Lawsuit Against EA Sports?

[waytofailself]

Quote: Originally Posted by roadman

My only question for you is, are you using speculation on point #4?

The computer I'm borrowing continues to eat my posts, so I'll shoot and take this on briefly.

The short answer: obviously it's speculation. Any time you predict what a court or jury is going to decide it's speculation. The best anyone can do is base their speculation on how courts have previously handled similar issues. Here, EA/NFL negotiations would be a factor to consider, but would not be dispositive by itself.

See, it takes two to tango, and this is where the California law becomes very important. Even though the NFL might have proposed the license agreement, the NFL still accepted and took part in behavior that limited competition in the market. The California Act has a far lower standard for showing market interference than the Sherman Act (that's why EA tried to say California law didn't apply). As far as I've read, if EA was found to have violated California law the license agreement would be void. Other companies would be open to negotiate with the NFL for a license.

But once again, it all comes back down to the definition of "market." The broader the market definition, the more likely EA is to win.

[roadman]

Quote: Originally Posted by waytofailself

The computer I'm borrowing continues to eat my posts, so I'll shoot and take this on briefly. The short answer: obviously it's speculation. Any time you predict what a court or jury is going to decide it's speculation. The best anyone can do is base their speculation on how courts have previously handled similar issues. Here, EA/NFL negotiations would be a factor to consider, but would not be dispositive by itself. See, it takes two to tango, and this is where the California law becomes very important. Even though the NFL might have proposed the license agreement, the NFL still accepted and took part in behavior that limited competition in the market. The California Act has a far lower standard for showing market interference than the Sherman Act (that's why EA tried to say California law didn't apply). As far as I've read, if EA was found to have violated California law the license agreement would be void. Other companies would be open to negotiate with the NFL for a license. But once again, it all comes back down to the definition of "market." The broader the market definition, the more likely EA is to win.

Makes sense your last paragraph.

Then people should be suing Budweiser, DirectTV, Nike/Rebook for the same reasons against the NFL.

I guess I'm having a hard time grasping why the courts are taking on lawsuits like this when there are other important things going on in the world than a video game.

In my opinion, telling a company how they should conduct their business and take in lower revenue is counter-intuitive when it comes to IP.

And back to my original point.

The lawsuit is against EA, not the NFL.

If the NFL proposed the deal, how does this make anything EA did illegal? They entered an agreement with an IP business and a company that has been doing IP business long before EA entered the picture.

Just my thoughts.

[waytofailself]

Quote: Originally Posted by roadman

Makes sense your last paragraph. Then people should be suing Budweiser, DirectTV, Nike/Rebook for the same reasons against the NFL. I guess I'm having a hard time grasping why the courts are taking on lawsuits like this when there are other important things going on in the world than a video game. In my opinion, telling a company how they should conduct their business and take in lower revenue is counter-intuitive when it comes to IP. And back to my original point. The lawsuit is against EA, not the NFL. If the NFL proposed the deal, how does this make anything EA did illegal? They entered an agreement with an IP business and a company that has been doing IP business long before EA entered the picture. Just my thoughts.

I'll address a few of your points, though not in order:

Why would a court take this case? Because government enacted laws that gave individuals the ability to file suit against corporations. That's how the game works. Is it waste? That's a matter of opinion, but if there's a justiciable claim the court can't throw it out. And it didn't.

How is EA liable?: Let me try a different approach in explaining. Let's say we've worked together for years and I put a set of car keys on the table and tell you to "take it." You take the car keys and drive off with the car, but it's someone else's car. It wasn't your initial idea, but you still stole the car.

Is that a 100% match to the case here? No, but it illustrates the point that antitrust law is more interested in the deals that limit the free market than how they came to pass. It might not have been EA that came to the table first, but it's a serious possibility that its deals with the NFL/AFL/NCAA all around the same time amount to a violation of the law. I'm sure the court will consider how the exclusive license arrangement came to be, but that's only a piece of the puzzle.

Taking lower revenue: Contrary to popular belief, the USA is not a purely capitalist economy. If we were everyone would be able to take actions that would lead to the highest possible revenue. Screwing out the middle man? Sure. Slavery? Well, it helps the bottom line (not an antitrust issue, but you get my drift?). Antitrust law is meant to keep corporations from over reaching and disrupting the market in search of making the highest revenue.

Suing Budweiser/DirectTV/Nike/Reebok: I'm not sure where you're coming from here. A purchaser is able to buy other beer without an agreement with the NFL (Bud is an advertising sponsor, not a trademark licensee as far as I know). A viewer can watch most all NFL games on other networks or directly through the NFL's website. An athlete has plenty of options for apparel outside of Nike and Reebok (Under Armor, Adidas, etc.). If you're referring to NFL licensed apparel, read up on and pay attention to American Needle v. NFL (which is probably back in district court by now).

Anti trust law is a law of access, and as has been pointed out above posts the claimants and EA are going to make two different arguments. The claimants will say that someone wanting to purchase a football video game cannot do it unless it is produced by EA. EA has eliminated the competition's viability through its exclusive license agreements, and can set the price however it wants. On the other hand, EA will argue that someone wanting to purchase a video game (or even a game or disk based entertainment) has plenty of options outside of EA's licensed football games. Furthermore, EA's pricing is consistent with the rest of the video game market at $50-$60.

