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Hart v. EA: Attempting to Balance Expression, Commerce and Sports

Posted in Sports Business and the Law

Perhaps the single most difficult analytic question facing sports law today is how to regulate the likenesses and marks of sports players and teams respectively. In Hart v. Electronic Arts, Inc., the Third Circuit has entered that fray with an interesting discussion of the various tests offered throughout the country, which balance First Amendment rights against the need to regulate commercial speech. Ryan Hart, the quarterback that led Rutgers to its first bowl game in over 20 years, sought compensation for EA’s use of his likeness in their popular NCAA Football video games. The district court granted EA’s motion for summary judgment and the Third Circuit reversed that decision last week.

 

Unlike most other industries, sports and video gaming are a perfect cocktail of commerce and expression. For instance, consumers wear sports paraphernalia in part because they believe the relevant sports team endorses the quality of the product, making their purchase more of a commercial activity. However, many consumers also wear sports paraphernalia to express their own allegiance to the team, making their use more of an expressive activity. Similarly, video games require a high level of creativity to produce but are also highly publicized and profitable widgets traded to and among consumers. Last week, the Third Circuit took on the task of determining whether a NCAA Football video game’s use of Rutgers QB, Ryan Hart, was protected by the First Amendment or regulable as commercial speech.

 

Various Circuits have come up with different ways to discuss the balance between First Amendment (expressive) and commercial interests.  Here, I wrote about the Eleventh Circuit’s adoption of the Rogers (2d Cir.) test, which holds that “unless the [use of the mark] has no artistic relevance to the underlying work whatsoever, or, if it has some artistic relevance, [but it] explicitly misleads as to the source or the content of the work,” it can be regulated by the Lanham Act.  The Third Circuit considered Rogers along with the “predominant use” test, which focuses on whether the offending work uses the likeness at issue predominantly for commercial purposes or for expressive purposes.

 

 

The Third Circuit rightly criticizes the predominant use and Rogers tests as vague and likely to be inconsistently applied largely because there is little case law on what constitutes “artistic relevance” or “predominant commercial purpose.” Instead, Hart adopted the first prong of copyright’s “fair use” analysis, transformative use. The Third Circuit determined that EA had not sufficiently transformed Ryan Hart’s likeness to justify First Amendment protection, by comparing Hart to the handful of cases using the transformative use test. Ultimately, none of the cases provide much help in applying the test to the Hart facts. Therefore, the dissent, though adopting the same test, comes to the opposite conclusion.

 

The dissent poses an important set of questions, which may be a basis for Supreme Court consideration. What constitutes sufficient transformation? When is the use of a likeness more than just commercial exploitation, particularly in a work that is both highly profitable and requires a lot of creativity to produce like a video game? The dissent also provides a fact that has no analytic weight, but under a legal realists theory, likely has the most impact: EA did not pay any of the players in the game because of NCAA amateurism rules. A fact that just seems unfair and may guide the decision in this and the pending O’Bannon class action suit with very similar facts and claims.