Pay-Per-View Theft: Increasing Ambiguity

A few months ago, the ABA Journal published an article addressing lawyers’ recent aggressive involvement in minimizing pay-per-view theft. Pay-per-view theft can be categorized into roughly three subheadings: active theft, pay theft, and passive theft.
Active theft occurs when someone intentionally makes an illegal physical connection to the cable system for the purpose of receiving cable service in their business. Pay theft occurs when someone intentionally attaches equipment (e.g., black boxes, decoders, etc.) for the unauthorized receipt of premium or pay cable services (e.g., HBO, pay per view movies, etc.). Passive theft occurs when someone has active cable service without notifying the cable operator.
In sum, active theft and pay theft involve the act of possessing an illegal cable service with the requisite mens rea. Passive theft simply involves the act of possessing an illegal cable service.
This ABA article sheds light on a new legal issue facing small business bar owners: hundreds of bars run by hardworking immigrants unfamiliar with the law, like the 8 Ball tavern co-owned by Rick Gorell of Cotati, California, are threatened with litigation ranging up to fees of $170,000—a fee local establishments simply cannot afford. Essentially, such bar owners are sued by pay-per-view promoters like Joe Hand Promotions when these companies send in investigators to stealthily infiltrate such establishments with the sole objective of gathering proof of illegal pay-per-view activity.
The problem of pay-per-view theft has been well-documented throughout the years—The New York Times discussed the practice of acquiring a $300 black box for a $40 fight-per-night in an article published 1995. Two years ago, the UFC successfully sued a fan watching a fight via stolen pay-per-view streaming. Although pay-per-view theft is illegal and ethically immoral, it is questionable whether the most reasonable way to fight it is through hardline policy.
Proponents of hardline policy (e.g., sending in investigators to bars, suing those caught in the act, setting up a website devoted to reporting illegal viewing, etc.) may argue that aggressive action is necessary because it is the most effective. They would argue that, for deterrence purposes, successfully suing someone in the act of pay-per-view theft would send a strong message to all—that they, too, are vulnerable to suit if engaging in illegal behavior.
However, as earlier stated, a hardline policy does not give those unfamiliar with the law a chance to remedy their faults. Many local bar owners do not speak English as their first language, and are uninformed with current events and legal developments as a result. Moreover, the tactics promotion companies use to investigate bars with illegal pay-per-view activity are ethically questionable—the investigators are paid only after they produce affidavits of illegal activity, which encourages investigators to produce faulty or inaccurate affidavits for the purpose of payment.
As such, the ramifications of a faulty affidavit can taint innocent bars—they would have to assemble fees for attorney fees and take time from work to defend suit. Dispatching 800 investigators to roam the country looking for illegal pay-per-view showings may unmistakably curb illegal activity, but at a cost—innocent bar owners may be accused of pay-per-view theft, and those who do engage in illegal behavior will face unforeseen consequences that require an inordinate amount of fees they cannot afford.
Today, an even larger problem looms—just last month, spectator Darren Sharpe attracted more than 150,000 viewers on his Facebook Live when he illegally streamed the Danny Green v. Anthony Mundine fight. He has apologized, and Foxtel has joined forces with Facebook to curb future illegal pay-per-view activity on the social media site. As such, social media appears to have enabled a fourth type of theft: a fight attendee using social media to share pay-per-view fights with others.
The advent of social media poses a new threat to copyright laws. Sharpe ultimately escaped consequences up to $60,000 or five years in jail after issuing a public apology. Such an apology may fulfill retribution but not necessarily deterrence purposes. However, severely punishing violators may trigger undesirable side-effects – similar to the externalities that stem from a hardline policy.
In relation to promotion companies, I propose a couple of ways that create a win-win for event licensors and local immigrant bar owners. One, license owners can devote resources to spreading awareness and educating those unfamiliar with the law. They can hold information sessions and send letters to establishments discouraging pay-per-view theft. Two, license owners can run a disclaimer on the screen prior to every televised event warning of illegal activity, which would bolster their argument for cracking down on illegal viewing due to providing adequate notice. Nonetheless, promotion companies and license owners will ask why they have to spend time and resources to alleviate this situation for uneducated bar owners. Perhaps a moral obligation is not enough to motivate such a change.
 
William Lee is a J.D. candidate, 2018, at NYU School of Law.