Can Fair Use be a defense to use UFC content?

February 4, 2016

MMA Junkie wrote a very nice piece on Wednesday on the UFC’s crackdown on copyright content.  We take a brief look at one of the legal theories that may be a defense to copyright infringement: Fair Use.

The article advises about the UFC’s aggressive protection of its marks.  Like many copyright owners, it searches online including places like YouTube to ensure that content is not used without the express consent of the copyright holder.  Of course, if you ask for consent, it’s likely that the copyright holder may deny your request or license the use so long as you pay the “license fee” associated with the use.

Either way, if you use a copyright owned by the UFC without consent, it’s likely that you may be the contacted by the company’s attorneys and/or receive a “cease and desist” or takedown noticeBJJ Scout, according to the Junkie article, is the latest to discover the broad reach of Copyright law.  Some of its videos were taken down due to purported Copyright violations.

Of course, the main defense to the unauthorized use of copyrighted material is the Fair Use Doctrine.  Fair Use permits limited use of copyrighted material without acquiring permission from the rights holder.  It is one of the limitations and exceptions to the exclusive rights copyright law grants to the author of a creative work.

Under the Copyright Act, the fair use factors include

  1. The purpose and character of the use, including whether such use is a commercial nature or is for nonprofit educational purposes;
  2. The nature of the copyrighted work;
  3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
  4. The effect of the use upon the potential market for or value of the copyrighted work.

Fair Use is a popular defense but the doctrine is constantly evolving which makes it hard to determine an outcome.

Many people tend to focus on factor number 3, the actual amount of time they use the copyrighted work.  It might be a plausible argument to suggest that a 30 second clip or vine should be considered fair use.  However, courts consider the “substantiality” of the portion used to determine the amount used (see Harper & Row  v. Nation Enterprises).  So, a short clip showing the finish of a UFC fight or a key technique in the fight might be weighed much more than the fact it was only a very brief use of the copyrighted material.

Of course, one of the more famous (or infamous) cases asserting the defense of Fair Use was the 2 Live Crew case (Campbell v. Acuff-Rose Music, Inc.).  If you recall, the lawsuit was based on a parody of the Roy Orbison song, “Oh, Pretty Woman,” which was retooled by the Miami rap group.  2 Live Crew established that its song was a commercial parody of the Orbison song and qualified as fair use.  It prevailed.

More recent Fair Use cases take us down different paths.  Last spring, a federal judge in New York deemed an Off Broadway Play named “3C,” which was a dark version of the 1970-80s sit com “Three’s Company” did not violate copyright laws as it was a “highly transformative parody of the television series.”  Despite having the same characters and appropriating a substantial amount of material from the original ABC show, the judge found the play posed “little risk to the market for the original.”

In another noteworthy case regarding the Fair Use Doctrine, Universal Music Corporation on behalf of recording artist Prince filed a takedown notice to YouTube citing Stephanie Lenz for posting a 29 second clip of her baby dancing to his song, “Let’s Go Crazy.”  Lenz claimed fair use and requested that the video be reposted.  She sued Universal.  After a lengthy court battle the U.S. Court of Appeals for the Ninth Circuit determined that copyright holders must consider fair use in good faith before issuing a takedown notice for content posted on the internet.

The noteworthy thing in the Three’s Company and Prince cases were that the parties sued by the copyright holders received pro bono (i.e., free) legal assistance.  It’s clear that a legal fight is costly and if it were not for the legal teams that were willing to work for free (aside from the notoriety they would obtain from winning), there would not be a case.  Instead, in all likelihood, the copyright holder would win.

While the three cases discussed here (2 Live Crew, Three’s Company and the Prince case) all revolve around parody, a legal theory not claimed by many in the MMA-copyright issue world, the cases show the broad depth and interpretation of the law.

Payout Perspective:

The UFC is familiar with playing hardball when it comes down to its intellectual property.  Notably, last fall, the UFC and the NFL took down the twitter account of Deadspin alleging copyright violations.  Prior to UFC 193, the UFC issued a release to media stating that it would aggressively go after copyright violators as a precautionary measure to ensure that no media members attempted to “vine” the ending of the Rousey-Holm fight.  The thought was that it could be a quick ending which could easily be posted online.  The irony is that Holm won in the second round and the real “vine” ending of a fight occurred about a month later when Conor McGregor knocked out Jose Aldo.

