The Fourth Circuit's application of the fair use doctrine in Bouchat v. Baltimore Ravens, Ltd. P'Ship.

Baker, Thomas A., III ; Byon, Kevin K.

Introduction

According to Fullerton (2010), licensing is a value adding process that provides sport organizations (both licensor and licensee) with significant revenue streams. For instance, the National Football League (NFL) is projected to earn $2.7 billion from the sales of logoed merchandise (Rovell, 2010). In order for sport organizations to maximize benefits as licensors and licensees, it is imperative that they develop and maintain a licensing plan for copyrighted marks and logos. A well-developed licensing plan would guide sport organizations in protecting the brand value of their own works and assist them in avoiding the possible misuse of works that are protected by other organizations or individuals. The Fourth Circuit's recent decision in Bouchat v. Baltimore Ravens, Ltd. P'Ship (2010) demonstrates the value of copyright protection and the potential pitfalls that await sport organizations and leagues that infringe on copyrighted works. The case also reinforces the need for a better understanding of the fair use doctrine in developing a licensing plan so that sport organizations can protect copyrighted marks and logos, and avoid infringing on another's protected work.

Overview of the Case

In September 2010, the United States Fourth Circuit Court of Appeals overturned, in part, a district court decision that dismissed a request by Federick E. Bouchat for injunctive relief to prohibit all current uses of the helmet logo (Flying B logo) used by the Baltimore Ravens for their first three football seasons (Bouchat v. Baltimore Ravens, Ltd. P'Ship, 2010). Bouchat, a security guard/amateur artist, originally brought suit more than 10 years ago against the Ravens for infringing on his copyright in the Flying B logo he designed and provided to the Ravens (Bouchat v. Baltimore Ravens, Inc., 2000). Despite the prior copyright infringement, the Ravens and the NFL continued to display the Flying B logo through the production and distribution of highlight films of the Ravens' first three seasons. Bouchat sought an injunction to prohibit the sale of all highlight films that included footage of the Ravens with the Flying B logo by the Ravens, the NFL, and other NFL franchises. The highlight films were produced by NFL films and were edited with narration, interviews, and a musical score. Bouchat also challenged the appearance of the Flying B logo in the lobby at the Ravens' headquarters where it was displayed in a collage that depicted the history of the franchise in Baltimore.

The Ravens and the NFL asserted the defense of fair use for the depictions of the Flying B logo in the films and at the lobby. "From the infancy of copyright protection" courts have recognized some opportunity for fair use of copyrighted materials (Campbell v. Acuff-Rose Music, Inc., 1994, p. 575). Congress codified fair use in [section] 107 of the Copyright Act to protect use of copyrighted material for the purposes of criticism, comment, news reporting, teaching, scholarship, and research. The following four statutory factors were included in [section] 107 to guide courts in applying the doctrine:

* the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

* the nature of the copyrighted work;

* the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

* the effect of the use upon the potential market for or value of the copyrighted work (17 U.S.C. [section] 107, 1988).

The four factors are illustrative rather than limiting and should be weighed together with the purpose of copyright in mind (Campbell v. Acuff-Rose Music, Inc., 1994, p. 575). Statutory fair use provides no bright-line test, but instead calls for case-by-case analysis (Harper & Row Publishers, Inc. v. National Enterprises, 1985).

Fair Use Applied to the Highlight Films

The Fourth Circuit applied the four factors to the highlight films and held that the NFL's use of Bouchat's copyright in the highlight films was not permitted under the fair use doctrine. For the first factor, the court found that the commercial purpose of the highlight films did not "align" with criticism, comment, news reporting, teaching, scholarship, and research. The court recognized that the list of purposes in [section] 107 is not exhaustive and that protection could be afforded when the new work has a transformative use. A transformative use is one that utilizes the copyrighted work in a different manner or for a different purpose from the original so as to transform it into something new and different (Vanderhye v. iParadigms, 2009). The court rejected the defendants' assertion that the use of the Flying B logo in the highlight films primarily served a historical and transformative purpose. Instead, the court found that the logo served the same purpose as it did when the highlight films were shot, to identify the Ravens. Further, the court rejected the defendant's argument that the dramatic editing, music, and narration in the films transformed the use of the logo into something original. The court in Bouchat demanded more transformation of the logo by the defendants than simply filming its use in the acts that supported the court's finding of copyright infringement 10 years prior.

