No. 02-2793

In the

SUPREME COURT OF THE UNITED STATES OF AMERICA

ELECTRONIC ARTS, INC., a Tulania Corporation;

NATIONAL COLLEGIATE ATHLETIC ASSOCIATION

Petitioner

v.

Matt LAUER, individually and on behalf of all other similarly situated;

Al ROKER

Respondent

ON A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE

FOURTEENTH CIRCUIT

BRIEF FOR PETITIONER

ORAL ARGUMENT REQUESTED

Dated: January 14, 2014

Team Number 3

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TABLE OF CONTENTS

TABLE OF CONTENTS................................................................................................................ii

TABLE OF AUTHORITIES..........................................................................................................iii

STATEMENT OF ISSUE...............................................................................................................1

STATEMENT OF FACTS..............................................................................................................2

SUMMARY OF THE ARGUMENT..............................................................................................4

ARGUMENT...................................................................................................................................7

I. THE FOURTEENTH CIRCUIT COURT OF APPEALS IMPROPERLY

REVERSED THE DISTRICT COURT‘S DISMISSAL OF RESPONDANTS‘

COMPLAINT OF MISAPPROPRIATION BECAUSE NATIONAL COLLEGIATE

ATHLETIC ASSOCIATION (NCAA) IS SHIELDED FROM VIOLATIONS OF

PETITIONER‘S RIGHT OF PUBLICITY BY THE FIRST AMENDMENT AS A

PROTECTED WORK. ……………….………………………………………………7

A. A Broad Interpretation of the Transformative Use Test Aligns with the Majority of

Circuit Courts………………………………………………………………………….8

B. Adopting a Broad Interpretation of the Transformative Use Test Best Comports

with Public Policy and Protection of First Amendment Rights………………………12

II. THE NCAA AMEATEURISM AND ELIGIBILITY BYLAWS ARE PROTECTED

AS A MATTER OF LAW FROM ATTACK UNDER SECTION 1 OF THE

SHERMAN ACT……………………………………………………………….........14

A. NCAA Bylaws Have Historically Been Protected From the Sherman Act…….….14

B. The Net Procompetitive Effects of NCAA Eligibility Bylaws Outweigh the Net

Anticompetitive Effect………………………………………………………………..17

CONCLUSION..............................................................................................................................24

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TABLE OF AUTHORITIES

UNITED STATES SUPREME COURT CASE

Nat'l Collegiate Athletic Ass'n v. Bd. of Regents of Univ. of Oklahoma, 468 U.S. 85, 101

(1984)……………………………………………………………………………...5, 15, 16, 17, 19

Ornelas v. U.S. 517 U.S. 690 (!996)……………………………………………………………7

Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562 (1977)……………………....4, 8, 9

UNITED STATES COURT OF APPEALS CASES

Agnew v.Nat'l Collegiate Athletic Ass'n, 683 F.3d 328 (7th Cir. 2012)………………5, 16, 17, 22

Banks v. NCAA, 977 F.2d 1081 (7th Cir. 1992)……………………………………….5, 17, 18, 21

Cardtoons, L.C. v. Major League Baseball Players Association, 95 F.3d 959 (10th Cir.

1996)..............................................................................................................................................10

ETW Corporation v. Jireh Publishing, Inc., 32 F.3d 915 (6th Cir. 2003) ……………………9, 10

Hart v. Electronic Arts, Inc., 717 F.2d 141 (3rd Cir. 2013)……………..………………..9, 10, 11

Hoffman v. Capital Cities/ABC, Inc., 255 F.3d 1180 (9th Cir. 2001)……………………………10

McCormack v. NCAA, 845 F.2d 1338, 1345 (5th Cir. 1988)………………...………..5, 17, 19, 20

Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989)…………………………………………………9

Tanaka v. Univ. of S. California, 252 F.3d 1059 (9th Cir. 2001)………………………………..15

UNITED STATES DISTRICT COURT DECISIONS

Banks v. Nat'l Collegiate Athletic Ass'n, 746 F. Supp. 850, 859 (N.D. Ind. 1990)……………...18

Comedy III Productions, Inc. v. Gary Saderup, Inc., 25 Cal.4th

387 (2001)……….4, 8, 10, 11, 12

Justice v. NCAA, 377 F. Supp. 356, 383 (D. Ariz. 1983)………………………………………..19

UNITED STATES CODE

15 U.S.C.A. § 1…………………………………………………………………………………..15

CONSTITUTIONAL AMENDMENTS

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U.S. Const. Amend. I………………………………………………………………………..passim

OTHER AUTHORITIES

NCAA Manual, Bylaw 1.3.1……………………………………………………………………..14

NCAA Manual, 12.5.2.1…………………………………………………………………………14

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STATEMENT OF THE ISSUE

I. Whether NCAA Football is protected by the First Amendment from violations of rights

of publicity when, through the Transformative Use Test, the expressive work is found to

have altered the likeness of the individuals into a new original work.

II. Whether the procompetitive effects of the NCAA bylaws regarding eligibility and

amateurism outweigh the alleged anticompetitive effects of allowing college athletes to

receive compensation for their performance or image, thus protecting the bylaws from

Section 1 of the Sherman Act.

