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From Intellectual Property Law Daily, October 3, 2017

Publicity-rights statute excepted fantasy sports companies’ use of college athletes’ names, likenesses

By Peter Reap, J.D., LL.M.

At least two of the statutory exceptions in Indiana’s right of publicity statute—the newsworthiness and public interest exceptions—removed from the statute’s coverage the use of three individual college football player plaintiffs’ names and likenesses by fantasy sports companies FanDuel and DraftKings, the federal district court in Indianapolis has decided. The court stated that, even if the defendants were engaged in illegal conduct, it could not conclude that such conduct would render the exceptions inapplicable. In addition, the defendants’ First Amendment defense could not be resolved on a motion to dismiss, and the Copyright Act did not preempt the plaintiffs’ right of publicity claims, the court decided (Daniels v. FanDuel, Inc., September 29, 2017, Pratt, T.).

The plaintiffs, Akeem Daniels, Cameron Stingily, and Nicholas Stoner are individuals who played football at the collegiate level. They filed suit against FanDuel and DraftKings, companies that run fantasy sports websites and mobile apps. The plaintiffs alleged that FanDuel and DraftKings used their names and likenesses in operating and promoting online fantasy sports contests without the plaintiffs’ consent, and that doing so was a violation of their right of publicity under Indiana law. The defendants’ motion to dismiss was before the court.

Indiana statute. Indiana Code Section 32-36-1-8(a) provides that a "person may not use an aspect of a personality’s right of publicity for a commercial purpose during the personality’s lifetime or for one hundred (100) years after the date of the personality’s death without having obtained previous written consent from a person specified in section 17 of this chapter." The statute defines a person’s right of publicity as "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." The defendants argued that the statute’s exceptions remove their conduct from the coverage of the statute.

Newsworthiness exception. Indiana Code § 32-36-1-1(c)(1)(B) specifies that the right to publicity does not apply to "[t]he use of a personality’s name, voice, signature, photograph, image, likeness, distinctive appearance, gestures, or mannerisms in material that has political or newsworthy value." The defendants argued that under Indiana law, the term "newsworthy" is "broadly construed." They contended that the definition articulated in Time Inc. v. Sand Creek Partners, L.P., 825 F. Supp. 210 (S.D. Ind. 1993) illustrates the breadth of the newsworthiness exception. In that case, the court concluded that:

[t]he scope of the subject matter which may be considered ‘of public interest’ or ‘newsworthy’ has been defined in most liberal and far reaching terms. The privilege of enlightening the public is by no means limited to dissemination of news in the sense of current events but extends far beyond to include all types of factual, educational and historical data, or even entertainment and amusement, concerning interesting phases of human activity in general.

Sand Creek, 825 F. Supp. 210 at 211-12.

Although Sand Creek was decided prior to the enactment of Indiana’s right-of-publicity statute, that fact did not by itself render Sand Creek inapplicable, the court held. The case law involving the definition of "newsworthiness" at common law developed and was in place before the passage of this statute. If the legislature intended for the term "newsworthy" to have a different definition under the statute than the one that had already developed through common law, the legislature could have indicated as much. Therefore, 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, the court determined

The court next must determine whether the materials at issue fall within the newsworthiness exception to the statute. The court concluded, as a number of other courts that have considered the issue in the context of professional sports, that plaintiffs’ athletic achievements and activities are "newsworthy" as contemplated by the statutory exception.

The plaintiffs argued that the "newsworthiness" exception did not apply, taking issue with two other types of materials on the defendants’ fantasy sports sites: the assignment of fictitious salaries to the plaintiffs and commentary posted in comment fields or in commentary/blog portions of the sites. However, the plaintiffs read the statute more broadly than its plain language allowed, the court opined. The statute 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. Adopting the plaintiffs’ reading of the statute would bring an almost limitless universe of materials within its reach, with obvious First Amendment implications. For these reasons, the fictitious salaries and commentary do not constitute a person’s name or likeness, and they are not encompassed within the definition of a person’s right of publicity.

