## Facts

- The National Basketball Association (NBA) and NBA Properties, Inc. (NBAP) produced professional basketball games and licensed broadcasts and related products.
- Motorola marketed “SportsTrax,” a handheld pager service that displayed ongoing NBA game scores and statistics with a short delay.
- Sports Team Analysis and Tracking Systems, Inc. (STATS) supplied the SportsTrax data by using employees to watch or listen to games and input play information for transmission to subscribers.
- The NBA alleged defendants unlawfully captured the economic value of games by selling “real-time” score and statistics updates without authorization.
- The NBA asserted federal claims (copyright infringement, Lanham Act § 43(a), and Communications Act § 605) and state-law unfair competition, including New York “hot-news” misappropriation.
- The district court held defendants liable for hot-news misappropriation and entered a permanent injunction barring transmission of NBA game data in progress via pagers and similar means; it dismissed the NBA’s Lanham Act false-advertising claim.
- Defendants appealed the injunction and misappropriation ruling; the NBA cross-appealed the Lanham Act dismissal.

## Issues

1. Whether New York “hot-news” misappropriation survives Copyright Act preemption in a limited INS-type form, and, if so, whether the NBA’s claim fits within that exception.
2. Whether defendants’ dissemination of time-sensitive NBA scores and statistics constituted actionable hot-news misappropriation (including “free-riding” and a threat to the plaintiff’s incentive to produce the product).
3. Whether Motorola’s marketing of SportsTrax supported a false-advertising claim under Lanham Act § 43(a).

## Decision

- The Second Circuit reversed the district court’s hot-news misappropriation judgment and vacated the permanent injunction.
- The court held that, although a narrow INS-type hot-news claim can survive Copyright Act preemption, the NBA’s claim did not satisfy that limited doctrine on these facts.
- The court affirmed dismissal of the NBA’s Lanham Act § 43(a) false-advertising claim.

## Legal Principles

- Facts, including sports scores and game statistics, are not copyrightable; copyright protects original expression, not underlying factual information.
- State-law claims equivalent to exclusive rights within the general scope of copyright are preempted by the Copyright Act unless they include a qualitatively different element.
- Only a narrow INS-type “hot-news” misappropriation claim survives preemption for time-sensitive information, limited to cases where:
  - the plaintiff gathers information at a cost;
  - the information is time-sensitive;
  - the defendant’s use is free-riding on the plaintiff’s efforts;
  - the defendant directly competes with a product or service offered by the plaintiff; and
  - widespread free-riding would substantially threaten the existence or quality of the plaintiff’s product or service by reducing incentives to produce it.
- Independent collection and retransmission of factual game information, at the defendant’s own expense, does not satisfy the “free-riding” element.
- A hot-news claim fails where the challenged service is not a market substitute that threatens the plaintiff’s core product or the incentive to produce it.
- Lanham Act § 43(a) false-advertising liability requires materially misleading commercial representations; where the challenged statements are not materially misleading in context, dismissal is proper.

## Conclusion

The Second Circuit held that real-time dissemination of NBA scores and statistics involved uncopyrightable facts and that the NBA’s state-law hot-news theory did not meet the narrow INS-type requirements, leading to vacatur of the injunction, while the NBA’s Lanham Act false-advertising theory was properly dismissed.


Nat'l Basketball Ass'n v. Motorola, Inc., 105 F.3d 841 (2d Cir. 1997)