UFC and Showtime face issuing refunds after technical difficulties for Mayweather-McGregor

August 29, 2017

After The Money Fight technical difficulty situation, the UFC and vendor NeuLion must determine how to address the situation.

A lawsuit has been filed related to the technical difficulties which angered many that paid $99.95 to watch the much-hyped Floyd Mayweather-Conor McGregor fight.

ESPN reports that Showtime has issued a “limited number” of refunds to those that complained, but only for its direct-to-consumer offerings which include its streaming and app product.  Notably, the lawsuit filed in the U.S. District Court of Oregon relates to its lead plaintiff purchasing the PPV on the Showtime App.  He claimed the event was “grainy” buffered and stalled.

The fight was delayed 20 minutes to accommodate for the technical difficulties but those paying $99.95 were shut out of the telecast.  According to a report from the Las Vegas Review-Journal, the PPV issues “appeared to come from a surge of late purchase and connectivity issues.”

The UFC issued a statement via Darren Rovell:

After this statement, it has now indicated that it is reviewing PPV Fight Pass refunds on a “case-by-case” basis.

Payout Perspective:

This is as much a public relations issues as it will eventually be a legal issue.  One might understand the UFC would not want to issue blanket refunds but if the technical difficulties occurred from UFC Fight Pass subscribers that made the additional purchase, you’d have to think that at least a credit to the account is necessary.  For Showtime, it is issuing refunds but is also “passing the buck” in referring those that made the PPV purchase through a cable or satellite company to speak with them.  You have to think that UFC is pointing to NeuLion to indemnify them from any potential issues and/or seek reimbursement for any refunds that they may have to issue.  The bottom line is the concern of how much this will affect the bottom line for the UFC and Showtime.

Report states almost 3 million saw Mayweather-McGregor fight for free

August 29, 2017

According to a report from a digital platform security company, almost 3 million people watched the Floyd Mayweather-Connor McGregor fight illegally.

Irdeto, a digital watchdog with global headquarters in the Netherlands but with U.S. offices noted that there were 239 illegal streams of the fight watched by approximately 2,930,598 people.  165 of those were made available through social media channels such as Facebook, YouTube, Periscope and Twitch.  67 were available through illegal streaming sites.  Kodi had six available as an add-on through the illegal streaming platform.

The report claims that due to clever marketing, consumers may have been fooled into choosing an illegal service over a legitimate service.  This is due to advertisements on e-commerce websites including Amazon.com, eBay and Alibaba.  However, a survey reflects that 52% of the consumers around the world knowingly watch pirated video content.

On Saturday, finding an illegal stream was easy.

Payout Perspective:

 While Showtime made proactive efforts to curb piracy, it could only do so much.  Notably, social media channels had the most available illegal streams which makes it hard for the IP holder to go after individuals that show the content for free.  The huge demand also made it a challenge to stop pirates.  But, with nearly 3 million watching the fight for free Showtime can feasibly say they have lost out on significant revenue.

Promoters look to curb Facebook and Periscope piracy for Canelo-Chavez fight

May 4, 2017

The Los Angeles Times reports that promoters are seeking to enforce anti-piracy efforts from this Saturday’s pay-per-view between Canelo Alvarez and Julio Cesar Chavez, Jr.

Believing that PPV numbers have decreased due to piracy, Golden Boy Promotions and HBO are combating pirates.  HBO has hired an anti-piracy company and are looking at live streaming products such as Facebook and Periscope which are burgeoning tools for piracy.

Notably, the Manny Pacquiao-Floyd Mayweather fight was subject to issues involving piracy.  This included people taking out their cell phones and live streaming the event from the fight.  Or, purchasing the pay-per-view or finding a pirated site and then streaming the television PPV from their phone.

Anti-Piracy companies have notified Facebook and Periscope about the issue and promoters are confident that they can curb the efforts to watch the $59.99 PPV for free.  There are also calls for distributors to take more of an active role in stopping pirated PPVs.

