July 2006
Volume 2, Number 4
Table of Contents

Fantasy Meets Reality: Examining Ownership Rights In Player Statistics

By Robert Freeman, Peter Scher

By most estimates, 10 million to 20 million Americans played fantasy sports games last year. And, the business of fantasy sports goes far beyond the $19.99 or so that a fantasy player generally must pay to join a league on a site such as SportsLine.com or ESPN.com. Through fantasy sites, advertisers target a highly desirable consumer demographic that (so we have heard) often spends hours a day online following their teams.

Providers and publishers of draft day guides, statistical packages and scouting reports sell to a captive and hungry audience of fantasy players. And, because fantasy sports enthusiasts like to watch their teams and individual players play, media conglomerates create synergistic programming campaigns around their fantasy sports properties. When one finishes tabulating all of the money that exchanges hands in relation to fantasy sports, what you have is a rapidly growing, billion-dollar industry.

Because fantasy sports are fun and lucrative, it comes as no surprise that the major sports leagues -- the real ones that is -- have recently taken steps to ensure and preserve their share of the revenue.

Changing the rules of the game

An example of this trend is the five-year, $50 million deal that Major League Baseball Advanced Media, LP (MLBAM) struck with the Major League Baseball Players Association (MLBPA) last January to acquire exclusive rights to players' names, statistics, likenesses, etc., for the development of online content, including fantasy baseball.

No sooner did MLBAM acquire these rights than it began to enforce them in ways that the MLBPA never had before. Indeed, according to the complaint for declaratory relief in C.B.C. Distribution and Marketing Inc. v. Major League Baseball Advanced Media, L.P., No. 4:05-cv-00252-MLM (E.D. Mo., complaint filed Feb. 7, 2005), MLBAM, almost immediately after signing the deal, began writing letters to companies that offered online fantasy baseball games, stating its position that the unlicensed use of players' names in the operation of fantasy games was illegal and that such use must cease immediately.

The plaintiff in C.B.C v. MLBAM -- a fantasy sports provider that had in past years operated under a license from the MLBPA -- seeks a declaration that the unlicensed operation of such games does not constitute a violation of the Lanham Act, copyright, rights of publicity or any state's unfair competition or false advertising laws.

C.B.C. v. MLBAM is still pending and it is being closely followed by the fantasy sports community. Through court papers and public statements, the position of MLBAM (and Major League Baseball as an intervenor) is that fantasy baseball sites have no right to use player names for commercial gain without an authorized license. C.B.C. and its supporters in the fantasy sports community have countered with the proposition that baseball statistics, which fairly include the names associated with those statistics, are not the property of anyone, since they are in the public domain.

The central issue raised by the C.B.C. case is whether, in using sports statistics, the focus should be on the fact that statistics may be in the public domain or on the publicity rights of the players whose names are inextricably linked to those statistics.

C.B.C. v. MLBAM underscores the fact that player statistics are the driving force behind fantasy sports. If issued, a judicial opinion in C.B.C. v. MLBAM could lend guidance regarding the boundaries of what a fantasy sports site can and cannot do with player statistics without a license from the applicable "real-world" league. In this article, we will seek to highlight the major legal issues raised by a fantasy sports site's unlicensed use of player statistics.

Statistics are facts

On a very basic level, sports statistics are facts and facts are not copyrightable unless their selection or arrangement demonstrates sufficient "originality" to merit protection. Feist Publications v. Rural Telephone Service Co. Inc., 499 U.S. 340, 349 (1991).

Shortly after Feist was decided, the Second Circuit considered whether a baseball pitching form that compiled nine different statistics relating to the opposing pitchers in each of a particular day's games was entitled to copyright protection and held that the plaintiff and author of the form was at least entitled to a trial on this issue. Kregos v. Associated Press, 937 F.2d 700 (2d Cir. 1991). The court noted, however, that even if the pitching form were entitled to protection, a competing form would not be infringing if its selection of statistics "differ[ed] in more than a trivial degree" from the plaintiff's. Id. at 710.

