The opinion of the court was delivered by: McLAUGHLIN, Sean J., District Judge.
Presently pending before the Court is the Plaintiffs' Motion for Default Judgment and Request for Statutory Damages and Permanent Injunction [ECF No. 12] against Defendant, Paul Rounds ("Defendant") pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure. This Court has jurisdiction pursuant to 28 U.S.C. § 1331. For the following reasons, Plaintiffs' Motion will be granted.
According to the allegations in the Complaint,*fn1 DISH Network L.L.C. ("DISH Network") is a multi-channel provider that delivers copyrighted satellite television programming to approximately 14 million subscribers throughout the United States. [ECF No. 1] ¶¶ 9-12. DISH Network uses high-powered satellites to broadcast, among other things, movies, sports and general entertainment services to consumers who have been authorized to receive such services after payment of a subscription fee, or in the case of a pay-per-view movie or event, the purchase price. Id. at ¶ 10. To restrict its programming to authorized subscribers, DISH Network encrypts its satellite signal, and authorized subscribers are provided with the necessary equipment in order to decrypt the signal and view the programming. Id. at ¶ 13. This equipment consists of a compatible dish antenna, receiver and smart card. Id. at ¶ 14. Defendant EchoStar Technologies L.L.C. ("EchoStar") provides receivers, dish antenna, and other equipment for the DISH Network system. Id. Smart cards and other proprietary equipment are supplied by Defendant NagraStar LLC ("NagraStar"). Id. at ¶ 15.
The EchoStar receiver and the NagraStar smart card work together to convert DISH Network's encrypted satellite signal into viewable programming that can be displayed on the attached television of a DISH Network subscriber. Id. at ¶ 18. The receiver processes an incoming DISH Network satellite signal by locating an encrypted part of the transmission known as the "entitlement control message" and forwards the message to the smart card. Id. at ¶ 17. The smart card uses its decryption keys to unlock the message uncovering a control word, which is transmitted back to the receiver in order to decrypt the DISH Network satellite signal. Id.
Various devices and services have been developed for the purpose of illegally decrypting or "pirating" DISH Network programming. Id. at ¶ 19. One method is known as "control word sharing," also called "internet key sharing" or simply, "IKS," which involves the use of an unauthorized receiver, piracy software and an internet connection. Id. at ¶ 20. Under this method, a pirate computer server sends descrambling codes to internet end-users who have downloaded piracy software onto their receivers so that their receivers are programmed to receive the descrambling control words and utilize the control words to descramble DISH Network programming. Id. at ¶¶ 20-21.
Here, Plaintiffs' allege that a pirate IKS television service operated by www.dark-angel.ca ("Dark Angel") provided end-users computer software and decryption codes needed to descramble DISH Network television programming without authority and without payment of a subscription fee to DISH Network. Id. at ¶¶ 8, 22. Dark Angel's business records reveal that Defendant purchased subscriptions to Dark Angel's pirate IKS television service on or about January 2, January 4, April 4, and May 1, 2010. Id. at ¶ 24. Utilizing Dark Angel's IKS service, Defendant obtained DISH Network's descrambling control words to illegally receive and descramble copyrighted television programming. Id. at ¶ 25. In order to access the IKS server, Defendant used a pirate satellite receiver loaded with piracy software designed to circumvent the technological measures used to protect access to copyrighted television programming. Id. at ¶ 26. Each time Defendant tuned his pirate satellite receiver to a scrambled DISH Network television channel, the receiver would access the Dark Angel IKS service and server to request the descrambling control word for that particular channel, the Dark Angel server would return the control word, and Defendant would descramble the encrypted signal and view the television programming without authorization. Id. at ¶ 26.
Plaintiffs' allege that through IKS piracy, Defendant had unlimited access to DISH Network programming, including premium and per-per-view channels, resulting in an unlimited and unknown amount of revenues being diverted from them. Id. at ¶27. In addition, Defendant's actions caused further harm to the Plaintiffs in the form of increased anti-piracy costs, as well as loss of reputation and goodwill. Id.
Plaintiffs filed suit against Defendant on October 13, 2011. [ECF No. 1]. Count I alleges unauthorized circumvention of DISH Network's security system controlling access to copyrighted works, in violation of 17 U.S.C. § 1201(a)(1) (the Digital Millennium Copyright Act). Count II alleges unauthorized reception of satellite signals, in violation of 47 U.S.C. § 605(a) (the Federal Communications Act). Count III alleges unauthorized interception of electronic communications, in violation of 18 U.S.C. §§ 2511(1)(a) and 2520 (the Electronic Communications Privacy Act). On October 19, 2011, Defendant was properly served with a copy of the Summons and the Complaint, and has since failed to appear or otherwise defend in this action. [ECF No. 9]. A default was entered by the Clerk of Court on November 14, 2011. [ECF No. 11]. The instant Motion for Default Judgment was filed on November 15, 2011, and served upon Defendant by U.S. mail. [ECF No. 12].
A. Standard on Motion for Default Judgment
Rule 55(b)(2) of the Federal Rules of Civil Procedure permits a district court to enter judgment by default against a defaulting party when a default has been entered by the Clerk of Court. The entry of a judgment by default is not automatic; rather, the decision is left to the sound discretion of the district court. Hritz v. Woma Corp., 732 F.2d 1178, 1180 (3rd Cir. 1984). This discretion is not unlimited, and the consideration of three factors control whether a default judgment should be granted: "(1) prejudice to the plaintiff if default is denied, (2) whether the defendant appears to have a litigable defense, and (3) whether defendant's delay is due to culpable conduct." Chamberlain v. Giampapa, 210 F.3d 154, 164 (3rd Cir. 2000) (citing United States v. $55,518.05 in U.S. Currency, 728 F.2d 192, 195 (3rd Cir. 1984)). The court must also ascertain whether "the unchallenged facts constitute a legitimate cause of action, since a party in default does not admit mere conclusions of law." Broadcast Music, Inc. v. Spring Mount Area
Bavarian Resort, LTD, 555 F. Supp. 2d 537, 541 (E.D.Pa. 2008) (quoting DIRECTV v. Asher, 2006 WL 680533 at *1 (D.N.J. 2006)).
Plaintiffs' proposed final judgment reflects that they have agreed to dismiss their claims under 17 U.S.C. § 1201(1)(1) and 47 U.S.C. § 605(a) upon default judgment being entered in their favor under 18 U.S.C. § 2511(1)(a). [ECF No. 12-2] ¶ 5. Section 2511(1)(a) states, in pertinent part, that "any person who . intentionally intercepts . any wire, oral or electronic communication . shall be subject to suit." 18 U.S.C. § 2511(1)(a). This section renders unlawful the unauthorized interception of electronic communications, including, inter alia, encrypted satellite television broadcasts. DIRECTV, Inc. v. Pepe, 431 F.3d 162, 167 (3rd Cir. 2005).
Here, Plaintiffs' have alleged that Dark Angel was a pirate IKS service that provided end-users computer software and decryption codes needed to descramble DISH Network television programming without authority and without payment of a subscription fee to DISH Network. [ECF No. 1] at ¶ 22. Defendant purchased subscriptions to Dark Angel's pirate IKS television service on four separate occasions in 2010 and utilizing this service, obtained DISH Network's descrambling control words to illegally receive and descramble copyrighted television programming. Id. at ¶¶ 24-25. Defendant's intentional interception of DISH Network's satellite transmissions of television programming and descrambling control words through IKS piracy ...