A typical narrative seen in commercial Pay Per View piracy litigation is a Plaintiff seeking substantial damages disproportionate to any harm caused to them with Courts rarely awarding the hefty damages sought.
In a sensible judgement released earlier this month the US District Court, D. New Jersey struck a reasonable position in awarding a total of $5,411 in damages and lawyer fees after the piracy of UFC 183.
In the recent case, (Joe Hand Promotions, Inc. v. Batra) the Defendant Lounge displayed UFC 183 without paying the commercial sub licencing fees to the Plaintiff. The cost would have been $1,200. The Defendant also commercially exploited the event collecting a cover charge, having a one drink minimum and requiring patrons to purchase a hookah. Based on a head count of patrons present an investigator deemed the Defendant would have brought in just over $2,000 in revenues based on this.
The Plaintiff sued and obtained default judgement seeking $35,ooo in damages. The Court found this request disproportionate but did award statutory damages at the actual cost of the licence and enhanced damages equivalent to the estimated profits for the lounge. Additionally the Defendant was made to pay the Plaintiff’s lawyers fees. In finding this result appropriate District Judge John Michael Vazquez provided the following reasons:
Here, Plaintiff seeks $10,000 in statutory damages for the initial violation. Plf’s Br. at 3-4. Plaintiff alleges that it is impossible to determine the full extent of profits it lost from Defendants’ conduct. As a result, Plaintiff argues that an award of $10,000, the statutory maximum, would serve as a deterrent, account for additional profits Defendants’ gained “as an indirect result of their unlawful actions,” and compensate Plaintiff for its loss of goodwill and reputation. Id. Recent cases within this district, however, conclude that an award of statutory damages pursuant to Section 605 should approximate actual damages. See, e.g., Directv, LLC v. Alvarez, No. 15-6827, 2016 WL 6650842, at *3 (D.N.J. Nov. 9, 2016); Premium Sports, Inc. v. Silva, No. 15-1071, 2016 WL 223702, at *2 (D.N.J. Jan. 19, 2016); Joe Hand Promotions, Inc.,2013 WL 1007398, at *7; J & J Sports Prods., Inc., 2012 WL 525970, at *4. “To determine actual damages, an appropriate starting point is to assess the cost of the licensing fee the defendants ought to have paid in order to broadcast legally.” Premium Sports, Inc., 2016 WL 223702, at *2 (citation omitted). Plaintiff states that an establishment with the capacity of 150 patrons, the approximate capacity of Aladdin, would have been required to pay $1,200 for a sublicense fee. Plf’s Br. at 2. As a result, the Court will award Plaintiff $1,200 in statutory damages.
Plaintiff also seeks $25,000 in enhanced damages, arguing that this amount “will fairly achieve the statutory goals of restitution and deterrence.” Plf’s Br. at 4. To calculate enhanced damages courts within the district consider the following five factors: (1) whether the defendant has intercepted unauthorized broadcasts repeatedly and over an extended period of time; (2) whether it reaped substantial profits from the unauthorized exhibition in question; (3) whether the plaintiff suffered significant actual damages; (4) whether the defendant advertised its intent to broadcast the event; and (5) whether the defendant levied a cover charge or significant premiums on its food and drink because of the broadcast. Joe Hand Promotions, Inc., 2013 WL 1007398, at *7. Plaintiff provides no evidence regarding the first three factors. Plaintiff, however, alleges that Defendants advertised the illegal broadcast on Aladdin’s Twitter page. Plf’s Br., Attachment C. Moreover, Plaintiff’s auditor states that during the night of the broadcast there was a $20 cover charge, a one drink minimum, and a required hookah purchase, which totaled $32.50. Id., Attachment A. The auditor additionally states that he took three head counts while at Aladdin and the highest count was 62 people. Id. The Court will award enhanced statutory damages of $2,015, which is equal to the highest count multiplied by $32.50. This amount is roughly equal to the amount that Defendants likely took in from the illegal broadcast and is sufficient to deter future conduct and provide restitution.
For the reasons set forth above, Plaintiff’s motion for default judgment is GRANTED. Accordingly, the Court will enter judgment against Defendants in the amount of $5,411, representing $1,200 in statutory damages, $2,015 in enhanced damages, $1,600 in attorney’s fees, and $596 in costs. An appropriate order accompanies this opinion.