Opinion
No. CV-03-2407 RMW, [Re: Docket No. 56].
August 12, 2004
Dale H. Oliver, Michael E. Williams, Jennifer A. Kash, Counsel for Plaintiff.
Shahab Eddin Fotouhi, Gregory L. Spallas, Counsel for Defendant(s).
Plaintiff Directv's motion for partial summary judgment was heard on July 2, 2004. Defendant Little opposes the motion. The court has reviewed the moving and responding papers and considered the arguments of counsel. For the reasons set forth below, the court denies plaintiff's motion.
I. BACKGROUND
A. Pirating Directv's Signal and Countermeasures
Directv delivers programs on a pay-per-view or channel subscription basis. (Mot. at 2.) Programming is transmitted to subscribers via a digital signal that is encrypted (electronically scrambled) to prevent unauthorized receipt and viewing. ( Id.) A subscriber receives a credit-card shaped Directv Access Card that is uniquely configured according to the programming purchased by the subscriber. ( Id.) While inserted into a Directv receiver device at the subscriber's location, the access card uses "smart card" technology to enable decryption of Directv's television signal for purchased programming. ( Id.) The card also captures and transmits information about the customer's pay-per-view purchases to Directv for billing purposes. ( Id.)
Various devices that enable the pirating of Directv's signal began emerging in 1995 and have been evolving since then. ( See Mot. at 3.) These "pirate access devices" include devices that work by modifying the access cards themselves so that they receive programming without authorization by or payment to Directv. ( Id.) Consequently, Directv's anti-piracy strategy has included periodic introduction of new access cards that use updated technology. (Mot. at 4.) After all subscribers have been converted to new cards, Directv disables the old access cards. ( Id.) Directv has undertaken four such conversions, since it began broadcasting in 1994, in order to keep up with and render extant piracy devices obsolete. ( Id.)
Directv's anti-piracy strategy also includes bringing thousands of legal actions — of which this case is one — in jurisdictions across the country against suppliers and users of pirate access devices.
Plaintiff labels devices that can be used to modify access cards "programmers" or "reader/writers". (Mot. at 3.) Legitimate smartcard reader/writers or programmers exist and, as their name suggests, these devices read data from and write data to smartcards. ( See Pl.'s Expert David Simon's Report and Disclosures at 6.) However, particular brands of reader/writers can be used in conjunction with Directv-specific piracy software to modify Directv Access Cards to receive unauthorized Directv programming. ( Id.)
In order to render illegally modified access cards ineffective, Directv periodically also implements electronic countermeasures ("ECMs"). (Mot. at 3.) An ECM is an electronic signal that targets and disables illegitimately modified Directv Access Cards. ( Id.) During a subsequent phase of evolution, devices emerged that are designed to overcome the effect of the ECMs. ( Id.) A pirate device called an "unlooper" could be used to remedy the effect of certain ECMs that put the software program used by a modified access card into an endless "loop". ( Id.) While in a loop, a modified access card cannot successfully receive Directv's signal. ( Id.)
B. Current Dispute
White Viper Technologies is a southern Californian distribution center for products including satellite signal pirate access devices, on whom Directv executed a civil Writ of Seizure in May 2001. (Mot. at 8.) Directv obtained White Viper business records that indicated sales of White Viper products to defendant Little. ( Id.)
Since 1995 defendant has operated Techs On Call LLC, a computer repair and network consulting company, and worked as a network technician. (Decl. Michael Little Opp. Directv's Mot. Partial Summ. J. ("Little Decl.") at 2.) Little subscribed to Directv's satellite services from a time before his purchase of the White Viper products until he cancelled his subscription in May 2003 when his landlord restricted the use of satellite dishes. (Opp'n at 4.) Plaintiff does not allege that defendant illegally intercepted Directv's signal for his personal use.
