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Article   |   December 2020

Recent High-Profile Content Infringement Case in Belize

In January of 2020, DISH Networks filed a lawsuit in a US District Court against a Belizean cable television operator (Channel Broadcasting Cable, i.e. CBC, in operation since 1992) and its owner Robert Reich alleging that the broadcaster was illegally rebroadcasting DISH programming to over 5,000 individuals and businesses in Belize without authorization [1]. DISH’s investigations found that CBC used official DISH subscriber accounts tied to locations in Florida to steal programming from DISH’s satellite television service and retransmit it to customers in Belize. After determining the case’s high likelihood of success, in May, the court granted DISH Networks a preliminary injunction to enjoin CBC from continuing its illicit operations. Now at the end of the year, the case has finally concluded with the court ordering CBC to pay statutory damages of $15.8M. This amount was calculated based on a fine of $750 for each of 21,136 pirated subscriptions that used DISH content which CBC sold or supported [2].

While details of the CBC case are publicly known, there have been a number of other instances of broadcast piracy uncovered in the Caribbean and Americas in recent years that have not received as much coverage. The issue of broadcast piracy is not new; however, US contents rights holders have sought to leverage recent shifts in trade philosophy to promote enforcement of copyright laws internationally in the Caribbean and Latin American markets. In the processes, US content rights holders are putting pressure on governments and operators to address various types of pirating activities prevalent in the region.

Background and Categorization of Broadcast Piracy

The issue of broadcast content infringement has been a decades-long problem that has grown and evolved particularly since the proliferation of satellite television technology. Satellite TV broadcasting in the 1980s helped cost-effectively expand US broadcasters’ reach to a wider audience of viewers (e.g. those in rural America) [5]. At the same time, it also heightened the problem of signal piracy due to the satellites’ large signal spillover into surrounding Caribbean and Latin American nations [3]. With the right receiving equipment, individuals and illicit television broadcasters could intercept US satellite signals and retransmit them locally for a profit. A sizable piracy pay TV market thereby developed in which broadcasters enjoyed substantial margins by circumventing much of the typical costs associated with pay TV service delivery (e.g., infrastructure investment, licensing fees, taxes, content acquisition) [4].

As TV broadcast technology has advanced, pirates have likewise diversified their mediums and methods, taking advantage of gaps in the foundational technologies and adapting new ways to acquire content through unscrupulous means. Generally speaking, piracy can be seen as a type of content infringement or put simply – the unauthorized use of copyrighted content. This can be characterized into two classes of infringement: underreporting and signal piracy [6]. Underreporting describes the situation where broadcasters legally obtain the rights to sell programming service but chose to report a smaller subscriber base than they actually serve in order to save on operating costs that are charged based on their subscriber count (e.g. content acquisition, taxes, royalties) [4]. Underreporting is often completely unbeknownst to the end consumer and remains a common practice in a number of Caribbean and Latin American countries. Signal piracy on the other hand, is theft of content that is illegally accessed (as opposed to underreporting where content is accessed legally). Signal piracy can be further categorized into five types [4]:

1. Free-to-Air (FTA) signal decryption – Using FTA satellite receivers retrofitted with decryption technology to illegally access and subsequently distribute pay TV programming
2. Signal retransmission – Using official pay TV set-top boxes (STBs) from a legitimate television provider to steal and subsequently retransmit programming
3. Illegal IPTV (internet protocol television) and ISD (illegal streaming device) schemes – Using unlocked/open-source IPTV or ISD pay TV boxes (e.g. Kodi, Android TV box) that have built-in or customized operating systems which pirates configure to stream live channels across the internet
4. Signal sharing – Connecting to neighbors’ legal STBs or subscription services to illegally share access to programming
5. Online peer-to-peer access & distribution – Obtaining content that is illegally streamed or downloaded over the internet (often for free) via a computer or mobile device

US producers and content rights holders view all these forms of content infringement as a direct threat to their businesses and bottom lines. According to data analytics firm Business Bureau, content infringement from both underreporting and signal piracy (of US and non-US content) extends to over 20 million households in the Caribbean and Latin America. Meanwhile the financial losses associated with this activity is estimated at US$8.1 billion annually (US$4.8 billion from signal piracy and US$3.3 billion from underreporting) [6] [data from Sep 2016 – 2017]. As a result, the US industry has devoted resources and sought government backing to crack down on these practices.

