Beyond pirating the content, they also went out of their way to steal fan translations. They eventually hired their own translators, but not before making boatloads of money off selling other peoples' work.
It's legally dubious as to whether or not translating someone else's text is piracy.
But that's irrelevant: this is supposed to be a legitimate business. Legitimate businesses aren't supposed to build a business model around selling others' works without permission.
Unless you're claiming that Crunchy are just as equally "thieves" as the pirates they supposedly work against, in which case I agree.
Under US law copyright owners are given the exclusive right to create derivative works[1] and translations are one of the things explicitly defined as a derivative work[2].
The Berne Convention also guarantees that authors have the exclusive right to make translations. [3]
and translations are one of the things explicitly defined as a derivative work
If this was true, Google Translate's "translate a website" feature would have been sued into nonexistence years ago. In fact, it probably would have never been created: its predecessors, like Babelfish, would have died first.
Translation is format-shifting. It is no more illegal for me to translate a movie from German to English than it is to convert it from a DOC to a PDF.
What would be illegal is if I paid for the movie, translated it, and then distributed it for free. The mere fact that it's a derivative work does not make it any more "mine" than the original, and thus it's just as much piracy as me distributing the original, untranslated version. Similarly, converting the movie from an iTunes MP4 to an MKV will not make it any more or less legal for me to redistribute it.
The legally dubious part is distributing just the translated script (i.e. subtitles), but not the movie itself. A reasonable fair use case could be made for this, though whether it would hold up in court likely depends on how much money each side spends on lawyers. Most likely, nobody will ever even bring such a thing to court, as there's no profit motive for doing so.
Curiously, mostly fan-subbers are very ethical about that.
Those subbers only translate and distribute stuff that isn't licensed outside of Japan, so the "would not buy it" is, in fact, "can't buy it because it's not for sale and even if it were it would be in a foreign language".
