TECHNOLOGY Brings New Meaning to the Words "Sports Page"

Near the beginning of this century, the fastest way to find out how your favorite sports team fared in the big game -- besides attending in person -- was to catch the news report on the radio or in the next morning's newspaper. Now, as the twenty-first century approaches, such constraints simply no longer exist. Recent technology has provided avid sports fans with results, statistics, and other information from almost any major sporting event -- almost instantly!

For example, nowadays, such television stations as CNN's Headline News provide continuous score updates on a scrolling "screen crawler." Packages on such television systems as DirectTV allow fans to enjoy virtually any major sporting event through satellite technology. Additionally, numerous Internet websites provide instantaneous sports score and injury information with a quick click of a mouse-button.

Responding to the obvious demand from thousands of enthusiastic fans for immediate sports information, STATS, Inc. and Motorola, Inc. have developed and marketed the latest technological gizmo -- but not without prompting a great deal of legal controversy. Additionally, they put a jazzed-up version on an Internet site, offering it as a service available from America Online.

"SportsTrax" is a wireless paging device that provides up-to-the-minute information about various sporting events in progress. STATS, Inc. has hired people from all around the country to watch television broadcasts of particular games and enter the statistics and results on a computer as the game is played. This data is then transmitted to a satellite that beams the information to anyone possessing a SportsTrax pager. With the touch of a button, the pager's liquid crystal display reveals such information as a baseball game's score, the inning, who is on base, who is at bat; a basketball game's score, time remaining and ball possession information -- it even shows a graphic rendition of a basketball court that illustrates the position of the ball during the game. The pager allows sports fans to "attend" any game when access to tickets, a television, or a radio is either inconvenient or unrealistic. The companion web site provides similar information online.

The legal controversy stems from the fact that the paging system and Internet site were broadcast and marketed without the authorization of the sports leagues, television stations, or radio stations that are in the business of conveying the broadcasts to the public. As a result, the National Basketball Association brought suit against STATS, Inc. and Motorola, Inc. in a New York federal court last year. National Basketball Ass'n v. Sports Team Analysis & Tracking Systems, Inc., 939 F. Supp. 1071 (S.D.N.Y. 1996). Because STATS, Inc. does not pay to "publish" the sports information to its customers, the NBA claimed that STATS, Inc. was liable for copyright infringement and commercial misappropriation. The NBA sought to recover damages it incurred as a result of the device as well as to force STATS, Inc. to cease all SportsTrax operations.

The NBA's unfair competition claim was premised on "common law" (that is, the law that emerges from decisions made by judges in cases over the years, in this instance New York case law). The NBA asserted that it possesses the exclusive right to use and license "NBA Intellectual Property" in conjunction with advertising, promotion, and other products and services in all forms of commerce and media. New York law, which is similar to laws in states around the U.S., forbids "taking the skill, expenditures, and labors of a competitor and misappropriat[ing] for the commercial advantage of one person . . . a benefit or property right belonging to another." Sometimes even factual information -- if commercially valuable -- is protectable under this law.

The ability to control the dissemination of sports information is undoubtedly valuable to the sports leagues. Consequently, the sports leagues employ various methods of limiting others' use of their events or broadcasts without permission. Nowadays, when a patron buys a ticket to an event, such as a basketball game, it is common for the back of the ticket to exhibit a warning. For example -- "you agree that you will not transmit or aid in transmitting any description, account, picture, or reproduction of the event to which this ticket admits you." In an attempt to protect the value of its $750 million, four-year contract with NBC, televised NBA games are now broadcast along with a warning that "this program is authorized under the rights granted by the National Basketball Association," and that unauthorized use of "the pictures, descriptions or accounts" of the game is prohibited. According to papers filed in the lawsuit, the SportsTrax manufacturers originally sought a license from the NBA to sell such information to the public via wireless communications, but the negotiations eventually broke down and STATS, Inc. marketed the pager anyway.

In its copyright claim, the NBA asserted that it owns the copyrights in all broadcasts and transmissions in all media of NBA games, and that STATS, Inc. should be prohibited from using game information for commercial profit. Congress enacted our current copyright law, which gives authors exclusive rights to their "original works" for a finite period. The law endeavors to protect creative expression. Prohibiting others' use of factual information -- which is in the public domain -- is generally disallowed as too broad under copyright law.

Because copyright law does not allow an author to prohibit the reproduction of facts included in a copyrighted work, the NBA could not recover under a copyright rationale.

Based on the "common law" of misappropriation, though, Judge Loretta Preska of the United States District Court in Manhattan granted an injunction against Motorola and STATS, Inc., ruling that their nearly real-time dissemination of sports information constituted a misappropriation of the NBA's and its licensees' commercial interests in their intellectual property.

STATS, Inc. appealed to the U.S. Court of Appeals for the Second Circuit and its appeal sparked the interest of many. In an attempt to overturn the court's decision, not only America Online, but also such entities as The New York Times, and the Associated Press filed "friend of the court" briefs arguing that STATS, Inc. has the right to produce, market, sell, and operate its SportsTrax pager without consent of the NBA. Sports organizations such as the National Football League, National Hockey League, and Major League Baseball, as well as the media network NBC, align themselves with the NBA on this issue.