For many MMA fans that used to post videos or gifs with UFC content, they are finding out that some of it may be taken down due to the company’s copyright.  It’s not always even-handed as some items might be online for a while as opposed to other postings which might be taken down immediately.  But, it seems that the only legitimate defense that one might offer is Fair Use.  As we see here, Fair Use is an evolving legal defense to a copyright violation.  But, is someone willing to put up the fight to claim that it has a right to use content based on the theory.  The case law tends to be not too helpful at this point.

The fact of the matter is that the Fair Use Doctrine has been criticized by scholars and attorneys for being “undisciplined” and “unwieldy” in its application and interpretation by courts.  Essentially, the doctrine is not applied uniformly by courts which makes it a guessing game as to how a court might rule when it comes to a party claiming Fair Use when being charged with a copyright violation.  Thus, is it worth it for someone to pay legal fees to fight a claim with an uncertain legal defense?

Bellator signs Bendo

February 1, 2016

Former UFC lightweight champion Benson Henderson has signed with Bellator MMA.  Henderson made the announcement on his web site on Monday.

Henderson’s last fight with the UFC was in November in South Korea.  Perhaps a sign that he would not return, after his win Henderson casually took off his UFC gloves in the Octagon.

Henderson thanked Dana White and Lorenzo Fertitta in his blog post for the opportunities.

Henderson is 23-5 overall and 11-3 in the UFC.  Prior to that, Henderson had a successful career in the WEC as its lightweight champion.

Payout Perspective:

There is no news on whether there are matching rights in his UFC contract and if so whether or not they will exercise them to retain Henderson.  If Henderson makes it to Bellator, it immediately enhances the lightweight and/or welterweight divisions for the company.  Henderson becomes the first UFC fighter to switch organizations at a point in his career where he is still valuable (sorry Phil Davis, Josh Koscheck, Stephan Bonnar).  The move is great for Bellator.  MMA Payout will keep you posted.

UFC on Fox 18 draws 2.43M in overnight ratings

January 31, 2016

UFC Fight Night 18 on Fox Saturday night drew an overnight average of 2.43 million viewers with an 0.8 rating among adults 18-49 and a 3 share per Television By Numbers.

The event aired on Fox from 8:00pm-10:00pm ET with the main event between Anthony Johnson and Ryan Bader ending prior to 10:00pm.  UFC on Fox drew stiff competition as it went up against the NBA in primetime with the San Antonio Spurs playing the Cleveland Cavaliers.

Dateline Mystery on NBC drew the most viewers overnight with 4.75 million and a 0.9 rating in the adult 18-49 demo.  It also received a 3 share.  The NBA game which started at 8:30pm ET drew 3.17 million with a 1.1 rating in the adult 14-49 and a 4 share.

UFC on Fox Ratings
Overnights Live + SD
UFC on Fox 1 5,700,000
UFC on Fox 2 4,570,000
UFC on Fox 3 2,250,000 2,400,000
UFC on Fox 4 2,360,000 2,400,000
UFC on Fox 5 3,410,000 4,400,000
UFC on Fox 6 3,770,000 4,220,000
UFC on Fox 7 3,300,000 3,700,000
UFC on Fox 8 2,040,000 2,380,000
UFC on Fox 9 2,410,000 2,800,000
UFC on Fox 10 2,550,000 3,220,000
UFC on Fox 11 1,990,000 2,500,000
UFC on Fox 12 2,020,000 2,500,000
UFC on Fox 13 2,270,000 2,800,000
UFC on Fox 14 2,820,000 3,049,000
UFC on Fox 15 2,430,000 2,745,000
UFC on Fox 16 2,290,000 2,800,000
UFC on Fox 17 2,280,000 2,781,000
UFC on Fox 18 2,430,000

UFC on Fox 18 Ratings Payout Perspective:

Pretty good ratings considering the main event was not between two “brand name” opponents or for a title belt.  However, in comparison to last January’s UFC show on Fox which pulled 2.82 million viewers and the previous 2 January events did much better (2013 – 3.77M overnight 2014 – 2.55M, 2014 –  2.82M).  The NBA probably pulled away some of the target demo.  The event is pretty comparable to the PBC event last weekend on the network which drew about 2.5M when all was said and done. MMA Payout will keep you posted on the updated ratings.

