UFC Makes The Awful Decision To Sue Some Of Its Biggest Fans

from the short-sighted dept

Having recently lost its attempt to blame Justin.tv for the fact that some of its users stream Ultimate Fighting Championship matches, UFC's parent company Zuffa is moving ahead with its strategy of going after its fans directly. This isn't entirely new. A few years ago, the company announced plans to sue fans, even though it admitted at the time that the costs of such lawsuits would outweigh any benefits. Of course, that alone should make you wonder what Zuffa management is thinking, but it seems that their entire thought process is "piracy bad, must stop," and that's about it.

The latest move is that Zuffa was able to get user information from Greenfeedz.com, one of the websites that let people watch unauthorized feeds of UFC's pay-per-view (PPV) events. This plan is very reminiscent of when DirecTV ran one of the first of these extortion-like shakedown campaigns by getting the list of customers from a seller of smart cards (which had other legitimate purposes) and then demanding $3,500 from each of them. That action did not go well for DirecTV, leading to multiple lawsuits, including from former employees, and the company eventually dropped the program altogether. Stunningly, Zuffa's lawyer compares his situation to the DirecTV situation... but seems to ignore the massive backlash it created, the legal pushback and the eventual dropping of the program.

Of course, as we also noted in that post a couple years ago about Zuffa's plan to sue fans, huge numbers of people are perfectly willing to pay large sums for the PPV fights, and the numbers seem to keep growing. It seems to depend more on who's fighting rather than whether or not unauthorized streams are available. That said, in explaining why they're going to sue their fans, Zuffa's legal boss, Lawrence Epstein, said that he believes the company has an obligation to sue the fans.

But, even more ridiculous is the response when someone asks about suing fans. Epstein claims that UFC loves its fans, but anyone who infringes is simply not a fan at all. However, that's ridiculous. An article by Ben Fowlkes at MMAFighting.com provides a wonderful explanation for why this is a ridiculous claim:

For starters, the UFC seems to believe that there are two types of MMA fans: the type who buys the pay-per-views, and the type who watches them illegally. In reality, the line between those two groups is probably a lot blurrier than Zuffa realizes. Chances are very good that some of the people who have streamed events in the past have also bought them, and probably will buy them again at some point in the future. Maybe they only pony up the $55 for the pay-per-view when the card is good enough, or when they can get friends to split the cost with them. Maybe they stream it when they only care about one or two fights, or when they’re simply too strapped for cash to afford it.

My point is, not all piracy is created equal, at least on the receiving end, and attacking viewers as if they are distributors could do much more harm than good.

For instance, picture a 19-year-old college student just about anywhere in America. He wants to see a UFC event, but maybe he can’t even afford basic cable, let alone a pay-per-view. He can’t go to a bar to watch the fights (unless he has a convincing fake ID), so he stays home and finds an illegal stream on his laptop, because he can't stand to miss the big fight. Then, months later, he gets sued by the UFC.

What’s going to happen when that kid graduates, goes to work, and finds a job that will allow him to enjoy luxury expenses like pay-per-views? You think he’s going to become a loyal customer of the company that sued him back when he was struggling to buy books? You think he’s going to buy a ticket to see a UFC event when it comes to his city? You think he’s going to buy merchandise or watch free events or patronize the UFC in any way after that experience? Maybe. Or maybe he’ll hold a little bit of a grudge. You know, for the rest of his natural life.

That's the amazing thing about so many anti-piracy attempts. They simply don't take into account the actual situation, and what the real costs and benefits of their actions are. They just think "piracy bad, must stop." They refuse to accept that those who are infringing may have reasons for doing so beyond "I'll never give any money to these people ever." Not actually understanding that seems like a huge strategic blunder. For all the talk of having an "obligation" to sue fans, I would think that the company's officers actually have an obligation to the company's shareholders, which means not making braindead moves that actually hurt the bottom line. And yet that seems to be the ultimate plan here.

Filed Under: copyright, fans, piracy, ultimate fighting
Companies: zuffa

Justin.tv Not Guilty Of 'Stealing Cable' When Users Stream UFC Matches

from the good-ruling dept

Last year, we wrote about how Zuffa, the parent company of Ultimate Fighting Championship (UFC) was suing Justin.tv because some of its users streamed UFC matches. As we noted at the time, we couldn't see how Zuffa would get past the DMCA's safe harbors. Apparently, Zuffa tried to get around that by being way too creative for its own good and the court has now shut down those efforts. Basically, Zuffa focused on two areas not covered (or not clearly covered) by safe harbors. The first is trademark, which is neither covered by the DMCA's safe harbors nor Section 230's safe harbors -- though, many courts have accepted similar rules that limit liability to third party service providers anyway. In this case, the court is extremely skeptical of the trademark claims, in part because it seemed clear that Zuffa was merely trying to use trademark law as if it were a "mutant copyright law," which courts have rejected in the past.

The other attempt to get around safe harbors was to use the Communications Act, which has rules against "intercepting cable." Justin.tv actually suggested that Section 230's safe harbors should protect it from that claim -- which makes sense -- but the court doesn't want to touch that argument. Instead, it just says that the basic idea that Justin.tv is illegally intercepting cable doesn't make any sense -- and notes, again, that it appears to be Zuffa seeking to do an end-run around copyright law:

In essence, Zuffa alleges that Justin.tv’s users copied Zuffa’s UFC event and then rebroadcast the UFC event over the internet. This is not the type of conduct properly addressed by the Communications Act, but by copyright law (and, potentially, trademark law) because Justin.tv had no relationship with the original cable or satellite signal: by the allegations, Justin.tv did not receive or intercept any actual cable or satellite signal or broadcast. The Court finds no evidence in the statutory language, other cases, or legislative history that the Communications Act addresses this type of conduct or was meant to bolster or act as a separate type of copyright claim.

Furthermore, as Eric Goldman highlights in the link above, there's a further footnote discussion in which the court notes that if Zuffa's "stealing cable" argument made sense, it would open up a whole host of legal issues against pretty much all cloud computing:

if the Court were to allow claims such as these, it would have to allow similar Communications Act claims against scores of “cloud computing” service providers such as Microsoft, Apple, Google, Amazon.com, Dropbox, Box.net, and others because Jusint.tv’s [sic] particular streaming service would be irrelevant. As an example, say a person took a snippet (or longer) of video of a UFC match being broadcast on their television with their iPhone, Windows Phone, etc. The iPhone then automatically uploads that video to one of dozens of cloud storage systems such as Apple’s iCloud. The Court refuses to find that Apple (or Microsoft, etc.) would be liable under the Communications Act for merely receiving and storing this data under the Communications Act. Yet, Zuffa arguesfor exactly this result when it argues that Justin.tv’s mere receipt of this video stream makes Justin.tv liable. In passing the Communications Act, Congress did not intend such a result, and this Court will not broaden the effect of the statute in this manner.

Nice to see a court recognize the troubling implications of such a crazy argument.

Filed Under: copyright, safe harbors, stealing cable, ultimate fighting
Companies: justin.tv, zuffa