Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca8-06-03357/USCOURTS-ca8-06-03357-0/pdf.json

Nature of Suit Code: 840
Nature of Suit: Trademark
Cause of Action: 

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United States Court of Appeals

FOR THE EIGHTH CIRCUIT

___________

Nos. 06-3357/3358

___________

C.B.C. Distribution and *

Marketing, Inc., *

*

Plaintiff-Appellee, *

*

v. *

* Appeals from the United States 

Major League Baseball Advanced * District Court for the Eastern

Media, L.P., * District of Missouri.

*

Defendant-Appellant, *

*

The Major League Baseball Players *

Association, *

*

Intervenor-Appellant. *

___________________ *

*

National Football League Players *

Association, National Football *

League Players, Inc.; NBA *

Properties, Inc.; NHL Enterprises, *

L.P.: NFL Ventures, L.P.; National *

Association for Stock Car Auto *

Racing, Inc.; PGA TOUR, Inc.; *

WNBA Enterprises, LLC; *

International Licensing Industry *

Merchandisers' Association, Inc., *

*

Amici on behalf of *

Appellants, *

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Fantasy Sports Trade Association; *

First American Real Estate *

Solutions, LLC; TransUnion, LLC; *

Reed Elsevier Inc., *

*

Amici on Behalf of *

Appellee. *

___________

Submitted: June 14, 2007

Filed: October 16, 2007

___________

Before LOKEN, Chief Judge, ARNOLD and COLLOTON, Circuit Judges.

___________

ARNOLD, Circuit Judge.

C.B.C. Distribution and Marketing, Inc., brought this action for a declaratory

judgment against Major League Baseball Advanced Media, L.P., to establish its right

to use, without license, the names of and information about major league baseball

players in connection with its fantasy baseball products. Advanced Media counterclaimed, maintaining that CBC's fantasy baseball products violated rights of publicity

belonging to major league baseball players and that the players, through their

association, had licensed those rights to Advanced Media, the interactive media and

Internet company of major league baseball. The Major League Baseball Players

Association intervened in the suit, joining in Advanced Media's claims and further

asserting a breach of contract claim against CBC. The district court granted summary

judgment to CBC, see C.B.C. Distrib. and Mktg., Inc. v. Major League Baseball

Advanced Media, L.P., 443 F. Supp. 2d 1077 (E.D. Mo. 2006), and Advanced Media

and the Players Association appealed. We affirm.

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I.

CBC sells fantasy sports products via its Internet website, e-mail, mail, and the

telephone. Its fantasy baseball products incorporate the names along with

performance and biographical data of actual major league baseball players. Before the

commencement of the major league baseball season each spring, participants form

their fantasy baseball teams by "drafting" players from various major league baseball

teams. Participants compete against other fantasy baseball "owners" who have also

drafted their own teams. A participant's success, and his or her team's success,

depends on the actual performance of the fantasy team's players on their respective

actual teams during the course of the major league baseball season. Participants in

CBC's fantasy baseball games pay fees to play and additional fees to trade players

during the course of the season. 

From 1995 through the end of 2004, CBC licensed its use of the names of and

information about major league players from the Players Association pursuant to

license agreements that it entered into with the association in 1995 and 2002. The

2002 agreement, which superseded in its entirety the 1995 agreement, licensed to

CBC "the names, nicknames, likenesses, signatures, pictures, playing records, and/or

biographical data of each player" (the "Rights") to be used in association with CBC's

fantasy baseball products.

In 2005, after the 2002 agreement expired, the Players Association licensed to

Advanced Media, with some exceptions, the exclusive right to use baseball players'

names and performance information "for exploitation via all interactive media."

Advanced Media began providing fantasy baseball games on its website, MLB.com,

the official website of major league baseball. It offered CBC, in exchange for a

commission, a license to promote the MLB.com fantasy baseball games on CBC's

website but did not offer CBC a license to continue to offer its own fantasy baseball

products. This conduct by Advanced Media prompted CBC to file the present suit,

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alleging that it had "a reasonable apprehension that it will be sued by Advanced Media

if it continues to operate its fantasy baseball games."