On May 21, 2003, plaintiff filed a complaint against Hyung Lim, Michael Little, Linh V. Nguyen, and other unnamed parties. The complaint listed ten separate claims related to allegedly unlawful manufacture, distribution and/or selling of devices intended to enable unauthorized access to Directv's programming. (Compl. ¶ 1.) On July 30, 2003, pursuant to a settlement agreement, the court dismissed all claims against defendant Lim and issued a permanent injunction barring him from various activities related to illegal reception and decryption of Directv's television programming. (Stip. Order Dismissal; Consent J. Order Permanent Inj.) Similarly, following an agreement between plaintiff and defendant Nguyen, the court entered a permanent injunction against Nguyen on February 17, 2004 and dismissed him from the case. (Stip. Permanent Inj. Re. Def. Nguyen; Stip. Order Re. Dismissal Action Against Def. Nguyen.) Consequently, Little is the only named defendant left in this case.
Fact discovery was scheduled to close on March 1, 2004, with expert discovery ending on May 5, 2004. (Order and Stip. Re. Continuance of Case Calendar at 2-3.) An order granting plaintiff's motions to compel production of documents and compel further deposition of defendant extended the date for producing requested documents to April 27, 2004 and for completing defendant's deposition to May 4, 2003. (Order Granting Part Pl. Mot. Compel Further Dep. Def. Little; Mot. Compel Produc. Docs. Responses to Requests Docs.; Denying Without Prejudice Req. Att'ys Fees Costs.) Fact and expert discovery have now ended.
On May 26, 2004 plaintiff filed this motion for partial summary judgment as to liability on claims 2-4 and 6 of its complaint. These claims allege that defendant Little is liable to plaintiff for violations of four statutory provisions: (1) 47 U.S.C. § 605(e)(4), the Federal Communications Act, (2) 17 U.S.C. § 1201 (a)(2), the Digital Millennium Copyright Act, (3) 17 U.S.C. § 1201(b)(1), and (4) 18 U.S.C. § 2512(1)(b), the Federal Wiretap Laws. (Compl. ¶¶ 38-53, 59-63.) Plaintiff also requests summary judgment on defendant's affirmative defenses.
C. Submitted Evidence
In support of its motion, plaintiff presents two expert opinions, defendant's deposition, and copies of emails, web pages and chat-room postings allegedly made by defendant. Plaintiff's complaint alleges that based on records obtained from White Viper Technologies, defendant Michael Little purchased approximately 48 pirate access devices and resold them. (Compl. at ¶¶ 28, 30(2).) Plaintiff's motion points to copies of six emails, bearing Little's email address and other identifying information, ordering a total of 46 White Viper reader/writers. (Mot. at 8-9.) Plaintiff also submits two email records containing defendant's identifying information, whose format differs from the others. ( See Decl. Larry Rissler Supp. Directv's Mot. Partial Summ. J. ("Rissler Decl."), Exhs. H, I.) These documents show an order for a "White Viper Kit" and a "Combo Pack" that apparently includes a White Viper reader/writer and an unlooper device. ( Id.) In his deposition, defendant admitted to purchasing at least 46 reader/writers from White Viper Technologies, but denies purchasing any other White Viper products. (2/27 Little Dep. at 91-114.) Only the 46 White Viper reader/writers are relevant for purposes of this motion. Defendant also acknowledges selling the reader/writers to his client companies, ( see 5/3 Little Dep. at 181), as part of an implementation of a secured access system for their networks (Little Decl. at 2-3).
Plaintiff's motion references sale of 46 White Viper reader/writer devices, but defendant's deposition testimony indicates sale of 47. ( See 5/3 Little Dep. at 177, 180.)
Plaintiff's expert report by Michael Barr concludes that the White Viper reader/writer device "was designed for the purpose of circumventing Directv's conditional access controls." (Simon Decl., Exh. B.) The report presents successful results of testing of a White Viper reader/writer with other equipment to obtain unauthorized access to Directv's programming. ( Id. at 8-12.) The report cites testimony from another case involving Derek Trone, owner of White Viper Technologies, indicating that Mr. Trone created his first reader/writer device by reverse engineering a pirate device purchased from another website. (Simon Decl., Exh. B. at 14.)
