By Doug Fuglsang. Mr. Fuglsang is a licensed attorney in Illinois and Wisconsin with a Sports Law Certificate from the National Sports Law Institute. He can be reached at firstname.lastname@example.org.
You might have heard recently that Michael Jordan received an $8.9 million judgment in Federal Court against Dominick’s, a defunct local Chicago grocery store chain, and its parent company Safeway, for violating the Illinois Right of Publicity Act (“IRPA”) by using Jordan’s identity for a “commercial” purpose without his permission.
Many took the clickbait opportunity to criticize Jordan for being greedy, but there is nothing wrong with someone preventing the unlicensed use of their image –especially if you have achieved celebrity status as an athlete, where your earning potential is severely limited by the length of your career and a salary cap.
Jordan currently has two lawsuits pending against local Chicago grocery stores for violating IRPA. The Dominick’s lawsuit has reached the damages phase of trial, while the second suit against Jewel, a local Albertsons subsidiary, is set for trial on December 8, 2015. Both lawsuits stem from advertisements placed in Sports Illustrated magazine using Jordan’s likeness.
To truly understand everything what goes into protecting an athlete’s image such as Michael Jordan’s you would need to consider state defamation, state privacy laws, common law, as well as federal trademark law and misappropriation claims under the Lanham Act; but the focal point of Jordan’s pending lawsuits against the grocery stores is the right of publicity.
The right of publicity is a property right that grants an athlete, or celebrity, the right to commercialize their image, and prevent others from capitalizing off of their acquired fame. The right of publicity is a fairly new legal principal and because these cases involve state law, recognition of such a right has not been uniform. These inconsistencies can cause trouble for agents, marketers, and lawyers if they aren’t careful; it’s precisely how Dominick’s and Jewel ended up in their current predicament.
The right of publicity protects a very valuable commodity for celebrities since today’s market enables elite athletes to make more money in endorsements than they do in salary. This, however, was not always the case.
Well before it became ubiquitous, in 1977 Caitlyn Jenner capitalized on achieving American hero status and entered into an endorsement deal with “Wheaties” cereal to become their official spokesman.
Fresh off a gold medal in the decathlon, Jenner and manager George Wallach felt they had a four-year window to capitalize off the moniker “World’s Greatest Athlete.” And they were right; Jenner had an extremely successful post-Olympic career and secured several lucrative endorsements. Jenner helped forge the modern sports marketing relationship; Michael Jordan revolutionized it.
CHANGING THE GAME
In 1984 Nike outbid Converse and adidas for Michael Jordan’s services, they gave Jordan an unprecedented $500k a year to endorse their products. Together they launched the “Air Jordan” brand and by the end of the first year yielded more than $100 million in revenue. The customary approach at the time was to have athletes endorse whatever product was on hand; Nike changed this practice by catering to Jordan’s preferences and customized shoes to his liking.
Additionally, Nike focused more on selling Jordan’s success rather than the product; a strategy that is often imitated but never duplicated. Jordan himself became a brand and global icon: as his agent stated at trial, “[he is] the best-known celebrity in the world.” The smartest thing Jordan and his management team did was make his sponsors commit to him long term near the end of his playing career. This forced them to continue marketing the Jordan brand long after his career was over; Jordan earned nearly $100 million in endorsements last year, more than he earned in salary throughout his entire playing career.
Jordan created an atmosphere where athlete endorsements have become the norm. Agencies now have dedicated teams of marketers, social media experts, lawyers, and accountants all looking for ways to capitalize on a client’s name, likeness, or identity. Personally, I’ll never understand what would possibly possess a person to buy a product simply because an athlete attaches their name to it, but there must be some evidence that demonstrates average Joe football fan is more likely to by Dannon Oikos yogurt if Cam Newton is their spokesman, but whatever — get that yogurt money Cam.
In today’s market, where tweeting for a brand or posting a photo on Instagram is as valuable as appearing on a Wheaties box, athlete endorsement earnings have skyrocketed. Yet the emergency of seemingly limitless channels for athlete marking has left the law scrambling to catch up.
THE ROOTS OF THE RIGHT OF PUBLICITY
The right of publicity has its roots in an 1890 Harvard Law Review article that argued the right to privacy was distinct tort at common law. Years later William Prosser formulated the four separate categories of privacy: (1) protection against intrusion into one’s own affairs; (2) avoidance of disclosure of one’s embarrassing private facts; (3) protection against publicity placing one in false light; (4) remedies for commercial appropriation of one’s likeness or name. It’s this last tort that evolved into the right of publicity: a distinct property right.