Hope that helps, or at least gives you a different perspective on the issues. There's still a lot up in the air in this case.

[waytofailself]

Quote: Originally Posted by roadman

In my opinion, telling a company how they should conduct their business and take in lower revenue is counter-intuitive when it comes to IP.

Forgot to mention something on this point. Courts have said again and again and again the following rule: a corporation is never allowed to violate antitrust law just because it acquired intellectual property to do so. The district court went so far as to shoot down EA's argument on this point at the dismissal stage (very early when it didn't have to). That's how entrenched this rule is -- at least in California though considering it's from a Supreme Court case probably everywhere.

[roadman]

Yes, thank you on the different perspectives. Interesting.

In your keys example, I would still claim my innocence.

Also, I'm sure you at the end you meant NFL licensed video football game vs video football game. Anyone can manufacture a video football game, just not licensed through the NFL/College ranks.

I didn't know that about IP. The only thing I will say about that is the claimants must prove that the antitrust laws were violated. As far as the deals with ESPN, College, etc...after the NFL license, heck, for all we know, that could be just a tumbling affect. Once one is signed, the others naturally fall into place. In my opinion, that could be just circumstantial.

Again, in my opinion, this would be very difficult to prove with IP's. To my knowledge, EA's game has always fell under the standard price of $60.00 except for the small window when both companies were allowing the bottom fall off their prices prior to the license agreement. I just don't see the price gouging since the agreement was signed.

My whole point about taking in lower profits is a company has every right to make money if it doesn't violate antitrust laws. I didn't state that earlier because I wanted to keep it general. I own my own company, if I didn't violate any laws, why should the government tell me how to do my business? That's my whole take on it.

Should be interesting where this leads, in my opinion, I don't feel it will go very far, but, I've been wrong before.

[mikehud]

Quote: Originally Posted by RedRiverchuteout

If Madden is a Monopoly, Then the NFL is a monopoly, Since the case with the $1 judgement is there, it could prove indeed that they are one in the same. This could mean that a lot of people will get law suits nailed to them this summer. With lockouts and all the "fun" that goes along with that, The NFL and EA will be knee deep in trouble.

Red River, you do realize that the NFL is a legal monopoly. the courts granted them an anti-trust exemption to operate as such, but when the NFLPA decertified, they challenged that position in court (or at least, they are trying to challenge that anti-trus exemption).

[waytofailself]

Quote: Originally Posted by roadman

Yes, thank you on the different perspectives. Interesting. In your keys example, I would still claim my innocence. Also, I'm sure you at the end you meant NFL licensed video football game vs video football game. Anyone can manufacture a video football game, just not licensed through the NFL/College ranks.

This post has been eaten twice already. This is why I haven't updated my legacy and should really be writing these posts in word or something.

It's refreshing to have a discussion instead of a flame fest on forums. Just two things this time and I'll make it quick out of necessity and might edit in a detail or two later.

#1: In the key example, there are plenty of ways to claim innocence for criminal liability (though less for civil liability). I only brought it up to raise the point that sometimes the law doesn't care who started or proposed the illegal conduct. If the other party didn't investigate that the conduct was in fact illegal, they might be in trouble. And to speculate further, it is quite possible (maybe even laudable) that EA did investigate and came to the following conclusion, "You know, making a series of exclusive deals like this would probably get us in hot water normally. But because IP law has been severely lagging behind in the digital world we might have some more wiggle room. Let's make the agreement." Of course, we'll never know what was said in back rooms to legal counsel, that's privileged.

I say laudable because that's the kind of thinking that's driven the software industry so far forward so fast over the past 2.5 decades. But that's another tangent for another post.

#2 (well, that's four crashes. Speaking of software innovation I'm starting to see why MS stopped supporting 64 bit vista after 4 months on the market. This is ridiculous)

Ahem: #2: I meant what I said regarding football video game vs. video game or broader entertainment, EA would not and cannot use the term “football video game” except to say the other side is wrong. The moment EA defines the market as “football video game” is the moment they shoot themselves in the foot and concede that point to the plaintiffs. By using that definition, they are telling the court the plaintiffs are right and the court/jury will generally be left using that definition as a result.


That's one thing that makes litigation so difficult. There are a number of procedural minefields parties have to walk through, and if they bungle it up even once they've severely harmed their case (wow – really, Open Office just tried to eat my post?!?!). Ex: if you look at EA's answer you'll notice a lot of repeated language denying the other side's allegations. If they don't do this at the very beginning, they've conceded the point for the rest of the trial. I've seen cases won and lost just because someone screwed this up at the very beginning.

[waytofailself]

Quote: Originally Posted by mikehud

Red River, you do realize that the NFL is a legal monopoly. the courts granted them an anti-trust exemption to operate as such, but when the NFLPA decertified, they challenged that position in court (or at least, they are trying to challenge that anti-trus exemption).

The Supreme Court overturned the 7th Circuit's ruling that the NFL had an antitrust exemption in American Needle v. NFL. Any hopes of them being a "legal" (as in permissible) monopoly have been dashed. What you're probably thinking of is the rule that the players union, through their agreement, cannot bring a class action suit like they are now against the NFL without first decertifying. Two separate issues.