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Zuffa, LLC v., Inc.

District court grants in part and denies in part motion to dismiss non-copyright claims arising out of live streaming of UFC fight through defendant’s internet service, limiting plaintiff’s trademark claims only to the display of trademarks that were not an inherent part of the video broadcast, and holding that Communications Act did not apply to defendant’s purported conduct.

Defendant operates a website that allows users to stream or broadcast live video across the internet to other users, akin to YouTube or Vimeo but for live, rather than pre-recorded, video. Plaintiff Zuffa, LLC, which operates and does business as the Ultimate Fighting Championship (UFC), owns various trademarks, including Ultimate Fighting Championship, UFC, and the “Octagon” (the special eight-sided ring in which UFC mixed martial arts bouts take place). Plaintiff frequently broadcasts its copyrighted bouts on television, particularly pay-per-view.

Plaintiff brought suit against defendant based on the live streaming of a UFC fight through’s service, asserting 12 claims against defendant for various types of copyright and trademark infringement, unfair trade practices under Nevada law, and violation of laws related to cable and satellite theft. Plaintiff stipulated to the dismissal of its unfair trade practices claim and defendant moved to dismiss plaintiff’s non-copyright claims for failure to state a claim and asserting statutory immunity.

In support of its motion to dismiss the trademark claims, defendant relied entirely on the Supreme Court’s decision in Dastar v. Twentieth Centry Fox Film Corp., 539 U.S. 23 (2003). In Dastar, the Supreme Court held that reverse passing-off claims under the Lanham Act cannot be used to create “mutant copyrights or perpetual copyrights,” concluding that a once-copyrighted video series that had fallen into the public domain could be edited and resold without “proper” attribution to the original creators.

The court recognized that the present case was critically different from Dastar in that, rather than involving physical product with modified intellectual property, the case involved the display of a company’s actual trademarks in connection with a video stream. The case did not involve a “reverse passing-off” or even a “passing-off” claim, but rather a basic trademark claim. Because plaintiff alleged that defendant displayed its trademarks as part of the video streams, and because at this stage of proceedings allegations must be interpreted in the light most favorable to the plaintiff, the court refused to dismiss the trademark claims in their entirety.

The court did significantly limit plaintiff’s trademark claims, however, ruling that, under Dastar, the plaintiff could not proceed on a trademark claim for the display of trademarks inherently part of the copyrighted broadcast (such as the Octagon). The court explained that if plaintiff were allowed to proceed on a trademark claim for the display of the Octagon ring, or other trademarks inherently part of the copyrighted broadcast, plaintiff would possess a mutant copyright or perpetual copyright because nobody would ever be able to copy the video and display it regardless of whether the video had entered the public domain. The court elected to address at a later stage, however, whether the UFC’s watermark logo or other trademarks were an “inherent” part of the video.

The court also dismissed plaintiff’s claims under the Communications Act, holding that the Act does not apply to defendant’s alleged conduct in this case. The Communications Act, which provides that “no person shall intercept or receive or assist in intercepting or receiving any communications service offered over a cable system, unless specifically authorized,” is targeted at cable and satellite service theft through the use of content descramblers and similar technology. The court noted that the provisions of the Communications Act are commonly applied against bar and motel owners extending their cable/satellite purchases beyond their authorized limitations. In this case, however, the plaintiff did not allege that defendant actually intercepted or received a cable or satellite broadcast; rather, plaintiff alleged that users of defendant's service copied and rebroadcast UFC’s event. According to the court, this conduct is properly addressed by copyright law, not the Communications Act.