Zuffa sued for patent infringement in Texas

March 19, 2015

Zuffa has been sued in a patent infringement lawsuit filed in the United States District Court for the Eastern District of Texas by a company that claims that Zuffa is infringing on a patent owned by Orostream LLC.  However, it appears that the lawsuit is one of many filed by the company on the same day.

According to the Complaint, Orostream is a Texas limited liability company with its principal place of business in Plano, Texas. Orostream’s lawyers are based out of Chicago, Illinois. It appears that Zuffa was one of several companies sued by Orostream on the same day: February 23, 2015.  At this point, it appears that Zuffa has requested and the Court has granted an extension of time to Answer the Complaint.

The Complaint alleges that Zuffa infringed on a patent known as the ‘837 Patent titled, “Computer Network System and Method for Efficient Information Transfer.” The patent was filed on April 15, 1996 according to the Complaint.

The Complaint states that Zuffa has directly infringed the patent “by making and/or using a content distribution system over the internet, including the system and application for the UFC.TV app, which performs a method of transferring target information packets while minimizing additional communication delay between a user node and a master node comprising the steps of monitoring length of time necessary for transfer of each target information packet, and adjusting the rate of target information transfer in response to the monitored transfer time.”

No dollar amount is associated with the lawsuit although Orostream requests that Zuffa pay “all damages to and costs incurred…because of Defendant’s infringing activities…”

Zuffa Patent Lawsuit

The full text of the patent can be found here via the USPTO web site.

H/t to Paul Gift for initially finding this lawsuit.

Payout Perspective:

Although not a patent attorney, reading the patent it appears that what Orostream has is a patent for which a web site disseminates information from an end user customer to the source. It appears to be broad and maybe that’s why on the same day it sued Zuffa, Orostream sued many others, in the same Court. Some of the other entities it has sued are WWE, NFL Enterprises, LLC, NHL Interactive Cyberenterprises and MLB Advanced Media. Notably, Texas courts are “patent-friendly” and the Eastern District is known for going to trial quickly on these cases. Here, Orostream has filed a jury demand along with its Complaint.

Only an opinion, but it appears that the strategy by Orostream is to seek a settlement from Zuffa to pay a settlement and not litigate the case. In patent law parlance, this is known as a “patent troll.” MMA Payout will keep you posted.

Can the UFC implement its drug testing plan?

March 13, 2015

Its the second episode of Show Money with Bloody Elbow’s John Nash and Paul Gift.  In this episode we talk the hurdles to the UFC’s implementation of its proposed drug policy, Premier Boxing and the latest from the Zuffa Antitrust lawsuit.

I apologize ahead of time for any audio problems on my end as I had issues with my internet.

Nevada AG files response to WSilva lawsuit

March 7, 2015

The Nevada Attorney General has responded to the lawsuit filed by Wanderlei Silva seeking judicial review of the state Athletic Commission’s ruling which issued a $70,000 fine and lifetime ban.

In response to the lawsuit, a copy obtained by Bloody Elbow, the Nevada AG argues that since the commission has broad authority over combat sports in the state, it should have had authority over Silva since he was (at the time) scheduled to fight in the state in July.  It goes on the argue that the discipline was proper and regardless of the ambiguity of any statute, it should be resolved in favor of the Nevada commission.

The AG brief references the UFC’s recent “Call to Action” news conference to underscore the importance of “out of competition” testing as well as the reasons it sought to test Silva.  The placement of this in the brief also is a subtle nudge to the public interest of the need to test.  For those in Silva’s corner, it’s a “smoke screen” as the AG fails to directly take on the issue of how it has authority to regulate a non-licensed fighter.  This argument was the crux of Silva’s brief.

Payout Perspective:

The case will boil down to that of statutory interpretation versus a policy argument.  Essentially, the Court will read the statute provisions in questions (namely NRS 467.850 versus NRS 467.110, NRS 467.158) Read narrowly Silva has a chance to win his argument.  If the arguments are read broadly, one could see the Court ruling in the favor of the AG.

