Federal judge rejects motions to dismiss, allows videogame suits against NCAA, Electronic Arts to proceed

Update Time! For those of you wondering what ever happened with the efforts of Ed O’Bannon, Sam Keller and Craig Newsome – former college athletic stars all (but you probably knew that already, didn’t you?) – to protect their right to control the use of their images, the answer is: Lots. While none has yet emerged victorious over the NCAA, Electronic Arts (EA) and other various foes, progress has been made recently.

As loyal readers of this blog know, the field of “image rights” has been the subject of extensive litigation over the last couple of years. Former professional athletes (including no less a luminary than Jim Brown) and their college counterparts have sued a range of defendants in an effort to protect their ability to control, and profit from, the use of their images. And while Jim Brown’s attempt was stopped at the line of scrimmage, recent rulings in the cases of O’Bannon, Keller and Newsome may provide a path to victory for them (and other similarly situated celebs).

Keller and Newsome were big-time college football players, while O’Bannon played hoops. Since I happen to be partial to b-ball – as opposed to football (in large measure because of my distaste for the whole BCS ridiculousness) – here’s some background on O’Bannon. Originally recruited to play basketball at UNLV, he ends up at UCLA when UNLV’s program is put on probation. He gets injured bad (ACL) as a frosh, but fights back and, as a senior in 1995, is named college player of the year, stars when the Bruins win it all at the NCAA’s Big Dance, gets his UCLA number retired, the works. As college careers go, it doesn’t get more Story Book. Pro-wise, not so much: he went high (9th) in the NBA draft, but lasted only two seasons, followed by some play in the foreign leagues, and then retirement to a new career as a pretty successful car salesman.

Fast forward a decade or so. As the story goes, O’Bannon notices a friend’s son playing a video game featuring the 1995 UCLA Bruins. The video team includes an unnamed player startlingly similar – actually pretty much identical – to O’Bannon: same position, same number, same stats, same shooting hand, etc. His friend remarks, “You know what’s sad about this whole thing? You’re not getting paid for it.” O’Bannon thinks, “Wow, you’re right.” He lawyers up and sues.

O’Bannon and Newsome went after the NCAA. Keller, in a separate suit which was ultimately joined with the O’Bannon/Newsome action, named the NCAA and EA as defendants. The gist of the suits is that somebody – maybe the NCAA, maybe EA, maybe others – is making a boatload of cash from video games which depict (without specifically identifying) real people who are readily identifiable through various aspects – stats, player numbers, years, etc. Why should those real people not be entitled to share in the profits since their images are central to enterprise?

The two cases – O’Bannon/Newsome on the one hand, Keller on the other – adopted different legal strategies. Keller claimed that the NCAA and EA violated his “right of publicity”, i.e., the right to profit from the use of his name and/or likeness. O’Bannon/Newsome, on the other hand, claimed that the NCAA is engaging in “anti-competitive” practices by unduly restricting the rights of college athletes. From the court’s initial rulings – the Keller decision is here, the O’Bannon/Newsome decision here – both arguments appear to have gotten traction.

While Keller’s claims were dismissed with respect to the NCAA, they stuck with respect to EA. Because of the particular statutory language of the “right of publicity” laws in Indiana (one of the two jurisdictions at issue in Keller’s suit, mainly because the NCAA happens to be headquartered in Indiana), the court held that the NCAA itself did not “use” Keller’s name/likeness in a way which would make the NCAA directly liable under those laws. But as to EA, well, that’s another story entirely.

Conceding, at least for the sake of its motion to dismiss, that Keller could establish all he needed to in order to establish that EA had violated his right of publicity, EA argued that it had engaged merely in “transformative fair use”. In other words, the image of the football player that was included in EA’s video game was really EA’s own expression, and not Keller’s true likeness. 

To be successful, the transformative fair use defense requires a demonstration that the defendant has contributed “significantly distinctive and expressive content” which might be protected by the First Amendment. Cases where the defense is successful often involve taking an individual’s recognizable likeness and adding to it distinct new elements, or placing it in a completely novel setting. For instance, albino rocker brothers Johnny and Edgar Winter were portrayed in comic book form as brothers Johnny and Edgar Autumn, with pale faces and long white hair reminiscent of albinism. Transformative? If the changes had been limited to the name change alone, probably not. But in that case the Autumn brothers were also depicted as half-human, half-worm characters with green tentacles sprouting from their chests. Now that’s transformative. In another case, a musician and dancer known for uttering the phrase “ooh-la-la” was depicted with similar physical features and named “ulala” – but, instead of singing and dancing, she was shown as a “news reporter in the 25th century, ‘dispatched to investigate an invasion of earth by dance-loving aliens’.” That, too, is what they’re talking about what they talk about “transformative fair use”.

In Keller’s case, the court concluded that EA’s depiction of Keller contained no such “distinctive content”. Rather, EA simply presented Sam Keller as the college football quarterback for Arizona State.

Result: EA’s motion to dismiss Keller’s suit was denied, and the case proceeds to trial. Along the way, the judge also agreed that Keller’s additional claim – that EA conspired with the NCAA to violate his image rights – could also proceed to trial. So while the NCAA dodged one bullet (i.e., the claim that it had directly violated the right to publicity), it will still remain under the gun because of its involvement with EA in the development of EA’s videogames.

As to O’Bannon/Newsome, the same judge gave a similar thumbs up to the “anti-competition” theory. O’Bannon/Newsome’s claim was based primarily on a provision that the NCAA apparently requires all of its student-athletes to sign:

You authorize the NCAA [or a third party acting on behalf of the NCAA (e.g., host institution, conference, local organizing committee)] to use your name or picture to generally promote NCAA championships or other NCAA events, activities or programs

The plaintiffs claimed that this provision allows the NCAA to enter into licensing agreements which financially benefit the NCAA without conveying a benefit to the athletes.

To prevail in an anti-competition claim along these lines, O’Bannon/Newsome had to establish (a) the existence of a contract, combination or conspiracy that (b) unreasonably restrains trade in a way which (c) affects interstate commerce. The judge concluded that O’Bannon’s claim was sufficient to go to trial. After all, the NCAA’s own constitution which requires member schools to agree to abide by the organization’s constitution, bylaws and rules (Factor (a)); the NCAA and its affiliates control the collegiate licensing market to such an extent that the average individual athlete is precluded from having any chance to enter the market for himself (Factor (b)); and the NCAA and its affiliates control the collegiate licensing market to such an extent that the average individual athlete is precluded from having any chance to enter the market for himself (Factor (c)). 

(Interestingly, Newsome’s claim was dismissed because he failed to make a sufficiently strong allegation of unreasonable restraint of trade (i.e., Factor (b)). No worries, though – the judge granted him to leave to amend his complaint to patch up that hole.)

The judge also ruled on a number of other ancillary arguments, but the bottom line here is that both the Keller and the O’Bannon/Newsome cases will proceed. While that does not necessarily mean that any of the athlete-plaintiffs will ultimately prevail, it’s at least a strong indication that their respective theories of liability are valid. It just remains for them to prove that the underlying facts support those theories.

Perhaps more importantly, though, the fact that the cases are proceeding – with the NCAA, in particular, as a defendant – means that discovery will go forward. And that in turn means that considerable light may now be shed on the various contractual arrangements which NCAA has made, and the wads of cash the NCAA has pocketed, in connection with the marketing of athlete-related merchandise. It is entirely possible that the revelation of the details of that enterprise could lead to substantial changes in the relationship between the NCAA, its members, and the student-athletes whose performance is the real key to the profit-generating machine that is college athletics. Attention should be paid.