Different Perspectives on Intellectual Property

The content infringement contention between the US and the surrounding region can be better understood by examining the differences in each party’s perspectives on intellectual property (IP). Historically, the international market for US produced media and entertainment has been large in comparison to that of the Caribbean and Latin America. Given the large Caribbean and Latin American diaspora in the U.S. and the cultural alignment, the demand for US media and entertainment in the region is high. Moreover, as a large developed nation, the US has maintained a mature media, entertainment, and pay TV distribution ecosystem for decades. As a result, the US has been a major producer and distributer of globally desired, big-ticket content. Therefore, it comes as no surprise that US pay TV supply chain stakeholders have more to lose from international content infringement than those of the surrounding region. This thus creates an asymmetrically high incentive for US entities to demand international IP enforcement. Because a strong IP protection ecosystem requires robust administrative and judicial infrastructure, Caribbean and Latin American nations are inclined to weigh the hefty cost of building/maintaining this infrastructure against the often marginal potential benefits of increased IP protection of their own domestic content [3]. With limited resources available, some developing nations have more interest in allocating funds to more pressing political, social, and economic priorities. As a result, US networks have often complained about some countries’ lack of enthusiasm in enforcing copyright laws and have cited systemic conditions such as political instability, corruption, and bureaucratic inertia as bottlenecks to robust IP protection [7].

International and US Intellectual Property Protection Laws

US content rights holders have multiple avenues to pursue international content rights infringers. The example of DISH Networks and CBC Belize illustrates that networks often employ their own fraud detection specialists whose job it is to investigate instances of piracy across the globe. The results of their findings can then be brought to US courts in lawsuits against alleged offenders. This is particularly effective when the defendant has property or assets in the US which can be seized through official writ of attachment. Given that some piracy schemes are founded upon accounts based in the US, it is not uncommon for illicit international operators to have some form of US presence such as real estate, a network of US-based suppliers, or/and US-based co-conspirators that are integral to their operations (e.g. helping with payments, sourcing pay TV boxes or other hardware).

1. Withdraw, suspend, or limit trade agreement concessions
2. Impose duties or other import restrictions
3. Enter into a binding agreement with the foreign government to:

1. Eliminate the behavior in question,
2. Eliminate the associated burden caused to US commerce, or
3.  Provide the US with satisfactory compensatory trade benefits [9]

While the USTR has the flexibility to independently levy these retaliatory measures, the World Trade Organization (WTO) Agreements encourage use of the WTO dispute settlement mechanisms for matters involving violations of WTO Agreements’ terms. Since the formation of the WTO in 1995, the WTO dispute process has historically been the USTR’s primary path to impose actions against infringers [8].

One major trade agreement that often factors into the USTR’s retaliation actions is the Caribbean Basin Initiative (CBI). Initially enacted in 1983, this consists of a collection of trade programs between the US and 17 Caribbean Basin nations. The objective of the initiative is to promote stable economic development in the region by granting duty free access into the US market for most goods. Every two years, the USTR reports on the trade practices of the CBI beneficiary countries and how well they have been conforming to CBI eligibility criteria. These findings along with findings from Section 301 investigations could warrant actions to revoke or curtail a CBI beneficiary’s preferential trade privileges. Some noteworthy findings in the 2019 CBI Report reveal that HBO Latin America believes that several CBI beneficiary countries are not compliant with the program’s eligibility requirements. The primary reason cited is the countries’ poor enforcement of their local IP protection laws particularly as it relates to “violations such as broadcast piracy and illegal streaming that negatively impact HBO LA’s business operations [10].”

