Breaking Down the Match-Up: UFC vs. IFL
Jeffrey Thaler Mar 2, 2006
On Thursday morning, a District Court in Clarke County Nevada will
hear the Ultimate Fighting Championship's motion for a preliminary
injunction against the International Fight League (the "IFL").
Based upon a review of the UFC's initial papers, the IFL's opposition, and the lawsuit filed by the IFL against the UFC and its president Dana White in Federal Court in New York, Sherdog.com has done its best to breakdown today’s hearing.
While virtually every mixed martial arts fan knows what the UFC is,
they might not be as familiar with the IFL. According to papers
filed by the IFL, Gareb Shamus, the CEO of a multi-media company
serving the comic book community, and Kurt Otto, an architect and
real estate entrepreneur, formed the MMA promotional company in
2005.
Shamus and Otto decided to take a different approach to MMA promotion, and began to organize a fight league with teams based in different cities. The IFL alleges that it was about to sign a major deal with Fox Sports to televise its fight league when White and the UFC baselessly threatened to sue Fox Sports if the TV network inked a deal with the IFL.
The UFC, as you might imagine, tells a different story. The Las Vegas-based promoter alleges that problems with the IFL started when the IFL illegally hired away a UFC employee, Keith Evans, and a former UFC employee, Steven Tornabene. Tornabene had, according to the UFC, signed a non-competition agreement when he left the company despite the fact that he previously had a relationship with the IFL.
The UFC alleges that Evans and Tornabene took valuable confidential information and trade secrets belonging to the UFC and gave them to the IFL. Moreover, the UFC contends before Tornabene left the UFC he fraudulently obtained all-access passes to UFC 55 and gave Shamus and Otto those passes to scope out the UFC production truck and get even more proprietary UFC information.
The UFC claims that the IFL has been using the misappropriated confidential information and trade secrets to illegally compete against it.
In its original filings with the court, the UFC requested that the court order that the IFL stops:
So what are the UFC's chances of winning its motion?
Home Court Advantage: The UFC gave itself a nice edge by filing the lawsuit in Nevada and scheduling a hearing before the IFL could do the same thing in New York. The UFC and its owners are well known and respected in Nevada, while the IFL is an upstart company from out of state. If it comes down to a close call, it never hurts to be the well-known local company. The edge here goes to the UFC.
Strength and Size: The UFC clearly has the money and resources to fight this lawsuit to the end. We do not know how much money the IFL has or what kind of resources it can devote to a long fight, although it appears to have enough money to hire a quality law firm. If the lawsuit drags on after this early round, you have to believe that the UFC will have an advantage. But, in a quick hearing like the one scheduled for Thursday, resources will not really come into play.
Biting Off More Than it Can Chew: The court order that the UFC requested is broad, and granting it may effectively cripple the IFL. Courts prefer to narrowly tailor their orders so that the losing party is restricted the least amount necessary. The odds are that if the court grants the UFC's motion it will cut back on the restrictions the UFC requested.
Dirty Boxing: The IFL's papers argue that the UFC completely fabricated the story about how Shamus and Otto obtained backstage passes to UFC 55, and it tells a story that is totally different than the UFC's. That means one of the parties has “bent” the truth. Courts hate it when parties mislead them, and a loss of credibility on a single point can kill a party's entire case. Here is an interesting additional fact that the IFL alleges: Tornabene's non-compete agreement ended in January, before he went to work for the IFL. The UFC never mentioned this fact in the original papers it filed, and instead said it believed that Tornabene and the IFL already had an “existing relationship” at the time he left the UFC. If the court concludes that the UFC failed to disclose a material fact in its papers, the UFC could be in trouble.
Making Weight: Since the UFC filed this motion it carries the burden to present enough evidence to prove its case. If it cannot do that, the IFL does not have to do anything to win other than point out this failure. In MMA terms, the motion depends on the UFC making weight. Here, the UFC may have some problems. A number of important facts it alleges are conclusions and lack the specificity a court would probably want to see before granting this kind of motion. Normally, the UFC would be handcuffed because it would not be able to add new facts to its motion at this late date, but two days ago the parties filed a Stipulated Protective Order (which is an order parties normally agree to before exchanging confidential information and filing that information with the court). So, the UFC may still plan to show the court some of the specific trade secrets it alleges were taken. But, from where I stand, it looks like the UFC is in a rubber suit riding an exercise bike and struggling to make weight.
Who is Hungrier for the Win: The UFC showed it is clearly concerned about the IFL and its actions when it filed this aggressive lawsuit and motion. But, the IFL has to win or its business could die. In a motion like Zuffa's, two of the criteria the court has to consider are whether Zuffa would suffer irreparable injury if the court ruled against it (i.e. whether money damages would not be enough to compensate it) and which party would suffer more hardship if it lost. Zuffa has not clearly explained what damage the IFL might do that money could not compensate, and the IFL clearly faces greater hardship if it loses. The advantage here goes to the IFL.
The Judge's Decision: In court there are no knockouts or submissions, and unless the parties settle motions like the UFC's always go to a judge for the decision. Just like in fighting, when you let a fight go to the judges anything can happen.
Sherdog.com’s legal correspondent Jeff Thaler is an attorney who has been licensed to practice law in California for over nine years. His first job as an attorney was as a law clerk for a federal judge. Thaler has followed mixed martial arts both as a fan and consultant for several years. For comments or questions about the article, please e-mail: [email protected].
Based upon a review of the UFC's initial papers, the IFL's opposition, and the lawsuit filed by the IFL against the UFC and its president Dana White in Federal Court in New York, Sherdog.com has done its best to breakdown today’s hearing.
