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Staking a Claim on Information

David G. Post American Lawyer "Plugging In" January-February 1997 *************************************************
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Consider the following somewhat fanciful scenarios. Mr. Jones is comfortably settled in at Yankee Stadium to watch his beloved Yankees take on the Atlanta Braves in the sixth game of the World Series. As the game winds down to its final innings, he takes out his cellular phone and calls his wife, who is stuck in her office and unable to get to a television set (let alone to accompany him to the stadium), and begins describing, in ever more excited tones, the progress of the game. At the same time, on the other side of town, Ms. Smith, an equally devoted Yankees fan, is calling her workaholic husband from home, relaying to him information on the game that she is getting from the televised broadcast of the game on the Fox network. Is there anything the Yankees, or Fox, or anyone else can do (or should be allowed to do) to stop Jones or Smith from behaving in this way?

Who, if anybody, owns this information about the game in progress? You might well ask whether it really matters. After all, there's little at stake here; the impact that Jones' or Smith's action might have on the Yankees' ticket or broadcasting revenues, or on Fox's advertising revenue, is so trivial as to be virtually non-existent. But things get more interesting in a hurry if we suppose that instead of a simple voice telephone Jones or Smith were using laptop computers for their communication, and further that an Internet Web site, rather than a beleaguered spouse, was at the receiving end of the telephone line, capable of relaying the updated play-by-play action to an audience potentially numbering in the thousands or millions. As this becomes more feasible with each passing day, the question of information ownership takes on more than purely academic interest.

One of the more interesting cases to arise from activities on the Internet -- National Basketball Association v. Sports Team Analysis and Tracking Systems (Stats, Inc.), 931 F.Supp 1124 (SDNY 1996) -- dealt with just this issue. Defendant Stats employed observers to watch televised broadcasts of sporting events (or to listen to radio broadcasts) and to relay the scores more-or-less instantaneously to a variety of devices (including specially-designed paging devices and a special Stats area on America Online) from which they could be retrieved by sports-hungry fans. The NBA -- which, not coincidentally is hoping to market its own competitive service, Gamestats, to do much the same thing -- sued in federal court, claiming, in essence, that the league owned this information and that its use without their authorization was unlawful.

Ordinarily, information ownership questions of this kind are the province of intellectual property law -- copyright, patent, trademark, and trade secret. But the NBA's intellectual property claim is in fact a very weak one. The games obviously do not qualify as "trade secrets," there's no patentable process on display, and, while Stats may be using the teams' trademarks without authorization, they are not doing so in a way that is reasonably likely to produce confusion in consumers, the touchstone of a trade secret claim. More surprisingly, perhaps, the NBA's copyright claim is also a weak one; the Supreme Court, in one of its more celebrated copyright cases of recent years, Feist v. Rural Telephone Services, 499 US 340 (1991) held that purely factual data -- such as Michael Jordan's shooting percentage, the score in the bottom of the 8th inning, the number of runners on base when Derek Jeter comes to bat, or the name of the Braves' pitcher -- are not copyrightable. To be sure, the broadcast of the games are covered by copyright -- we've all heard the announcement that "this copyrighted broadcast may not be re-broadcast or re-transmitted without the express written permission of the National Basketball Association." But Stats was not infringing that copyright because it was not re-broadcasting or re-transmitting the telecasts; it was simply extracting the uncopyrightable factual information from them, as they have, at least under the Copyright Act, every right to do.

So is the NBA left without a remedy here? Not in the eyes of the district court, which granted the NBA's request for a preliminary injunction based upon New York's law of "commercial misappropriation." Tracing the roots of this doctrine to a celebrated Supreme Court case from early in the century, International News Service v. Associated Press, 248 US 215 (1918), the court held that by "disseminating to fans the changing scores on a real-time basis . . . defendants have appropriated the essence of NBA's most valuable property -- the excitement and entertainment of a game in progress." There are any number of difficult legal questions lurking here. One might ask, for example, whether the Copyright Act, which clearly denies the NBA a property interest in this kind of information, pre-empts any state law of misappropriation that purports to give them one.

But more interesting than the specific holding in this case, from my perspective, is the way that this case illustrates the clash between old doctrine and new realities, and the way that the new communications media may subtly change the balance of public and private interests at stake here. The question raised by the NBA case seems to have been much-litigated in the early part of this century, when new broadcast technologies were making their presence felt; most of the cases -- 8 out of 12, to be precise -- that the court relied on in its discussion of the NBA's misappropriation claim were over fifty years old, and involved some remarkably similar attempts to utilize those then-new technologies to satisfy the public's hunger for up-to-the-minute information. (Remember Ronald Reagan, and the stories of his early days as a sportscaster, re-creating' play-by-play accounts of baseball games from information coming across the ticker wire? See National Exhibition Co. v. Fass, 143 NYS2d 767 (1955), enjoining similar activities as "commercial misappropriation"). Ever-conservative, the legal system looks back to these cases for guidance, finding in them the closest analogue to the challenged conduct.

But the Internet is not precisely analogous to earlier broadcast technologies. It may be one thing to fashion a doctrine of misappropriation to resolve conflicting claims of a small number of commercial competitors (i.e., those who could afford the substantial financial outlay necessary to transmit baseball play-by-play over the radio); it is quite another to apply that doctrine to a medium that opens up broadcast-like potential to virtually anyone who owns a PC (like Mr. Jones or Ms. Smith in my hypothetical). In the old world of broadcast technology, the interest of the public -- me and you -- in the resolution of property claims like the NBA's is a function solely of our status as passive listeners -- the range of information that we can receive on our radio or television sets. But in the world of the Internet, as the court in the Communications Decency Act case, 929 FSupp 824 (ED PA 1996), noted earlier this year, users "may speak or listen interchangeably, blurring the distinction between speakers' and listeners.'" That the NBA now has a property right in information pertaining to its games restricts not only my ability to receive information, but my new technologically-enhanced ability to retransmit that information, which in turn must change the relevant First Amendment balance in a case of this kind.

One thing is certain: in a world in which the Internet's infinite capability for access and dissemination threatens to make information of all kinds less and less valuable, the legal battles to protect ownership interests in that information are likely to become ever fiercer. This war will likely be fought on many fronts. The Feist holding itself, establishing the uncopyrightability of factual information and of compilations of factual data, is under attack. As I write this, 160 nations are gathered together at the World Intellectual Property Organization headquarters in Geneva to consider a new Database Treaty that would provide copyright-like protection to all "collections of data," and would prohibit anyone from "making available to the public all or a substantial part" of the contents of such collections without the owner's permission. (Domestic legislation to similar effect has been introduced by Rep. Carlos Moorhead in the House of Representatives, HR 3531). This would, if implemented, not only help the NBA to protect its property interest in the real-time action of its games, but may extend more broadly to cover the many statistical compilations (shooting percentages, rebounds per game, and the like) that the league derives from its performances. Valuable information, that (and the tip of a very large iceberg, consisting of such diverse collections as the Lexis or Westlaw databases of public domain legal information to the directory information in the Manhattan Yellow Pages) The Database Treaty may or may not pass in its current form. But either way, you can be sure that in the face of greater commercial prospects for exploiting information of this kind on a global scale, those currently in control of that information will intensify their efforts -- through litigation, and through lobbying for domestic and international legal protection -- to protect it from exploitation by others. Whether the public mobilizes quickly enough to protect its new interests in this information is an open question.