Student-athlete likeness litigation appears headed to trial.

Last week, the presiding judge in the NCAA student-athlete likeness antitrust litigation denied competing motions for summary judgment. The judge has not yet issued a written ruling on either motion, but indicated that the issues cannot be resolved without a trial. Keep in mind, there were two classes seeking certification, and only one was certified: current student-athletes. Former student-athletes were not certified as a class.

Interestingly, the presiding judge gave a scathing reply to the NCAA's argument that paying players would affect competitive balance: "Maybe you could enforce more competitive balance by having coaches' salaries addressed."

The prerequisite of "commonality" in class actions.

It is axiomatic that class actions must involve common questions of law or fact. Otherwise, a class action would be inappropriate. This is called "commonality," and requires that the questions of law or fact are similar enough that a just result can be obtained without litigating multiple cases. In other words: different people, same story.

MDL sought in NCAA concussion litigation.

In the past I discussed multidistrict litigation (MDL) and when it is strategically advantageous. MDL is similar to a class action, but distinct. MDL is appropriate when there are one or more common questions of fact involved in different lawsuits that are pending in different judicial districts. In such cases, the actions may be transferred to any district for consolidated pretrial proceedings.

Certification as a class action requires common questions of fact -- or law -- and more. It requires a proposed class too large to join all the members in the pending lawsuit, the same or similar claims and defenses among the class members, and the lead plaintiffs must fairly and adequately represent the entire class's interests. A class action also requires either the risk of inconsistent or preclusive results in other lawsuits if the class is not certified, or that the common questions of law or fact predominate over those affecting only individual members.

The latest NCAA concussion litigation is a good example of a case where consolidation for MDL is sought. The first case was filed in 2011, and several more have been filed this year.

On the new concussion class action lawsuit against the NHL.

Concussion lawsuits against sports organizations are in vogue. The NFL recently settled a class action lawsuit for $765M. The NCAA is currently facing one. Now, former NHL players filed a class action complaint against the NHL. The number of plaintiffs started at 10, but has grown to more than 200. All of the concussion lawsuits center around a condition called Chronic Traumatic Encephalopathy (CTE). The NHL players' suit alleges the same culpable conduct on the NHL's part as the former NFL players' suit alleged against the NFL: that the league withheld information and research on the effects of repeated head trauma.

With the NHL suit, it is pretty simple. If the NHL withheld information from the players, then it will likely be found liable or will pay a lot of money in settling. The opposite is not true. If the NHL does settle for a lot of money, it does not necessarily mean that it would be found liable if the case went to trial. When the NFL settled its class action, it admitted no liability.

The players will still need to file a motion for class certification. At this point, they just filed the class action complaint, which leaves the door open for class certification. Individual federal district courts set their own rules regarding deadlines for class certification.

Student-athletes file motion for summary judgment in NCAA likeness antitrust litigation.

The student-athletes in the partially certified class action against the NCAA filed a recent motion for summary judgment. Summary judgment is granted when the parties agree on the important facts, and there is only one possible result from a legal perspective. Here, the student-athletes' motion for summary judgment will be denied, because even though there is no dispute on the important facts, more than one legal outcome can result from them. If NCAA rules were not upheld in the past, summary judgment may be granted. But courts have upheld NCAA rules before, and that precludes entry of summary judgment here.

NCAA seeks Supreme Court intervention on First Amendment argument in student-athlete likeness antitrust litigation.

On October 25, 2013, the NCAA filed a motion for review by the U.S. Supreme Court of the Ninth Circuit's decision on the NCAA's First Amendment argument in the student-athlete likeness antitrust litigation. The Ninth Circuit determined that the First Amendment argument did not apply, because the NCAA did not change the likenesses of the football players enough in the NCAA Football series of video games. The NCAA contends that the argument does apply, and wants the Supreme Court to decide the issue. As mentioned yesterday, certiorari is infrequently granted.

If certiorari is granted, the Supreme Court would review the decision concurrently with the likeness antitrust litigation. This sort of review is analogous to when a football coach calls timeout in a game so he can challenge a referee's decision and obtain further review. Upon doing so, the referee consults instant replay and decides whether his decision is confirmed, stands, or is reversed. Here, the difference is that the referee does not review his own decision; the Supreme Court would review the Ninth Circuit's decision.

EA and Collegiate Licensing Co. settle with former players in NCAA likeness litigation; NCAA only remaining defendant.

EA Sports and the Collegiate Licensing Company, defendants in the NCAA student-athlete likeness antitrust litigation, settled all claims with former and current college players. The defendants are paying the plaintiffs $40 million. The case has not been certified as a class action, so this was a good time to settle. If the defendants waited until a ruling on the plaintiffs' motion for class certification, they could have lost a significant amount of leverage in settlement negotiations, and they did not have much leverage at this point anyway.

