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By Anthony Daye

Recently, my Alma Mater, The University of Southern California, was sued by a former member of the Trojan football team. Former cornerback Brian Baucham filed a lawsuit against USC and former coach Lane Kiffin, alleging he suffered permanent injuries after being forced to play in a game while he was ill. Baucham’s lawsuit claimed that he was “forced by Coach Kiffin to play a home game even though Mr. Baucham was very ill and diagnosed by the USC Health Clinic with an influenza-like illness, viral pharyngitis and dehydration.” After playing in a game against Berkeley, “Baucham suffered from cardiopulmonary damage, as well as brain injury with neurocognitive deficits,” according to the lawsuit. Baucham alleges that USC and Kiffin violated both the NCAA and USC injury protocol programs when they forced him to play.

This got me to thinking: Now that the National Labor Relations Board has found that scholarship football players are employees under the NLRA, what if Mr. Baucham filed suit against USC as an employee?

What causes of action could an employee have against an employer that forces them to work when they are injured or seriously ill?

Failure to Reasonably Accommodate a Disability: The Americans with Disabilities Act (ADA) and the California Fair Employment and Housing Act require that most employers provide qualified individuals with disabilities with reasonable accommodations. Whether or not the employee has a qualifying disability should always be carefully analyzed. For example, an employee’s bad back or sprained knee can be a disability; telling them to “tough it out” is not a reasonable accommodation. Keep in mind that time off of work may be considered a “reasonable accommodation” depending on the circumstances.

Workers’ Compensation – Aggravation of Pre-Existing Injuries: Even if an employee has a pre-existing injury that is bothering him/her at work (i.e. a skiing injury), forcing an employee to “fight through the pain” may cause the employee to aggravate the pre-existing injury. This essentially means that the employee’s injury is now worse than it was before, which will likely lead to a workers’ compensation claim. This is similar to what Baucham alleges in his law suit against USC.

FMLA Violation: The Family and Medical Leave Act (FMLA) provides for job protected leave and benefits coverage entitlements to employees who meet FMLA eligibility requirements. FMLA regulations define a “serious health condition” as an illness, injury, impairment, or physical or mental condition that requires the employee to be away from work. For example, if an employee comes to his/her employer with a doctor’s note for a Crossfit injury and needs a week off during the busiest time of the year, the employer has to allow the leave if the employee has:

(a) worked for the employer for at least 12 months;

(b) has worked at least 1,250 hours during the 12 months prior to the start of the FMLA leave; and

(c) works at a location where at least 50 employees are employed at the location or within 75 miles of the location.

Because this employee is an avid Crossfitter, he/she repeatedly shows up injured to work needing days off at a time. This means the employer must repeatedly allow the employee to take time off for qualifying injuries, up to 12 weeks per year.

In addition to the traditional employment claims, there is nothing to stop and employee from tacking on non-traditional claims such as negligence, intentional infliction of emotional distress, and negligent infliction of emotional distress to name a few. Moreover, both injured employees and their coworkers may have claims against employers based on general negligence (similar to negligent hiring) and OSHA regulations.

Suffice it to say, employers should think twice before requiring injured employees to “take one for the team” and work through pain as a condition of continued employment.

A few years ago, I wrote a column addressing a case in which Pom Wonderful LLC sued Coca Cola Company in connection with the marketing of one of its pomegranate-blueberry juice products. That case dealt with whether one of Pom Wonderful’s claims were barred by the Federal Drug and Cosmetic Act with regard to labeling issues.

Ever protective of its brand, Pom Wonderful was recently successful before the Ninth Circuit in a trademark infringement case. Pom Wonderful sued a competing pomegranate beverage maker doing business under the name Pur Beverages for trademark infringement. After the district court denied Pom Wonderful’s motion for preliminary injunction barring the defendant from selling its competing beverage, Pom Wonderful appealed to the Ninth Circuit.

Pom Wonderful owns numerous trademark registrations that make up its “Pom” brand family. Pom Wonderful spends significant sums in marketing its products and policing against other companies’ uses that may infringe on its trademarks. In connection with these efforts, Pom Wonderful discovered that Pur was selling a pomegranate flavored energy drink that it called “Pŏm”. When Pur refused to change its marking, Pom Wonderful sued it for trademark infringement and moved for an injunction.