The district court granted summary judgment to CBC. It held that CBC was not

infringing any state-law rights of publicity that belonged to major league baseball

players. C.B.C., 443 F. Supp.2d at 1106-07. The court reasoned that CBCs fantasy

baseball products did not use the names of major league baseball players as symbols

of their identities and with an intent to obtain a commercial advantage, as required to

establish an infringement of a publicity right under Missouri law (which all parties

concede applies here). Id. at 1085-89. The district court further held that even if CBC

were infringing the players' rights of publicity, the first amendment preempted those

rights. Id. at 1091-1100. The court rejected, however, CBC's argument that federal

copyright law preempted the rights of publicity claim. Id. at 1100-03. Finally, the

district court held that CBC was not in violation of the no-use and no-contest

provisions of its 2002 agreement with the Players Association because "the strong

federal policy favoring the full and free use of ideas in the public domain as

manifested in the laws of intellectual property prevails over [those] contractual

provisions" (internal quotations omitted). Id. at 1106-07.

Because this appeal is from the district court's grant of summary judgment, our

review is de novo, and we apply "the same standards as the district court and view[]

the evidence in the light most favorable to the nonmoving party." Travelers Prop.

Cas. Co. of Am. v. General Cas. Ins. Co., 465 F.3d 900, 903 (8th Cir. 2006).

Summary judgment is appropriate only if "there is no genuine issue as to any material

fact and ... the moving party is entitled to judgment as a matter of law." Fed. R. Civ.

P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). We also review de novo

the district court's interpretation of state law, including its interpretation of Missouri

law regarding the right of publicity. See Hammer v. City of Osage Beach, 318 F.3d

832, 841 (8th Cir. 2003). When state law is ambiguous, we must "predict how the

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highest court of that state would resolve the issue." Clark v. Kellogg Co., 205 F.3d

1079, 1082 (8th Cir. 2000).

II.

A.

An action based on the right of publicity is a state-law claim. See Zacchini v.

Scripps-Howard Broad. Co., 433 U.S. 562, 566 (1977). In Missouri, "the elements

of a right of publicity action include: (1) That defendant used plaintiff's name as a

symbol of his identity (2) without consent (3) and with the intent to obtain a

commercial advantage." Doe v. TCI Cablevision, 110 S.W.3d 363, 369 (Mo. 2003),

cert. denied, 540 U.S. 1106 (2004). The parties all agree that CBC's continued use of

the players' names and playing information after the expiration of the 2002 agreement

was without consent. The district court concluded, however, that the evidence was

insufficient to make out the other two elements of the claim, and we address each of

these in turn.

With respect to the symbol-of-identity element, the Missouri Supreme Court

has observed that " 'the name used by the defendant must be understood by the

audience as referring to the plaintiff.' " The state court had further held that "[i]n

resolving this issue, the fact-finder may consider evidence including 'the nature and

extent of the identifying characteristics used by the defendant, the defendant's intent,

the fame of the plaintiff, evidence of actual identification made by third persons, and

surveys or other evidence indicating the perceptions of the audience.' " Doe, 110

S.W.3d at 370 (quoting Restatement (Third) of Unfair Competition § 46 cmt. d).

Here, we entertain no doubt that the players' names that CBC used are

understood by it and its fantasy baseball subscribers as referring to actual major league

baseball players. CBC itself admits that: In responding to the appellants' argument

that "this element is met by the mere confirmation that the name used, in fact, refers

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to the famous person asserting the violation," CBC stated in its brief that "if this is all

the element requires, CBC agrees that it is met." We think that by reasoning that

"identity," rather than "mere use of a name," "is a critical element of the right of

publicity," the district court did not understand that when a name alone is sufficient

to establish identity, the defendant's use of that name satisfies the plaintiff's burden to

show that a name was used as a symbol of identity.

It is true that with respect to the "commercial advantage" element of a cause of

action for violating publicity rights, CBC's use does not fit neatly into the more

traditional categories of commercial advantage, namely, using individuals' names for

advertising and merchandising purposes in a way that states or intimates that the

individuals are endorsing a product. Cf. Restatement (Third) of Unfair Competition

§ 47 cmt. a, b. But the Restatement, which the Missouri Supreme Court has

recognized as authority in this kind of case, see Doe, 110 S.W.3d at 368, also says that

a name is used for commercial advantage when it is used "in connection with services

rendered by the user" and that the plaintiff need not show that "prospective purchasers

are likely to believe" that he or she endorsed the product or service. Restatement

(Third) of Unfair Competition § 47 & cmt. a. We note, moreover, that in Missouri,

"the commercial advantage element of the right of publicity focuses on the defendant's

intent or purpose to obtain a commercial benefit from use of the plaintiff's identity."

