Company paying $5.2 million to Warner for facilitating 4K content “stripping”

by on May 30, 2016

Stephan Jukic – May 30, 2016

A month ago, in the apparent closing chapter of an ordeal which we had covered on at least a couple occasions here at, the Chinese company LegendSky won its counter lawsuit against the legal duo of Warner Bros. and Intel subsidiary company Digital Content Protection (DCP) in a New York federal court.

The core issue in the legal wrangling between these three parties was a LegendSky product called HDFury, which according to Warner and DCP, is capable of stripping HDCP 2.2 content copy protection encryption from 4K media files. After an initial lawsuit attack by Warner and DCP against LegendSky, The much smaller Chinese company eagerly took the fight to the two giants doors by countersuing them and claiming DMCA exemptions and arguing that their product didn’t in fact strip HDCP protection from 4K entertainment content and other videos but merely downgraded it to a weaker version. Whoever the real wronged party may have been, LegendSky prevailed and both DCP and Warner eventually dropped their lawsuit against the manufacturer.

However, now in a more recent but related incident, another small company wasn’t quite so lucky against the same duo of Warner and DCP. The two companies had also sued Ace Deal, a California-based hardware seller for also violating their rights under the DMCA due to its own sales of apparent HDCP “stripper” technology. In this latter case, Warner and DCP ended up winning.

In the Ace Deal case, Warner and DCP submitted a joint proposal for a final judgement and a permanent injunction in a California federal court, alleging that Ace Deal had sold 2,078 imported HDCP stripping devices of different types (PDF) from the brand PanLong to third parties in recent years. With this injunction and judgement both weighing against it, the “stripper” hardware maker not only admitted to its “guilt” but also agreed to pony up a large amount for damages caused to Warner, DCP and their respective associates, to the tune of $5,250,00 in compensation payments.

For a relatively small company like Ace Deal, this hefty damage payment is certainly not pocket change.

One of the 4K content protection "stripping" devices sold by Ace Deal according to the Warner/DCP judgement

One of the 4K content protection “stripping” devices sold by Ace Deal according to the Warner/DCP judgement

Things however get heavier still for Ace Deal, since the company not only has to pay the 5.2 million in damages money but must also cease and desist from “importing, manufacturing, offering to the public, providing, selling, using, or otherwise trafficking in any technology, product, service, device, component or part thereof that is primarily designed or produced to circumvent HDCP…”, according to the wording of the Warner/DCP judgement against them.

Ace Deal hasn’t yet been nailed with a formal court sign-off on the judgment ruling from Warner and DCP but that last little bit of the bureaucratic process is expected to be little more than a formality. In the meantime, the company has removed their products from their website and we assume they’re not likely to put up a further fight at this stage in the lawsuit.

Unlike LegendSky, Ace Deal apparently wasn’t able to use the argument that its own stripping devices merely downgraded HDCP 2.2 for 4K content to a weaker, older version of HDCP and were thus exempt under DMCA provisions for fair use of the relevant hardware.

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