SUPREME COURT REFUSES TO HEAR FANTASY BASEBALL DISPUTE BETWEEN MAJOR LEAGUE BASEBALL AND A MISSOURI FANTASY BASEBALL COMPANY - JUNE 2008

On June 2, 2008, the Supreme Court denied writ of certiorari to Major League Baseball to hear its licensing dispute with the St. Louis-based fantasy baseball company, CBC Distribution.

Originally, the 2005 lawsuit was brought by CBC against MLB to protect its right to use MLB players' names and statistics in its fantasy baseball league, which MLB had moved to prevent.

In response to earlier difficulties securing revenues from the rapidly growing fantasy baseball market, MLB created its own fantasy baseball league, and then began informing outside companies, each could license the use of the new MLB fantasy league, but could not, effectively, run independent fantasy baseball leagues.

Without comment, the Supreme Court turned down the MLB appeal of the Eighth Circuit ruling, which affirmed an earlier district court ruling that CBC Distribution is not required to pay licensing fees to use MLB players' names and statistics in its fantasy baseball league (Eighth Circuit Opinion, Supreme Court Order).

The Federal Appeals Court in St. Louis held that, First Amendment guarantees outweigh the "right of publicity" that team owners and the players union had offered to support the argument that fantasy baseball leagues must pay licensing fees to use player names, statistics, and other public information.

In its ruling, the Eighth Circuit said, “the information used in CBC’s fantasy baseball games is all readily available in the public domain, and it would be strange law that a person would not have a First Amendment right to use information that is available to everyone.”

In its argument to the Supreme Court, MLB argued that its "right of publicity" outweighed CBC's First Amendment right to use information that is publicly available. The Supreme Court, however, agreed with the appellate court ruling, which affirmed that First Amendment rights are superior, under the circumstances.

This, effectively, ends MLB's attempt to gain control of the fantasy baseball market through licensing rights, which is an argument that has consistently been rejected by the courts.

It is an important ruling no doubt, as fantasy baseball has grown in to a $1.5 billion per year industry since its introduction in the mid-1980's. Now MLB will need to pursue other methods to gain its share of the fantasy baseball market, not its claim of licensing rights by way of "right of publicity."

Here is a Wall Street Journal article (Wall Street Journal), and a New York Times article (New York Times) on the Supreme Court ruling.