California Federal Court Finds that the First Amendment Does Not Preclude Sporting Event Participants from Asserting Right-of-Publicity Claims Against Broadcasters

On April 11, 2014, a California federal court issued a First Amendment ruling that has potentially significant implications for broadcasters in the sports-media industry.  Specifically, the Northern District of California’s Judge Claudia Wilken held that “the First Amendment does not guarantee media organizations an unlimited right to broadcast entire college football and basketball games” “without regard for the participating athletes’ rights of publicity.”  Order at 19, 16, In re NCAA Student-Athlete Name & Likeness Licensing Litigation (“In re NCAA”), Case No. 09-1967 (N.D. Cal. Apr. 11, 2014), ECF No. 1025.  

Led by former UCLA basketball player Ed O’Bannon, a group of class plaintiffs in In re NCAA (the “Antitrust Plaintiffs”) allege that defendant National Collegiate Athletic Association (“NCAA”) has violated federal antitrust laws by administering rules that prevent former and current Division I football and basketball players from licensing their names, images and likenesses for commercial purposes.  The court’s recent ruling came in response to NCAA’s cross-motion for summary judgment, which sought dismissal on First Amendment grounds of Antitrust Plaintiffs’ “live broadcast” theory of liability.  The court found that the First Amendment does not preclude any of Antitrust Plaintiffs’ claims as a matter of law and has scheduled trial to commence on June 9, 2014. 

Antitrust Plaintiffs allege that, absent the challenged NCAA restrictions, a market would exist for “group licenses” to use current student-athletes’ names, images and likenesses in live game broadcasts.

In their operative Third Amended Consolidated Class Action Complaint (“TCAC”), Antitrust Plaintiffs assert that NCAA’s prohibition on student-athlete compensation for the use of their names, images, and likenesses harms competition in two separate markets:

  1. the “college education” market (in which Division I universities compete to recruit football and basketball players); and
  2. the “group licensing” market (in which broadcasters and videogame makers would allegedly compete for group licenses to use the names, images and likenesses of Division I football and basketball players in live game broadcasts, archival footage, and videogames). 

The court has recognized, on multiple occasions, that Antitrust Plaintiffs’ theory of a “group licensing” market “rests on the assumption that student-athletes, absent the challenged restraint, would be able to assert cognizable right of publicity claims against broadcasters who depict them in live game broadcasts or archival game footage without a group license or consent.”  Id. at 15.  Thus, while Antitrust Plaintiffs do not assert right of publicity claims directly against the NCAA, current student-athletes’ legal ability to bring right of publicity claims arising from live broadcasts is essential to their antitrust claims related to the so-called “group licensing” market.

In terms of relief, the Antitrust Plaintiffs request an injunction that would bar the NCAA from enforcing any rules or policies that prohibit current and former student-athletes from seeking compensation for the commercial use of their names, images, or likenesses (including in connection with live broadcasts).

NCAA seeks dismissal of the TCAC on the basis that – even absent the challenged NCAA restraints – no market would exist for “group licenses” to use current student-athletes’ names, images and likenesses in live broadcasts, because event participants have no legally cognizable publicity rights associated with such broadcasts.

In September 2013, NCAA moved to dismiss the TCAC, arguing that Antitrust Plaintiffs’ claims concerning alleged restrictions on the ability of current student-athletes to enter into “group licenses” for use of their names, images and likenesses in live broadcasts of men’s basketball and football games fail as a matter of law.  See Motion to Dismiss at 2, In re NCAA, Case No. 09-1967 (N.D. Cal. Sep. 17, 2013), ECF No. 857.  According to NCAA, the Antitrust Plaintiffs possess no legally cognizable right to their names, images and likenesses in connection with live broadcasts, because the law does not recognize a right of publicity for persons appearing in such broadcasts.  See id.  NCAA relied on three legal principles to support this argument: 

  1. First Amendment preemption;
  2. Copyright Act preemption; and
  3. State statutory and common law exceptions to right of publicity causes of action.

The court denied NCAA’s motion to dismiss in October 2013.  Order, In re NCAA Case No. 09-1967 (N.D. Cal. Oct. 25, 2013), ECF No. 876.  It specifically rejected NCAA’s copyright preemption argument.  The court reasoned that the Copyright Act does not preempt Antitrust Plaintiffs’ claims because “the rights Plaintiffs seek to assert in the present case are fundamentally different from those protected by the Copyright Act” and because “Plaintiffs’ underlying claims…are based principally on an injury to competition, not simply misappropriation.”  Id. at 23. 

