C.B.C. Distribution v. Major League Baseball

• Decision Date: 08 August 2006
• Docket Number: No. 4:05CV00252MLM.,4:05CV00252MLM.
• Citation: 443 F.Supp.2d 1077
• Parties: C.B.C. DISTRIBUTION AND MAKETING, INC., Plaintiff/Counter Defendant, v. MAJOR LEAGUE BASEBALL ADVANCED MEDIA, L.P., Defendant/Counter Claimant, and Major League Baseball Players' Association, Intervenor/Counter Claimant.
• Court: U.S. District Court — Eastern District of Missouri

443 F.Supp.2d 1077

C.B.C. DISTRIBUTION AND MAKETING, INC., Plaintiff/Counter Defendant, v. MAJOR LEAGUE BASEBALL ADVANCED MEDIA, L.P., Defendant/Counter Claimant, and Major League Baseball Players' Association, Intervenor/Counter Claimant.

No. 4:05CV00252MLM.

United States District Court, E.D. Missouri, Eastern Division.

August 8, 2006.

COPYRIGHT MATERIAL OMITTED

Neil M. Richards, Washington University School of Law, Rudolph A. Telscher, Jr., Douglas R. Wilner, Kara R. Yancey, Molly B. Edwards, Harness and Dickey, St. Louis, MO, for Plaintiff/Counter Defendant..

Jeffrey H. Kass, Jay A. Summerville, Armstrong Teasdale, LLP, St. Louis, MO, Michael J. Aprahamian, Patrick M. Kuhlmann, Foley and Lardner, Milwaukee, WI, for Defendant/Counter Claimant.

Donald R. Aubry, Steven A. Fehr, Jolley and Walsh, Karen R. Glickstein, Russell S. Jones, Jr., Travis L. Salmon, Monica M. Fanning, Shughart and Thomson, Virginia A. Seitz, Sidley Austin Brown & Wood, Kansas City, MO, for Intervenor/Counter Claimant.

MEMORANDUM OPINION

MEDLER, United States Magistrate Judge.

Before the court are the Motion for Summary Judgment filed by Intervenor/Counter Claimant Major League Baseball Players Association (the "Players' Association"), Doc. 44, the Motions for Summary Judgment filed by Plaintiff/Counter Defendant C.B.C. Distribution and Marketing, Inc. ("CBC"), Doc. 72, Doc. 107, and the Motion for Summary Judgment filed by Defendant/Counter Claimant Major League Baseball Advanced Media, L.P., ("Advanced Media"), Doc. 87. The Fantasy Sports Trade Association has filed an Amicus Brief. Doc. 76. The parties have filed Responses and Replies to the various Motions for Summary Judgment.¹ The parties have consented to the jurisdiction of the undersigned United States Magistrate Judge pursuant to 28 U.S.C. § 636(c)(1). Doc. 13.

I. BACKGROUND AND UNDISPUTED FACTS²

The Players' Association is the bargaining representative for Major League baseball players and is comprised of almost all persons who are employed as Major League baseball players. Advanced Media was formed in 2000 by various owners of Major League Baseball teams to serve as the interactive media and internet arm of Major League Baseball. As part of its responsibilities Advanced Media is in charge of running Major League Baseball's internet site, MLB.com.

CBC, which uses the trade name CDM Fantasy Sports, is a Missouri corporation whose primary offices are located in St. Louis, Missouri. CBC markets, distributes and sells fantasy sports products, including fantasy baseball games accessible over the Internet. To date, the business of fantasy sports games is a multimillion dollar industry in the United States.

CBC offers its fantasy sports products via telephone, mail, e-mail, and the Internet through its website, www. CDMsports.com. CBC currently offers eleven fantasy baseball games, two midseason fantasy baseball games, and one fantasy baseball playoff game. CBC provides lists of Major League baseball players for selection by participants in its games. Game participants pay fees to CBC to play its games and pay additional amounts to trade players.³ Prior to the start of the professional baseball season participants form their teams by "drafting" players from various Major League baseball teams. Participants or "owners" compete against other fantasy owners who have drafted their own teams. The success of one's fantasy team over the course of the baseball season is dependent on one's chosen players' actual performances on their respective actual teams.

In addition to fantasy sports games, CBC's website provides up-to-date information on each player to assist game participants in selecting players for and trading players on their fantasy teams.⁴ This information includes information which is typically found in box scores in newspapers such as players' batting averages, at bats, hits, runs, doubles, triples, home runs, etc. See CBC's Ex. 16E, attached hereto. CBC also hires journalists to write stories relevant to fantasy owners, such as the latest injury reports, player profiles, and player reports.

