Over the past several years, I have written about a series of decisions in suits brought by former collegiate athletes against EA Sports and the NCAA, seeking compensation for the use of their likenesses and those of thousands of other football and basketball players in EA's gold standard NCAA video games in alleged violation of their common law and statutory right of publicity. Federal district courts in the Third and Ninth Circuits reached opposite conclusions on virtually identical facts, threatening a split that would sow further confusion. But in two recent decisions, the Third and Ninth Circuit Courts of Appeal resolved the issue in favor of the athletes, establishing a unified paradigm for delineating the border between the right of publicity and First Amendment–protected creative expression, with significant ramifications for entertainment and media companies.

The "right of publicity" (recognized in Texas and most other states and by the U.S. Supreme Court) purports to protect against the uncompensated commercial exploitation of one's likeness or identity by another. In Keller v. Electronic Arts, No. 09–1967, 2010 WL 530108 (N.D.Cal. 2010) and Hart v. Electronic Arts, 808 F. Supp. 2d 757 (D.N.J. 2011), two federal courts applied the "transformative use" test to EA's NCAA Football video game to determine whether the inclusion of virtually identical avatars of two college quarterbacks violated their right of publicity. The Keller court, focusing on the clone-like appearance of the avatars, found for the players; the Hart court, focusing instead on the game as a whole (which includes equally life-like replicas of stadiums, fight songs, uniforms, coaches and cheerleaders) was equally adamant in finding for EA. When both decisions were appealed, lawyers advising publishers and celebrities eagerly waited to see where the chips would fall.

The answer came in Third and Ninth Circuit appellate decisions which sided with the players, finding that EA's uncompensated use of their virtual personas in its life-like video games usurped their rights of publicity. The majority in Hart v. Electronic Arts, Inc., 717 F.3d 141 (3d Cir. 2013) began by determining that only the "transformative use" test (developed by California appellate courts and borrowed from copyright law's fair use defense) adequately balanced the conflicting interests of First Amendment-protected expression and the common law right of a person to control the commercial exploitation of his or her persona. The question then turned to whether a court should consider only the celebrity likeness, or the work as a whole, when determining whether the non-permissive use of the likeness is transformative enough to invoke the First Amendment's protection. The Third Circuit held that the celebrity likeness itself – not other creative aspects of the game when taken as a whole – should be the focus of the court's inquiry, easily concluding that player Ryan Hart's "digital avatar does closely resemble the genuine article." When considering the context within which Hart's digital avatar exists to determine if it had been adequately "transformed," the Third Circuit concluded that "[t]he digital Ryan Hart does what the actual Ryan Hart did while at Rutgers: he plays college football, in digital recreations of college football stadiums.... This is not transformative; the various digitized sights and sounds in the video game do not alter or transform the Appellant's identity in a significant way."

Also relying on the transformative use test, the Ninth Circuit In re NCAA Student-Athlete Name & Likeness Licensing Litigation, 724 F.3d 1268 (2013) found that Arizona State quarterback Sam Keller's virtually identical avatar – right down to his height, weight, jersey number, home state, physical appearance, wristband preference, and even his playing style as a pocket passer – was dispositive. While acknowledging that the "sheer number of virtual actors" depicted and relative anonymity of each player in EA's NCAA Football are facts which can be considered in the framework of the transformative use test, the Ninth Circuit observed:

"[T]he fact is that EA elected to use avatars that mimic real college football players for a reason. If EA did not think there was value in having an avatar designed to mimic each individual player, it would not go to the lengths it does to achieve realism in this regard. Having chosen to use the players' likenesses, EA cannot now hide behind the numerosity of its potential offenses or the alleged unimportance of any one individual player."

Last June, the NCAA joined its licensing agent and EA in settling Keller for a reported combined total of $60 million to avoid a March 2015 trial.

The reasoning found most persuasive by both federal Courts of Appeal is that set forth in the California state appellate decision in No Doubt v. Activision Publishing, 192 Cal.App.4th 1018 (2011), finding that Activision's use of identical avatars of Gwen Stefani and other No Doubt band members in its popular Band Hero game in applications that exceeded their license agreement violated their right of publicity. As in Keller and Hart, the No Doubt court was unmoved by the game maker's reference to other creative elements within the game's virtual world:

"[The No Doubt] avatars perform rock songs, the same activity by which the band achieved and maintains its fame. Moreover, the avatars perform those songs as literal recreations of the band members. That the avatars can be manipulated to perform at fanciful venues including outer space or to sing songs the real band would object to singing, or that the avatars appear in the context of a video game that contains many other creative elements, does not transform the avatars into anything other than exact depictions of No Doubt's members doing exactly what they do as celebrities."

Not surprisingly, these landmark rulings have encouraged other "celebrities" to take their shot. Last month, deposed Panamanian dictator Manuel Noriega sued Activision Blizzard, Inc. for copying his likeness to portray an alleged "kidnapper, murderer and enemy of the state" in Call of Duty: Black Ops II, without compensation or his consent. The complaint alleges that Noriega's name is used in the game in connection with his avatar; it has also been reported that characters in the game refer to his alleged avatar as "old pineapple face," an actual nickname used by Panamanians to describe Noriega's distinctively acne-scarred face, and that an object of the game is to capture him. According to Activision, Black Ops II earned more than $1 billion in sales in the first 15 days after its November 2012 release, and Noriega wants his cut. And just weeks before, Mean Girls star Lindsay Lohan sued Grand Theft Auto V producer Take-Two Interactive Software Inc. in New York State court, claiming a character in the game closely resembles the real-life actress (allegedly sporting a similar hair style and wearing items from Lohan's clothing line), and that the character's side mission in the game incorporates numerous personal details from Lohan's life, including the famous Chateau Marmont Hotel on Sunset Boulevard, where Lohan once lived and still frequents. We may thus find ourselves in the first wave of an unfortunate flood of cases brought by plaintiffs seeking to enforce a right to payment they did not believe they possessed until recently.

What "take-aways" of application beyond video games can be learned from these cases?

(1) Like it or not, the subjective "transformative use test" is controlling. To the extent other tests have been suggested by courts and litigants over the years, it is now clear that the transformative use test will be the "go-to" standard applied by courts both in and outside California, in light of Hart and Keller and the well-developed case law in California (where most right of publicity cases have been brought, given the concentration of celebrities living and working there). Courts in states which have not yet developed a test (like Texas) will have little else to look to for guidance.

(2) The more identical the avatar, the less important the other creative elements. It will now be harder to overcome the presumption that inclusion of an avatar virtually identical to the celebrity plaintiff (especially if engaged in the same activity which brought the plaintiff fame) was intended to capitalize on plaintiff's fame, no matter how many other creative elements or characters populate the work's fictional world. Although the "avatar-centric" approach taken in recent videogame decisions has been criticized for diluting the requirement that the work be considered as a whole, a trend against permitting the unlicensed inclusion of virtual clones of celebrities has emerged and should not be ignored.

(3) Avoid cloning sympathetic plaintiffs. By profiting from inclusion of virtual clones of college athletes who are barred from making paid endorsements under NCAA amateur rules, EA had two strikes against it from the start. Authors/publishers of creative works should not pretend that judges will set aside their sympathy for plaintiffs who can convincingly argue they were unfairly exploited and are not otherwise handsomely compensated.