Payout Perspective:

Perhaps piracy is not a reason for depressed boxing PPV numbers.  There has not been a boxing PPV to reach over 1 million buys since Manny-Floyd.  Most of the boxing PPVs have yielded well below 300,000 buys since Manny-Floyd.  In fact, Canelo-Miguel Cotto was the last big PPV when it drew 900,000 buys in November 2015.  Promoters hope to curb piracy but it is harder with new live streaming tools like Facebook Live and Periscope.

It would not be out of the realm of possibility that down the road promoters, rights fees holders and those with intellectual property interests might look to legal action for contributory infringement and/or vicarious liability.  But, that might be hard to prove yet the threat of action may cause others to be more active.

Could this possibly a First Amendment issue?  Maybe.  A free plug for myself as next month a law review article I authored about the live streaming of sports will be in the Marquette Sports Law Review.

Zuffa settles piracy lawsuit with individual that shared 141 PPVs

September 14, 2014

Zuffa has settled with PPV pirate Steven Mussina according to company press release sent out Saturday.  Although terms of the settlement agreement were not disclosed, Mussina, who was accused of pirating at least 141 UFC PPVs, will comply with the wishes of Zuffa and provide information on how he circumvented the pay per view system.

Via UFC press release:

Steven Messina, through his attorney, Michael Heitmann, confessed to his illegal behavior and apologized for his actions that resulted in the illegal sharing of UFC content. As part of the settlement, Messina was penalized by the UFC for an undisclosed amount and forced to surrender his computer hardware and software to UFC representatives. Additionally, Messina will turn over all records and information pertaining to piracy of UFC content and information related to other potential infringers. He must also cooperate with the UFC organization and law enforcement authorities in an effort to prevent others from stealing intellectual property.

When asked about the settlement, Messina said, “I apologize to the UFC for any damages incurred as a result of my actions in illegally distributing copyrighted UFC broadcasts. As a result of my confession for piracy of UFC’s protected content, I fully accept the terms of the settlement with the UFC.”

Messina also states, “I now realize the harm caused by my actions. It is my hope that I can use this difficult period as a learning experience as I move on with my life. I would also like to tell anyone pirating UFC broadcasts, either through illegal downloading or non-authorized streaming, that it is illegal and not worth the risk.”

As part of the settlement, Messina will provide details of his procedures that led to the unauthorized distribution of an estimated 200 hours of UFC content and will offer his records to the UFC to further prevent illegal usage or sharing of the company’s broadcasts.

Payout Perspective:

The settlement is the best possible outcome for the UFC.  Let’s face it, while the initial claim that Zuffa was seeking $32 million from Messina seemed intimidating, it would have never happened.  Messina did not have the money (and who does, unless you just beat Marcos Maidana for the second time).  Even if you obtained a judgment against Messina, one can surmise he does not have any assets that would satisfy the damage Zuffa claims (even if it’s less than $32M).  Here, Zuffa gets an on the record ‘crime doesn’t pay’ statement from Messina plus information on how he was able to obtain UFC PPVs without paying.  This may provide some insight for Zuffa to see how it may better crack down on piracy.

Zuffa sues NY man for alleged pirating of 141 UFC PPVs

May 1, 2014

The New York Post first reported that a New York man is being sued by Zuffa for alleged copyright infringement for pirating, uploading and distributing 141 UFC PPVs.

In a lawsuit filed on Tuesday in the United States District Court for the Eastern District of New York, Zuffa is suing Steven Messina and assorted unnamed individuals for copyright infringement among other causes of action as it relates to pirating UFC PPVs and uploading them to a web site for viewing.  Zuffa alleges that the defendants received a financial benefit as a result of uploading the pirate PPVs.

Zuffa is asking for statutory penalties of $150,000 for each separate act of copyright infringement, up to $110,000 for each of the defendants’ use of UFC content, up to 60,000 for intercepting UFC content, attorney fees and unspecified punitive damages.

Adding up all the penalties, Zuffa would request $32 million plus attorney fees and punitive damages from the New York resident which the New York Post reports lives with his parents.

