Cutting the Cord: “Smart TV Box” Devices and Copyright Infringement

copyright

Innovative ways to view broadcast content such as scripted shows, sporting events, and recently released movies are advancing at breakneck speed. Buyers should beware, however, that not all methods for accessing entertainment content are on the up-and-up. Several devices, for instance, promise extreme “cord-cutting” and incredibly wide access to content at a relatively low, one-time cost.

There’s a good reason why these devices are so cheap and offer so much: they provide a gateway to pirated content, facilitating copyright infringement on a massive scale. Unsurprisingly, the sellers of two such “smart TV boxes” are embroiled in copyright litigation.

As explained in the two most recent complaints, Universal City Studio Prod. et al. v. TickBox TV and Netflix Studios, et al. v. Dragon Media Inc., the devices in question, TickBox TV and Dragon Box, don’t come with any pre-loaded content. Instead, purchasers plug the devices into their TVs and then download open-sourced software. That software launches a user-friendly TV-screen display allowing users to choose from various general categories of content, such as “Kids,” “TV Shows,” “Sports,” and “Videos.” Those categories then break out into more specific “add-ons” such as “Box Office,” “In Theaters,” and “Live TV.”

Clicking on the add-on menus initiates online searches for the desired content. Those searches are unlikely to return offerings such as Amazon Prime, HBO Now, or Hulu. The Dragon Media complaint related how a Dragon Box search last December in the “In Theaters” add-on returned such movie choices as “Thor: Ragnarok” and “The Shape of Water,” neither of which have been authorized for outside-theater viewing. Less than a month after it had been released in theaters, a Dragon Box search for the movie “Coco” returned 100 different unauthorized sources. An “In Theaters” choice on TickBox TV last October returned 44 sources for “War for the Planet of the Apes,” another movie available only in theaters. Dragon Box and TickBox TV users don’t pay a penny to watch these movies or any of the other content the software discovers.

Indeed, the device makers tout such unfettered access in their advertisements, product packaging, and social media. The Dragon Media complaint recites how the company urges consumers to “Get rid of your Premium Channels” and lures buyers in with “You no longer have to pay for PPV [pay-per-view] events.” The company’s Facebook page promotes “Free movies still in theaters in HD and 3D.” The TickBox complaint relates such promotional statement as “enjoy unlimited access to ALL the hottest TV shows, Hollywood blockbusters, and LIVE sporting events … ABSOLUTELY FREE.”

The TV boxes call to mind Napster, Grokster, and other past online piracy facilitators. Like those peer-to-peer file-sharing services, Dragon Box and TickBox TV are capable of accessing unprotected entertainment content. But the vast majority of the content the boxes’ software discovers is copyrighted, and that is in fact the type of programming access the box sellers pitch to potential customers.

The makers of Dragon Box and TickBox TV are likely to suffer the same fate as Grokster. In 2005, the U.S. Supreme Court unanimously held in MGM Studios v. Grokster that the file-sharing service constituted third-party copyright infringement by intentionally inducing others to unlawfully obtain copyrighted material.

In Grokster, when assessing if the service’s third-party actions led to others’ copyright infringement, Justice Souter wrote that a defendant’s actions must be based on “purposeful, culpable expression and conduct,” and not on “mere knowledge of … actual infringing uses.” The “classic instance of inducement,” the Court explained, “is by advertisement or solicitation that broadcasts a message designed to stimulate others to commit violations.”

As Universal City Studios’ and Netflix’s complaints detail, Dragon Media and TickBox TV consciously designed their products to search online for copies of content that everyone else must pay for. They purposefully advertised that users could watch pay-per view programming, shows available only via a licensed subscription video service, and movies still in theaters “ABSOLUTELY FREE.” And the companies have profited handsomely from facilitating others’ copyright infringement. Like Grokster, these are “classic instance[s] of inducement.”

Dragon Media now claims over 250,000 purchases of the Dragon Box since 2012. One analysis found that over 6.4% of North American households with broadband access use TV piracy services. That amounts to millions of hours of no-cost entertainment content. “Free,” however, comes with a price—the debasing of basic property rights and the virtual theft of hard-earned money from countless workers in the entertainment content industries.

If courts follow the law, the plaintiffs in Dragon Media and TickBox TV should achieve easy, early victories—outcomes that we hope send a clear message to other current and future content pirates.

Also published by Forbes.com on WLF’s contributor page.

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