2

STATEMENT OF FACTS

Electronic Arts, Inc. (EA) produces a video game series annually entitled NCAA Football

which allows users to manipulate the actions of over 100 college football teams and thousands of

virtual players in a virtual world with simulated games. (Record at 17). The teams in the video

game mirror real teams in the NCAA identifiable by jersey number and position. (R. at 17).

Users have the ability to significantly alter the virtual player avatars by changing their surnames,

personal characteristics, accessories, physical abilities, and biographical details. (R. at 17). Users

most directly influence the games‘ outcome through their own play-calling and their ability to

use their hand-held controllers to manipulate the actions of the virtual players. (R. at 17). The

video game is not simply a reenactment of actual NCAA games using avatars of real players.

The users create their own games, manipulate rosters of players with custom settings, and can

direct a team for an entire season or more. (R. at 17).

Respondents Lauer and Roker allege that EA violated their rights of publicity by

misappropriating and incorporating their identities and likenesses for a commercial purpose in

connection with EA‘s video games without compensating the players whose attributes EA used

for the games. (R. at 18). Respondents identify their corresponding avatars in the video games

which draw from physical attributes referenced in the Ole Tulania Football Media Guide and

actual footage of Respondents during a season in the NCAA. (R. at 18). Respondents allege that

the misappropriations of their identities were committed with the full intent of increasing the

sales and profits of Petitioner without compensating Respondents. (R. at 18).

Lauer and Roker also allege that the NCAA bylaws regarding amateurism and eligibility

of college players violate Section 1 of the Sherman Act. The NCAA bylaws prohibit athletes

from accepting compensation, outside of scholarships and similar exceptions. (R. at 21). If

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athletes accept compensation for the use of their image or likeness, they are no longer eligible to

participate in college athletics. (R. at 21). Lauer and Roker further allege that the NCAA has

subsequently sold their image to EA, which has created a horizontal price fixing scheme that

prevents the players from being compensated for the use of their ―name, image and likeness used

in archival game footage‖. (R. at 21).

The District Court issued a dismissal order in favor of the NCAA, supporting EA‘s First

Amendment defense and citing decades of precedent upholding NCAA bylaws from attack

under the Sherman Act. (R. at 24). On appeal, the Fourteenth Circuit Court of appeals reversed

the District Courts order, finding the avatars not sufficiently transformative and requesting

further analysis of the net pro and anticompetitive effects of the bylaws. (R. at 11).

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SUMMARY OF THE ARGUMENT

The Fourteenth Circuit improperly reversed the judgment of dismissal when it held that

the NCAA Football video game was not protected under the First Amendment from violations of

Respondents‘ right of publicity. The lower courts adopted the Transformative Use test set forth

in Comedy III Productions, Inc. v. Gary Saderup, Inc., 25 Cal.4th

387 (2001) as a way to balance

the two interests. However, the test was incorrectly applied with a narrow focus on the

transformative value of the individual elements of the video game avatars. The history of the

Transformative Use test throughout the circuits indicate the analysis to involve the

transformative value of the expressive work in its entirety. View from the appropriate lens, the

use of avatars which closely resemble real NCAA football players such as Respondents, are not

the sum and substance of the video game. Rather, these avatars are the raw materials from which

the video game itself can be utilized effectively. The role that the avatars play assist in allowing

the users of the video game to manipulate and choreograph the finesse nuisances of a real

football game. Importantly, the users do not merely act out actual games that transpire in the

NCAA league. They create completely new, totally fictional games using the avatars provided.

The sum and substance of NCAA Football is this ability to allow users to create their own

football world. The video game therefore is transformed sufficiently to protect the use of the

avatars under the First Amendment.

The purpose of the right of publicity is to protect celebrities who profit off their image

from exploitation. Respondents are seeking to profit off their likeness in a video game that can

be altered and manipulated. Unlike in Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S.

562 (1977), NCAA Football is not profiting off of broadcasting Respondents‘ ―entire act‖ which

would be the games they played in. NCAA Football is also not deterring fans from attending

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games because an interactive video game is not a substitute for the real NCAA football games

being played. Rather, it is an alternative way for fans to enjoy the sport in an original manner

granting control to the users.

Additionally, the majority of circuit courts have adopted a broader interpretation of the

Transformative Use test than the lower court. Courts typically avoid placing restrictions and

limitations on rights granted through the Constitution, electing for broad interpretations when

specific violations are not outlined. Similarly in this case, adopting a narrow interpretation could

possibly lead to a dramatic limit on First Amendment rights and a limitation on the production of

expressive works which are an integral part of the country‘s society and economy.

The Fourteenth Circuit improperly reversed the judgment of dismissal when it held that

the anticompetitive and procompetitive effects of the NCAA bylaws regarding eligibility and

amateurism required further examination. The aforementioned bylaws have long found

protection from Section of the Sherman Act dating back to the landmark Supreme Court case,

Board of Regents. In Regents the Supreme Court stated that in general the NCAA bylaws are

procompetitive and not subject to the Sherman Act, although the case did hold that the NCAA

rules capping the amount of televised games were not protected activity. Although Respondents

in this case are former college athletes that have challenged the bylaws on the basis that they

prevent athletes from any compensation related to the use of their image and likeness, and

Regents did not specifically deal with the bylaws and their effects on student athletes, Regents

has been followed by nearly every circuit in cases challenging the amateurism bylaws. Multiple

cases, such as McCormack, Banks, and the recent Agnew have held that bylaws regarding

eligibility and amateurism are necessary for the survival of the NCAA product.

