Government Memorandum of Law in Opposition to Petition for Release of Rojadirecta.com

8/6/2019 Government Memorandum of Law in Opposition to Petition for Release of Rojadirecta.com

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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK- - - - - - - - - - - - - - - x

PUERTO 80 PROJECTS, S.L .U. ,P l a i n t i f f ,

- v. -UNITED STATES OF AMERICA ANDDEPARTMENT OF HOMELAND SECURITY,'IMMIGRATION AND CUSTOMSENFORCEMENT,

Defendants .----------------- x

No. 11-CV-3983 (PAC) (FM)

GOVERNMENT'S MEMORANDUM OF LAW IN OPPOSITION TO PETITION OFPUERTO 80 PROJECTS, S.L.U. SEEKING RELEASE OF SEIZED PROPERTY

PURSUANT TO 18 U.S.C. 983(f)

Chris topher D. FreyDavid I . Mil le r

PREET BHARARAUnited Sta tes Attorney fo r theSouthern Di s t r i c t o f New York,Attorney fo r th e United Sta tesof America

Ass i s t an t United S ta t e s Attorneys- Of Counsel -

Case 1:11-cv-03983-PAC Document 18 Filed 07/11/11 Page 1 of 28


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TABLE OF CONTENTSPRELIMINARY STATEMENT

FACTS ...PROCEDURAL HISTORYSTATUTORY FRAMEWORKSTANDARD OF REVIEWARGUMENT

1 . THE PETITION OF PUERTO 80 MUST BE DENIED BECAUSE ITHAS NOT SATISFIED ITS BURDEN OF DEMONSTRATING THATTHE REQUISITE FACTORS UNDER SECTION 983(f ) ARE META.

B.

Puer to 80 Has Fai led To Demonstra te "Subs tan t i a lHardship" As Required By Sect ion 983( f ) .The Pe t i t i o n Should Be Denied Because Return ingThe Seized Proper ty Would Afford Puer to 80 TheA b i l i t y To Commit Ad d i t io n a l Criminal Acts . .1 . Puer to 80 Engaged in Criminal Copyr ight

In f r ingement Pr io r to th e Government ' sSe izu re o f the Rojad i rec ta Domain Names.a . The Exis tence o f a Val id Copyright .b . In f r ing ing Acts .c . W i l l fu l n ess .d. Fi n an c i a l Gain.

CONCLUSION

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UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF NEW YORK--------------- xPUERTO 80 PROJECTS I S.L,U' I

P l a i n t i f f l- v. -

UNITED STATES OF AMERICA ANDDEPARTMENT OF HOMELAND SECURITYIMMIGRATION AND CUSTOMSENFORCEMENT IDefendants .----------------- x

No. 1 1 ~ C V - 3 9 8 3 ( P A C ) (FM)

PRELIMINARY STATEMENTThe United Sta tes o f America and th e U.S. Department of

Homeland SecuritYI Bureau of Immigrat ion and Customs Enforcement(the "Government ll ) I by t h e i r a t to rney I Pree t Bharara l United Sta te sAttorney fo r th e Southern D i s t r i c t of New York l Chr i s topher D. Freyand David I . Mil le r l Ass is tan t United Sta tes Attorneys l of counsellsubmit t h i s memorandum of law in opposi t ion to th e pe t i t i on ofPuerto 80 Pro jec t s l S.L.U. ("Puerto 80") fo r th e r e tu rn of se izedproper ty pursuan t to T i t l e 18 1 United Sta tes Code Sect ion 983( f ) .

By way of i t s p e t i t i o n l Puerto 80 seeks th e immediater e lease of two domain names s pe c i f i c a l l y ro j ad i rec ta . com andro j ad i rec ta . o rg (c o l l e c t i v e l y the "Roj a d i r e c t a Domain Names") Ise ized by th e U.S. Department Homeland Secur i ty Immigrat ion andCustoms Enforcement ("ICE") I pursuan t to federa l se i zure warrantsobta ined in th e Southern D i s t r i c t of New York and i ssued by th e/



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Honorable Frank Maas, un i ted S ta tes Magistra te Judge, on January31, 2011. In a t tempt ing to provide j u s t i f i ca t ion fo r grant ing th i sextreme remedy, Puerto 80 seeks to character ize the websi te itoperated under the Roj ad i rec ta Domain Names as an onl ine discuss ionforum and, in so doing, would have t h i s Court decide , on anexpedi t ed bas i s and without a fu l ly developed fac tua l record, avar ie ty of i s sues t ha t are more proper ly ra i sed e i t h e r in a motionto dismiss the Government' s Verif ied Complaint 1 o r fol lowing aper iod of discovery. Indeed, through i t s pe t i t i on , Puerto 80 i sa t t empt ing to use a l imi ted provis ion of fo r f e i t u r e law designed toprovide r e l i e f in only the r a re s t of c i rcumstances in order tomount a broader chal lenge to a widely employed t oo l of lawenforcement. Because r e a l quest ions of f a c t e x i s t here concerning,among other th ings , what exac t ly Puerto 80 ' s websi t e i s and howPuerto 80 p r o f i t s by opera t ing i t , the Government respec t fu l lysubmits t ha t t h i s Court should r e s i s t Puerto 80 ' s i nv i t a t i on toengage in such an undertaking.

