$32.5m Pirate IPTV Lawsuit Must Be Dismissed Due to ‘Encrypted Traffic’

A $32.5m copyright infringement lawsuit filed by DISH Network claims that CDN company DataCamp failed to prevent several pirate IPTV providers from pirating its content, even after receiving hundreds of DMCA notices. DataCamp has just informed the court that since it's unable to monitor encrypted traffic, there is no liability and the lawsuit must be dismissed.

encryptionDISH Network’s campaign against the pirate IPTV ecosystem is large but also unique. Anyone involved, from the biggest fish to the smallest fry, is a potential target.

From those who capture or distribute streams to those who sell, resell, or buy them, DISH and partner Nagrastar can easily come up with a tailored cash settlement or a full-blown lawsuit. For any entity facilitating any of the above, the same also holds true.

DISH Targets CDN Company DataCamp
In February, DISH filed a lawsuit at an Illinois district court against UK-based CDN/hosting company DataCamp (d/b/a CDN77 and DataPacket). The broadcaster claimed that IPTV providers Banjo TV, Bollywood IPTV, Comstar TV, Express IPTV, Gennie TV, Gold TV, IPGuys, Istar, Red IPTV, Sky IPTV, and Zumm TV, used DataCamp services that were designed with IPTV/OTT delivery in mind.

While that in itself raises no legal issues, DISH claimed that despite sending hundreds of DMCA notices to DataCamp, the company “deliberately refused” to take reasonable steps to prevent IPTV providers’ ongoing infringement using its services. Blocking or the enforcement of a repeat infringer policy were both options, DISH said, but instead DataCamp did nothing, “because it wanted to maintain the revenue that would come from the accounts.”

DISH believes that inaction cost DataCamp its ‘safe harbor’ protections so the company should be held liable for contributory infringement. Since money was made from those infringements, the matter of vicarious liability also enters the mix, leading DISH to demand at least $32.5m in damages.

It’s no surprise that DataCamp’s response paints a completely different picture.

Targeting DataCamp is a ‘Tactical Leverage’ Strategy
In a memorandum supporting a motion to dismiss filed on August 5, DataCamp describes the DISH lawsuit as a means to “gain tactical leverage” over alleged direct infringers, i.e the people behind the named IPTV providers. DataCamp says that DISH seeks to impose “unprecedented liability” over the alleged infringements of third parties but with no knowledge of such infringement, the CDN company carries no responsibility.

“Instead of seeking out the alleged infringers of its works, Plaintiff attempts to assert that DataCamp ‘materially assists’ the alleged Pirate Services’ infringement and, in the process, conflates the two separate businesses named in this action: CDN77 and DataPacket,” DataCamp’s motion reads.

Encryption: No Access, No Knowledge
In respect of the IPTV providers listed in the complaint, DataCamp says that DISH “fails to, and cannot allege” that any are or were customers of CDN77. ‘DataPacket‘ is a server and connectivity provider designed to shift subscriber data across the internet, DataCamp adds, noting that the provider’s only responsibility to customers is to ensure it stays connected to the internet.

“DataPacket has no access, let alone involvement, with the software those subscribers install. Nor does DataPacket maintain any access to the material displayed or viewed by end-users of its network, which is completely encrypted,” its motion to dismiss reads.

“Because DataPacket is merely a server provider, it has no more involvement in the alleged infringement than a hardware manufacturer providing a direct infringer with computers and routers, a power utility company providing a direct infringer with electricity, or a web-hosting service providing a direct infringer with a web address.”

‘Contributory Copyright Infringement Claim Fails’
Under United States copyright law a defendant is liable for contributory copyright infringement when it has knowledge of infringing activity carried out by a third party and “induces, causes or materially contributes” to the infringing conduct.

DataCamp says that a finding of liability requires knowledge of “specific infringing uses” of its technology, evidenced by the “ability to monitor or control” infringing content. Since DISH’s complaint acknowledges that DataCamp’s IPTV provider customers “encrypt their streams so that only [their] subscription paying customers can view them,” that limits DataCamp’s knowledge.

“Even if DataCamp could view the data passing through the alleged Pirate Services to those companies’ customers— which it cannot — DataCamp would be wholly unable to discern what content the data includes or where that data is being routed. It is technologically impossible for DataCamp to have actual knowledge that specific infringing material was available using its network,” the company adds.

DMCA Notices: Actual Knowledge of Specific Infringement?

DISH claims that it sent hundreds of DMCA notices to DataCamp relating to the conduct of its pirate IPTV provider customers. Do these notices provide evidence that the IPTV providers infringed “DISH’s exclusive public performance rights” and were engaged in “repeated and willful” copyright infringement? Do they show that DataCamp had actual knowledge of specific infringement? DataCamp doesn’t think so.

“Infringement notices sent to service providers like DataCamp do not constitute ‘notice of any specific acts of
infringement,’ regardless of the number of notices sent, but instead ‘gives at most a general knowledge that infringement will likely occur again in the future’,” DataCamp notes, citing a 2020 decision by the Ninth Circuit Court of Appeals.

“[Infringement notices] are therefore insufficient to sustain a claim for contributory copyright infringement.”

Turning to DISH’s allegations that DataCamp failed to remove or disable content identified in the notices, the CDN company says that contributory copyright infringement cannot be based merely on a “failure to take affirmative steps to prevent infringement” unless there is evidence of intentional infringement.

“[A] computer system operator such as DataCamp which merely provides a network of servers for its customers, is not liable for contributory infringement where it takes the ‘simple measure’ of forwarding notices of claimed infringement to the alleged infringer,” the company writes.

“DataCamp has satisfied this requirement, and Plaintiff does not dispute it, acknowledging DataCamp’s correspondence that it ‘forwarded the notice[s] to the responsible customer to remove the infringing content’.”

‘Vicarious Copyright Infringement Claim Fails’

In response to DISH’s claim of vicarious copyright infringement, DataCamp says DISH must show that the defendant had the right and ability to supervise the infringing conduct and had a direct financial interest in the infringing activity.

DataCamp says it can’t monitor customers if their activities are encrypted and if it had terminated entire customer accounts (which in turn could have customers of their own, wholly engaged in legal activity), that would’ve been an imprecise, overbroad, and unworkable solution. In any event, DISH failed to evidence any direct financial benefit to DataCamp.

“It is of course no surprise that Plaintiff has not adequately alleged that DataCamp receives a direct financial benefit from the alleged infringements because it cannot. DataCamp receives payments from its customers to utilize its server network, but such payments have no relation to the content, infringing or not, produced by end-users,” the company adds.

In closing, DataCamp reminds the Court that “permitting such bald and faulty allegations to proceed here” would set a precedent affecting many other companies operating similar networked server access, with Amazon, Digital Ocean, Leaseweb and OVH as just a few examples.

To avoid that, the complaint should be dismissed, DataCamp concludes.