Wednesday, February 8, 2023

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$16m Pirate IPTV Lawsuit Magically Returns $32m Thanks to Bankruptcy
Andy Maxwell, 08 Feb 12:30 PM

iptvAdvanced TV Network (ATN) was an IPTV service in Sweden that supplied more than a thousand TV channels to customers via the Internet. In 2008, that was an unusual achievement.

ATN gave the impression of operating legally. As a registered company it was generating annual sales of around $7 million by 2013 and paid taxes to the state. However, the content ATN supplied to its customers had illegal origins.

A police raid in 2016 led to three of its operators being convicted two years later for criminal copyright infringement, among other offenses.

All three were handed prison sentences and ordered to pay $24 million in damages to rightsholders, but the service itself lived on after relocating to the United Arab Emirates. Utilizing overseas resellers, ATN continued its business in Europe and North America but ran into more trouble in 2020. An IBCAP investigation led to a DISH lawsuit that targeted the pirate IPTV service's official distributor in the United States.

DISH Lawsuit Takes a Second Bite

Filed in a Florida district court in October 2020, the complaint alleged that Alfa TV Inc. was operated in the United States by individuals associated with ATN. In the complaint, Florida resident Hisham Manse Ibrahem was named as the company's president, Haitham Mansi its vice-president. Nezar Saeed Hammo allegedly acted as Alfa's marketing manager while Mohammed Abu Oun was identified as the company's general manager.

DISH alleged that the men and Alfa TV Inc. did business under the pirate IPTV brand ElafnetTV, which in turn described itself as the "Biggest Arabic IPTV Provider in the World." After failing to respond to takedown notices, IBCAP/DISH ran out of patience and sought $150,000 in statutory damages for at least 107 registered works – a total of $16,050,000.

With the pandemic causing chaos and less than cooperative defendants, progress in the case was slow. Then on May 21, 2021, Alfa TV marketing manager Nezar Saeed Hammo filed for bankruptcy in Florida. Within days DISH moved to hold Alfa TV Inc. and Hisham Ibrahem in contempt of court, and then filed for default judgment against Haitham Mansi, who countered in August 2021 by answering the lawsuit.

After almost a year of subsequent filings, in July 2022 the court announced that a jury trial had been scheduled for July 3, 2023. What followed was six months of complete silence and then a sudden flurry of activity last month.

Docket Comes Alive, IBCAP Celebrates Judgments Worth $32m

In an announcement yesterday, the International Broadcaster Coalition Against Piracy (IBCAP) celebrated wins for its member, DISH, in both the district court and bankruptcy court in Florida.

"[A] federal district court and a federal bankruptcy court, both in Florida, have ordered Hisham Manse Ibrahem and Nezar Saeed Hammo, U.S.-based sellers of the pirate service ATN, to pay $32,100,000 in combined damages for willful copyright infringement," IBCAP's announcement reads.

"Both individuals were selling the ATN service through a company known as Alfa TV Inc., which was also found liable, along with Haitham Mansi, a Sweden-based owner, and operator of Alfa TV, Inc."

As previously noted, Nezar Saeed Hammo filed for bankruptcy in May 2021. IBCAP says that since the move was an attempt to avoid liability, an adversary complaint was filed to determine the non-dischargeability of the debt against him.

"As with similar actions against willful copyright infringers, the bankruptcy court ruled the judgment non-dischargeable, again showing that infringers cannot use the bankruptcy system to avoid liability for willful copyright infringement," IBCAP notes.

A Win is a Win – Even When Defendants Agree to Lose

While IBCAP's statement is technically accurate, liability was only established after consent was obtained from the defendants. On January 10, 2023, a stipulation was filed jointly by DISH and defendants Alfa TV Inc., Haitham Mansi, and Hisham Manse Ibrahem. This meant that the judge didn't have to determine liability on the merits, because an agreement between the plaintiff and defendants established that as fact.