The court also rejected NCAA’s state law arguments.  It recognized that state right of publicity statutes, including California’s, carve out express exceptions for sports broadcasts.  See id. at 17; Cal. Civ. Code § 3344(d) (providing that individuals have no right of publicity “in connection with any news, public affairs, or sports broadcast or account.”)  But because Antitrust Plaintiffs “allege harm to a national market for the licensing rights to their names, images, and likenesses in game broadcasts,” the court reasoned that “[t]o disprove the existence of this market at the pleading stage, the NCAA would have to identify a law or set of laws that precludes student-athletes from asserting publicity rights to game broadcasts in every state.”  Id. at 17-18 (emphasis in original).  On this basis, the court concluded that state-specific exceptions to right of publicity causes of action do not warrant dismissal of Antitrust Plaintiffs’ “live broadcast” claims brought under the Sherman Act. 

Judge Wilken also refused to dismiss the TCAC on First Amendment grounds.  She acknowledged that the U.S. Supreme Court and the federal circuit courts have never “squarely addressed whether the First Amendment bars athletes from asserting a right of publicity in the use of their names, images, or likenesses during sports broadcasts.”  Id. at 18.  But after analyzing the framework adopted in other right of publicity cases, Judge Wilken recognized that “the central question in determining whether the First Amendment bars an athlete’s right-of-publicity claim is whether the defendant’s use of the athlete’s name, image, or likeness is primarily ‘commercial.’”  Id. at 20. 

The court went on to conclude that “[e]ven though the commercial speech determination is a question of law,” it could not make this determination on the pleadings.  Id at 21.  The court specifically reasoned that, when construing the TCAC’s allegations in the light most favorable to Antitrust Plaintiffs, “it is plausible at least some of the broadcast footage described in the complaint – particularly the promotional highlight films and the ‘stock footage’ sold to advertisers – was used primarily for commercial purposes.”  Id

The court thus held that the First Amendment did not mandate dismissal of Antitrust Plaintiffs’ “broadcast-related claims” at the pleading stage.  Id.  But it did not foreclose the NCAA from subsequently moving for summary judgment on its First Amendment defense and provided the following suggestion for how it might address the First Amendment question on summary judgment: “Should the NCAA raise this issue again at summary judgment, Plaintiffs will need to submit evidence that the relevant broadcast footage on which their claims are based – including both the archival game footage and the live game broadcasts – was used primarily for commercial purposes.”  Id. at 22.

NCAA moves for summary judgment on Antitrust Plaintiffs’ “live broadcast” claims on the basis that student-athletes’ names, images and likeness are not used in live sporting event broadcasts for commercial purposes, and thus the First Amendment shields such broadcasts from right of publicity liability. 

In late 2013, both parties moved for summary judgment on the asserted antitrust claims. NCAA again argued that the First Amendment bars Antitrust Plaintiffs’ “live broadcast” claims.  See Memorandum in Support of Motion for Summary Judgment,  In re NCAA Case No. 09-1967 (N.D. Cal. Dec. 12, 2013), ECF No. 926.  Expressly relying on language from the court’s prior motion to dismiss order, NCAA asserted that the use of players’ names, images and likenesses in live broadcasts of men’s basketball and football games is not primarily commercial in nature, and therefore entitled to full First Amendment protection against right of publicity claims.  Id. at 3.  To support this argument, NCAA emphasized that the Ninth Circuit defines speech as “commercial” when it “propose[s] a commercial transaction” with respect to a “particular product.”  Id. at 5 (quoting Hunt v. City of Los Angeles, 638 F.3d 703, 715 (9th Cir. 2011)).  NCAA characterized college sporting events, by contrast, as “matters of intense public interest,” which deserve the broadest scope First Amendment protection.  Id. at 4. 

The district court denies NCAA’s summary judgment motion, ruling that – even though live broadcasts of Division I football and basketball games are not commercial speech – the First Amendment does not preclude student-athletes from asserting rights of publicity in live broadcasts.

