Omniverse Fears Criminal Investigation Into Alleged IPTV Piracy

In February, several major Hollywood studios filed a lawsuit against Omniverse One World Television.

Under the flag of anti-piracy group ACE, the companies accused Omniverse and its owner Jason DeMeo of supplying of pirate streaming channels to various IPTV services.

Omniverse sold live-streaming services to third-party distributors, such as Dragon Box and HDHomerun, which in turn offered live TV streaming packages to customers. According to ACE, the company was a pirate streaming TV supplier, offering these channels without permission from its members.

Omniverse disagreed with this characterization and countered that it did everything by the book. It relied on a deal from the licensed cable company Hovsat, which has a long-standing agreement with DirecTV to distribute a broad range of TV-channels with few restrictions.

As time went on, however, it transpired that the streaming provider was clearly worried about the legal threat. After several of its distributors distanced themselves from the service, Omniverse decided to wind down its business.

An earlier statement that the service was “fully licensed” was replaced by more reserved language. In a court filing in June, Omniverse said that if any infringement took place, it was without the company’s explicit knowledge.

“To the extent there was any infringement, such infringement was, on information and belief, without malice or bad intent by Omniverse or its management and was caused or contributed to by third-parties such as HovSat,” the company stated.

Fast forward a few weeks and the case remains unresolved. According to recent court records, Omniverse would like to settle the matter. It has made several offers to do so, but the Hollywood studios were not interested. Instead, ACE would like to know all the ins and outs of the alleged infringements.

To break this impasse, Omniverse asked the court to compel the Hollywood studios to engage in a mediation process yesterday. At the same time, the company would like to bring the ongoing discovery efforts to a halt.

According to the court filing, the ACE members were willing to agree to a stipulated judgment where the streaming provider would admit certain wrongdoings. However, this goes too far according to Omniverse, which fears that the rightsholders could use this to fuel a criminal investigation.

“The parties have exchanged drafts of a stipulated judgment, but the parties reached an impasse when Plaintiffs demanded that Defendants admit to what amounts to egregious conduct in exchange for settlement,” Omniverse writes.

“Defendants fear Plaintiffs intend to use such a stipulated judgment as part of a criminal investigation against Defendants. To resolve the impasse, Defendants proposed a mediation, which Plaintiffs have flatly refused,” the company adds.

The mention of a potential criminal investigation is new. While it’s not a secret that Hollywood studios have referred several streaming piracy cases to the Department of Justice, Omniverse was never mentioned in this regard. Whether the streaming provider has any concrete indication that it’s a criminal target is unknown.

The request to compel mediation was submitted “ex parte,” meaning that ACE’s members weren’t made aware of it beforehand. However, the rightsholders were quick to respond.

In a filing submitted a few hours ago they object to the request. Instead, the Hollywood studios want to complete the discovery process, so they can find out more about the infringing activity. When that’s done, they are open to mediation.

The rightsholders further point out that, while the Omniverse brand may have ceased operating, the company’s CEO appears to be involved in another potentially troublesome IPTV service, OSTV Now, which is set to launch next month.

“While Defendants represented to the Court that they have ceased operations, it appears that Defendant DeMeo is merely shifting from one infringing operation (Omniverse) to another (OSTV Now), advertised as a new ‘One-Stop For TV Entertainment’ to launch on September 1.

“Whatever the branding, Defendants appear to be continuing their infringing practices. These and other important facts are exactly why discovery needs to move forward,” the studios add.

The new “OSTV Now” service doesn’t mention Omniverse CEO Jason DeMeo by name. However, as Lightreading pointed out previously, the service is promoted on DeMeo’s personal website.

Given the potential threat and several outstanding questions the studios have, they ask the court to deny Omniverse’s request to compel mediation at this stage of the case.

“Only when the facts are known to both sides (not just Defendants) can the parties meaningfully engage in a mediation. Defendants’ ex parte is a transparent attempt to avoid the very discovery that would reveal those facts, seemingly so they can continue infringing in the meantime,” they write.

Unlike Omniverse, the rightsholders make no mention of a potential criminal case. Whether that threat is indeed warranted, has yet to be seen.

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A copy of Omniverse’s ex parte request to compel mediation is available here (pdf) and a copy of the Hollywood studios’ response can be found here (pdf).

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