Details disclosed in Bellator-Rampage lawsuit

March 5, 2015

Newsday reports the details filed within the complaint by Bellator MMA against Quinton “Rampage” Jackson. The complaint filed in New Jersey provides some interesting financial tidbits on Jackson’s contract.

A hearing will be held on April 2nd to determine whether Jackson will be able to fight in the UFC 186 in April.

Jackson received a $200,000 bonus for Bellator’s May 2014 PPV despite not meeting the PPV threshold bonuses indicated in his contract.

Jackson’s contract also included a 2013 Tesla Sport worth $129,603, a $100,000 signing bonuses and guaranteed fight purses between $200,000 and $300,000 for non-PPV fights. He would receive between $200,000 and $450,000 for a PPV fight. Jackson also received a $50,000 guarantee if the event did not receive a certain revenue from sponsors. The contract was negotiated between Jackson’s representatives and then-Bellator CEO Bjorn Rebney.

Additional incentives included:

-30% of Bellator’s net gate receipts over $400,000 at events where he fought

-$35,000 per episode for the SpikeTV Reality Series “Rampage 4 Real”

-A screenwriter for a feature film project and access to Paramount Pictures to develop film projects

-A red carpet appearance at the 2013 MTV Video Music Awards

-$4 for every Bellator 120 PPV buy over 190,000

-Bellator spent $250,000 to advertise Bellator 120 during the NBA Playoffs

-Bellator spent $200,000 to secure rights to a Rolling Stones song for an advertisement featuring Rampage

Bellator filed a lawsuit and injunction this past Monday as a result of Jackson’s purported breach of contract.

Payout Perspective:

Some of the demands seem unattainable and perhaps that’s the reason why Bellator agreed to them (i.e. $4 PPV buys over 190K, 30% of Bellator’s net gate over $400K). Other inclusions in the contract seem very good for Jackson (i.e., $35K per ep for that show, $200K bonus for Bellator 120). Jackson’s management team cited Jackson’s right to breach based on the contract being an “entertainment” contract. Looking at the details, the overall pay guarantees and sweeteners (red carpet appearance and car) is favorable for Jackson.

UFC awards PPV to Melbourne

March 5, 2015

UFC will hold a PPV in Melbourne, Australia in November 2015 after the state of Victoria legalized “fenced-in enclosures” for professional MMA.  After the legal hurdle was accomplished, the company announced plans for a PPV in a press release issued Thursday.

Via UFC press release:

The UFC® today applauded the State of Victoria Labor Government for executing a ministerial directive designed to increase safety within the sport of mixed martial arts (MMA) by allowing the sport to be conducted in a much safer fenced-in enclosure.  The directive was announced this morning at a press conference held by The Honourable John Eren, Minister for Sport, Tourism and Major Events.  “This is a major milestone for mixed martial arts in Victoria, which will allow the sport to flourish while at the same time better protecting its competing athletes,” said Tom Wright, UFC Executive Vice-President and General Manager, Australia, New Zealand and Canada.

Prior to the passing of today’s ministerial directive, MMA competitions in the State of Victoria were required to be conducted in boxing rings which were never designed for MMA competitions. The UFC uses a unique, octagon-shaped enclosure which prevents fighters from falling out of the structure or becoming entangled in the ropes as could occur with a boxing ring.  “The Octagon® is purpose-built for MMA competition and was designed and developed to optimize safety and to create a level playing field.  The UFC thanks the Labor Party for spearheading this initiative and focusing on the safety of the competitors,” added Wright.

With this new ministerial directive in place, the UFC confirmed that it will bring a global pay per view event, UFC 193, to Melbourne on Sunday, November 15, 2015 locally, to be broadcast live in North America on Saturday, November 14.

Payout Perspective:

The announcement is good news for Australian fans that have supported the UFC each time it has come to the country.  As with most international PPVs, there will be an issue with timing as the live event will take place on Sunday afternoon as its 15 hours ahead of East Coast time.  The change in laws in Victoria is a solid victory for the UFC in order to expand its brand in the country.