In its April 2014 summary judgment ruling, the district court rejected NCAA’s argument that the First Amendment necessarily shields broadcasters from liability for right of publicity claims asserted by participants in live sporting events.  Even though the U.S. Supreme Court has never ruled on this specific issue, Judge Wilken found that its decision in Zacchini v. Scripps–Howard Broadcasting Co., 433 U.S. 562 (1977) “strongly suggests that the First Amendment does not guarantee media organizations an unfettered right to broadcast entire sporting events without regard for the participating athletes’ rights of publicity.”  Order at 16, ECF No. 1025.  

In Zacchini, the Supreme Court determined that the First Amendment did not protect a television station from the unauthorized broadcast of the plaintiff’s entire fifteen-second “human cannonball” routine performed at an Ohio county fair.  In drawing this conclusion, the Zacchini court emphasized that the defendant decided to broadcast the performer’s entire act without his consent, thus undermining his economic interest in attracting viewers to attend his live show.  Judge Wilken found that this analysis “provide[d] useful guidance in balancing a performer’s right of publicity against First Amendment considerations.”  Id. at 16.  Applying similar standards, Judge Wilken concluded that “the First Amendment does not guarantee media organizations an unlimited right to broadcast entire college football and basketball games.”  Id. at 19. 

On the other hand, the California district court went on to find that “broadcasts of entire Division I football and basketball games do not constitute commercial speech.”  Id. at 24.  Yet, this finding did not impact Judge Wilken’s ultimate conclusion – that the First Amendment does not necessarily bar live sporting event participants from asserting right of publicity claims in connection with live broadcasts.

 

Permanent link to this article: http://blogs.dlapiper.com/mediaandsport/?p=2382

FA Proposes Global Ban on Gambling

 By Alasdair Muller and Patrick Mitchell

The FA has proposed amendments to its rules on gambling which, if approved by its shareholders at their AGM on 21 May, will come into effect from the start of the 2014-15 season. The amendments have already received recommendation from the FA Council and the Football Regulatory Authority.

The revised rules would introduce a world-wide ban on players and other participants involved in the top eight tiers of the English league system from betting on the outcome of football matches and competitions, or on any other “football-related matter”, including the transfer of players, employment of managers and team selections.

This represents a significant extension to the FA’s current rules, which prevent players and other participants betting on matches or competitions in which they are involved (or over which they have a degree of influence), or on “football-related” matters concerning any club which competes in the leagues in which, in the relevant season, the relevant participant is involved.

This proposed new “global” approach would be comparable to the position adopted by, for example, the British Horseracing Authority. The BHA’s rules prohibit riders and other participants in racing from making bets on horseracing, “regardless of where the bet is placed or where the race is run”.

Permanent link to this article: http://blogs.dlapiper.com/mediaandsport/?p=2372

Football rights guidelines approved by Agcom!

Further to the preliminary inquiry carried out by the Italian Communication Authority (Agcom) with operators holding a direct interest in the sale of media rights for the Italian football seasons (as discussed here), yesterday the Authority approved the guidelines issued by the Lega Nazionale Professionisti Seria A (hereinafter “Lega Nazionale”) for seasons 2015/2016, 2016/2017, 2017/2018. Read the rest of this entry »

Permanent link to this article: http://blogs.dlapiper.com/mediaandsport/?p=2366

Italy – (Yet another) LCN Suspension

Groundhog Day for LCN in Italy, as today the Consiglio di Stato (Administrative Supreme Court) suspended the LCN Consultation. Read the rest of this entry »

Permanent link to this article: http://blogs.dlapiper.com/mediaandsport/?p=2362

Media, Sport & Entertainment Webinars 2014: Television Signal Piracy

Media, Sport & Entertainment Webinars 2014

Television signal piracy
Wednesday 23 April 2014
3.00 – 4.00 pm BST

We are delighted to invite you to the second of our series of 1 hour webinars. This webinar will focus on Television signal piracy.

Signal piracy has been described by many of our clients as their single biggest threat. DLA Piper has acted on many of the recent cutting edge cases in this field and we are intimately familiar with the issues involved in protecting our clients’ property and services across jurisdictions. This session will look at recent cases, regulations and strategies for dealing with pirates, and our Italian team will consider the new Agcom regulations in Italy.