The NCAA has not settled. It is the only remaining defendant, and publicly shows no indication that it intends to settle. I would be surprised if the NCAA allows the case to go to trial. The NCAA is banking on denial of the plaintiffs' motion for class certification. It also expects more public support as the case draws closer to trial.

Publicly, the NCAA claims it is prepared to go down with the ship; either college sports stays the same or the current model will be replaced with a minor league sports model. To college sports fanatics, of which there are many, this existential threat should garner the NCAA more public support as trial draws closer. Privately, the NCAA must be examining its options for settlement and how it would affect the current NCAA model.

The use of state consumer protection laws to curb litigation by "patent trolls."

There is a recent trend among states to try and use state consumer protection laws to prevent patent trolls from suing in their federal courts. I briefly discussed patent trolls elsewhere. When states use their own laws to inhibit the operation of federal law, such as here, federal pre-emption is implicated. The pre-emption doctrine comes from the Supremacy Clause of the U.S. Constitution. Under it, state laws that conflict with federal law are ineffective.

In this context, state consumer protection laws may or may not be pre-empted. There is another reason they may be unconstitutional: the burden on interstate commerce. Under the Commerce Clause, the federal government has the right to govern interstate commerce. Even though the federal government has not spoken directly on this issue, states cannot enact or use legislation that discriminates against interstate commerce. Using state consumer protection laws this way burdens interstate commerce, because one cannot avoid suing in a particular state if jurisdiction or venue requirements mandate that a lawsuit be filed there. Accordingly, a plaintiff entitled to redress could be foreclosed an opportunity to bring a lawsuit.

This does not mean that patent trolls are not a problem. It means that states likely have to wait for the federal government to address the issue. State consumer protection laws could be a valid way to defend an infringement lawsuit by a putative patent troll, but they cannot preclude a party from bringing the lawsuit.

On direct and indirect patent infringement.

There are two types of patent infringement, direct and indirect. Direct infringement occurs if you make, use, offer to sell, sell or import any patented invention in the U.S. without authorization of the patent holder. Indirect infringement occurs in two scenarios. First, you are guilty of induced infringement if you induce someone else to infringe another person's patent. Second, you are guilty of contributory infringement if you offer to sell, sell or import a component of a patented invention, and know that the component will be used for infringing purposes.

Direct infringement is a strict liability tort, which means you can be held liable without intending to do anything wrong. Induced and contributory infringement are not strict liability torts; both require the alleged infringer to know he or she is doing something wrong.

If the claims of a patent cover a product or apparatus, direct infringement will always be present. If a patent claims a method (method patent), you can also have divided infringement, which is a type of induced infringement. With divided infringement, a defendant can be held liable if he or she performed some steps of a claimed method and had others do the remaining steps, or if he or she had others to collectively perform all of the steps of the claimed method but no single party did all of the steps individually.

NCAA moves to dismiss student-athletes' claim in likeness antitrust litigation.

Yesterday, the NCAA moved to dismiss the plaintiffs' antitrust claim in the NCAA student-athlete likeness antitrust litigation. In moving for dismissal, a defendant must show that there is no factual scenario on which a plaintiff could win the case. Usually, a plaintiff can show some factual basis that would entitle him or her to relief.

The NCAA relied on NCAA v. Board of Regents of the University of Oklahoma, which deregulated college football television broadcasts and paved the way for conference realignment. The NCAA argues that Board of Regents categorically approved NCAA rules on amateurism. The student-athletes argue the opposite. The student-athletes are right, because the legality of the NCAA amateurism rules was not in question in Board of Regents. Only the legality of the NCAA rules on television broadcasts was under consideration. Accordingly, anything the court said about NCAA amateurism rules in Board of Regents was non-precedential.

Filing a motion to dismiss was an odd move by the NCAA, because it will be denied. Proper motion practice is to file a motion only when there is a chance it will be granted. Otherwise, it is a waste of time. The NCAA would have been better off filing a motion for summary judgment. Although unlikely, it would have at least had the possibility of being granted.

On false patent marking.

False patent marking occurs when someone marks an unpatented article as patented, intending to deceive the public, and it results in "competitive injury." Though undefined in the false marking statute, competitive injury can be loosely defined as "actual monetary damages." Before September 2011, competitive injury was not required to bring a false marking suit. In fact, a plaintiff could sue any defendant for false marking on behalf of the United States (which is called suing "qui tam").

The Leahy-Smith America Invents Act amended the false marking statute by requiring competitive injury. It is not that difficult to show competitive injury, provided you have "standing."

