Joint Stock Company "Channel One Russia Worldwide" v. Russian TV Company Inc.

District Court, S.D. New York·Decided September 22, 2021·No. 1:18-cv-02318·Unknown

Opinion

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK -------------------------------------------------------------X : JOINT STOCK COMPANY “CHANNEL ONE : RUSSIA WORLDWIDE,” : : 18 Civ. 2318 (LGS) Plaintiff, : -against- : AMENDED FINDINGS : OF FACT AND RUSSIAN TV COMPANY, et al., : CONCLUSIONS OF : LAW : Defendants. : ------------------------------------------------------------ X

LORNA G. SCHOFIELD, District Judge: Plaintiff Joint Stock Company “Channel One Russia WorldWide” brings this action against Defendants Russian TV Company, Inc. (“Russian TV”), SR Express Consulting Inc. d/b/a/ Techstudio (“Techstudio”), Servernaya Inc. (“Servernaya”), ESTIDesign, Inc. (“ESTIDesign”) and their owner, Steven Rudik. The Second Amended Complaint (the “Complaint”) alleges violations of the Federal Communications Act (“FCA”) and the Copyright Act. Plaintiff agreed that resolution of its claims under the FCA in its favor would resolve all claims, including those for copyright. The parties agreed to proceed by summary trial on the papers. The Court now issues findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52(a). BACKGROUND The background facts below are drawn from witness affidavits and declarations, documentary evidence, deposition transcripts, the parties’ Rule 56.1 statements and other submissions for the summary trial. The facts are either undisputed or determined by the Court based on the parties’ submissions. Plaintiff produces and broadcasts television programming (the “Programming”), which enjoys a large audience in the Russian Federation and other members of the Commonwealth of Independent States. Plaintiff enters into licensing agreements that grant third parties the right to broadcast a version of the Programming in the United States. While not named as a plaintiff,

Kartina Digital GmbH (“Kartina”) is a television programming provider that was previously authorized to stream the Programming in the United States, and that is at least partially funding this litigation on behalf of Plaintiff. Steven Rudik owns and operates the other Defendants -- Russian TV, Techstudio, Servernaya and ESTIDesign. Defendant Russian TV is a New York corporation that owns and operates a website through which it provides access to the Programming in the United States in exchange for a subscription fee. Defendant Techstudio is a business that, inter alia, provides foreign-language broadcasting to distinct ethnic communities in the United States and around the world and advertises subscriptions for Russian TV to U.S. consumers. Defendant Servernaya is

a New York corporation that, among other things, hosts servers and provides hosting services to Techstudio. Defendant ESTIDesign is a New York corporation that designed Russian TV’s website and was listed on the Samsung Smart TV App Store as the developer of a Samsung Application (“RTV App”) that provides access to Defendants’ internet protocol television service (“IPTV”). In brief, Plaintiff alleges that Defendants illegally rebroadcast the Programming through IPTV, which provides Russian TV subscribers streaming of over 200 television channels including those owned by Plaintiff. Russian TV subscribers can access IPTV through mobile devices, Russian TV’s website, set-top boxes (“STBs”), computers and Smart TVs. Defendants argue that they were permitted to rebroadcast the Programming because they had legitimate access codes purchased from Kartina and other vendors who were authorized to rebroadcast the Programming. BURDEN OF PROOF To establish a violation of the Communications Act, Plaintiff must prove its claims by a

preponderance of the evidence. See J & J Sports Prods., Inc. v. Port Richmond Emporium Corp., No. 12 Civ. 4926, 2014 WL 692189, at *5 (E.D.N.Y. Feb. 21, 2014). Defendants bear the burden of proving an affirmative defense. See United States v. Livecchi, 711 F.3d 345, 352 (2d Cir. 2013). FINDINGS OF FACT The Programming bears a trademark and is distributed via transmission to a satellite, which transmits the Programming to the Commonwealth of Independent States. Plaintiff enters into license agreements with third parties to distribute a version of its Programming in the United States. The Programming is encrypted, and Plaintiff issues de-encryption devices to permit

access by authorized recipients. Plaintiff authorized Kartina to stream the Programming until July 2019. Kartina sold Defendant Techstudio access codes to the Programming between January 2011 and February 2017. Defendant Techstudio purchased from Kartina 2,117 STBs, 18,311 3-day, 31,888 1- month, 200 3-month and 2,975 1-year access codes pursuant to an agreement with Kartina. Defendants were authorized to resell Kartina access codes, which provided access to the Programming, until February 2017. In March 2017, Kartina informed Defendant Russian TV that it would no longer sell its access codes to Russian TV. As of July 2017, all but one of the access codes Techstudio had purchased from Kartina had expired. (Kartina seems to have viewed Rudik and his companies Techstudio and Russian TV interchangeably; they are referred to above, somewhat inconsistently, as Kartina referenced them). Defendant Techstudio then purchased access codes from three other dealers -- Apeiron Global Services Inc. (“Apeiron”), Digital Security Networks Ltd. and Digital Services LLC (collectively “Third Party Vendors”). These access codes included 3,452 Kartina access codes.

The Third Party Vendors were not licensed or authorized by Plaintiff to distribute the Programming or sell access codes to view the Programming. In addition to STBs purchased from Kartina, Defendant Techstudio purchased several thousand STBs from non-party Infomir, LLC (“Infomir”) and from a Chinese supplier. At least 3,000 of these STBs purchased from Infomir were customized to enable “plug and play access,” which allows a customer to watch the Programming without entering an access code. Two of Plaintiff’s investigators were able to view the Programming on a Smart TV through these STBs without entering an access code. A third-party developer hired by Techstudio designed the RTV App, although the Samsung App Store lists it as developed by Defendant ESTIDesign. The RTV

App functions like an STB and provides access to the Programming. Russian TV subscribers downloaded the RTV App at least 200 times. Russian TV has admitted to having at least 1,964 subscribers who can view Russian- language television programming through Russian TV’s website, STBs, computers, mobile devices and Smart TVs. Certain subscriptions to Russian TV permit access to the Programming. Defendant Rudik owns the other Defendants, and controls and directs their operations and finances. Rudik derives his income in part from the other Defendants’ operations, including the streaming of the Programming. CONCLUSIONS OF LAW A. FCA § 605(a) Plaintiff seeks statutory damages for Defendants’ unauthorized streaming of the Programming in violation of FCA § 605(a), 47 U.S.C. § 605(a). Plaintiff has shown by a preponderance of the evidence that each of the Defendants rebroadcast the Programming, or

assisted in doing so, without authorization.

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Joint Stock Company "Channel One Russia Worldwide" v. Russian TV Company Inc., (S.D.N.Y. 2021).

Joint Stock Company "Channel One Russia Worldwide" v. Russian TV Company Inc. (Joint Stock Company "Channel One Russia Worldwide" v. Russian TV Company Inc.) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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