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August 5, 2024

UFC’s commercial TV distributor has sued more than 60 CT businesses over pay-per-view piracy; financial stakes are high for bars, restaurants and others

HBJ PHOTO | STEVE LASCHEVER Hartford attorney Michael L. Chambers Jr. is the Connecticut counsel for Pennsylvania-based media distribution company Joe Hand Promotions, which has sued dozens of companies in the state for illegally broadcasting Ultimate Fighting Championship events.
By Andrew Larson

On a Saturday night in 2021, anticipation was high for a mixed martial arts event produced by the Ultimate Fighting Championship.

The July 10 event — held at the T-Mobile Arena in Paradise, Nevada, and headlined by former UFC lightweight champions Dustin Poirier and Conor McGregor — attracted a full-capacity crowd of more than 20,000. Ticket sales exceeded $15.7 million.

In addition, about 1.8 million purchases were made for the pay-per-view broadcast, according to USA Today’s MMA Junkie blog.

Many viewers purchased the broadcast to watch in the comforts of their home. Restaurants, bars, casinos, gyms and other venues had to purchase commercial sublicenses through UFC’s distributor, Pennsylvania-based Joe Hand Promotions, in order to show the event to patrons.

However, Gentlemen’s Aroma Cigar & Lounge in Wethersfield was allegedly not one of them. And now the business is facing legal consequences.

According to a July 10 lawsuit filed in federal court, the cigar lounge showed the Poirier-McGregor fight to a crowd without paying for a sublicense from Joe Hand Promotions, which has held UFC’s exclusive commercial TV distribution rights since 2001. The cost of a commercial license is determined by a venue’s capacity, and is substantially higher — ranging from several hundred to several thousand dollars — than the pay-per-view cost for residential customers.

Commercial sublicense fees devour part of a venue’s would-be profits. As a result, some bars, restaurants and other establishments try to avoid the commercial fee, while reaping the benefits of showing copyrighted material.

This warning is included on all UFC broadcasts.

It’s a widespread problem that threatens the existence of distributors and content creators, said Hartford attorney Michael L. Chambers Jr., who filed the suit against Gentlemen’s Aroma Cigar & Lounge.

Chambers is Joe Hand Promotions’ Connecticut counsel, but the company has attorneys and private investigators in every U.S. state.

“The business has to protect their property,” Chambers said. “If they don’t do this, and if there’s not a deterrent, no one will pay for the fight.”

Over the last two decades, Joe Hand Promotions has filed 64 lawsuits in Connecticut, mostly against restaurants and bars.

Nationally, the company has filed thousands of suits.

The suit against Gentlemen’s Aroma Cigar & Lounge accuses the business of willfully engaging in wrongful acts to intercept and/or receive the program for free, or at a nominal cost.

The cigar lounge sold food and drinks during the broadcast, using the fight to entice patrons, the suit states. The business even advertised the UFC event on social media.

The lawsuit seeks up to $110,000 in damages for each willful violation of the Communications Act of 1934, along with attorney’s fees.

Businesses that benefit financially by infringing on others’ intellectual property rights face a significant potential penalty. In a February 2023 lawsuit against another Connecticut cigar bar that didn’t show up to court, a judge awarded Joe Hand Promotions a $10,322 award, federal court records show.

Patrick M. Fahey

“The Communications Act provides a huge club, or a weapon, against infringers to deter this kind of conduct,” said attorney Patrick M. Fahey, a partner at Hartford law firm Shipman & Goodwin who focuses on intellectual property litigation, but is not involved in the Joe Hand Promotions lawsuit. “Not a lot of people are aware of the extent of the penalties. They think, ‘I’ll have to pay for what I would have had to pay for a license to begin with.’ Unfortunately, that’s the wrong way to look at it, because the Communications Act provides so much more than just having to pay what you would have paid otherwise.”

'Strict liability crime'

Although Joe Hand Promotions is a prolific lawsuits filer, the cases that go to court represent a small percentage of commercial broadcast thefts that occur.

Typically, Joe Hand’s national counsel, Ryan Janis, of Philadelphia-based Jekielek & Janis, will send multiple demand letters to establishments suspected of pirating their content.

The demand letters give potential defendants the ability to settle out of court.

Often, the demand letters are ignored. When that happens, Joe Hand doesn’t disappear — it doubles down, Janis said.

After a period of time, Janis will refer a case to a local attorney who files a lawsuit in a U.S. District Court located in the violator’s home state.

While a small restaurant or bar circumventing the payment of fees to a national distributor might seem like a victimless crime, Joe Hand Promotions’ livelihood is actually at stake, Janis said.

“When defendants finally get a lawsuit filed against them, they want to claim that they’re getting picked on, or this is a heavy-handed approach and things of that nature,” Janis said. “But the bottom line is, my client is a sales business. And this is how they survive.”

A copy of the complaint filed by Joe Hand Promotions against Gentlemen’s Aroma Cigar & Lounge in Wethersfield.

While courts can impose hefty penalties on defendants, most cases settle before going to trial. That’s because defendants quickly realize the law isn’t on their side, and their costs will increase the longer the case continues, Janis said.

'Widespread' problem

The lawsuit against Gentlemen’s Aroma Cigar & Lounge names three owners and/or operators of the venue.

An attorney has not yet entered an appearance on their behalf. The venue did not respond to a message seeking comment, and a phone call to the establishment was not answered.

Chambers said lack of knowledge about the law is not a defense.

“It’s a strict liability crime,” Chambers said. “So, if you’ve shown it, you don’t have a defense, and attorney fees are literally part of the statute. It doesn’t behoove anyone to contest it.”

Also, by the time a lawsuit is filed, Joe Hand has gathered plenty of evidence to support its claim. Typically, a private investigator already attended the unlicensed public broadcast in question, and has documented it.

Janis said UFC events even feature prominent warnings during the broadcast.

Joe Hand doesn’t directly profit from the lawsuits, as the costs of monitoring venues and prosecuting violators tend to offset monetary awards, Janis said.

And despite an aggressive legal strategy, the pirating of pay-per-view content doesn’t appear to be slowing.

A 2019 study by the U.S. Chamber of Commerce Global Innovation Policy Center found that global online piracy costs the U.S. economy at least $29.2 billion in lost revenue each year.

As technology evolves, more sophisticated ways of pirating content emerge, and the law tends to lag behind, said Fahey, the Shipman & Goodwin attorney.

“I think the volume of cases that are filed is a good indication of how widespread the problem is,” Fahey said. “But, you’ve got to bear in mind that the cases that are found just represent a fraction of the infringing that’s actually going on. There are a lot of people who don’t hit the radar, and they get away with it.”

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