Reasons for judgement were released this week by the US District Court, S.D. California, discussing if Zuffa was a necessary party to copyright litigation brought by their commercial distributor. In short the answer was no.
In this week’s case (Joe Hand Promotions v. Bragg) the Defendants operated Henry’s Doghouse Bar and Grill in San Diego. They allegedly broadcast UFC 154 without proper commercial licencing. The Plaintiff had the exclusive commercial exhibition licensing rights to the event and sued the Defendant for Damages. The Defendant argued that the claim should be dismissed because Zuffa, the owner of the copyright protected broadcast, was not a party in the lawsuit. The Court dismissed this argument finding Zuffa was not a necessary party and a commercial distributor of copyright protected content has standing to sue. In reaching this conclusion the Court provided the following reasons:
Defendants argue this action must be dismissed because Plaintiff failed to join necessary parties, namely Zuffa, LLC (“Zuffa”) and DirecTV. In support of this argument, Defendants claim the Doghouse Bar obtained a license and subscription from DirecTV to display commercial content at the Doghouse Bar (“Commercial Viewing Agreement”). (Mot. at p. 2 & Exhibit 6.) Thereafter, Defendants ordered theProgram from DirecTV pursuant to the Commercial Viewing Agreement. (Mot. at Exhibits 6 and 7.) Based on filings with the U.S. Patent and Trademark Office, Defendants also claim that Zuffa is the exclusive copyright holder of the Program.(Mot. at p. 4.)
Defendants argue Zuffa is a “necessary party” because, as the exclusive copyright holder, Zuffa is the only party with standing to sue. (Mot. at p. 24.) However, as discussed earlier, Zuffa is not the only party with standing to sue, and therefore must not be joined on that basis. Defendants further assert Zuffa must be joined because “it has a direct legal interest in the alleged infringement of its copyright in the CONTENT.” (Mot. at p. 24.) Similarly, Defendants argue DirecTV is a “necessary party” because it has a direct legal interest in (1) “the alleged infringement [of] the product it distributed via its exclusive electronic closed circuit system,” and (2) “ensuring the product it sells is free of infringement claims under the California Uniform Commercial Code.” (Mot. at p. 24.)
DirecTV and Zuffa are not indispensible parties to this case. Courts have routinely declined to find the cable or satellite provider or copyright holder to be an indispensable party in Section 553 and Section 605 actions. See J&J Sports Prods., Inc. v. Live Oak County Post No. 6119 Veterans of Foreign Wars, 2009 WL 483157, at *4 (S.D. Tex. Feb. 24, 2009) (finding DirecTV is not an indispensable party and denying defendant’s motion to dismiss); J & J Sports Prods., Inc. v. Coyne, 2011 WL 227670, at *2 (N.D. Cal. Jan. 24, 2011) (striking affirmative defense of failure to join indispensable party with prejudice as legally insufficient); Nat’l Satellite Sports v. Gianikos, 2001 WL 35675430, at *2-3 (S.D. Ohio June 21, 2001) (finding complete relief can be afforded to plaintiff in the absence of the provider Time Warner). Moreover, Plaintiff has alleged it had an exclusive contractual right to commercial distribution of the Program. (Complaint at ¶ 18.) Defendants bear the burden of persuasion and they have not persuaded the Court that DirecTV and Zuffa have any legal interest in the infringement of the Program or that the ability of DirecTV and Zuffa to protect any possible legal interest will be impaired or impeded if they are not joined in this matter. Accordingly, the Court finds Zuffa and DirecTV are not indispensible parties warranting dismissal of this action.