Thus, the materials challenged by the plaintiffs fell within the "newsworthiness" exception to Indiana’s right-of-publicity statute, and therefore the prohibition of using an individual’s right of publicity without his consent did not apply to the defendants’ conduct. The court granted the defendants’ motions to dismiss on this issue.

Public interest exception. The so-called "public interest exception" to Indiana’s right-of-publicity statute exempts the use of a person’s right of publicity "in connection with the broadcast or reporting of an event or a topic of general or public interest." For the same reasons that the subject materials are newsworthy, they are also matters of public interest, the court said.

However, a key difference between the two provisions is that the public interest exception includes the condition that the use of a person’s right of publicity be done "in connection with the broadcast or reporting of an event or a topic," and the newsworthiness exception does not. Therefore, the key issue was whether the defendants’ conduct constitutes "broadcasting or reporting" under the statute. Given Indiana’s interpretive preference to read statutes in a manner that avoids constitutional issues, as well as other Circuits’ reasoning on similar issues, the defendants’ materials constitute "reporting," as that term is used in Ind. Code § 32-36-1-1(c)(3), the court explained. The court granted the defendants’ motions to dismiss on this basis as well.

Literary works exception. The defendant DraftKings argued that the fantasy sports contests at issue fall within the "literary works" exception created by the statute. The court disagreed. At the motion to dismiss stage, the court could not conclude that the websites at issue fall within the literary works exception.

Performers of recorded performances exception. Indiana Code Section 32-36-1-1(c)(2)(B) specifically exempts from the statute’s coverage "[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." The decisive issue was that the defendants used the plaintiffs’ names and likenesses for purposes other than to identify them as performers of a recorded performance, according to the court. At a minimum, the defendants also listed selections of the plaintiffs’ athletic and statistical achievements. The statute itself only lists a personality’s "name" as subject to coverage by this exception, and the defendants offered no justification as to why it should expanded to cover the other uses—including the plaintiffs’ likenesses—that were at issue in this case.

Illegal conduct. Setting aside the issue of whether it would be appropriate to make a finding as to whether the defendants engaged in conduct that violated Indiana law, the plaintiffs provided no authority or citation to support the contention that illegal behavior would render the defendants’ materials somehow outside the scope of the statutory exceptions. The statute itself does not include any such provision, and the plaintiffs cited no other authority or rule of law in support of their contention. Therefore, the court could not conclude that, even if the defendants were engaged in illegal conduct, such conduct would render Indiana Code §32-26-1-1 inapplicable.

First Amendment. The court concluded that the existence of the defendants’ First Amendment defense was not "so plain" from the face of the Amended Complaint that the suit can be regarded as frivolous. And the court concluded that consideration of this defense requires an analysis of evidence that was not possible or appropriate at the motion to dismiss stage.

Copyright Act preemption. State law rights granted by statute "are only valid if they do not interfere with federal copyright protections." Toney v. L’Oreal USA, Inc., 406 F.3d 905, 908 (7th Cir. 2005). DraftKings argued that Indiana’s right-to-publicity statute is preempted by the Copyright Act.

Here, the Indiana Act mirrors the Illinois Act highlighted by the Seventh Circuit in Toney v. L’Oreal USA, Inc., 406 F.3d 905, 908 (7th Cir. 2005). It seeks to protect the persona of the plaintiff, like the Illinois statute, by enumerating attributes unique to each individual. The subject matters at issue here, as in Toney, are the personas of the plaintiffs, as represented here by their names and likenesses. Finding that this case is factually analogous to Toney, the court concluded that the same result is required here. Indiana’s right-of-publicity statute is not preempted by the Copyright Act.

The case is No. 1:16-cv-01230-TWP-DML.

Attorneys: Joseph J. Siprut (Siprut PC) for Akeem Daniels. Kenneth L. Doroshow (Jenner & Block LLP) for FanDuel, Inc. Benjamin Margulis (Boies Schiller & Flexner LLP) for DraftKings, Inc.

Companies: FanDuel, Inc.; DraftKings, Inc.

MainStory: TopStory Copyright PublicityRights TechnologyInternet IndianaNews

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