Michael Barr is an adjunct faculty member of the Department of Electricaland Computer Engineering at the University of Maryland and an editor-at-large for Embedded Systems Programming, a monthly technical journal with 50,000 subscribers. He is also founder and president of Netrino, an engineering consulting company specializing in real-time and embedded software. He has a Bachelor and Master's degree in electrical engineering from the University of Maryland and formal training in computer science. His engineering experience has involved working on products ranging from high-end consumer electronics to physical therapy equipment. (Decl. David Simon Supp. Directv's Mot. Partial Summ. J. ("Simon Decl."), Exh. A.)
Plaintiff's expert, David E. Simon, points to two hardware features of the White Viper reader/writer as indicative of its illegitimate purpose: the absence of a "card present" indicator needed for compatibility with Windows' secured access functionality, and the rare layout of the reader/writer that makes it compatible with the unique orientation of Directv access cards. (See id. at 6-7; Simon Decl. ¶¶ 9, 11.) The ability to send a "card present" signal to the host computer is required to secure a machine using Windows' built-in security features or any other secure login software known to plaintiff's experts. (Simon Decl., Exh. B at 6.) Mr. Barr characterizes Directv Access Cards as atypical because their contacts are located on the side of the smartcard opposite its primary graphic, while most other smartcards have their contacts and graphic on the same side. (Simon Decl. at 7.) Thus, a Directv Access Card would have to be inserted "upside down" if placed in a typical smartcard reader. ( Id.) The smartcard slot for a legitimate Directv receiver and for the White Viper reader/writer is mounted such that a Directv Access card can be inserted "right-side up." ( See id.)
David E. Simon is a founding partner of a three-person computer engineering consulting firm. His work experience in the field of software engineering dates back to 1976 and covers all aspects of software development. He has extensive knowledge of embedded system software and his publications include a primer on embedded software that has sold over 10,000 copies. He has a Bachelor's degree in Mathematics from Stanford University and a Master's degree in Mathematics from the University of Chicago. (Simon Decl., Exh A.)
Plaintiff's experts also note that White Viper's products were marketed specifically for the purpose of circumventing Directv's conditional access controls. ( See Simon Decl. ¶ 7, Exh. B at 12.) In addition, Mr. Simon states that none of the software drivers built into Windows 2000 or any third-party driver known to him would make the White Viper reader/writer compatible with Windows 2000. (Simon Decl. ¶ 8.)
Defendant emphasizes that smartcards and their readers are frequently used to secure networks and workstations in various businesses. (Little Decl. ¶ 4.) His deposition explains that to secure a computer and network access in this manner, the reader/writer would be hooked up to the computer. ( See 2/26 Little Dep. at 74.) A software program embedded in Windows 2000 Server would "program" a blank smartcard, assigning and embedding a personal identification number ("PIN") of sorts on it. ( See id.) This PIN would correspond to the computer's ID on the network. ( Id.) To access data on the computer, the user would have to insert the smartcard into the attached reader/writer and use an assigned username and password that the system associates with the PIN on the card. ( See id.) The security program controlling access will recognize authorized PINs and allow access accordingly. ( See id.)
Microsoft's operating system for servers.
Little testifies that the White Viper reader/writers he purchased were used legitimately as security devices for two of his client companies' networks. (Little Dep. at 176-181.) He states that he found out about the reader/writers via a simple Google search for an "ISO 7816 reader" and found the White Viper product cost effective and convenient. (Little Decl. ¶ 5.) He verifies that he sold 39 of the White Viper reader/writers to Nareo, an application service provider, and 8 devices were sold to a company called Crown Vantage, Inc. (5/3 Little Decl. at 176-181.) Defendant's company, Techs On Call, had a network maintenance agreement with Nareo, under which it provided Nareo network installation and maintenance services. ( Id. at 176.) The sale of the 39 White Viper reader/writers was described by an invoice entry of "ISO Smartcard Security for Compaq Rackmount Fileserver" and a manufacturing part of "ISO 7816." ( Id. at 177.) Defendant also had a service agreement with Crown Vantage, Inc. ( See id. at 179.)