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Furthermore, regardless of the longstanding precedent holding that amateurism bylaws

are necessary to protect the product of non-professional college sports, the procompetitive effects

of the bylaws outweigh any anticompetitive effects when analyzed through the Rule of Reason.

Under the Rule of Reason, the standard analysis for Section 1 Sherman Act cases, the plaintiff

must first establish an anticompetitive effect on the alleged market. Defendants can then rebut

this challenge if they show that the challenged practice has net procompetitive effects. Plaintiffs

can subsequently rebut the procompetitive effects if they can show that the practice is not

necessary to maintain the procompetitive effects. If colleges were permitted to pay student

athletes, or if the student athletes were permitted to seek compensation for their image or

likeness, the product of the NCAA, i.e. amateur competition, would no longer exist. Even though

the Respondents are no longer athletes at the university, and thus not concerned with eligibility,

the bylaws are still necessary to protect the product, as well as the athletes. The Respondents

have not demonstrated any alternatives to the bylaws that would protect the product or produce

similar procompetitive effects. Therefore, the Fourteenth Circuit improperly reversed the order

of dismissal, as the bylaws should be protected as a matter of law from the Sherman Act, and the

Respondents case should once again be dismissed.

7

ARGUMENT

I. THE FOURTEENTH CIRCUIT COURT OF APPEALS IMPROPERLY REVERSED

THE DISTRICT COURT‘S DISMISSAL OF RESPONDANTS‘ COMPLAINT OF

MISAPPROPRIATION BECAUSE NATIONAL COLLEGIATE ATHLETIC

ASSOCIATION (NCAA) IS SHIELDED FROM VIOLATIONS OF PETITIONER‘S

RIGHT OF PUBLICITY BY THE FIRST AMENDMENT AS A PROTECTED WORK.

The first issue before the Court is whether NCAA Football is protected from violating

Respondents‘ rights of publicity by the First Amendment. This Court reviews whether a district

court prematurely granted summary judgment de novo. Ornelas v. U.S. 517 U.S. 690, 691 (!996).

Respondents filed a complaint alleging that EA violated their rights of publicity under

Tulania law by misappropriating and incorporating their identities and likenesses for commercial

purpose within the video game NCAA Football without compensation. (R. at 18). The Complaint

alleges that the characteristics of one of the virtual players in the video game match exactly the

attributes of Respondent Matt Lauer in the Ole Tulania Football Media Guide. (R. at 18). In

addition to the physical attributes, the virtual player also wears Respondent Lauer‘s jersey

number and has the same accessories. (R. at 18). Respondent claims that the misappropriation of

his identity and likeness were ―committed with the full intent of increasing the sales and profits

for Defendant(s) while not reimbursing Plaintiffs since [EA‘s] heightened realism in NCAA

Football video games translates into increased sales and revenues for EA.‖ (R. at 18).

Chief Judge Gifford of the Fourteenth District Court delivered the opinion of the court

finding under the Transformative Use test that there are sufficient elements of EA‘s own

expression found in the game that the use of the players‘ images are transformative and,

therefore, entitled to First Amendment protection. (R. at 25).

Chief Judge Couric delivered the opinion of the Fourteenth Circuit Court of Appeals. The

court found that the district court improperly dismissed Respondents‘ claim of violation of their

8

rights of publicity because NCAA Football did not use their likenesses in a transformative way

to fall under the protection of the First Amendment. (R. at 4).

A. A Broad Interpretation of the Transformative Use Test Aligns with the Majority of

Circuit Courts.

The Transformative Use Test was first formulated in Comedy III Productions, Inc. v.

Gary Saderup, Inc., 25 Cal.4th

387 (2001) as a way to balance the right of publicity with First

Amendment protections, ―[W]hen a work contains significant transformative elements, it is not

only especially worthy of First Amendment protection, but it is also less likely to interfere with

the economic interest protected by the right of publicity.‖ Id. at 405. The court gave further

clarification of the balancing test as ―whether the celebrity likeness is one of the ‗raw materials‘

from which an original work is synthesized, or whether the depiction or imitation of the celebrity

is the very sum and substance of the work in question.‖ Id. at 406.

Both lower courts elected to exclusively use the Transformative Use Test to analyze if

Petitioner‘s use of Respondents‘ identities and likenesses was protected under the First

Amendment. The District Court correctly decided that NCAA Football fulfilled the

Transformative Test. However, the opinion cited the creative elements and interactive devices

that alter the appearance and performance of the virtual players as the transformative elements,

and did not state that the video game itself was transformative. (R. at 25). The Court of Appeals,

also using the Transformative Use Test, did not arrive at the same conclusion, finding instead

that the creative elements cited by the district court did not surmount the resemblance between

the avatars and real life players. (R. at 8).

