June 18, 2009 6:30 PM
Of Fathers, Sons, Baseball Cards, and Intellectual Property
Posted by Ed Shanahan
By Paul Lesko from IP Law & Business
To my sons, Jude and Charlie,
Every year for your birthday, I buy each of you a complete set of baseball cards from that year. I always figured these gifts would give the three of us a fun hobby to share. I never expected they would give me a chance to explain to you what I do for a living.
Neither one of you cares to hear about how "Daddy's client came up with a computer program, and another company is using this same concept, so daddy is suing the other company." Even when I refer to my adversaries as "the bad guys" it doesn't really register. And you definitely stop listening if I say the computer program I'm talking about is a business application and not some kind of game.
That's why I'm hoping a recent case about baseball cards might just help me explain what it is that I do when I leave the house every morning.
In April, a card maker named Topps sued a rival card maker named Upper Deck in the Southern District of New York. Topps claims that designs Upper Deck used for a series of 2009 cards it sold under the O-Pee-Chee label copied the design of cards that Topps put out in the 1970s.
(As it happens, the two companies agreed on Thursday that Upper Deck can keep selling its existing stock of O-Pee-Chee cards through July 16; a hearing on whether it will eventually have to recall those cards will be delayed until the case goes to trial. A date for that hasn't been set.)
The similarities between the Upper Deck cards in question (below, left) and the 1975 Topps cards (below, right) are quite clear.
Both use an outer border with two colors, a thin white border surrounding the players' pictures, bubble-lettered team names with shadows at the top of the card, players' names in a single color at the bottom, and an image of a baseball in a bottom corner. Here's another example (Upper Deck card, below left; Topps card, below right):
At first glance, some of these design choices might look generic or common when considered by themselves, but the overall card designs are quite similar. To emphasize this, let's remove the players' photographs (Upper Deck card, below left; Topps card, below right).
It's not hard to imagine someone thinking these cards are from the same set.
So boys, here's the question that lawyers like your father deal with: Does Upper Deck's use of these design features constitute what's known as copyright and trade dress infringement?
Case law regarding how much protection baseball cards are entitled to is relatively silent. Not that there haven't been lawsuits over baseball cards--there have been plenty. But court rulings focused on the alleged copying of specific cards or card designs don't appear to exist. That's surprising considering the amount of intellectual property that's connected to a baseball card (copyright for the designs and layouts, trade dress protection for the cards themselves, and for the packaging they come in, copyright of the players photograph, etc.) and how long baseball cards have been around (nearly 150 years). The reason for the lack of court decisions may simply be that the ultimate winner in court still stands to lose something valuable.
Here's why: Trading cards are collectibles, which means supply dictates demand. Cards distributed in smaller numbers invariably command higher prices than cards that flood the market. There are various reasons why shortages sometimes arise: the natural attrition of cards as time passes; mistakes that requires cards to be reprinted; limited print runs by manufacturers.
Lawsuits based on questions of whether cards have been copied create another type of card shortage. If a court orders a recall of cards that have already been sold--or halts production of new cards--the supply of those cards dwindles and the demand for them rises. So if Topps were to win this case and get the relief it wants, the Upper Deck O-Pee-Chee cards already in collectors' hands would quickly become some of the most sought-after cards sold this year. That means Topps could win--and still lose.
But that's not the only curveball here. Should Upper Deck emerge victorious, the entire trading card industry, including Upper Deck itself, could lose. That's because Upper Deck says in its defense that the Topps designs it supposedly copied are "common and functional" and therefore not protected as a matter of law. As Topps notes in its court papers, "[B]y necessary implication, any Upper Deck cards that use the same "functional" elements are also not protectable." In other words, Upper Deck appears to take the position that the design features in question should not be entitled to copyright or trade dress protection--for anyone.
If Upper Deck ultimately prevails, then, the level of protection any trading card enjoys could be greatly reduced.
Think of it as a game of chicken. A win for Topps certainly helps Topps, and ensures IP protection for the entire trading card industry. It also increases the demand for and value of whatever 2009 Upper Deck O-Pee-Chee cards that are already out there. A win for Upper Deck lets the company keep selling its 2009 O-Pee-Chee line. But any other trading card maker could poach its designs--and maybe other card designs too.
By the way, regardless of how the case turns out, boys, we are the proud owners of a handful of 2009 Upper Deck O-Pee-Chee cards—and a few recently purchased Topps 1975 cards. If Topps wins, all of these cards could increase in value. If Upper Deck wins, or if there is a confidential settlement, the value of our cards isn't likely to go up. Either way, buying these cards--and explaining this case to you--was worth it if it helps you understand what your dad does for a living.
Paul Lesko is an associate at Simmons Cooper in East Alton, IL, and chairman of the firm's intellectual property department. He is not involved in this case.