UFC 196 Piracy Leads to $4,500 Damage Assessment

Adding to this site’s archived cases addressing UFC PPV piracy assessments, reasons for judgement were recently published by the US District Court, M.D. Pennsylvania, assessing damages of $4,500 for the commercial piracy of UFC 196.

In the recent case (Joe Hand Promotions Inc. v. Michelina Enterprises, Inc) the Defendant displayed UFC 196 without paying the commercial sub-licening fee which would have been $1,313.

The Plaintiff obtained default judgement and statutory damages of $2,000.  A further $2,500 in enhanced damages were awarded.  In justifying this quantification District Judge Richard Caputo provided the following reasons:

First, the Court notes that according to Plaintiff’s Rate Card, the fee it lost by virtue of Defendants’ unlawful actions was for $1,313.00, based on the approximate occupancy of Bart & Urby’s. (Ex. 4, Doc. 11-4.) Clearly, Plaintiff should receive an award that compensates it for this lost fee. However, the Court disagrees with Plaintiff’s contention that statutory damages under this Section should factor in deterrence. Considering that a party may be subject to statutory damages under § 605 without engaging in intentional or willful misconduct, the Court cannot conclude that Congress intended statutory damages awards under this Section to deter an unwitting violator. See J&J Sports Prods., Inc. v. Cruz, 2015 WL 2376051, at *4 (E.D. Pa. May 18, 2015) . Indeed, many courts in this Circuit have found that statutory damages under § 605 should approximate actual damages and not consider deterrence. See Joe Hand Promotions, Inc. v. Batra, 2017 WL 838798, at *3 (D.N.J. Mar. 2, 2017) (citing cases); J&J Sports Prods., Inc. v. Chauca, 2015 WL 7568389, at *6-*7 (E.D. Pa. Nov. 25, 2015) (citing Cruz, 2015 WL 2376051, at *4). Thus, Plaintiff is entitled to $1,313.00 in statutory damages for the licensing fee that it did not receive from Defendants, but the Court declines to increase this award based on a deterrence rationale.

In addition to the fee, the Court finds it appropriate to attempt to estimate the profits Defendants earned that are “attributable to the violation” alleged in the Complaint. Chauca, 2015 WL 7568389, at *7 (citing Joe Hand Promotions, Inc. v. Yakubets, 3 F. Supp. 3d 261, 280 (E.D. Pa. 2014)). However, “in the absence of evidence, an estimate of profits should be a conservative figure,” and the Court must use its discretion to ensure that this estimation is attributable to the violation. Yakubets, 3 F. Supp. 3d at 280. Here, the Court will award an additional $687.00 in damages. This figure is based on the average number of people observed in the bar by the auditor on March 5, 2016 (26 + 34 + 43/3) and an estimated profit of $20 per patron. See Cruz, 2015 WL 2376051, at *5-*6.  Thus, the Court will award $2,000.00 in statutory damages under § 605(e)(3)(C)(i)(II).

The Court finds it more appropriate to apply and weigh the relevant factors identified by courts to assess the appropriateness of an enhanced damages award, rather than a flat multiplier. Courts have considered the following factors in arriving at an enhanced damages award: “(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.” Waldron, 2013 WL 1007398, at *7 (citation omitted).

Here, there is no direct evidence that Defendants are repeat offenders. This weighs against imposing a hefty enhanced damages award. However, at the hearing, Plaintiff’s counsel directed the Court to comments posted on Bart & Urby’s Facebook page. (See Ex. 2, Doc. 11-2.) One comment made from Bart & Urby’s own Facebook account in connection with its promotion of the Fight states: “Next UFC pay per view will also be free on 4.23[.] [C]an’t wait.” (Id. at 2.) This suggests that Defendants, at the least, might have considered committing a repeat violation, which weighs in favor of an increased enhanced damages award. As to any “substantial profits” reaped, there is no evidence that Defendants charged a cover on the night of the Fight or imposed premiums on its food or drinks. (See Moran Aff. 1, Doc. 11-6.) Based on the materials submitted by Plaintiff, it is difficult for the Court to assess whether Defendants made any profits, let alone substantial profits, that are specifically attributable to the violation alleged rather than the establishment’s normal Saturday night business. Additionally, the Court considers the fact that the auditor observed five televisions in Bart & Urby’s, only one of which was displaying a UFC 196 fight, and that the maximum estimated attendance was forty-three (43) patrons in an establishment with an estimated occupancy capacity of 140 people. These factors suggest that the violation was relatively small in scale, and thus warrants a lesser enhanced damages award. However, the Court recognizes that Defendants clearly advertised the Fight in connection with promoting sales of their drinks and encouraged people to patronize their bar. This weighs in favor of a steeper enhanced damages award.

Considering the above, the Court will award Plaintiff $2500.00 in enhanced damages. The Court believes this figure takes into account the fact that Defendants’ advertised the Fight in connection with drink promotions on their social media pages, the fact that Defendants are not shown to have been repeat violators, the lack of proof as to any substantial profits Defendants reaped that are attributable to the illegal broadcasting of the Fight, the fact that only one television was displaying the Fight, and the fact that the auditor counted between twenty-six and forty-three patrons in the bar over the course of the night.

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