Judge denies UFC’s Preliminary Injunction to hold UFC 198 at MSG

January 25, 2016

Judge Kimba Wood has denied the UFC’s request for a Preliminary Junction which would have allowed UFC 198 at New York’s Madison Square Garden.  The UFC will either appeal the ruling and/or seek another venue for UFC 198.

In denying the Preliminary Injunction, Judge Wood cited the Pullman doctrine, a legal case which dictates that a federal court must abstain from ruling on a state court law until that state court had a chance to adjudicate the matter.

The court indicated it would issue a longer opinion, but the one issued today is below:

Zuffa PI – Court Denies PI by JASONCRUZ206

The New York Attorney General cited this argument when it filed its opposition to the Preliminary Injunction.

Via our December post regarding the Pullman doctrine:

New York also claims that the U.S. District Court should abstain under the Pullman doctrine.  Under this case, where a state law is allegedly vague, a federal court should abstain from interpreting the law until the state courts have a reasonable opportunity to construe the statute.

Railroad Commission v. Pullman Co. is a 1941 U.S. Supreme Court Case which dictates that a federal court should stay (i.e., hold off on deciding) a decision on state law when the state court has yet to interpret.  It bases the decision on three factors:

  1. The case presents both state grounds and federal constitutional grounds for relief;
  2. The proper resolution of the state ground for the decision is unclear; and
  3. The disposition of the state ground could obviate the need for adjudication of the federal constitutional ground.

Frankly, the UFC should have saw this coming as Judge Wood indicated a state court might be a better venue for its claims.  She wrote this in her concluding order dismissing the UFC’s original lawsuit against the state:

Kimba Wood opinion

Payout Perspective:

Earlier in the day, we wrote about New York’s response to the UFC’s demand for an order by today.  Looks like the UFC got what it wanted so to speak.  The UFC may appeal the ruling which would mean that the UFC could have two appeals in the Second Circuit related to legalizing the sport in the state.  The other avenue to legalization in New York, is of course, through the legislative process.  We will see what the UFC’s decides to do at this point.  As for UFC 198, it looks like that the UFC will need to find another venue outside of New York.


New York AG responds to UFC request for PI ruling

January 25, 2016

Monday is the deadline set by the UFC in its hopes to obtain a ruling on its Preliminary Injunction to hold UFC 198 at New York’s Madison Square Garden.  It had requested that Judge Kimba Wood rule on the issue lest they need to move the event for marketing and event planning reasons.  New York offered its response to the alleged deadline in a letter to Judge Kimba Wood.

The Office of the Attorney General for the State of New York responded to the letter from the UFC to the court in which the company requested a ruling on the preliminary injunction.  In a January 20, 2016 letter, the New York AG issued its response to the UFC request.  New York argues that moving the April 23, 2016 event reveals that the UFC could have scheduled the event at a later date.  This, according to New York’s contention, means that the UFC “can mitigate if not eliminate the alleged “irreparable” harm it says it will suffer from not holding events in New York.”  Thus, New York argues to the court that the UFC letter “adds nothing to, and indeed detracts” from the UFC’s preliminary injunction request.

New York PI – Letter From NY Respondijng to Zuffa Letter

Payout Perspective:

Perhaps a moot point for the hoped UFC 198 at MSG as the UFC intends to seek another venue if there is no ruling by today (Monday, January 25th).  But, the New York letter offers some legal strategy.  By requesting a ruling from the court and issuing a tacit ultimatum, the UFC indicated that it would move its April event if a ruling had not been issued by today.  Since there appears to be no ruling, it is moving the event to another venue outside of New York.  Capitalizing on this move, New York argues that since the UFC is moving the event, there is no “irreparable harm,” an argument needed to prove a preliminary injunction is warranted.  New York will likely bring this letter up again in later arguments for a PI by the UFC citing that there is no immediate harm to the company as there are comparable alternatives to holding an event in New York.  We shall see if there will be an official statement from the UFC this week about the venue for UFC 198.