Defendant Little includes a self-authored whitepaper detailing the steps by which the White Viper reader/writers were used to implement a secured network access system. (Little Decl., Exh. A.) The whitepaper indicates use of Windows 2000's logon functionality and refers to use of a smartcard reader in generic terms. ( See id.)
Plaintiff Directv objects to defendant Little's declaration and whitepaper as not qualifying as an expert or competent opinion. (Pl.'s Obj. at 5-6.) However the court views them simply as descriptions by defendant of how he used the White Viper reader/writers, and also notes that Little's background and work experience as a network technician qualify him to speak of his use of the devices.
Plaintiff Directv points to additional evidence in attempting to show defendant Little's involvement in piracy of Directv's programming. Plaintiff claims defendant Little purchased software used to modify Directv Access Cards. (Rissler Decl. ¶¶ 30-31.) In support of this claim, plaintiff includes documents reflecting purchases of two products from www.ultra3m.com, a website selling piracy software. (Rissler Decl. ¶¶ 29-30.) Defendant only confirmed that his correct name, address, phone number and email information appear on the documents (5/3 Little Dep. at 141-142) and denies purchasing any piracy software intended to steal Directv's signal (Little Decl. ¶ 8). Little claims he never sold the White Viper reader/writers he purchased to anyone for the purpose of pirating Directv's satellite transmission. (Opp'n at 4.)
Defendant objects to the evidence of software orders and defendant's email orders of the White Viper reader/writers as hearsay. (Little's Objections Evidence at 2-3.) These documents do not fall within the ambit of the hearsay rule because they are not statements that assert a particular matter, but rather themselves form the matter asserted. In other words, these documents do not make a statement that defendant placed certain orders, but rather constitute the orders themselves.
Plaintiff also claims that defendant participated in internet chat room discussions on topics related to piracy of Directv's programming. (Mot. at 12-14.) Plaintiff provides copies of thirty-three postings — bearing Little's email address — to a piracy newsgroup called alt.dss.hack, obtained via a Google newsgroup search. (Rissler Decl., Exhs. 01-033.) Defendant denies making any of the postings (5/3 Little Dep. at 169-170) and provides results of a similar Google search that do not include those same postings. (Little Objections ¶ 5.) Plaintiff argues that defendant must have deleted his postings and submits results of reruns of the original searches showing that while the number of messages in the discussion threads remain the same, the messages with defendant's name are no longer accessible. (Reply at 6-8.)
Defendant also submits a declaration and other materials from a case brought by Mr. John Fisher against Directv in the Superior Court of California for the County of Los Angeles. After some materials from the case were posted on the internet, Judge Cary H. Nishimoto of the Los Angeles Superior Court issued a protective and sealing order in that case on May 11, 2004. The order covers the exhibits and other filings that constitute, reproduce or paraphrase any confidential, privileged or work product information of Directv. The court finds that the protective order covers the Fisher declaration and related exhibits inappropriately filed in this case and strikes them.
II. ANALYSIS
A. Legal StandardsPlaintiff brings this motion for summary judgment as to defendant's liability under four statutory provisions. Although the elements that need to be shown to establish a violation under each provision vary slightly, the primary dispute centers on an element common to all four provisions: whether the White Viper reader/writer devices are primarily designed to steal Directv's satellite signal. Before focusing on the gravamen of the parties' dispute, each provision and the elements necessary to establish a violation under it in this case are discussed.
1. 47 U.S.C. § 605(e)(4), the Federal Communications Act
Claim 2 of plaintiff's complaint alleges injuries from defendant's violation of 47 U.S.C. § 605(e)(4). ( See Compl. at 9.) In relevant part, § 605(e)(4) prohibits a person from, inter alia, selling and/or distributing "any electronic, mechanical, or other device or equipment, knowing or having reason to know that the device or equipment is primarily of assistance in the unauthorized decryption of satellite cable programming. . . ." § 605(e)(3) provides anyone aggrieved by a violation of § 605(e)(4) with a private cause of action.