I will chair the session, and our speakers will include specialists from the UK (Ruth Hoy), Italy (Giangiacomo Olivi and Alessandro Ferrari ), Dubai (Jamie Ryder) and US (Richard Flaggert).

 It’s simple: the webinars are free and delivered to your desk. You can access the slides on your PC and access the audio presentation by freephone number. There will be an opportunity at the end of each session to ask questions.

This webinar may attract continuing legal education points, CPD or CLE, depending on the rules in your jurisdiction.

Best regards

Nick Fitzpatrick
Global Co-Chair, Media, Sport and Entertainment

If you wish to attend,  please click the RSVP at the bottom of the page.

Please click here to RSVP

Permanent link to this article: http://blogs.dlapiper.com/mediaandsport/?p=2356

EU – International data transfers from processors to processors made easier, good news for cloud providers and outsourcers

By Patrick Van Eecke and Elisabeth Verbrugge

Working Party 29 issued a working document on model clauses for personal data transfers from EU data processors to non-EU sub-processors. This is an important step towards creating a more comprehensive framework for contract-based personal data transfers outside the EEA.

European data protection laws in principle prohibit the transfer of personal data to countries outside the EEA which are not deemed to offer an adequate level of protection. As only a very limited number of countries are deemed to offer such adequate level of protection, the processing of personal data in global companies or in a cross-border context in general, often proves to be a challenge. Indeed, transfers to such third countries are only permitted in case an exception applies, or in case the data controller adduces additional safeguards, e.g. via conclusion of a data transfer agreement. The European Commission has approved three sets of model clauses which can be used as a basis for such data transfer agreements. Subject to local notification and approval requirements, transfer agreements based on those model clauses will typically provide a sufficient legal basis for data transfers. To date, the European Commission has only approved model clauses governing “controller-to-controller” and “controller-to-processor” transfers.

However, practice demonstrates that companies are often confronted with an EU controller – EU processor – non-EU sub-processor set-up. The transfer of personal data outside the EEA only occurs in the processor – sub-processor relationship, and not in the controller – processor relationship. In such case, companies are often forced to rely on one of the exceptions permitting data transfers (which is often a challenge as the exceptions can rarely be invoked in relation to large-scale data transfers), or to create a customised data transfer agreement (which offers less legal security and/or is subject to burdensome approval processes).

We therefore welcome Working Party 29′s initiative to take the first steps towards creating model clauses for processor-to-processor data transfers. Indeed, such model clauses will complement the existing model clauses framework and facilitate compliance with European data protection laws. It should, however be noted that these draft new model clauses have not yet adopted been by the European Commission and therefore do not constitute a new official set of model clauses. Use of these new model clauses will not yet guarantee compliance with data transfer requirements. It can, however, be expected that using these draft new model clauses could facilitate approval from the local data protection authority in countries where customised transfer agreements are subject to such data protection authority approval.

For more information, contact Patrick Van Eecke (Patrick.VanEecke@dlapiper.com) or Elisabeth Verbrugge (Elisabeth.Verbrugge@dlapiper.com).

Permanent link to this article: http://blogs.dlapiper.com/mediaandsport/?p=2339

US Copyright Office Calls For Public Comment on Music Licensing

By Matt Ganas and Sam Churney

As part of a concerted effort to assess the effectiveness of existing methods of licensing music, the US Copyright Office has published a request in the Federal Register for public comment on a number of copyright issues. This request relates to an ongoing congressional review and a potential overhaul of the US Copyright Act, 17 U.S.C. 101, et. seq. (the “Act”),  in view of technological developments that continue to shape music industry practices in the digital age.  According to the Copyright Office, information gathered during the public comment period will be reported to Congress for consideration of possible revisions to the Act.

