Spinelli v. National Football League
903 F.3d 185
2d Cir.2018Background
- Seven professional sports photographers (Plaintiffs) entered contributor agreements with the Associated Press (AP) to place NFL-event photos in AP’s image database; photographers retained copyright but granted AP broad licensing rights and royalties for certain qualifying sales.
- AP served as the NFL’s exclusive licensing agent (since 2009) and in a 2012 renewal agreement granted the NFL broad, royalty-free "complimentary" rights to AP-Contributor photos (i.e., photographer-owned works) dating back to April 1, 2009.
- Plaintiffs allege AP and the NFL (and Replay Photos, a vendor) exploited thousands of Plaintiffs’ photos without paying royalties; Plaintiffs refused contract amendments and sued in 2013 asserting copyright, contract, tort, fraud, and Sherman Act claims.
- The district court dismissed all claims for failure to state a claim; Plaintiffs appealed. The Second Circuit reviewed whether AP could retroactively or permissibly grant the NFL complimentary licenses and whether Plaintiffs stated various alternative causes of action.
- The Second Circuit affirmed dismissal in part, but vacated and remanded as to copyright infringement claims relating to NFL uses from 2009 onward (including Replay store sales), as well as breach of the implied covenant and fraud claims against AP.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of AP’s retroactive 2012 license covering 2009–2012 uses | Davis prohibits a retroactive license that would extinguish accrued infringement claims | AP/NFL rely on the 2012 agreement as an effective retroactive license (or implied license) | Court: Davis controls; retroactive license cannot erase accrued claims. Dismissal vacated for 2009–2012 uses. |
| Validity/scope of 2012 complimentary license (2012–2015) under contributor agreements | Contributor agreements are ambiguous and plausibly prohibit royalty-free sublicenses to NFL; if so AP exceeded its sublicense authority → infringement | Defendants read agreements to require royalties only for "a la carte" per-image sales, so complimentary uses do not trigger royalties and AP may sublicense broadly | Court: Agreement ambiguous; reasonable inference that AP lacked power to grant unfettered complimentary licenses. Infringement claims for 2012–2015 uses vacated. |
| Replay Photo Store sales & secondary liability of NFL | Replay and AP sold Plaintiffs’ works without permission; NFL involved in store and quality control → direct and secondary liability | AP/Replay claim their sublicenses covered Replay’s uses; NFL says it isn’t alleged to operate store so not secondarily liable | Court: AP/Replay sublicense language does not cover contributor-owned photos; allegations sufficient to proceed against Replay, AP, and potential secondary liability for NFL. |
| Breach of implied covenant & fraud vs. fiduciary duty and unconscionability | AP secretly promised no complimentary licenses then granted them; this breaches implied covenant and supports fraud based on pre-contract misrepresentations | AP says implied-covenant claim duplicates contract, cannot displace express rights, and fraud is promissory or duplicative; fiduciary duty disclaimed; agreements are ratified so not unconscionable | Court: Sustained implied covenant and fraud claims (plausibly alleged); fiduciary duty and unconscionability claims dismissed (arm’s-length contract disclaimer and ratification). |
| Antitrust (Sherman Act) claim that NFL/AP restrained market for commercial licenses | NFL teams’ pooled licensing and AP exclusivity foreclosed competition and raised licensing prices / reduced output | Defendants: joint licensing not per se illegal; plaintiffs must plead adverse effect in the relevant market and price/effects facts | Court: Dismissed — plaintiffs failed to plead plausible anticompetitive effect in the defined market for commercial licenses of NFL-event photos. |
Key Cases Cited
- Davis v. Blige, 505 F.3d 90 (2d Cir. 2007) (a retroactive assignment or license cannot extinguish a co-owner’s accrued infringement claim)
- Yurman Design, Inc. v. PAJ, Inc., 262 F.3d 101 (2d Cir. 2001) (elements of copyright infringement claim)
- Bourne v. Walt Disney Co., 68 F.3d 621 (2d Cir. 1995) (existence of a license is an affirmative defense and burden rules on license scope)
- Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) (secondary liability principles: contributory and vicarious infringement)
- Graham v. James, 144 F.3d 229 (2d Cir. 1998) (distinguishing breach of contract from infringement when license scope governs)
- American Needle, Inc. v. National Football League, 560 U.S. 183 (2010) (collective licensing by sports leagues and antitrust framework)
- Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard for antitrust and other claims)
- Capital Imaging Assocs., P.C. v. Mohawk Valley Med. Assocs., Inc., 996 F.2d 537 (2d Cir. 1993) (plaintiff must show adverse effect on competition in the relevant market)