Based on the teaching of Feist and Kregos, it is highly doubtful that sports leagues could use copyright law, in and of itself, to effectively claim that fantasy sports sites infringed their statistical compilations. Fantasy sports sites rarely select and arrange statistics in the same manner that the leagues do and in fact the more advanced sites allow users to sort and customize a diverse array of obscure, nonstandard statistics.

Motorola and the fantasy gamecast

In the Second Circuit at least, this question appears to have been partially addressed by National Basketball Association v. Motorola Inc., 105 F.3d 841 (2d Cir. 1996), in which the court vacated an injunction against Motorola's transmission to pagers and Internet sites of real-time NBA scores and statistics. Motorola's operation relied on a data feed from reporters who watched live TV and radio broadcasts, but the court distinguished the broadcast of a sporting event -- which is copyrightable under 17 U.S.C. §  101 -- from the game itself, which is not an original work of authorship. The court held:

*8 We agree with the district court that the "defendants provide purely factual information which any patron of an NBA game could acquire from the arena without any involvement from the director, cameraman or others who contribute to the originality of a broadcast." ... Because the [defendants] reproduce only factual information culled from the broadcasts and none of the copyrightable expression of the games, appellants did not infringe the copyright of the broadcasts. Id. at 847.

The Motorola court also held that the transmissions of real-time scores and statistics did not constitute a misappropriation of "hot news" from the NBA, mainly because Motorola's service was not "free-riding" on the NBA's product in that the defendants expended their own resources to collect and transmit the scores and statistics.

Arguably then, at least insofar as copyright infringement or "hot news" misappropriation claims go, any Web cast of a sports game, no matter how "granular" or realistic, may be legal under a Motorola-type analysis so long as the protectible elements of the league's or team's broadcast are not reproduced. Copyright claims might be even weaker if a Webcaster does not even watch the league's TV broadcast and instead relies solely on an audio or Internet data feed.

Still, it should not be forgotten that the Motorola court was confronted with a real-time statistical service that could hardly be characterized as simulating a true "game experience;" whether a play-by-play "gamecast" that is loaded up with computer-generated graphics infringes the league's television broadcast remains an open question.

It should also be considered that the defendants in Motorola were able to collect all the data they needed just by watching or listening to broadcasts. In this aspect, some sports may be better positioned to protect against real-time gamecasts than others. In Morris Communications Corp. v. PGA Tour Inc., 364 F.3d 1288 (11th Cir. 2004), the court upheld the denial of an antitrust challenge by a news publisher that sought to gather and disseminate real-time golf scores from PGA events. The PGA had implemented an electronic relay system to gather and transmit real-time scores of the entire tournament field to its own Web site, as well as an on-site media center.

PGA rules against wireless devices on the courses prevented the plaintiff from setting up its own system and TV broadcasts did not provide enough individualized information for such a purpose. Thus, the plaintiff was forced to rely on the media center to obtain score information and had to abide by the PGA's restrictions designed to preserve its "first opportunity" to post and syndicate the scores. The court concluded that the PGA's purpose, preventing the plaintiff newspaper publisher from "free-riding" on its proprietary technology, was a valid business justification for the restrictions.

A fair use of trademarks?

Trademark law may offer sports leagues and teams greater protection than copyright law against unauthorized uses of statistics. Most obviously, without a proper license, fantasy sites may not be able to use league or team trademarks, including team names and logos, in connection with statistics. Any displays of marks or logos that suggest an affiliation or sponsorship from the league, such as the NBA logo, would be particularly problematic, but even simpler identification of players by team or division will in all likelihood give rise to claims of trademark infringement or unfair competition.

A counterargument to such trademark claims is that a fantasy site merely uses such trademarks to describe the sports league's product -- not its own -- and that such use is allowable under the doctrine of nominative fair use. As set forth by the Ninth Circuit Court of Appeals, the defense of nominative fair use is available to a commercial defendant if three requirements are met:

First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder. New Kids on the Block v. News America Publishing, 971 F.2d 302, 308 (9 th Cir. 1992).