UFC Fight Night 81 draws 2.288M viewers; Prelims post impressive 1.767M

January 20, 2016

UFC Fight Night 81 drew 2.288 million viewers on Sunday night (10-12:40 am EST) on FS1 via Sports TV Ratings.  It was the highest-rated sports cable TV show airing on Sunday night.  The Prelims, which preceded the main card on Sunday, drew a big 1.767 million viewers on FS1.

UPDATED: Fight Night peak 2.464 million between the 10:45-11pm ET quarter hour during the main event.  It drew 1.410 million viewers in the A18-49 category.  The prelims drew 1.025M in the A18-49 demo according to Fox Sports.  This, and the 1.767 million viewer rating, made the prelims the highest-rated non-PPV prelim event on FS1 in both categories.

UFC Fight Night featured T.J. Dillashaw and Dominick Cruz in the main event with Cruz winning the bantamweight championship via split decision.  The main event did not start until midnight on the east coast and although no peak viewership has been announced yet one might assume it occurred during this overrun.

The prelims (airing from 8-10pm EST)  featured Patrick Cote-Ben Saunders in the last fight before the main card.  Cote won via KO in the second round.

Additionally, the UFC Fight Night Prefight show (7-8pm EST) on FS1 drew 312,000 viewers.  Also, the Fox Sports Live on FS1 which followed the overrun of the main card drew 1.391 million viewers making UFC-related programming 3 out of the top 4 shows for sports cable on Sunday (NFL Countdown on ESPN drew 1.87M viewers via Sports TV Ratings).

Payout Perspective:

It was the second year that the UFC and NFL collaborated in promoting a Sunday night Fight Night from Boston.  The UFC event served as a dessert for many sports fans after watching NFL Playoffs during the day.  The main card ratings, which drew a 1.4 rating, is down from last year’s 2.8 million (1.7 rating) UFC Fight Night 59 which featured Conor McGregor.  You might recall that last year’s event occurred during NFL Championship Sunday and that the UFC did an Embedded series to promote McGregor for the event.  Despite being lower than last year, it’s a very good rating for a bantamweight fight.

This time around the prelims did vastly better than last year’s 908,000 viewers.  The 1.767 million viewers were better than all of the UFC PPV Prelims on FS1 last year with the exception of the 1.9M of UFC 194.  MMA Payout will update these ratings with peak viewership numbers later today.

B.J. Penn’s comeback doesn’t sound like a good idea

January 19, 2016

UFC Hall of Famer B.J. Penn is coming out of retirement and training for another shot in the cage.  But is Penn’s return the best idea for the former lightweight champion and the UFC?

UFC President Dana White stated to MMA Junkie that he “supports the idea” of Penn’s return.  But, nothing else has been solidified.

The 37-year old’s last fight was a hard-to-watch loss to Frankie Edgar in July 2014.  Penn was thoroughly dominated and did not look like the former UFC Lightweight Champion.  Notably, White stated that he would push for the Hall of Famer to retire if he lost to Edgar.  Now, he supports the comeback.

Penn is setting his sights on the Featherweight title of Conor McGregor.  It appears that he will be training with Greg Jackson.

Payout Perspective:

Does the 37-year-old Penn coming out of retirement makes sense?  It seems more like he has not determined a path post-UFC and is coming back to fight as a result.  Unless he was hampered by major injuries, the fight against Edgar should prove that he is not a UFC-caliber fighter anymore.  Moreover, a move to Featherweight seems more like an aspiration that a reality.  In a USADA-regulated UFC, it would seem hard for Penn to make the weight-cut.

Frankly, the Penn news puts the pressure on the UFC.  Certainly, White knows that Penn can only tarnish his Hall of Fame status if he puts on a performance like he did against Edgar.  Do we believe that Penn has rejuvenated since we last saw him in July 2014?  Should the UFC allow him to fight?  On Tuesday, Matt Mitrione believed that he should have been saved from himself on Sunday and that the fight against Travis Browne should have been stopped after being poked in the eye.  Similarly, it might be up to the UFC to save B.J. Penn from himself.  Of course, you can argue that Mitrione is no B.J. Penn. Then again, B.J. Penn is not B.J. Penn anymore.