The singular relevant Supreme Court case addressing right of publicity is Zacchini v.

Scripps-Howard Broadcasting Co., 433 U.S. 562 (1977), in which this Court determined that

Petitioner‘s right of publicity was violated and not protected under the First Amendment when

9

Respondent filmed and broadcasted his entire act, without his permission. Id. at 575. The

rationale behind this Court‘s decision was, ―if the public can see the act free on television, it will

be less willing to pay to see it at the fair.‖ Id. Petitioner was being deprived of economic value of

his performance by the filming and airing of his entire act. Therefore, those actions cannot be

protected under the First Amendment.

Zacchini is distinguishable from the facts of the instant case. NCAA Football is an

entirely fictional video game, controlled solely by its users. Aside from the picture in the

montage which was confirmed by the Court of Appeals to be too fleeting to render the work non-

transformative, there is no actual footage of Respondents. (R. at 11). Rather, there are avatars

created to look like real NCAA players. There is no ―entire act‖ utilized in the video game that

would analogize Respondents‘ argument with Zacchini. More importantly, the creation of the

video game containing these avatars in no way detracts from Respondents‘ performances as

actual NCAA players in real games. The reasoning applied in Zacchini that the performer was

being deprived his livelihood is entirely inapplicable. Regardless of the existence of the video

game or the description of the avatars, Respondents‘ livelihoods are not being deprived by a

substitute for their performances.

The majority of circuit courts have used the Transformative Use test broadly in balancing

interests of the right of publicity and First Amendment protections. The Fourteenth Circuit

follows the Second and Third Circuits in adopting a more limited interpretation of the

Transformative Use Test. Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989), Hart v. Electronic

Arts, Inc., 717 F.2d 141 (3rd Cir. 2013). However, the most recent cases have come out of the

Sixth, Ninth, and Tenth Circuits, using a broader interpretation of the Transformative Use Test

and seek to look at the entirety of the work. ETW Corporation v. Jireh Publishing, Inc., 32 F.3d

10

915 (6th Cir. 2003) Hoffman v. Capital Cities/ABC, Inc., 255 F.3d 1180 (9th Cir. 2001)

Cardtoons, L.C. v. Major League Baseball Players Association, 95 F.3d 959 (10th Cir. 1996). By

focusing on the goals of the right of publicity and closely analyzing cases incorporated in the

lower court‘s opinion, a broad interpretation of the Transformative Use Test best comports with

the history and progress of the Transformative Use Test as a balancing tool for the right of

publicity and First Amendment protections.

In ETW Corporation v. Jireh Publishing, Inc., the expressive work in question was a

painting consisting of three views of Tiger Woods in different poses, two caddies, the Augusta

National Clubhouse, and the likenesses of famous golfers of the past. ETW, 332 F.3d 915 at 918.

The court found that the painting was entitled to the full protection of the First Amendment,

―Unlike the unadorned, nearly photographic reproduction of the faces of The Three Stooges in

Comedy III, Rush‘s work does not capitalize solely on a literal depiction of Woods. Rather,

Rush‘s work consists of a collage of images in addition to Woods‘s image which are combined

to describe, in artistic form, a historic event in sports history.‖ Id. at 938. The court focused on

the painting in its entirety, and not only on the portions depicting Tiger Woods.

In a closely analogous case, Hart v. Electronic Arts, Inc., the court analyzed whether the

First Amendment protected EA from violating amateur college football players‘ rights of

publicity by using their likenesses in their video game using the Transformative Use Test. This

test gives First Amendment immunity where, in an expressive work, and individual‘s likeness

has been creatively adapted in some way. Hart, 717 F.3d 141 at 171 (J. Ambro, dissenting). The

dissent disagrees with the majority‘s limited scope of viewing transformative effects as it relates

solely to the avatars in the game. Illustratively, the Comedy III court, in establishing the

Transformative Use Test, focuses on whether the celebrity likeness is one of the ‗raw materials‘

11

making up an original work or whether it is the very sum and substance of the work. Comedy III,

106 Cal.Rptr.2d 126. The dissent also references the decision in ETW, ―No doubt the use at issue

here – creating digital avatars of football teams and placing them in an interactive medium

designed for user interaction and manipulation – is significantly more ‗transformative‘ than the

use in ETW, which simply combined several photographs into a photomontage.‖ Hart, 717 F.2d

at 173. If ETW was analyzed under the same logic of the majority in Hart, the court would only

look at the parts of the collage with Tiger Woods‘ image and determine whether the actual image

of Tiger Woods had been transformed.

The opinion in the Court of Appeals for the instant case follows the majority in Hart

stating that the creative elements of NCAA Football are wholly unrelated elements in deciding

the transformative value. (R. at 11). The dissent in Hart refocuses the lens on the protection of

the entire work, ―the work should be protected if that likeness, as included in the creative

composition, has been transformed into something more or different than what it was before.‖

Hart, 717 F.3d at 174. Crucial to the dissent‘s argument is the actual purpose of the video game,

―Users are not reenacting real games, but rather are directing the avatars in invented games and

seasons‖ and ―[S]uch modes of interactive play are…imaginative transformations of the games

played by real players.‖ Id.