Three elements must be shown to establish that defendant violated § 605(e)(4): (1) defendant distributed or sold equipment, (2) the equipment was primarily of assistance in decrypting satellite signals, such as Directv's, without permission, and (3) defendant knew or had reason to know that the equipment primarily aided the unauthorized use of such signals. See International Cablevision, Inc. v. Sykes, 75 F.3d 123, 133 (9th Cir. 1996); Allarcom Pay Television, Ltd. v. General Instrument Corp., 69 F.3d 381, 385-386 (9th Cir. 1995).
2. 17 U.S.C. § 1201(a)(2), the Digital Millennium Copyright Act
Claim 3 of plaintiff's complaint alleges that defendant violated 17 U.S.C. § 1201(a)(2). (Compl. at 10.) In relevant part, § 1201(a)(2) prohibits the trafficking in any technology or device that "(A) is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title; [or] (B) has only limited commercially significant purpose or use other than to circumvent a technological measure that effectively controls access to a work protected under this title;" § 1203 creates a private cause of action for anyone injured by a violation of § 1201.
To establish that Little's conduct violated § 1201(a)(2), two elements must be shown: (1) defendant trafficked in a technology; and (2) the technology was primarily designed or produced to circumvent conditional access controls to protected works, or has limited commercially significant use other than such circumvention. See 321 Studios v. Metro Goldwyn Mayer Studios, Inc., 307 F.Supp.2d 1085 (N.D. Cal. 2004), 1094-1099.
3. 17 U.S.C. § 1201(b)(1), the Digital Millennium Copyright Act
Claim 4 of plaintiff's complaint alleges injuries resulting from a violation of 17 U.S.C. § 1201(b)(1). (Compl. at 11.) § 1201(b)(1) uses identical language to § 1201(a)(2), except where 1201(a)(2) covers devices used to circumvent a "technological measure that effectively controls access", 1201(b)(1) covers devices used to circumvent "protection afforded by a technological measure that effectively protects a right of a copyright owner under this title in a work or a portion thereof."
The same two elements necessary to establish a violation of § 1201(a)(2) must be shown to demonstrate a violation of § 1201(b)(1). Further, a third element that must be shown under § 1201(b)(1) is that Directv's conditional access controls protect a right of a copyright owner. See id. 4. 18 U.S.C. § 2512(1)(b), the Federal Wiretap Laws
Claim 6 of plaintiff's complaint claims injury resulting from a violation of a 18 U.S.C. § 2512(1)(b). (Compl. at 13.) § 2512(1)(b) prohibits any person from, inter alia, intentionally possessing and/or selling "any electronic, mechanical, or other device, knowing or having reason to know that the design of such device renders it primarily useful for the purpose of the surreptitious interception of wire, oral, or electronic communications, and that such device or any component thereof has been or will be sent through the mail or transported in interstate or foreign commerce."
District courts disagree on whether a private cause of action exists for violations of § 2512 based on different interpretations of the scope of § 2520. See Directv Inc. v. Cardona, 275 F. Supp.2d 1357, 1364-1367 (describing decisions on both sides). In relevant part, § 2520(a) provides that "any person whose wire, oral, or electronic communication is intercepted, disclosed, or intentionally used in violation of this chapter may in a civil action recover from the person or entity, other than the United States, which engaged in that violation such relief as may be appropriate."
An important rationale for the district courts that found a civil cause of action for violations of § 2512 stems from a 1986 amendment to the text of § 2520. See, e.g., Oceanic Cablevision, Inc. v. M.D. Electronics, 771 F.Supp. 1019, 1028 (D. Neb. 1991); Directv Inc. v. Drury, 282 F.Supp.2d 1321, 1323-24 (M.D. Fla. 2003). The pre-1986 version of § 2520 provided, in relevant part, that "any person whose wire or oral communication is intercepted, disclosed, or used in violation of this chapter shall (1) have a civil cause of action against any person who intercepts, discloses, or uses [such communication.]" The change in description of those liable from specifically anyone "who intercepts, discloses, or uses" to generally one who "engaged in that violation" was interpreted as expanding the category of potential defendants to violators of any of the chapter's provisions. See Drury, 282 F.Supp.2d at 1323.