Doe, 110 S.W.3d at 370-71. Because we think that it is clear that CBC uses baseball

players' identities in its fantasy baseball products for purposes of profit, we believe

that their identities are being used for commercial advantage and that the players

therefore offered sufficient evidence to make out a cause of action for violation of

their rights of publicity under Missouri law.

B.

CBC argues that the first amendment nonetheless trumps the right-of-publicity

action that Missouri law provides. Though this dispute is between private parties, the

state action necessary for first amendment protections exists because the right-ofAppellate Case: 06-3357 Page: 6 Date Filed: 10/16/2007 Entry ID: 3362128
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publicity claim exists only insofar as the courts enforce state-created obligations that

were "never explicitly assumed" by CBC. See Cohen v. Cowles Media Co., 501 U.S.

663, 668 (1991).

The Supreme Court has directed that state law rights of publicity must be

balanced against first amendment considerations, see Zacchini v. Scripps-Howard

Broad., 433 U.S. 562 (1977), and here we conclude that the former must give way to

the latter. First, the information used in CBC's fantasy baseball games is all readily

available in the public domain, and it would be strange law that a person would not

have a first amendment right to use information that is available to everyone. It is true

that CBC's use of the information is meant to provide entertainment, but "[s]peech that

entertains, like speech that informs, is protected by the First Amendment because

'[t]he line between the informing and the entertaining is too elusive for the protection

of that basic right.' " Cardtoons, L.C. v. Major League Baseball Players Ass'n, 95

F.3d 959, 969 (10th Cir. 1996) (quoting Winters v. New York, 333 U.S. 507, 510

(1948)); see also Zacchini, 433 U.S. at 578. We also find no merit in the argument

that CBC's use of players' names and information in its fantasy baseball games is not

speech at all. We have held that "the pictures, graphic design, concept art, sounds,

music, stories, and narrative present in video games" is speech entitled to first

amendment protection. See Interactive Digital Software Ass'n v. St. Louis County,

Mo., 329 F.3d 954, 957 (8th Cir. 2003). Similarly, here CBC uses the "names,

nicknames, likenesses, signatures, pictures, playing records, and/or biographical data

of each player" in an interactive form in connection with its fantasy baseball products.

This use is no less expressive than the use that was at issue in Interactive Digital.

Courts have also recognized the public value of information about the game of

baseball and its players, referring to baseball as "the national pastime." Cardtoons,

95 F.3d at 972. A California court, in a case where Major League Baseball was itself

defending its use of players' names, likenesses, and information against the players'

asserted rights of publicity, observed, "Major league baseball is followed by millions

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of people across this country on a daily basis ... The public has an enduring fascination

in the records set by former players and in memorable moments from previous games

... The records and statistics remain of interest to the public because they provide

context that allows fans to better appreciate (or deprecate) today's performances."

Gionfriddo v. Major League Baseball, 94 Cal. App. 4th 400, 411 (2001). The Court

in Gionfriddo concluded that the "recitation and discussion of factual data concerning

the athletic performance of [players on Major League Baseball's website] command

a substantial public interest, and, therefore, is a form of expression due substantial

constitutional protection." Id. We find these views persuasive.

In addition, the facts in this case barely, if at all, implicate the interests that

states typically intend to vindicate by providing rights of publicity to individuals.

Economic interests that states seek to promote include the right of an individual to

reap the rewards of his or her endeavors and an individual's right to earn a living.

Other motives for creating a publicity right are the desire to provide incentives to

encourage a person's productive activities and to protect consumers from misleading

advertising. See Zacchini, 433 U.S. at 573, 576; Cardtoons, 95 F.3d at 973. But

major league baseball players are rewarded, and handsomely, too, for their

participation in games and can earn additional large sums from endorsements and

sponsorship arrangements. Nor is there any danger here that consumers will be

misled, because the fantasy baseball games depend on the inclusion of all players and

thus cannot create a false impression that some particular player with "star power" is

endorsing CBC's products.

