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Royalty Dispute Over NFL Photos Revived by 2nd Circuit

The Second Circuit revived fraud claims Tuesday by Associated Press contributors who have taken photographs at NFL events for what has been nearly a decade.

MANHATTAN (CN) - The Second Circuit revived fraud claims Tuesday by Associated Press contributors who have taken photographs at NFL events for what has been nearly a decade.

“My clients are very pleased with this ruling as it vindicates in virtually every respect our position on the central copyright claims at the heart of this case,” said Kevin P. McCulloch, an attorney for seven photographers who brought the underlying suit five years ago in New York.

Though a federal judge dismissed the entire case for failure to state a claim, the Second Circuit found Tuesday that many of the allegations should have advanced to trial.

Among other points, photographer Paul Spinelli and his co-plaintiffs accuse the NFL and AP of having cut them out of royalties for a broad range of uses of the photographs they licensed.

In addition to publishing the images in NFL promotional and editorial materials, the companies license and sell the photos through online photo stores, display them on NFL websites and sometimes use the images to promote the Super Bowl and other events.

Writing for a three-judge panel Tuesday, U.S. Circuit Judge Gerard Lynch said the “allegations plausibly support an inference that before the 2012 AP-NFL agreement was signed, AP had not granted the NFL a complimentary license to plaintiffs’ works, and the NFL knew it.”

“In effect, the complaint plausibly alleges that defendants’ claim of an implied license is simply a posthoc rationalization meant to excuse the NFL’s infringing uses should the 2012 retroactive license be deemed invalid,” Lynch wrote. “We thus cannot conclude that AP’s alleged failure to act on the NFL’s infringing uses — particularly where AP had no authority under the contributor agreements to pursue infringement claims — means that, as a matter of law, AP gave the NFL an implied license.”

Lynch added later that “discovery and trial will shine greater light on whether the extrinsic evidence actually weighs in plaintiffs’ favor, but at this stage of the case, plaintiffs have plausibly alleged that AP’s complimentary license to the NFL was not permitted by [those] agreements.”

In addition to the copyright claims, the Second Circuit found that the photographers have also plausibly alleged fraud and bad-faith claims.

Lynch also pointed out the problem seems to persist.

“The NFL allegedly continues to use Plaintiffs’ photographs to this day without paying royalties,” Lynch wrote.

McCulloch reiterated that allegation.

“We have argued for years that AP not only committed fraud and acted duplicitously throughout the contract negotiation process, it also violated the plaintiffs’ copyrights and wrongfully tried to cover up those infringements by issuing an obviously sham ‘license’ to the NFL despite knowing it had no authority to do so,” McCullouch said in an email. “This ruling also confirms our claim that the NFL and Replay also infringed the Plaintiffs’ copyrights and cannot hide behind the sham “licenses” they extracted from AP, which is extremely significant given that they have continued to do so knowingly and willfully for many years throughout this case.”

Andrew Deutsch of DLA Piper, representing the Associated Press and Replay Photos, declined to comment.

Jeffrey Mishkin of Skadden, Arps, Slate, Meagher & Flom LLP, representing the NFL and its teams, has not responded to a request for comment.

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