All states now recognize the right of publicity in some form, whether codified into statute or accepted at common law, which has led to varying results.
Generally, proving the unauthorized use of an athlete’s name, likeness, or identity for a commercial purpose is essential to bringing a successful claim. Additionally, First Amendment and Lanham Act issues compound this problem because these cases tend to end up in federal courts, leaving federal courts to interpret state law or decide whether state common law protection exists. This is how both of Jordan’s state law claims against Dominick’s and Jewel ended up in federal court.
Luckily for Jordan, Illinois has adopted statute 765 ILCS 1075, which states:
“a person may not use an individual’s identity for commercial purposes during the individual’s lifetime without having obtained previous written consent from the appropriate person…”
The remedies for unauthorized use under the statute are the main contention of the Dominick’s case, and will likely factor into the case against Jewel once it goes to trial.
THE MICHAEL JORDAN VIOLATIONS
In 2009, Time Inc. published a commemorative issue of Sports Illustrated, celebrating Michael Jordan’s induction into the Basketball Hall of Fame. The special issue was not distributed to subscribers and was only available at specific retail locations. SI offered both Dominick’s and Jewel a free one-page ad in the commemorative issue, in exchange for, premium floor space and sale of the issue at their respective locations. The Dominick’s ad featured a basketball jersey bearing the number 23 and clearly read, “Michael Jordan.” In the center of the ad it said “YOU ARE A CUT ABOVE,” and below that was a photograph of a Rancher’s Reserve tender Angus steak, along with a $2.00 coupon for a Rancher’s Reserve at any Dominick’s location.
This coupon, only two of which were EVER redeemed, is a crucial discrepancy between the complaints against Dominick’s and Jewel. The Jewel ad contained no coupon or specific promotion; however, the ad featured a pair of basketball sneakers with the #23, Jewel’s logo and slogan, and a brief paragraph congratulating Jordan.
Shortly after publication Jordan filed complaints against both in Illinois. Jordan was able to get this case in front of a hometown jury because of the “conflicts of laws” principles, which dictate the plaintiff’s domicile, or state of residency, governs. Choosing the proper venue for a right to publicity case is important because problems may arise in states that have narrower recognition of these rights or where the state law may be uncertain, but because Illinois adopted IRPA, Jordan avoided this problem.
Jordan’s complaints alleged Dominick’s violated IRPA, in addition to violations of the Lanham Act, common law unfair competition, and the Illinois Consumer Fraud and Deceptive Trade Practices Act. The district court granted Jordan summary judgment on his right of publicity claim, Jordan withdrew all other remaining claims, and then proceeded to a jury trial for damages, where the court entered judgment in Jordan’s favor. Dominick’s has SINCE appealed that ruling.
The Dominick’s case is a pretty straightforward right of publicity case, Dominick’s clearly used Jordan’s likeness without his permission, in order to advertise $2 steak coupons, something Jordan denied he would ever consider doing at trial. Jordan testified that he only signs long term deals for about $10 million, while Dominick’s expert argued a hypothetical deal between the two would be closer to $125k, the jury sided with Jordan and granted him $8.9 million; Dominick’s has filed a motion seeking a new trial or significant reduction in damages to $250k. They also argued at the very least the award should be capped at $2.5 million because Jordan was “deliberately misleading” about the damages he would seek.
Jordan’s suit against Jewel on the other hand, is a bit more complicated, because it requires consideration of THE First Amendment. The complaint against Jewel alleged violations of the federal Lanham Act, IRPA, the Illinois deceptive-practices statute, and the common law of unfair competition. Jewel moved for summary judgment claiming the advertisement was “non-commercial speech” and thus protected by the First Amendment. The district court agreed and found in favor of Jewel, Jordan appealed and the Seventh Circuit reversed.
The First Amendment protects a lot of important rights: the freedom of speech is one of them. The First Amendment is complicated but basically, the freedom of speech is not absolute, the Supreme Court has carved out several different categories of speech, all with different protections and legal tests.
In regards to commercial speech, the Court decided the law must help strike a balance between an individual’s right to control the use of his or her likeness and the constitutional guarantee of free dissemination of ideas, images, and newsworthy matter, in whatever form it takes. As you can imagine courts have struggled to draw this line but generally, if the use of an athlete’s identity is simply communicative or expressive, it is protected speech, but if it promotes a commercial transaction, it is not protected, unless you are in the media, in which case the First Amendment also immunizes them from state law liability, even though media publications are generally for-profit commercial activity.
