Nagravision wins $101M piracy lawsuit against China’s Gotech

judgement fine regulatory hammer

AMSTERDAM – Nagravision, a subsidiary of Kudelski Group – which tends to grab headlines with high-profile patent lawsuits against Netflix, Yahoo and other companies over OTT patents -- has been awarded $101 million by a U.S. district court judge in a default judgment against China-based Zhuhai Gotech Intelligent Technology Ltd. The suit claimed that Gotech was selling set-top boxes worldwide that circumvented piracy protections, enabling users to watch and share content from channels they weren’t paying for.

Gotech was tossed out of the IBC 2016 show here following the judgment.

In its case, Kudelski claimed that Gotech was manufacturing and distributing piracy-enabled set-top boxes under brand names like AZAmerica, Captiveworks, Globalsat, Limesat and NAZAbox. It was also operating Internet Key Sharing (IKS) services using servers located in the United States, violating both the DMCA (Digital Millennium Copyright Act) and the FCA (Federal Communications Act).

Unlike in patent cases, where there can be a lot of back and forth on whether a company is violating a patent, Kudelski was able to bring evidence of piracy to court. Its Kudelski Security division tracked Gotech activities from facilities in Switzerland and Brazil and identified over a half million users of Gotech technology. Kudelski believes more than 3 million users actually connected to Gotech’s servers and that every pay-TV operator worldwide was likely affected by its activities.

“We have demonstrated in our security labs that Gotech has impacted every major conditional access system (CAS) and is also providing an illegal content sharing solution, impacting pay-TV operators everywhere,” said Maurice van Riek, SVP and Head of Content and Asset Security for Nagra, sister company of Nagravision.

Kudelski Group and its subsidiary companies, like Nagravision, Nagra and OpenTV, not only have a range of security, middleware and multiscreen hardware and software solutions on the market but also own a significant number of patents – like, thousands. A recent licensing deal with Disney gave the media giant access to 3,000 patents from the group, for example.

Nagra's Christopher Schouten holds a promotional
key used to showcase a new security key dongle
for smart TVs.
Last year, Kudelski and EchoStar joined forces to develop advanced set-top boxes and conditional access modules for the international market, deepening its reach in the pay-TV hardware ecosystem.

Nagra is continuing to work on security solutions for the pay-TV market. At IBC, the company showcased a number of products, including a security key for smart TVs that it says will protect pay-TV operators from security breaches of the connected screens.

“Conditional access and digital rights management continue to play an important role, because they help you keep honest people honest,” said Christopher Schouten, senior director of product marketing for Nagra in an interview with Fierce here. “But … piracy has shifted from people trying to hack their smart cards to the internet. I can pull out my phone and show you a single pirate service that’s offering 2,000 pay channels. And I can get HBO from the East Coast. I can get HBO from the West Coast. I can get Sky Sports UK. I can get anything I want. So it’s really become about, how do you do real content protection? Not just bits and pieces but the whole thing.”

Nagra has offered content security as part of its portfolio for some time, but building an anti-piracy element to actively track down stray content is a new element and was key in the lawsuit against Gotech.

“…the anti-piracy services (are) required to track down channels that are being streamed onto all these $60, $75 Android set-top boxes form China that you can set up at home, type in a URL and boom, you’re up and running with those 2,000 channels. I would make sure that when Dish is paying for a bunch of South Asian channels to distribute to the Indian or Pakistani market in the U.S., that they maintain exclusive rights to that and these Android boxes don’t come in and get used for a tenth of the price.”

In July, Nagra added forensic watermarking to its content with the acquisition of Civolution and its NexGuard solution, which meets the MovieLabs requirement for content security. With its existing security products, anti-piracy tracking and watermarking, Schouten said Nagra “finally created real content protection. Where you’re protecting it to the STB, protecting it when it escapes the STB to the internet, tracking it down, shutting it off at the source, taking people to court with solid evidence that we’ve used our technology to prove what’s been going on.”

For more:
- see the release

Related articles:
Disney inks licensing deal with Kudelski Group, accessing 3,000-plus OTT patents
Samsung and NAGRA partner on set-top replacement dongle
Dish expands Nagra partnership to include TVE ad insertion, audience measurement

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