The Eleventh Circuit recently became the first Court of Appeals to address the issue under the current language of § 2520 in a case involving a defendant who allegedly possessed a satellite-signal theft device. See Directv Inc. v. Treworgy, No. 03-15313, 2004 WL 1317849 (11th Cir. June 15, 2004). The Court found that in creating a civil remedy, § 2520(a) defines a beneficiary as one whose communication is "intercepted, disclosed, or intentionally used in violation of this chapter" and a liable party as "the person or entity which engaged in that violation." Id. at *3. The Court interpreted the plain language and grammatical structure as indicative of Congress' intent to limit the class of defendants to those that engaged in the violations implied by the earlier part of the sentence, i.e. to those who had illegally "intercepted, disclosed or intentionally used" a communication. Id.
As the motion is denied on alternate grounds, the court declines at this time to rule on this issue.
Five elements must be shown to establish that Little violated § 2512(1)(b): (1) he possessed or sold a device, (2) whose design makes it primarily of use to surreptitiously intercept electronic communications such as Directv's satellite signal, (3) a part of or the whole device was or will be transported in the mail or interstate/foreign commerce, (4) he knew or had reason to know of the primary use of the device, and (5) he knew or had reason to know of its transportation in the mail or interstate/foreign commerce.
B. Factual Disputes
As noted above, there is considerable overlap among the elements necessary for establishing violations of the four statutory provisions at issue. As an initial matter, 18 U.S.C. § 2512(1)(b) contains two unique elements pertaining to transportation of the illegal device and 17 U.S.C. § 1201(b)(1) contains one unique element relating to protection of a right of a copyright holder. The parties do not dispute any facts related to these elements, and neither addresses them specifically. Little's email orders include several references to mailing of the reader/writers including "Please ship (5) programmers to this address" ( see Rissler Decl., Exh. E) and "Please send them overnight" ( see id., Exh. G). Directv's channels include major cable television networks and showings of major studio movies. (Mot. at 1-2.) In the absence of any discussion, the court is satisfied that this evidence adequately establishes no factual issue related to the two elements dealing with transportation of the devices under § 2512(1)(b) and the element related to the right of a copyright owner under § 1201(b)(1).
The remaining three elements of § 2512(1)(b) overlap with and cover all the elements of the other provisions: (1) defendant sold equipment, (2) primarily designed to intercept electronic communications such as Directv's signal, and (3) he knew or had reason to know of its primary use. The first element is not at issue, and Little admits purchasing and reselling 46 White Viper reader/writers to two client companies. ( See 2/27 Little Dep. at 120.) Rather, the dispute centers around whether the White Viper reader/writers were primarily designed for theft of Directv's television programming, and further whether defendant acted with the requisite scienter.
1. Design of the White Viper Reader/Writer
Defendant Little testifies that he used the White Viper reader/writers for the legitimate purpose of securing the networks of two client companies. (5/3 Little Dep. at 176-181.) He states that he came across the White Viper reader/writers via a simple Google search for an "ISO 7816 reader." (Little Decl. ¶ 5.) His testimony indicates that his company, Techs On Call, installed and configured 39 of the White Viper reader/writers on Nareo's network and 8 of the devices on Crown Vantage Inc.'s network. (5/3 Little Dep. at 176-181.) According to him, this work was done to implement a secured access system for the companies' networks under network service management contracts. ( Id.)
Defendant Little explains the setup by which a White Viper reader/writer, plugged into a computer, would be part of a security mechanism protecting data on the computer by restricting access to the network: In order to log in to the system, a smartcard pre-programmed with a unique authorization PIN is placed in the reader/writer device. ( See 2/27 Little Dep. at 74, 76-77.) The PIN on the smartcard corresponds to that computer's ID on the network and enables the security program to recognize it as anauthorized ID. ( Id.) The user would also have to enter a user-name and password associated with the inserted smartcard's PIN to gain access. ( Id.)
