FAQ about Sport Statistics on the Net
By Marie D’Amico
Sports reporting on the Net is big business. ESPN’s SportsZone site attracts an estimated 400,000 people daily. To get all the sports news they need, those visitors make almost 3 million clicks within its pages, according to Starwave CEO Michael Slade.
A decision by the U. S. District Court for the Southern District of New York, issued July 19th, 1996, placed the electronic reporting of sports events in real-time in jeopardy. On January 30th, 1997, however, the U.S. Court of Appeals for the Second Circuit reversed the district court decision. Let’s take a look at both decisions.
1. The Case: The National Basketball Association (NBA) and NBA Properties, Inc., the company that owns the exclusive worldwide rights to market and promote NBA games, sued Sports Team Analysis and Tracking Systems, Inc. (Stats, Inc.) of Skokie, Ill. and Motorola’s SportsTrax , its paging sport service. Stats gathers and provides real-time regularly updated NBA game data displayed by SportsTrax pagers and published on America Online, Inc. (keyword: Stats). The district court’s initial ruling directly concerned SportsTrax pagers, but the court later amended its ruling to cover transmission of sports scores via Stats’ site on AOL or "any equivalent means."
The NBA sued Motorola and Stats for copyright infringement, commercial misappropriation under New York common law, false advertising and false designations of origin under the federal unfair competition statute, and violation of the Communications Act of 1974.
For over a year, the NBA had engaged in discussions with Stats and Motorola to provide game information for pagers, but after negotiations broke off, Motorola sold the SportsTrax service without the NBA ’s involvement or approval. In Jan. 1996, the NBA sent Motorola a letter demanding the company "cease and desist from further advertisement, distribution, and sale of the NBA SportsTrax Device." On March 5, 1996, NBA filed suit against Stats and Motorola.
2. What Is This Case About: Basically, SportsTrax provides NBA fans with information about NBA games via its paging service on a real-time basis. It provides the scores, the teams playing, the team in possession of the ball, whether the team is in free-throw bonus, the quarter of the game, the time remaining in the game, and foul statistics. The district court found the information was transmitted to SportsTrax subscribers’ pagers within two to three minutes of the on-court activity. Toward the end of competitive NBA games, SportsTrax updates the information more frequently.
On Stats’ AOL site, users are provided with even more comprehensive sports statistics with a faster response time. On Stats’ AOL site, sports scores are updated between every 15 seconds and one minute, and the player and team statistics are updated each minute.
Roger L. Zissu, a lawyer with Weiss Dawid Fross Zelnick & Lehrman, P.C., the New York law firm that represents the NBA and NBA Properties, says the NBA doesn't object simply to transmitting real-time sports scores. Rather, the NBA objects to frequent dissemination of all the other sports statistics, Zissu says.
The NBA has big money at stake in terms of controlling licensing fees for sports statistics reporting. For example, the district court found the National Broadcasting Company ("NBC") pays the NBA $3 million per game to broadcast NBA games, Turner Broadcasting pays the NBA $1 million per game for broadcast rights, and ESPN Radio pays the NBA between $50,000 and $100,000 per game for the national radio distribution rights for NBA games.
3. District Court Case Status:
Copyright Infringement: The district court dismissed the NBA ’s claim of copyright infringement in the NBA games and its claim of copyright in the broadcasts of the NBA games. The Court ruled that sports statistics from NBA games are facts, and therefore they cannot be protected under U.S. copyright law .
"The first person to find and report a particular fact has not created the fact; he or she has merely discovered its existence," the district court said. In addition, the district court ruled that the Copyright Act does not include a category for sports events in its list of protectible works of authorship even though Congress has considered it in the past. While the district court ruled that the copyright laws do protect sporting event broadcasts, the information conveyed by SportsTrax didn’t constitute broadcast copyright infringement because SportsTrax only conveyed factual information that any patron of an NBA game could acquire from the arena.
Unfair Competition: The district court did find that Stats and Motorola engaged in unfair competition and violated New York law through their "commercial misappropriation" of the NBA ’s proprietary interests in the NBA games. The district court found that Stats and Motorola reaped profits from the NBA ’s most valued asset - real-time NBA game information. The NBA vigorously protects its property interest in real-time game information by licensing rights to real-time information. The organization imposes specific restrictions on media entities covering NBA games and warns patrons of NBA games that their license to enter NBA arenas does not include permission to transmit real-time game information to others. The district court found that Stats and Motorola deprived the NBA "of the just benefits of its labors and expenditures in respect of the creation and production of NBA games and public dissemination of descriptions and accounts thereof."
False Designations of Origin and False Advertising: The district court rejected the NBA ’s claims of false designation of origin and false advertising. While Motorola did issue a false statement in a January 1996 press release that SportsTrax provides "updated game information direct from each arena" (the information comes from Stats’ reporters watching NBA games on television or listening to them via radio broadcasts of NBA games), the district court held that this misrepresentation wasn’t "material" in the sense that it would not affect a consumer’s decision to purchase SportsTrax . While Brookstone, a chain of stores, had issued a false advertising statement that SportsTrax was "officially licensed by the National Basketball Association," the company withdrew the ad after being notified of its error, corrected its next catalogue, and apologized to Motorola.
Communications Act Claim: The district court rejected the NBA ’s claim that Stats’ and Motorola’s conduct violated the Communications Act of 1934.
4. The Appeal: The district court initially found that Stats’ and Motorola’s conduct constituted commercial misappropriation under New York state law and granted the NBA a permanent injunction forbidding Motorola from selling the SportsTrax pager. The district court amended its decision also to prohibit Stats from transmitting real-time sports statistics via its AOL site. Stats and Motorola appealed the district decision to the U.S. Court of Appeals for the Second Circuit and the district court stayed the permanent injunction until the Court of Appeals could issue its decision. The Court of Appeals issued its decision on January 30th, 1997.
The Court of Appeals decided that neither Stats nor Motorola had misappropriated NBA ’s property with their transmission of real-time NBA sports scores and statistics. The Court ruled that the NBA had failed to show any competitive effect from SportsTrax on any NBA product, i.e. , "there is no evidence that anyone regards SportsTrax or the AOL site as a substitute for attending NBA games or watching them on television." In addition, the Court ruled that neither Stats nor Motorola had misappropriated NBA ’s property because they weren’t free-riders. Both Motorola and Stats expended their own resources in collecting, assembling, and transmitting NBA sports statistics to the SportsTrax pagers and AOL site. The Court concluded no unlawful misappropriation had occurred.
5. How to Play it Super Safe: The NBA could appeal the Court of Appeals’ decision. If you want to play it super safe until then, follow the NBA ’s Media Guidelines which specify how electronic media can use information from NBA games. The Guidelines permit you to transmit scores and/or other game information outside of an NBA arena without prior written approval of the NBA as follows:
1) No more than three times per quarter and once during each of the two quarter breaks;
2) Two times during each overtime period, once during the overtime period and once during the break immediately before the start of the overtime period; and
3) No transmission may exceed 30 seconds.
If you want to exceed these limitations, you’ll need a license from the NBA.
Questions, Comments? Please send e-mail to me.
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© 2006 NetGuide Magazine