The Ninth Circuit concluded that the district court erred in denying Pom Wonderful’s motion for preliminary injunction. While a preliminary injunction is “an extraordinary and drastic remedy,” an injunction should issue where the moving party, such as Pom Wonderful, can establish that “(1) it is likely to succeed on the merits; (2) it is likely to suffer irreparable harm in the absence of preliminary relief; (3) the balance of equities tips in its favor; and (4) an injunction is in the public interest.” The primary issue facing the Ninth Circuit was whether the lower court had erred in determining that Pom Wonderful had not demonstrated the likelihood of success on the merits.

The Court began by recognizing that Pom Wonderful, to prevail on a claim of trademark infringement, would have to show that: “(1) it has a protected ownership interest in the `Pom’ mark; and (2) Pur’s use of the word ‘Pŏm’ is likely to cause consumer confusion thereby infringing upon Pom Wonderful’s rights.” The Court did not have to spend much time on the first factor because Pom Wonderful’s registration of its trademarks was “prima facie evidence of the validity of the mark”. This registration provided Pom Wonderful the “exclusive right to use the ‘Pom’ mark [and] covers all design variations of the word because ‘Pom’ was registered as a standard character mark,” i.e., a mark that makes no claim to any particular font, style, color or display size.

Turning to the issue of likelihood of consumer confusion, the Ninth Circuit stated that it had to use the factors from AMF, Inc. v. Sleekcraft Boats, 5999 F.2d 341 9th Cir. 1979) (“the Sleekcraft Factors”) in assessing the likelihood of consumer confusion. These factors are as follows: “(1) strength of the protected mark; (2) proximity and relatedness of the goods; (3) type of goods and the degree of consumer care; (4) similarity of the protected mark and the allegedly infringing mark; (5) marketing channel convergence; (6) evidence of actual consumer confusion; (7) defendant’s intent in selecting the allegedly infringing mark; and (8) likelihood of product expansion.” The Ninth Circuit turned to each of these factors in turn to determine that the lower court had erred.

Strength of the Protected Mark: The Ninth Circuit found that the lower court had correctly found that this factor favored Pom Wonderful. Although the mark “Pom” does not necessarily mean pomegranate by resorting to conventional dictionaries, it requires customers to use some additional imagination and perception to attribute the mark to Pom Wonderful’s goods. Given its substantial investment in its sales and marketing efforts, the Court held that “Pom Wonderful enjoys sufficient marketplace recognition to render its `Pom’ mark commercially strong.”

Relatedness of Goods: The Ninth Circuit found that the lower court had also correctly found that this second factor favored Pom Wonderful and that Pom Wonderful’s juice beverages were related to Pur’s “Pŏm” energy drink. This factor addresses “related goods … are those `which would be reasonably thought by the buying public to come from the same source if sold under the same mark’.” The Court concluded that a fruit juice beverage and a fruit flavored energy drink are sufficiently complimentary that a reasonable consumer would connect them.

Degree of Consumer Care: This was another factor that the Ninth Circuit concluded had been properly found by the lower court to be in Pom Wonderful’s favor. Given the nature of the beverage market whereby customers typically by single unit beverages at low cost, a “consumer [would] exercise a low degree of care and sophistication” in making such purchases

Similarity of Marks: Here, the Ninth Circuit found that the lower court erred in concluding that there was not a similarity of marks. The Ninth Circuit compared the product labeling and noted that they had “many obvious visual similarities,” including each containing three letters with a stylized second letter. The Ninth Circuit further went beyond the mere look of the labeling and found that because the marks were pronounced in precisely the same manner, “the marks are aurally identical.” Finally, the Ninth Circuit concluded that the two marks had the same meaning in that they both referred to pomegranate flavoring and/or ingredients. Given the visual, aural and semantic similarities, and having to weigh similarities more heavily than dissimilarities between the marks, the Ninth Circuit concluded that the lower court erred in not finding the marks to be similar for purposes of the injunction motion.

