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A class action lawsuit seems to be the best option to assure that our current HDTV sets are not made obsolete by the proposed 5C initiative. The purpose of this thread is to elicit legal opinions on the merit and optimal timing of such a case.


As quick a quick background, a group of major electronic manufacturers have created an alliance ("5c") to propose a standard for digital encryption of HDTV signals. It (appears) as if part of this standard includes the provision to disable (or "downrez") analog connectivity to HDTV televisions when "copy protection" is enabled.


The core of the complaint is that the same television manufacturers defrauded consumers by marketing such televisions as "HDTV compatible" while at the same time were working on standards that would make such televisions "incompatible". It has been suggested that up to one million effected sets have been sold.



Questions I advance on this thread:

1. What additional information is needed to create a "prima facie" case on fraud? On civil racketeering influenced and corrupt organizations act?

2. Do we need to wait until televisions with "encrypted" inputs are made available?

3. Do we need to wait until content is not made available to said sets?

4. Is it useful to begin "background" work on this action now?


BTW, an interesting site:
http://www.web-access.net/~aclark/frames45.htm


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Alex


[This message has been edited by work permit (edited 07-25-2001).]
 

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A couple of things (keep in mind, this is not legal advice and you should not construe it as such).


I am not sure whether a lawsuit would ultimately be successful here, although I am just as pissed off that my television could be rendered obsolete. Nevertheless, I am not certain whether fraud is the best cause of action to assert here. Fraud requires a showing, with particularity (meaning that it has to be more specific than what you might otherwise plead in a lawsuit), of a misstatement or omission of a material fact (meaning it is important), that was made with scienter (meaning an intent to deceive), that was reasonably/justifiably relied upon by you, and which injured you. The requirements may vary slightly from state to state.


You do have to wait for this standard to be adopted, because courts will not hear controversies that are not "ripe." If there was an immediate harm, I suppose you could file a lawsuit and at the same time move for an injunction prohibiting them from implementing this encryption standard.


In any event, if you were to proceed, it always helps to gather background. Specifically, you could find statements made about HDTV in the past. I think this probably won't work -- because it will be very hard to prove that the manufacturers or providers knew, at the time the statements were made, that they were false. That is why a fraud case is going to be difficult.


What I would suggest is that you look at state unfair trade practices statutes (in New York, look at General Business Law Section 349). These statutes are more flexible, and I think you can make a fair argument that rendering non-5C compliant HDTV ready sets unable to view HDTV programming, after selling them for however many years, is an unfair trade practice.


Hope this helps.
 

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Discussion Starter #3
Thanks Alan, good points.


I believe the consortium was created 3 years ago. It would appear from early adopter licenses that such standards were contemplated back then. Of course, it would require a subpoena to establish this fact.


Can RICO apply to unfair trade practices? Triple damages would sure help get peoples attention.


Does anyone know?


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Alex


[This message has been edited by work permit (edited 07-25-2001).]
 

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However ineffectual it might be, I would think the first course of action would be a formal complaint to the FTC, and perhaps the FCC. These governing bodies can do a lot more than the courts, and it doesn't require "proof".


The FCC has clearly been unwilling to tackle this issue, if for no other reason than their ruling concerning DFAST and cable connectivity.


The FTC, however, may be a much more promising avenue. Specifically, I would think the Sherman Anti-Trust Act would be applicable to the MPAA, and possibly the 5C consortium, since their existence and espousal of access-limiting technology "standards" impinge on the free trade of information and its use by consumers. I know, for example, that the MPAA is being investigated for unfair trade practices by several states' atorneys general.


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A couple of other, further points.


Generally speaking, you will not be able to serve a subpoena until after a case is filed. Depending on where you file such a case (state or federal court), and how the defendants respond (answer or move to dismiss), it may be even longer before you actually get discovery. The problem then becomes -- what you know v. what you think you know. Most attorneys will not sign their name to something absent specific personal knowledge on the part of their client. In other words, you need to be able to be able to swear to the fact that you know based on personal knowledge that they made these statements thinking it was false. It is an important point to keep in mind.


I have to agree that contacting the FTC is probably a good route, at least preliminarily.


I don't want to seem skeptical about the prospects of a lawsuit -- because I do think there is something fundamentally unfair here. There is just a lot more to making such a case than most people think.
 

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I think it is fraudulent to sell "HDTV compatible" sets right now when they are contemplating 5C technology. Its not as if they have removed the older sets from the market or are warning consumers about 5C. The newer sets coming out this fall don't have 5C either with few exceptions.

I purchased my HDTV last month and had never even heard of 5C until I came to this board.

If there is a complaint filed with the FCC or FTC or in court I want to be a part of it.

