Sports Illustrated Profiles Cutting Edge Fair Use Case Handled by Miller Barondess
By Michael McCann, Sports Illustrated Legal Analyst, Monday, November 27, 2017 – You might not be familiar with DeAndre Daniels. The Toronto Raptors selected him with the No. 37 pick in the 2014 NBA draft. Now 25 years old, the 6’9″ forward has yet to appear in an NBA regular–season game. He has played professionally in Australia and Italy and most recently played stateside for the G League Erie BayHawks.
The odds of you knowing about Daniels are certainly higher if you are a Raptors fan or a UConn fan—he played a key role in the Huskies winning a national title in 2014. And if you follow high school basketball and college recruiting, Daniels’s name is likely to ring a bell. He was a five-star recruit out of Taft High School in Woodlands, California, and also played post-graduate ball at the IMG Academy.
There’s another group of basketball fans who when they hear the name “DeAndre Daniels” think, “I remember that guy.”
That group would be NBA draft fanatics.
Back in 2014, those who love to consume all things NBA draft likely came across scouting reports and video analysis of Daniels. In doing so they probably encountered a DraftExpress.com profile centered on Daniels. The profile, which is accessible for free and doesn’t require any kind of registration, includes an 875-word scouting report co-authored by Jonathan Givony and Mike Schmitz. The profile assesses how well Daniels projects to play in the NBA. It also includes a 12-minute, 24-second video that blends a series of short highlights of Daniels playing at UConn with graphics discussing Daniels’s strengths and weaknesses.
The DraftExpress profile on Daniels is now the subject of a federal lawsuit. And it is a lawsuit that could impact how websites show video clips of athletes.
Wazee Digital, a technology company that licenses video footage for the NCAA, has sued DraftExpress and its founder and owner, Givony, for copyright infringement. The lawsuit, filed in the U.S. District Court for the Eastern District of New York back in April, highlights the DraftExpress profile on Daniels to assert that DraftExpress has knowingly—and without Wazee’s consent—used video content that Wazee had registered with the U.S. Copyright Office. Wazee stresses that it derives “a substantial revenue stream from licensing game footage to various entities and media outlets, who create game highlights or other video montages and rebroadcast those videos on television and on the Internet.” DraftExpress, Wazee reasons, ought to pay for this content as well.
Benefiting Wazee is that courts have held that copyright law protects sports broadcasts. This dynamic ensures that the NCAA, as well as professional sports leagues, can earn substantial revenue from licensing rights to broadcast games.
Yet copyright protection in a broadcast does not, by itself, prevent DraftExpress from legally using portions of the content. To that end, DraftExpress asserts that its use of copyrighted broadcasts is through “fair use.” Generally speaking, the legal doctrine of fair use permits copying of protected material for certain uses. When fair use applies, the copying party need not obtain permission or submit payment to the party in possession of the copyright.
Although fair use analysis is somewhat subjective, federal law and the U.S Supreme Court have identified five basic factors. None of these five factors are necessarily more influential than the other and they are usually balanced against each another.
The first factor is the purpose of the copying. When the intent is for news reporting and sharing of information, fair use is more likely to apply. However, copying motivated by pursuit of money is less likely to gain protection. On one hand, DraftExpress can convincingly argue that its content is newsworthy and informative. Profiles of draft-eligible players educate NBA draft fans, journalists and others about those players. Accompanying video analysis only further informs readers. DraftExpress can also stress that its website offers such content for free. On the other hand, DraftExpress, like most sports websites, profits from advertisements, including pre-roll advertisements that run before videos. DraftExpress has seemingly secured a sizable audience to watch those advertisements given that ESPN recently paid for the right to publish future DraftExpress content.
The second factor is the nature of the original work. In this instance, the original work consists of videos copyrighted by Wazee. The more creative the original work, the more protection it tends to gain. In contrast, the more factual the original work, the less protection applies. The underlying logic is that creative content ought to receive significant protection in order to properly incentivize inventiveness—if creative individuals knew that their work could be easily copied, they might become less likely to invest their time, energy and money into developing those works. Conversely, works derived from facts and events are less original and less deserving of protection. Video of a basketball game requires some degree of creativity since it reflects broadcast design choices as well as studio direction. At the same time, video of a basketball game is factual in nature: it depicts a live sporting event that is controlled by the athletes, coaches and referees—not the broadcasters.
The third factor is the extent and substantiality of copying. A person who engages in unauthorized copying is more likely to gain protection under fair use if the amount of copying is relatively minimal. DraftExpress stresses that its video of Daniels consists of only 66 seconds of copyrighted video from game broadcasts that are several hours long. The substantiality aspect of the copying refers whether the material copied is critical to the original work. It seems unlikely that short clips of Daniels performing various moves on the court would be considered the “heart” of any original broadcast.
Fourth is how the relevant copying impacts the marketplace. Wazee contends that DraftExpress has caused the company to lose licensing fees that it believes DraftExpress owes. If DraftExpress can use such video without paying, DraftExpress is arguably diluting the value of Wazee’s broadcast licenses. After all, such a practice could encourage other websites to copy Wazee’s broadcasts without permission or pay. On the other hand, DraftExpress can assert that the relatively small amount of copying of Daniels and other players does not impact Wazee’s ability to license broadcasts of the entire games. Stated differently, DraftExpress featuring video highlights arguably doesn’t implicate the marketplace of selling entire game broadcasts.
Finally, the fifth factor is whether the “derivative work” (i.e., DraftExpress scouting videos) is sufficiently transformative from the original work. The U.S. Supreme Court has recognized so-called “transformative use.” The basic idea is that the derivative work uses the original work in such a distinct way that it becomes “transformed” into a different kind of work. DraftExpress’ legal filings suggest the company is confident it will prevail based on the transformative factor. In one filing, attorneys from DraftExpress’ law firm, Miller Barondess, detail how DraftExpress’ video of Daniels incorporates DraftExpress’s own original analysis and graphics:
[O]riginal graphics are followed by roughly 30-second-long clips, each illustrating one of Daniels’ strengths in actual gameplay situations. After assessing Daniels’ strengths, the Video Breakdown follows the same format to dissect and analyze his weaknesses (strengths begin at 28 seconds); (weaknesses begin at 6:01).
DraftExpress’ analysis of Daniels’ “Physical Tools” is illustrative. The “Physical Tools” segment begins 43 seconds into the video. An introductory graphic provides an overview of Daniels’ “Physical Tools,” which include “[e]xcellent size and length.”
Expect attorneys for Wazee, who have retained Adam Hirsch of Kutak Rock, to counter these points by insisting that graphic overlays and similar adjustments do not alter the underlying — and copyrighted — video of Daniels playing at UConn.
Like any lawsuit, Wazee v. DraftExpress could settle at any time. But if it proceeds toward a trial, its outcome would be important to anyone who posts highlight videos online and earns money by doing so. This is true for those who have monetized their YouTube accounts.
The Crossover will keep you posted on the litigation.
Michael McCann, SI’s legal analyst, provides legal and business analysis for The Crossover. He is also the Associate Dean for Academic Affairs at the University of New Hampshire School of Law and co-author with Ed O’Bannon of the forthcoming book Court Justice: The Inside Story of My Battle Against the NCAA.