Fantasy Sports Dispute Results in New Views On Exceptions to Rights of Publicity

The big news in the fantasy sports arena this past summer was the announcement that competitors FanDuel and DraftKings, which make up more than 90% of the online market, would end their merger bid following the Federal Trade Commission's filing of an antitrust lawsuit against the companies. The two fantasy sports giants have also been lobbying and litigating for legal status of their game in several U.S. states. All this amidst a decrease in revenues.

Now, there's good news for FanDuel and DraftKings on a different front, involving the use of athletes' personality components. In a case of first impression, the U.S. District Court for the Southern District of Indiana has decided that the newsworthiness and public interest exceptions to Indiana's right-of-publicity statute, Indiana Code §32-36-1-1 et seq., do apply to online fantasy sports companies that use college athletes' names and likenesses. Daniels v. FanDuel Inc., 1:16-cv-01230. The Indiana statute's liberal choice-of-law provision for right-of-publicity disputes makes the ruling nationally notable.

Defendants FanDuel and DraftKings include commentary, and athletes' names and fictitious salaries, on the fantasy sports operators' sites, and have used players' names and likenesses for marketing purposes. Indiana Code §32-36-1-7 includes in its right of publicity protection, for which written consent is required, “a personality's property interest in the personality's: (1) name; (2) voice; (3) signature; (4) photograph; (5) image; (6) likeness; (7) distinctive appearance; (8) gestures; or (9) mannerisms.”

In raising the newsworthiness and public interest exceptions to enforcement of these rights, FanDuel and DraftKings pointed to the Southern District of Indiana ruling in Time Inc. v. Sand Creek Partners L.P., 825 F.Supp. 210 (S.D.Ind. 1993), which addressed Indiana's common law prior to the enactment of its right-of-publicity statute. In Daniels, District Judge Tanya Walton Pratt noted the Sand Creek court had held: “The scope of the subject matter which may be considered 'of public interest' or 'newsworthy' has been defined in most liberal and far reaching terms.”

District Judge Pratt thus decided “that the Indiana Supreme Court would conclude that the broad definition of 'newsworthy,' as developed at common law, applies to the statutory exception listed in the right-of-publicity statute.” She then granted the defendants' motion to dismiss under the statute's newsworthiness exception, Indiana Code §32-36-1-1(c)(1)(B).

The athletes had argued FanDuel's and DraftKings' inclusion of comment posts and fictitious salaries on their sites weren't “newsworthy,” but Judge Pratt countered that Indiana law “does not prohibit the use of materials 'associated with' the name, likeness, or any other of the enumerated aspects of an individual's personality — it prohibits the use of the names and likenesses themselves.”

The Indiana statute's newsworthiness exception doesn't specifically require that parties such as fantasy sports sites qualify as “reporting” or news outlets. But the Indiana statute's public interest exception, Indiana Code §32-36-1-1(c)(3), does require that an individual's otherwise-protected personality traits be used “in connection with the broadcast or reporting of an event or a topic.”

On this, Judge Pratt noted, though it was “a close call,” the fantasy sports operators were engaged in “reporting” within the coverage of the §32-36-1-1(c)(3). She noted: “Defendants do provide factual data, and their websites could be used as 'reference sources,' either for purposes of playing the associated game, or for information about the collegiate sports and athletes represented on the websites.”

However, for those in the “fantasy” content business, the Daniels decision does include some caveats. Judge Pratt declined to give FanDuel and DraftKings protection under §32-36-1-1(c)(2)(B), which provides a liability exception for “[t]he use of a personality's name to truthfully identify the personality as the performer of a recorded performance under circumstances in which the written work or recorded performance is otherwise rightfully reproduced, exhibited, or broadcast.” With no case precedents, Judge Pratt ruled “even if Defendants are correct that they need not be the entities that broadcast the recorded performance, that issue is not determinative here. The decisive issue is that Defendants use Plaintiffs' names … for purposes other than to identify them as performers of a recorded performance.”

Judge Pratt also declined to dismiss the athletes' right-of-publicity suit on copyright preemption grounds. The U.S. Court of Appeals for the Seventh Circuit, within which the Southern District of Indiana resides, has case law on this. Toney v. L'Oreal U.S.A. Inc., 406 F.3d 905 (7th Cir. 2005), which was decided under the Illinois Right of Publicity Act (IRPA), 765 Ill. Comp. Stat. 1075/1-60, involved the unauthorized use of a photograph of model in a hair care ad. The Seventh Circuit found: “Toney's identity is not fixed in a tangible medium of expression. There is no 'work of authorship' at issue in Toney's right of publicity claim. A person's likeness — her persona — is not authored and it is not fixed. The fact that an image of the person might be fixed in a copyrightable photograph does not change this. From this we must also find that the rights protected by the IRPA are not 'equivalent' to any of the exclusive rights within the general scope of copyright that are set forth in [17 U.S.C.] Sec. 106.”

In light of Toney, Judge Pratt concluded in Daniels that an individual's persona doesn't amount to a copyright “writing.”

So the takeaways from Daniels are mixed. There has been a series of court decisions, including in suits by athletes, over uses of persona components in videogames. The Daniels case adds new perspectives to them.

*****
Stan Soocher is Editor-in-Chief of Entertainment Law & Finance and a tenured Associate Professor of Music & Entertainment Studies at the University of Colorado's Denver Campus. He is author of the book Baby You're a Rich Man: Suing the Beatles for Fun & Profit (ForeEdge/University Press of New England). For more, visit www.stansoocher.com.

