communication between receivers and smartcards.^897 The court also found the defendant liable
under Section 1201(b)(1) for trafficking in a program that allowed users to copy the
programming of a Dish Network satellite receiver to a computer hard drive. Dish Network
protected against unauthorized copying and distribution of recorded programming by saving the
copyrighted content in an unrecognizable format, and the court found that to be a sufficient
technological measure to invoke the protection of Section 1201(b)(1). The defendant contended
that his program served a legitimate function by allowing individuals to create backup copies of
their Dish Network recordings. The court rejected this defense, citing the case of Realnetworks,
Inc. v. DVD Copy Control Ass’n^898 for the rule that, although the DMCA provides for a limited
fair use exception for certain end users of copyrighted works, the exception does not apply to
manufacturers or traffickers. Because the defendant’s program allowed a computer to overcome
Dish Network’s copy-control measures, it violated Section 1201(b)(1).^899
c. Dish Network v. DimarcoThe case of Dish Network LLC v. Dimarco^900 involved the impoundment of technology
that could be used to gain unauthorized access to Dish Network signals. When an authorized
EchoStar receiver received a Dish Network signal, it forwarded part of the signal called the
“entitlement control message” to a NagraStar smart card in the receiver. If the subscriber was
tuned to a channel he was authorized to receive, the smart card retrieved a decryption key from
its read-only memory and used the key to unlock the “control word” from the entitlement control
message. The smart card then transmitted the control word back to the receiver, and the receiver
used it to decode the incoming signal so the subscriber could watch the programming. Content
providers like Dish Network routinely changed their decryption keys to help thwart piracy. A
new form of piracy was developed called “Internet key sharing” or “IKS” whereby a pirate kept
his unauthorized receiver connected to the Internet for automatic re-flashing with the newest
keys, which were retrieved from an IKS server connected to multiple legitimate NagraStar smart
cards. Control words obtained from the authorized smart cards were sent from the IKS server
over the Internet to unauthorized receivers.^901
The defendants sold unauthorized receivers with decryption software and hardware,
cables to connect the unauthorized receivers to the Internet for use with an IKS server, and
passwords to access the IKS server which were euphemistically referred to as “extended
warranty codes.” The defendants admitted that the receivers they sold were capable of being
used for piracy, but argued that because they did not themselves traffic in illegal encryption keys,
their products amounted to “modern day rabbit ears” for their customers to receive free satellite
(^897) Id. at 3-6, 12-13. The court also found the defendant liable for personal violations of Section 1201(a)(1) for
his admitted modification of Dish Network smartcards. The court rejected the defendant’s defense that he had
modified the smartcards only for the purpose of testing the operation of various receivers, not to receive an
unauthorized satellite signal. Id. at 10-11.
(^898) 641 F. Supp. 2d 913 (N.D. Cal. 2009).
(^899) Dish Network, 2011 U.S. Dist. LEXIS 25038 at 13-14.
(^900) 2012 U.S. Dist. LEXIS 33889 (D. Nev. Mar. 14, 2012).
(^901) Id. at *3-4.