Marketing Channel Convergence: The Ninth Circuit concluded that the lower court again erred in concluding that this factor did not favor Pom Wonderful. This factor concerns “whether the parties’ customer basis overlap” and “how the parties advertise and market their products.” The Ninth Circuit concluded that Pom Wonderful would likely be able to establish that “both companies use parallel market channels” and that they both sell their products through supermarkets throughout the country, with at least one overlapping state and one overlapping supermarket chain. The Ninth Circuit also concluded that both products were similar in that they were “inexpensive and marketed to health conscience consumers.” Therefore, the Ninth Circuit held that this factor should have been weighed in Pom Wonderful’s favor.

Turning to the three remaining factors: actual confusion, defendant’s intent and product expansion, the Court held that the record before the lower court indicated that these factors did not favor one side or the other. Thus, in looking at the totality of the circumstances, the Ninth Circuit found that five of the Sleekcraft factors favored Pom Wonderful and the other three were neutral. Thus, the Ninth Circuit held that the lower court erred in not finding that Pom Wonderful had established the likelihood of success on the merits to warrant injunctive relief. The Ninth Circuit remanded the case back to the lower court to consider whether Pom Wonderful had established the other factors necessary for injunctive relief in light of its ruling.

The Federal Circuit Court of Appeals has applied the Supreme Court’s test for unpatentable abstract ideas to patents covering methods to determine a person’s likelihood of getting certain types of cancer.

In University of Utah Research Foundation v. Ambry Genetics Corp., 2014 U.S. App. LEXIS 23692, decided by the Federal Circuit on December 17, 2014, the court addressed the patentability of two types of claims:  compositions and methods.  The composition claims were directed to single strands of DNA called “primers” that correspond to the double-stranded DNA of a gene.  The method claims were directed to diagnostic methods used to determine whether a patient carries a particular gene mutation that carries an increased risk of breast and ovarian cancer.

The plaintiffs were Myriad Genetics, University of Utah, and others.  They discovered the BRCA1 and BRCA2 genes that, when mutated, cause breast and ovarian cancer.  Myriad developed diagnostic test kits to detect the presence of the mutations.  Myriad patented the natural gene sequences, synthetic primers, and medical test kits.

In 2013, the U.S. Supreme Court held that Myriad’s claims to the natural gene sequences were invalid.  Association for Molecular Pathology v. Myriad, 133 S. Ct. 2107 (2013).  The Court found that the gene sequences were not patent-eligible subject matter, but were instead ineligible natural phenomena.

After the Supreme Court’s decision,  Ambry Genetics began selling its test kits for the BRCA1 and BRCA2 genes.  Myriad sued Ambry Genetics for infringement of the claims to the primers and the diagnostic methods.  The district court for the District of Utah denied Myriad’s motion for preliminary injunction, holding that the claims covered patent-ineligible subject matter.  The district court found that the primers and the methods were products of nature, essentially the same as the natural DNA of the gene, and therefore patent-ineligible.

The Federal Circuit affirmed.  The court held that the primer claims were patent-ineligible as products of nature, even though they were synthetic, as they were identical in structure to the natural DNA.  As to the method claims, the court explained that it did not need to decide if the method claims were patent-ineligible as laws of nature, but instead applied the Supreme Court’s test for claims that are directed to abstract ideas.  That test was set forth in a business method case, Alice Corp. v. CLS Bank, International, 134 S. Ct. 2347 (2014).  Under the Alice Corp. test, a court must first determine whether the claim covers a patent-ineligible idea.  If so, the court must then determine whether the remaining claim elements transform the claim into patent-eligible subject matter (i.e., whether there is a further “inventive concept” that makes the claim patent-eligible).

The court applied the two-part Alice Corp. test to Myriad’s method claims.  According to the court, the first part of the test was met because the step of comparing the gene sequences of the patient’s DNA to the normal DNA of the BRCA genes was an abstract idea.  The second part of the test was met because the remaining steps of the claims did not add an “inventive concept” to transform the claim into patent-eligible subject matter.  The court found that these steps were “routine and conventional activity.”  Because both parts of the test were met, the court held that the method claims were patent-ineligible.