At the end of January, 1997, the Court of Appeals partially reversed the district court's decision, providing a safe-haven for information-peddlers in new technological media. National Basketball Ass'n v. Sports Team Analysis & Tracking Systems, Inc., 105 F.3d 841 (2d Cir. 1997). While the appellate court agreed that the NBA did not have any copyright interests in the factual statistical information surrounding the game, the appeals court disagreed with the district court as for the NBA's misappropriation claim. The Court of Appeals determined that the NBA failed to make out a viable case under New York's "hot-news" misappropriation doctrine. The "hot-news" doctrine, as interpreted by the appeals court, protects purveyors of time-sensitive information products from competitors' free-riding. However, the appeals court found that two critical elements were missing: (1) Sports Trax is not a substitute for the product offered by the NBA -- being at the game or watching it on television -- and (2) there was no "free-riding" because STATS and Motorola expended their own resources to collect the factual information (broadcast to the public via television or radio) which they then disseminated. Thus, the appellate tribunal reversed the district court's decision on the New York common law "misappropriation" claim.

The lawsuit raises interesting questions about how the law should respond to this heretofore untested technological invention. To many, the Second Circuit's decision makes sense, but obviously the lower court judge did not agree. The appeals court's ruling does not answer how other courts in the country -- or throughout the world -- will rule when presented with similar claims about Cyberspace communications of ongoing sports events or other news stories.

Because the U.S.A. has parallel court systems, consisting of a federal judiciary as well as separate state, commonwealth and territory judiciaries (each of the fifty states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam), the Second Circuit's decision technically binds only the federal district courts in its jurisdiction, those being federal district courts in New York, Connecticut and Vermont. Federal courts elsewhere have the prerogative to decide that New York law operates differently than the Second Circuit concluded, although absent a decision from a New York state court's disagreeing with the Second Circuit that would not seem likely.

Yet, even though the Second Circuit's opinion has persuasive value in courts (both federal and state) outside the Second Circuit's jurisdiction, the opinion does not bind New York state courts on the issue of how New York's common law "misappropriation" doctrine operates. Each state develops its own substantive law and federal court decisions do not bind state courts on the substantive law of the states. That leaves open the possibility that New York's highest state court might disagree with the Second Circuit on this subject and, if that were to occur, the ruling of that state tribunal would control on how courts should apply the New York "misappropriation" theory. On top of that, even a definitive decision on how the law of one state operates does not mean that the laws of the other states -- or other countries -- all operate similarly.

Could the continuous updates provided by the SportsTrax pager and companion web site ever really be deemed a re-creation or broadcast of a sporting event or are they merely the relay of factual news information? What is the appropriate level of control given to the sports leagues in preventing unauthorized broadcasting by third (nonpaying) parties of the factual information generated from their games? Surely the NBA cannot stop someone from telephoning a friend and telling him that the Knicks are up by 6 with 2:40 to play in the fourth quarter!

In response to its critics, STATS, Inc. maintains that SportsTrax does not attempt to rebroadcast the event -- it is merely a relay of scores and other factual information. It is unlikely that SportsTrax competes with a live game or television or even radio broadcast. No digital display can ever compare to actually watching the players on the court "setting a pick" or "ripping down" an offensive rebound. But how does this apply to a sport like baseball, where a detailed on-line play-by-play description would be very similar to what a radio broadcast could offer?

At least one thing is clear: we have seen only the beginning of this new technology. With a touch of a button (and a monthly fee), perhaps fans around the world will soon be able to watch still pictures and film-clips, or listen to sound, almost as the action unfolds live. In fact, during the 1996 U.S. Open tennis tournament, fans could access an Internet website that displayed a still photograph of a match in progress, updated every thirty seconds. Where does one draw the line between conveying factual information and providing a "portable ticket to the game" that eliminates the financial involvement of the sporting leagues or the contracted-for media broadcasts?

In the future, courts across the country -- indeed, across the world -- will need to strike a balance between public and private interests. While we like to think of "sports" as more than mere, paid entertainment, the truth remains that professional athletics are performances of highly paid performers. Up-to-the-minute accounts of games certainly increase fan interest and, indeed, one would think that sports leagues would be eager to see their games on new media. Instant sports information, however, is extremely valuable. While rapidly transmitted numerical and shorthand written descriptions lack much of the "color" of verbal and pictorial play-by-play reports, they may be sufficiently close approximations that companies like Motorola and STATS, Inc. may choose to pay reasonable sums for it, otherwise some future court may rule it unfair to let them reap where they have not sown, while at the same time the leagues may need to curb their appetites as to the size of such royalties lest future courts propagate the rationale adopted by the Second Circuit.

As computer and information technology changes the way we distribute and receive information in the twenty-first century, calls will come for our courts to attempt to wrestle further with the necessity to adjust the applications of our laws accordingly.