Julian Sanchez header image 2

photos by Lara Shipley

Satellites, Small Businesses, and the DMCA

October 2nd, 2008 · No Comments

I figure my blog readers, even the ones not normally super enamored of the techy stuff, might be interested in this story at Ars about a fascinating case that doesn’t seem to have gotten a whole lot of coverage.  It involves Echostar, the parent company of DISH Network, suing a firm that manufactures “free to air” satellite receivers that can be easily hacked to let users get premium satellite programming without paying.

The case is still in its early phase, and depending on the facts that come out, it’s totally possible that Echostar could prove to be in the right here.  Even so, the case highlights a couple of troubling features of litigation under the Digital Millennium Copyright Act.

First, Echostar was seeking the disclosure of retailer records to reveal the identity and contact information for every one of the hundreds of thousands of people who had bought one of the defendant’s products in the past five years. The court ultimately blocked the effort, but it was a close call and turned on some specifics of the case that might not obtain in other cases, or even later phases of this litigation. And the main reason they were able to plausibly attempt to subpoena the information is that the DMCA makes a manufacturer potentially liable for making a device that has few comercially significant uses beyond piracy, regardless of whether that was the manufacturer’s (provable) intent—which makes liability contingent on the evolving usage patterns of thousands or millions of customers.

Second, it’s clear that just bringing the suit, which doesn’t even go to trial until next year, has absolutely devestated the defendant company’s business. They’ve lost 90 percent of their distributors and 95 percent of their sales since the suit was brought. And again, depending on the facts that come out at trial, it’s totally possible that Echostar will be shown to be in the right here—they’re claiming the company actively colluded with pirates to get illicit codes out for their boxes, and if that’s true, I’ll have no sympathy if they get the book thrown at them. But it should probably give us pause that the 800-pound-gorilla here is well on their way to wiping out a small competitor without having proven any of that in court yet, because distributors and (to a lesser extent) end users are reasonably chary of getting drawn into a lot of thorny litigation and having their records subject to discovery. Remember, even without the collusion claim, a company can be targeted for making an open device that users can later hack for circumvention purposes, at least if such modification becomes sufficiently prevalent.

Anyway, read, as they say, the whole thing.

Tags: Law · Privacy and Surveillance · Self Promotion · Tech and Tech Policy