This decision was in the best interest of patients.  Myriad’s claims to the diagnostic methods are invalid.  This means that Ambry Genetics and other competitors will be able to offer their own diagnostic test kits to patients, and the price of the kits will drop.  More patients will be tested, and that’s a good thing.

Just over a month ago I wrote about the Davis v. Electronic Arts matter that was pending before the Ninth Circuit Court of Appeal.  Specifically, I opined that the matter was ripe for Supreme Court review in light of the circuit split that is developing with respect to the misappropriation of likeness in video games.  In my last blog, I explained that a number of legal scholars, and myself, believed that Electronic Arts had absolutely no chance of prevailing in Davis in light of an identical case that Electronic Arts lost at the trial level and on appeal (Keller v. Electronic Arts) wherein NCAA college football players brought a similar claim for the use of their likeness in the Electronic Arts video game franchise NCAA Football.  The matter was submitted to the Ninth Circuit on September 11, 2014, and the Ninth Circuit issued its opinion on January 6, 2015.

In the Davis v. Electronic Arts opinion (Case No. 12-15737), the Ninth Circuit rejected the legal razzle dazzle (pardon the football expression) raised by Electronic Arts and upheld the denial of Electronic Arts’ motion to strike the case as a strategic lawsuit against public participation (SLAPP).  Specifically, the Ninth Circuit rejected the argument that the use of the former players’ likeness was protected under the First Amendment as “incidental use.”  The Court disagreed with Electronic Arts’ characterization of the role of the former players’ likeness in the video game because it was central to Electronic Arts’ main commercial purpose: to create a realistic virtual simulation of football games involving current and former NFL teams.  Electronic Arts acknowledged that the likeness of the current NFL players carries substantial commercial value and failed to offer a meaningful distinction with respect to the former NFL players.  Instead, it argued that there are thousands of players in the video game and accordingly, any individual player’s likeness has only “de minimis commercial value.”  However, the Court refused to accept this highly technical argument and instead found “no basis for such a sweeping statement.”

The Court also rejected Electronic Arts’ transformative use defense, which is a defense used when the “work in question adds significant creative elements so as to be transformed into something more than a mere celebrity likeness or imitation.”  The Court stated that the case was analogous to Keller in that the game “replicates players’ physical characteristics and allows users to manipulate them in the performance of the same activity for which they are known in real life—playing football for an NFL team.”  “Neither the individual players’ likeness nor the graphics and other background content are transformed more in Madden NFL than they were in NCAA Football. “  In fact, Electronic Arts did not even attempt to distinguish the two games.  Accordingly, the Court found that Electronic Arts had not shown that the transformative use defense applies to the claims.

Thus, the Ninth Circuit ruled exactly how the majority of legal scholars believed it would and followed Keller.  As a result, the circuit split regarding the misappropriation of likeness in video games has been reemphasized and it is quite possible that Electronic Arts will petition the Supreme Court for review to resolve the split.  It remains to be seen whether the Supreme Court will review the case in light of the sparse number of cases it reviews every year.  But be sure to check back periodically because if the Supreme Court grants review, we will be here with the play-by-play.

By Labor & Employment

The U.S. Supreme Court has declined to review California high court’s landmark decision in Iskanian v. CLS Transportation Los Angeles, which held that arbitration agreements with mandatory class waivers are generally enforceable, but carved out an exception for the state’s Private Attorney General Act (“PAGA”) claims.

As discussed in our prior blog post, The New PAGA-Waiver Trap Door, while the California Supreme Court in Iskanian held that an employee cannot waive their right to a PAGA lawsuit, not all California federal courts agree. A number of federal trial judges in California have disagreed and ruled that PAGA waivers are enforceable in their courts. (See, e.g., Lucero v. Sears Holding Mgmt. Corp., 2014 U.S. Dist. LEXIS 168782 (S.D. Cal. Dec. 2, 2014); Mill v. Kmart Corp., 2014 U.S. Dist. LEXIS 165666 (N.D. Cal. Nov. 26, 2014); Ortiz v. Hobby Lobby Stores, Inc., 2014 U.S. Dist. LEXIS 140552 (E.D. Cal. Oct. 1, 2014); Chico v. Hilton Worldwide, Inc., 2014 U.S. Dist. LEXIS 147752 (C.D. Cal. Oct. 7, 2014); and Langston v. 20/20,Companies, Inc., 2014 WL 5335734 (C.D. Cal. Oct. 17, 2014).

