The Ultimate Fighting Championship (UFC) and other similar organizations are actively investigating local sports bars for airing pay-per-view programming without ordering the event through proper channels. Federal regulations prohibit the unlawful interception of these events and provide for some stiff penalties. The type of piracy involved in these investigations include using one’s personal DIRECTV account for viewing in a commercial establishment, ordering a pay-per-view event for personal use and then broadcasting it for financial gain, or intercepting a television signal from another authorized user.
Event operators typically hire investigators to audit bars during pay-per-view events. These investigators may also attempt to record these events in order to prove their unauthorized airing. Shortly after an investigator verifies the unlawful airing of an event, the responsible business owner may be contacted by a UFC lawyer via phone or letter. Business owners will be asked to settle these matters for large amounts in order to avoid paying damages, penalties, and attorneys’ fees. We have noticed a significant increase in claims involving the piracy of pay-per-view programming in the Lehigh Valley in the last year. Therefore, in order to avoid liability, bar operators need to order all pay-per-view events through the proper channels by contacting the organization which owns the television distribution rights and informing that organization of the planned use for the pay-per-view event.
The applicable law is strongly on the side of the event operators. Event operators may bring causes of action pursuant to 47 U.S.C. § 605 (“Communications Act”) and 47 U.S.C. § 553 (“Cable & Television Consumer Protection and Competition Act”), as well as a state law claim for conversion. These two statutory schemes provide relief for the alternate means of reception—satellite and cable, respectively—of the pay-per-view event.
A higher range of damages is available in 47 U.S.C. § 605 than in 47 U.S.C. § 553. Statutory damages under 47 U.S.C. § 605 range from $1,000 to $10,000 and a $100,000 maximum enhancement for willfulness; statutory damages under 47 U.S.C. § 553 range from $250 to $10,000 for all violations and a maximum $50,000 enhancement for willfulness. 47 U.S.C. §§ 605(e)(3)(C)(i)(II), 605(e)(3)(C)(ii); 47 U.S.C. §§ 553(c)(3)(A)(ii), 553(c)(3)(B). In addition, plaintiffs’ attorneys’ fees and costs are recoverable. However, an award for damages under both sections is inappropriate.
As demonstrated, there is a large range of monetary damages that could possibly be awarded in television signal piracy cases. Factors that the courts consider when determining damages are as follows: (1) repeated violations, (2) intent to profit, (3) actual profit, (4) extent of broadcast, (5) number of patrons, (6) number of televisions, (7) advertisements of the event, (8) cover charges, and (9) license fees. Joe Hand Promotions v. Burg’s Lounge, 2 F.Supp. 2d. 710, 713 (E.D. Pa. 1998); see also Joe Hand Promotions, Inc. v. D.M.B. Ventures, Inc., 1995 WL 683847, at*2-*3 (E.D. La. Nov. 14, 1995)(discussing the kind of evidence that warrants an award of a greater amount under § 605(e)(3)(C)(ii)); Kingvision Pay-Per-View Ltd. v. Lardo, 2010 WL 3463316, at *4 (E.D. Pa. Sept. 1, 2010).
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