Showing an intent to deceive is more difficult. False marking alleges fraudulent conduct, and fraud requires "particularity" in the complaint. Accordingly, a false marking complaint must explain the "who," "what," "when," "where," and "why" of false marking conduct. This is incredibly difficult before discovery, and jurisdictional discovery may be required.

Basically, you have to explain your allegations in more detail than an ordinary case when suing for false marking or fraud. If you do not sufficiently explain yourself and the false marking conduct, your complaint could be dismissed.

Opting out of a class action: The NFL publicity rights example.

As discussed previously, class certification is required before a case is a class action. If a case settles after class certification, court approval is needed before the case can be dismissed. Class members who object to terms of any settlement can opt out of the class. If a class member opts out, he or she is not precluded from bringing another suit against the defendant. If a class member does not opt out, he or she is precluded from bringing another suit against the defendant (unless new facts or events are involved).

This happened in a case filed August 30, 2013. The plaintiffs are former NFL players, and they opted out of a previous class action, Dryer v. NFL. The plaintiffs argue that the NFL and NFL Films used their likenesses without compensation or their consent, like the plaintiffs are arguing in the NCAA student-athlete likeness antitrust litigation. Before approving a class action settlement, a court must make sure five requirements have been met:

- Reasonable notice must be directed to all class members bound by the proposed settlement;
- If the proposed settlement binds class members (which it usually would), the court can approve it only after a fair and adequate hearing on the settlement;
- The parties seeking approval of the proposed settlement must file a statement identifying the terms of any agreement;
- Any class member has a right to object; and
- The court can refuse to approve the settlement if a second opportunity for class members to opt out is not afforded, even if those class members previously had an opportunity to opt out.

Former NFL star Jim Brown made a strategic error in suit against EA Sports.

NFL hall-of-famer Jim Brown lost a recent appeal against EA Sports, in which Brown alleged that EA Sports used his likeness in the Madden series of video games without his consent. EA Sports is also a defendant in the NCAA student-athlete likeness antitrust litigation, and there are similarities between the two cases. The plaintiffs in the NCAA student-athlete likeness antitrust litigation alleged that their likenesses were used in video games without their consent. In the NCAA and NFL video games, names were not used, but other aspects of the players were imitated. The video game players shared the same jersey number, size, physical skills, skin color and other attributes with their real-life counterparts.

The names of most players are used in the Madden series of video games, because they are licensed by the NFL players' union (NFLPA). Player names that were not licensed by the NFLPA were not included in the game unless consent was given. There is no college football players' union, so no player names were used in the NCAA Football video game.

Brown made a strategic error in his lawsuit. The student-athletes' lawsuit alleged that the use of their likenesses was an antitrust violation. Brown alleged that the use of his likeness was a violation of federal trademark law, which was largely inapplicable to his case.

If Brown sued under common law rights of publicity, his claim would have survived dismissal because a different legal analysis would have applied. Instead, EA Sports filed a motion to dismiss, which was granted and affirmed on appeal.

Basically, in addressing the claim under trademark law, the court only considered the publicity rights issue insofar as it pertained to a violation of trademark law. Since Jim Brown's likeness is not a federal trademark, trademark law was largely inapplicable in his case. Brown should have known of the pending NCAA student-athlete likeness antitrust litigation, and amended his complaint to include a publicity rights claim.

If Brown had done this, when the trademark claim was dismissed, he could have still litigated the publicity rights claim. Since he did not, and the dismissal has now been granted, he is precluded from bringing the publicity rights issue in a new lawsuit.

Conferences to stop licensing trademarks to EA Sports' NCAA Football video games; more posturing in settlement negotiations in NCAA student-athlete likeness antitrust litigation.

The Big Ten, Southeastern (SEC) and Pac-12 Conferences have decided to stop licensing their trademarks to EA Sports for its NCAA Football series of video games. Last month, the NCAA said it would discontinue licensing its trademarks to EA Sports for the NCAA Football video games. In light of the NCAA's decision, EA Sports said its next college football release would be titled "College Football '15."

The Big Ten, SEC and Pac-12 are just the first conferences to say they will not license their trademarks to EA Sports for the video game. More conferences are expected to do the same. While individual schools can still license their marks to EA Sports for the game, EA would no longer be able to mention the NCAA or any of the conferences in future releases. This would diminish the realism of the game, and likely severely diminish profits EA is able to realize.

The conferences' decision is a continuation of the strategy employed by the NCAA: The conferences are "taking their balls and going home." Rather than pay the players for licensing their likenesses in video games, the conferences and the NCAA before them are now simply saying they will not take any part in the game's production, to avoid having to compensate the players.

In settlement negotiations, this is probably the best strategy the NCAA and the conferences can employ, because it eliminates the student-athletes' ability to negotiate for future profits. Unfortunately for gamers, it could mean the beginning of the end for college football video games.