CLS and other California employers were hoping the U.S. Supreme Court would resolve this growing conflict. Unfortunately, for now, the U.S. Supreme Court has decided they will not resolve this divide. Accordingly, a PAGA waiver in an arbitration agreement may or may not be enforceable, depending on whether the action is in state or federal court. Employers who wish to have arbitration agreements with PAGA waivers should consult legal counsel to determine if doing so is advisable.

This blog has previously reported on the anti-poaching cases involving various tech companies in Silicon Valley. The cases arise out of alleged agreements between various tech companies not to recruit each other’s employees. The U.S. Department of Justice brought antitrust actions as a result of these alleged agreements which resulted in the companies entering into settlements with the government. In addition to the government’s actions, a class action was filed on behalf of tech employees claiming these “anti-poaching” agreements harmed their earning ability and mobility.

Last year, various tech companies entered into a settlement of these claims for approximately $325 million. That settlement was rejected by U.S. District Court Judge Lucy H. Koh as not being “within the range of reasonableness.” Earlier this week, the parties to this class action announced that they had entered into a new settlement with Apple, Google, Intel and Adobe proposing to pay $415 million to settle the class action. The settlement will be submitted to Judge Koh for approval. If the settlement is not approved, the case is currently set to go to trial this spring.

More details concerning the proposed settlement can be found at the following New York Times Article, “Bigger Settlement Said to Be Reached in Silicon Valley Antitrust Case,” dated January 14, 2015.

Many employers have arbitration agreements wherein employees agree to waive the right to file a lawsuit against the employer under various laws, including the California’s Private Attorney General Act (“PAGA”).  Employers were disappointed when the California Supreme Court ruled last June that such waivers of PAGA lawsuits are invalid, at least in state court.  See Iskanian v. CLS Transportation Los Angeles, LLC, 59 Cal.4th 348 (2014).However, a number of federal trial judges in the Golden State subsequently disagreed and ruled that PAGA waivers are enforceable in their courts.  See, e.g., Ortiz v. Hobby Lobby Stores, Inc., E.D. Cal. Case No. 2:13-cv-01619 (Sept. 30, 2014).  Because a PAGA waiver still may be enforceable against an employee in federal court, many employers have either kept or inserted such waivers in their arbitration agreements.

This week it became apparent that including a PAGA waiver may destroy an employer’s ability to require arbitration in any type of lawsuit, be it under PAGA or some other theory (e.g., alleged discrimination, harassment, retaliation, or wage-and-hour or meal-and-rest-period violations).  Specifically, the California Court of Appeal ruled that a PAGA waiver will invalidate an entire arbitration agreement in state court if that agreement also includes a non-severability clause.  See Montano v. The Wet Seal Retail, Inc., Cal. Ct. App. Case No. B244107 (Jan. 7, 2015).

Non-severability clauses basically state that the entire agreement will be unenforceable if any provision of it is found to be invalid.  By contrast, severability clauses allow a court or an arbitrator to strike any invalid provision in the agreement while still enforcing the remainder of it.

The non-severability clause in the Montano case recited that the PAGA waiver was “a material or important term of this arbitration agreement.”   That clause also mandated that, if “the wavier is found to be unenforceable for any reason by a court or arbitrator, then this entire arbitration agreement is void and unenforceable by the parties.”

There are advantages and disadvantages to both having or refraining from arbitration agreements, as well as including or deleting severability clauses and non-severability clauses.  Employers should weigh those risks and benefits carefully before deciding which path to follow.  Employers who wish to enhance the likelihood of enforcing their arbitration agreements should review them in light of this new Montano decision and consult legal counsel to determine if amendments are advisable.

