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

United States District Court, Ninth Circuit

July 25, 2013

DISH NETWORK, L.L.C., et al., Plaintiffs,
VICXON CORPORATION, et al., Defendants.


M. JAMES LORENZ, District Judge.

On January 3, 2012, Plaintiffs DISH Network, L.L.C., EchoStar Technologies L.L.C. ("EchoStar"), and NagraStar L.L.C. filed their complaint against Defendants Vicxon Corporation, a Korean corporation, and Soo Jong Yeo, a Korean citizen, alleging violations of the Digital Millennium Copyright Act ("DMCA"), the Federal Communications Act ("FCA"), and the Electronic Communications Privacy Act ("ECPA"). Now pending before the Court is Plaintiffs' unopposed motion for summary judgment.

The Court found the motion suitable for determination on the papers submitted and without oral argument. See Civ. L.R. 7.1(d.1). (Doc. 58.) For the following reasons, the Court GRANTS Plaintiffs' motion for summary judgment. (Doc. 57.)


A. Plaintiffs' Subscription-Based Satellite TV Programming

DISH Network, EchoStar, and NagraStar operate various elements of the DISH Network satellite television distribution system. DISH Network is a multi-channel provider that delivers video, audio, and data services via a direct broadcast satellite system to authorized subscribers throughout the United States. (Duval Decl. ¶ 4 [Doc. 57-2].) EchoStar designs, develops, and distributes receiver systems, satellite dishes, and other digital equipment for use in the DISH Network system. ( Id. ¶ 9.) NagraStar provides DISH Network with "smart cards" that are used in EchoStar's satellite receivers to facilitate the decryption of DISH Network's programming signals. ( Id. ¶ 13.)

DISH Network contracts for and purchases the distribution rights for the copyrighted programming it broadcasts from outlets such as network affiliates, cable networks, motion-picture distributors, sports leagues, event promoters, and other holders of programming rights. (Duval Decl. ¶ 6.) It uses high-powered satellites to broadcast, among other things, movies, sports, and general entertainment services to consumers who have been authorized to receive such services after payment of a subscription fee, or in the case of a pay-per-view movie or event, the purchase price. ( Id. ¶ 5.) DISH Network then digitally encodes and scrambles the broadcast signals using NagraStar's encryption technology, and delivers the scrambled signals via satellite to the EchoStar dishes and receivers owned or leased by authorized subscribers. ( Id. ¶ 8.)

Plaintiffs use an encryption system to restrict access to their signals such that only authorized subscribers can decrypt the signals. ( See Duval Decl. ¶ 11.) To effectuate this decryption system, Plaintiffs use smart cards that carry a secured embedded microprocessor provided by NagraStar. ( Id. ¶¶ 9, 12.) The microprocessor contains information that provides instructions and commands to the smart card in the everyday operation of the NagraStar security system as well as decryption keys. ( Id. ¶ 12.) The EchoStar receiver possesses an incoming DISH Network satellite signal by locating an encrypted part of the transmission, known as the entitlement control message, and then forwards that message to the smart card. ( Id. ¶ 13.) If the subscriber is tuned to a channel he is authorized to watch, the smart card uses its decryption keys to unlock the message, uncovering a control word. ( Id. ) The control word is then transmitted back to the receiver in order to decrypt the DISH Network satellite signal. ( Id. ) Then the receiver and smart card convert DISH Network's encrypted satellite signal into viewable programming that can be displayed on the attached television of an authorized DISH Network subscriber. ( Id. )

B. Piracy of DISH Network Programming Using Free-To-Air Receivers

Satellite television pirates have developed several means of circumventing the DISH Network security system and intercepting DISH Network satellite broadcasts using Free-To-Air ("FTA")[1] satellite receivers. (Duval Decl. ¶ 15.) In one method of circumvention, the pirates created software which was programmed onto the FTA receiver so as to mimic a DISH Network smart card. ( Id. ¶¶ 15-16.) Once the FTA receivers were programmed with the card-hack software, the "modified" receiver could decrypt DISH Network's signals without authorization. ( Id. ¶ 16.) This method requires the piracy software to be regularly updated in order to overcome countermeasures employed by DISH Network, such as changing the decryption keys required to access proprietary information. ( Id. ¶ 17.)

Recently, pirates have developed a new method of obtaining DISH Network's signals without authorization called Internet Key Sharing ("IKS"). (Duval Decl. ¶ 18.) IKS uses internet-enabled FTA receivers. ( Id. ¶ 19.) In IKS piracy, the decoding keys that allow the decryption of DISH Network's signals are captured from a computer server ("IKS server") that connects with multiple subscribed NagraStar smart cards. ( Id. ¶ 20.) Control words obtained from the authorized smart cards are sent from the IKS server over the internet to unauthorized receivers, where they are used to decrypt DISH Network's satellite signal and view its programming without paying the subscription fee. ( Id. ) In short, IKS servers allow the decoding keys to be shared over the internet such that internet-enabled FTA receivers programmed with modified FTA/IKS piracy software can use these decoding keys to decrypt DISH Network's signals without authorization. Furthermore, because IKS is based on the trafficking of control words obtained from subscribed DISH Network receiving equipment, this method of satellite piracy remains effective even after DISH Network's transition to "Nagra 3, " the latest generation security technology that was recently introduced by NagraStar. ( Id. ¶ 21.)

C. Evidence of Defendants' Distribution of Piracy Devices and Piracy Software

1. Vicxon Corporation and Soo Jong Yeo

Vicxon is the exclusive manufacturer of Sonicview-branded satellite receivers and add-on dongles. (Yeo Decl. ¶ 8 [Doc. 33-2].) Plaintiffs previously filed suit against Sonicview USA, Inc. for the distribution of the equipment manufactured by Vicxon. This Court granted Plaintiffs' motion for summary judgment in that action. See DISH Network, L.L.C. v. Sonicview USA, Inc., No. 09-CV-1553-L WVG, 2012 WL 1965279 (S.D. Cal. May 31, 2012). Vicxon manufactures receivers and dongles, referred to as iHubs, for Sonicview. The receivers include the following models: SV-HD8000, SV-360 Elite, SV-360 Premier, and SV-4000. From January 2009 to August 2009, Vicxon distributed at least 111, 291 receivers to Sonicview, consisting of 27, 500 SC-360 Elites, 84, 910 SV-360 Premiers, and 8, 881 SV-HD8000s. (Hagan Decl. ¶¶ 6-7, Ex. 5.) From May 2009 to August 2009, Vicxon distributed at least 17, 500 iHubs to Sonicview USA. ( Id. ¶¶ 6, 8.)

Mr. Yeo is the President and Chief Executive Officer of Vicxon. (Yeo Decl. ¶ 8.) Sonicview dealt exclusively with Mr. Yeo as the main point of contact at Vicxon, and ordered Sonicview-branded products solely from him. (Sanz Dep. 73:13-74:5.) Mr. Yeo visited California multiple times to conduct business with Sonicview, and served as the lead in marketing and giving product demonstrations of Sonicview recievers and iHubs during his visits. (Yeo Decl. ¶ 30.) Additionally, all of ...

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