Opinion ID: 219099
Heading Depth: 4
Heading Rank: 2

Heading: NBA Preemption Analysis Applied to The NBA Facts

Text: Applying the principles of preemption it had identified, the NBA Court concluded that the tort claim that the NBA sought to assert against Motorola and STATS was preempted by the Copyright Act because, the general scope requirement and the subject matter requirement having been satisfied, the extra elements necessary for such a claim nonetheless to survive preemption were absent. This was so despite the fact that Motorola and STATS were indeed disseminating, on a timely basis, information about NBA games that the NBA was also circulating. [35] The Court concluded that: An indispensable element of an INS hot news claim is free-riding by a defendant on a plaintiff's product, enabling the defendant to produce a directly competitive product for less money because it has lower costs.... Appellants are in no way free-riding on [the NBA service that provided game statistics to the public]. Motorola and STATS expend their own resources to collect purely factual information generated in NBA games to transmit to [Motorola] pagers. They have their own network and assemble and transmit data themselves. To be sure, if appellants in the future were to collect facts from an enhanced [NBA] pager to retransmit them to [Motorola's] pagers, that would constitute free-riding and might well cause [the NBA service] to be unprofitable because it had to bear costs to collect facts that [Motorola] did not. If the appropriation of facts from one pager to another pager service were allowed, transmission of current information on NBA games to pagers or similar devices would be substantially deterred because any potential transmitter would know that the first entrant would quickly encounter a lower cost competitor free-riding on the originator's transmissions. However, that is not the case in the instant matter. [Motorola] and [the NBA] are each bearing [its] own costs of collecting factual information on NBA games, and, if one produces a product that is cheaper or otherwise superior to the other, that producer will prevail in the marketplace. This is obviously not the situation against which INS was intended to prevent: the potential lack of any such product or service because of the anticipation of free-riding. NBA, 105 F.3d at 854 (footnote omitted).