Just in time for the holidays, the National Labor Relations Board (“NLRB”) and the U.S. Department of Labor (“DOL”) have delivered additional workplace protections for workers and prospective unions this month.  Whether those government agencies are viewed as Santa or the Grinch coming down workplace chimneys depends upon one’s perspective.

Specifically, the NLRB gave a sugary treat to unions and employees who want union representation by ruling in early December that, under most circumstances, workers must be permitted to use their employers’ email systems for purposes of union-organizing activities.  Then, in mid-December, the NLRB stuffed the stockings of unions and employees who desire union representation by issuing a final rule shortening the time to hold an election to determine whether a majority of workers want to be unionized.

Many employers worry that this speedy-election change, which becomes effective on April 14, 2015, will diminish management’s ability to stage an anti-union campaign prior to voting.  As such, employers who are concerned about unionization likely will focus on year-round anti-union avoidance programs, instead of anti-union campaigns that commence only upon the filing of a representation petition.

Next, as though flying from one significant decision to another behind a team of reindeer, the NLRB issued complaints alleging that McDonald’s USA LLC, a franchisor, and a number of its franchisees committed labor law violations.  In particular, the NLRB accused these “joint employers” of violating the rights of employees who engaged in protected conduct to improve working conditions by participating in nationwide protests.  According to the franchisor, the NLRB’s complaints “improperly and dramatically strike at the heart of the franchise system,” and amount to overreaching by the agency.

Between those developments, the DOL issued final regulations barring discrimination against lesbian, gay, bisexual, and transgender employees and applicants by federal contractors and subcontractors.  Those regulations have been highly anticipated to implement a Presidential Executive Order issued in July prohibiting such discrimination.

While those regulations were long expected and welcomed by many, their issuance this month was greeted by some with some bah-humbug grumbles because the DOL delivered them without providing an opportunity for public comment.  In a related development, the U.S. Department of Justice released a memo on December 18 indicating that the U.S. government can now file claims against employers on behalf of workers who allege that they were discriminated against because of their transgender status.

The takeaway from these developments is that employers will face a sleigh-full of significant and unfamiliar challenges in the New Year.  To promote the chances for prosperity and happiness in 2015, employers should consider seeking advice from legal counsel to ensure that their policies and practices do not run afoul of these new legal guidelines.

The last time I checked (which was a couple of years ago), I found 979 U.S. patents in the U.S. Patent and Trademark Office’s database that had the word “Christmas” in the title.  Every year at this time, I look at a few of the most interesting ones.

My favorite one this year is U.S. patent no. 5,523,741 entitled “Santa Claus Detector.”  This patent covers a Christmas stocking that contains a light bulb or LED, a battery to power the light, and a hidden switch that turns on the light.  The switch is connected to a pull cord.  When the stocking is hung on the fireplace, the pull cord is positioned across the opening of the fireplace, forming a barrier across the fireplace opening.  After the child has gone to sleep on Christmas Eve, Santa Claus comes down the chimney with his bag of toys and triggers the cord, which turns on the light.  The next morning, the child will see the light on and know that Santa was there! (Or, as the patent describes, the parent can secretly pull the cord and turn on the light.)  The purpose of this invention, according to the inventors, is to reassure children that their good behavior was rewarded by Santa.

Another fun Christmas patent is the “Santa Claus Visit Kit,” U.S. patent no. 7,258,592.  This kit is used by parents to prove to a child that Santa Claus has visited.  The kit includes a stencil to leave boot prints on the floor, a letter from Santa, and a snack item for Santa.  The kit is intended to alleviate a child’s fear that Santa Claus might not leave presents.

There are several patents for fire extinguishers incorporated into Christmas decorations.  One patent covers a fire extinguisher hidden inside the trunk of a synthetic Christmas tree that is activated by a heat sensor.  Another patent is for a Christmas tree ornament that contains a fire-retardant powder.  The ornament pops open when the temperature reaches a certain point, releasing the fire retardant powder and, hopefully, putting out the fire.

