Posted on November 13, 2008 by Stacia Lay

Jury Awards $28.1 Million to Retired NFL Players

On November 10, 2008, a jury awarded a $28.1 million verdict ($7.1 million in damages and $21 million in punitive damages) against the National Football League Players Association and Players Inc. in a class action suit brought by retired NFL players.

In the suit, retired football players (including the named-plaintiffs Bernard Paul Parrish, Herbert Anthony Adderley and Walter Roberts, III) alleged various claims against the NFLPA in connection with "Group Licensing Agreements" or "Group Licensing Authorizations" ("GLAs").  Pursuant to these GLAs, the NFLPA obtained the (allegedly) non-exclusive right to market retired players' names, numbers, likenesses, voices, facsimile signatures, photographs, and biographical information with respect to licensed products such as trading cards, video games, and personal appearances and events.  The money generated by such licensing was to be "divided between the player and an escrow account for all eligible NFLPA members who have signed a group licensing authorization form."

But the plaintiffs alleged that the NFLPA failed to comply with this revenue-sharing obligation and thereby violated the GLAs as well as fiduciary obligations owed to the retired football players.  You can read a copy of the (heavily-redacted) Third Amended Complaint, without exhibits, here.

The jury found for the retired football players on both claims but only awarded damages ($7.1 million) on the breach of fiduciary claim plus the $21 million in punitive damages.

The case cite is Adderley, et al. v. National Football League Players Association, et al., No. C 07-00943 WHA (N.D. Cal.).

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Posted on November 7, 2008 by Stacia Lay

Ninth Circuit Upholds First Amendment Defense to Strip Club's Trademark Claims

In E.S.S. Entertainment 2000, Inc. v. Rock Star Videos, Inc., the Ninth Circuit addressed the question of whether the producer of the video game "Grand Theft Auto: San Andreas" had a defense under the First Amendment to the claim of trademark infringement brought by the operator of a strip club in downtown Los Angeles called the Play Pen Gentlemen's Club.

In "Grand Theft Auto:  San Andreas," the game depicts, in the words of the Ninth Circuit, "one or more dystopic, cartoonish cities" modeled after American urban areas including, as relevant to this case, Los Angeles.  The game's version of Los Angeles, called "Los Santos," depicts various businesses such as liquor stores, ammunition dealers, bars and strip clubs, which were inspired, at least in part, from photographs of actual businesses in Los Angeles, including the Play Pen.  The strip club in the game, however, was named the "Pig Pen" and lacked some of the characteristics of the Play Pen building.

Nonetheless, the operator of the Play Pen sued the producer of the game for trade dress infringement, unfair competition and trademark infringement under the Lanham Act and unfair competition under California state law claiming that the game "used Play Pen's distinctive logo and trade dress without its authorization and has created a likelihood of confusion among consumers as to whether [the plaintiff] has endorsed, or is associated with, the video depiction."

The producer of the game moved for summary judgment arguing the affirmative defenses of nominative fair use and the First Amendment.  The District Court (Judge Margaret M. Morrow, who wrote a very thorough 55-page opinion containing a wealth of authority) rejected the nominative fair use defense but granted summary judgment to the game producer based on the First Amendment defense.

The Ninth Circuit agreed with the District Court, concluding that because the game's "Pig Pen" strip club did not use the actual trademarked Play Pen logo, the nominative fair use defense did not apply.

Applying the Second Circuit's test from Rogers v. Grimaldi, the Ninth Circuit also upheld the defendants' First Amendment defense to the strip club's trademark claims.  Although traditionally, the test had been applied to uses of a trademark in the title of an artistic work (such as the song "Barbie Girl" in the Mattel, Inc. v. MCA Records, Inc. case), the Ninth Circuit concluded that it should also apply to the use of a mark in the body of the work, such as the "Pig Pen" strip club in the video game.  Other than this clarification, the Ninth Circuit's application of the Rogers test was straightforward:  the use of the mark had some artistic relevance to the work ("some" meaning the level of relevance must merely be more than zero); and the use of the mark did not explicitly mislead as to the source or content of the work.  As to the latter point, the Ninth Circuit described its conclusion in creative fashion:

Both San Andreas and the Play Pen offer a form of low-brow entertainment; besides this general similarity, they have nothing in common.  The San Andreas Game is not complementary to the Play Pen; video games and strip clubs do not go together like a horse and carriage or, perish the thought, love and marriage.

You can read the Ninth Circuit's opinion here (PDF, 11 pages).

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