Publications

Every practitioner should teach law school at least once. This year I am teaching Entertainment Law at the University of California at Davis. (Although flying up from and back to L.A. once a week can be a bit of a drag, so far it is a good experience.) Finding issues to trigger discussion and debate in class is forcing me to look at cases much differently. Since I already know the general holdings of the cases I am teaching, I find myself spending more time analyzing the dissenting opinion and loosing party’s position, looking for points that can foster robust in-class discussion. This week, in preparing for a class session on right of publicity, I re-read the recent 9th Circuit case of Keller v. Electronic Arts and found myself questioning whether the courts have changed the Transformative Use test set forth by the California Supreme Court and used to analyze a conflict between right of publicity and First Amendment protected speech.

The facts of Keller are straight forward. Electronic Arts produced an NCAA Football series of video games which allowed users to control avatars representing college football players and participate in simulated football games. In NCAA Football, EA replicated each school’s entire team as accurately as possible and every football player avatar had a jersey number and virtually identical height, weight, build, skin tone, hair color and home state as each real life player. EA’s player avatars reflect all of the real life attributes of the NCAA players; the only exception is that EA omitted the real life player’s name from the corresponding avatar and assigned the avatar a hometown that is different from the real player’s hometown.

Keller was the starting quarterback for Arizona State University in 2005. The 2005 edition of EA’s NCAA Football video game featured an avatar that was the starting quarterback for Arizona State University, wore the number 9, as did Keller and had the same physical characteristics, facial features, play style, and home state as Keller.

Objecting to EA’s use of his likeness in the video game, Keller filed a class action complaint alleging that EA violated his right of publicity under California Civil Code section 3344. EA moved to strike the complaint as a strategic lawsuit against public participation (“SLAPP”) under California’a anti-SLAPP statute. The case came to the 9th Circuit from the District Court’s denial of EA’s motion.

Having found that EA made a prima facie showing that Keller’s suit arises from EA’s production and distribution of video games — activities that are Constitutionally protected as free speech — the court spent most of its time evaluating whether Keller had established a reasonable probability that he would prevail on his claim. Since EA did not contest that Keller stated a right of publicity claim, the court’s focus was on the affirmative defenses advanced by EA and EA’s claim that in light thereof, it is not reasonably probable that Keller would prevail on his right of publicity claim.

In California, the test used to evaluate an affirmative defense to a right of publicity claim is to evaluate the “transformative use” of the new work. This test was formulated by the California Supreme Court in Comedy III Productions, Inc. v. Gary Saderup, Inc. Comedy III involved a charcoal sketch-work by artist Gary Saderup of The Three Stooges reproduced on lithographs and T-shirts . This test is a balancing of the defendant’s First Amendment rights and the plaintiff’s right of publicity. The Supreme Court explained that where a work contains significant transformative elements, it is not only especially worthy of First Amendment protection, but it is also less likely to interfere with the economic interest protected by the right of publicity. In upholding the plaintiff’s right of publicity claim, the California Supreme Court found that the work in question contained “no significant transformative or creative contribution” and that the artist’s “skill is manifestly subordinated to the overall goal of creating literal, convenient depictions of The Three Stooges so as to exploit their fame.”

In analyzing Comedy III, the 9th Circuit explained that it provides “at least five factors to consider in determining whether a work is significantly transformative to obtain First Amendment protection.” These factors are as follows:

(i) is the celebrity likeness one of the “raw materials” from which an original work is synthesized, or is the depiction of the celebrity the very sum and substance of the work;
(ii) is the work primarily the defendant’s own expression or merely an expression of the likeness of the celebrity. This factor is determined by looking at whether a purchaser of the work is motivated to buy a reproduction of the celebrity or buy the expressive work of the defendant;
(iii) which elements predominate in the work? The literal and imitative reflection of the celebrity or the defendant’s creative elements;
(iv) in close cases, is the economic value of the work derived primarily from the fame of the celebrity depicted; and
(v) is the defendant’s skill and talent “manifestly subordinated” to the overall goal of creating a conventional portrait of a celebrity so as to commercially exploit his or her fame.

After setting forth the five factors, the court then reviewed the major right of publicity cases following Comedy III and applying the Transformative Use test. In Winter v. DC Comics, villainous half-worm, half-human offspring named Johnny and Edgar Autumn were found not to violate the rights of rockers Johnny and Edgar Winters. Not only did the court find that the comic books contained significant expressive content other than plaintiffs’ mere likeness, but also that the brothers are “cartoon characters…in a larger story, which itself is quite expressive.”