The big news in the fantasy sports arena this past summer was the announcement that competitors FanDuel and DraftKings, which make up more than 90% of the online market, would end their merger bid following the Federal Trade Commission's filing of an antitrust lawsuit against the companies. The two fantasy sports giants have also been lobbying and litigating for legal status of their game in several U.S. states. All this amidst a decrease in revenues.

Now, there's good news for FanDuel and DraftKings on a different front, involving the use of athletes' personality components. In a case of first impression, the U.S. District Court for the Southern District of Indiana has decided that the newsworthiness and public interest exceptions to Indiana's right-of-publicity statute, Indiana Code §32-36-1-1 et seq., do apply to online fantasy sports companies that use college athletes' names and likenesses. Daniels v. FanDuel Inc., 1:16-cv-01230. The Indiana statute's liberal choice-of-law provision for right-of-publicity disputes makes the ruling nationally notable.

Defendants FanDuel and DraftKings include commentary, and athletes' names and fictitious salaries, on the fantasy sports operators' sites, and have used players' names and likenesses for marketing purposes. Indiana Code §32-36-1-7 includes in its right of publicity protection, for which written consent is required, “a personality's property interest in the personality's: (1) name; (2) voice; (3) signature; (4) photograph; (5) image; (6) likeness; (7) distinctive appearance; (8) gestures; or (9) mannerisms.”

In raising the newsworthiness and public interest exceptions to enforcement of these rights, FanDuel and DraftKings pointed to the Southern District of Indiana ruling in Time Inc. v. Sand Creek Partners L.P. , 825 F.Supp. 210 (S.D.Ind. 1993), which addressed Indiana's common law prior to the enactment of its right-of-publicity statute. In Daniels, District Judge Tanya Walton Pratt noted the Sand Creek court had held: “The scope of the subject matter which may be considered 'of public interest' or 'newsworthy' has been defined in most liberal and far reaching terms.”

District Judge Pratt thus decided “that the Indiana Supreme Court would conclude that the broad definition of 'newsworthy,' as developed at common law, applies to the statutory exception listed in the right-of-publicity statute.” She then granted the defendants' motion to dismiss under the statute's newsworthiness exception, Indiana Code §32-36-1-1(c)(1)(B).

The athletes had argued FanDuel's and DraftKings' inclusion of comment posts and fictitious salaries on their sites weren't “newsworthy,” but Judge Pratt countered that Indiana law “does not prohibit the use of materials 'associated with' the name, likeness, or any other of the enumerated aspects of an individual's personality — it prohibits the use of the names and likenesses themselves.”

The Indiana statute's newsworthiness exception doesn't specifically require that parties such as fantasy sports sites qualify as “reporting” or news outlets. But the Indiana statute's public interest exception, Indiana Code §32-36-1-1(c)(3), does require that an individual's otherwise-protected personality traits be used “in connection with the broadcast or reporting of an event or a topic.”

On this, Judge Pratt noted, though it was “a close call,” the fantasy sports operators were engaged in “reporting” within the coverage of the §32-36-1-1(c)(3). She noted: “Defendants do provide factual data, and their websites could be used as 'reference sources,' either for purposes of playing the associated game, or for information about the collegiate sports and athletes represented on the websites.”

However, for those in the “fantasy” content business, the Daniels decision does include some caveats. Judge Pratt declined to give FanDuel and DraftKings protection under §32-36-1-1(c)(2)(B), which provides a liability exception for “[t]he use of a personality's name to truthfully identify the personality as the performer of a recorded performance under circumstances in which the written work or recorded performance is otherwise rightfully reproduced, exhibited, or broadcast.” With no case precedents, Judge Pratt ruled “even if Defendants are correct that they need not be the entities that broadcast the recorded performance, that issue is not determinative here. The decisive issue is that Defendants use Plaintiffs' names … for purposes other than to identify them as performers of a recorded performance.”

Judge Pratt also declined to dismiss the athletes' right-of-publicity suit on copyright preemption grounds. The U.S. Court of Appeals for the Seventh Circuit, within which the Southern District of Indiana resides, has case law on this. Toney v. L'Oreal U.S.A. Inc. , 406 F.3d 905 (7th Cir. 2005), which was decided under the Illinois Right of Publicity Act (IRPA), 765 Ill. Comp. Stat. 1075/1-60, involved the unauthorized use of a photograph of model in a hair care ad. The Seventh Circuit found: “Toney's identity is not fixed in a tangible medium of expression. There is no 'work of authorship' at issue in Toney's right of publicity claim. A person's likeness — her persona — is not authored and it is not fixed. The fact that an image of the person might be fixed in a copyrightable photograph does not change this. From this we must also find that the rights protected by the IRPA are not 'equivalent' to any of the exclusive rights within the general scope of copyright that are set forth in [17 U.S.C.] Sec. 106.”

In light of Toney, Judge Pratt concluded in Daniels that an individual's persona doesn't amount to a copyright “writing.”

So the takeaways from Daniels are mixed. There has been a series of court decisions, including in suits by athletes, over uses of persona components in videogames. The Daniels case adds new perspectives to them.

*****
Stan Soocher is Editor-in-Chief of Entertainment Law & Finance and a tenured Associate Professor of Music & Entertainment Studies at the University of Colorado's Denver Campus. He is author of the book Baby You're a Rich Man: Suing the Beatles for Fun & Profit (ForeEdge/University Press of New England). For more, visit www.stansoocher.com.