Viewed proper ly , the i n s t a n t pe t i t i on must be deniedbecause Puerto 80 simply has not met i t s burden of demonstrat ingt ha t a l l of the r e qu i s i t e f ac to r s under Sect ion 983(f) of Ti t le 18are sa t i s f i ed in orde r fo r t h i s Court to grant the r e l i e f it seeks.Fi r s t , Puerto 80 has fa i led to make the r e qu i s i t e showing of

1 See June 17, 2011 Verif ied Complaint in United Sta tesv. Rojadirecta .org , e t a l . , 11 Civ. 4139 (PAC), Docket N o . 1 .2



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" subs tan t ia l hardship" requi red by Sect ion 983 (f) (1) (C) . Puerto 80c i t e s a p o t e n t i a l lo s s o f goodwil l , diminut ion in In t e rn e t v i s i t o rt r a f f i c , and an a l leged F i r s t Amendment v io l a t i on as a r e s u l t ofth e se i zure , b u t these purported hardships simply do not r i s e tothe l ev e l o f t he ex t raord ina ry c i rcumstances contemplated byCongress in its enactment of t h i s ex igen t r e l i e f prov i s ion .

Second, Puer to 80 has fa i led to sa t i s fy th e requirementsof Sec t ion 983 (f) (1) (E) . In t h i s regard , Puer to 80 has not -because it cannot - assure t h i s Court t ha t t he se i zed domain namesw i l l not l i ke ly be used to commit ad d i t i o n a l cr imina l ac t s i fre turned. See 18 U.S.C. 983 (f) (8) (D) . To th e con t ra ry ,re tu rn ing the Rojadi rec ta Domain Names a t t h i s t ime would providePuerto 80 with the very too l s it used to commit the cr imes theGovernment has a l leged it engaged i n p r i o r to th e se izure .Accordingly, Puerto 80 ' s p e t i t i o n should be den ied .

FACTS

The fac t s in suppor t of the fo r f e i t u r e o f th e Roj ad i rec taDomain Names a re s e t fo r th in th e January 31, 2011 a f f i d a v i t of ICESpecia l Agent Danie l M. Braz ie r ( the "Braz i e r Aff idav i t " ) ,submit ted in support of the Government 's app l i ca t ion fo r a warrantto se i ze the Rojadi rec ta Domain Names. See Declara t ion ofGenevieve Roslof f in Support of Puerto 80 ' s Pe t i t i on fo r Release ofSeized Proper ty ( the "Ros lo f f Declo") , Ex. E. In summary, p r i o r toFebruary 1 , 2011, the Rojadi rec ta Domain Names d i rec ted In te rne t

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users to a webs i te commonly known as "Rojadi rec ta ." Rosloff Declo IEx. E a t 4 Oa. Roj a d i r e c t a was a \' l inking" webs i te t ha t co l lec tedand catalogued l i nks to f i l e s on t h i rd -p a r t y webs i tes t ha tcontained i l l e g a l copies of copyr igh ted con ten t here da i ly l ivespor t ing events and Pay-Per-View events as well as downloadablespor t ing events o r Pay-Per-View events t ha t had been prev ious lya i r ed . Users simply c l i cked on a l i nk to begin th e process ofdownloading o r s t reaming to t h e i r own computer an i l l e g a l broadcasto f a spor t ing even t o r Pay-per-View even t from th e t h i rd -par tywebsi te t h a t hosted the st ream. Linking websi te s a re popularbecause they al low use rs to quickly browse con ten t and loca tei l l e g a l s t reams t ha t would otherwise be more d i f f i c u l t to f indthrough manual searches o f the In te rne t . Id . a t 13.

Rojad i rec ta / s homepage 2 disp layed th ree genera lca tegor i e s of l inks to con ten t t h a t was av a i l ab l e f o r viewing: (1 )"Today on In t e rn e t TV"; (2 ) "Download l a s t f u l l matches"; and (3)"Last video h igh l igh t s . " Id . a t 40a. Links fo r da i ly spor t ingevents were disp layed under th e "Today on In t e rn e t TV I ca tegoryheader . The l i n k s under th e "Today on In t e rn e t TV" category headerchanged on a da i ly bas i s ; l inks were added as th e day progressedand an even t l s s t a r t i ng t ime drew c lo s e r . The spor t ing events and

2 A copy of Rojad i rec ta / s homepage as it appeared on o rabout January 31 1 2011 i s a t tached as Exhib i t A to th eDecla ra t ion of Chr i s topher D. Frey in Support o f th e Government/sOpposi t ion to Puer to 80 / s Pet i t ion fo r Release o f Seized Property("Frey Decl . II) 4



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t h e i r s t a r t i ng t imes corresponded to indiv idual spor t ing leagues 'o f f i c i a l event s and s t a r t i ng t imes. Id . a t 40b.

When a user se lec ted a l ink fo r a par t i cu l a r spor t ingevent under the "Today on In te rne t TV" category header , the type ofl i nk , the name of the broadcast ing s t a t i on (e. g . , ESPN) , thelanguage opt ion , and the type of In t e rn e t media p layer weresubsequent ly displayed. Once a user , se lec ted a spec i f i c l inkopt ion, t ha t user was then taken to a new window, which displayedth e se lec ted program and bore a Uniform Resource Locator , or"URL,"3 conta in ing th e words " ro jad i rec ta . " Because the contentran on a l i ve stream from another websi te , the se lec ted show didno t s t a r t a t the beginning of the program; in s tead , th e program ranfrom whatever par t i cu l a r po in t the show was presen t ly a t in thes t ream. Moreover, the event broadcas t was shown i n r e a l t ime andwas the same broadcas t as the author ized broadcas t of tha t sameevent . However, these broadcasts over Rojadirecta were notauthor ized by the r e levan t copyr ight holders . In addi t ion ,adver t i sements t ha t were separa te and d i s t inc t from any commercialst ha t may have been a i red during the stream of the spor t ing eventbroadcast were per iodica l ly displayed a t the bottom of the videoduring the l i ve s t ream. Id . a t 40c, 40d, 42, 44.

