A New Front in the Set-Top Box Piracy Wars: Can Sony’s Safe Harbor Save TickBox TV?

(NB: This headline does not obey Betteridge’s Law.)

Hollywood studios, led by Universal, have sued TickBox TV in federal district court in California, bringing their campaign against set-top box (STB) piracy stateside after a big win earlier this year in the EU. Last spring, the Dutch film and recording industry trade association BREIN prevailed in copyright litigation against the distributor of a STB called the Filmspeler. The CJEU held that the Filmspeler’s distributor, Wullems, directly infringed the plaintiffs’ copyrights—specifically, their right of communication to the public—by selling STBs loaded with software add-ons that provided easy access to infringing programming online. (I blogged about the Filmspeler case here.)

Universal’s lawsuit, which was filed in October, follows a decision by Amazon last year to ban third-party sellers on its platform from selling Android-powered STBs running the open-source Kodi media player and Kodi add-ons. (For more on Kodi and the Amazon ban, see here. Interestingly, Amazon—now a producer of paid programming—is Universal’s co-plaintiff against TickBox TV.) Universal’s suit also follows litigation in Canada in which three cable company plaintiffs won an injunction last June against dozens of STB sellers. According to the Internet traffic analytics firm Sandvine, the streaming video and television piracy ecosystem, which includes box sellers and add-on software providers, generates about $1 billion in revenue. Pay TV providers and video programming copyright holders are, of course, eager to shut it down.

Universal’s suit claims contributory infringement and intentional inducement to infringe the plaintiffs’ right of public performance in their copyrighted films and television shows. “For the customers who use TickBox TV,” the complaint alleges, “the device provides the hallmarks of subscribing to authorized streaming services, with one notable exception: the customers only pay money to TickBox, not to Plaintiffs and other content creators upon whose works TickBox’s business depends.”

The complaint asserts that the operators of TickBox TV not only promote and sell STBs to the public for the purpose of delivering infringing program streams, they also run a companion website that offers live technical support and automatic software updates for TickBox devices. According to the complaint, TickBox makes accessible to users a universe of Kodi add-ons that “are designed and maintained for the overarching purpose of scouring the Internet for illegal sources of copyrighted content and returning links to that content.” The complaint acknowledges that users can also use the TickBox to connect to paid subscription services like Amazon Prime and Netflix, but, the plaintiffs allege, it is the promise of access to free popular content (i.e., “ALL the hottest TV shows, Hollywood blockbusters, and LIVE sporting events”) that drives consumer demand.

The controlling US cases in this area of copyright law are Sony v. Universal and MGM v. Grokster, both of which involved the distribution of dual-purpose devices—the VCR in Sony, and peer-to-peer file sharing software in Grokster. (The devices in question were dual-purpose in the sense that they could be used for both infringing and non-infringing activity.) Under Sony, a court will not impute knowledge of infringing activity, which is a necessary element of a claim for contributory infringement, to a device distributor based solely on the fact that the device in question can be used to infringe copyright. Absent knowledge on the part of the device distributor of specific infringing acts by users of the device, there can be no contributory liability. Under Grokster, however, a device distributor can be liable for inducing infringing uses of its device if it “distributes [the] device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement.” If the requisite purposeful conduct is shown, no knowledge of specific infringing acts is required for inducement liability.

The secondary infringement claims against TickBox TV are interestingly different from those in Sony and Grokster, however, which makes this case a bit of an odd duck from a liability standpoint. In both Sony and Grokster, the copyright claims against the defendant device distributors were predicated on the device users’ alleged direct infringements (of the reproduction right). In this case, by contrast, the users of TickBox TV are not potential direct infringers, because it is not an infringement of the public performance right to receive an unauthorized program stream. Instead, the potential direct infringers of the public performance right are the transmitters of the illegal program streams that are received by TickBox users. See ABC v. Aereo. The potential secondary infringers are the add-on developers, who provide links to those streams. See Perfect 10 v. Amazon. Where does that leave the distributors of the TickBox, who provide a hardware device that provides easy access to software add-ons that provide easy access to infringing program streams?

