If It’s In the Game …

This past week, the Third Circuit Court of Appeals’ decision in the case Ryan Hart v. Electronic Arts, Inc., Index No. 11-3750, paved the way for a showdown that could fundamentally change the way the National Collegiate Athletic Association (NCAA) goes about its business. In the case, Hart alleged that Electronic Arts (EA) had violated his right of publicity under New Jersey law by including his “likeness” in its video games NCAA Football 2004, 2005, and 2006. EA had previously won a motion for summary judgment based as against the claims made in Hart’s complaint, with the district court finding that EA’s use of Hart’s “likeness” was protected by the First Amendment’s protection of expressive speech in video games.

But on May 21, the Third Circuit reversed the grant of summary judgment and remanded the case to district court for further proceedings. In its decision, the court stated while the First Amendment protection would remain for video games overall, when the First Amendment right of free expression afforded to video games conflicts with other protected rights, i.e. the appellant’s right of publicity, the exception is more limited. More interestingly, the court found no issue with applying the “transformative use test” in determining whether Hart’s publicity rights were violated. The test, which was developed in California under the common law and California statutory law, was applied in the New Jersey action — signaling that such a test could become the standard bright-line rule amongst all the circuits going forward. The “transformative use” test, derived from a 2001 California Supreme Court case, Comedy III Prods., Inc. v. Gary Saderup, Inc., 21 P.3d 797, 809 (Cal. 2001), asks “whether a product containing a celebrity’s likeness is so transformed that it has become primarily the defendant’s own expression rather than the celebrity’s likeness.” Based on this test, the Third Circuit found that EA’s use was not “transformative,” stating that “[a]ppellant’s unaltered likeness is central to the core of the game experience” and “the appeal of the game lies in users’ ability to play ‘as, or alongside’ their preferred players or team.”

The decision will almost certainly end up serving as a template for the plaintiff in a hearing on June 20th, in the case In re NCAA Student-Athlete Name & Likeness Licensing Litig., No. C 09-1967 CW, in federal court in the Central District of California. There, a Ninth Circuit District Court will decide whether a class should be certified allowing hundreds, if not thousands, of current and former athletes to join an antitrust lawsuit against the NCAA (and EA). Ed O’Bannon, the proposed class-action plaintiff in the California action, argues the NCAA is violating antitrust law in that is profiting off of the licensing of player “likenesses” to companies like EA, while simultaneously requiring its athletes to, in essence, “sign away” their names and images for use by the amateur organization in its endeavors. The NCAA, as a result he says, is reaping untold millions in rewards, and failing to compensate its members in violating their publicity rights. And, while Hart and O’Bannon seemingly hail from opposite ends of the sporting spectrum (Hart, who played collegiate athletics in the 2000s, was a 6’2” former quarterback for Rutgers University who threw for 376 yards and three touchdowns in the 2005 Insight.com Bowl, while O’Bannon, who played collegiate athletics in the 1990s, was a 6’8” do-it-all small forward for UCLA, who was named the Most Outstanding Player of the Final Four in 1995 where his Bruins won a national championship, and went on to play four seasons in the NBA), their respective “likenesses” arguments will almost certainly be the same.

With the Third Circuit’s decision looming over the proceedings, it will be tough for the EA (and the NCAA) to argue that this particular use of players’ “likenesses” is transformative, and not just the exact same violation of the players’ publicity rights as in Hart’s case. The likelihood of success on this front could lead directly to the certification of a class therein. It may eventually lead to a dismantling of the NCAA’s business model as we know it. And, of course, it inevitably leads us to one final question: “If it’s in the game, will it remain in the game?”

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