filoe a complaint and ask that someone be charged where crimes have occured.

[rohoryder]

They sued me a Mondex Product Manager

I was one of the people they sued several years ago. My use of Smart Card programmers was as a Mondex Product Manager (European Smart Card). We were developing products for Smart Card intergration in cooperation with a financial institution. They forced me into bankrupcy and never collected anything. They continued to try to collect money and filed again against me during the bankrupcy. The judge threw the case out because DTV was in violtion of Federal law.
I didn't have the money to fight them. It would have cost me a $100,000.00 in legal fees to fight. I tried to file against them under the RICO act but at that time I couldn't get any support. DTV, like the RIAA deals in Extortion which is a violation of the RICO act. But as everyone said who could afford to fight them.

[fleeced]

sued

maby this action by the court will encourage all those sued unjustly to band togeather and contribute to a legal fund and teach Direct TV that our courts and legal system is not for sale. I know the actions of a few lawyers and judges has made it appear to be , but perhaps in the final round the honorable among them will renew our faith in the legal system.

[wjcunning]

DTV = safe from MY wallet

Anybody that takes the time to read the internet complaints of DTV legal abuse of customers will quickly realize that DTV is not worthy of their business.

Vote with your wallet, and tell DTV and your local legislator why.

As a counter, there are other ways to fight back.

I would recommend about 10,000 simultaneous small claims actions per month against DTV to give them a taste of what they have been dishing out to their customers. NY is especially attuned to civil judgements against DTV.

"If you can't compete, warp the field."

[mectron]

DTV join the MPAA and RIAA in a fight

agains they own consumers. The clearly criminal act (using someone else sale list) to illegally sue innocent individuals should be punish extremly severly. Not only they loose in court but DTV is a now an official criminal corporation and should be forced to close (the same goes to MPAA, RIAA, Sony, macrovision and other parasitics companies) as DTV does not have any legitimate reason to be in business.

But since the main function of USA courts of laws is to protect the interest of criminal organisations, this will only be a small stepback for DTV and they will find a ways to continue STEALING from they own consumers!

When a product/service is pirated, it is a sign that it is OVERPRICED. Takes DVDs for exemple. Not only DVD are sold for 3 to 4 times the price they should, we are getting ripped as other "region", like.. lets say region 5 get DVD for a lot cheaper and a lot sooner... why? because the criminal hand of the MPAA cannot reach that market. so they fight piracy they way it should.. with lower price....

The day the Mickey Mouse(c) USA goverment will start punishing corporation who comminted crime, is the day consumers will start paying fair price for enterteiment.

[Leria]

I have to agree

I have to agree with most of those points there, especially about the DVD's being overpriced today.
One DVD with shipping included costs the movie companies a grand total of 50 cents to make..... you heard right, 50 CENTS!
It's even LESS for a CD to be made and shipped, once you take into account how many CD's can be put on ONE truck compared to DVD's.

Though, you might have gone a little too far with the 'the main function of USA courts of law is to protect the interest of criminal organizations'.
These companies are by and large NOT criminal organizations, however they do use criminal like tactics from time to time.
I do think that when a company files a lawsuit against a person and the person is found innocent, that company should be punished severely for the despair and anguish the innocent party has gone through.

[syberlink]

they need to return the property

Now that there is a ruling, Directv needs to return the property they took from thousands of people.They need to return the iso7816 and iso 7818 programming they took under false pretense. They have no right to keep the property belonging to others.