CBC entered into license agreements with the Players' Association covering the period from July 1, 1995, through December 31, 2004 (the "1995 and 2002 License Agreements" or the "Agreements"). Doc. 44, Ex. B 1 and B2. The 2002 License Agreement stated that it "represents the entire understanding between the parties and supercedes all previous representations." The court, therefore, need only address the terms of the 2002 License Agreement. The 2002 License Agreement stated that the Players' Association was acting on behalf of all the active baseball players of the National League and the American League who entered into a Commercial Authorization Agreement with the Players' Association; that the Players' Association in this capacity had the right to negotiate the Agreements and to grant rights in and to the logo, name, and symbol of the Players' Association, identified as the Trademarks, and "the names, nicknames, likenesses, signatures, pictures, playing records, and/or biographical data of each player," identified as the "Players' Rights"; and that CBC desired to use the "Rights and/or the Trademarks on or in association with the manufacture, offering for sale, sale, advertising, promotion, and distribution of certain products(the `Licensed Products')."

The 2002 License Agreement included a no-challenge provision which provided that "during any License Period ... [CBC] will not dispute or attack the title or any rights of Players' Association in and to the Rights and/or the Trademarks or the validity of the license granted." The 2002 License Agreement further stated that upon termination CBC would have no right "... to use in any way the Rights, the Trademarks, or any Promotional Material relating to the Licensed Products" and that upon expiration or termination of the License Agreement, CBC shall "refrain from further use of the Rights and/or the Trademarks or any further reference to them, either directly or indirectly...."

Between 2001 and January 2004, Advanced Media offered fantasy baseball games on MLB.com without obtaining a license and without obtaining permission from the Players' Association.

In 2005, Advanced Media entered into an agreement (the "Advanced Media License Agreement") with the Players' Association whereby the Players' Association granted to Advanced Media a license to use "Rights and Trademarks for exploitation via all interactive media," with some exclusions.

On or around January 19, 2005, Advanced Media executive George Kliavkoff sent a request for proposals (the "RFP") to various fantasy game operators and providers including CBC. The RFP invited CBC to submit a proposal under which it would enter into a license agreement with Advanced Media and participate in Advanced Media's fantasy baseball licensing program for the 2005 season.

On February 4, 2005, Advanced Media offered CBC a license to promote Advanced Media's fantasy baseball games on CBC's website in exchange for a percentage share of all related revenue. Doc. 74, Ex. 4N. In particular, Advanced Media stated that it was offering "a full suite of MLB fantasy games" and that CBC could use its "online presence and customer relationships, in conjunction with [Major League Baseball's] marks, to promote the MLB.com fantasy games to [CBC's] customers in exchange for a 10% revenue share from MLB.com on all related revenue." As such, Advanced Media was not offering CBC "a license to promote its own MLB fantasy game for the 2005 season." Doc. 74, Ex. 4N.

On February 7, 2005, CBC filed the Complaint for declaratory judgment in the matter under consideration in which it alleges that it has a reasonable apprehension that it will be sued by Advanced Media if it continues to operate its fantasy baseball games. The Complaint further alleges that Advanced Media has maintained that it has exclusive ownership of statistics associated with players' names and that it can, therefore, preclude all fantasy sports league providers from using this statistical information to provide fantasy baseball games to the consuming public.⁵ CBC also seeks injunctive relief asking that Advanced Media and its affiliates be enjoined from interfering with CBC's business related to sports fantasy teams. Doc. 1.

Advanced Media and the Players' Association, the latter of which intervened in this matter, assert counterclaims, including a contract violation based on the 2002 License Agreement between the Players' Association and CBC. Advanced Media and the Players' Association further assert as a counterclaim that CBC violated the players' right of publicity based on CBC's exploiting the rights of players including their names, nicknames, likenesses, signatures, jersey numbers, pictures, playing records and biographical data (the "Player Rights") via all interactive media with respect to fantasy baseball games. Advanced Media and the Players' Association also seek injunctive relief and exemplary and punitive damages. Doc. 7.

Because the claims and counterclaims asserted in the parties' pleadings and arguments in some, but not all, of the summary judgment briefs are considerably broader than the use of players' names and statistics, the court requested a teleconference with the parties to clarify the precise scope of the matters at issue. On the record, in a teleconference of May 24, 2006, CBC clarified that when it speaks of statistics it is referring to players' names and performance records, also referenced as players' playing records or players' records; "player[s'] names plus their performance records are the only thing[s] at issue in this litigation." Doc. 129 at 6, 9. Additionally, the Players' Association and Advanced Media clarified that they are not claiming that CBC cannot use players' playing records or biographical data; that they are challenging CBC's use of players' names in conjunction with its fantasy...