The lower court‘s opinion limits its focus on tallying creative elements rather than

analyzing the creativity of the work in its entirety, ―Acts of blatant misappropriation would count

for nothing so long as the larger work, on balance, contained highly creative elements in great

abundance.‖ (R. at 11). This is not the proper use of the Transformative Use Test. A creative

work is protected under the First Amendment by default. The issue is whether Respondents‘

right of publicity trumps the First Amendment protection. Historically the right of publicity was

12

established to protect the economic interests of people who are able to market their name from

others capitalizing on that ability without the person‘s permission. The use of Respondents‘

identities and likenesses are simply ‗raw materials‘ from which the original work is synthesized,

not the very sum and substance of the work in question. This is evident by the fact that the

avatars are continually updating with the real rosters in the NCAA. Respondents‘ corresponding

avatars are not the sum and substance of the work in question. Their avatars only appear in select

years of the game and then are eliminated. The very substance of the video game is the users‘

ability to manipulate teams and play imaginary games.

The Transformative Use Test was created in Comedy III to balance the interests of right

of publicity with First Amendment protections by analyzing whether the expressive work in

question was transformed, ―whether the new work merely ‗supercede[s] the objects‘ of the

original creation, or instead adds something new, with a further purpose or different character,

altering the first with new expression, meaning or message; it asks, in other words, whether and

to what extent the new work is ‗transformative‘.‖ Comedy III, 106 Cal.Rptr.2d at 126. The

expressive work, therefore, must be looked at in its entirety to determine the use of the likeness

of the celebrity. A broad interpretation of the Transformative Use Test follows the majority of

the circuit courts in analyzing the expressive work in its entirety to determine whether it is

granted First Amendment protections. NCAA Football, in its entirety, clearly utilizes

Respondents‘ likenesses in their avatars to heighten the realism of an alternate world which

allows users to manipulate and customize teams to play in imaginary games, departing from the

reality of Respondents‘ participation in collegiate athletics.

B. Adopting a Broad Interpretation of the Transformative Use Test Best Comports with

Public Policy and Protection of First Amendment Rights.

13

The right of free speech is one of the most jealously guarded rights in this country. In a

society with instantaneous access to ideas and information, it becomes increasingly difficult to

locate originality. In each expressive work, there can be numerous claims of true sources for the

raw materials. The Transformative Use test stems from this realization that originality is a rarity.

The analysis for who is due economic benefit is a weighing between the original source and the

expressive work in question. Clearly, this Court must favor a policy that encourages and fosters

the sharing of ideas and information rather than suppress creativity from fear of lawsuit.

If this Court adopts the narrow approach of the lower court, nearly every expressive work

would fall under scrutiny and most would not survive. Society adapts and grows by learning

from one another, replicating, and adding something new. The narrow interpretation of the

Transformative Use test would stunt this growth. By analyzing each expressive work element by

element, as the lower court did, the results will almost always point to another source of

inspiration. Every unique idea comes from another that was once unique. A broad interpretation,

however, would not limit the First Amendment rights.

The First Amendment automatically provides protection for expressive works. The right

of publicity must trump the First Amendment protections for a violation to exist. The First

Amendment does not demand, in order to pass the balancing test, that every work be wholly and

entirely original. Rather, tests such as the Transformative Use test provide a guideline to attempt

to draw a line between the two competing interests. The issue then becomes whether the subject

of the suit is the sum and substance of the work, or whether it is simply a raw material in an

original work. Raw materials stem from innumerable sources. Thus by interpreting the

Transformative Use test narrowly, this Court would be inviting a flood of misappropriation suits

for seemingly innocuous elements in a work that resemble something else. Instead, the broad

14

interpretation would promote progress of expressive works and still maintain protection from

abuse by analyzing the work in its entirety.

II. THE NCAA AMATEURISM AND ELIGIBILITY BYLAWS ARE PROTECTED AS A

MATTER OF LAW FROM ATTACK UNDER SECTION 1 OF THE SHERMAN ACT.

The Fourteenth Circuit Court of Appeals incorrectly reversed the District Court‘s judgment

of dismissal, because the NCAA Bylaws concerning Amateurism and Eligibility should be

protected from attack under Section 1 of the Sherman Act. Respondents have challenged the

bylaws regarding amateurism and eligibility as anticompetitive because they prohibit college

athletes from receiving compensation for their performance, or the use of their image and

likeness. However, the bylaws are necessary to protect the interests of both the institution, and

the college players. Despite the potential market restrictions that result from the NCAA bylaws,

the rules do not constitute an unreasonable restraint on trade and should thus be protected from

attack from Section 1 of the Sherman Act.

