UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION DISH NETWORK L.L.C., Plaintiff/Counter-Defendant, v. Case No. 8:16-cv-2549-T-60CPT GABY FRAIFER, TELE-CENTER, INC., and PLANET TELECOM, INC., individually and together d/b/a UlaiTV, PlanetiTV, and AhlaiTV, Defendants/Counter-Plaintiffs. __________________________________/ REPORT AND RECOMMENDATION This cause is before me on referral for consideration of the Plaintiff’s Dispositive Motion for Summary Judgment (Doc. 146) and the Defendants’ Amended Motion for Summary Judgment on Count I of Plaintiff’s Amended Complaint (Doc. 217). For the reasons set forth below, I respectfully recommend the Court grant in part the Plaintiff’s motion for summary judgment and deny the Defendants’ amended motion for summary judgment. I. A. Procedural Background Plaintiff DISH Network L.L.C. (DISH) initiated this action in August 2016 against Defendants Gaby Fraifer (Fraifer) and Tele-Center, Inc. (TCI), asserting one count of direct copyright infringement under Section 501 of the Copyright Act, 17 U.S.C. § 101, et seq. (Copyright Act or the Act). (Doc. 1). In March 2017, DISH amended its complaint to add Planet Telecom, Inc. (PTI) as a defendant. (Doc. 62). In short, DISH claims in its revised complaint that the Defendants “captur[ed] broadcasts of television channels exclusively licensed to DISH and unlawfully retransmitted these channels over the Internet to customers of the[ Defendants’] UlaiTV and AhlaiTV services throughout the United States.” Id. DISH further avers that the Defendants “profit from [this] scheme by selling UlaiTV and AhlaiTV set-top boxes and corresponding service plans,” and that they have engaged in this conduct without compensating DISH. Id. For relief, DISH seeks, inter alia, statutory and actual damages as well as a permanent injunction precluding the Defendants from committing further infringing activity. Id. All three Defendants—Fraifer, TCI, and PTI—timely answered DISH’s amended complaint and asserted counterclaims against DISH for conversion, trespass, and breach of contract. (Docs. 77-79). After two rounds of motion practice, the Court dismissed the Defendants’ counterclaims for conversion and trespass. (Doc. 115). The counterclaim for breach of contract, however, remains pending. Id. That claim is founded upon the Defendants’ assertions that DISH purchased a set-top box from the Defendants, agreed to certain terms in connection with that purchase, 2 and thereafter breached those terms by “hacking” into the set-top box and utilizing the Defendants’ “URLs1 . for its own purposes.” (Doc. 104). Following the close of discovery, the parties filed cross motions for summary judgment as to DISH’s copyright infringement claim. (Docs. 146, 217). DISH also seeks summary judgment on the Defendants’ breach of contract counterclaim. (Doc. 146). Each party filed a memorandum in opposition to the other’s summary judgment motion. (Docs. 151, 224). In addition, the Defendants submitted a reply to DISH’s response to their summary judgment motion, and DISH filed a sur-reply. (Docs. 228, 237). These matters are now ripe for consideration. B. Factual Background2 While the parties hotly contest the claims and defenses at issue, many of the basic facts underlying this litigation are not genuinely in dispute. A brief overview of these facts is useful before delving into the parties’ respective arguments. DISH is a pay-television provider that airs, inter alia, twenty-one Arabic language channels (the Protected Channels) in the United States. (Doc. 146-1 at 1- 2). DISH serves its subscribers by means of satellite delivery and over-the-top (OTT) services, whereby programming is delivered using a public internet infrastructure. Id.; (Doc. 62 at 3). These satellite and OTT services allow DISH’s clients to access the 1 URL is an acronym for “uniform resource locator” and is “more commonly known as a web address.” United States v. Auernheimer, 748 F.3d 525, 530 n.1 (3d Cir. 2014) (citation omitted). 2 The factual background set forth herein is derived primarily from the pleadings, the parties’ statements of undisputed facts, and the documentary evidence of record. 3 Protected Channels, as well as other international or foreign language channels. (Doc. 62 at 3). DISH claims the exclusive right to distribute and publicly perform in the United States all programs broadcast on the Protected Channels. Id. at 2-5. According to DISH, it derives this right from license agreements with various networks (the Networks) that are responsible for such programming or that work with the entities that produced the programming. Id. The Networks consist of: (1) MBC FZ LLC (MBC), a United Arab Emirates (UAE) media and broadcasting organization that provides five of the Protected Channels (MBC Channels); (2) Al Jazeera Media Network (Al Jazeera), a Qatari media and broadcasting organization that offers one of the Protected Channels, Al Jazeera Arabic News (AJAN); (3) International Media Distribution (IMD), a content redistributor that allegedly obtained the