Foretelling the DishTv v. ZemTV case-story

In June 2017, American satellite and broadcast provider ‘Dish Network’ dragged one ‘ZemTV’ (an add-on developer for kodi software) and ‘TVaddons.ag’ (the largest add-on online library for Kodi-software users) to the Texas Federal Court for copyright infringement. According to the complaint, ‘ZemTV’ is accused for directly infringing the copyrights of various TV channels by providing an add-on (whereby the channels are retransmitted over internet), which allows the end-users to stream the copyright-content on their TV illegally i.e. without paying any subscription fee to the broadcasters, while the ‘TVAddons website’ is accused to be indirectly (contributory/vicariously) liable for marketing and inducing the distribution of the ‘ZemTV add-on’ to the end-users.  The case is still at its nascent stage and effective replies are yet to be filed by both the accused coupled with the thingness that a lot of questions of facts are still to be established by both the parties but this two-staged article would try to augur the possible outcome of the case.

STAGE A

What is Kodi software and its Set-top box.

Kodi is a free and open source media player application for playing videos, music, pictures, games, and developed by the XBMC Foundation. It allows users to play and view most streaming media, such as videos, music, podcasts, and videos from the internet, as well as all common digital media files from local and network storage media in a Netflix kind-of interface. It’s very much available for download on the Android Play store and compatible with Microsoft Windows, Linux and iOS operating systems as well.

A Kodi Set-top Box, famous for its Plug and Play capability, is essentially a set-top box or a HDMI stick with the software installed on it. It allows people to stream shows and watch them on any platform including a computer, smartphone and tablet.

Though, Kodi is a neutral platform but over last few months, it has hogged negative limelight for two reasons. Firstly, for the misuse of its specific feature of Add-ons or plug-ins that allow the end-users to gain unauthorized access over copyrighted media content by installing illegal or unlicensed add-ons over the software. Secondly, for the sale of ‘fully loaded’ digital media players or set-top boxes that comes with such pre-loaded add-ons. The founders of the Kodi Software i.e. XBMC Foundation has always tried to disassociate the Kodi project from such illegal products, and also requisitions third-party add-ons providers to refrain themselves from exhibiting any kind of association with the foundation.

ZemTV and TVaddons.org – the incriminated parties.

Zemtv is an unofficial Kodi add-on, which, after installation upon the software, unlawfully retransmits the TV channels and allows the end-users to scrape online copyright media content over their devices. Technically, as alleged, it captures live broadcast signals of the protected channels outside the U.S, transforms into a format which is serviceable for internet streaming  and then uploads and transfers the transcoded content to computer servers (controlled and operated by the developer) and the redirect the same to end-users, who have installed the Zemtv Addon. (Pssst. I may be wrong in understanding and/or explaining the technical aspect or procedure of this operation, please correct me, if found wrong). After serving subpoenas upon Facebook, Twitter and Paypal etc., ZemTV service/addon was found to be developed and operated by one Shahjahan Durrani, who’s based in London.

‘Tvaddons.ag’ or ‘Tvaddons.org’ (now Tvaddons.co) is a third-party website and a platform, which hosts hundreds of unofficial Kodi-Addons and probably, the largest repository for addons.  TVaddons website claims itself to be the only legitimate source for different types of addons and tools and to have participation of combined total of 36 million active users. The website also notifies a disclaimer for disassociating itself with the Kodi founders. It is owned and operated by Adam Lackman, who resides in Montreal, Canada.

STAGE B

ZEMTV

• Defense of ‘Fair Use’ – The ZemTV has been alleged to be liable for directly infringing DISH’S copyrights in audio-visual works (in violation of 17 U.S.C S 106) and is an infringer (in accordance with 17 U.S.C S.501). Apparently, the complainant is likely to succeed against this prime-accused on merits but after considering the developer’s response to media, I am sure that the developer will definitely take the defense of ‘fair-use’ in this case. The developer has taken the guard by saying that it has developed the Kodi add-on for learning python and broadening his coding skills (i.e. for educational purposes) and was further doing a community service (i.e. non-commercial use) and without receiving any profit.

Now let us examine that whether this possible defense of ‘fair use’. The determination of the issue that whether an activity is within the realm of ‘fair-use’ hinges upon the application and counterpoising of following four factors outlined in Section 107 of the Copyright Act, which were thoroughly analyzed and explained by the US Supreme Court in Sony Corporation of America v. Universal City Studios (Betamax Case):

1. The purpose of the use – As mentioned earlier, the developer claims that the purpose of performing the infringing activity was purely educational and non-commercial basis. Conversely, the complainant claims that the developer used to ask donations from the end-users for maintenance and other purposes. This plea, though looks after-thought, is purely a mixed question of law and fact and will be decided after the trial. However, it cannot take the defense of ‘transformative’ use (i.e. conversion of original to new work) as merely retransmission of the copyright content in a different medium is not a ‘fair use’ as held in ‘Napster case’.
2. the nature of the work being used – The rationale behind this factor is that certain types of works, typically those involving “more of diligence than of originality or inventiveness,” require less copyright protection than other original works. Thus, for example, informational works, such as news reports, that readily lend themselves to productive use by others, are less protected than creative works of entertainment. In this case, the copyright work is audiovisual works (motion pictures) which involves good level of creativity and deserves strong protection and DishTV have probably got the rights to communicate the same work to public. This factor would definitely weigh against ZemTV.

