[IP] Direct TV sues 22,100 people
Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Wed, 18 Feb 2004 22:16:05 -0500
From: Barry Ritholtz <ritholtz@xxxxxxxxxxxxx>
Subject: Direct TV sues 22,100 people
To: Dave Farber <dave@xxxxxxxxxx>
Dave,
For IP. This is an outrageous abuse of the legal system.
Tort reform? We need Satellite litigation reform.
Barry L. Ritholtz
Market Strategist
Maxim Group
britholtz@xxxxxxxxxxxx
(212) 895-3614
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The Big Picture: A blog of capital markets, geopolitics, with a dash of film!
<http://bigpicture.typepad.com/comments/>http://bigpicture.typepad.com/comments/
There's No Such Thing as Free HBO
Satellite television giant DIRECTV is suing thousands who may or may
not have hijacked its signal. And you thought the music industry was tough.
BY KARA PLATONI
<http://www.eastbayexpress.com/issues/2004-02-18/cityside.html/1/index.html>http://www.eastbayexpress.com/issues/2004-02-18/cityside.html/1/index.html
Meet Michael and Mike. No last names, since both East Bay residents are
embroiled in a legal battle with digital satellite provider DIRECTV that
involves tens of thousands of people and has raised serious concerns about
civil liberties. Michael is a college student from Alameda, Mike an
electrical engineer from Blackhawk. What they have in common is that
they've been accused of pirating DIRECTV's signal using a cheap and readily
available device called a smart card.
Unlike your ATM card, which gets you into a computer network to do your
banking, a smart card contains a chip that can store a considerable amount
of information. This emerging technology has a growing number of everyday
applications -- nearly two billion cards were sold last year. The American
Express Blue smart card, for instance, allows secure online shopping.
Starbucks uses the technology in its prepaid debit cards. Smart cards also
can be used to store computer passwords, or to control employee access to
buildings and authorized areas. More to the point, DIRECTV uses them to
control customers' access to its 225-plus channels of programming and
pay-per-view movies. People who buy the service get a satellite dish and a
card that lets their TV-top decoder box unscramble the signal.
But smart cards are hackable, and some people have hacked them to get their
DIRECTV fix for free. Alongside legitimate products, some Web sites and
mail-order outlets have hawked smart-card programmers as devices for
reprogramming DIRECTV access cards, in addition to "preflashed" cards that
have been coded to steal DTV's signal. In the fall of 2002, the satellite
TV giant raided a half-dozen such businesses and seized their customer
lists. Now, in what may be the largest legal action in US history, it is
threatening to sue everybody on those lists, including Michael and Mike.
The company has written to roughly 150,000 of these customers, warning that
each may be liable for up to $10,000 per device -- $100,000 if the devices
are resold. In most cases, DIRECTV will back off if the accused agrees to
shell out a $3,500 settlement, surrender the devices in question, and sign
a pledge to never pirate the company's signal again. So far, it has sued at
least 22,100 people who have refused to settle. Very few cases have
proceeded all the way through the court system. DIRECTV has had a handful
of court victories, including a $30,000 judgment this month against a
Florida man. The company also dropped a few cases at the last minute,
although it won't reveal how many it has dropped or settled. . . .
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