While US companies can use petitions to address international infractions, the USTR itself can also self-file a petition under Section 301. In addition, USTR prepares an annual “Special 301” report in which it examines the condition of IP rights protection and enforcement globally. For nations having serious IP rights deficiencies, the report assigns risk designations such as “Watch List”, “Priority Watch List”, and “Priority Foreign Country” (the most severe classification). One notable change in the 2020 report is the inclusion of Trinidad and Tobago onto the Watch List. This was done because of piracy and counterfeiting concerns as well as unsatisfactory enforcement of IP protection to stop state-owned networks from broadcasting unlicensed US content. Additionally, Barbados was kept on the Watch List for 2020 in part due to continuing concerns regarding unauthorized retransmission of US programming by local private and state-owned operators [11]. Nations in the region aim to stay off the watch list in order to maintain a good reputation of IP protection and avoid trade/economic retaliation that may ensue as a result.

Benefits for Resolving Content Infringement & Cizmic’s Value

With the recent crackdown on content infringement throughout the region, broadcasters and governments are taking steps to enhance IP protection and remedy longstanding broadcast piracy practices. For markets like Jamaica that have an internationally acclaimed music production industry, improvements in IP protection does have worthwhile benefits in safeguarding profits and royalties for the nation’s music exports. Moreover, this has the added benefit of incentivizing and stimulating creativity in the local Caribbean and Latin American markets, helping to enhance fair domestic competition and build stronger content exports.

With a strong presence in the Caribbean and Americas, Cizmic has been a key player in the effort to improve regional compliance with international copyright laws. Although schooled in the North American environment, our advisors are experts in Caribbean Basin markets and share a strong passion to promote the economic prosperity of the region. As a result, Cizmic offers a team of effective mediators that understand the sensitivities of both parties and follow a sound data-driven approach. This allows our clients (e.g. governments, legitimate broadcasters, etc.) to establish the level of infringement (including the scale and duration) which our team then uses to quantify the economic impact. With a fact-based foundation, Cizmic enables good faith negotiation that allows for efficient, pragmatic resolution between parties involved.

Sources

1. Maxwell, A. (2020, May 29). US Court Hands Down Preliminary Injunction Against Pirate IPTV Provider. https://torrentfreak.com/us-court-hands-down-preliminary-injunction-against-pirate-iptv-provider-200529/
2. Maxwell, A. (2020, Dec 13). Pirate IPTV Provider Must Pay DISH $15.8m in Damages. TorrentFreak. https://torrentfreak.com/pirate-iptv-provider-must-pay-dish-15-8m-in-damages-201213/
3. Ebanks, K. D. (1989). Pirates of the caribbean revisited: An examination of the continuing problem of satellite signal piracy in the caribbean and latin american. Law and Policy in International Business, 21(1),33-52.
4. Rodriguez, Jose & Stammati, Luigi & Figueroa, Maria. (2019). The impact of piracy on the structure of the Pay TV market: a case study for Latin America. Journal of Media Business Studies. 16. 1-18. 10.1080/16522354.2019.1572449.
5. Weinstein, J. S. (1985). International satellite piracy: The unauthorized interception and retransmission of united states program-carrying satellite signals in the caribbean, and legal protection for united states program owners. Georgia Journal of International and Comparative Law, 15(1),1-28.
6. (2019) BB Book 2018. Business Bureau. https://bb.vision/bb-book-2018-english/
7. Valerie L. Hummel, The Search for a Solution to the U.S.-Caribbean Copyright Enforcement Controversy, 16 FordhamInt’lJ. 721 (1992). Available at: https://ir.lawnet.fordham.edu/ilj/vol16/iss3/6
8. Schwarzenberg, A. B. (2020). Section 301 of the Trade Act of 1974: Origin, Evolution, and Use. Congressional Research Service, (R46604)
9. Trade Act of 1974, 19 U.S.C. 2411, Subsection C (2009). https://uscode.house.gov/view.xhtml?path=/prelim@title19/chapter12/subchapter3&edition=prelim
10. García, M. C., (2019, December 31). Thirteenth Report to Congress on the Operation of the Caribbean Basin Economic Recovery Act. United States Trade Representative https://ustr.gov/sites/default/files/CBI_Report_2019.pdf
11. The Office of the United States Trade Representative. (2020, April). 2020 Special 301 Report. https://ustr.gov/sites/default/files/2020_Special_301_Report.pdf