"DISH and Defendants request that the Court enter a final judgment and permanent injunction against Defendants. This stipulation has no effect on DISH's claims against co-defendants Nezar Saeed Hammo and Mohammed Abu Oun," it reads (pdf).

dish - alfa - stip

The proposed order and injunction (pdf) was signed by the judge the very next day. A note that each party will bear its own attorneys' fees and costs may hint at the realities behind the scenes, but cast-iron confidentiality agreements mean the details are unlikely to see the light of day.

And Then There Were Two…

In response to Nezar Saeed Hammo filing for bankruptcy in May 2021, DISH filed a complaint against him in August the same year. That docket runs to 51 entries with the penultimate entry (dated January 12, 2023) revealing another stipulated motion for final judgment and permanent injunction.

The agreement between DISH and the apparently penniless Hammo is almost identical to the separate agreement signed by his colleagues. However, by admitting his actions were "willful and malicious," the $16 million Hammo owes DISH in damages is rendered non-dischargeable.

Each party will bear its own attorneys' fees and costs in this matter too, but the real magic lies elsewhere.

The original complaint filed by DISH demanded $150,000 in statutory damages for 107 registered works – a total of $16,050,000. From the same pool of defendants, with exactly the same damages claims, DISH has managed to double the original request for damages to more than $32 million.

IBCAP Says It's Pleased With The Result

As some may have noticed, a defendant named in the original complaint is absent from these judgments. DISH voluntarily dismissed Mohammed Abu Oun from the lawsuit on January 18, 2023, but without prejudice. In theory, that raises the possibility of another $16 million in agreed damages later on. Whether any of the defendants expect to pay anything is unknown but IBCAP says it's pleased with the outcome.

"Yet again, the federal courts have levied huge financial awards against individuals in the U.S. who were selling pirate services," says Chris Kuelling, executive director of IBCAP.

"This case is another example of why it is not worth the risk for retailers to sell pirate services. It is also important to point out that sellers of pirate services cannot use bankruptcy to shield against their illegal activities."

Meanwhile, the ATN IPTV service is still online, but IBCAP says its members' content is no longer being made available. In a statement sent to TorrentFreak, IBCAP notes that while DISH puts its name on the lawsuit as the rightsholder, IBCAP itself does most of the work.

"IBCAP is the driver behind these lawsuits. As a coalition that represents the interests of more than 170 channels, our lab and analysts, team of lawyers, and other experts are instrumental in identifying pirate sources of content and we have a very high success rate in taking down illegal streams without litigation," the anti-piracy group notes.

"On behalf of our members, IBCAP is responsible for all monitoring, pre-litigation investigations, legal resources and efforts, including takedowns and the identification of non-compliant sources of our members' content. Once identified, we guide our members to take final legal action to protect content. As the final part of this process, our members have to do the actual filing because they are the rightsholder.

"However, it is IBCAP doing the pre-litigation work, takedown efforts, identifying the targets for lawsuits and providing the necessary evidence to achieve a successful outcome," the group concludes.

Documents related to both actions can be found here (1,2,3,4,5,6, all pdf)

From: TF, for the latest news on copyright battles, piracy and more.

Cheat Developer Can Pursue 'Hacking' Claims Against Bungie, Court Rules
Ernesto Van der Sar, 07 Feb 08:47 PM

aimjunkiesIn 2021, Bungie filed a complaint at a federal court in Seattle, accusing AimJunkies.com of copyright and trademark infringement, among other things.

The same accusations were also made against Phoenix Digital Group, the alleged creators of the Destiny 2 cheating software at the center of the complaint.

AimJunkies denied the claims and argued that cheating isn't against the law. In addition, it refuted the copyright infringement allegations; these lacked substance and were ungrounded because some of the referenced copyrights were registered well after the cheats were first made available.

Court Dismissed Bungie's Copyright Claims

In May 2022, U.S. District Court Judge Thomas Zilly largely sided with AimJunkies. The original complaint lacked sufficient evidence to support a plausible claim that the 'Destiny 2 Hacks' infringed any copyrights, the Judge concluded.