The protections provided by the First Amendment are not limited to written or spoken words, but extend to other mediums of expression: music, pictures, film, paintings, photographs, prints, etc. The mere fact that expressive materials are sold does not make it commercial speech or diminish the degree of protection provided by the First Amendment. Whether something falls within First Amendment protection requires a fact intensive inquiry in each case.
At trial, the district court found that nothing in Jewel’s advertisement proposed a commercial transaction. The court reasoned that the mere presence of Jewel’s logo did not render the ad commercial speech; rather it was simply the most effective way to identify Jewel as the speaker. Additionally, the court found the repeated use of Jewel’s slogan just reinforced the congratulatory theme of the ad, nothing more, it established that Jordan was a source of pride for Chicagoans and Jewel.
The Seventh Circuit disagreed, they reversed finding that the ad was a form of image advertising and thus commercial speech not protected by the first amendment and remanded the case so that Jordan can go forward with his claims at trial. The Seventh Circuit noted that modern commercial advertising varies greatly in form and style. The court also stated the rule that an advertisement counts as “commercial” speech, only if it makes an appeal to purchase a particular product makes no sense today, the court emphasized promoting brand loyalty is just as commercial in nature. Finally, the court undertook an analysis of three important components of commercial speech, whether: “(1)the speech is an advertisement; (2)it refers to a specific product; and (3)the speaker has an economic motivation for the speech.” None of these are essential for finding commercial speech but are relevant factors to the analysis. The court found the speech was a form of image advertising, one that doesn’t necessarily sell a product but instead promotes the company’s brand. Lastly, the court found that there was economic motivation for the speech.
The court reasoned Jewel’s ad served two essential functions: congratulating Jordan and enhancing Jewel’s brand by associating itself with Jordan. The Court concluded the obvious: “that Jewel had something to gain by conspicuously joining the chorus of congratulations on the much-anticipated occasion of Jordan’s induction into the Basketball Hall of Fame. Jewel’s ad is commercial speech.”
After the decision, Jordan’s lawyers amended their complaint, dropped all claims except the IRPA claim and filed a motion for summary judgment with the district court. They argued that because the Seventh Circuit’s opinion said Jewel’s ad had a ‘commercial purpose’ under First Amendment test, therefore under IRPA Jewel’s ad would satisfy the commercial purpose test as well. However, under IRPA there is a different test, similar to common law misappropriation claims. The plaintiff must establish three elements: (1) an appropriation of one’s name or likeness; (2) without one’s consent; and (3) for another’s commercial benefit. These first two elements were not in dispute; the central issue was whether “commercial purpose” under the IRPA encompasses “brand advertising” and if so, to what extent the term is compatible with the “commercial speech” test under the First Amendment. Jordan’s camp provided no precedent but merely relied on the appellate court’s opinion, that explicitly declined to address whether “the Supreme Court’s commercial-speech doctrine should be used to define” the “‘commercial’ element” of Jordan’s IRPA, Lanham Act, and other claims. For these reasons the court denied Jordan’s motion, trial is set for December 8
It will be interesting to see if Jewel tries to settle this case before trial or if they decide to proceed.
“Commercial purpose” under the IRPA has been defined as “the public use or holding out of an individual’s identity (i) on or in connection with the offering for sale or sale of a product, merchandise, goods, or services; (ii) for purposes of advertising or promoting products, merchandise, goods, or services; or (iii) for the purpose of fundraising.”
However, no Illinois court has given any guidance on the matter of “commercial purpose,” and there is really no way of knowing which “test” they might use for determining a “commercial purpose” under the act. A narrower interpretation will likely benefit Jewel and save them from the same fate as Dominick’s, but I believe a narrower interpretation will be out of touch with the reality of image advertising, which serves three basic functions: increase consumer awareness, convert that awareness into familiarity, and then use that familiarity to influence consumer buying behavior. This is something I believe is equivalent to a commercial purpose, because though it might not advertise a particular product, it promotes all things Jewel — in essence all the products and services they provide.
I believe “brand advertising” fits neatly into the second category under IRPA. Jewel’s purpose was not only to congratulate Jordan on his career, but also served a commercial purpose to promote the products, goods, and services provided by the Jewel brand. Thus, in my opinion, it serves a commercial purpose under IRPA entitling Jordan to damages. Jewel took Jordan’s likeness, without his permission, and sought to elevate their brand awareness among Chicagoans by tying this free advertisement opportunity with Chicago’s greatest sports hero — a marketing move for which Jordan deserves just compensation.