A. NCAA Bylaws Have Historically Been Protected From the Sherman Act.

The stated goal of the NCAA is ―to maintain intercollegiate athletics as an integral part of the

educational program and the athlete as an integral part of the student body and, by so doing,

retain a clear line of demarcation between intercollegiate athletics and professional sports.‖

NCAA Manual, Bylaw 1.3.1. The distinction between an amateur and professional athlete is

crucial to the NCAA product, and one of the key components of the distinction is that college

athletes are not paid or signed to individual contracts, whereas professional athletes are. In order

to protect this distinction, an athlete becomes ineligible if he ―accepts any remuneration for or

permits the use of his or her name or picture to advertise, recommend or promote directly the

sale or use of commercial product or service of any kind‖ NCAA Manual, 12.5.2.1. These rules

may act as a restriction on trade, but only in the sense that college athletes are not paid

15

monetarily, and are instead compensated through ―privileges and incentives such as scholarships,

access to state-of-art training facilities, and . . . the opportunity to compete on a national stage.‖

(R. at 10.) Thus, while the Fourteenth Circuit Court of Appeals held that the bylaws ―must be

examined more closely to determine their actual competitive effects‖, decades of precedent have

already established that the procompetitive effects outweigh the anticompetitive effects, and the

bylaws are thus protected from Section 1 of the Sherman Act. (R. at 14)

Section 1 of the Sherman Act states that ―Every contract, combination in the form of trust

or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with

foreign nations, is declared to be illegal. 15 U.S.C.A. § 1. Furthermore, to make a claim under

the Sherman Act, plaintiffs must ―demonstrate(1) that there was a contract, combination, or

conspiracy; (2) that the agreement unreasonably restrained trade under either a per se rule of

illegality or a rule of reason analysis; and (3) that the restraint affected interstate

commerce.‖Tanaka v. Univ. of S. California, 252 F.3d 1059, 1062 (9th Cir. 2001) (citations and

internal quotations omitted). Inthe landmark caseBoard of Regents, which dealt with an antitrust

challenge to an NCAA rule capping the amount of televised football games schools could

broadcast, the Supreme Court stated that the ―market‖ in the case of the NCAA was ―competition

itself—contests between competing institutions‖ Nat'l Collegiate Athletic Ass'n v. Bd. of Regents

of Univ. of Oklahoma, 468 U.S. 85, 101 (1984). The Supreme Court also stated that the NCAA is

―an industry in which horizontal restraints on competition are essential if the product is to be

available at all‖ which requires restraints and rules to maintain order. Id. Furthermore, the Court

stated that the ―academic tradition differentiates college football from and makes it more popular

than professional sports to which it might otherwise be comparable, such as, for example, minor

league baseball. In order to preserve the character and quality of the ―product,‖ athletes must not

16

be paid, must be required to attend class, and the like.‖ Id. The defining characteristic of college

athletics is that the student-athletes are amateurs, not professionals, which draws the interest of

the fans, and the bylaws are meant to protect that product. Although Board of Regentsdealt with

a different type of competitive restraint than the bylaws currently challenged, it established the

course of analysis that has long been followed by courtsin cases involving on antitrust challenges

to the NCAA.

As the Court of Appeals stated, Regents ―did not address the impact of the NCAA‘s

horizontal restraints on student athletes‖. (R. at 10.) The Court of Appeals found that the bylaws

required closer examination, and cited Agnew to support the holding that Regents did not bar

such further examination. In Agnew, the Seventh Circuit Court of Appeals dealt with a case in

which two former college athletes challenged NCAA scholarship rules.Agnew v. Nat'l Collegiate

Athletic Ass'n, 683 F.3d 328 (7th Cir. 2012). In that case, the Court ultimately dismissed the

claim as the plaintiffs had not established a market. However, the Court also stated that ―the

transactions those schools make with premier athletes—full scholarships in exchange for athletic

services—are not noncommercial, since schools can make millions of dollars as a result of these

transactions‖ and are thus subject to the Sherman Act. Id. at 340 (citation omitted). However, the

Court in Agnew also stated that although the Sherman Act can be utilized as an avenue of attack

to the NCAA bylaws, that ―[m]ost—if not all—eligibility rules, on the other hand, fall

comfortably within the presumption of procompetitiveness afforded to certain NCAA

regulations‖ Id. at 343.

Although Agnew held that former players, if they can establish the market, may challenge

NCAA rules through the Sherman Act, the case does not provide much else in support of the

Respondents case. As the Agnew Court stated, the bylaws challenged in that case dealt with

17

scholarship issues, rather than eligibility issues, which have historically been protected from

attack under the Sherman Act in multiple circuits. For instance, in McCormack the Fifth Circuit

held that suspending players, as enforcement of eligibility violations, did not constitute a group

boycott or violate the Sherman Act. McCormack v. NCAA, 845 F.2d 1338, 1345 (5th Cir.

1988).Additionally, the Seventh Circuit held in Banks that NCAA bylaws, which make college

athletes ineligible if they enter a professional draft but are not drafted, are also protected from

attack. Banks v. NCAA, 977 F.2d 1081 (7th Cir. 1992).Thus, precedent strongly suggests that the

bylaws should be afforded protection. However, the next question is whether the net

procompetitive effects created by the bylaws outweigh any anticompetitive effects.

B. The Net Procompetitive Effects of NCAA Eligibility Bylaws Outweigh the Net

Anticompetitive Effects.