3 A URL i s code t ha t spec i f i e s a par t i cu l a r webpage orf i l e on the In te rne t . I f cl icked on by a user , a URL can, fo rexample, br ing up the r e levan t webpage in an In t e rne t browser orrun a program.5



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PROCEDURAL HISTORYOn January 31, 2011, Magist rate Judge Frank Maas found

t ha t probable cause ex i s t ed to bel ieve t ha t the Rojadirecta DomainNames were subj e c t to for fe i ture because they had been used tocommi t and f ac i l i t a t e cr imina l copyright infr ingement and conta inedevidence of t ha t crime. Accordingly, t ha t same day, Magist rate

se izure of theudge Maas i s sued a warrant author iz ing theRojadi rec ta Domain Names ( the "Seizure Warrant") . On or aboutFebruary 1, 2011, ICE agents executed the Seizure Warrant.

Shor t ly a f t e r the execut ion of the Seizure Warrant,at torneys fo r the Government engaged in varied and numerousdiscuss ions with counsel fo r Puerto 80 in an a t tempt to reachagreement. Those discuss ions inc luded, among o ther th ings , theGovernment 's of fe r to re tu rn the R ojadi rec ta Domain Names to Puerto80 under an agreement in which the websi te would hos t chat forumsand other non- inf r inging mater ia ls under the observa t ion of a firmre ta ined to monitor Puer to 80' s compliance. Ultimately, thosediscuss ions ended on May 26, 2011, however, because Puerto 80 'scounsel ind ica ted t ha t it would not agree to remove from theRoj ad i rec ta webpages any conten t t ha t the Government contendsin f r inges the r igh t s of U.S.-based copyrights owners. See FreyDeclo 2-5.

On June 13, 2011, more than four months a f t e r ICE'sexecut ion of the Seizure Warrant , Puerto 80 f i l ed the ins tan t

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pe t i t i on . Pursuan t to th e procedures s e t fo r th in T i t l e 18, UnitedSta tes Code, Sect ion 983(a) (3) (A), the Government had nine ty daysfrom the da te Puerto 80 f i l ed i t s Seized Asset Claim Forms (here,March 22, 2011) to f i l e a compla int fo r fo r f e i t u r e and thus, onJune 17, 2011, th e Government f i l e d i t s Ver i f i ed Complaint .

STATUTORY FRAMEWORK

Congress enacted Sect ion 983(f) as pa r t of the Civ i lAsset For fe i tu re Reform Act of 2000, Pub. L. No. 106-185, 2, 114S t a t . 202, 208-09 (2000) , in order to provide a mechanism fo r th er e lease of prope r ty dur ing the pendency o f a c i v i l fo r f e i t u reproceeding in c e r t a in circumstances in which th e government 'scont inued possess ion of the p roper ty would pose a s u b s t an t i a lhardship to a c la imant . United Sta tes v. Undetermined Amount ofU.S. Currency, 376 F.3d 260, 263-64 (4th Cir . 2004) . This extremeremedy i s gran ted in the r a r e s t of ci rcumstances. Accordingly, thes t a tu t e places a hef ty burden on the c la imant , and provides, inp e r t i n en t p a r t :

(1 ) A c la imant . i s en t i t l ed toimmediate r e lease of seized prope r ty if -(A) the cla imant has a possessoryi n t e r e s t in the p roper ty ;(B) the cla imant has s u f f i c i e n t t i e s to

th e community to provide assurance t ha t th eprope r ty w i l l be ava i lab le a t th e t ime oft r i a l ;(C) th e cont inued possess ion by th eGovernment pending the ' f i na l d i spos i t ion o ffo r f e i t u r e proceedings w i l l cause su b s t a n t i a l

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hardship to the c la imant , such as preven t ingth e func t ion ing of a business , p reven t ing ani n d i v i d u a l from working, o r l eav ing ani n d i v i d u a l homeless ;

(D) th e c la imant ' s l i ke ly hardship fromth e con t inued possess ion by th e Government ofth e se i zed proper ty outweighs th e r i sk t ha tt he p rope r ty w i l l be des t royed , damaged,l o s t , concealed, . o r t r an s f e r r ed if it i sre turned to th e c la iman t dur ing the pendencyof the proceeding; and

(E) none of the cond i t ions s e t fo r th inparagraph (8) app l i e s .(2) A c la imant seeking r e lease of prope r tyunder t h i s subsec t ion must reques t possess ionof th e prope r ty from th e appropr i a t eo f f i c i a l , and the reques t must s e t f o r th th eb as i s on which the requirements o f paragraph(1.) a re met.(3) (A) I f not l a t e r than 15 days a f t e r th edate o f a r eq u es t under paragraph (2) th eprope r ty has not been re leased , the c la imantmay f i l e a p e t i t i o n in the d i s t r i c t cour t inwhich th e compla int has been f i l ed . . .

(B) The p e t i t i o n descr ibed insubparagraph (A) sh a l l s e t fo r th -( i) the bas i s on which th erequirements of paragraph (1) a remet; and( i i ) th e s teps th e c la imanthas t aken to secure r e lease of the

prope r ty from th e appropr ia teo f f i c i a l .

(6) I f -(A) a p e t i t i o n i s f i l e d under paragraph

(3); and

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Wisc. 2007) (c i t ing Matter of Si n c l a i r , 87 0 F.2d 1340, 1343 (7thCir . 1989)) . Thus, while Sect ion 983 (f) o f fe r s a cla imant a"de ta i l ed and comprehensive mechanism" fo r obta in ing the r e lease ofproper ty sub jec t to c i v i l for fe i ture , it " s t r i c t l y l imi t s th es i t ua t ion in which such r e l i e f i s ava i l ab le . " United Sta tes v.Contents of Accounts, Nos. 10-5799 and 10-5800, 2011 WL 9167, a t *5(6th Cir . Jan . 4, 2011).

