1. (250 words, 1 reputable source)
Ready Case 1 then answer the following question: The district court is considering whether the exercise of personal jurisdiction is proper. What should it decide and why?
2. (250 words, 1 reputable source)
Answer the following question: Apple Inc. and Major League Baseball (MLB) signed an agreement for the broadcast of games. MLB will offer two live games per day, subject to black-out restrictions. Then MLB plans to roll out an entire offering of out-of-market games currently offered only through its premium live streaming video service. Read the case 2, and describe how Digital Rights Management (DRM) can help protect Apple, MLB, or both. WARNING: Do not simply state your opinion without support.
The new age of technology presents much opportunity for litigation. The Internet is no exception. When operating Internet websites, an important part of it is owning the domain name (www.example.com). Anyone in the world can own any domain name that is available and the facts of this case arise from this concept.
The plaintiff in this case, Weather Underground Corporation (Weather Underground), a Michigan corporation, is a commercial weather service. It owns and operates several domain names so that people can access their company through their websites. Defendants in this case, Navigation Catalyst Systems, Incorporated (“NCS”), a Delaware corporation, owns many domain names that are similar to the plaintiff’s company name (some would result from people misspelling the correct domain name for Weather Underground). NCS profits from consumers going to one of these websites and clicking on links that are on them.
Plaintiff filed suit against NCS and several of its companies in the District Court for the Eastern District of Michigan. As defendants were not incorporated in Michigan, the issue of personal jurisdiction arise. The courts of appeals have held that in order to establish specific personal jurisdiction (showing that this company has established contacts with the forum state), one must show three things: (1) the defendant purposefully availed himself of the privilege of acting in the forum state, (2) the cause of action arises from the defendant’s activities there, and (3) the defendant’s acts were so substantial as to make the exercise of personal jurisdiction there reasonable.
C.B.C. DISTRIBUTION AND MARKETING, INC. v. MAJOR LEAGUE BASEBALL ADVANCED MEDIA, L.P.: 505 F.3d 818 (8th Cir. 2007), cert. denied, 553 U.S. —, 128 S. Ct. 2872 (June 2, 2008)
CBC brought this action for a declaratory judgment against Major League Baseball Advanced Media to establish its right to use, without license, the names of and information about major league baseball players in connection with its fantasy baseball products. Defendants counter-claimed, maintaining that CBC’s fantasy baseball products violated rights of publicity belonging to MLB players and that players, through their association, had licensed those rights to Advanced Media, the interactive media and internet company of MLB. The MLB Players Association intervened in the suit and further asserted a breach of contract against CBC. The district court granted summary judgment to CBC and defendants appealed.
CBC sells fantasy sports products and it incorporates the names along with performance and biographical data of actual MLB players. Before each season begins, participants form their fantasy baseball teams by “drafting” players from various real MLB teams. Participants compete against other fantasy baseball “owners” who have also drafted their own teams. A participant’s success depends on the actual performance of the fantasy team’s players on their respective actual teams during the course of the MLB season. Participants pay fees to play and additional fees to trade players during the season.
From 1995 to 2004 CBC licensed the names and statistics on MLB players from the MLB Players Association pursuant to license agreements. The 2002 Agreement, which superseded in its entirety the 1995 Agreement, licensed to CBC the “names, nicknames, likenesses, signatures, pictures, playing records, and/or biographical data of each player” (the “Rights”) to be used in association with CBCs fantasy baseball products. Section 8(a) of the agreement further provides, “It is understood and agreed that [the Players Association] is the sole and exclusive holder of all right, title and interest” in and to the names and playing statistics of virtually all major league baseball players. CBC also agreed that, upon expiration or termination of the contract, it would “refrain from further use of the Rights … either directly or indirectly” (the no-use provision). Then in 2005, the 2002 Agreement expired. The MLB Players Association thereafter licensed to Advanced Media, with some exceptions, the exclusive right to use baseball players’ names and performance information “for exploitation via all interactive media.” Advanced Media provided fantasy baseball on its site, MLB.com, and it offered CBC, for a commission fee, a license to promote the MLB.com fantasy baseball games on CBCs site. Significantly, Advanced Media did not offer CBC a license for CBC to offer its own fantasy baseball products, thus prompting CBC to file this lawsuit alleging it had a “reasonable apprehension that it will be sued by Advanced Media if it continues to operate its fantasy baseball games.”
The district court granted summary judgment to CBC, ruling that it was not infringing any state-law rights of publicity that belonged to MLB players since CBCs products did not use the names of MLB players as symbols of their identities and with an intent to obtain a commercial advantage. It further held that even if CBC were infringing the player’s rights of publicity, the first amendment preempted those rights. The court held that CBC was not in violation of the no-use provision in the 2002 agreement with the Players Association because “the strong federal policy favoring the full and free use of ideas in the public domain as manifested in the laws of intellectual property prevails over [those] contractual provisions.”
JUDICIAL OPINION: JUDGE ARNOLD
It is clear that CBC uses baseball players’ identities in its fantasy baseball products for purposes of profit. We believe that their identities are being used for commercial advantage and that the players therefore offered sufficient evidence to make out a cause of action for violation of their rights of publicity.
CBC argues that the first amendment nonetheless trumps the right-of-publicity action. The Supreme Court has directed that rights of publicity must be balanced against first amendment considerations, and here we conclude that the former must give way to the latter. First, the information used in CBCs fantasy baseball games is all readily available in the public domain. “Pictures, graphic design, concept art, sounds music, stories, and narrative present in video games” is speech entitled to first amendment protection. Similarly, here CBC used the names, nicknames, and so forth … in an interactive form. This use is no less expressive than [non-commercial speech]. Courts have also recognized the public value of information about the game … referring to baseball as “the national pastime.” The facts in this case barely, if at all, implicate the interests that states typically intend to vindicate by providing rights of publicity to individuals. MLB players are rewarded, and handsomely, too, for their participation in games and can earn additional large sums from endorsements. Nor is there any danger here that consumers will be misled, because the fantasy baseball games depend on the inclusion of all players and thus cannot create a false impression that some particular player with “star power” is endorsing CBCs products. CBCs first amendment right in offering its products supersede the players’ rights of publicity.
We come finally to the breach of contract issue. The Players Association maintains that the no-use provisions in the 2002 agreement [were breached]. The district court held the no-use provision unenforceable as against public policy. We believe that the contested contract terms are unenforceable for a different reason. Section 8 (a) of the agreement is quite obviously a representation or warranty that the Players Association did in fact own these rights. Yet, the Players Association did not have exclusive “right, title and interest” in the use of such information [because this data is in the public domain], and it therefore breached a material obligation that it undertook in the contract. CBC is thus relieved of the obligations that it undertook, and the Players Association cannot enforce the contract’s no-use provision against CBC. Summary judgment to CBC is affirmed.
DISSENTING OPINIONL: JUDGE COLLOTON
Section 8 (a) appears under a heading “Ownership of Rights.” The provision states that the parties “agree” that MLB Advanced Media is the sole and exclusive holders of all rights. CBC surely can “agree,” as a matter of good business judgment, to bargain away any uncertain first amendment rights that it may have in exchange for the certainty of what it considers to be an advantageous contractual arrangement. That CBC later decided it did not need a license, and that it preferred instead to litigate the point, does not relieve the company of its contractual obligation.
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