College sports is big business.  Student-athletes generate truckloads of cash for their schools, but are prohibited by NCAA rules from sharing in the haul.  In fact, if the student-athlete learns that someone is commercially exploiting his or her name or picture, NCAA rules require the student “to take steps to stop such an activity in order to retain his or her eligibility for intercollegiate athletics.”  (Wouldn’t we all have loved to have had that problem in college….)

Given this state of affairs, when Electronic Arts made its NCAA Football games using the likenesses of college athletes, it could not have obtained licenses from the students even if it had wanted to.  That would have violated NCAA rules.  So what happens when EA uses the likenesses of college athletes without permission, makes a bunch of money, and then doesn’t compensate the students?  After graduation, once they are no longer bound by NCAA rules, they all sue, of course!

Hart v. Electronic Arts

Back in March, I wrote about how EA and its NCAA Football games received a major legal blow in a case called Hart v. Electronic Arts, 11-3750 (3rd Cir., filed Oct. 7, 2011).  In Hart, a former Rutgers football player, Ryan Hart, brought a class action lawsuit against EA, arguing that EA had violated his right of publicity by including a digital representation of him in the game without his permission.  In a 2-1 decision, the 3rd U.S. Circuit Court of Appeals ruled that EA’s First Amendment defense failed because EA failed to “sufficiently transform” Hart’s identity.  Specifically, the court observed that “[t]he digital Ryan Hart does what the actual Ryan Hart did while at Rutgers: he plays college football, in digital recreations of college football stadiums, filled with all the trappings of a college football game.”  The court also chastised EA for seeking to increase profits by capitalizing “on the respective fan bases for the various teams and players” by creating “a realistic depiction of college football for the users.”

In dissent, Judge Thomas Ambro argued that EA’s use of real people as “characters” in its sports games should be treated the same way as portrayals of individuals (fictional or nonfictional) in movies and books.  He opined that the inclusion of realistic player likenesses to increase profits should have nothing to do with First Amendment protection.  In Judge Ambro’s view, by making such a distinction, the majority created a “medium-specific metric that provides less protection to video games than other expressive works.”  He also stated that digital portrayals of real people should be protected where the likeness, as included in the creative work, has been transformed into something more or different than it was before.

Keller v. Electronic Arts

This month, in the case of Keller v. Electronic Arts, 10-15387 (9th Cir., filed May 6, 2009), EA experienced major déjà vu.  This time, Samuel Keller, the former starting quarterback for Arizona State University who later transferred to the University of Nebraska, brought a nearly identical lawsuit.  Once again, a 2-1 decision was reached, this time by the 9th U.S. Circuit Court of Appeals.  The panel ruled that, at least at this stage in the case, “[g]iven that NCAA Football realistically portrays college football players in the context of college football games…EA cannot prevail as a matter of law based on the transformative use defense….”

In dissent, Judge Sidney Thomas criticized the majority for confining “its inquiry to how a single athlete’s likeness is represented in the video game, rather than examining the transformative and creative elements in the video game as a whole.”  Citing to Judge Ambro’s dissent in the Hart case, Judge Thomas opined that the majority’s approach contradicts the “holistic analysis required by the transformative use test.”  In his view, the “salient question is whether the entire work is transformative, and whether the transformative elements predominate, rather than whether an individual persona or image has been altered.”

The Transformative Use Test

In both cases, all judges agreed (at least theoretically) that the appropriate test was the “transformative use defense” developed by the California Supreme Court in Comedy III Productions, Inc. v. Gary Saderup, Inc., 25 Cal.4th 387 (2001).  The test is “a balancing test between the First Amendment and the right of publicity based on whether the work in question adds significant creative elements so as to be transformed into something more than a mere celebrity likeness or imitation.”  To make this determination, both courts ostensibly looked at the five Comedy III factors, including whether: (1) the celebrity likeness is one of the raw materials from which an original work is synthesized; (2) the work is primarily the defendant’s own expression if the expression is something other than the likeness of the celebrity; (3) the literal and imitative or creative elements predominate in the work; (4) the marketability and economic value of the challenged work derives primarily from the fame of the celebrity depicted; and (5) an artist’s skill and talent has been manifestly subordinated to the overall goal of creating a conventional portrait of a celebrity so as to commercially exploit the celebrity’s fame.  Yet, out of six federal appellate judges (all ostensibly applying the same five-factor test), four reached one result and two reached an opposite result.

This is nothing new.  It has always been incredibly difficult to predict the outcome of right of publicity cases and some would say it is even more difficult to try and reconcile the outcomes.  That being said, there is much to be gleaned from these two rulings against EA.

In both cases, the majority opinions relied heavily on the case of No Doubt v. Activision Publishing, Inc., 192 Cal.App.4th 1018 (2011).  In the No Doubt case, members of the rock band “No Doubt” appeared in a game published by Activision called Band Hero where users could simulate performing in a rock band in time with popular songs.  Activision licensed No Doubt’s likeness, but exceeded the scope of the license.  When the 9th U.S. Circuit Court of Appeals analyzed Activision’s “transformative use” defense, the court ruled against Activision because the video game characters were “literal recreations of the band members” doing “the same activity by which the band achieved and maintained its fame.”  The court ruled that the fact that the avatars appear in a context of a videogame that “contains many other creative elements[] does not transform the avatars into anything other than exact depictions of No Doubt’s members doing exactly what they do as celebrities.”

Sound familiar?

In what appears to be a new, albeit unannounced, bright-line rule for video games, all three cases—No DoubtHart, and Keller—seem to be singing the same tune:  It is not transformative to depict celebrities in a video game doing exactly what they normally do for a living, especially if it is in the exact same setting.  While the dissenting judges urge a “holistic” examination of the game, any game developer with a lick of sense is going to pay close attention to the bright-line rule.  Some may contend that this may not be the same rule that exists for books and movies—and that it may not be fair—but this is the direction the law is headed.  Which once again brings to mind former Supreme Court Justice Benjamin Cardozo’s famous words:  “The law never is, but is always about to be.”