The Jetflicks indictment: talk about crime not paying.

After reading the indictment that was handed down last week against the eight men who allegedly ran the pirate streaming service called Jetflicks, all I could do was wonder what the hell they were thinking. Between 2007 and 2017, Krisopher Lee Dallmann and Darryl Julius Polo operated Jetflicks as a subscription-based service, delivering tens of thousands of unlicensed audio-visual works to customers around the United States.  So, not only do I want to ask how they imagined they would avoid prosecution while operating inside the U.S., but the following email exchange between Dallmann and a programmer named Louis Angel Villarino (as quoted in the indictment) really makes me wonder why they even bothered …

Dallmann: When Jetflicks starts making crazy $$ in a few months… How much do you need to make to be full-time for Jetflicks only?

Villarino: 120k a year

Dallmann: That’s doable …

Dallmann:  Jetflicks made 750k 3 years ago… 500k in 2015… And a sad 350k last year

Dallmann: If we didn’t have people that took advantage, we’d be awesome.

Assuming this correspondence provides some insight into the enterprise, I am not sure which inscrutable detail to highlight first; but I suppose it would have to be Dallmann’s woeful complaint that customers were “stealing” from Jetflicks by sharing login credentials.  The naïve innocence in his choice of words “took advantage,” implying that he sincerely believed he had an ethical leg to stand on, resonates with the somewhat pathetic revelation that this doomed venture was not even viable enough to provide Villarino with a full-time gig at $120k/year.  

Not that I recommend or condone criminal enterprises, but if one is going to take the risk, it seems like it ought to be with the intent to make some serious money, no?  Operating a media piracy service inside the United States is operating on a time-clock; a criminal indictment will be forthcoming.  So, if the plan does not include reaping several million dollars in a very short time, followed by a flight to a country beyond extradition, then perhaps applying to one of the many tech jobs out there is a better career move.  Some of them actually pay more than $120k per year.

In fact, if I correctly interpolate the evidence cited in the multi-count indictment, it does seem like running Jetflicks was a lot of damn work for not nearly enough revenue.  After all, making sure subscribers receive TV shows in a timely manner when you have absolutely no license to do so requires quite a bit of time and technical skill—not to mention capital expense for servers etc.—that, again, better pay a substantial return considering that a hearty pounding on the door by the FBI is imminent.  Instead, the operators almost seem to have believed they were running a legitimate business that they expected to operate indefinitely.

Some Defendants May Argue Misdemeanor Offense

As this case proceeds to trial, perhaps the rationales of the defendants will be revealed, but if not, it may still be interesting to watch the defense(s) of the six supporting characters, including Villarino.  While the apparent ringleaders Dallmann and Polo are charged with multiple counts of felony infringement, money laundering, aiding and abetting, the other six are only charged with conspiracy to commit copyright infringement.  Consequently, some or all of these men may try to prove that they were only involved in the act of streaminginfringing content because streaming is currently a misdemeanor. I have no idea, of course, whether any of the six has any evidence to support such a defense, and some or all may seek plea deals; but this case could highlight the view that many policymakers believe there is no reason for streaming not to be a felony.

The distinction between civil copyright infringement and criminal copyright infringement is based on the purpose, conduct, and goal of the alleged infringer.  Old-school criminal copyright infringement usually entailed conduct like mass-producing bootleg copies of works to sell in an unlicensed market as a substitute for the legal market.  Consequently, U.S. criminal code identifies unlicensedreproductionand distributionas charges that law enforcement may bring in copyright cases.  But streaming audio or video (though it often implicates reproduction and distribution) is considered a public performance of a work, and unlicensed public performances are still considered misdemeanors. 

Clearly, with regard to the kind of harm that may be caused by enterprise-scale infringement, the “streaming loophole” is a legal distinction that is outdated by the nature of the technological means used to infringe.  If selling ten thousand bootlegs out of a warehouse in 1988 was a felony, then how can it be that streaming multiple infringing works to potentially millions of viewers is considered a lesser crime?  A letter written this July by the Register of Copyrights to the Senate Judiciary Committee, IP Subcommittee states, “Under this system, criminal streaming piracy, no matter the dollar amount it involves or the number of works affected, is de facto treated as a lesser crime than the illegal downloading or reproduction of the exact same content.”

It seems likely that lawmakers will eventually recognize that streaming is the contemporary method of mass-bootlegging and, therefore, amend the criminal code to encompass public performance by streaming as a form of felony infringement.  In response, the “digital rights” advocates will doubtless write many screeching blogs and post scary-looking memes predicting once again that innocent children will face jail for inadvertently streaming infringing material, or that startup “innovators” will be afraid to enter the market.  And as usual, none of these complaints will be grounded in reality.

Caselaw is replete with both criminal and civil copyright cases, and the distinctions are clear.  This is why a start-up like VidAngel, no matter how much its model proves to be a contorted workaround to copyright law, will have its day in civil court, but its founders will not face criminal charges for the attempt.  There is no comparison between a well-intended enterprise that is held to be infringing and a criminal enterprise that seeks to profit by means of a black market.  Though in the case of Jetflicks, apparently not profiting enough for all the trouble.

Regardless of where policymakers net out on felony streaming in the near term, I will say this for the proposal:  the amended criminal statute might have acted as a deterrent for at least some of the six guys now facing charges in the Jetflicks case. Of course, this implies that they would have known enough to consider the difference, which only begs the original question:  What the hell were they thinking?

© 2019, David Newhoff. All rights reserved.

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