In addition to providing his clients with the reader/writer devices, Little would install the devices using embedded software in Windows 2000 Server to configure the system and program the smartcards with unique IDs. ( Id.) Defendant also states that "it's possible" he used other types of software other than that contained in Windows 2000 Server. ( Id. at 77.) However, as only a portion of his deposition transcript was submitted, it remains unclear what other software may have been used.
Defendant's whitepaper details technical requirements and guidelines for a Windows 2000 secure logon implementation. (Little Decl., Exh. A.) He indicates that the whitepaper outlines the steps followed to install the White Viper reader/writers as security devices on his clients' networks. (Little Decl. ¶ 6.) Although the whitepaper lists an "ISO 7816 smartcard reader" as a requirement, plaintiff emphasizes in its reply that the whitepaper does not specifically discuss the White Viper device and is nearly identical to a document on a Microsoft web page. (Reply at 4.)
Plaintiff's experts assert that the White Viper reader/writers are primarily designed for the purpose of circumventing Directv's conditional access controls, relying on reasons including the following: (1) the reader/writer lacks hardware necessary to generate a "card present" signal that is a requirement for using Windows or any other secure login software known to plaintiff's experts to secure a computer, (2) the White Viper reader/writer has its smartcard slot mounted upside down, a rare orientation, which is compatible with the orientation of Directv access cards, (3) White Viper's products were specifically marketed for circumvention of Directv's access controls, (4) in testing, the reader/writers enabled unauthorized access to Directv's programming when used in conjunction with other equipment and piracy-related software, and (5) the owner of White Viper Technologies acknowledged that he created his first reader/writer device by reverse engineering a pirate device purchased from another website. (Simon Decl. at 2-3, Exh. B. at 1, 6-14.)
Plaintiff's expert, David Simon, also indicates that neither Microsoft nor any third-party known to him provides a software driver that makes the White Viper reader/writer compatible with the Windows logon functionality. (Simon Decl. ¶ 8.) From the partial deposition transcripts submitted by plaintiff it is unclear whether defendant Little was directly questioned on this point or if the possible additional non-Windows software he referenced sheds light on this apparent discrepancy. ( See 2/27 Little Dep. at 77.) As plaintiff bears the burden of showing no issue of material fact, the court is not convinced that a lack of a driver for Windows 2000 compatibility, even in combination with the other reasons put forward by plaintiff, renders the White Viper reader/writers unusable for a network security system and primarily of use in pirating Directv's satellite signal.
A notable absence in plaintiff's submissions are any facts suggesting an alternative reason defendant Little's clients might have had for purchasing the White Viper reader/writers, if not for a network security system. Plaintiff does not contest that the 46 reader/writers were sold to Nareo and Crown Vantage, Inc. or challenge defendant Little's representation that they were companies engaged in legitimate business. Nor does plaintiff present any facts showing why an apparently legal business would have an interest in 46 reader/writers that were primarily of assistance in pirating Directv's signal.
Moreover, the determinative issue before the court is not the specific use defendant made of the reader/writers but whether the reader/writers are primarily designed for signal theft. Based on the evidence presented, the court cannot conclude as a matter of law that the White Viper reader/writer is primarily designed for this illegal purpose. Since the moving party bears the burden of showing the absence of a genuine issue of material fact on a motion for summary judgment, the material it presents must be viewed in the light most favorable to the nonmovant. Adickes v. S.H. Kress Co., 398 U.S. 144, 157 (1970). Although no third-party vendor known to plaintiff's experts offers a driver to make the device compatible with Windows, no evidence has been submitted showing that purchasers of the reader/writers could not readily code their own drivers. Further, it is not readily apparent that the lack of any Windows drivers precludes the possibility that a smartcard reader/writer with the White Viper reader/writer features is designed for a non-piracy purpose.
