Spinelli v. National Footbal League
1:13-cv-07398
S.D.N.Y.Mar 27, 2015Background
- Seven professional sports photographers (Plaintiffs) sued the NFL, its clubs, Getty Images, Associated Press (AP), Replay Photos and others, alleging antitrust conspiracies, copyright infringement, contract breaches, fiduciary breaches and unjust enrichment related to licensing of NFL-related photographs.
- Getty held an exclusive NFL photo-licensing deal (via Getty Agreement) until 2009; AP acquired successive exclusive commercial licensing arrangements (First and Second AP Agreements) for 2009–2015; AP subcontracted retail fulfillment to Replay.
- Plaintiffs had contributor agreements with Getty and later with AP granting AP broad, often exclusive, perpetual licenses to reproduce, sublicense and distribute their photos; Getty contributor agreements contained broad arbitration clauses.
- Plaintiffs allege defendants allowed royalty-free or ‘complimentary’ uses by the NFL (including on NFL.com, publications, promotions and via links to retail sites), depriving Plaintiffs of royalties and depressing their bargaining power — and that the NFL’s collective licensing and exclusive deals restrained trade.
- Procedurally: Getty moved to compel arbitration; AP, NFL, Replay and AP-related defendants moved to dismiss. Court treated contract documents integral to the complaint and considered them on the motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of Getty arbitration clauses | Getty contributor agreements are unconscionable; plaintiffs should avoid arbitration | Getty: valid broad AAA/ICC clauses require arbitration of disputes arising out of/relating to agreements | Court: Arbitration clauses enforceable; challenges to whole contract must go to arbitrator; Getty claims (antitrust, copyright, contract, fiduciary, unjust enrichment) against Getty compelled to arbitration |
| Antitrust standing (Sherman Act) against NFL/AP | NFL’s collective licensing and exclusive grants to Getty/AP foreclosed competition and caused Plaintiffs’ royalty losses | Defendants: plaintiffs are indirect victims (suppliers), lack antitrust standing and fail to plead market or foreclosure | Court: Plaintiffs lack antitrust standing (efficient-enforcer factors) and fail to plead a plausible relevant product market; Section 1 claims dismissed |
| Product-market definition (commercial licensing of NFL photos) | Market is commercial licensing of NFL-related stock photographs (narrow) | Defendants: market definition improperly limited to a single brand; substitutes (other sports photos/licensors) exist | Court: Market inadequately pleaded; a single-brand market implausible absent facts showing lack of reasonable substitutes; claim dismissed |
| Legality of exclusive licensing to Getty/AP | Exclusive licenses enabled anticompetitive foreclosure and coercion of contributors | Defendants: exclusive vertical licenses lawful, competitively bid and limited in duration; no exceptional circumstances alleged | Court: Exclusive vertical licenses presumptively legal; no foreclosure shown; competitive bidding and limited terms undermine antitrust claim |
| Direct copyright infringement by AP, NFL, Replay | AP/ Getty/Replay/NFL used/authorized uses of plaintiffs’ photos without paying royalties; retroactive/royalty-free sublicenses invalid | Defendants: AP contributor agreements grant AP broad, perpetual, transferable sublicensing rights; sublicenses (including royalty-free or retroactive) are authorized; sublicensees (NFL, Replay) are licensed | Court: AP’s broad license and right to sublicense preclude infringement claims based on authorized uses; AP/Replay/NFL infringement claims dismissed (royalty disputes are contract claims) |
| Secondary copyright liability (vicarious/contributory) against AP | AP is liable for third-party uses (NFL/Replay) that deprived plaintiffs of royalties | AP: license authorized sublicenses; no primary infringement by sublicensees so no secondary liability | Court: Because no primary infringement by NFL/Replay, counts for contributory/vicarious infringement fail against AP |
| Breach of contract against AP | AP breached duties to track/limit NFL uses, pay royalties, and notify plaintiffs | AP: Contributor agreements contain no such limitations; plaintiffs’ contract readings are contradicted by agreement text | Court: AP Contributor Agreements unambiguous and grant AP broad sublicensing rights; plaintiffs fail to identify breached contract terms; breach claim dismissed |
| Breach of fiduciary duty against AP | AP held itself out as agent and fiduciary to plaintiffs | AP: agreements expressly disclaim agency; relationship is independent contractor/licensee | Court: Express disclaimers preclude fiduciary duty; claim duplicative of contract claim and dismissed |
| Unjust enrichment (alternative) | Defendants were unjustly enriched by uncompensated uses | Defendants: contracts govern the relationships; copyright law preempts alternative claims | Court: Unjust enrichment precluded by valid contracts and preempted by Copyright Act; claim dismissed |
Key Cases Cited
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (arbitrability challenges to contract validity go to arbitrator when challenge is to contract as whole)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (statutory antitrust claims arbitrable absent clear congressional intent otherwise)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (federal statutory claims generally subject to arbitration if parties bargained for it)
- Ashcroft v. Iqbal, 556 U.S. 662 (federal pleading standard: plausibility)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (antitrust pleading requires factual plausibility)
- JLM Indus., Inc. v. Stolt-Nielsen S.A., 387 F.3d 163 (broad arbitration clauses construed to reach disputes touching contract matters)
- Kamazaki Music Corp. v. Robbins Music Corp., 684 F.2d 228 (copyright claims covered by broad arbitration clauses)
- Graham v. James, 144 F.3d 229 (valid license immunizes licensee from infringement claims; unpaid royalties give rise to contract claims)
- American Needle, Inc. v. New Orleans Louisiana Saints, 560 U.S. 183 (collective activity by sports teams can be characterized under antitrust law; context matters)
- Atlantic Richfield Co. v. USA Petroleum Co., 495 U.S. 328 (antitrust injury requirement)
- In re Cotton Yarn Antitrust Litig., 505 F.3d 274 (co-conspirators not necessary parties; costs of separate arbitrations do not defeat arbitration)