DirecTV, Inc. v. Huynh
Ninth Circuit, No. 05-16361, September 11, 2007
Faced with the question of how to resolve a provision of the Federal Communications Act banning the assembly and modification of devices primarily designed for the unauthorized decryption of satellite signals, the Ninth Circuit held on September 11 that this provision applies only to â€œassemblers, manufacturers, and distributors of piracy devicesâ€ and not individual end users of such devices.
Jennifer Granick expects that the ruling will "prevent satellite and cable TV companies from piling on excessive damages that would punish and chill legitimate encryption research."
Declan McCullagh discusses the various legal and illegal uses of the smart card devices purchased by defendants.
DirecTV argued that the FCA provision should sweep more broadly and cover all people who modify devices ("smart cards") designed to intercept satellite signals, regardless of their intent and whether interception actually occurred. On DirecTV's reading, the provision would have encompassed any person who inserted a pirated access card into a receiver, on DirecTV's theory that this person had thereby "assembled" the device. Defendants responded that such a broad interpretation of the FCA would criminalize security and computer science research into satellite technology, and would effectively render it illegal to purchase smart card programmers.
The Ninth Circuit largely agreed with defendants, affirming the district courtâ€™s refusal to grant default judgments that would have required defendants to pay up to $100,000 in statutory damages per violation. The court also rejected DirecTV's broad interpretation of the FCA and upheld a distinction between those who illegally intercept satellite signals and those who manufacture, assemble, or modify devices to enable others to do so. It is still possible that defendants will be found liable for copyright or lesser statutory violations.