I either want some device which makes my TV HDTV compatible or a new TV.


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Eram

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Discussion Starter #7
Is there any way to get the FTC's attention? Somehow, a single consumer writing a letter seems destined for the circular files.




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Alex
 

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Could get expensive? Since it would be an FTC ruling, not a civil case, you'd have to pay by the hour rather than a contigency.


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Alex
 

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It certainly would be expensive. Although, at least in the first instance, sending a letter to the FTC would not take so long to draft (relatively speaking). The other thing is class action lawyers are generally very picky as to what cases they will take, because it is on a contingency, and they will be floating the cost of such litigation for at least a year, maybe more. Motion practice and discovery take time. So you may have problems. Then again, I think there is something there -- and other lawyers might think so too.
 

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Quote:
Originally posted by work permit:
Could get expensive? Since it would be an FTC ruling, not a civil case, you'd have to pay by the hour rather than a contigency.

That is why you would need to recruit an attorney on this board. One name comes to mind, and he's posting in this thread.... Alan?


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Very interesting article on DVI/HDCP. And very self-serving. I noticed not one consumer advocate applauded the adoption of this "standard". Boo Hiss


Ralph Nader - where are you?????


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Stephen Couch
 

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Discussion Starter #14
In either an FTC letter or a class action suit we would need someone who bought an HDTV set be the complainant. Any volunteers? You would have needed to purchased an HDTV set that was clearly marketed as such.


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Alex
 

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Quote:
Originally posted by stephenC:
....And very self-serving.....
The article is a Business Wire release. That means it was drafted ONLY by parties interested in portraying the subject in their best interests. Always consider Business Wire articles to be complete and total propaganda.


This article means nothing other than the ominous tone it sets for one possible future for HDTV. It is the first I have heard about STB manufacturers using the DVI/HDCP interface in ACTUAL future products with an ACTUAL time frame. I will wait for other press releases from the actual STB mfrs. before I accept these statements as having any truth in them (other than the obvious application of DVI/HDCP in the first place).


If it happens, well, then there will be blood AFAIK (figuratively speaking, of course http://www.avsforum.com/ubb/smile.gif ). I will not take the obsoletion of my HDTV lightly.


Rick

 

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I will be happy to sign any petition or complaint as well.


We need to nip this in the bud if possible.


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While I can see the value of being prepared just in case... I don't really expect that any of the existing HDTVs will become obsolete. The free market will brake any monopolistic self imposed "down-res on analog output" rule. (Just like gasoline prices always come down from artificial OPEC highs.)


At the most, some of us might have to buy a new STB. Big deal!!!


The glass is half full damm it! http://www.avsforum.com/ubb/wink.gif


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STOP DFAST!!!
 

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I think we may need to make a distinction here between OTA content and DBS content. For OTA transmission I seriously doubt the FCC would allow a broadcaster to encypt transmission and make early sets and set top boxes obsolete. Or perhaps more accurately, it easier to argue to the FCC that broadcasters should not be able to encrypt content over airwaves for which the broadcasters paid no money (in other words the taxpayers subsidized the spectrum).


For DBS content I think we are pretty much screwed, Directv and Dish are proprietary systems and can do whatever the hell they want since they paid for the spectrum.
 

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Having done a fair amount of class action work, and some unfair trade practices work, I really do think this is a problematic area. I also think there are a lot of potential loopholes for the manufacturers to use to avoid liability here. Personally, though, if what occurs here is that, on a going forward basis, you need either a firewire HDTV or you need an STB that outputs via firewire and can hook up to a firewire to component (or VGA) converter box, I would not have a problem with that.


As for taking this case, it isn't really practical for me to take this case. i bill my time on the hour, and i don't think it is something i can do "pro bono." I will be watching it, and may revisit it as this develops.


That is the other thing -- you can't really do anything legally until some action is taken. You could write to the FTC and alert them though.
 

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Discussion Starter #20
Quote:
you need either a firewire HDTV or you need an STB that outputs via firewire and can hook up to a firewire to component (or VGA) converter box, I would not have a problem with that.
Neither would I.


There are other threads (and organizations) dealing with the "freedom to copy" issues and such. My purpose in this thread is focus on the (potential) obsolescence of my equipment.


An FTC letter (appropriately drafted) seems to be a start. Do the legal bills stop at the letter?


Quote:
For DBS content I think we are pretty much screwed, Directv and Dish are proprietary systems and can do whatever the hell they want since they paid for the spectrum.
The action is not against DirectTV, Dish, Time-Warner, or the MPAA. Its against the 5C equipment manufacturers who were developing an alternate standard while still selling televisions marketed as "HDTV" compliant.


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Alex


[This message has been edited by work permit (edited 07-25-2001).]
 
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