Resources

On July 31, 2012, the Ninth Circuit issued its ruling protecting the right of privacy held by collegiate athletes against the use of their likeness in connection with video games. (Keller v. Electronic Arts, Inc. (2013) 9th Circuit Court of Appeals 10-15387. This decision joins the Third Circuit’s decision in Ryan Hart v. Electronic Arts, Inc., U.S. App. LEXIS 10171 (3d Cir. 2013), finding that the collegiate athletes’ right to publicity outweighs Electronic Arts’ First Amendment rights.

Sam Keller was a starting quarterback for Arizona State in 2005, before joining Nebraska in 2007. Electronic Arts (“EA”) is the producer of a series of video games known as NCAA Football, in which EA seeks to replicate a school’s entire team as closely as possible. NCAA Football is an interactive game that allows the video gamer a wide range of playing options including modification of a player’s size and abilities as well as for which team he plays. Keller sued EA and the NCAA in a putative class action. EA filed a SLAPP motion (“Strategic Lawsuit Against Public Participation”), claiming that this conduct was protected by the First Amendment. The District Court denied the SLAPP motion, and EA appealed.

The Ninth Circuit recognized that video games, like books, plays, and movies, are entitled to the full protections of the First Amendment. (Brown v. Entm’t Merchs. Ass’n, 131 S.Ct. 2729, 2733 (2011). However, the First Amendment rights are not absolute, and states may recognize the right of publicity to a degree consistent with the First Amendment. (Zacchini v. Scripps-Howard Broad Co., 433 U.S. 562, 574-75 (1977).)

California’s right of publicity is codified in Civil Code section 3344 as well as common law. Civil Code section 3344 prevents the use of another’s likeness “in any manner on or in products, merchandise, or goods, or for purposes of advertising or selling . . . without the person’s prior consent.” EA raised four First Amendment privileges as defenses. The first, and most viable, potential defense is the “transformative use defense” as formulated by the California Supreme Court in Comedy III Productions, Inc. v. Gary Sandrup, Inc., 25 Cal.4th 387 (2001). The transformative use defense is “a balancing test between the First Amendment and the right of publicity based on whether the work in question adds significant creative elements so as to be transformed into something more than a mere celebrity likeness or imitation.” (Id.) The protected economic interest in a celebrity’s right of publicity diminishes when the work contains substantial transformative elements.

The court in Comedy III set forth five factors to consider in determining whether a work is sufficiently transformative. First, if the celebrity likeness is just one of many elements from which the work is developed as compared to whether the likeness is the “very sum and substance of the work in question.” Second, the work is protected if it is primarily the defendant’s own expression so long as that expression is something other than the likeness of the celebrity. This element has been described to examine whether the consumer is purchasing the work primarily because it is a replicate of the likeness of the celebrity or is purchasing the work because of the creative elements added by the defendant. Third, each of the five factors is to be applied more quantitatively than qualitatively in order to avoid debates over artistic expression. In other words, do the creative elements predominate over the likeness of the celebrity? Fourth, the court is to consider whether the economic value of the work is primarily due to the likeness or fame of the celebrity. Lastly, there is no transformative work if the overall goal is to create a traditional likeness or portrait of the celebrity so as to exploit his or her fame.

In addition to Comedy III, the Ninth Circuit examined three other California decisions applying the transformative use defense: Winter v. DC Comics, 30 Cal.4th 881 (2003); Kirby v. Sega of America, Inc., 144 Cal.App.4th 47 (2d Dist. 2006); and No Doubt v. Activision Publishing, Inc., 192 Cal.App.4th 1018 (2d Dist. 2011). Applying the five factors, the Ninth Circuit found that EA’s depiction of Sam Keller was not protected by the transformative use defense. Although all players, including Mr. Keller, could be modified by the video gamer, such control did not outweigh Mr. Keller’s right of publicity. The Court found that, just as in the No Doubt v. Activision Publishing, Inc., the characters in the EA NCAA Football video series were literal recreations of the collegiate players engaging in the same activities, and in the same settings, in which they gained their fame. The transformative elements of the overall video game that allowed the video gamer to manipulate certain elements of the characters, settings, and plays did not overcome the literal recreation of the collegiate players.