The congressional review is directed to a variety of issues concerning the US copyright system’s mechanisms for licensing musical works (i.e., compositions) and sound recordings (i.e., recorded performances of musical works). The Copyright Office thus seeks public comment related to a number of subjects, including (for example):

  • whether Section 115 of the Act – which establishes a compulsory licensing scheme for the right to reproduce and distribute phonorecords (i.e., physical copies) of musical works – should be updated to permit licensing of musical works on a “blanket” rather than “song-by-song” basis;
  • whether the scope of Section 115’s statutory license should be expanded to include public performances of musical works;
  • whether antitrust consent decrees governing Broadcast Music, Inc. (“BMI”) and the American Society of Composers, Authors and Publishers (“ASCAP”) with respect to public performance licenses for musical works:
    • are serving their intended purpose of protecting licensees from anticompetitive price discrimination, or
    • should be amended to enable music publishers to withdraw digital rights from the blanket BMI/ASCAP license and negotiate public performance licenses directly with digital music services (an issue that internet radio service provider Pandora recently litigated against both ASCAP and BMI);
  • whether the limited public performance right in sound recordings pursuant to Section 114 – which applies only to “digital audio transmissions” (i.e., satellite radio and internet-based music services) – should be expanded to include broadcast radio transmissions; and
  • whether federal copyright protection should extend to sound recordings made prior to February, 15 1972 in view of recent developments and, if so, whether pre-1972 sound recordings should be included within the Act’s statutory licensing provisions.

In addition to considering specific revisions to the Act, Congress is also assessing how the federal government might influence music licensing policy more generally.  The Copyright Office thus seeks comment on whether and to what extent the government could play a role in encouraging: (i) the development of alternative licensing models and (ii) the adoption of universal standards for identifying sound recordings and musical works to facilitate the music licensing process. From an economic perspective, Congress is also analyzing how music marketplace advancements have impacted the income of recording artists, composers and songwriters, and whether industry revenues are split fairly between distributors and creators of musical works and sounds recordings.

Comments are due by May 16, 2014 and can be submitted electronically on a comment page on the Copyright Office’s website.

The relevant notice in the Federal Register can be read here: http://www.copyright.gov/fedreg/2014/79fr14739.pdf

Permanent link to this article: http://blogs.dlapiper.com/mediaandsport/?p=2332

FC Barcelona sanctioned by FIFA for international transfers of minors

By Ceyhun Pehlivan and Jorge Monclús

FIFA’s Disciplinary Committee has sanctioned the Spanish Football Federation (“RFEF”) and Spanish club FC Barcelona for “breaches relating to the international transfer and registration of players under the age of 18“.

The investigations undertaken by the FIFA Transfer Matching System over the last year confirmed that both the RFEF and FC Barcelona had violated provisions relating to the transfer and registration of international minors, as well as other relevant regulations regarding the registration and participation of certain players in national competitions between 2009 and 2013.

Accordingly, the FIFA’s Disciplinary Committee has deemed the above-mentioned infringements as serious and decided to sanction the Spanish club with a transfer ban at both national and international level for two complete and consecutive transfer periods as well as a fine of 450,000 Swiss francs (approximately €370,000). Moreover, FC Barcelona has been granted a period of 90 days to regularise the situation of the affected minor players.

Additionally, the RFEF has also sanctioned with a fine of 500,000 Swiss francs (approximately €410,000) and ordered to regularise its regulatory system concerning the international transfer of minors in football in a period of one year.

FC Barcelona has recently issued an official statement confirming that they would appeal the ban to FIFA.

Permanent link to this article: http://blogs.dlapiper.com/mediaandsport/?p=2328

Google gives UK “super flagger” powers

Google has granted the UK security services privileged “super flagger” status over YouTube videos, which enables the government to alert YouTube to videos deemed to threaten national security.  It follows a campaign led by the government to persuade ISPs, search engines and social media sites proactively to monitor online content.

The authority will grant the UK Metropolitan Police’s Counter Terrorism Internet Referral Unit the ability to refer videos to YouTube that it believes have violated the Terrorism Act. Google itself will retain the ultimate discretion as to whether to remove content for breaching its community guidelines.

Permanent link to this article: http://blogs.dlapiper.com/mediaandsport/?p=2323

ATVOD issues new regulatory guidance

By Patrick Mitchell and Bethan Lloyd

The co-regulator of video on demand (“VOD”) editorial content, the Authority for TV on Demand (ATVOD), has recently published revised guidance [http://www.atvod.co.uk/uploads/files/Statement_on_New_Scope_Guidance_FINAL.pdf ] on the scope of the regulations concerning VOD services.   The updated guidance draws upon the outcomes of a consultation process and is also intended to reflect ATVOD’s recent experience, including various appeals of its decisions to Ofcom. Please let us know if you want our insights on this new guidance.

Permanent link to this article: http://blogs.dlapiper.com/mediaandsport/?p=2317

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