The lawsuit can be seen here (via MMA Junkie).

Payout Perspective:

First thing is first.  Forget about anyone getting $32 million.  Even if the defendant did not show up and a judgment was entered in against him, Zuffa would still have to find this guy’s assets to collect.  The fact he lives in the basement of his parents’ house should tell you it is not going to get it.  So, it’s merely a number to intimidate.  As for the story that the guy lives with his parents, it’s sad and not relevant to his alleged wrongdoing.

Does this make people hate Zuffa because it is suing someone allegedly stealing its PPVs?  It should not but sentiment seems to be that this is a bad move for the UFC. Do some UFC fans want the option of stealing the occasional PPV when they don’t want to pay the $55 and suing these guys eliminates the option?  Zuffa is protecting its copyright and while it may be overreaching in some cases, the accused perpetrator did more than just stream a PPV illegally.

MMA Payout will keep you posted.

WWE denied motion to stop sellers of counterfeit merchandise

April 3, 2014

According to the Hollywood Reporter, the U.S. District Court for the Eastern District of Louisiana denied the WWE’s request for a temporary restraining order granting the sports and entertainment company the opportunity to protect it from anticipated bootleggers that will sell unauthorized and infringing merchandise at Wrestlemania, the biggest weekend in the company’s year.

Judge Helen Berrigan issued the ruling which reasoned that since the WWE could not name the potential infringers (the lawsuit was filed against John Does) or at least provide some information, it could not grant the WWE the authority as a “judicial imprimatur” to determine “when and from whom seizure (of alleged infringing goods) is appropriate.”

The WWE requested, like other leagues and touring music acts have done in the past, for a Court order granting it the ability to stop and seize unauthorized vendors selling unlicensed merchandise which infringes on one’s licensed trademarks.  Many fans of the WWE are in New Orleans for the 30th edition of the WWE’s Super Bowl.  It’s the biggest event of the year for the company and its expected that there will be bootleggers selling counterfeit WWE goods.

While Judge Berrigan sympathized with the WWE and acknowledged the unenviable position it was in as a company which knows a wrong will happen but cannot tell the Court anything more than this, the Court could not grant it the relief it sought.

Judge Berrigan certified her ruling for interlocutory appeal which is an appeal of a ruling by a trial court that is made before the resolution of the claims.  According to the THR article, the WWE has filed a motion for reconsideration.  But, this motion will likely be heard by Judge Berrigan once again and unless there is something that was not brought up in the original WWE motion, it’s unlikely to succeed.

So, the WWE may still file the interlocutory appeal but this would have to happen now (the rules state it has 10 days but since Wrestlemania occurs this Sunday it’s now or never.)

Payout Perspective:

The overarching legal issue is that the Court would not grant the WWE the right to enforce its trademark by allowing it the right to go around and stop non-licensed vendors and confiscate their merchandise.  This was due the fact that it could not specify or identify the potential bootleggers.  To give an example of how much may be lost; investigators on behalf of the NFL seized $21.6 million in counterfeit NFL merchandise at this year’s Super Bowl.  The WWE claimed that their merchandise sales are “expected to be at least $19 million” per THR.  The WWE is not the NFL but this should give one a snapshot of how much may be at stake.  We will see what legal move the WWE does next but this ruling may be of concern for other big events where opportunists will try to make money selling counterfeit merchandise.

Recent Court ruling may impact Zuffa anti-piracy litigation

March 30, 2014

A recent federal court ruling could pose a problem for Zuffa in its legal strategy to go after end users that steal its pay per views.  A federal judge in a Florida court has thrown out a lawsuit by adult film company Malibu Media due to lack of jurisdiction.