The second factor required consideration of the nature of the copyrighted work. The court found that the creative nature of Bouchat's work, a drawing, weighed against a finding of fair use because creative works are closer to the core works protected by the statute. The third factor concerned the amount and substantiality of the use and the court found that this factor also weighed against fair use because Bouchat's entire work was copied. In reaching this determination, the court disagreed with the district court's decision that the third factor favored the defendants because the Flying B was only a minor component of the overall work. The Fourth Circuit found that the district court erred in focusing on the overall work rather than the amount of the copied work.

With the fourth factor, the court had to address the effect of the use on the potential market or value of the copyrighted work. Citing Harper & Row, the court recognized the fourth factor as the single most important of fair use. The court found a "throwback" merchandising market for Bouchat's work despite the fact that neither the Ravens nor the NFL derive revenues from licensees who sell official team merchandise with the Flying B logo. Further, the court found that the defendants failed to offer evidence that a licensing market for Bouchat's work no longer existed. The lack of transformative value in the highlight films was also important because market substitution is more likely in situations where a work is not transformative. Accordingly, the court found that all four weighed against a finding of fair use for the highlight films.

Fair Use Applied to the Corporate Headquarters

In contrast to its decision with regard to the NFL films, the Fourth Circuit, concluded that the four fair use factors supported a finding of fair use of the Flying B logo in the collage at the Ravens' headquarters. The court described the lobby as a "museum-like setting" and this added transformative value to the display because its purpose extended beyond the identification of the Ravens to include a factual representation of the team's inaugural season and first draft pick. The transformative purpose behind the use of the logo in the lobby influenced the court's findings on the remaining three factors. The court also placed importance on the fact that the Ravens had no commercial purpose for using the logo because the lobby was open to the public, free of charge. Only the second factor was found to weigh against fair use because the nature of Bouchat's copyrighted work (a drawing) was expressive. However, the court recognized that the second factor is limited in importance to works that serve a transformative purpose.

The Fourth Circuit reversed the district court decision that found fair use of the Flying B logo in the highlight films, but affirmed the lower court's determination of fair use of the logo in the Ravens lobby at corporate headquarters. The appellate court's decision concerning the highlight films drew a strong dissent from Judge Niemeyer. His dissent stated that the Ravens' use of the logo in the films was historical and transformative and described Bouchat's request for injunctive relief as an attempt to hold the Ravens' history hostage for ransom.

Implications for Sport Marketers

The implications of the Bouchat decision extend beyond the Ravens and the NFL and include the use of the Flying B logo in any highlight film sold by other NFL franchises as well as to other segments of the sport and entertainment industry. For example, Bouchat's lawsuit prompted the filing of amicus curiae (friend of the court) briefs from the International Documentary Association, et. al. and the Motion Picture Association of America, Inc. Both briefs warned the court of the possible implications resulting from a decision that inclusion of the logo in the highlight films did not constitute fair use. This was the first time that any court has held that the appearance of a copyrighted logo captured incidentally and unavoidably in a non-fictional narrative was not considered fair use (International Documentary Association, et. al., 2010). The amici curiae cautioned that the Bouchat decision could have a profoundly negative impact on the film industry. Copyright holders could exert control over the way individuals or organizations are portrayed, prompting negotiations for any and all depictions of copyrighted work in films, even when incidental. "One shot of Times Square could require hundreds of negotiations" (International Documentary Association, et. al., 2010, p. 10). Conversely though, the Fourth Circuit's application of the fair use doctrine in Bouchat provides sport organizations with increased protection in limiting or controlling the incidental use of copyrighted works in films. Further, this decision could extend to protect against the incidental use of sport logos in television shows, web-based media, or commercial products like video games.

