National Basketball Ass'n v. Motorola, Inc.

The district court's injunction was based on its conclusions that the defendants had unlawfully misappropriated the NBA's property rights in its games, under New York law. However, the Second Circuit found that "the district court concluded that the NBA's misappropriation claim was not preempted because... the subject matter requirement was not met"(39).[4] The Second Circuit court argued that the copyright act should not be used to distinguish between copyright infringement and state-law misappropriation.

The Court noted that the broadcasts of the NBA games, not the games themselves, are entitled to copyright protection. The Copyright Act of 1909 was amended in 1976 specifically to protect the broadcast and meet the requirement that the original work of authorship be "fixed in any tangible medium of expression" 17 U.S.C. § 102(a).

The district court held that Motorola and STATS did not infringe NBA's copyright because only facts from the broadcasts, not the broadcasts themselves were transmitted. The Second Circuit Court agreed with the district court's argument that the "[d]efendants provide purely factual information which any patron of an NBA game could acquire from the arena without any involvement from the director, cameramen, or others who contribute to the originality of the broadcast" [939 F. Supp. at 1094].

The New York hot news misappropriation developed out of International News Service v. Associated Press, a 1918 U.S. Supreme Court case.[3] Great Britain prohibited INS reporters because INS's owner, William Randolph Hearst, was an outspoken critic of the allies and an open supporter of the Germans. In order to keep INS newspapers up to date with the latest information from the war, the INS would obtain the factual data from east coast AP news articles, then would send it out to subscribers on the west coast, occasionally beating the AP news stories.[3] In order to deal with this, the Supreme court "crafted a new variant of the common law tort of misappropriation" called the "hot news" doctrine.

New York sought to apply ethical standards to the INS case and created its own body of misappropriation law.[4] However, the Second Circuit Court found that the New York misappropriation law "goes well beyond the 'hot news' claims and is preempted".[4] The court claimed that to survive a "hot news" INS-like claim, several elements were required: the plaintiff generates the information at a cost; the information is time-sensitive; the defendant is free riding off the plaintiff's efforts; and the defendant is in direct competition with a product or service offered by the plaintiffs, and in doing so, enables others to free ride off the efforts of the plaintiffs.[4]