My all-time favorite Christmas patent, however, is the “Apparatus to Prevent Pets Climbing a Christmas Tree.”  The need for this invention is not surprising to anyone who has kittens or cats.  As the patent explains, “as is generally well known in the prior art, pets, such as cats, like to climb up the branches of a Christmas tree.  [Duh!]  Oftentimes this will result in knocking some of the ornaments off such tree.  These ornaments may be broken…”  The invention is basically a giant circular screen that clips under the lowest branches of the tree, and is intended to frustrate the climbing felines.  If you have a cat, however, you know that this device will have precisely the opposite effect.  Any cat who sees this big screen will be curious and simply jump up onto it.  The screen will become a staging platform for your cat to explore the tree.  So, I don’t think it will work.  But, actually, who really wants to stop cats from climbing Christmas trees?  It’s way too much fun to watch them perched on the branches, swatting ornaments, and looking embarrassed when they land clumsily on the floor!

On September 11, 2014, the Ninth Circuit heard oral argument on the appeal in Davis v. Electronic Arts (Case No. 12-15737), a class action lawsuit brought by three former NFL Players against Electronic Arts (“EA”), the publisher of the renowned Madden NFL Games.  Michael Davis, Vince Ferragamo, and Billy Joe Dupree claimed that EA violated their right of publicity by using their likeness and the likeness of six thousand other similarly situated former NFL players without permission.  The Ninth Circuit has yet to issue its ruling on the appeal, but most legal scholars agree that EA has almost no chance of prevailing on the issue in light of the Ninth Circuit’s holding in Keller v. Electronic Arts (Case No. 10-15387) where the Ninth Circuit found that EA unlawfully utilized the images of collegiate athletes in its NCAA Football game series.

Interestingly, EA put forth the same argument in Davis as it did in Keller.  Specifically, EA argued that its portrayal of the class members is protected by the First Amendment under the doctrine of transformative use, which analyzes whether the challenged work or product contains significant transformative elements (or value that) does not derive primarily from the celebrity’s fame.

At the oral argument, counsel for EA cited to a footnote in the Keller decision wherein the court reserved the “question of whether the First Amendment furnishes a defense other than those the parties raise.”  EA argued that the footnote provided the court with the wiggle room it needed to come to a different conclusion than it did in Keller.  EA urged that the court prescribe a second standard for the use of likeness in books, films, and video games.  Specifically, EA argued that the extensive labor and detail involved in making a video game should almost guarantee that the product is entitled to First Amendment protection as an expressive work.  Judge Marsha S. Berzon was not very receptive to this argument and remarked that the creation of a video game sounded more like a compilation of data than an expressive work.  EA responded that a great deal of creative expression is embodied in that compilation.  Whether the Court accepts EA’s position remains to be seen.

EA raised a new argument that the depiction of the NFL class members should qualify as incidental use and be protected under the First Amendment.  Specifically, EA argued that the avatars that the class members complained of were merely a “few of the thousands of virtual athletes in its Madden NFL video game. “Where the use of plaintiff’s name or likeness is incidental in relation to the defendant’s work as a whole, the use is not actionable under the right of publicity.”  It remains uncertain whether this new argument will suffice to overcome the Court’s previous ruling regarding the right of publicity in the context of video games.  However, one thing is certain.  This issue is ripe for Supreme Court review.  There is confusion among the lower courts as to how they should reconcile the right of publicity with the First Amendment rights of video game creators.  Arguably, there is already a circuit split on this issue because the Eighth Circuit took a contrary position when it found in favor of a fantasy baseball provider back in 2007.

The circuit split is likely to grow as similar lawsuits continue to develop.  For example, Lindsey Lohan recently sued the publisher of Grand Theft Auto V on similar grounds in New York (Case No. 156443, NY Supreme Court).   Maybe one more circuit weighing in on the issue will give rise to the circuit split needed to get the Supreme Court’s attention.  Or, perhaps that won’t necessary and the Ninth Circuit’s ruling in Davis will be sufficient to get the Supreme Court to grant certiorari.

We will be certain to report back once the Ninth Circuit issues its ruling in Davis.