I considered this question in my earlier post on BREIN v. Wullems, in which I briefly analyzed whether Wullems’s distribution of the Filmspeler STB would give rise to secondary liability under US copyright law. Under Sony and Grokster, I pointed out, the sale of the Filmspeler on its own would not give rise to liability. However, Wullems’s marketing efforts for the Filmspeler, which apparently highlighted access to infringing material as a selling point, could meet the Grokster standard for inducement to infringe. For there to be inducement liability, however, there must be an underlying direct infringement that the defendant’s conduct induced. As I pointed out above, STB users are not direct infringers of the public performance right, so no claim of secondary infringement against TickBox TV can piggyback on their conduct. As for the providers of the infringing program streams and the add-ons that connect users to those streams, those parties might be infringers, but TickBox TV isn’t inducing them to do anything; it’s just giving users access to what they already provide. For instance, there’s no allegation in the complaint that TickBox TV is inducing add-on developers or illegal stream transmitters to provide content to be used with TickBox devices. The allegation is instead that TickBox TV is inducing purchasers of its devices to use those devices to benefit from the independent infringements of third parties. And that’s arguably not actionable inducement at all under Grokster, a case in which the defendant was inducing users of its software to infringe by downloading files of copyrighted sound recordings.

It could be, then, that inducement is the obvious but wrong secondary liability theory in STB piracy cases under US law—because the induced are not actually infringers, and the infringers are not actually being induced. Contributory infringement may be a better fit. It requires proof that the defendant knows of and materially contributes to direct infringements. Universal’s complaint alleges that TickBox has actual or constructive knowledge that its devices are being used to infringe, but the illustrative screen captures in the complaint are of user interfaces for add-ons that may (or may not) be downloaded by particular TickBox users. TickBox TV doesn’t ship its STBs pre-loaded with add-ons. Individual users choose which add-ons to install after purchase, and different users will install different add-ons. Moreover, the complaint doesn’t allege that TickBox TV has direct knowledge of any specific programs that are being offered through the universe of Kodi add-ons that can be downloaded through links provided on the companion website.

As in Sony, the knowledge element of contributory infringement is a high hurdle for the plaintiffs in this case; TickBox, like Sony, has general knowledge that its devices will be used to infringe, but it’s unclear that it has knowledge of any actual infringements. Under Sony, general knowledge that a dual-purpose device is being used to infringe is not enough to establish liability. Universal acknowledges, moreover, that the TickBox is a dual-purpose device when it concedes that TickBox can be used to connect users to their paid subscriptions for services like Amazon Prime and Netflix. Unless discovery in the case uncovers evidence that TickBox agents/employees knew about actual infringements by add-on providers and/or stream transmitters being accessed by TickBox users, Universal seemingly can’t win.

Predictably, the FAQ on TickBoxTV.com asserts that TickBox is simply a device distributor:

Q. Is it legal to use Tickbox TV™?

Tickbox TV™ is a device, much like a computer or cell phone, it provides a hardware platform for you to utilize Kodi and download add-ons for kodi or apps for android TV via the Google Play store. Devices like Tickbox TV™ are perfectly legal as it does not offer file-sharing, copying or sharing of content streamed to the device.

TickBox TV makes it convenient for users to locate infringing content online and view it on their TVs. It also makes it convenient for users to locate and view content from legal services for which they pay. Making infringement more convenient, however, is not actionable in its own right. Under Sony, TickBox TV’s relationship to direct infringements of the plaintiffs’ specific works may be too attenuated, and its knowledge of third-party infringements that pass through its devices may be too generalized, to be actionable as contributory infringement. Under Grokster, the consumer conduct TickBox TV is arguably inducing isn’t itself infringing, although it does rely on the infringements of others who are not actually being induced. This case provides a great example of the ways in which new technologies test the limits of existing secondary copyright liability doctrines.

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