STANDARD OF REVIEW

In order to obta in the r e lease of proper ty under Sect ion983 ( f ) , a c la imant bears the burden of demonstra t ing t h a t thes t a t u to ry p re re q u i s i t e s a re sa t i s f i ed . Contents of Accounts , 2011WL 9167, a t *5; Undetermined Amount of U.S. Currency, 37 6 F.3d a t264 (c i t ing Sect ion 983(f) (6)) i United Sta tes v. HuntingtonNational Bank, No. 2:07-cv-0080, 2007 WL 2713832, a t *1 (S.D. OhioSept . 14, 2007) (same).

ARGUMENT

I . THE PETITION OF PUERTO 80 MUST BE DENIED BECAUSE IT HAS NOTSATISFIED ITS BURDEN OF DEMONSTRATING THAT THE REQUISITEFACTORS UNDER SECTION 983(f) ARE MET

As discussed in fu r the r de t a i l below, Puer to 80 simplyhas not s a t i s f i e d i t s burden of demonstra t ing t ha t the requ i s i t efac tors of Sec t ion 983(f) (1) a re sa t i s f i ed . I t s pe t i t i on fo r theimmediate re l ease of the Rojadi rec ta Domain Names should t he re fo rebe denied .

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A. Puerto 80 Has Fai led To Demonstrate "Subs tan t i a lHardship" As Required By Sect ion 983(f)Afte r wai t ing more than four months from the date of th e

Government's se izu re of the Roj ad i rec ta Domain Names to f i l e ape t i t i on with t h i s Court , th e sole a l leged hardships t h a t Puerto 80has a r t i c u l a t e d in suppor t of i t s pe t i t i on a re (1 ) a purporteddecrease in th e t o t a l number of v i s i t s to th e Rojadi rec ta websi teand an ~ s s o c i a t e d lo s s of goodwil l from In t e rn e t users access ingt h a t s i t e ; and (2 ) t ha t th e se izure c o n s t i t u t e s an i n v a l i d pr io rr e s t r a i n t , thereby in f r ing ing upon i t s users ' F i r s t Amendmentr i g h t s . See Memo a t 9-12. Puerto 80 ' s a l l eged harms, however, donot r i s e to th e l ev e l of " s u b s t an t i a l hardship" t h a t Congresscontemplated in author iz ing a cour t to orde r the immediate r e leaseof se i zed p rope r ty under Sect ion 983( f ) . As such, Puerto 80 ' spe t i t i on i s without mer i t and should be den ied .

As Puer to 80 i t s e l f acknowledges, shor t ly a f t e r these izure of the Rojadi rec ta Domain Names, Puer to 80 t rans fe r red i t swebsi te to o t h e r domain names s pe c i f i c a l l y , ro j a d i r e c t a . e s ,ro j ad i rec ta . me, and ro j ad i rec ta . in . See Memo a t 10 n. 5 . Thus, theRojad i rec ta webs i te i t s e l f remains ava i lab le to In t e rn e t users tot h i s very day. In fac t , by typing "Rojadi recta" in anyone of themany search eng ines ava i lab le on th e In t e rn e t , such as Google, ause r i s d i rec ted to the Rojad i rec ta webs i te v ia one of those newly

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es tab l i shed domain names and/or the under ly ing IP address 4 i t s e l f .Puer to 80 mainta ins t h a t the Rojadi rec ta websi te has never the l es sexperienced a 32% reduct ion in t r a f f i c in terms of v i s i t s to t ha ts i t e . See Declara t ion of Igo r Seoane Minan in Suppor t of Puerto80 ' s Pe t i t i on fo r Release of Seized Proper ty ("Seoane Decl .") ,11 .However, nowhere in i t s pe t i t ion does Puer to 80 a s s e r t t h a t it i sincur r ing a f inanc ia l lo ss as a r e s u l t of the Government 's se i zu reof the Rojad i rec t a Domain Names, nor has it provided t h i s Courtwith any evidence of any such l os s . To t he con t ra ry , Puerto 80seemingly contends t h a t it does no t receive any revenue fromspec i f i c content hos ted on i t s websi te , Seoane Decl . , 10, and t ha tno p r o f i t i s genera ted d i r ec t l y from adver t i sements t ha t aredisp layed dur ing the s t reaming of the l ive spo r t ing events . Id.,5. Thus, it i s wholly unc lea r from i t s p e t i t i o n what Puerto 80 'sbus iness model i s o r how it genera tes pro f i t of any kind.

In c r a f t i ng the t ex t of Sec t ion 983(f ) , Congressexpl ic ' i t ly mandated t h a t a c la imant i s e n t i t l e d to the immediater e lease of se i zed p roper ty only in th e most urgent of s i tua t ions ,inc luding , among o the r s , those t ha t make it impossible to run the

4 In t e rne t Protocol Addresses or IP addresses a re uniquemachine-readable numeric address t h a t computers use t o i den t i fyeach o the r on the In t e rne t . An IP address looks l ike a ser ies offour numbers, each in the range of 0-255, separa ted by per iods(e .g . , 121.56 .97 .178) . Every computer connect ion to the In t e rne tmust be ass igned an IP address so t h a t In t e rne t t r a f f i c sen t fromand di rec t ed to t h a t computer i s di rec t ed proper ly 'from i t ssource to i t s des t ina t ion .12



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impacted bus iness . 18 U.S.C. 983(f) (1) (C) ( requi r ing pe t i t i one rto demonstra te t h a t " th e cont inued possess ion by theGovernment w i l l cause su b s t a n t i a l hardship to th e claimant , such asprevent ing the func t ion ing o f a business ." ) (emphasisadded) i United s t a t e s v. $6,787 in U.s . Currency, No. 1:06-cv-1209WSD, 2007 WL 496767, a t *2 (N.D. Ga. Feb. 13, 2007) (holding t h a twhile absence o f a veh ic l e may decrease p e t i t i o n e r ' s p r o f i t margin,such loss does not amount to subs tan t i a l hardship because it doesnot preven t func t ion ing o f bus iness ) .