• the amount of the work used – This factor takes into account the proportion of the original work which has been copied and/or infringed by the infringer. Sometimes, copying of entire works may also amount to fair use but it behavior of other factors has to be considered also. In this case the ZemTv has copied the entire original work, as it has merely retransmitted the audiovisual works, so this factor would also go against ZemTv developer.

1. the effect of the use upon potential market for or value of the original work – This is one the most decisive factor amongst all as it may singly outweigh other factors. It is the right of the author/s to commercially exploit their works by themselves or by assigning/licensing these rights and to protect the value of their work but if this right is impinged or any activity acts as barrier in exercising this right or any activity degrades the value of such work/s, then the same has to discontinued forthwith. In this case, after installing ZemTv addon, end-users were able to stream the TV channels via internet over their devices without paying any subscription fees to the DishTV and/or other broadcasters, which serves as a ‘market-substitute’ for the original work, and such activity will definitely have massive impact upon the potential market, therefore, this factor also goes against the developer.

So, from my standpoint, the developer would not succeed in this ‘fair-use’ defense, subject to the judgment upon the somewhat important first factor. For better understanding of ‘fair-use’ doctrine, readers are humbly invited to read ‘Campbell’, ‘Author’s Guild’, and ‘Grokster’ case.

• Passive Service provider – The developer alleges inter-alia that it is an open-source developer and ZemTV was merely a passive service, which was scraping content from a third-party source i.e. ZemTV.com, and completely disavows its involvement, hosting and/or control over the websites or other content sources that were allegedly accessible through ZemTV addon. By taking up this defense, the developer is trying to shift himself to the category of ‘merely conduit’ online service providers, so it could possible take-up the defenses available in Digital Millennium Copyright Act (DMCA) Though it’s apparently a specious argument, nevertheless, in order to succeed in this defense, primarily, it has to demonstrateits status as a ‘service provider’ with a ‘working notice-and-takedown process and repeat infringer policy’. Well, it would be a herculean task for the developer to succeed in this defense and claim immunity as it has to firstly qualify himself as a ‘mere conduit’ (rather than a direct infringer itself) and then prove that it has complied with all other necessary DMCA requirements/provisions. Moreover, it has also to prove that it has no reason to believe that the retransmitted content was not authorized or illegal.

TVADDONS.ORG

• Indirect Copyright infringement – TVaddons has been alleged to be liable on following two counts, which I will be dealing separately:

1. Contributory/Inducing Copyright Infringement – DishTv alleges that the website Operators have actual or constructive knowledge of this infringing activity and materially contribute to that activity by providing the forum (where the ZemTV add-on can be downloaded) and soliciting and/or accepting donations from ZemTV users. It further alleges that TVAddons also engage in purposeful conduct that intentionally induces ZemTV users to display the programs, obtained without authorization, through the ZemTV service and did not take necessary measures to remove it, even after receiving the DMCA takedown notices. Substantially, these claims are mixed questions of law and fact and can be established only after the trial. On the other hand, the TVaddons will definitely invoke ‘safe-harbor’ clause {as provided in Section 512(c)} by arguing that it is an online service provider and merely hosting, distributing and/or promoting user-generated and/or third-party content (i.e. Kodi Addons) is not an offence. Nevertheless, the ‘safe-harbor’ provision requires the service provider to meet a number of requirements for safe harbor, including but not limited to following:
2. No actual knowledge of the infringing material or activity on the system or network: an ISP is disqualified from the safe harbor only if it has knowledge of specific infringing activity, not a generalized awareness that there is or may be infringing activity on the website ;
3. No awareness of fact or circumstances (red-flag test) – in the absence of such actual knowledge, the ISP is not aware of facts or circumstances from which infringing activity is apparent, and it must meet an objective standard also, namely, whether the ISP was subjectively aware of facts that would make specific infringement ‘objectively’ obvious to a reasonable person- as held in Viacom case); or

• Immediate Removal: upon obtaining such knowledge or awareness, ISP acts expeditiously to remove, or disable access to, the material.

It would be pertinent to mention that in recent case of ‘Vimeo LLC’ case, it has been held that safe-harbour provision is an affirmative defense, and the initial onus of proof to show eligibility to this defense is upon the entity (which is quite a low standard),  but the ultimate onus to prove that the service provider should be  held liable for copyright infringement because of ‘red flag’ knowledge has now undeniably shifted to the copyright holder (i.e. Dishtv in the present case).