The commercial value of names

Ultimately, it may be the players' rights of publicity that provide the strongest argument for protection against fantasy sites' unauthorized use of statistics. For the last half century, courts have recognized athletes' exclusive rights to exploit the commercial value of their names, likenesses and in some cases, on-field accomplishments. The right of publicity is both a common law right and a statutory right that varies by jurisdiction.

In an early case dealing with player statistics, Uhlaender v. Henricksen, 316 F. Supp. 1277 (D. Minn. 1970), the newly founded Major League Baseball Players Association obtained an injunction and judgment against the manufacturers of board games (a less successful version of Strat-O-Matic) that incorporated the names and statistics of hundreds of major league players.

Addressing the plaintiffs' claim of "misappropriation and use for commercial profit of the names of professional major league baseball players without the payment of royalties," the court found it clear that "the use of the baseball players' names and statistical information is intended to and does make defendants' games more salable to the public than otherwise would be the case." Id. at 1278.

Significantly, the Uhlaender court rejected the defendants' contention that because their statistics were already published in newspapers and in the public domain, the players had waived their rights to relief. Id. at 1282- 83. As in the pending C.B.C. case, there is an apparent tension between players' rights to the commercial value of their names on the one hand and the rights of a gamesmaker, if you will, to make use of facts that are in the public domain. In Uhlaender, the former decidedly trumped the latter.

*9 But players' publicity rights may not always trump competing interests. Ironically, in Gionfriddo v. Major League Baseball, 114 Cal. Rptr. 2d 307 (Cal. Ct. App. 2001), it was Major League Baseball that argued, successfully, that the public's interest in baseball history outweighed the economic interests and statutory rights of old-time baseball players whose names, images, statistics and biographical information were used for MLB publications and Web sites. (In 1947, the standard player contract was revised to define more clearly the MLB's rights to such material.) Ruling for the MLB on First Amendment grounds, the court effused:

Major league baseball is followed by millions of people across this country on a daily basis. Likewise, baseball fans have an abiding interest in the history of the game. The public has an enduring fascination in the records set by former players and in memorable moments from previous games. Statistics are kept on every aspect of the game imaginable. Those statistics and the records set throughout baseball's history are the standards by which the public measures the performance of today's players. The records and statistics remain of interest to the public because they provide context that allows fans to better appreciate (or deprecate) today's performances. Id. at 315.

Returning to the here and now, the right of publicity is positioned at the center of the dispute between sports leagues and fantasy sports sites. In analyzing publicity rights in the context of fantasy sports, courts may need to take a close look at what it means to use a player's name for commercial gain.

Can it really be said that fantasy sports sites exploit the commercial value or goodwill that players have built up in their names, when the essence of fantasy sports is that a player's worth is exactly measurable by the statistics that he generates? One could argue that fantasy sports are driven by cold, hard statistics, not by the intangibles of players' popularity, fame or market value.

Conclusion

Nevertheless, the immense commercial appeal of professional athletes and their names is undeniable. To those who argue that fantasy games are all about the numbers, one may ask why there isn't a fantasy game based on the barometric pressure recorded hourly at various weather stations around the world. As long as fantasy sports games continue to generate significant revenue, one should expect leagues, teams and athletes to continue to demand a share and, in support of such demands, to rely on a three-headed weapon of intellectual property rights: copyright, trademark and the right of publicity.

Ultimately, it may be the last right -- the right of publicity -- that will force all unlicensed operators of fantasy sites to either obtain a license or significantly alter their operations.

Robert Freeman is a partner in the New York office of Brown Raysman Millstein Felder and Steiner LLP. His e-mail is rfreeman@brownraysman.com. Peter Scher is a litigation associate in the same office.

Copr. (C) 2006 West, a Thomson business. No claim to orig. U.S. govt. works. This article is reprinted with permission from West, a primary sponsor of the General Practice, Solo and Small Firm Division.

This first appeared in Entertainment and Sports Lawyer, Winter, 2006

Copyright © 2006 American Bar Association.

 

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