exclusive right to air domestically all programming on ten of the Protected Channels (IMD Channels) from the programming’s producers located in Lebanon, Egypt, Cyprus, and Saudi Arabia; and (4) World Span Media Consulting, Inc. (World Span), a content redistributor that allegedly obtained the exclusive right to air domestically programming on four of the Protected Channels (World Span Channels) from an Egyptian entity, Trenta for Art and Production and Distribution (Trenta). Id. According to DISH, World Span also serves as the licensing agent for Dream Media (Dream), another Egyptian entity that produced works airing on one of the Protected Channels. Id. 4 The programming on the Protected Channels consists of audiovisual works that DISH contends were authored and first published in one or more of the following foreign countries: the UAE, Qatar, Lebanon, Egypt, Cyprus, and Saudi Arabia. Id. at 6. While MBC allegedly registered four of these works with the United States Copyright Office (the Registered Works), the remaining works that aired on the Protected Channels are not registered (the Unregistered Works). Id. at 3-4; (Doc. 146 at 2).3 Fraifer is the founder, sole shareholder, and president of TCI and PTI. (Docs. 146-1 at 5; 150 at 6). TCI and PTI are effectively the same company, although TCI generally handles sales and distribution, while PTI deals with technology. (Docs. 150 at 6, 151-5 at 8-9). All of TCI and PTI’s employees and consultants reported to Fraifer during the relevant time period. (Doc. 150 at 6). Fraifer, TCI, and PTI own and operate the UlaiTV and AhlaiTV services, as well as TCI-Direct.com and Planet-itv.com (collectively, the Defendants’ Services). Id. at 4. UlaiTV and AhlaiTV offer customers access to hundreds of Arabic-language channels, while TCI-Direct.com and Planet-itv.com allow customers to order UlaiTV and AhlaiTV products. Id. These products include UlaiTV and AhlaiTV set-top boxes, which give customers access to the Arabic-language channels provided by UlaiTV and AhlaiTV. Id. at 5. 3 In its amended complaint, DISH identifies the four Registered Works by name. (Doc. 62 at 3-4). DISH does not, however, specifically identify the Unregistered Works, alleging instead that they consist of “[a] vast number of additional, unregistered copyrighted works[, which] also aired on the Protected Channels.” Id. at 4. 5 DISH contends the Defendants unlawfully transmitted the Protected Channels through the Defendants’ Services. Id. at 5. Specifically, DISH posits that, during the relevant time period, the Defendants captured live broadcast signals on the Protected Channels; transcoded those signals into a format useful for streaming over the internet; transferred the transcoded content to servers the Defendants provide, control, and maintain; and then retransmitted the Protected Channels to their customers—some of whom are located in the United States—through OTT internet delivery. Id. According to DISH, this method allows the Defendants to provide the Protected Channels to their UlaiTV and AhlaiTV users in real time, nearly simultaneously with the original transmission. Id. The Defendants dispute DISH’s allegations. They deny intercepting DISH’s transmission of the Protected Channels and interfering with or violating the exclusive copyrights DISH claims it has. (Doc. 151 at 9-11). Instead, the Defendants maintain that the Protected Channels are accessible through their UlaiTV and AhlaiTV set-top boxes due to the actions of the third parties that sell the boxes, and that the Defendants merely contract with content delivery networks (CDNs) 4 to improve the quality of the Protected Channels for the Defendants’ customers. Id. According to the Defendants, these third-party set-top box suppliers—or “Channel Providers”—create the hardware and software that makes the Protected Channels 4 Websites and other content providers pay “CDNs to accelerate delivery of their content over the internet to end users.” Limelight Networks, Inc. v. XO Commcn’s, LLC, 241 F. Supp. 3d 599, 604 (E.D. Va. 2017). 6 available on the internet through the set-top boxes the Defendants purchase and sell. Id. at 10. The Defendants argue that their conduct—the purchase and sale of the set- top boxes, along with their enhancement of the content through the CDNs—does not rise to the level of direct copyright infringement. Id. at 11. In their cross motions for summary judgment on DISH’s copyright infringement claim, each side contends that the uncontroverted material facts warrant judgment as a matter of law in their favor as to: (1) DISH’s ownership of valid copyrights in the Registered and Unregistered Works, and (2) the Defendants’ alleged infringement of those copyrights. On the issue of ownership, DISH submits that the undisputed evidence proves the Networks owned valid copyrights in the Registered and Unregistered Works and then transferred those rights to DISH by way of written agreements, thereby affording DISH the exclusive rights to distribute and publicly perform the works in the United States.