Rupert Murdoch Firm Goes on Trial for Alleged Tech Sabotage

After NDS cracked its rival's card, Tarnovsky and his associates allegedly created and sold counterfeit NagraStar cards through a piracy site based in Canada, among others, that allowed pirates to access Dish Network programs for free. Tarnovsky is also accused of later posting on the Canadian site the code, secret keys and instructions for hacking the microprocessor on EchoStar's access cards, allowing pirates to flood the market with even more cards. He has denied the allegations. Hazak and Norris are accused of providing Tarnovsky with the code so he could post it online, but NDS maintains this didn't happen.

According to court documents, the sabotage scheme worked remarkably well throughout 1998 and 1999 as counterfeit NagraStar cards flooded the market.

It was around this time, however, that a German hacker in Berlin known as Boris Floricic, aka Tron, disappeared while walking home from his parents' home one day. He was found several days later hanging from a belt in a park.

Among his possessions, authorities found correspondence from NDS. NDS later said it had offered Boris a job, which he had rejected. Prior to his death, Boris had obtained source code and information about hacking access cards that were being used in a German satellite TV system. His friends in the German hacker group, Chaos Computer Club, were convinced that he'd met with foul play.

Although his death was officially ruled a suicide, there were enough details around it to create suspicion. Floricic's feet were on the ground when he was found hanging, for example, and other evidence suggested that his body might have been placed in the park after he died.

During this time, NagraStar wasn't the only alleged victim of NDS hacking and piracy. In 2002, the French pay-TV service Canal Plus filed a damages suit against NDS, from which the EchoStar/NagraStar case emerged. In an affidavit from that case, Kommerling disclosed that NDS had cracked the Canal Plus cards using a method he had taught its engineers in Israel. Then, he revealed, the company instructed Tarnovsky to post the Canal Plus code on the internet.

The Canal Plus suit fizzled after its parent company, Vivendi Universal, struck a business deal with News Corporation that included a condition that Canal Plus would drop its suit against NDS. This is when EchoStar joined the litigation.

Before Canal Plus's case against NDS died, Tarnovsky indicated to the company that Reuven Hazak had given him the Canal Plus code to post it on the internet. He reportedly told the French firm he would testify in the case, but later backed out, citing fear for his life and his family.

In May 2002, two months after Canal Plus filed its suit, someone broke into the car of one of its U.K. employees and stole the hard drive from his laptop, making off with thousands of NDS documents and e-mails. EchoStar/NagraStar say the e-mails provide proof of NDS' hacking and piracy activities. NDS has suggested that the e-mails might be fabricated and has battled to keep them out of the court proceedings.

NDS has denied the lawsuit allegations. The company maintains that it was simply engaging in reverse-engineering, as any company would do to understand rivals and compete in the marketplace, but that it did not distribute cards or information about hacking NagraStar's encryption to pirates.

In an e-mail statement to, the company took a dig at its competitor's competence and touted its superior skills.

"The hacking of EchoStar was the result of inferior technology arising from inadequate investment in research and development by [NagraStar]," said the statement. "NDS, on the other hand, invests heavily in research and development ... we reinvested over 30 percent of our revenues into R&D -- and the result is that we have zero piracy and the platforms of our customers are completely secure."

The trial is expected to last at least two more weeks.

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