“Free TV” box lawyer says video industry is “digging its own grave”

A win for “Dragon Box” would be bad legal precedent for industry, lawyer says.

The entertainment industry is lining up against the maker of a "free TV" box in a lawsuit that alleges piracy, but the defendant's lawyer says the industry is in for a difficult and dangerous fight.

"I think this is a very, very dangerous lawsuit by plaintiffs," lawyer Erik Syverson told Ars yesterday. "If the case does not go the plaintiffs' way, they will have established very unfavorable law to their business models and they may be digging their own grave."

Syverson represents Dragon Media Inc., whose "Dragon Box" device connects to TVs and lets users watch video without a cable TV or streaming service subscription.

Dragon Media faces a lawsuit filed last week by Netflix, Amazon, Columbia Pictures, Disney, Paramount Pictures, Twentieth Century Fox, Universal, and Warner Bros. The case is in the US District Court for the Central District of California.

The companies claim that Dragon is "sell[ing] illegal access to Plaintiffs' Copyrighted Works."

But Dragon Media argues that it is merely facilitating access to online content rather than providing pirated TV itself.

"The entertainment industry for decades, even going back to Sony Betamax cases, have been fighting tooth and nail against innovation and technology and losing almost every single battle," Syverson said. "There is no reason for plaintiffs to be optimistic in any way."

"I remember a young company called YouTube whose business model was copyright infringement. It was sued, and it didn't turn out too badly for YouTube, did it?" Syverson also said. (Viacom sued YouTube in 2007, and the case was settled in 2014.)

"Generally speaking, linking to content online has been cleared by almost every court in the land," he said.

Copyright owners have more commonly sued website operators or software makers than hardware makers. In November 2015, for example, the Motion Picture Association of America was able to shut down major torrent sites including PopcornTime.io after winning court orders in Canada and New Zealand. One case that featured a mixture of hardware and software involved Aereo, which provided TV over the Internet while leasing antennas to customers. (The antennas were stored remotely so customers didn't have to actually need an Aereo device in their homes.) A US Supreme Court case put Aereo out of business in 2014.

The Android-powered Dragon Box device connects to TVs with an HDMI cable and streams content from the Internet just like other streaming devices do. But the product's marketing focuses heavily on free video services instead of ones that require TV or streaming subscriptions. "You are not required to have Cable TV for the box to work; all you need is an Internet connection and HDTV," its website says.

The lawsuit against Dragon Media says the box and the software provided by Dragon Media greatly simplify the process of viewing pirated video. Dragon Media's legal disclaimer points out that it "does not host, provide, archive, store, or distribute media of any kind and acts merely as an index (or directory) of media posted by other enthusiasts on the Internet, which is completely outside of our control."

Case is “free marketing” for defendant

Even if the entertainment industry wins its case against Dragon Media, it "will have given us a tremendous amount of publicity and free marketing," Syverson said.

"Assuming the plaintiffs win their case, the day after they win there will be 100 companies to take our place in China and India," he also said.

In Syverson's opinion, the entertainment industry "continue[s] to struggle very mightily with technology."

Dragon Boxes are sold on Amazon, "so Amazon maybe should consider suing itself, and we will be happy to coordinate defense strategy with [it]," he said.

Despite Syverson's tough talk, the sides are holding settlement talks, as required by the court.

"If the plaintiffs want to be reasonable and come to some sort of reasonable business solution, we may be interested in that and are open to exploring that as we are required to by the court," Syverson said.

Video industry’s argument

As we previously reported, the complaint against Dragon Media alleges that it takes an active role in promoting piracy.

The complaint describes how Dragon Media allegedly provides custom software to help users obtain pirated content:

"When a customer selects "DRAGON MEDIA" for the first time, the device prompts the customer to download the "DragonBox" software. After clicking through the guided "Media Setup," the device downloads and installs the latest version of Dragon Media.

Once the Dragon Media software application has been downloaded and installed onto the Dragon Box device, the customer is presented a multi-page home screen that presents the customer with categories to select. These categories include "Sports," "4Kids," "Videos," "IPTV," and "TV Shows," among others... In total, Defendants provide customers with over 80 add-ons as part of their suite of Dragon Media add-ons to access all of the "Unlimited Shows, Movies, [and] Live Sporting events."

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We asked Syverson about the Dragon Media software's role in the case yesterday, and he declined to discuss it. "I haven't had a chance to totally vet the technology and dig in there," he said, noting that he was just recently retained by Dragon Media.

Ars had previously reached out to Dragon Media, but we never got a response directly from the company. Syverson is handling all of its press inquiries.

“TickBox” faces similar piracy Claims

We reached out to the plaintiffs' law firm and were re-directed to a representative of the Alliance for Creativity and Entertainment (ACE), whose members include the plaintiffs in the Dragon Box case and a similar case against the makers of the TickBox device.

ACE hasn't provided us with any information on the Dragon Box case, but it pointed us to filings in the TickBox case. Netflix, Amazon, and the studios claim that there is "overwhelming and undisputed evidence that the TickBox TV device was designed for infringing use" and that "TickBox intentionally induces its customers to access unauthorized streams made by third-party sources that directly infringe plaintiffs' public performance right."

TickBox said in a filing that its hardware device performs the same functions as "a smartphone, tablet, or desktop computer and display[s] those functions on the user's television screen or other monitor." The alleged copyright infringement is from "third-party modifications of the open-source media player software which the Box utilizes," TickBox argues.

In our previous story, we described claims in the Dragon Box suit as follows:

"The Dragon Box is marketed explicitly as a means to watch video without paying for anything but the box, the lawsuit also says. "Defendants promote the device as the means to 'cut your cable & save money' and encourage customers to 'Get rid of your Premium Channels... [and] Stop paying for Netflix and Hulu,'" the complaint says. Customers can access "Free TV Shows commercial free from season one," the company also tells customers.

Dragon Media gives each Dragon Box customer "a user login and password to access 'Area-51 IPTV,'" an add-on that "can stream live television channels, including premium cable television networks and sports networks," the complaint said.

Dragon Box customers can also watch sports and movies while they're still in theaters, the suit says."

Dragon Media says it has "over 250,000 customers in 50 states and 4 countries and growing." The lawsuit alleges that Dragon Box distributors and resellers have made millions of dollars and asks for financial damages and an injunction preventing Dragon Media from continuing the alleged copyright infringement.