Bellator MMA files lawsuit against Rampage

March 2, 2015

Bellator MMA has filed a lawsuit today in New Jersey against Quentin “Rampage” Jackson for breach of contract. The organization is also seeking an injunction to prevent Jackson from appearing in the UFC.

Jackson is scheduled to fight at UFC 186 against Fabio Maldonado on April 24th. It appears that today’s lawsuit and request for an injunction will seek to preclude Jackson from appearing on that card unless something can be worked out between Bellator, Jackson and likely the UFC.

Bellator issued the following release:

Today, Bellator MMA was compelled to go to court to stop Quinton “Rampage” Jackson from fighting in an April 25th bout promoted by Bellator’s competitor, Ultimate Fighting Championship (UFC).  Jackson, who has completed only three fights of his exclusive six-fight contract with Bellator, is barred by contract from fighting for any promoter other than Bellator. Our lawsuit for an injunction and related relief – filed in the Chancery Division of the Superior Court in Burlington County, New Jersey – will compel Jackson to honor his contractual agreement.   We look forward to having one of our MMA stars fighting for Bellator again.

This lawsuit had been brewing for a while after Jackson left the Viacom-owned company late last year and indicated that he had conferred with UFC lawyers and “an outside law firm” to determine if he could legitimately leave Bellator. Jackson’s story is that Bellator did not live up to his Bellator contract, Jackson gave Bellator time to cure the issues he had, but the company did not satisfy Jackson’s concerns so he decided to leave.  What may be an interesting detail here is that Jackson’s management views the contract he signed with Bellator (under Bjorn Rebney) as an entertainment contract rather than a pure sports contract.  This may come into play, as well as the fact that the contract was signed in California.  But that is speculation at this point.

Although Bellator MMA is headquartered in Irvine, California and Jackson lives in Irvine, the lawsuit is filed in New Jersey.

As you recall, Bellator prevailed against Eddie Alvarez when Alvarez sought an injunction against the organization in their contractual dispute. The lawsuit was venued in the U.S. District Court of New Jersey.

Payout Perspective:

Timing is everything when filing lawsuits as we recently wrote about. It was clear that there was going to be a legal issue when Jackson left Bellator to sign with the UFC. The timing of the filing and injunction comes close to UFC 186 and might mean that Jackson will be pulled from the card. The interesting issue here is that the UFC will be implicated here and its clear based on its actions that it thinks it had solid legal grounds to sign Rampage and actively promote him for his fight.

MMA Payout will keep you posted.

Zuffa files Motion to Dismiss in Antitrust lawsuits

March 1, 2015

The end of the week and the end of the month are always prime dates to zing your opposing counsel with motions.  On Friday, February 27th, Zuffa filed a Motion to Dismiss the four identical Antitrust Complaints filed by former UFC fighters in federal court in San Jose.  The hearing date will not be until July 23rd.

There is a looming Motion to Transfer Venue to be decided by the court that could cause the case to be move to Las Vegas and this motion to be heard before another Judge.  In the meantime, Zuffa’s lawyers have filed this Complaint seeking to dismiss the plaintiffs’ claims citing they fail to state any legal claim against the UFC.

The UFC has issued an official statement on its motion to dismiss here.

A portion of the statement reads:

While UFC vigorously contests the plaintiffs’ characterization of the facts, a court deciding a motion to dismiss generally must accept the allegations as true. Even with that high legal standard, UFC’s motion demonstrates that UFC competed in lawful ways that helped fighters and built UFC into a premiere organization in the sport of Mixed Martial Arts.

The UFC treats its fighters well, compensates them fairly, competes against other MMA promoters, and produces a product that is enjoyed by millions of fans around the world. We are confident in our legal position and expect to ultimately win this lawsuit.

As for the actual motion, Zuffa argues that the Plaintiffs have failed to state a claim per the standards set forth under two recently decided U.S. Supreme Court cases.  In Bell Atlantic Corp.. v. Twombly (2007) and Ashcroft v. Iqbal (2009), the U.S. Supreme Court heightened the pleading requirement for Federal civil cases.  The rules require that plaintiffs include enough facts in its complaint to make it plausible that they will be able to prove facts to support its claims.

