By Michelle A. Cooke, Co-Chair, Intellectual Property
Why it matters: On April 5, 2017, the Ninth Circuit ruled in Maloney v. T3 Media Inc. that federal copyright law pre-empted the state law right of publicity claims of two former NCAA student athletes who had argued that the defendant website improperly exploited their likenesses by non-exclusively licensing their digital images to online consumers in violation of California’s right of publicity laws.
Detailed discussion: On April 5, 2017, the Ninth Circuit held in Maloney v. T3 Media Inc. that federal copyright law pre-empted the state law right of publicity claims of two former National Collegiate Athletic Association (NCAA) student athletes, Patrick Maloney and Tim Judge, who had sued the defendant T3Media Inc., d.b.a. Paya.com (T3Media) in the Central District of California for improperly exploiting their likenesses by selling non-exclusive licenses permitting consumers to download their photographs from the NCAA Photo Library for non-commercial art use.
Factual and procedural background: Briefly, Maloney and Judge (collectively, plaintiffs) were part of the Catholic University men’s basketball team that won a first-ever dramatic upset victory in a Division III national championship game in 2001. As such, there were numerous “action” photographs of the plaintiffs taken during game play, and the plaintiffs also posed with the team for an official championship team portrait. Those photographs were owned by the NCAA, which placed them into its official Photo Library collection. In 2012, the NCAA contracted with T3Media (a provider of storage, hosting and licensing services for digital content) to provide online licensing services for the images in the NCAA Photo Library via T3Media’s website Paya.com. Pursuant to this arrangement, consumers could view digital thumbnails of the images contained in the NCAA Photo Library on Paya.com, and obtain a non-exclusive, single “not for commercial use” license permitting them to download a copy of a chosen photograph for $20-$30.
The plaintiffs filed a putative class action lawsuit against T3Media in 2014 in the Central District of California primarily claiming that T3Media exploited their likenesses without their consent in violation of the California statutory and common-law right of publicity laws. T3Media moved to strike the complaint pursuant to California’s anti-strategic lawsuit against public participation (anti-SLAPP) statute (Cal. Civ. Proc. Code §425.16), which allows for early dismissal of “meritless first amendment cases aimed at chilling expression through litigation.” T3Media argued in its anti-SLAPP motion, among other things, that the federal Copyright Act pre-empted the plaintiffs’ claims. The district court agreed and granted the anti-SLAPP motion in 2015. The plaintiffs appealed to the Ninth Circuit, which affirmed.
Ninth Circuit opinion: The Ninth Circuit began its opinion by restating the two-part test that must be met before a court can grant an anti-SLAPP motion to strike: (1) the defendant filing the anti-SLAPP motion “must make a prima facie showing that the plaintiff’s suit arises from an act in furtherance of the defendant’s constitutional right to free speech,” and (2) assuming that showing has been made, the burden shifts to the plaintiff “to establish a reasonable probability that it will prevail on its claim[s].”
In this case, the court noted that the plaintiffs conceded the first step of the anti-SLAPP analysis because “their suit arises from acts in furtherance of T3Media’s right to free speech,” i.e., its right to publish and distribute “expressive” photographs it owns on the Internet.
Thus, the court said, under step two of the anti-SLAPP analysis, the burden shifted to the plaintiffs to present a reasonable probability of prevailing on their state law right of publicity claims. The court found that the plaintiffs failed this step because their state law claims were pre-empted by the federal Copyright Act.
The court pointed out that Section 301 of the Copyright Act “affords copyright owners the ‘exclusive rights’ to display, perform, reproduce, or distribute copies of a copyrighted work, to authorize others to do those things, and to prepare derivative works based upon the copyrighted work.” Section 301, the court said, pre-empts all state law copyright (or their equivalent) laws if the rights at issue fall within the scope of the federal Copyright Act. This pre-emption determination also requires a two-step analysis: (1) a court must first determine “whether the ‘subject matter’ of the state law claim falls within the subject matter of copyright as described in 17 U.S.C. §§ 102 and 103,” and (2) assuming it does, a court must determine “whether the rights asserted under state law are equivalent to the rights contained in 17 U.S.C. § 106, which articulates the exclusive rights of copyright holders.”
The court said that the parties were “jousting solely” with respect to the first step of the pre-emption analysis and were asserting “competing rules that seek to define the boundary between copyright pre-emption and state law rights of publicity.”After considering the merits of both sides’ arguments and looking to case law precedent, the court found that:
“[t]he right of publicity seeks to prevent commercial exploitation of an individual’s identity without that person’s consent… Maloney and Judge do not contend that their likenesses were ever used on merchandise or in advertising. They challenge instead the copyright holder’s decision to distribute the copyrighted images themselves by selling consumers a non-exclusive license to download a chosen photograph from the NCAA Photo Library for non-commercial art use. Under these circumstances, the publicity-right claims…challenge ‘control of the artistic work itself.’…Because plaintiffs seek to hold T3Media liable for exercising rights governed exclusively by copyright law, the claims are preempted by section 301 of the Copyright Act.”
The court then moved on to the second step of the pre-emption analysis, and found that the district court was correct in its finding that “the rights plaintiffs assert are no different than the rights contained within the general scope of the Copyright Act.”
Thus, the court concluded:
“Under the circumstances presented here, the ‘subject matter’ of the state law claim[s] falls within the subject matter of copyright and ‘the rights asserted under state law are equivalent to the rights contained in 17 U.S.C. § 106.’… The federal Copyright Act therefore preempts the plaintiffs’ publicity-right claims… In light of that holding, plaintiffs’ cannot demonstrate a reasonable probability of prevailing on their challenged claims. The district court did not err in granting T3Media’s special motion to strike.”