Smart-Card Maker Accuses Rival of Spying

[R. A. Hettinga]

http://www.nytimes.com/2002/03/13/technology/13DIGI.html?tntemail0=&pagewanted=print&position=top




March 13, 2002

Smart-Card Maker Accuses Rival of Spying

By THE ASSOCIATED PRESS

SAN JOSE, Calif., March 12 (AP) - The Canal Plus Group, a unit of Vivendi
Universal (news/quote), has accused a rival owned by the News Corporation
(news/quote) of cracking its digital television smart cards and
distributing the information on the Internet.

In a lawsuit, filed on Monday in Federal District Court here, Canal Plus
accused the News Corporation unit, NDS Group (news/quote), of corporate
espionage and conspiracy with criminals. Canal Plus says NDS spent millions
of dollars cracking its signal protection system in an effort to flood the
European market with counterfeit cards.

"We believe the illegal acts performed by NDS were part of a conspiracy to
enhance NDS's competitive position at the expense of Canal Plus," the chief
executive of Canal Plus, François Carayol, said.

The lawsuit claimed damages of more than $1 billion.

NDS called the claims "outrageous and baseless," and said that it planned
to file a counterclaim once it had the opportunity to fully review Canal
Plus's accusations.

The news alarmed investors, who sent NDS shares down $6.05, to $16.95.
Shares of Vivendi fell 88 cents, to $39.55.

Smart cards, which are each about the size of a credit card, slip into
satellite receivers or cable boxes and include a chip that descrambles
programming that subscribers have paid for.

Copyright 2002 The New York Times Company | Privacy Information
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R. A. Hettinga <mailto: rah at ibuc.com>
The Internet Bearer Underwriting Corporation <http://www.ibuc.com/>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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