USDC Minnesota, June 13, 2012
- District court grants NFL’s motion to dismiss class action filed by former football players alleging that, by not allowing the players the rights to game films and images from the games in which they played, the NFL is monopolizing the market for former players’ likenesses, in violation of antitrust laws.
Plaintiffs Gene Washington, Diron Talbert, and Sean Lumpkin, former professional football players, brought a class action suit against the National Football League and a number of affiliated entities, including each of the 32 NFL teams, alleging that the NFL defendants, by constraining plaintiffs’ use of footage from games featuring their images and likenesses, are violating the Sherman Act. Specifically, the former players contended that by not allowing them the rights to game films and images from the games in which they played, defendants are monopolizing the market for former players’ likenesses. The district court granted the NFL defendants motion to dismiss, finding that defendants, as copyright owners of the footage, could exclude the rights of former players to sell their likenesses contained in the footage. Distinguishing the case from the facts in the recent Supreme Court decision in American Needle, Inc. v. NFL, the court concluded that plaintiffs failed to state a claim for violation of the Sherman Act.
Under the Sherman Act, instructed the court, it is illegal to “monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any party of the trade or commerce among several States…” In American Needle, Inc. v. NFL, a former licensee of NFL team merchandise alleged that the NFL and its member teams had conspired illegally to restrain trade by agreeing that NFL Properties could license all NFL-related merchandise, including individual team logos, to a single entity. While the lower courts found that the NFL could not conspire with itself, the Supreme Court disagreed, finding that the actions of the NFL and its teams might, in some instances, constitute concerted action in violation of the Sherman Act. Relying heavily on American Needle, plaintiffs argued that Supreme Court had determined that the NFL and its teams can “act in concert for the purpose of marketing their collective intellectual property” and that the NFL defendants’ actions violated the Sherman Act.
The court disagreed, finding that “other than the holding that the NFL and its teams might, in some instances, be capable of concerted action in violation of the Sherman Act, American Needle does not support plaintiffs’ contentions here in the least.” Unlike in American Needle, which involved intellectual property that each team owned separately from the NFL, including team logos and team colors, the intellectual property involved in the case before it was historical football game footage, which the individual teams did not own separately and never had. Rather, the footage was owned by the NFL, either alone or jointly with the teams filmed playing in the footage, and these entities must cooperate to produce and sell these images, because no one entity could do it alone.
Plaintiffs’ assertion that American Needle established that the NFL and its teams can “act in concert for the purpose of marketing their collective intellectual property” is fundamentally incorrect, stated the court. The NFL defendants could conspire to market property individually owned by each team, but not property owned collectively by the teams and the NFL. Moreover, even if the NFL defendants did act in concert to restrain trade in plaintiffs’ images, the agreement was essential if the product is to be available at all. The market, stated the court, is for game footage featuring many players, wearing NFL logos and treading fields replete with NFL marks, and plaintiffs had not established that a market could exist for only the footage to which any individual player could claim to be entitled: a single player’s image without any NFL logos or marks. Accordingly, the agreement to constrain trade in plaintiffs’ images is necessary to market the product at all and is not illegal.
Independent of American Needle, the court found that plaintiffs failed to state a claim for violation of the Sherman Act. The plaintiffs, noted the court, attempt to explain their claims by asserting that the relevant market is for footage of NFL games and players, and the customers in that market would be NFL and, perhaps, television networks. Not only did plaintiffs fail to explain how the NFL can be both a customer and a trade-restrainer at the same time, but alleged “restraints” arise because the NFL owns a copyright in the game footage and, according to the court, “a copyright is nothing more than legal authorization to restrain trade in that intellectual property.”
In addition, the court found “nonsensical” plaintiffs’ contention that a copyright owner does not have the right to exclude the “right of someone else within the technology” to sell their own likeness that is contained in that technology. If that statement were true, the court stated, then an actor in a film could sell his or her own image from the film for his or her own purposes – i.e., Tom Cruise could sell portions of the Mission: Impossible franchise that feature him and Paramount Pictures could not restrain him from doing so. The simple fact that the copyright in Mission: Impossible” is owned by a single entity and the copyright in historical NFL game footage is owned collectively is also irrelevant to the rights conferred by the copyright.