1. Vicarious Copyright infringement – Unlike contributory infringement, vicarious liability can be imposed even in the absence of any intent or knowledge on part of the defendant. In the Napstercase, the Court of Appeals for the Ninth Circuit observed that In the context of copyright law, vicarious liability extends beyond an employer/employee relationship to cases in which a defendant
   1. has the right and ability to supervise the infringing activity – The ability to block infringers’ access to a particular environment and/or having any express reservation-policy or a right to terminate and/or suspend account of the user with discretion, is enough to prove ‘the right and ability to supervise’. Nevertheless, to escape imposition of vicarious liability, it must be shown by the website that it has been regularly exercising the reserved rights thereat, but turning a blind eye to detectable acts of infringement for the sake of profit gives rise to this liability, and
   2. also has a direct financial interest in such activities – Financial benefit exists where the availability of infringing material “acts as a ‘draw’ for customers to visit/subscribe more and such progressive viewership/subscription, eventually, enhance the revenue of the website owner.

In the present case, defendant’s website invites users to donate money through cards or Bitcoins, and such collected donations forms part of the revenue only. So, if the complainant proves that the TVaddon website had the right and/or ability to control/supervise the conspicuous infringing activities, but even then remained imperceptive, then it can be held to be ‘vicariously’ liable for copyright infringement.

• Defense of Fair-use – Cord-cutting – ‘Cord cutting’ refers to the process of cutting expensive cable connections in order to change to a low-cost TV channel subscription through over-the-air (OT) free broadcast through antenna, or over-the-top (OTT) broadcast over the Internet. Netflix, Apple TV and Hulu are some of the popular broadcasting services that encourage cord cutting. In April 2016, Fortune published an article describing a cable industry report which found that 1.1 million American households dropped a traditional TV subscription during 2015, pushing the percentage of American households to almost 20 percent which have either cut the cord or never subscribed to such a service. Although ‘cord-cutting’ is originally aimed at lowering your entertainment expenses but nowadays, it has become more of a lifestyle choice than a mere need.

In the present case, perhaps, in order to escape the liability, the TVaddon (not sure about ZEMTV though) may take the plea that it is contributing to the ‘cord-cutting’ process, which eventually, is in public interest and therefore, should not be fastened with any liability. The defendant can make up some defense here, if it proves, that substantial number of the available add-ons on the website provides access to authorized/licensed or non-copyrighted content and it is not encouraging or inducing copyright infringement.

• Jurisdiction – The implicated defendants are neither the residents nor the citizens of U.S.A, so the defendants would be definitely challenging the ‘personal jurisdiction’ of the courts of Texas over the defendants. For analyzing the question of ‘personal jurisdiction’, I would have to invest my reading into civil laws of the states but I will forbid myself as the same is not the prinicipal subject-matter of the present post. However, the best I can offer for the time being is that (as held in Latshaw v. Johnston) the initial onus of proof to manifest that the Court has prima-facie personal jurisdiction is upon the complainant by demonstrating;

1. that defendants has purposefully availed himself of the benefits and protections of the forum state by establishing ‘minimum contacts’ with the forum state; and
2. the exercise of jurisdiction over that defendants does not offend traditional notions of fair play and substantial justice.

Moreover, as per Ruston Gas Turbines, Inc. v. Donaldson Co, even a single act by the defendant directed at the forum state can be enough to confer jurisdiction, if that act gives rise to the claim being asserted. So, the complainant has to pass this hurdle to show the maintainability of the complaint.

Is KODI responsible too? – Though the Kodi Founders have not faced any music of law yet but in any case, I am certain that Kodi cannot be held responsible for any kind of copyright infringement because it is this ‘add-on’ feature only which makes it special & unique and merely some persons can misuse it to have access to unlicensed and/or unauthorized copyright content (i.e. incidental infringing purposes) is no ground to hold them wrong.

Conclusion

After analyzing the given situation, I am of the view that it would be a grueling task for the ZEMTV to wriggle out of the alleged liability but as far as TVaddons is concerned, it surely has some good case, particularly under the defense of ‘fair-use’.  At this eventide, I would say that this case can be a great opportunity to settle or clean various obscure minefields of technical & copyright matters and act a guiding light to deal with future copyright issues, which keep on factoring with the growth of technology.

ALERT!!! ALERT!!! – My examination and/or prognosis is only based upon limited facts, which I was able to gather from bounded news reports and informative websites, and a lot of facts are still to be unfolded or investigated and then proved. Nonetheless, the views are purely personal. Rest, I would be happy to receive comments from the readers on any aspect.

8:10:03 PM

Saturday, January 20, 2018.©