Sports & Entertainment Beat

Benjamin Riesenberg is a former Garvey Schubert Barer legal extern who worked out of the firm’s New York office. He was a law student at Brooklyn Law School.

As the popularity of fantasy sports grows, so do the legal issues surrounding the industry.  The main legal challenges facing fantasy sports have been centered on the issue of whether pay-to-play fantasy sports contests constitute illegal gambling.  In 2006, Congress passed The Unlawful Internet Gambling Enforcement Act (“UIGEA”), which created certain guidelines for fantasy sports.  For a pay-to-play fantasy sports contest to be legal under the UIGEA, the fantasy sports game must have a result that is predominantly based on the knowledge of participants as opposed to mere chance.

Back in the olden days of last year, there was no particular reason for entertainment industry players to be particularly interested in the actual administration of the Internet, unless they were just curious.  Now, it benefits every brand owner to understand and pay attention to the basics of how new domain names come into being, who selects them and how they become public. 

The Department of Justice recently disclosed that the FBI and Justice Department prosecutors are investigating whether the St. Louis Cardinals hacked into the Houston Astros’ computer network to steal information about the Astros’ players.  According to the New York Times, officials believe that “vengeful front-office employees for the Cardinals, hoping to wreak havoc on [former Cardinals executive and current Astros general manager] Jeff Luhnow …” orchestrated the hack.  The breach apparently occurred in 2013.  The sports implications are interesting, but the data privacy implications are crucial.  Specifically, the nearly nonexistent protection that the Astros allegedly afforded its valuable confidential information should give pause to any business that, without intensive verification, believes its information is safe.

On September 30, 2014, the Federal Communications Commission (FCC) released a statement repealing its sports blackout rule, a rule that the National Football League (NFL) has defended and relied on since 1975. The blackout rule strengthened the NFL’s own blackout policy, which prohibited local broadcast stations from televising a game that did not sell between 85% and 100% of its tickets at least 72 hours before kickoff. Similarly, the FCC rule prohibited cable and satellite operations from airing any game that was blacked out on local broadcast stations. Although the FCC’s rule applied to all sports, the NFL has not only relied upon it the most, but also fought the hardest to preserve the rule.

On October 1, 2014, a new law came into effect that excepts parody, caricature and pastiche from the scope of copyright protection in the United Kingdom.  Under the previous law, parodists bore the risk of being sued for breach of copyright if they used clips from television shows, films or songs without the copyright holder’s permission.  The new law allows the use of such content as long as the use is “fair” (meaning it does not commercially compete with the original work) and is not discriminatory in nature.

On August 6, 2014, the online gaming community and video platform Twitch announced that copyright protected music and audio would be muted in its Video on Demand content.  In a move that is likely related to its recent acquisition by Amazon, Twitch is collaborating with Audible Magic, the provider of automated audio content identification software, to identify and mute copyright-protected content.  In an explanation provided on Twitch’s blog, it notes that it “respect[s] the rights of copyright owners” and is seeking to “help protect both our broadcasters and copyright owners.”

On August 18, 2014, the Ninth Circuit Court of Appeals issued an opinion that may impact the way website users are bound by Terms of Use.  In Nguyen v. Barnes & Noble, Inc., Plaintiff had purchased two items during a "fire sale" on the Barnes & Noble website, received an order confirmation and then received another e-mail the following day notifying him that the order had been cancelled.  Plaintiff proceeded to file a putative class action lawsuit against Barnes & Noble, alleging deceptive business practices and false advertising.  In response, Barnes & Noble moved to compel arbitration pursuant to the Barnes & Noble website Terms of Use.  Plaintiff argued that he never clicked on the link to the Terms, and he had no notice of the Terms or the arbitration provision.  The district court ruled in favor of the Plaintiff, finding that, even though the site contained a hyperlink to its Terms of Use on every page, including through completion of the purchase process, the Plaintiff did not have actual notice of the Terms, nor did the existence of the hyperlinks provide him with constructive notice (i.e. implied notice) of the Terms, and Plaintiff was therefore not bound by the arbitration provision.