DISH Sued Two IPTV Resellers: First Case Dismissed, Second Owes $30m

Most civil lawsuits against alleged IPTV pirates end badly for the defendants, something easily predicted after a single read of the initial complaint. Two separate lawsuits filed by DISH against two IPTV resellers in recent months were classic examples, at least until they weren't. One reseller has just been ordered to pay damages of $30m. The second, a reseller in the astrology business, just had his case suddenly dismissed. Nobody could've predicted that.
Last November, IPTV subscription resellers operating from channels4cheap.com (C4C) and purchase-iptv.com found themselves being sued by broadcaster DISH Network.

After what appears to have been a handful of trouble-free years of trading, the lawsuit named Texas residents John Gwaka Magembe and Joyce Berry as the alleged operators of the C4C website.

The decision to sell packages branded as Beast TV, a service that was taken down three years earlier by several Hollywood studios, Netflix, and Canada’s Bell Media, may have been a ploy to exploit existing brand awareness among pirates. The obvious downside was awareness among rightsholders.

DISH Was More Aware Than Expected

Defendants are trafficking in the Beast TV internet streaming television service a/k/a Channels4Cheap through their websites located at www.channels4cheap.com and its sister website www.purchase-iptv.com,” the company wrote in its complaint.

“Defendants sell Device Codes [subscriptions] to the Service on the C4C Website for $2 for a forty eight hour trial; $15 for one month; $40 for three months; $70 for six months; and $120 for twelve months, depending on the option selected by the user.”

And then came the body blow. DISH produced a screenshot to show that a person, also called John Magembe, was among the top 10 resellers of Beast TV subscriptions when the platform was in full swing.

In common with many other lawsuits of this type, this seemed destined for a predictable outcome. The final judgment would be months in the making so, in the interim, DISH took on another reseller.

IPTV and Astrology Align

In a complaint filed at a California court in February, DISH and Sling described Mr.Sharma of Sharma IPTV, and his company Astro Vastu Solutions (AVS), as traffickers of an illegal streaming service. Flyers distributed in the Bay Area advertising the service had led to DISH investigators handing over $135 for a subscription test purchase.

Payment for the alleged 10,000 channel service was made to Astro Vastu Solutions LLC. DISH and Sling alleged that this was to separate the name Sharma IPTV from transactions, with users asked to disguise their payments as something unrelated, such as an astrology consultation. Evidence presented in court reveals that the DISH test purchase was recorded as a “3 month warranty” (pdf).

Other documents filed in the lawsuit reveal that a cease-and-desist notice sent to Sharma IPTV last September contained an offer to settle the case. DISH and NagraStar cited similar cases where failing to settle ended up costing a lot more, the $100m+ judgment against Nitro TV, for example.

With the $1m settlement offer attracting no interest, the companies ultimately sued for willful violations of 17 U.S.C. § 1201(a)(2) and 17 U.S.C. § 1201(b)(1) when the defendants manufactured, offered to the public, provided, or otherwise trafficked in their infringing IPTV service. DISH and Sling also demanded an injunction under 17 U.S.C. § 1203(b)(1) plus actual or statutory damages of up to $2,500 for each infringement under § 1201.

On February 20, 2024, DISH and Sling filed their motion for preliminary injunction but were unable to personally serve the defendants until early March, leading to a request to continue the hearing on May 30, 2024, around a month from now.

Then, seemingly out of the blue, a note appeared on the docket last week. It revealed that since the owner of Sharma IPTV was representing himself, he would appreciate some help from the clerk of the court “to process and serve documents to other parties.”

Exactly what that note means in the context of the lawsuit, which started with a rejected $1m settlement offer and escalated from there, isn’t made clear from the docket.

What is clear, however, is that the very next day DISH and Sling dismissed all of their claims in the lawsuit.

An accompanying note states that the notice of dismissal was served on the defendants at their last known addresses. Beyond that, there’s no additional information to explain why such a serious matter suddenly ended with no mention of a settlement.

Contrasting Fortunes

For channels4cheap.com (C4C) and purchase-iptv.com operators John Gwaka Magembe and Joyce Berry, their fates diverged considerably, even from each other. It transpired that Berry is Magembe’s mother and the reason she appeared as a defendant in the lawsuit was her son’s unauthorized use of her bank account to receive payments for IPTV subscriptions. Berry was dismissed from the case, Magembe was left to face the music alone.

In a judgment handed down April 26, 2024, District Judge Mark T. Pittman noted that the plaintiffs had filed a well-pleaded complaint but the defendants’ failure to defend the claims against them had “brought the adversarial process to a halt, causing substantial prejudice to Plaintiffs.”

Based on this and other factors, a default judgment was warranted (1,2). On top of a broad injunction to restrain any similar conduct, Judge Pittman said that Magembe must pay damages totaling over $30 million in connection with the sale of at least 12,000 ‘device codes’ (subscriptions).

The conclusions of these cases couldn’t have been more different, despite being about broadly the same thing: reselling IPTV subscriptions to services operated by people other than the defendants in these cases.

Predictions sometimes miss the mark but for those who like a wager, it’s more than likely that new information will play a role when DISH moves on to its next targets. And the targets after those.