Judge Sidney R. Thomas issued a dissent, finding that a “holistic” examination of the video game established that the “transformative and creative elements” of the work “predominate over commercially based literal or imitative depictions.” Judge Thomas criticized the majority decision, focusing on a single athlete’s likeness rather than examining the video game as a whole.

The majority, and dissenting Judge Thomas, gave little weight to the other three First Amendment defenses argued by EA.

The Ninth Circuit was now joined by the Third Circuit in finding that the transformative use defense did not protect EA against claims for violation of the collegiate players’ right of publicity. The Third Circuit denied EA’s petition for a hearing en banc. One can only assume EA will make the same request for the Ninth Circuit. Unless overturned by the United States Supreme Court, these two decisions affirm substantial rights for collegiate athletes to protect the use of their likeness for commercial purposes without their consent. The economic consequence to EA and the NCAA will undoubtedly be substantial.

In April, we published an article about Fox Broadcasting Co. v. Dish Networks, LLC, where Fox Broadcasting was requesting a preliminary injunction against Dish Network, claiming that were engaged in copyright infringement by offering their Auto Hop on Dish Networks’ DVRs. As of that date, a judge declined to issue a preliminary injunction and Fox had appealed to the Ninth Circuit Court of Appeals. On July, 24, 2013, the Ninth Circuit rejected Fox’s appeal, and affirmed the district court’s refusal to enjoin Dish Network’s features. It affirmed the lower court’s reasoning that the consumer is the party causing a copy to be made, and not Dish Network. So if you subscribe to Dish Network and have the Auto Hop and “PrimeTime Anytime” features, no need to panic and switch cable/satellite providers, you can still watch your favorite television shows, commercial-free, without even touching the fast-forward button.

The Ninth Circuit confirmed that DVR recording is protected fair use, and since Fox did not have any copyright interest in the advertisements (the only content that was being skipped), it could not show that it was irreparably harmed by the features. However, it may be a bit premature for Dish Network to break out the champagne, despite Dish’s executive vice-president’s statement that, “This decision is a victory for American consumers.” That is because this decision was made using the very high legal standard required to justify a preliminary injunction, and the deferential standard of review applied to denials of preliminary injunctions.

A preliminary injunction is a remedy that requires a defendant to take, or refrain from taking, a specific action, prior to a trial on the merits, but based on an underlying lawsuit. It is often referred to as an “extraordinary remedy” because you are essentially granting relief to a party pre-litigation, without giving the enjoined party the chance to conduct discovery, put forth their side of the case, etc . . As a result, a party seeking a preliminary injunction has a pretty high bar to meet.

Before an injunction can be granted, a plaintiff must prove a few things, including (1) there is no adequate remedy at law (meaning that money compensation is not sufficient), (2) there is a serious risk of immediate irreparable harm absent injunctive relief, (3) a likelihood that he or she will prevail on the merits of the underlying controversy, and (4) the plaintiff is more likely to be harmed if an injunction is not issued, than defendant would be if the injunction is granted (the so-called “balance of hardships”). The plaintiff essentially has to try a mini-version of the case in front of the judge and courts often apply all these factors on a “sliding scale.” In other words, if the plaintiff can prove that the likelihood of success is very high, their showing of irreparable harm does not need to be as strong. Likewise, if the injunction’s burden on the defendant is low, but the plaintiff would be greatly harmed without the injunction, the plaintiff would only need to show a fair ground for litigation.

It is not easy to get an injunction and logically this makes sense because sometimes an injunction gives the plaintiffs the exact remedy they wanted (if they’re not interested in money). Accordingly, the law sets a high bar for granting “extraordinary” equitable remedy and typically a bond is required so that if the injunction is wrongfully granted, the defendant has some kind of redress.

Given the above factors, it’s not surprising that the judge denied Fox’s appeal for a preliminary injunction. The questions of law are by no means a “slam dunk” for Fox, complicated copyright questions rarely are, especially when they involve a new technology like this one. In addition, the harm to Dish Network and its subscribers would be great as the injunction could force Dish Network to disable the AutoHop and “PrimeTime Anytime” features and affect millions of its customers and lose millions of dollars. So for now, Dish Network and its subscribers can continue “hopping” their way through prime time.