Nitro IPTV faces $100M hack damages, but it could have been worse *TorrentFreak

In April 2020, a coalition of entertainment companies led by Universal, Paramount, Columbia, Disney and Amazon filed a copyright infringement lawsuit against the operators of the “pirate” IPTV service Nitro TV.

The case, which included alleged operator Alejandro “Alex” Galindo, his wife Anna Galindo and YouTuber “Touchtone,” is still ongoing, but things haven’t gone well for the defendants so far.

The evidence destruction allegations and an injunction certainly put them on the defensive and a second lawsuit from broadcaster DISH Network didn’t help either.

Filed in August 2021, the complaint targets Alex, Anna and Osvaldo Galindo. According to plaintiffs DISH, Sling and NagraStar, defendants received millions of dollars in exchange for subscriptions to their pirate service.

Unlike Hollywood’s complaint, the lawsuit does not allege direct or contributory copyright infringement, but rather violations of the DMCA’s anti-circumvention provisions and violations of the Federal Communications Act (FCA). These pertain to circumventing Sling’s DRM and unauthorized use of satellite signals, respectively.

Defendants served, did not respond to complaint

Although months have passed since the complaint was filed, the defendants have not responded in court, meaning the case is now heading for a significant default judgment in favor of the plaintiffs. The big question is exactly how much defendants will have to pay.

In a motion for default filed late last week, DISH and its partners set out their reasoning for an award of colossal damages.

With respect to alleged FCA violations (improper receipt of communications for profit), DISH claims that defendants unlawfully received its broadcasts and then retransmitted them through the Nitro service to users, who paid Nitro for the privilege while DISH did not receive anything.

On the copyright front, DISH asserts that the DMCA prohibits a person from circumventing a technological measure that controls access to a copyrighted work. Sling uses digital rights management (DRM) to protect its content from piracy, but the complaint alleges this was rejected by the defendants, who distributed the acquired content through their Nitro TV service for profit.

The issue of damages

DISH says that section 605(a) of the FCA allows them to recover damages in the amount of $1,000 to $110,000 for each violation, while Section 605(e)(4) allows $10,000 to $100,000 for each violation . Under the DMCA, each violation of section 1201(a)(1)(A) allows statutory damages ranging from $200 to $2,500.

Since the court may not respond positively to claims at the higher end of the scale, DISH presents its case relatively modestly. For example, for each 605(e)(4) violation, he is only asking for $1,000 when he could be asking for $100,000. However, it is the multiplier that matters here, i.e. the number of subscriptions sold by Nitro. It turns out that the IPTV service sold out a lot.

Since the defendants did not appear in the case, DISH and its partners turned to Nitro’s merchant service providers (PayPal, Stripe, Zelle, Square and Cash App) and other financial institutions to provide informations. These records show that the defendants sold more than 100,000 subscriptions, referred to in the complaint as “device codes”.

Plaintiffs seek $100 million in damages

“Account statements provided to plaintiffs show that defendants sold at least 100,363 device codes. Accordingly, statutory damages should be awarded in the amount of $100,363,000 (100,363x $1,000), jointly and severally against the defendants,” the motion for default states.

While that’s certainly a staggering number, DISH says the damages sought are conservative. Defendants also received subscription payments through Facebook Pay, Coinbase, and Paymentech, but these were not included in the claim because plaintiffs could not determine exactly how many subscriptions were involved.

What they were able to establish was the amount of money Alejandro and Martha Galindo received in their bank accounts – a total of $5.5 million in two accounts at Wells Fargo and Chase.

DISH further explains why its $100 million damages claim is reasonable, noting that aggravated damages are available in this case due to the for-profit motive and stated goal of converting legal customers into subscription pirates at Nitro. The plaintiffs also cite the Hollywood lawsuit as demonstrating the defendants’ broader involvement in TV piracy.

Finally, DISH and the other plaintiffs say they are not seeking attorneys’ fees or costs to which they are entitled under the DMCA and FCA. All they want is a $100.36 million judgment and a broad, permanent injunction against the defendants.

The request in default can be found here (pdf)

Comments are closed.