Then there are so-called non-monetary interests that publicity rights are

sometimes thought to advance. These include protecting natural rights, rewarding

celebrity labors, and avoiding emotional harm. See Cardtoons, 95 F.3d at 973. We

do not see that any of these interests are especially relevant here, where baseball

players are rewarded separately for their labors, and where any emotional harm would

most likely be caused by a player's actual performance, in which case media coverage

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would cause the same harm. We also note that some courts have indicated that the

right of publicity is intended to promote only economic interests and that noneconomic interests are more directly served by so-called rights of privacy. See, e.g.,

id. at 967; Gionfriddo, 94 Cal. App. 4th at 409 (2001); see also Haelan Laboratories

v. Topps Chewing Gum, 202 F.2d 866, 868 (2d Cir. 1953). For instance, although the

court in Cardtoons, 95 F.3d at 975-76, conducted a separate discussion of noneconomic interests when weighing the countervailing rights, it ultimately concluded

that the non-economic justifications for the right of publicity were unpersuasive as

compared with the interest in freedom of expression. "Publicity rights ... are meant

to protect against the loss of financial gain, not mental anguish." Id. at 976. We see

merit in this approach.

Because we hold that CBC's first amendment rights in offering its fantasy

baseball products supersede the players' rights of publicity, we need not reach CBC's

alternative argument that federal copyright law preempts the players' state law rights

of publicity.

III.

We come finally to the breach of contract issue. The 2002 contract between the

Players Association and CBC specifically provided: "It is understood and agreed that

[the Players Association] is the sole and exclusive holder of all right, title and interest

in and to the Rights." CBC undertook not to "dispute or attack the title or any rights

of Players' Association in and to the Rights and/or the Trademarks or the validity of

the license granted," either during or after the expiration of the agreement (the nochallenge provision). CBC also agreed that, upon expiration or termination of the

contract, it would "refrain from further use of the Rights and/or the Trademarks or any

further reference to them, either directly or indirectly" (the no-use provision). The

Players Association maintains that the no-challenge and no-use provisions of the 2002

agreement are fatal to CBC's claim. We disagree.

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In holding the no-use and no-challenge provisions unenforceable as against

public policy, the district court applied a Supreme Court decision dealing with patents.

In that case, the Supreme Court held that the doctrine of licensee estoppel (under

which a licensee is estopped from contesting the validity of its license, see Idaho

Potato Comm'n v. M&M Produce Farm & Sales, 335 F.3d 130, 135 (2d Cir. 2003),

cert. denied, 541 U.S. 1027 (2004)), must give way when the "strong federal policy

favoring the full and free use of ideas in the public domain" contained in federal

patent law outweighs the "competing demands ... of contract law." Lear, Inc. v.

Adkins, 395 U.S. 653, 674, 675 (1969). The Lear balancing approach has been

applied to other areas of federal intellectual property law, see Idaho Potato, 335 F.3d

at 137-39 (certification marks); Beer Nuts, Inc. v. King Nut Co., 477 F.2d 326, 328-29

(6th Cir. 1973), cert. denied, 414 U.S. 858 (1973) (trademarks); see also Saturday

Evening Post Co. v. Rumbleseat Press, Inc., 816 F.2d 1191, 1200-01 (7th Cir. 1987)

(copyright). The district court's application of the Lear principles to a state law rightof-publicity action, however, was unique so far as we can determine.

We do not reach the issue of whether Lear is applicable here, though, because

we believe that the contested contract terms are unenforceable for a different reason.

We first note that in its brief, CBC argued that it should be relieved of its no-use and

no-challenge obligations because the Players Association breached a warranty

contained in § 1(b) of the 2002 agreement. Section 1(b) of the agreement provides

that "[the Players Association] represents and warrants that it has the authority to grant

the rights licensed herein." CBC argued that this was a warranty of title in the players'

publicity rights and that the Players Association breached this warranty, either because

the players did not have publicity rights or because CBC's first amendment rights

superseded any such publicity rights. We find this argument meritless: Section 1(b)

is not a warranty of title, it is merely a warranty that the Players Association is the

agent of the players. That warranty was not breached.

