NCAA to EA Sports: You stabbed us in the back, now you will pay
NOV 21, 2013 7:16a ET
The NCAA sent a message to its former business partner: You surrendered when we agreed to never surrender, and now you're gonna pay the price.
The NCAA has sued Electronic Arts, accusing the video game giant of reneging on its agreement when it agreed to settle with former players suing for it unfairly using their images without compensation, and seeking to block the settlement.
A federal appeals court ruled in July that EA must face legal claims, and it agreed to settle for $40 million. But the NCAA never agreed, and now it wants EA to be responsible for all current and future claims -- and the legal fees.
The suit, which also names Collegiate Licensing Co., the nation's top sports licensing firm, claims that EA failed to carry enough liability insurance to cover "pending third-party claims, including for attorneys' fees that the NCAA has already incurred in defending against those claims."
"EA has demonstrated that it will not perform its contractual duty," the suit states.
The legal action by the former players was filed in 2009 by Sam Keller, a quarterback who played for Arizona State before transferring to the University of Nebraska. It argued for class action status to represent all current and former players and was combined with a similar lawsuit filed by former UCLA basketball star Ed O'Bannon against the NCAA.
EA had claimed its college-based sports games were works of arts deserving freedom of expression protection. The court disagreed, ruling the avatars used in the company's basketball and football games were exact replicas of individual players. The court concluded that the company did little to transform the avatars into works of art and said EA's NCAA Football game was too realistic to be considered a new art form.
"Every real football player on each team included in the game has a corresponding avatar in the game with the player's actual jersey number and virtually identical height, weight, build, skin tone, hair color, and home state," Judge Jay Bybee wrote for the divided three-judge panel.
Bybee rejected EA's contention that the game was akin to a newsgathering product that restates statistical, biographical and other publicly available information.
Bybee noted that EA omitted putting the names of players on the avatars.
"EA can hardly be considered to be 'reporting' on Keller's career at Arizona State and Nebraska when it is not even using Keller's name in connection with his avatar in the game," Bybee concluded.
Judge Sidney Thomas dissented. She warned that the majority's stance will jeopardize the rights of authors, movie makers and others to use real people in fictional settings.
"Absent the use of actual footage, the motion picture 'Forrest Gump' might as well be just a box of chocolates," Thomas wrote. "Without its historical characters, 'Midnight in Paris' would be reduced to a pedestrian domestic squabble."
EA no longer makes a college basketball game. The NCAA announced that it won't seek a new contract with EA Sports when the current deal expires in June 2014. EA said it intended to continue making a college football product without NCAA logos.
The decision upheld a lower court ruling.
In a separate ruling, the same panel tossed out Jim Brown's lawsuit against EA, even though Brown made similar, but not identical, allegations. Brown argued that his inclusion in the Madden games suggested he endorsed the product.
Brown's attorney Ron Katz said his client filed his lawsuit alleging a violation of the Hall of Famer's "trademark" rather than Keller's claim that EA violated his "right to publicity."
Authors, filmmakers and others are allowed to use famous people's "trademarks" as long as they are creating new artwork and not seeking to profit specifically from the celebrity.
The 9th Circuit said Brown, unlike Keller, needed to prove that EA explicitly mislead consumers into thinking Brown endorsed the Madden video games because of his inclusion. EA promoted a feature in older Madden games that included 50 of the greatest NFL players.
"EA's statement is true and not misleading," Bybee said, noting that the NFL had named Brown one of its 50 greatest players.
"As expressive works, the Madden NFL video games are entitled to the same First Amendment protection as great literature, plays, or books," the panel concluded. "Brown's likeness is artistically relevant to the games and there are no alleged facts to support the claim that EA explicitly misled consumers as to Brown's involvement with the games."
The Associated Press contributed to this report.