The l e g i s l a t i v e h i s to ry of the C iv i l Asset Forfe i tureReform Act underscores Congress ' s i n t en t to severe ly l i m i t thes i t u a t i o n s in which such immediate r e l i e f would be av a i l ab l e . Inrecommending i t s passage , th e House Jud ic ia ry Committee l a i d outseve ra l examples of s i t ua t ions , not un l ike the ones contained inth e ac tu a l t e x t of Sec t ion 983 (f) (1) (C), in which i r r eparab ledamage may be done to a prope r ty owner 's i n t e re s t s even i f theowner u l t imate ly p r ev a i l s in a c i v i l for fe i ture proceeding and, assuch, cons t i tu t e a showing o f hardship t h a t may j u s t i f y a r e tu rn ofproper ty before f i na l jud i c i a l d ispos i t ion o f fo r fe i tu reproceedings. Fi r s t , a claim of subs tan t i a l hardship may be shownif the proper ty se ized i s "used in a bus iness ," wherein " i t s lackof ava i l ab i l i t y fo r th e t ime necessary to win a v ic to ry in cour tcould have forced i t s owner in to bankruptcy." H.R. Rep. No. 106-192, a t 17 (1999). Second, " i f th e proper ty i s a car , th e ownerI

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might not have been able to commute to work u n t i l it was won back."Id . Fina l ly , " i f th e proper ty i s a house, th e owner may have beenl e f t t emporar i ly homeless (unless th e government l e t th e owner r en tth e house back) . II The Jud ic ia ry Committee 's f ea r in suchins tances was t ha t , desp i te a weak government case , the p roper tyowner would " se t t l e with the government and lose a ce r ta in amountof money in orde r to g e t the proper ty back as qu ick ly as poss ib l e . IIFurthermore, Congress d id no t want " ind iv idua l s ' l i ves andl i ve l ihoods [to] be in p e r i l dur ing th e course of a l ega lchal lenge to a se izu re . 145 Congo Rec. H4854-02 (da i ly ed . June24, 1999) (s ta tement o f Rep. Hyde), a t *WL 419756.

Puer to 80 ' s cla ims o f purported hardship do not remotelyapproach th e concerns expressed by Congress in enac t ing Sec t ion983(f ) . The bottom l i ne i s t h a t th e Rojadi rec ta websi te remainsfu l ly ope ra t iona l (and to the f i n an c i a l det r iment o f U.S. copyr ightholders , it i s cont inuing to provide users with highly sought outl inks to in f r ing ing con ten t ) . At bes t , Puer to 80 can say only t ha tit has experi .enced a modest decrease in v i s i t s to i t s websi te .However, noth ing in th e l e g i s l a t i ve h i s to ry suggests t h a t Congresswas concerned with a decrease in the t r a f f i c of v i s i t o r s to apa r t i c u l a r websi te o r a loss of goodwil l in contemplat ing hardship .Nor i s the re anything in the l e g i s l a t i ve h i s t o ry t ha t ind ica tesCongress was concerned t h a t reg i s t e red use rs o f a websi te mightchoose in s tead to use th e websi te of a compet i tor , an ac t ion t ha t

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Puerto 80 t o re tu rn th e Rojadi rec ta Domain Names sub jec t to cer t a incondi t ions . Frey Decl . 2-5 . To the ex ten t Puerto 80 seeks tochal lenge the c ons t i t u t i ona l i t y of such a se izu re on F i r s tAmendment grounds, a pe t i t i on brought pursuant to Sect ion 983(f) i snot the p roper veh ic le fo r asse r t ing such a cla im. Indeed, th earguments Puerto 80 seeks to advance in t h i s regard would seeminglybe included in a motion to dismiss th e Government ' s Veri f iedComplaint or , even more appropr i a t e ly , fol lowing a per iod of f ac tdiscovery. 6

Accordingly, Puer to 80 has wholly fa i led to demonst ra tet h a t the Government 's se izu re of the Rojadi rec ta Domain Names hasresu l t ed in any subs tant ia , l hardship .

B. The Pe t i t i on Should Be Denied Because ReturningThe Seized Property Would Afford Puer to 80 The Abi l i tyTo Commit Addi t iona l Criminal ActsPursuant to subsec t ion 983 (f) (1) (E), th e immediate r e tu rn

of proper ty i s not warran ted if the se ized proper ty , among othe rth ings , " i s l i ke l y to be used to commit ad d i t i o n a l cr imina l ac t s i fre turned to th e c la imant ." 18 U.S.C. 983(f) (8) . The Rojad i rec taDomain Names were se ized pursuant to a warrant obta ined in theSouthern D i s t r i c t of New York and i ssued by th e Honorable FrankMaas, uni t ed S ta t e s Magis t ra te Judge, who found probable cause to

6 In th e event t he 'Cour t deems it appropr i a t e to considerth e F i r s t Amendment i s sues a t t h i s t ime, th e Governmentrespec t fu l ly r e que s t s ' t ha t it be granted leave to submitadd i t iona l b r i e f i n g on t h a t top ic .

