New York (April 20, 2011) -- A California federal judge on Wednesday ordered Viewtech Inc. and its jailed founder to pay $214 million to EchoStar Satellite LLC for building and selling set-top boxes designed to break EchoStar's signal encryption.
U.S. District Judge Roger Benitez said Viewtech's sale of more than 1 million code-cracking satellite boxes left him no choice but to order the company to pay the massive amount, since the Digital Millennium Copyright Act calls for statutory damages between $200 and $2,500 for each piracy device sold.
The receivers were “designed, marketed and sold for piracy,” Judge Benitez said, granting an EchoStar motion for summary judgment under the DMCA-related claim.
How much EchoStar will be able to get from Viewtech's accounts remains to be seen. The company is bankrupt, but the bankruptcy judge has agreed to let EchoStar ignore the automatic stay and go after Viewtech's assets, according to Judge Benitez.
Viewtech founder Jung Kwak, now serving an 18-month sentence after pleading guilty to trying to circumvent EchoStar's encryption technology, made the company's millions by selling Viewsat-brand boxes.
The boxes were billed as a way to pick up free, unencrypted satellite signals, but could be converted to crack EchoStar's encryption and receive its satellite service for free, according to Judge Benitez.
When EchoStar improved the effectiveness of its encryption software, Kwak hired computer hackers to crack it, Judge Benitez said. He also sent out free boxes to moderators of popular online piracy forums to garner positive reviews, according to Judge Benitez.
Under the decision, Kwak is personally liable for some of the damages. He mingled his own money with Viewtech's to pay his taxes and expenses and buy gifts for his family, receiving more than $15 million from the company in 2007 and 2008, according to Judge Benitez.
Neither Kwak, who is due to be released from a Long Beach, Calif., federal prison in June, nor Viewtech contested EchoStar's motion for summary judgment. Kwak dumped his attorneys in April 2010, and does not have access to telephone privileges in prison, according to a motion filed by the former defense counsel.
Viewtech has argued in the past that EchoStar's copyright suit — along with similar suits against Viewtech competitors — is an attempt to scare the company out of the market for free-to-air receivers.
Kwak could not be immediately reached for comment. An attorney for EchoStar did not immediately respond to a request for comment.
EchoStar is represented by DLA Piper and Hagan Noll & Boyle LLC.
Viewtech and Kwak are represented by the Clark Law Firm APLC and Law Offices of Manuel de la Cerra.
The case is EchoStar Satellite LLC et al. v. Viewtech Inc. et al., case number 3:07-cv-01273, in the U.S. District Court for the Southern District of California.
U.S. District Judge Roger Benitez said Viewtech's sale of more than 1 million code-cracking satellite boxes left him no choice but to order the company to pay the massive amount, since the Digital Millennium Copyright Act calls for statutory damages between $200 and $2,500 for each piracy device sold.
The receivers were “designed, marketed and sold for piracy,” Judge Benitez said, granting an EchoStar motion for summary judgment under the DMCA-related claim.
How much EchoStar will be able to get from Viewtech's accounts remains to be seen. The company is bankrupt, but the bankruptcy judge has agreed to let EchoStar ignore the automatic stay and go after Viewtech's assets, according to Judge Benitez.
Viewtech founder Jung Kwak, now serving an 18-month sentence after pleading guilty to trying to circumvent EchoStar's encryption technology, made the company's millions by selling Viewsat-brand boxes.
The boxes were billed as a way to pick up free, unencrypted satellite signals, but could be converted to crack EchoStar's encryption and receive its satellite service for free, according to Judge Benitez.
When EchoStar improved the effectiveness of its encryption software, Kwak hired computer hackers to crack it, Judge Benitez said. He also sent out free boxes to moderators of popular online piracy forums to garner positive reviews, according to Judge Benitez.
Under the decision, Kwak is personally liable for some of the damages. He mingled his own money with Viewtech's to pay his taxes and expenses and buy gifts for his family, receiving more than $15 million from the company in 2007 and 2008, according to Judge Benitez.
Neither Kwak, who is due to be released from a Long Beach, Calif., federal prison in June, nor Viewtech contested EchoStar's motion for summary judgment. Kwak dumped his attorneys in April 2010, and does not have access to telephone privileges in prison, according to a motion filed by the former defense counsel.
Viewtech has argued in the past that EchoStar's copyright suit — along with similar suits against Viewtech competitors — is an attempt to scare the company out of the market for free-to-air receivers.
Kwak could not be immediately reached for comment. An attorney for EchoStar did not immediately respond to a request for comment.
EchoStar is represented by DLA Piper and Hagan Noll & Boyle LLC.
Viewtech and Kwak are represented by the Clark Law Firm APLC and Law Offices of Manuel de la Cerra.
The case is EchoStar Satellite LLC et al. v. Viewtech Inc. et al., case number 3:07-cv-01273, in the U.S. District Court for the Southern District of California.