As the Supreme Court stated in Regents, the ―Sherman Act was intended to prohibit only

unreasonable restraints of trade.‖ Board of Regents, supra at 99. Additionally, the―standard

framework for analyzing an action's anticompetitive effects on a market is the Rule of Reason.‖

Agnew, supra at 335.The Rule of Reason places the initial burden on the plaintiff to establish that

there is an ―anticompetitive effect on a given market within a given geographic area.‖ Id. If an

anticompetitive effect is established, ―the defendant can show that the restraint in question

actually has a procompetitive effect on balance, while the plaintiff can dispute this claim or show

that the restraint in question is not reasonably necessary to achieve the procompetitive

objective.‖ Id. at 335-36. The Respondents have alleged that the NCAA prohibition of

compensation for commercial use of college athlete‘s likeness restrains ―competition in the

market for Division 1 student-athletes and results in lower compensation for the student-athletes

than would otherwise prevail in a more competitive market.‖ (R. at 9). While it is unclear from

the facts provided what the potential compensation for athletes image and likeness would be, the

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procompetitive effects of the prohibition outweigh any potential anticompetitive effects raised by

the Respondents.

To begin, even if the Respondents have established the market (presumably player

compensation from image licensing) and that the NCAA has market power, ―market power, for

antitrust purposes, is the ability to raise prices above the competitive level by restricting output.‖

Banks v. Nat'l Collegiate Athletic Ass'n, 746 F. Supp. 850, 859 (N.D. Ind. 1990) (citation

omitted). In Banks, a college athlete challenged the NCAA rules which prevented players from

regaining college eligibility after entering a pro draft but failing to be selected. Id. The Court

stated that ―[i]dentifying the concept of ―price‖ in intercollegiate football is no easy matter‖ and

that while Banks was harmed in that ―the collegiate market for his skills [was] closed to him‖,

the market as a whole was not injured. Id. at 859-60. While players may have remained in

college rather than be stuck in a limbo situation as Banks was, which strengthened the NCAA

product, the NCAA persuasively argued ―the players' profit-making objectives soon would

overshadow educational objectives‖. Id. at 861. Furthermore, the bylaws ―advance the goal of

focusing student-athletes' attention and energies on collegiate endeavors, both academic and

athletic, and so have the procompetitive effect of promoting the integrity and quality of college

football‖ Id. In the present case, the Respondents specifically challenge the limitations on

compensation and the licensing of their image in video games. However, nothing in the record

articulates what specific effect their images had on the product, much less the market, as they

were only in used a brief montage. (R. at 10). Additionally, without addressing the First

Amendment issues of this case the videogames are likely successful because they allow ―users to

experience the excitement and challenge of college football‖, not because of any particular

players, and the developers do not include specific players in the game.

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Regardless, the procompetitive effects of the eligibility rules are inherent and have been

recognized as such by the courts. As Justice White stated in his dissent of Board of Regents, the

effect of many NCAA bylaws ―is to prevent institutions with competitively and economically

successful programs from taking advantage of their success by expanding their programs,

improving the quality of the product they offer, and increasing their sports revenues . . .these

regulations represents a desirable and legitimate attempt to keep university athletics from

becoming professionalized to the extent that profit making objectives would overshadow

educational objectives.‖ Board of Regents, supra (White, dissenting) at 123. (citations/quotations

omitted). Per the stated goal of the NCAA, student-athletes involved in NCAA athletics are just

that: students first, athletes second. College athletics enhance the college experience, and may

also provide opportunities through scholarship to allow athletes to attend college, but outside

compensation would distort, and possibly destroy, the entire institution. Additionally, although

the Respondents believe that without the bylaws, compensation for athletes would be higher.

However, they have produced no evidence to support such a claim. Although the record is

devoid of facts regarding profits that university athletic departments make, it is unlikely many

schools would even be able to pay athletes to play even if they were permitted to do so, beyond

what is allocated for scholarships. Additionally, as the District Court stated, in Justice v. NCAA,

a case in which players challenged sanctions against the University of Arizona, rules that are

―rooted the NCAA‘s concern for the protection of amateurism‖ are not considered to be

restraints on trade. Justice v. NCAA, 377 F. Supp. 356, 383 (D. Ariz. 1983). (also see R. at 24-

25).

Furthermore, as the Fifth Circuit stated in McCormack, the ―NCAA markets college

football as a product distinct from professional football. The eligibility rules create the product

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and allow its survival in the face of commercializing pressures.The goal of the NCAA is to

integrate athletics with academics. Its requirements reasonably further this goal.‖ McCormack,

supra at 1344-45. The enforcement of the bylaws is procompetitive, because without the bylaws

college athletics loses its appeal, i.e. amateur players representing their respective universities.

Players are compensated through scholarships, giving athletes the opportunity to pursue an

education through their athletic ability, which in turn supports the idea of amateur athletes. If

athletes were to be paid, the entire product would be destroyed, as the appeal lies in the fact that

the competitors are not professional athletes.

In the current case, the Respondents are former athletes that challenge their images brief

use in iterations of EA‘s NCAA Football videogames, and claim that the bylaws prevented them

from any form of compensation in connection to that use of their image. This is a novel concept,

but precedent suggests that that the procompetitive effects of the eligibility and compensation

bylaws outweigh any alleged anticompetitive effects in any antitrust challenge to the bylaws,

even those by non-collegiate athletes. For example, in Pocono Invitational Sports, a ―non-

institutional‖, or for profit, basketball camp challenged the NCAA amateurism bylaws. Pocono

Invitational Sports Camp, Inc. v. Nat'l Collegiate Athletic Ass'n, 317 F. Supp. 2d 569 (E.D. Pa.