Malibu Media sues hundreds of people claiming that they have illegally downloaded its product. It employs a strategy of finding the alleged illegal users through tracking of individuals’ IP addresses.  Essentially, it files lawsuits all over the country in venues where it has tracked down where the alleged infringer is living.  But, the basis for the filing of the lawsuit is premised upon its location of the plaintiff via IP address.  Malibu argued that the reliability that the plaintiff is located in the venue where the lawsuit is filed is reliable due to the time of the use and the location of the address.  The IP addresses were obtained from Comcast Cable.  However, the Court, on its own accord, determined that Malibu Media must show good cause why the Court should rely on its geolocation of the defendants (alleged infringers). Notably, Malibu Media had sued the individuals as “John Doe” with only an IP address to identify the individual.

Based on the IP address would Malibu Media then request that it obtain the name of the individual with the account that is linked with the IP address.   The Court ruled that Malibu Media could not provide sufficient evidence for the Court to rely on to show that the actual infringer of the company’s copyright.  Thus, without the alleged infringer providing a response, the Court threw out the lawsuit.

Zuffa has taken down web sites illegally streaming UFC PPVs and has obtained user information such as usernames and IP addresses in order to track down the individuals for possible lawsuits.

Payout Perspective:

Even before evaluating the merits of the lawsuit, the party filing suit must establish that it is in the correct jurisdiction.  The Malibu Media ruling in Florida may be either an isolated or persuasive ruling for other venues to follow suit.  In general, in order for Zuffa to sue in a particular court, the person it must sue must reside in that district.  The viewership of the illegal stream must occur in the place where it happened.  But, the ruling states that despite the location of the IP address, Malibu Media could not establish the actual person that is purportedly watching the illegal stream.

Zuffa indicated that more than 50% of the individuals targeted for allegedly illegal streaming UFC events settle out of court according to MMA Junkie. And while the issue that it loses millions of dollars from illegal streaming is a reality, the legal procedure that it seeks to recoup its losses may be taken into question.  While Zuffa has been able to shut down illegal streaming sites and have gone after end users which has resulted in either out of court settlements or default judgments, the Malibu Media ruling in Florida may be an impediment to suing claimed infringers.  If a Court does not rely on an IP address to establish the jurisdiction of the claim, then it becomes harder to sue.

UFC shuts down illegal streaming web site

February 12, 2014

The UFC announced that it had successfully taken and down and seized the records of a web site that illegally streamed two PPVs.  Also, it has made good on its threat of pursuing individuals accessing these illegally streaming sites.

The UFC has seized the records of www.cagewatcher.eu and it appears that the UFC will use this information to go after its users.

Via UFC web site:

UFC has obtained details of the streaming site’s userbase, including email addresses, IP addresses, user names and information pertaining to individuals who watched pirated UFC events including UFC 169. Also recovered were chat transcripts from the website.

In related news, there has been one instance where Zuffa has successfully obtained a judgment against an individual utilizing www.greenfeedz.com, a web site that provides illegal streaming of copyrighted content.  The individual did not respond to Zuffa’s lawsuit against him and a default judgment was entered in against him.  The individual viewed two PPVs without paying his ISP – Time Warner.  According to the legal order, he was assessed $6K in damages for copyright violations and $5,948 in attorney fees. The individual was discovered via his IP address at Time Warner.  We had previously reported that the UFC had obtained Greenfeedz user information. and this may be the result.

Payout Perspective:

It should be noted that the UFC did not prevail on the merits of its lawsuit against the Greenfeedz user.  It prevailed due to the individual’s failure to respond to the lawsuit.  Even though the individual has a judgment against him for over $11K, it will be up to Zuffa to decide whether or not to go after him for the money.  Regardless, the new information that the UFC has obtained more records from another illegal web site may give pause for those that pirate PPVs.  Certainly, individuals do not want to be sued and be subject to potential fines.  Will this be a deterrent for pirates?  So far, it has not stopped individuals but if the UFC continues to go after end users it may deter a portion of the existing base of people accessing illegal streaming.  The issue with this strategy is would suing these people alienate the fan base.  Of course, the easy UFC response is that the people not paying for UFC content are not really fans.