The court also discussed the 6th Circuit case of ETW Corporation v. Jireh Publishing, Inc. which involved a painting entitled “The Masters of Augusta” which commemorates Tiger Woods’ victory at the Masters Tournament in Augusta, Georgia in 1997. Woods became the youngest player ever to win the Masters in that tournament. In assessing Woods’ right of publicity claim, the 6th Circuit applied the Transformative Use test and found the artwork contains significant transformative elements. The 6th Circuit specifically noted that the work consists of a collage of images in addition to Woods’ image, and that they are all combined to describe, in artistic form, a historic event in sports and convey a message about the significance of Woods’ achievement in that event.

Next the 9th Circuit analyzed the California Court of Appeals’ application of the Transformative Use test in Kirby v. Sega of America, Inc. In that case, the work in question was a video game that featured “Ulala,” a reporter from outer space allegedly based on a well known singer whose “signature” lyrical expression is “ooh la la.” The court noted the video game character’s physical characteristics, costume, dance mores and role as a space age reporter, and found the video game character to be more than a mere literal depiction of the singer. The court noted that Ulala is a “fanciful, creative character who exists in the context of a unique and expressive video game.”

And finally, the 9th Circuit reviewed No Doubt v. Activision Publishing, Inc. in which the California Court of Appeal addressed Activision’s “Band Hero” video game. In Band Hero, users can choose from a number of avatars, some of which represent actual rock stars, including the members of No Doubt, and are able to simulate performing in a rock band. Activision had licensed No Doubt’s likeness, but allegedly exceeded the scope of the license. The court held that No Doubt’s right of publicity claim prevailed over Activision’s First Amendment defense; the court concluded that the video game was not “transformative” under the holding of Comedy III. Specifically, the court reasoned that the video game characters were “literal recreations of the band members” doing “the same activity by which the band members achieved and maintain fame.” The fact that the avatars “appear in the context of a video game that contains many other creative elements…does not transform the avatars into anything other than exact depictions of No Doubt’s members doing exactly what they do as celebrities.”

After review of these cases, the 9th Circuit found that EA was not entitled to judgment as a matter of law on the Transformative Use test. The court stated that “No Doubt offers a persuasive precedent that cannot be materially distinguished” from the case at hand.

In almost the exact same case in the 3rd Circuit, Hart v. Electronic Arts, Judge Ambro dissented and disregarded No Doubt and Kerby on the grounds that they were not decided by the Supreme Court; the court that established the Transformative Use test. In his dissent, Judge Ambro stated his belief that Kirby and No Doubt were wrongly decided. The Ninth Circuit acknowledged Judge Ambro’s position, but stated its belief that No Doubt is consistent with the California Supreme Court’s relevant decisions and will not disregard a well reasoned decision from a state’s appellate court.

The question I posed to my students was whether the California Court of Appeals had properly applied the holdings of Comedy III and Winters in deciding Kerby and No Doubt. In Winters, the court clearly considered the comic book in its entirety when determining whether the work met the Transformative Use test. Why did the Appeals Court specifically state that it did not matter that the No Doubt avatars appear in the context of a video game containing other creative elements. I asked my students whether it is fair to say that the California Court of Appeals added two additional factors to the Transformative Use test – (i) without regard to the context in with the celebrities’ likeness appears, is that likeness a literal recreation of the celebrity; and (ii) is the celebrity featured performing the same activity by which he/she achieved and maintains fame. If this is now the test for determining transformative use, the 6th Circuit Tiger Woods case – which I believe was correctly decided – may very well have been decided differently.

By James Kachmar

A recent decision in the case Jobscience, Inc. v. CVPartners, Inc. (N.D. Cal. Jan. 9, 2014) shows the interplay between the various theories of intellectual property claims. There, the plaintiff asserted claims for both copyright infringement and trade secret misappropriation arising out of the alleged theft of its software code. The court was required to deal with the issue of whether plaintiff’s trade secret claim was preempted by its claim for copyright infringement.

Jobscience develops and licenses recruiting software applications, including its JS 2 Jobscience Recruiting Package. In 2010, Jobscience entered into a master agreement with defendant CVPartners that contained an End User License and Agreement, which provided the defendant with a license to use plaintiff’s job recruiting software application. The license was renewed in 2011.

