CoxCom, Inc. v. Chaffee
536 F.3d 101
Procedure: This is an appeal by defendant from the US District Court for the District of Rhode Island’s decision granting summary judgment and damages to the plaintiff after finding the defendant in violation of the Cable Communications Policy Act of 1984 and the Digital Millennium Copyright Act.
Facts: CoxCom is a cable provider offering cable television services in Rhode Island, Massachusetts, and Connecticut. The company leases cable boxes to subscribers that descramble incoming signals for viewing and also to transmit certain information from subscribers (such as billing information associated with pay-per-view) back to CoxCom. A digital cable filter is a device that can affect those return transmissions. Essentially, with a filter installed, pay-per-view purchases of up to $300 would not register because of the low frequency through which they are transmitted. The filters are not illegal and do have other valuable purposes. Appellants, residents of Rhode Island, sold the filters at trade shows, along with an instruction sheet stating that the filters will block out pay-per-view charges but also urging customers to notify the cable company of any orders. CoxCom’s undercover investigators purchased eighteen digital cable filters from appellants at trade shows, and subsequently commenced this action in district court alleging that the filter sales violated Section 553 and the DMCA.
Analysis: On appeal, appellants first argue that the district court had no jurisdiction over the matter because CoxCom lacked standing to sue. For standing, a plaintiff must allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief. Appellants argue that CoxCom was not actually injured; however, the court finds that CoxCom produced enough evidence to show that appellants sold filters within CoxCom’s service area that were capable of bypassing CoxCom’s pay-per-view billing mechanism, and that appellants had specific knowledge of this. The court finds that CoxCom has standing. Next, appellants argue that summary judgment was improperly granted to CoxCom on the questions of liability under Section 553 and the DMCA. This is reviewd de novo and in the light most favorable to appellants. Section 553 was enacted to reflect concern that theft of cable poses a major threat to the economic viability of cable operators. Liability exists even where a plaintiff proves that a defendant intended to assist in unauthorized reception of cable services. Appellants argument focuses on language (“reception†as opposed to “outgoingâ€) and the court finds this argument weak. The court further rejects the argument that the appellants did not intend the filters to be used in this manner. Furthermore, appellants argue that they are not liable under the DMCA because their filters did not “circumvent†technological measures. The court goes through the test and finds that the technological measure here is CoxCom’s pay-per-view delivery and billing system, a digital filter allows subscribers to “avoid†or “bypass†that technological measure, and that summary judgment was properly granted on this claim. Next, appellants argue they were entitled to a jury trial, but the court finds that the sellers waived their right to a jury trial by failing to object to the bench trial.
Holding: The rulings of the district court are affirmed in all respects.
536 F.3d 101
Procedure: This is an appeal by defendant from the US District Court for the District of Rhode Island’s decision granting summary judgment and damages to the plaintiff after finding the defendant in violation of the Cable Communications Policy Act of 1984 and the Digital Millennium Copyright Act.
Facts: CoxCom is a cable provider offering cable television services in Rhode Island, Massachusetts, and Connecticut. The company leases cable boxes to subscribers that descramble incoming signals for viewing and also to transmit certain information from subscribers (such as billing information associated with pay-per-view) back to CoxCom. A digital cable filter is a device that can affect those return transmissions. Essentially, with a filter installed, pay-per-view purchases of up to $300 would not register because of the low frequency through which they are transmitted. The filters are not illegal and do have other valuable purposes. Appellants, residents of Rhode Island, sold the filters at trade shows, along with an instruction sheet stating that the filters will block out pay-per-view charges but also urging customers to notify the cable company of any orders. CoxCom’s undercover investigators purchased eighteen digital cable filters from appellants at trade shows, and subsequently commenced this action in district court alleging that the filter sales violated Section 553 and the DMCA.
Analysis: On appeal, appellants first argue that the district court had no jurisdiction over the matter because CoxCom lacked standing to sue. For standing, a plaintiff must allege personal injury fairly traceable to the defendant’s allegedly unlawful conduct and likely to be redressed by the requested relief. Appellants argue that CoxCom was not actually injured; however, the court finds that CoxCom produced enough evidence to show that appellants sold filters within CoxCom’s service area that were capable of bypassing CoxCom’s pay-per-view billing mechanism, and that appellants had specific knowledge of this. The court finds that CoxCom has standing. Next, appellants argue that summary judgment was improperly granted to CoxCom on the questions of liability under Section 553 and the DMCA. This is reviewd de novo and in the light most favorable to appellants. Section 553 was enacted to reflect concern that theft of cable poses a major threat to the economic viability of cable operators. Liability exists even where a plaintiff proves that a defendant intended to assist in unauthorized reception of cable services. Appellants argument focuses on language (“reception†as opposed to “outgoingâ€) and the court finds this argument weak. The court further rejects the argument that the appellants did not intend the filters to be used in this manner. Furthermore, appellants argue that they are not liable under the DMCA because their filters did not “circumvent†technological measures. The court goes through the test and finds that the technological measure here is CoxCom’s pay-per-view delivery and billing system, a digital filter allows subscribers to “avoid†or “bypass†that technological measure, and that summary judgment was properly granted on this claim. Next, appellants argue they were entitled to a jury trial, but the court finds that the sellers waived their right to a jury trial by failing to object to the bench trial.
Holding: The rulings of the district court are affirmed in all respects.