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bel ieve t ha t Puer to 80, through the Rojadi rec ta Domain Names, wasengaged in cr imina l copyright infr ingement . The Government has noreason to bel ieve t ha t Puer to 80 would not cont inue to engage inthe very i l l e g a l ac t s in which it engaged pr i o r to the se izure ,were those domain names to be re turned to Puerto 80 a t th i s t ime.

1. .puer to 80 Engaged in Criminal CopyrightInfr ingement Pr io r to the Government 'sSeizure o f the Rojadi rec ta Domain NamesAs discussed in de t a i l below, in opera t ing the

Rojadi rec ta websi te , Puer to 80 has engaged in (and aided andabet ted) f l ag ran t cr imina l copyright infr ingement . Ti t l e 18,Uni t ed S ta tes Code, Sect ion 2319 se t s fo r th c e r t a in cr imina lpena l t i e s as soc ia ted with the criminal infr ingement of a val idcopyright , in v io l a t i on of Ti t l e 17, United Sta tes Code, Sect ion506 (a) . In order to es tab l i sh cr imina l infr ingement of acopyrighted work, th e Government must e s t a b l i s h each of thefol lowing e lements : (1 ) the exis tence of a va l id copyr ight ; (2) ana c t of infr ingement of t ha t copyright ; (3) wi l l fu lness on the p a r tof the i n f r inger ; and (4 ) e i t he r t ha t (a) the infr ingement was fo rpurposes of commercial advantage or pr iva te f inanc ia l gain , or (b)the i n f r inger reproduced o r d i s t r ibu ted , during any 180-day period,one or more copies o r phonorecords of one o r more copyr ightedworks, with a t o t a l r e t a i l value of more than $1,000. 17 U.S.C. 506(a) . As presented in i t s app l ica t ion to Magis t ra te Judge Maasfo r the Seizure Warrant , the Government bel ieves t ha t Puerto 80,

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through the Roj ad i rec ta Domain Names, has engaged in criminalcopyright infr ingement .

a . Th e Existence of a Valid CopyrightAs s e t fo r th in the Braz ie r Aff idav i t , the owner of the

copyrights to a l l t e lev i s ion broadcas t s and o ther footage of apa r t i c u l a r spor t ing event i s the associa ted indiv idual spor tsleague, such as the National Footba l l League ( the "NFL") , theNat iona l Baske tba l l Assoc ia t ion ( the "NBA") , the National HockeyLeague ( the "NHL"), World Wrest l ing Enter ta inment (the "WWE") andUl t imate Fight ing Championship ( the "UFC") (col lec t ive ly , the"Leagues ll ). Rosloff Decl . , Ex. E a t , 8. The U.S. Copyright Act,Ti t l e 17, United Sta tes Code, Sect ions 101, e t seq . , gives theowner of such copyrights exclusive r i gh t s , inc luding the r igh t toreproduce the copyrighted work, the r i gh t to prepare der ivat iveworks, the r i gh t to d i s t r i bu t e copies to the pub l ic , and the r i g h tto publ ic ly d isp lay the work. 17 U.S.C. 106(1)-(3) & (5) . Assuch, the Leagues hold a va l id copyright to the broadcas t of t he i rrespect ive spor t ing events .

b. In f r ing ing ActsInfr ingement cons i s t s of the unauthorized exercise of one

of the exc lus ive r i gh t s of the copyright holder . Despite i t scla ims t ha t it i s "essent ia l ly an onl ine discuss ion group tha thos ts ' forums' in which use rs can pos t messages concerning spor ts ,p o l i t i c s , and o th e r t op ics , " (Memo a t 2) , the Ro jadi rec ta webs i te ' s

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p r in c ip a l purpose appears to be to organize l i nks to broadcastsava i lab le on th e In t e rn e t of var ious copyr igh t -p ro tec t ed spor t ingeven t s . Indeed, to t he ex ten t Puerto 80 has any s i g n i f i c a n tt r a f f i c to th e Rojadi rec ta websi te a t a l l , th e Government contends(as it a l l eg es in i t s Ver i f i ed Complaint) t ha t i s because Puerto 80organizes popular , in f r ing ing con ten t ava i lab le on th e I n t e r n e t ina way t ha t i s u s e fu l to those who seek such mate r i a l . In makingava i lab le these s t reams o f l i ve and pre-recorded broadcas ts ofspor t ing events on the Rojadi rec ta webs i te wi thou t th e permiss ionof the Leagues which own th e assoc ia t ed copyr igh t s , Puerto 80 hasengaged in repea ted a c t s of infr ingement wi th severe consequences.The Leagues s u f f e r s i g n i f i c a n t negat ive impact from unau thor izedstreaming o f l i ve programming. Online p i racy o f l i ve spor t ingeven t t e l e c a s t s th rea tens the investment t h a t broadcas te rs andd i g i t a l media companies a re wil l ing to make to d i s t r i bu t e l i vecon ten t , the Leagues ' a b i l i t y to s e l l game t i c ke t s and secure loca lt e l ev i s ion and radio car r iage , and th e value o f adver t i s ing revenuegenerated by broadcas t , radio and ne w media p a r tn e r s , among othe rth ings . Roslof f Decl . , Ex. E a t , 9.