The Twombly case is relevant here since it was an Antitrust case in which the court dismissed Plaintiffs Complaint citing that the pleading did not allege sufficient facts for the court to determine that there was anti-competitive behavior in violation of the Sherman Antitrust Act.  Iqbal reaffirmed the test announced in Twombly which was that a federal complaint may be dismissed if the court can “identify and disregard naked assertions and conclusory allegations, and then determine where the factual context presented by the remaining specific allegations plausibly suggest the defendant is liable under the relevant law.”

What this all means is that Zuffa is claiming that the Complaint(s) do not have sufficient facts to prove its claim that Zuffa violated Antitrust laws.  While we will not go into the specifics of the motion, it is meticulous in going through plaintiffs’ Complaint and identifying each paragraph in which it believes it is mere allegations and/or conclusory statement.

Payout Perspective:

This appears to be standard litigation playbook stuff from Zuffa.  First, it filed a motion to transfer venue seeking to move the case to Las Vegas.  Instead of responding to the Complaint in affirming or denying the allegations, it has filed a motion to dismiss.  There are at least three things that might occur from this filing.  First, the plaintiffs may amend its Complaint to be more specific in its allegations.  Second, the plaintiffs may refile its Complaint so that it conforms to the rules (i.e., provide more specific facts of its allegations).  Or, respond to the Motion to Dismiss.  The legal requirements for filing Complaints in federal court differ due to the Supreme Court cases.  Essentially, the federal rules are stricter than lawsuits filed in state courts (in state courts pleadings can allege “Upon information and belief…”, but you can’t get away with that in federal courts) due to the case law which seem to require more factual detail in allegations.  Obviously, there is risk in providing specific details in Complaints.  If the factual allegation proves not to be true or cannot be proven, you will have the allegation dismissed or end up losing.

MMA Payout will keep you posted on these developments.

Court will likely decide Zuffa’s-NY motions without oral argument

February 23, 2015

Zuffa’s lawsuit in which it sued New York for its legislation banning professional MMA in the state is still ongoing and it looks like there could be a conclusion this spring based on the dual summary judgment motions filed by the state and Zuffa. But, it appears that there will be no oral argument to persuade the judge on the matter unless attorneys for each side amend their travel schedules.

Originally, the Court of Judge Kimba Wood issued an Order a couple weeks ago in which it would grant the parties final briefing and an oral argument on whether the New York statute banning professional MMA in the state was unconstitutionally vague. The briefs would be limited and the sides would only be allowed only 10 minutes of oral argument. The Court set the hearing for March 5, 2015.

However, the state indicated that both sides had conflicts with the date provided by the Court.  Each side indicated conflicting travel schedules (with nonrefundable tickets) and unavailability for the hearing.  In a letter from attorney John Schwartz on behalf of the state of New York, he proposed a hearing date scheduled for some time the week of March 30th.

Defendants' Letter to the Court by JASONCRUZ206

Well, no go from the Court.

Court Order in response to request to move hearing date

Instead of providing the accommodation, the Court has decided to render its opinion without oral argument unless of course they are available on March 5th.  The Court indicated in an order dated February 20th that it has reserved time for March 5th “in case that date becomes viable for counsel.” This is well within the rights of the Court.

Payout Perspective:

Would the Court have been persuaded by either side’s additional briefing or oral argument? Moreover, did the sides piss off the Judge for not being available or does the Judge just want this case to either end or proceed to trial? We shall see. Based on the limited scope of what the Court was requesting, it appeared that it wanted to hear some further information but maybe not so much as to postpone the decision any further.

What will be interesting is to see if a ruling comes out prior to an anticipated vote in the New York State Assembly on legalizing professional MMA in the state. MMA Payout will keep you posted.

Punk and Cabana sued by WWE doctor

February 21, 2015

MMA Fighting reports that UFC fighter CM Punk and indy wrestler Colt Cabana are being sued by a WWE doctor for defamation among other claims resulting from Punk’s comments on Cabana’s “Art of Wrestling” podcast last year.