UFC Fight Night 81 posts 1.4 rating

January 18, 2016

The Sports Business Journal’s John Ourand reports that the overnight ratings have UFC Fight Night 81 on FS1 with a 1.4 rating which projects to be the second highest-rated UFC event ever on the network.

The event, which is the second year in which it was held in Boston on a Sunday night featured a bantamweight title fight between T.J. Dillashaw and Dominick Cruz.  Cruz won the title via a split decision.

There are no estimates of viewership numbers at this point but MMA Payout will provide these numbers once they become available.

Payout Perspective:

Last year’s UFC 59 from Boston which featured Conor McGregor drew the highest FS1 rating with a 1.7 overnight rating.  Last night’s UFC Fight Night 81 was helped by promotion during the NFL broadcasts including last week’s Wildcard weekend.  It’s clear that this Sunday night in January event works and the UFC will continue.  The main event, featuring bantamweights, reflects the fact that audiences are tuning in more to lighter weight divisions and/or whatever live event is on.

NAC passes settlement agreement with Nick Diaz

January 12, 2016

The Nevada State Athletic Commission passed a proposed settlement agreement with UFC contracted fighter Nick Diaz at the commission’s monthly hearing on Tuesday.

Pat Lundvall, who was the main driver during the contentious Nick Diaz hearing, seconded the motion for the passage of the proposed settlement.  The settlement was passed without any discussion or public announcement as to the terms.  MMA Junkie obtained the settlement agreement after speaking with NSAC Chairman Bob Bennett.

The Settlement Agreement obtained by MMA Junkie indicates that Diaz’s initial penalty was reduced to 18 months (retroactive to his last fight January 31, 2015) and a $100,000 fine.  He will need to pay the fine by August 1, 2016 (the date in which he may be allowed to fight in Nevada) or at least December 1, 2016, whichever comes first.  He will also need to provide a negative urine sample, “in-competition and out-of-competition, 30, 15, and 3 days before his next contest in Nevada…”

The UFC’s legal counsel on various issues, Campbell and Williams, represented Diaz in negotiating the settlement with the NAC.

Payout Perspective:

It was very interesting that the settlement was passed swiftly and without much talk.  It was not until after did we hear of the terms of the settlement.  You may infer what you may from this outcome.  While Diaz could have made a point by continuing on with a potential lawsuit, we’re not here to spend other people’s money.  Further, if the point is to get him back to fighting, getting tied up in litigation is not in the best interests of Diaz.  On a sidenote, it is interesting in the settlement agreement that it states that Diaz “wrongly invoked the Fifth Amendment” in response to the Commission questions.  We shall see how soon Diaz will be back with the UFC.

UFC 197 official announcement delayed due to money demands per report

January 11, 2016

The official announcement for UFC 197 has been delayed due to monetary demands by headliner Conor McGregor per a report by Brazilian outlet Globo.  The event is slated to be McGregor challenging for the lightweight title against Rafael dos Anjos.

In addition, another rumored bout includes Holly Holm defending her women’s bantamweight title against Miesha Tate.  The event is set to take place in Las Vegas.

The Globo report states that the announcement of the fight was to be slated for halftime of the Green Bay-Washington NFL playoff game this past Sunday.  The announcement would have been a good spot for the UFC as the game drew 38 million viewers.  But, if the news is correct, McGregor is demanding more money prior to signing the fight contract.

Payout Perspective:

Realistically, this is a savvy business move by McGregor.  He has set attendance records for the UFC in Vegas and he is the only fighter to garner such PPV buy rate attraction next to Ronda Rousey.  Knowing that his fight will not only bring a PPV buy rate, but an economic boon to the hospitality industry (he has a staunch Irish contingent that travel) in Vegas, McGregor should ask for more money.  This is the first time that a fighter has had some leverage over the UFC and we shall see how the company responds.

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