NBA case no slam dunk
The court battle between AOL and the NBA over the right to rebroadcast scores could end up altering the Internet as we know it.
As America Online (AOL) and the National Basketball Association square off in court--that is, the court of law--those in the online world are snapping up front-row seats to witness the battle over who has the legal right to rebroadcast scores.
The case is no slam dunk. The law is anything but clear on the subject, legal experts and other Internet observers say, so whatever happens in federal court between AOL and the NBA could end up altering the Internet as we know it.
"I don't believe there's ever been a case like this," said Stephanie Ardito, the past president of the Association of Independent Information Professionals, which deals with copyright issues. "Who owns the content on the Internet is a huge issue. It is going to be precedent-setting case."
Earlier this week, the NBA sued the world's largest online service in New York federal court, claiming that AOL and its contractor, STATS, are stealing proprietary information by posting professional basketball scores, live, along with highlights without paying for that right.
A few weeks earlier, AOL launched a preemptive strike and sued the NBA in federal court in Alexandria, Virginia, challenging the basketball association's right to bar it and other electronic services from reporting up-to-the minute scores.
If AOL wins, the case could give the green light to all kinds of online news services to post live information once seen as the province of television and radio. Those media have traditionally paid sports franchises and other event sponsors for the right to broadcast live events.
If the NBA wins, on the other hand, it will have a chilling effect throughout the Internet community, bearing the message that it no longer is safe to post live events and transactions ranging from stock market quotes to live news and sports events like the Olympics and the Oscars.
"If the court rules that what AOL is doing is illegal, I think it would have very wide-ranging implications in the stock area, in the financial reporting area, in news reporting of all sorts," said Jeff Crigler, vice president at IBM infoMarket search and retrieval service. It also could affect nonInternet businesses like the Associated Press wire service, which routinely send out bulletins about in-progress events, he said.
Some say the NBA has a strong case in claiming that AOL is pirating information that the association clearly owns. Others maintain that the NBA cannot control how facts such as scores are disseminated, no matter what the financial consequences.
The NBA has at least one element in its favor: a July victory in New York federal court over Motorola. The NBA had sued the communications company in a virtually identical suit, saying that it was pirating information by sending out live scores and broadcasting them on pagers. STATS also was supplying the information for Motorola.
Judge Loretta Preska ruled in favor of Motorola, but that decision has been stayed pending an appeal.
The National Football League has also faced the same legal issue but settled out of court. The NFL sued STATS and SportsLine USA over the use of live scores, said Ann Kirschner, vice president of NFL Interative. SportsLine agreed to pay a licensing fee under the settlement, she said, and STATS and the NFL are still talking.
"Where we are most concerned is with a complete play-by-play of the game in real time or something close to it," Kirschner said. "This is not about limiting access to coverage. It's about protecting the game itself, in real time."
But the issue as a whole is far from being resolved, and the NFL is watching the NBA case carefully, along with everyone else.
"In my mind, the way the judge is interpreting the misappropriation law conflicts with the copyright law," said Robert Yoches with Finnegan, Henderson, Farbow, Garrett & Dunner.
The copyright law is a federal statute and therefore supersedes the misappropriation law, he said. "Even though the NBA won before in New York, it has a weak case," Yoches said. "As near as I can tell, the NBA is trying to prevent people from copying facts." Facts are not protected by copyright law.
"The irony of it was that what we're reporting are facts, and that's news," said John Dewan, president and chief executive of STATS. "The NBA is trying to take ownership of the news, and no one owns the news."
Legal experts on all sides agree on one point: As the Internet explosion continues, courts are being put in the awkward position of trying to apply old laws to technology that didn't exist when they were written.
What is needed, attorneys agree, are new laws for a new medium that doesn't clearly fit under any jurisdiction. "It shows how hopelessly out of date our legal infrastructure is to deal with this stuff," Crigler said.
Even if the case is settled in the United States, it will be impossible to apply abroad. "What law controls the Internet?" asked William A. Tanenbaum, partner with Rogers & Wells and president of the Computer Law Association of America. "The problem is intellectual property laws are inherently territorial. Now you've got a medium and transmission method for which national boundaries are irrelevant."
In the end, it will be up to the court to decide where journalistic rights end and proprietary interests begin or where journalism ends and the business of entertainment begins on the Internet.
The case "tests the balance of freedom of the press against proprietary interests and information," said Jeff Neuburger, a partner with Brown Raysman Millstein Felder & Steiner.
"If the court doesn't analyze the issue carefully," he said, "it could reach a conclusion that could make everybody's life difficult."