Additionally, although some of the products on White Viper's website made reference to terms related to Directv piracy like "HU" or "unlooper", the White Viper reader/writer at issue is simply described as an "ISO7816 Smart Card Reader/Writer" without any references that indicate it was being marketed for an illegal purpose. ( See Rissler Decl., Exh. A.) In light of defendant's testimony on his actual use of the White Viper reader/writers and these general considerations of the device's primary design, the question of whether the White Viper reader/writer is primarily designed for stealing Directv's signal remains an issue of fact.
"HU" appeared in the identification number on the back of Directv's third generation access cards and satellite pirates referred to them as "HU Cards". See Rissler Decl. at 4.
2. Knowledge of the Primary Use of the White Viper Reader/Writers
Even assuming the White Viper reader/writer is primarily of assistance in the theft of Directv's signal, an issue remains as to whether adequate evidence shows that defendant meets the requisite knowledge requirement of 47 U.S.C. § 605(e)(4) and 18 U.S.C. § 2512(1)(b). To establish a violation, both statutory provisions require a showing that defendant knew or had reason to know of the devices' primarily illegal purpose. Plaintiff does not present adequate uncontested facts that show defendant had the requisite knowledge.
Directv argues that, at a minimum, defendant should have known of the reader/writers' illegal purpose because his identifying information appears in piracy newsgroup discussions and on orders for piracy software, and he purchased the reader/writer devices from an obvious reseller of pirate access devices. (Mot. at 19.) Plaintiff points to results of a Google newsgroup search showing thirty-three postings on a piracy newsgroup bearing defendant Little's email address. (Rissler Decl., Exhs. 01-033.) Defendant testifies that he never made those postings, (5/3 Little Dep. at 170), and submits the results of another Google newsgroup search that do not include the thirty-three postings (Fotouhi Decl. Opp., Exh. A). Plaintiff argues defendant deleted the incriminating postings and provides evidence of Google's instructions on removing one's own postings as well as a re-run of the original search. Plaintiff points out that the results of its re-run list the same number of postings in each discussion thread, but the postings from Little's email address are no longer accessible. Defendant's testimony presents a factual dispute as to whether defendant participated in piracy newsgroup discussions.
Plaintiff also points to two documents bearing defendant Little's identifying information that represent purchase orders from www.ultra3m.com for satellite piracy software. (Rissler Decl. ¶¶ 29-30.) Defendant Little testifies under oath that he is not familiar with the website www.ultra3m.com, (5/3 Little Dep. at 142), and denies purchasing any piracy software. (Little Decl. ¶ 8.) Consequently, a factual dispute exists as to whether he made any purchases from the ultra3m website.
In addition, plaintiff Directv argues that since defendant Little purchased the reader/writers from an obvious seller of piracy devices he should have known of the White Viper reader/writer's illegitimate primary use. As there remains a question as to the device's primary use, this argument is unavailing. Thus, even assuming plaintiff's position on the primary use of the White Viper reader/writers were conceded, plaintiff has not established undisputed facts that show defendant Little must have known of the reader/writers' primary use.
C. Affirmative Defenses
Plaintiff also requests summary judgment on defendant's affirmative defenses. In his answer, defendant Little raises twenty-one separate affirmative defenses. (Answer at 11-14.) Many of the defenses pertain to damages and the injury suffered by plaintiff from defendant's actions which is an issue to be reached only after liability is established. Plaintiff summarily contends that because defendant fails to present evidence supporting his defense of legitimate use or the other defenses, plaintiff is entitled to summary judgment on them. However, there remains a question of fact on legitimate use, and plaintiff fails to specify which affirmative defenses Directv would be entitled to summary judgment on under such circumstances. Consequently plaintiff's motion for summary judgment on defendant's affirmative defenses is denied.
III. ORDER
For the foregoing reasons, the court hereby denies plaintiff's motion for partial summary judgment as follows:
1. DENIES plaintiff's motion for partial summary judgment as to liability on claims two, three, four and six.
2. DENIES plaintiff's motion for summary judgment on defendant's affirmative defenses.
The court hereby STRIKES the declaration of John Fisher with exhibits and directs the clerk to file them under seal.