Korean Networks Win $65 Million From "Pirate" Streaming Service

In a default judgment, a California judge ruled against the companies behind the TVPad device.
Courtesy of Munhwa Broadcasting Corporation
Munhwa Broadcasting Corporation

Three Korean TV networks will receive over $65 million in damages from the manufacturers of a device called TVPad for copyright infringement and related claims.

The TVPad, a unit like an Apple TV or Amazon Fire TV, connects users with a network of retransmission apps and live broadcasts.

In June 2014, the Korean networks Munhwa Broadcasting Corporation, Seoul Broadcasting System and Korean Broadcasting System filed suit against the Chinese companies behind the device. They claimed Create New Technology, ShenZhen GreatVision and Hua Yang International distribute their programming on the TVPad network without licenses in a "pirate network."

The claims included public performance copyright infringement, unfair competition and violation of the Digital Millennium Copyright Act's clause, prohibiting "traffic[king] in any technology, product, service, device, component or part thereof that is primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected by copyright" (read the complaint). Circumvention of copyright control is a rarer (though not unprecedented) claim under the DMCA, which plaintiffs more often invoke to get pirated content removed from websites like YouTube.

The case resembles one filed in March by Dish and several Chinese broadcasters targeting TVPad, which they say distributes content from HBO, BBC, CNN and other American networks in addition to Asian producers. The lawsuit is ongoing in California federal court.

The Korean networks sought $358,741,454 in damages against Create New Technology and Hua Yang and Du Hyun (Dylan) Song and Media Journal, Song's company for distribution of Create products in the U.S. ShenZhen was dismissed due to difficulty serving the company in China, and other defendants (including several California restaurants with TVPads) settled and signed consent agreements not to deal with the device.

Instead, California federal judge Gary Klausner awarded the networks $65,315,954.

Klausner granted default judgment in favor of the Korean networks in a hearing on Sept. 2. The networks had filed for summary judgment (read here) in April against Create and Song and claimed they were trying to dodge the proceedings. "Create and Song — banking that this Court cannot or is unwilling to reach them — have blatantly refused to follow Court orders to mediate or provide further discovery," states the motion.

Because the defendants hadn't hired new attorneys after their previous attorneys withdrew and continued to slow the discovery process, Klausner granted the networks' request for default judgment.

The damages amount comprises $48,730,200 ($16,243,400 per network) under the DMCA, the number an expert for the networks reached by multiplying the DMCA's minimum damage requirement of $200 per copyright circumvention by the 81,217 TVPads the expert found were sold (read the ruling).

The judge ordered an additional $15,111,254 for trademark violations because the networks' logos and other iconography were displayed in the corner of TVPad streams.

For copyright infringement, the networks requested $294,900,000 under the U.S. statute according up to $150,000 in damages per willful infringement. While agreeing TVPad's infringements were willful, the court ordered the statutory minimum of $750 per infringement (to limit the total) for an additional $1,474,500.

The judge separately issued an injunction Tuesday against Create's distribution of the networks' copyrighted content.

"This is an important ruling for broadcasters who work hard to develop and provide high-quality programming to their viewers," said the networks' lawyer, Brent Sokol of Jones Day, in a statement to The Hollywood Reporter. "This ruling sends a message that infringement of the copyright and trademark rights of KBS, MBC, and SBS will not be tolerated."

THR has requested comment from Create.