2004). The camps were meant for high school athletes seeking to compete in the college ranks.

The NCAA ran ―institutional‖ camps, which were not for profit and allowed anyone to

participate, whereas the non-institutional camps were selective of their entrants. The challenge

arose because the NCAA camps were still subjected to the NCAA bylaws, and although the non-

institutional camps were not subject to the bylaws directly, the camps were faced with several

indirect effects. Specifically, the non-institutional camps challenged:

(1) the NCAA requirement that Division I coaches can only evaluate prospects at non-

institutional basketball camps if the camps are certified by the NCAA (Bylaw 13.13.3)

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and the requirements with which non-institutional camps must comply in order to be

certified (Administrative Regulation § 30.16); (2) the reduced number of days coaches

are permitted to visit plaintiffs' camps; and (3) the prohibition of Division I men's

basketball coaches from accepting employment with non-institutional camps attended by

prospects. Id. at 573.

Essentially, the camps alleged that the NCAA bylaws served to promote and protect the

institutional camps, and ―destroy‖ the non-institutional camps, as it required them to be certified,

which involved a detailed certification procedure. Id. at 577. However, the Court correctly

followed precedent and held that the bylaws were protected from attack under the Sherman Act.

Id. at 584.Specifically, the bylaws regarding the camps produced procompetitive effects and

protected young athletes from exploitation by ―increasing the importance of scholastics and

decreas[ing] the impact of nonscholastic external influences on the prospects' lives.‖ Id. at 583.

The bylaws also served to ―separate high school athletics from the realm of professional sports‖

and protect players from camps that had become increasingly ―physically and emotionally

taxing‖ on high school recruits. Id. at 582.

As the concurring opinion in Banks said, it is true that ―times have changed‖ and NCAA

athletics have changed, the bylaws work to protect against the dangers that have accompanied

the changing landscape of amateur sports.Banks supra at 1099.The bylaws regarding

compensation and licensing of images serve to protect young athletes from exploitation by

memorabilia dealers, television companies, videogames developers, or any other merchant that

would seek to take advantage of students inexperienced in business. Much like the certification

bylaws challenged in Pocono, the bylaws concerning licensing and compensation are

procompetitive in effect because they continue the long tradition of college athletics as an arena

purely for amateur student athletes, while also ensuring the safety of the athletes. In Pocono,the

non-institutional camps created scenarios which allowed ―street agents taking advantage of

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prospects, the summer season hurting prospects by making them miss classes and tests, and a

lack of parental involvement which exposed the prospects to exploitation by ―street agents,

runners, and hangers-on.‖ Id. at 577. Thus, the NCAA instituted rules restricting the camps ―so

that prospects would have more recruiting time when parents and coaches were available to

supervise the process.‖ Id. at 583. Similarly, the bylaws restricting compensation to athletes are

meant to protect young athletes from not only losing out on college eligibility, but also from

agents and companies from taking advantage of them.The Respondents have not demonstrated

any alternatives that would show that the bylaws are not necessary for the aforementioned

procompetitive effects.

Although the NCAA may benefit from the products that are made that briefly utilize

player images, bylaws pertaining to amateurism ultimately ensure the safety of the athletes,

much like the bylaws at issue in Pocono. The anticompetitive effect of the bylaws is that athletes

are not compensated for their performance, or in this case, the use of their image. However

procompetitive effects ensure that athletes remain focused on academics, as well as their athletic

endeavors, rather than endorsement deals. The NCAA and colleges may gain some profit from

the images of the athletes, but if the bylaws are removed, the product that enables many athletes

to receive a college education would also be destroyed. As the Court in Agnew stated the ―bylaws

eliminating the eligibility of players who receive cash payments beyond the cost attendance to

receiving an education . . . clearly protects amateurism.‖ Agnew, supra at 343.Furthermore,the use

of the player likeness itself is a procompetitive effect, as it serves to promote the product and in

the case of the videogames, maintain interest of the fans in a world filled with an ever growing

well of entertainment products. The times may be changing, but the values the NCAA sought to

create and protect, namely amateurism in athletics, remain the same. The bylaws procompetitive

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effects serve to protect those values, and as a result, the bylaws should remain protected from

Section 1 of the Sherman Act.

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CONCLUSION

For the forgoing reasons, Electronic Arts, Inc. and National Collegiate Athletic

Association, Petitioners, respectfully request, on Issue I, this Honorable Court REVERSE the

decision of the Fourteenth Circuit, and find instead that the NCAA Football video game is a

protected expressive work under the First Amendment that meets the Transformative Use test.

Also, Petitioners on Issue II respectfully ask this Honorable Court REVERSE the

decision of the Fourteenth Circuit, and find instead that the procompetitive effects of the NCAA

bylaws regarding amateurism and eligibility outweigh any market restrictions that may occur and

should thus be protected from the Sherman Act.

Respectfully submitted,

______________________________

Team Number 3