DMCA takedown notices sent to porn sites on Zuffa’s behalf

August 26, 2013

It is well known that Zuffa is an aggressive defender of its intellectual property.  It found itself in an unenviable position as the company it hired to issue DMCA takedown requests issued notices to child pornography sites claiming that Zuffa was the lawful rights holder.

IP Arrow, the company that Zuffa hired to do this work is an anti-piracy company that represents over 10,000 of Zuffa’s copyrights. Its latest reported request on August 23, 2013 has it making takedown requests of over 131 URLs.  IP Arrow has been identified as a company owned by Morganelli Group LLC.

According to tech blog, Techdirt.com, “IP Arrow is issuing takedown links to files that appear to be child porn while making the claim that Zuffa/UFC hold the copyright to these photos.”

More from Techdirt.com:

Judging from the quality of the DMCA notices it’s issued, IP Arrow either has no idea what it’s doing or just doesn’t care. What’s worse is that its submitted links have been taken down nearly 100% of the time, despite the fact that its DMCA notices are loaded with content its clients don’t own.

The DMCA takedown notices request the online service provider (e.g. Google) take down the offending material and that it makes a sworn statement that it has a “good faith belief is not authorized by the copyright owner” and that the notification is accurate, and under penalty of perjury, that the complaining party is authorized to act on behalf of the owner of an exclusive right that is allegedly infringed”  See 17 U.S.C. sec 512(c)(3)(v)-(vi).

Techdirt had attempted to contact Zuffa about these takedown notices but had not received response. It had heard from Lynda.com, another client of IP Arrow, which issued the following statement which we might assume may be the same position Zuffa would take:

…On our behalf, IP Arrow issues batch DMCA takedown notifications for links to directories containing our content. Those links often contain keywords designed to drive traffic to adult or illegal material in directories that happen to also contain lynda.com videos. Many of the URLs highlighted in this TechDirt story, implied to be targets of erroneous takedowns, at one time contained our files but no longer do.

It would be easy to conclude that the UFC may argue the same thing.  At one time, the sites targeted by IP Arrow – including the porn sites, had keywords which may have included Zuffa content.  Therefore, the takedown notices would not appear as arbitrary as it might seem.  Nevertheless, its hard to fathom that all of the sites that are being taken down contained Zuffa-owned material.

Payout Perspective:

Based on a look at some of the takedown notices sent out by IP Arrow, we may assume that Zuffa never held a copyright interest in any of the sites.  Moreover, from a PR standpoint, the practice of sending out blanket notices, especially to porn sites may look as though it is tied to these sites.  This is something it likely does not want to have happen.  What we may surmise is that these takedown notices were incorrectly aggregated.  Thus, the notices were likely made to sites that did not infringe UFC copyrights, another bad scenario.

But, the “whac a mole” strategy may have turned into a “excavate the earth” as IP Arrow is using a broad stroke in taking down any sites remotely linked to Zuffa.  Is Zuffa taking advantage of the system by issuing these notices?  Will this strategy show any results?  Or, will it just be a useless exercise in taking down sites that will “pop-up” somewhere else?


Zuffa obtains TRO for trademark infringers for UFC 148

July 5, 2012

The Las Vegas Journal Review reports that Zuffa is readying for trademark infringers for UFC 148.  Its lawyers have obtained a Temporary Restraining Order (TRO) which will allow the UFC to shut down any vendor it believes infringes on the UFC’s trademark.

The TRO coincides with International Fight Week as many fans are in Vegas for the UFC Fan Expo and 148. It allows the UFC to go after infringers within 10-miles of the MGM Grand (the event venue) and 6 hours before and after the fight. It’s expected that the UFC will have people monitoring vendors to ensure that no one is selling bootleg UFC branded gear.

Payout Perspective:

The article states that this strategy of a pre-emptive strike against potential trademark infringers has not occurred in Vegas since the Oscar de la Hoya-Felix Trinidad fight in 1999.  The strategy is in line with Zuffa’s aggressive protection of its trademark. With the hype for the Silva-Sonnen fight and the UFC Expo, potential infringing vendors are very possible.

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