C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, L.P., et al.

--- F.3d ---, 2007 WL 2990366, 84 U.S.P.Q.2d 1328 (8th Cir. 2007)

In a much watched case, on October 16, 2007, the United States Court of Appeals for the Eighth Circuit decided C.B.C. Distribution and Marketing, Inc. v. Major League Baseball Advanced Media, L.P., et al., regarding whether it is ok for fantasy sports operators to use professional athletes’ names and historical statistics without a license from the players, the players association and/or the relevant league. In this case, the sport is baseball, but the ruling can be applied across the board to any fantasy sports league. In this case, the Eighth Circuit held that C.B.C. Distribution and Marketing, Inc. (“CBC”), a provider of online fantasy baseball products, could use the names of and statistics of Major League Baseball (“MLB”) players without a license from Major League Baseball Advanced Media, L.P. (“Advanced Media”), a MLB holding company to whom The Major League Baseball Players Association (“the Players Association”) had granted the exclusive right “to use baseball players’ names and performance information ‘for exploitation via all interactive media.’” Slip. Op. at 3. MLB and Advanced Media unsuccessfully argued that CBC’s use of player names and statistics was a violation of the players’ rights of publicity, copyright infringement, and breach of contract, among other theories. The court held that the fantasy sports operator's actions were protected under the First Amendment.

In 1995, the Players Association first granted CBC a license to use the names of MLB players and their corresponding statistics in fantasy baseball games. In 2002, the Players Association granted CBC a renewed license, which gave CBC the rights to use “the names, nicknames, likenesses, signatures, pictures, playing records, and/or biographical data of each player” in connection with CBC’s fantasy baseball products. Slip. Op. at 3. When this renewed license expired in 2005, however, the Players Association did not grant CBC another renewed license. Instead, the Players Association granted the exclusive right “to use baseball players’ names and performance information ‘for exploitation via all interactive media’” to Advanced Media (the MLB holding company mentioned above). Id. After Advanced Media received this exclusive license from the Players Association, it approached CBC and proposed a license under which CBC could promote fantasy baseball games on, but could not continue offering its own fantasy baseball products. CBC subsequently brought this declaratory judgment lawsuit, seeking a court decree that it could continue to use the names of and statistics related to MLB players without a license from Advanced Media.

At issue in this case was whether MLB could exercise exclusive control over the fantasy baseball business by limiting others’ access to factual player information (i.e., names and statistics). In order to exercise this control, MLB, acting through the Players Association and Advanced Media, tried to establish that CBC’s use of the names of MLB players and their corresponding statistics violated rights of publicity, was copyright infringement, and was a breach of the previous licensing contract. At the trial court level, MLB argued that CBC was violating the baseball players’ individual rights of publicity, which are protected under state law (Missouri state law in this case, pursuant to federal jurisdictional rules). Although the trial court held that MLB failed to establish these state-law rights, the Eighth Circuit reversed this determination and found that state-law rights of publicity were implicated. However, the Eighth Circuit further held that First Amendment considerations (i.e., the “right to use information that is available to everyone”) trumped these state-law rights. Significantly, in deciding that these state-law rights “must give way” to First Amendment considerations, the Eighth Circuit characterized the baseball players’ names and their corresponding statistics as information that is “readily available in the public domain.” Slip. Op. at 7. Because MLB (or anyone else for that matter) cannot exercise exclusive control over information in the public domain, the Eighth Circuit affirmed the trial court’s judgment in favor of CBC, thus allowing CBC to continue using MLB players’ names and statistics without a license.

(Earlier in the case, MLB and Advanced Media also tried to argue that the use of player names and statistics was an infringement of one or more copyrights owned by MLB. MLB argued that it owned a copyright in the compilation of names and statistics. The court didn’t buy it and indicated that the names and statistics were public domain factual information.)

So for those of you running your own fantasy sports sites (or at least fantasy baseball sites), the decision in this case means that you can make use of the same information as CBC (i.e., player names and statistics) without obtaining a license from the relevant professional sports league. However, you should still consult a lawyer regarding your particular situation, because the ruling in this case involves some complicated interactions between state and federal law, and perhaps could have been decided differently by a different court with respect to the rights of publicity issues.
Word on the street is that MicroUnity and Sony Computer Entertainment America have settled their ongoing patent dispute regarding Sony's PlayStation products. The two companies have asked for a 30-day stay of all deadlines in the pending litigation in the Eastern District of Texas so they can put the finishing touches on their settlement agreement. MicroUnity first filed the lawsuit against Sony in November 2005, accusing the Japanese company of infringing 10 patents with its Sony Playstation 2, Playstation 3 and Playstation Portable game consoles. The patents cover various semiconductor integrated circuits and system processes that MicroUnity claimed were used to make the various Sony products.

Read more here.
More Second Life news: As reported in the New York Post, a half-dozen entrepreneurs are suing a Queens man, charging him with counterfeiting and selling versions of their products. Here's the catch: The products aren't real, and the alleged crimes took place in the virtual world of Second Life on the Web.

Read full story here.

We'll keep monitoring this case and let you know as we learn more.
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