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Dish Network L.L.C., et al v. Vicxon Corporation

February 11, 2013

DISH NETWORK L.L.C., ET AL.,
PLAINTIFFS,
v.
VICXON CORPORATION, ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: M. James Lorenz United States District Court Judge

) (1) DENYING YEO'S MOTION TO ) DISMISS [DOC. 33], AND (2) DENYING DEFENDANTS' ) MOTION TO DISMISS [DOC. 32]

ORDER:

On January 3, 2012, Plaintiffs DISH Network L.L.C., Echostar Technologies L.L.C. ("Echostar"), and Nagrastar LLC commenced this action against Defendants Vicxon Corporation and Soo Jong Yeo. Plaintiffs allege violations of the Digital Millennium Copyright Act, Communications Act, and Electronic Communications Privacy Act based on the manufacturing and trafficking of hardware and software allegedly used to circumvent Plaintiffs' security system and intercept copyrighted satellite television programming. Yeo now moves to dismiss for lack of personal jurisdiction, and Defendants collectively move to dismiss two of Plaintiffs' claims. Plaintiffs oppose both motions.

The Court found these motions suitable for determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1). (Doc. 40.) For the following reasons, the Court DENIES Yeo's motion to dismiss and DENIES Defendants' motion to dismiss.

BACKGROUND

Plaintiffs operate various elements of the DISH Network satellite television distribution system. DISH Network is a multi-channel video provider that delivers audio, video, and data services to subscribing customers throughout the United States. (Compl. ¶ 10.) A DISH Network satellite television system consists of a compatible dish antenna, receiver, smart card, television, and cabling components. (Id. ¶ 15.) Echostar provides receivers, dish antenna, and other digital equipment for the DISH Network system. (Id.) And Nagrastar provides smart cards and other security technologies that allow paying customers to access decrypted programming while preventing unauthorized reception and viewing of DISH Network programming. (Id. ¶¶ 15--17.)

Various devices have appeared in the black market over the years for the purpose of illegally decrypting or "pirating" DISH Network programming. (Compl. ¶ 21.) One method developed to circumvent the DISH Network security system and intercept satellite broadcasts is through the use of "free-to-air" (or "FTA") receivers. (Id. ¶ 22.) Circumvention was achieved

loading software that contains the proprietary data and keys to the DISH Network security system onto circuit chips in the FTA receivers, which mimic a legitimate NagraStar smart card.

In response to countermeasures initiated by Plaintiffs, a new form of satellite piracy emerged, going by names such as "control word sharing," "Internet key sharing," or "IKS." (Compl. ¶ 24.) By using various unauthorized devices and software, a computer server-called an "IKS server"-with subscribed NagraStar smart cards allow the distribution of control words through the Internet. (Id. ¶ 26.) Those control words are then used to decrypt DISH Network's signal to view programming without paying a subscription fee. (Id.)

Vicxon is a Korean Corporation with its principal place of business in Korea. (Compl. ¶ 4.) Yeo, a Korean resident, is the president and chief executive officer ("CEO") of Vicxon. (Id. ¶ 5.) Plaintiffs allege that Defendants "manufacture and traffic in several DISH Network piracy devices," the primary purchaser being a California company based in Escondido called Sonicview USA, Inc. (Id. ¶ 28.) "Defendants contracted with Sonicview USA, Inc. to supply the products, and then delivered them to Sonicview USA, Inc., and related entities in the United States." Plaintiffs further allege that "[t]he relationship between Vicxon and Sonicview USA, Inc. was managed by Defendant Yeo." (Id.)

Plaintiffs add that "Sonicview" brand receivers are among the products manufactured and distributed by Defendants. (Compl. ¶ 29.) These receivers are capable of circumventing the DISH Network security system and intercepting satellite television programming using IKS.

) Defendants also allegedly manufacture and traffic an adapter for Sonicview receivers, known as the "iHub," "New Link," "SV Lan," or "WizHub," which are collectively referred to as the "Sonicview dongle." (Id. ¶ 31.) These dongles enable Sonicview receivers to access an IKS server and obtain control words used to decrypt DISH Network programming without authorization. (Id.)

Soniceview high-definition receivers are also configured to accommodate an add-on module known generally as an "8PSK module," and more specifically known as the "A-1 module." (Compl. ¶ 32.) The A-1 module enables Sonicview receivers to pirate DISH Network's high-definition programming, which is broadcast using a "unique combination of 8PSK modulation and Turbo forward error correction." (Id.) "Defendants manufacture and traffic in piracy software that is specifically tailored for Sonicview receivers," which is freely available on numerous websites. (Id. ¶ 33.)

Plaintiffs allege that Defendants directly, or working at their direction or under their control, test the piracy capabilities of Sonicview receivers, dongles, and piracy software prior to distribution. (Compl. ¶ 34.) They also "performed live demonstrations of their products for customers such as Sonicview USA, Inc. in order to entice customers to purchase them," where the "piracy capabilities of the products were among the features demonstrated." (Id. ¶ 35.)

On January 3, 2012, Plaintiffs commenced this action in federal court alleging violations the Digital Millennium Copyright Act, Communications Act, and Electronic Communications Privacy Act. Yeo now moves to dismiss for lack of jurisdiction under Federal Rule of Civil Procedure 12(b)(2), and Defendants collectively move to dismiss two claims under Federal Rule

Civil Procedure 12(b)(6). Plaintiffs oppose both motions.

JURISDICTION

When the parties dispute whether personal jurisdiction over a foreign defendant is proper, "the plaintiff bears the burden of establishing that jurisdiction exists." Rios Props. Inc. v. Rio Int'l Interlink, 284 F.3d 1007, 1019 (9th Cir. 2002). In ruling on the motion, the "court may consider evidence presented in affidavits to assist in its determination and may order discovery on the jurisdictional issues." Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001). Where the motion is based on written materials rather than an evidentiary hearing, the plaintiff need make "a prima facie showing of jurisdictional facts to withstand the motion to dismiss." Bryton Purcell LLP v. Recordon & Recordon, 575 F.3d 981, 985 (9th Cir. 2009). "In determining whether the plaintiff has met this burden, the Court must take the allegations in the plaintiff's complaint as true and resolve the disputed jurisdictional facts in the plaintiff's favor." Nissan Motor Co., Ltd. v. Nissan Computer Corp., 89 F. Supp. 2d 1154, ...


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