Moreover , Puerto 80' s at tempts to l i ken i t s e l f to anIn te rne t search engine i s wholly unava i l ing . Unlike a searchengine o r o th e r s i t e t ha t aggregates l inks to ex i s t ing con ten tneu t ra l mate r ia l on th e In te rne t , Rojad i rec t a organ izes l i nks tovery spec i f i c con ten t in a prec i se and t a rge ted way. As such, the

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cases Puerto 80 c i t e s fo r the propos i t ion t ha t the ac t of indexingand l inking to copyrighted mater ia l i s no t d i r e c t or ind i rec tcopyr ight inf r ingement a re wholly inappos i te . See, Field v.Google, Inc . , 412 F. Supp. 2d 1106 (D. Nev. 2006) (holding tha t theautomated, non-vol i t ional conduct by Google in response to anIn te rne t use r ' s search terms does no t c ons t i t u t e d i r e c tinfr ingement under the Copyright Act) .

As descr ibed above and as se t for th in the BrazierAff idav i t , Rojad i rec ta ' s homepage displayed th ree generalcategor ies of l inks to content ava i lab le fo r viewing: (1) "Today onIn te rne t TV"; (2) "Download l a s t fu l l matches"; and (3) "Last videohighl ights ." Rosloff Decl . , Ex. E a t 40a. Links fo r dai lyspor t ing events were disp layed under the "Today on In te rne t TV"category header . Th e l inks under the "Today on In te rne t TV"category header changed on a dai ly bas i s . The l i nks fo r spor t ingevents were added as the day progressed and an event ' s s ta r t ingt ime drew c lose r . The spor t ing events and t h e i r s t a r t i ng t imescorresponded to indiv idual spor t ing l eagues ' o f f i c i a l events ands ta r t ing t imes. Users simply c l icked on a l ink to begin theprocess of downloading o r s t reaming to t h e i r own computer ani l l e g a l broadcas t o f a spor t ing event or Pay-per-View event fromthe th i rd-pa r ty websi te t ha t hosted the st ream. Id . a t 40b.Under t h i s s e t of fac t s , even i f Puerto 80 has not engaged ind i r e c t copyright inf r ingement through the Rojadirecta websi te , it

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ce r ta in ly has engaged in cont r ibutory infr ingement , and has aidedand abet ted the infr ingement by o ther s . "Trad i t iona l ly , 'one who,wi th knowledge of the in f r ing ing ac t ivi ty induces, causes ormater ia l ly con t r ibu tes to the inf r inging conduct of another , may beheld l i ab le as a ' con t r ibu to ry ' i n f r inger . " A&M Records, Inc . v.Napster , Inc . , 239 F.3d 1004, 1019 (9th Cir . 2001) (c i t ing GershwinPubl 'g Corp. v. Columbia A r t i s t s Mgmt., Inc . , 44 3 F.2d 1159, 1162(2d Cir . 1971)) . In l ink ing to th i s content , Puerto 80 's fa i lureto "s top an i n f r ing ing copy from being d i s t r i bu t e d worldwidecons t i tu t es s ubs t a n t i a l par t i c ipa t ion" i n d i s t r i bu t ion ofcopyr ighted mater i a l . Cubby, Inc. v. CompuServe, Inc . , 776 F.Supp. 135, 141 (S.D.N.Y. 1991). Through the Rojadi rec ta websi te ,Puer to 80 mater i a l ly contr ibutes to i n f r ing ing a c t iv i t y , fo rwithout the support se rv ices it provides , users could not eas i lyf ind and stream the spor t ing events they seek. See A&M Records,Inc . , 239 F. 3d a t 1022 (upholding the d i s t r i c t cour t ' sdeterminat ion t ha t Napste r provided th e s i t e and f a c i l i t i e s fo rd i r e c t inf r ingement because "[w]i thout the suppor t serv ices [ i t ]provides , Napster user s could not f ind and download the music theywant with the ease of which defendant boas t s" ) . And, as cour t shave recognized, "[u]nauthor ized pos t ing may also be reviewed asf ac i l i t a t i ng unauthorized downloading o r copying by a t h i rd par tyand as such i s also a v io la t ion of the exc lus ive r igh t of

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reproduct ion under th e copyright laws." Ohio v. Perry , 697 N.E.2d624, 628 (Ohio 1998) .

Thus, Puer to 80 has repea tedly engaged in ac t s t h a tin f r inge the va l id copyrights owned by th e Leagues through the useof the Rojadi rec ta Domain Names.

c . Wi l l fu lnessAlthough th e Second Circu i t held in 1943 t h a t w i l l fu l

i n t e n t in the cr imina l copyright context need only be shown as tothe i n t e n t to copy th e works, and not as to th e i n t e n t to inf r ingethe copyright , see United Sta tes v. Backer , 134 F.2d 533, 535 (2dCir . 1943), r ecen t dec is ions of the Second Circu i t in c i v i l cases 7have made c l e a r t ha t " [ t ] he s tandard i s s imply whether thedefendant had knowledge t h a t i t s conduct rep re sen ted infr ingemento r perhaps reck less ly disregarded the poss i b i l i t y . " Twin PeaksProds . , Inc . v. Publ 'ns I n t ' l , Ltd . , 996 F.2d 1366, 1382 (2d Cir .1993) .

