Eighth Circuit opens the door to fantasy sports free-for-all

The US Court of Appeals for the Eighth Circuit has held that a fantasy baseball company has the right to use, without licence, Major League Baseball (MLB) players' names, statistics and biographical information in connection with its fantasy baseball products. In CBC Distribution & Marketing Inc v Major League Baseball Advanced Media LP (Case 06-3357/3358, October 16 2007), the Eighth Circuit Court of Appeals affirmed the Eastern District of Missouri's grant of summary judgment in favour of CBC Distribution & Marketing Inc, holding that CBC's First Amendment right "to use information that is available to everyone" superseded MLB players' publicity rights.

Fantasy sports providers allow participants to draft actual players and compete against other participants throughout a sports season based on those players' actual performance statistics. Fantasy sports are big business and the high stakes of this lawsuit were evidenced by the numerous professional sports entities that submitted amicus briefs siding with their baseball counterparts, including the National Football League Players Association, NBA Properties Inc, NHL Enterprises LP, and the PGA TOUR Inc.

In this case, MLB Advanced Media LP (MLBAM), the exclusive interactive media licensee of the MLB Players Association (MLBPA), had launched its own fantasy baseball product and was seeking to prevent CBC, which was not a licensee, from using MLB player information, the result of which effectively would have been to shut CBC out of the fantasy baseball business.

From 1995 to 2004 CBC did license the right to use player information from the MLBPA. In 2005, however, after CBC's licence expired, MLBPA licensed the exclusive rights in the information to MLBAM, which began providing fantasy baseball through MLB's official website, MLB.com. CBC was not offered the opportunity to renew its licence.

CBC continued to operate its fantasy baseball business and brought the underlying declaratory judgment action against MLBAM to establish a right to use the previously licensed player information. MLBAM counterclaimed that CBC's unlicensed use of such information violated the players' publicity rights. MLBPA intervened, adding a breach of contract claim.

The court held that, while CBC was likely in violation of MLB players' publicity rights, these rights were superseded by CBC's First Amendment right to use information deemed by the court to be so widely available as to be in the public domain. The court also said that the "public value of information about the game of baseball and its players" outweighed the individual-based right of publicity, where MLB players already are well compensated.

MLBPA's contract claim, meanwhile, sparked dissent. CBC, in its licence agreement with MLBPA, had agreed not to "dispute or attack the title or any rights" of MLBPA during or after the expiration of its licence. CBC also agreed that, upon expiration of the licence, it would "refrain from further use" of the player names and information.

The court, sua sponte, deemed these provisions unenforceable due to MLBPA's breach of its representation that it owned the state law publicity rights at issue in the case (a representation to which CBC had agreed). Because the MLBPA did not own this information, which by virtue of the First Amendment was in the public domain, CBC had therefore breached a material obligation of the licence agreement. In dissent, Judge Colloton disagreed with the majority, saying there was no reason why CBC could not bargain away its "uncertain First Amendment rights".

Susan Progoff and Victor Hendrickson, Fish & Neave Intellectual Property Group of Ropes & Gray, New York