In November 2011, defendant Brandon Metcalf, who was formerly the Senior Director of Technology at CVPartners, was alleged to have assisted with the formation of defendant Skipan SAAS LLC and within months, defendants were alleged to have recreated and began marketing a software application that was similar to that of Jobscience. In August, 2012, defendant CVPartners notified Jobscience that it was terminating the license agreement and plaintiff alleged that shortly thereafter it discovered a “replica of the Jobscience job board” on defendant’s website. Plaintiff claimed that the job board was one of the “functional elements” of its own software and that defendant’s job board “was so similar to Jobscience that Jobscience’s own employees were fooled to believe that the Jobscience job board was still up on the CVPartners website.” Plaintiff sued the defendants for numerous claims, including copyright infringement and trade secret misappropriation. The defendants moved to dismiss all of plaintiff’s claims.

The Court began by examining plaintiff’s copyright infringement claim. The defendants argued that plaintiff’s complaint failed to state a claim. The Court recognized that a plaintiff must plead the following to state a copyright infringement claim: “(1) ownership of a valid copyright; and (2) copying of protected expression by the alleged infringers.” The Court noted that a plaintiff could establish the second element “by showing that the works in question are substantially similar in their protected elements and that the alleged infringers had access to the copyrighted works.” Defendants did not dispute that plaintiff had a valid copyright in its Jobscience software application. The defendants argued that the complaint failed to plead the second element, specifically there were no allegations as to what any defendant allegedly did to infringe on plaintiff’s copyright, that defendants had access to the works entitled to copyright protection or that there was virtual identity of works entitled to copyright protection. They also argued that because plaintiff had alleged that the job board “was one of the functional elements of plaintiff’s software solution,” it was not entitled to protection as a functional element under the Copyright Act.

The Court rejected these arguments and found that there were sufficient allegations in the complaint that defendants had developed an application called Talent Rover which was alleged to have infringed on plaintiff’s Jobscience software program. The Court also noted that plaintiff had alleged that one of the defendants’ websites allegedly contained a “replica” of plaintiff’s job board and that this was sufficient to allege the “virtual identity of works entitled to copyright protection.” Thus, the Court denied the motion to dismiss plaintiff’s copyright infringement claim.

However, given the survival of the copyright infringement claim, the Court then turned to the issue of plaintiff’s trade secret misappropriation claim and whether it was preempted by plaintiff’s copyright infringement claim. The Court noted that section 301(a) of the Copyright Act provided the “exclusive rights” within the general scope of copyright law and that “no person is entitled to any such right or equivalent right in any such work under the common law or statutes of any state.” The Court noted that copyright “preemption” applies if the content of the protected right falls within the subject matter of the Copyright Act and the rights asserted under state law are equivalent to those protected by the Copyright Act.

The Court then considered the nature of plaintiff’s trade secret misappropriation claim to see whether it was “based on the same nucleus of facts as the copyright infringement claim.” Plaintiff had alleged that defendant Metcalf “gained access to plaintiff’s trade secrets consisting of software code and other proprietary information” and that plaintiff had made substantial investments of time and money “in developing its proprietary software application software code methods and other trade secrets.”

The Court noted the definition of a trade secret under California’s Uniform Trade Secret Act, which requires the following to state a claim: (1) the existence of a trade secret; and (2) misappropriation of the trade secret. The Court observed that plaintiff’s complaint did not plead the separate existence of a trade secret but instead simply referred to “proprietary software applications” that it noted were the basis of plaintiff’s copyright infringement claim. The Court further found it significant that plaintiff could not show that it had taken reasonable steps to maintain the secrecy of its alleged trade secret “because it received copyrights for its software applications.”

Given that plaintiff’s claim for trade secret misappropriation was based on the “same nucleus of facts” as its copyright infringement claim, the Court found that plaintiff’s trade secret misappropriation claim was preempted by the Copyright Act. It therefore granted defendants’ motion to dismiss this trade secret claim.

The Jobscience decision demonstrates that while a plaintiff may plead multiple claims of liability in an intellectual property case, a defendant has several important defenses at its disposal such as preemption. A defendant in such a case should carefully examine the interplay between the various claims to determine whether certain of the claims can be dismissed under preemption doctrine.