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Although the parties did not cite to it in their briefs, the agreement does contain

what we believe is a warranty of title not in § 1(b), but in § 8(a). The agreement

provides that its interpretation will be governed by New York law. In New York, a

contractual warranty is defined as " 'an assurance by one party to a contract of the

existence of a fact upon which the other party may rely.' " CBS Inc. v. Ziff-Davis

Publ'g Co., 75 N.Y.2d 496, 503, 553 N.E.2d 997, 1000 (1990) (quoting Metropolitan

Coal Co. v. Howard, 155 F.2d 780, 784 (2d Cir. 1946) (Hand, J.)). Section 8(a) of the

agreement provides that the Players Association "is the sole and exclusive holder of

all right, title and interest" in and to the names and playing statistics of virtually all

major league baseball players. This is quite obviously a representation or warranty

that the Players Association did in fact own the state law publicity rights at issue here.

For the reasons given above, the Players Association did not have exclusive "right,

title and interest" in the use of such information, and it therefore breached a material

obligation that it undertook in the contract. CBC is thus relieved of the obligations

that it undertook, and the Players Association cannot enforce the contract's no-use and

no-challenge provisions against CBC.

IV.

For the foregoing reasons, the district court's grant of summary judgment to

CBC is affirmed.

COLLOTON, Circuit Judge, dissenting.

I agree with the court’s discussion of the right of publicity in Missouri and the

application of the First Amendment in this context. I would resolve the contractual

issues differently, however, and I therefore respectfully dissent.

Advanced Media and the Major League Baseball Players Association

(“MLBPA”) contend that CBC has violated two provisions of the applicable License

Agreement as set forth in the majority opinion – the “no-challenge” provision and the

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“no-use” provision. CBC does not really dispute that it violated the restrictions, but

it contends that the contractual provisions are unenforceable. I disagree with the

court’s conclusion, sua sponte, that the provisions are unenforceable because MLBPA

breached a warranty set forth in section 8(a) of the agreement.

Section 8(a) appears under a heading “Ownership of Rights.” It provides as

follows: “It is understood and agreed that MLBPA is the sole and exclusive holder

of all right, title and interest in and to the Rights and/or Trademarks for the duration

of this Agreement.” Given the court’s resolution of issues concerning the right of

publicity and the First Amendment, section 8(a) wins the day for CBC only if it is a

warranty by MLBPA that CBC does not have rights under the First Amendment to use

the players’ names and statistics in its fantasy baseball games. 

Assuming that section 8(a) does address CBC’s constitutional rights (as

opposed merely to the players’ state-law rights of publicity, which are accurately

represented), and assuming that one party’s prediction about the constitutional rights

of another party is the sort of “fact” that can be warranted under New York law,

section 8(a) does not purport to make such a warranty. The provision states that the

parties “agree” that MLPBA is the sole and exclusive holder of all right, title and

interest in and to the Rights. CBC surely can “agree,” as a matter of good business

judgment, to bargain away any uncertain First Amendment rights that it may have in

exchange for the certainty of what it considers to be an advantageous contractual

arrangement. See Paragould Cablevision v. City of Paragould, 930 F.2d 1310, 1315

(8th Cir. 1991). That CBC later decided it did not need a license, and that it preferred

instead to litigate the point, does not relieve the company of its contractual obligation.

See Heath v. Dick Co., 253 F.2d 30, 34-35 (7th Cir. 1958).

I also do not believe the district court’s grant of summary judgment invalidating

the no-use and no-contest provisions can be sustained on the grounds actually raised

by CBC. I agree with the court that MLBPA has not breached the warranty set forth

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in section 1(b) of the agreement. And I would not adopt the district court’s conclusion

that the Supreme Court’s decision in Lear, Inc. v. Adkins, 395 U.S. 653 (1969), should

be applied to declare the no-use and no-contest provisions unenforceable as against

public policy. Lear held that state contract law establishing the doctrine of licensee

estoppel in a patent case was preempted where its enforcement would significantly

frustrate “overriding federal policies” embodied in the federal patent laws. The Lear

approach to preemption has been extended only to areas where there are comparable

federal policies derived from federal statutes that justify the preemption of state law.

In this case, there is no federal statute that addresses state-law contract obligations

with respect to the right of publicity, and no indication that Congress sought to

abrogate contracts in this area that are otherwise enforceable under state law. I would

not fashion a rule of federal common law that abrogates these freely negotiated

contractual provisions. See Saturday Evening Post Co. v. Rumbleseat Press, Inc., 816

F.2d 1191, 1200 (7th Cir. 1987).

For these reasons, I would reverse the district court’s grant of summary

judgment in favor of CBC.

______________________

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