EA's First Amendment defense a no-go in NCAA student-athlete likeness antitrust litigation.

In the NCAA student-athlete likeness antitrust litigation, EA Sports argued that its use of player likenesses is protected speech under the First Amendment. The court shot down this argument, basically saying that EA Sports did not change the likenesses enough to qualify as protected speech. Instead, the court said that the likenesses were directly replicated in the game. The players' class action complaint seeks damages and relief for players whose game likeness does not differ more than 10 percent from their real-life attributes (height, weight, etc.).

It is not surprising that the First Amendment argument was unsuccessful. I played the NCAA Football video games throughout my youth, and the game's success hinges on its use of accurate player likenesses. Year-to-year, the actual gameplay does not change much. The reason people keep buying the game is the updated rosters for every major college football team and its ability to create a virtual proxy for real-life football.

Dealing with patent trolls in litigation.

Currently, patent trolls are a problem in intellectual property litigation. They opportunistically seek and enforce patents to make money, not bringing lawsuits in good faith. This is a good article from a patent litigator about dealing with patent trolls.

During the summer of 2013, there have been a few legislative proposals aimed at stopping patent trolls. It remains to be seen whether the proposals will become law or not.

Six current student-athletes join NCAA student-athlete likeness antitrust litigation.

In the NCAA student-athlete likeness antitrust litigation, the judge said last month that she would not rule on the former student-athletes' motion for class certification until at least one current student-athlete joins the lawsuit. In the past week, six current student-athletes have joined. The current student-athletes represent four of the five "major" conferences: the ACC, Big Ten, Pac-12 and SEC. The Big 12 is the lone major conference without a current player in the lawsuit.

Having current student-athletes join the lawsuit is not a sufficient condition for class certification, but the judge considered it necessary before she would rule on whether the case can proceed with two classes in the class action: former and current student-athletes.

When is multidistrict litigation strategically advantageous?

I previously provided a primer on multidistrict litigation (MDL). Basically, MDL is appropriate when there are common questions of fact in two or more cases in different federal district courts. MDL consolidates the pretrial proceedings and places them in one forum. When the pretrial proceedings are complete, the cases are sent back to the courts from which they came.

MDL is a strategic consideration. In the paradigmatic example, a group of plaintiffs is not certified for a class action, and a corporate defendant tries to use MDL. In such a case, MDL is beneficial for both the defendant and plaintiffs, because it lowers litigation costs, and promotes efficiency and consistency. If the defendant's strategy is to delay litigation, which is common but ethically improper, MDL may not in the defendant's best interest.

A primer on Multidistrict Litigation.

If you are familiar with legal process, you may have heard of multidistrict litigation (MDL). Even if you are familiar with legal process, you may not be aware of MDL. Not all attorneys are familiar with it because it is an uncommon procedure used in complex civil litigation. As its name suggests, MDL deals with multiple cases involving common questions of fact in multiple federal district courts. In cases where class certification is appropriate for purposes of a class action, the case would previously have been appropriate for MDL as well. However, MDL is not appropriate once a class has been certified.

Not all cases appropriate for MDL are appropriate for class certification. Class certification requires common questions of law or fact, as well as a number of other criteria. With class certification, the preceding cases can, but need not be, in different federal district courts. In cases where MDL and/or class certification are available, the particular method selected is a strategic consideration.

Any real similarities or comparisons between the two methods ends there. There is a Judicial Panel on MDL made up of seven judges from different federal districts, appointed by the Chief Justice of the Supreme Court. During cases involving common questions of fact, any party in any of those cases can file a motion to transfer the actions under the MDL statute (28 U.S.C. 1407). The Judicial Panel can transfer cases on its own, but usually a party has to file a motion. The Judicial Panel decides whether to grant or deny motions to transfer before MDL, and whether to grant or deny motions to remand when MDL is complete. Here is a handy checklist for attorneys filing a new MDL motion.

Once a party files a motion to transfer any number of cases (two or more), the Judicial Panel sets the motion for hearing, notifying all parties in all districts that would be affected by the transfer. Filing a motion to transfer is an exercise in transcription, because one must include all parties in all cases where transfer is sought. If the motion is granted, copies of the order transferring the case are sent to each court from which a case is transferred. If the motion is denied, the order is filed only in districts where there is a pending motion to transfer.

If the motion is granted, MDL is only operative in pretrial proceedings. Pretrial proceedings in MDL cases are not conducted before the Judicial Panel, but are instead conducted in the court specified in the motion to transfer and its resultant order. When the cases are ready for trial, they are remanded to the district court from which they were transferred. If the Judicial Panel sees fit, it has discretion to separate claims, counterclaims and cross-claims before the pretrial proceedings are complete.