Wednesday, August 09, 2006

An Update on the IP of Baseball Stats

A couple of months ago, I commented on the lawsuit focused on whether or not CBC (a company that runs fantasy sports leagues) had to pay a license to MLB in order to use the statistics from games (and the names of the players that generate those statistics). The legal issue focused on the "right of publicity" of the players, but from an economic perspective, the case is a no-brainer, as I wrote in the original post:
As a matter of economics, I can't see any basis for not allowing the use of baseball statistics in these services. It is not misrepresenting any facet of the service, and doesn't reduce the incentives to produce the "infringed" product, or any other future innovation derived from it. ("It" being baseball statistics, games, or players.) What it does do, though, is allow MLB to restrict the number of (and suppliers of) fantasy games that use baseball statistics. As the article points out, while 3 years ago there were dozens of options for fantasy baseball services, there are now only 7 licensed services. And that doesn't seem good at all.
A ruling came down in the suit today, finding in favor of CBC. Maury Brown has the details, as well as links to the ruling. Some highlights:
The court further finds that the undisputed facts establish that the names and playing records of Major League baseball players as used in CBC’s fantasy games are not copyrightable and, therefore, federal copyright law does not preempt the players’ claimed right of publicity. Additionally, the court finds that the no-challenge provision of the 2002 Agreement between CBC and the Players’ Association and the provision of this Agreement which prohibits CBC from using players’ names and playing records after the expiration of the Agreement are unenforceable based on public policy considerations.
I particularly like that the prohibition against using the names of players in this context is "unenforceable based on public policy considerations." I don't know the judge's social welfare function, but it seems to be working properly here. More:
This court has also noted above that Major League baseball players make a living from playing baseball and from endorsements; that they are well compensated for these endeavors; but that CBC’s use of players’ names and records in its fantasy games does not go to the heart of the players’ ability to earn a living.
[Emphasis mine.] The judge's rationale is not just a legal one, but an economic one, following the logic that I layed out in the earlier post and quoted above. The "infringement" at dispute here is not impacting the incentives to provide professional baseball, and the judge recognizes that point as important. If CBC's use of player's names and statistics was reducing the earnings of those that "supply" baseball, then their actions might well be harming social welfare and worthy of stopping from an economic perspective. ("Sorry Timmy, there's no Cubs game today because CBC told people that Juan Pierre went 1 for 4 with a stolen base last night.... the bastards!") But that's just not the case.

Good work, Judge Medler!

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