On December 20, 2010, the Fourth Circuit rejected the Ravens' request for rehearing; thus, the Fourth Circuit's decision in Bouchat continues to control the application of the transformative use test for that circuit. It remains unclear as to whether other circuits will follow Bouchat and refuse to recognize fair use in cases concerning the incidental and unavoidable use of copyrighted logos in highlight films. Accordingly, the ramifications of the Bouchat decision are unknown. However, the case demonstrates the importance of copyright protection in sport and the need for an effective licensing plan focused on identification of licensable products. Sport organizations need to be vigilant in market surveillance to protect against the wrongful use of copyrighted works. Sport organizations also need to be careful not to profit off of the commercial and non-transformative use of images that violate another's copyright, even when the use is believed to be incidental to the overall product.

DISCLAIMER: Inquiries regarding this feature may be directed to Thomas Baker at tab3@uga.edu. Professor Anita M. Moorman, JD, is the editor of this section. She teaches sport law in the sport administration program the University of Louisville. She can be contacted at amm@louisville.edu.

The materials in this column have been prepared for informational and educational purposes only, and should in no way be considered legal advice. You should not act or rely upon these materials without first consulting an attorney. By providing these materials it is not the intent of the authors or editors to enter into an attorney-client relationship with the reader. This is not a solicitation for business. If you choose to contact the authors or editors through e-mail, please do not provide any confidential information.

References

Bill Graham Archives v. Dorling Kindersley, Ltd., 448 F.3d 605 (2d Cir. 2006).

Brief of Amici Curiae International Documentary Association, American Library Association, Association of Research Libraries, Association of College and Research Libraries, and the WGBH Educational Foundation in Support of Defendants-Appellants' Petition for Rehearing or Rehearing En Banc, Bouchat v. Baltimore Ravens, Ltd. P'Ship, No. 08-2381 (4th Cir. Sept. 2, 2010).

Brief of Amicus Curiae Motion Picture Association of America, Inc. in Support Of Defendants-Appellees' Petition for Rehearing or Rehearing En Banc, Bouchat v. Baltimore Ravens, Ltd. P'Ship, No. 08-2381 (4th Cir. Sept. 2, 2010).

Bouchat v. Baltimore Ravens, Inc., 241 F.3d 350 (4th Cir. 2000).

Bouchat v. Baltimore Ravens, Ltd. P'Ship, No. 08-2381 (4th Cir. Sept. 2, 2010), rehearing denied (December 20, 2010).

Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994).

Davis v. The Gap, Inc. 246 F.3d 152 (2d Cir. 2001).

Fullerton, S. (2010). Sports marketing (2nd ed.). New York: McGraw-Hill/Irwin.

Harper & Row Publishers, Inc. v. National Enterprises, 471 U.S. 539 (1985).

Ringgold v. Black Entertainment Television, Inc., 126 F.3d 70 (2d Cir. 2001).

Rovell, R. (2010, June). MLB will beat NFL in licensing revenue in '10. CNBC.com Retrieved from http://www.cnbc.com/id/3769214/Publication_MLB_Will_Beat_NFL_in _Licensing_Revenue_In_10

Vanderhye v. iParadigms, LLC, 562 F.3d (4th Cir. 2009).

Thomas A. Baker III and Kevin K. Byon, University of Georgia

Thomas A. Baker III, JD, PhD, is an assistant professor in the Sport Management and Policy Program at the University of Georgia. His research interests include sport law with emphasis on topics involving contract and commercial litigation, premises liability, and tort law, with applications to professional, intercollegiate, and youth sports.

Kevin K. Byon, PhD, is an assistant professor in the Sport Management and Policy Program at the University of Georgia. His research interests include sport consumer behavior and sport tourism.