While this was a setback for Bungie, the court gave the company an opportunity to file a new complaint to address these shortcomings, which it did soon after.

In its amended complaint, the game developer added more copyright infringement details and shared more information on the roles of several key people that are also allegedly involved. They include James May, who Bungie describes as a third-party cheat developer.

Cheaters Countersue Bungie

In response, the AimJunkies defendants went on the offensive. They didn't deny that the AimJunkies site offered 'Destiny 2' cheats in the past but rejected allegations that copyright law had been violated.

Instead, James May and the three managing members of Phoenix Digital turned the tables. Their countersuit against Bungie contains several hacking allegations and claims that the game company violated the DMCA by circumventing the cheat's technological protection measures.

These initial counterclaims were dismissed after Bungie pointed out several flaws to the court. However, AimJunkies was allowed to amend its allegations to add missing details. This attempt was more successful.

'Hacking' and Theft Claims Can Proceed

Late last week, United States District Judge Thomas S. Zilly ruled that the hacking, theft, and contract breach allegations survive Bungie's motion to dismiss so can proceed.

"May and Phoenix Digital have cured deficiencies the Court previously identified in its earlier Order […] and many of the arguments Bungie raises in its motion to dismiss would be more appropriately presented in a motion for summary judgment or at trial," Judge Zilly writes.

denied

The hacking and theft claims only apply to James May, who's described as a third-party cheat developer. These allegations are grounded in a spreadsheet obtained during discovery and suggest that Bungie breached his computer without permission.

Bungie's own privacy policy didn't allow the company to access files on Mr. May's personal computer surreptitiously, let alone download any of its contents. However, May believes this is what happened.

"On several occasions between October 2, 2019 and May 25, 2021 Bungie, Inc […] obtained information from personal files contained on Mr. Mays' personal computer. Bungie did so by exceeding the authorization provided to it by the Bungie Privacy Policy.

"In particular, the reference in Exhibit D to the file path "g:\work files\", directs to Mr. May's external drive which contains proprietary technology and trade secrets known only to Mr. May. Mr. May holds copyrights in these materials…," the counterclaim added.

By accessing the drive, the game company allegedly violated the Computer Fraud and Abuse Act, which can be seen as hacking. In addition to accessing the files, May also accuses Bungie of downloading them, which is seen as theft.

may evidence

The alleged hacking and theft caused damage to May, as he spent dozens of hours reviewing potentially compromised files. May also had to purchase a new computer.

Points for AimJunkies

There is also positive news for AimJunkies' parent company Phoenix Digital. Judge Zilly concludes that its contract breach claim can continue. AimJunkies argued that Bungie violated its terms of service by decompiling and reverse-engineering its cheat software.

Since these activities are expressly prohibited by AimJunkies' terms of service, the cheat developers argue that amounts to a breach of contract.

AimJunkies previously filed hacking-related claims against Bungie, but since the company didn't file an amended hacking-related counterclaim, that is no longer an issue.

DMCA Circumvention Counterclaims

Not all counterclaims survived Bungie's motion to dismiss. Alleged violations of the DMCA due to circumvention of technological protection measures can't continue.

According to Judge Zilly, there is no evidence that AimJunkies' software had any technical copyright protection measures. As such, there is nothing to circumvent.

That said, the circumvention claims of third-party developer James May can continue. He accused Bungie of bypassing password and firewall technology to access his personal files, which means that there was something to circumvent.

Everything considered, plotting the future course of the case is difficult. A myriad of claims filed by both sides have rendered the case unpredictable, and with the parties apparently determined to keep fighting, further unexpected twists can't be ruled out.

The amended counterclaims and Bungie's motion to dismiss can be found here (pdf) and here (pdf). Judge Zilly's order granting/dismissing various claims is available here (pdf)

From: TF, for the latest news on copyright battles, piracy and more.

 
 
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