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Shamus and Otto decided to take a different approach to MMA promotion, and began to organize a fight league with teams based in different cities. The IFL alleges that it was about to sign a major deal with Fox Sports to televise its fight league when White and the UFC baselessly threatened to sue Fox Sports if the TV network inked a deal with the IFL.
According to the IFL, Fox balked when threatened with the lawsuit
and chose to put the deal on “hold.” The IFL, alleging that White
and the UFC set out on a course to “crush” the fledgling company,
said the UFC also threatened major fight managers that if they
dealt with the IFL their fighters would be barred from the UFC.
The UFC, as you might imagine, tells a different story. The Las Vegas-based promoter alleges that problems with the IFL started when the IFL illegally hired away a UFC employee, Keith Evans, and a former UFC employee, Steven Tornabene. Tornabene had, according to the UFC, signed a non-competition agreement when he left the company despite the fact that he previously had a relationship with the IFL.
The UFC alleges that Evans and Tornabene took valuable confidential information and trade secrets belonging to the UFC and gave them to the IFL. Moreover, the UFC contends before Tornabene left the UFC he fraudulently obtained all-access passes to UFC 55 and gave Shamus and Otto those passes to scope out the UFC production truck and get even more proprietary UFC information.
The UFC claims that the IFL has been using the misappropriated confidential information and trade secrets to illegally compete against it.
In its original filings with the court, the UFC requested that the court order that the IFL stops:
1. Utilizing the UFC's confidential information and trade secrets;If the UFC wins its motion on Thursday and gets the court order it requested (along with money to compensate it for its alleged damages), it will have effectively crippled the IFL.
2. Continuing to interfere with the UFC's business and prospective business relationships;
3. Contacting or soliciting any of the UFC's current or future employees, independent contractors, fighters and business contacts that the IFL either came to know or may have come to know about through its misappropriation of the UFC's confidential information and trade secrets;
4. Conducting business with any person or entity where the business dealings came about as a result of the IFL misappropriating the UFC's confidential information and trade secrets; and
5. Conducting any business utilizing UFC confidential information and trade secrets.
So what are the UFC's chances of winning its motion?
Home Court Advantage: The UFC gave itself a nice edge by filing the lawsuit in Nevada and scheduling a hearing before the IFL could do the same thing in New York. The UFC and its owners are well known and respected in Nevada, while the IFL is an upstart company from out of state. If it comes down to a close call, it never hurts to be the well-known local company. The edge here goes to the UFC.
Strength and Size: The UFC clearly has the money and resources to fight this lawsuit to the end. We do not know how much money the IFL has or what kind of resources it can devote to a long fight, although it appears to have enough money to hire a quality law firm. If the lawsuit drags on after this early round, you have to believe that the UFC will have an advantage. But, in a quick hearing like the one scheduled for Thursday, resources will not really come into play.
Biting Off More Than it Can Chew: The court order that the UFC requested is broad, and granting it may effectively cripple the IFL. Courts prefer to narrowly tailor their orders so that the losing party is restricted the least amount necessary. The odds are that if the court grants the UFC's motion it will cut back on the restrictions the UFC requested.
Dirty Boxing: The IFL's papers argue that the UFC completely fabricated the story about how Shamus and Otto obtained backstage passes to UFC 55, and it tells a story that is totally different than the UFC's. That means one of the parties has “bent” the truth. Courts hate it when parties mislead them, and a loss of credibility on a single point can kill a party's entire case. Here is an interesting additional fact that the IFL alleges: Tornabene's non-compete agreement ended in January, before he went to work for the IFL. The UFC never mentioned this fact in the original papers it filed, and instead said it believed that Tornabene and the IFL already had an “existing relationship” at the time he left the UFC. If the court concludes that the UFC failed to disclose a material fact in its papers, the UFC could be in trouble.
Making Weight: Since the UFC filed this motion it carries the burden to present enough evidence to prove its case. If it cannot do that, the IFL does not have to do anything to win other than point out this failure. In MMA terms, the motion depends on the UFC making weight. Here, the UFC may have some problems. A number of important facts it alleges are conclusions and lack the specificity a court would probably want to see before granting this kind of motion. Normally, the UFC would be handcuffed because it would not be able to add new facts to its motion at this late date, but two days ago the parties filed a Stipulated Protective Order (which is an order parties normally agree to before exchanging confidential information and filing that information with the court). So, the UFC may still plan to show the court some of the specific trade secrets it alleges were taken. But, from where I stand, it looks like the UFC is in a rubber suit riding an exercise bike and struggling to make weight.
Who is Hungrier for the Win: The UFC showed it is clearly concerned about the IFL and its actions when it filed this aggressive lawsuit and motion. But, the IFL has to win or its business could die. In a motion like Zuffa's, two of the criteria the court has to consider are whether Zuffa would suffer irreparable injury if the court ruled against it (i.e. whether money damages would not be enough to compensate it) and which party would suffer more hardship if it lost. Zuffa has not clearly explained what damage the IFL might do that money could not compensate, and the IFL clearly faces greater hardship if it loses. The advantage here goes to the IFL.
The Judge's Decision: In court there are no knockouts or submissions, and unless the parties settle motions like the UFC's always go to a judge for the decision. Just like in fighting, when you let a fight go to the judges anything can happen.
Sherdog.com’s legal correspondent Jeff Thaler is an attorney who has been licensed to practice law in California for over nine years. His first job as an attorney was as a law clerk for a federal judge. Thaler has followed mixed martial arts both as a fan and consultant for several years. For comments or questions about the article, please e-mail: [email protected].