The lawsuit filed in Cook County Circuit Court (IL) by WWE doctor Christopher M. Amann accuses the former WWE wrestlers (Cabana had a brief stint with the company) of making defamatory statements regarding his professional duties as a medical doctor for the company.

In support of Dr. Amann, the WWE has released a statement and video which refutes Punk’s story told on Cabana’s podcast that he had a MRSA staph infection on his back and Dr. Amann misdiagnosed it.  Punk also indicated that the doctor did not treat him for a concussion.

Cabana was sued as Dr. Amann claims that he “helped Brooks falsely depict Amann as lazy and a bad doctor per the Cook County Record.

Payout Perspective:

When I first heard the much heralded podcast where Punk aired out the WWE, I wondered about whether there would be any response by the WWE on the comments made by Punk on how his injuries were addressed. It appears that the lawsuit is the response.  Certainly a physician filing a defamation claim against what was essentially a patient are unusual.  One might think that Punk may now bring a counterclaim alleging medical malpractice based on his side of the story from Cabana’s podcast.  Then again, the WWE statement (via the Wrestling Observer) includes a claim that there are no medical records documenting Punk’s condition and that Punk did not communicate his condition (i.e., lump on back) with the WWE’s doctors.

The news of Punk’s health will be interesting when he applies for a license to fight.  We will see if this lawsuit brings up additional information since it is an issue in this lawsuit.  Punk is at an “advanced age” for a first-time MMA fighter and one would think an athletic commission would look more closely at his health history when issuing him a license.

But, the Punk-WWE legal issues look to continue.

Widow of former WWE performer sues

February 20, 2015

Cassandra Frazier widow of the late WWE wrestler Nelson Lee Frazier (aka Mabel, Viscera, Big Daddy, V, King Mabel) has sued the WWE in a wrongful death lawsuit filed in the Circuit Court of Shelby County, Tennessee.

The 124 page claims that Frazier suffered multiple head injuries/concussions while he wrestled with the WWE.  The Complaint claims negligence, negligent misrepresentation, intentional misrepresentation and loss of consortium, a personal injury to Ms. Frazier among other claims asserted in the Complaint.

Frazier, who weighed near 500 pounds while wrestling for the WWE, died of a heart attack on February 18, 2014 at the age of 43.  Perhaps in honor of the anniversary of his death, the lawsuit was filed February 18, 2015.

The Complaint includes a timeline of events in which Frazier suffered injuries while working for the WWE.  It also includes a list of nearly 40 WWE wrestlers (photos of each included) that have passed due to issues related to head trauma.  Notably, the lawsuit includes some information revealed by CM Punk and Colt Cabana on Cabana’s infamous podcast last year.

Ms. Frazier claimed her husband suffered concussion symptoms, CTE, disfiguring scar tissue, head trauma

The WWE released a statement with respect to the lawsuit by Frazier (via Wrestling Observer):

“WWE has not been served with a lawsuit by Cassandra Frazier.  If served, we will vigorously contest this lawsuit brought by the same lawyers who have been soliciting people to sue WWE without merit.”

Payout Perspective:

This is the third lawsuit in less than a year against the WWE which relates to the issue of head injury/concussions that may have caused injury to former performers.  “Billy Jack” Haynes filed a lawsuit he had hoped would gain class action status in Oregon and Vito LoGrasso and Evan Singleton in Philadelphia.  As you can tell from the WWE’s initial statement, it is shifting the focus to the fact that we have “ambulance chasing” lawyers and not true claims.  The lawsuit has been filed by one of the lawyers that filed suit in the LoGrasso and Singleton case.  Hence, the statement by the WWE.  The Complaint includes information revealed by CM Punk on Colt Cabana’s podcast about the WWE medical policy.  The veracity of the statements made on the podcast are in question as a WWE doctor has filed a defamation lawsuit against Punk and Cabana.

MMA Payout will keep you posted.

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