Over th e course of severa l years , the Leagues have sen tso -ca l led t ake down not i ce s to the owner and ope ra to r of theRojad i rec ta websi t e , adv i s ing t h a t th e websi te was in f r ing ing t he i rva l id copyr ights . Frey Decl . 7, Ex. B. Despi te these , numerouscommunications, pu t t ing it on not ice of i t s i l l e g a l ac t ions , Puerto80 p e r s i s t e d in its conduct. Moreover, var ious cour t s throughout

7 "There i s a genera l pr inc ip le in copyr igh t law oflooking to c i v i l au th o r i t y fo r guidance in cr imina l cases ."United Sta tes v. Moran, 757 F. Supp. 1046, 1050 (D. Neb. 1991) .22



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the country have held such exp l i c i t forms of not ice to bes u f f i c i e n t evidence to suppor t a f inding t h a t the defendant knewi t s conduct represented inf r ingement o r a t l e a s t r eck les s lydisregarded t ha t poss i b i l i t y . See, Sh9:..:.., Getaped.com, Inc . v.Cangemi, 188 F. Supp. 2d 398, 402-03 (S.D.N.Y. 2002) (holding t h a tevidence t ha t p l a i n t i f f ' s websi te had a prominent copyr ight not icesuppor ted a f inding t ha t defendan t s ' ac ted in r eck les s dis regard ofp l a i n t i f f ' s r igh t s ) i Cast le Rock Enter ta inment v . Carol Pub. Group,In c . , 955 F. Supp. 260, 267 (S.D.N.Y. 1997) (hold ing t ha t f ac t t h a tp l a i n t i f f ' s copyrighted works had copyr igh t n o t i ce s weighed indetermining wi l l fu lness of defendant ' s inf r ingement ) . In l i g h t ofth e p le thora of communications sen t by the Leagues to th e owner ofthe Rojadi rec ta Domain Names, Puerto 80 ' s claim t ha t it was notaware t ha t i t s conduct was tantamount to copyr igh t inf r ingementr ings hollow.

Nor i s Puer to 80 ' s a t tempt to re ly upon th e so -ca l ledva l ida t ion of i t s ac t i v i t y by Spanish cour t s , apply ing Spanish law,persuas ive . Puer to 80, with two domain names reg i s t e red in theuni ted Sta tes , c e r t a in ly should have been aware t h a t the websi tereached v ia those domain names was sub jec t to the app l ica t ion ofAmerican copyr igh t law. This i s th e case desp i te the fac t tha t theuni ted Sta tes i s a s igna to ry to the Berne Convention fo r thePro tec t ion o f Li te ra ry and Art i s t i c Works, as th e Convention " isnot se l f - execu t ing under the Cons t i tu t ion and th e laws of the

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United States" and the Convention does not pre-empt the scope ofAmerican copyr igh t law. S e e , ~ , Baby Moose Drawings, Inc . v.Valent ine , No. 2: 11-CV-00697-JHN-JCGx, 2011 WL 1258529, a t *4 (N.D.Cal. Apr. 1, 2011) (c i t ing Berne Convention Implementation Act of1988, H.R. 4262, 100th Congo 2 (1988) and 17 U.S.C. 301(e) ) .The evidence i s thus c lea r tha t Puer to 80 engaged i n w i l l f u lbehavior .

d. Financ ia l GainPuer to 80 argues t ha t it does not rece ive any revenue

derived from spec i f ic conten t hosted on, o r s t reamed by, thewebsi tes to which it l i nks , and to the ex ten t the re i s any s i t e towhich Rojadi rec ta l i nks t ha t conta ins in fr inging mater ia l , Puerto80 rece ives no spec i f ic f inanc ia l b e n e f i t from a user c l ick ingthrough to t ha t s i t e and viewing such content . See Memo a t 16.Puerto 80 ' s argument, however, evidences a misunderstanding of whati s requi red to es t ab l i sh the requis i t e element of f inanc ia l gain.

As an i n i t i a l mat te r , Ti t l e 17, United Sta tes Code,Sect ion 506(a) "does not require t ha t a defentlant ac tua l ly rea l i zea commercial advantage o r pr iva te f inanc ia l gain . It i s onlynecessary t h a t th e ac t iv i ty be fo r the purpose of f inanc ia l gain o rbenef i t . " United Sta tes V. Cross, 81 6 F.2d 297, 301 (7th Cir .1987) (c i t ing United Sta tes V. Moore, 604 F.2d 1228, 1235 (9th Cir .1979)) . Moreover, cour ts have held t ha t "[f ] inanc ia l benef i texis t s where th e ava i l ab i l i t y of in fr inging mater ia l ' ac t s as a

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CONCLUSIONFor th e reasons discussed above, and pa r t i c u l a r ly in

l i g h t of th e numerous dispu ted f ac tua l i s sues on th e ex is t ingrecord before the Court , th e Government respec t fu l ly submits t h a tthe p e t i t i o n of Puer to 80 fo r th e immediate r e lease of se izedproper ty pursuan t to Ti t l e 18, uni t ed Sta tes Code, Sect ion 983( f ) ,should be den ied . Indeed, th e Government r e sp e c t fu l l y submits t h a tth e major i ty of the i s sues ra i sed in Puer to 80 ' s pe t i t i on are moreap t ly ra i sed in connect ion wi th th e p a r t i e s ' l i t i g a t i o n , v ia f a c tdiscovery and motions to dismiss and /or fo r summary judgment, ofth e a l l ega t ions s e t fo r th in th e Government 's Ver i f i ed Complaint inUnited Sta tes v . Rojadi rec ta .org , e t a l . , 11 Civ. 4139 (PAC),Docket N o . 1 .Dated: New York, New York

July 11, 2011

Respec t fu l ly submit ted ,PRE;ET BHARARAUnited Sta tes Attorney fo rth e Southern D i s t r i c t of New York,Attorney fo r th e United Sta tesof America

By, . ~ C U . - f ~ Chr i s to he r D. FreyDavid I . Mil le rAss i s tan t United Sta tes Attorneys(212) 637-2270/2484

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Documents

Government Memorandum of Law in Opposition to Petition for Release of Rojadirecta.com