The digital TV service provider charges subscribers for the privilege of decoding its encrypted programme transmissions, but decoding devices that let users intercept pay-TV broadcasts for free are readily available.
DirecTV, like entertainment companies around the world, has been fighting an uphill battle against piracy for many years. Finding that actions against the sellers of decoding equipment were not having the desired effect, the company turned its attention to the purchasers.
According to civil liberties group the Electronic Frontier Foundation (EFF), over the past few years the company has orchestrated a nationwide legal campaign against hundreds of thousands of individuals, claiming they were illegally intercepting its satellite TV signal.
The company began its crusade by raiding smart card device distributors to obtain their customer lists, then sent over 170,000 demand letters to customers and eventually filed more than 24,000 federal lawsuits against them. The suits created panic among legitimate users of the devices (such as researchers), because DirecTV made little effort to distinguish legal uses of smart card technology from illegal ones.
One of the arguments used by DirecTV as a basis for the suits was that the company had a private right to sue people who "possess devices used to intercept satellite transmissions".
But on Tuesday, the 11th Circuit Court of Appeals rejected this argument, ruling that "Possession of a pirate access device alone, although a criminal offence, creates nothing more than conjectural or hypothetical harm to" DirecTV.
The case has now been sent back to the District Court, where DirecTV will face the more difficult task of proving that the equipment was actually used to illegally intercept signals.
"We're glad to see the court apply common sense to this issue," said EFF lawyer Jason Schultz. "Merely possessing a device doesn't harm anyone and shouldn't give a company like DirecTV the right to drag you into court without proof that you're actually stealing something from them."
On Monday the EFF set out details of an agreement with DirecTV and the Center for Internet and Society (CIS) Cyberlaw Clinic, in which the television service provider agreed to make some changes to its piracy campaign, including a promise to no longer pursue people solely for purchasing decoding equipment, but to sue only those it suspects of actually pirating its satellite signal.