By Jonathan Stempel
(Reuters) - A federal appeals court on Tuesday said Electronic Arts Inc (NASDAQ:EA.O) must face a lawsuit by former National Football League players that accuses the video game maker of using their likenesses in the Madden NFL series without permission or proper compensation.
The 9th U.S. Circuit Court of Appeals in San Francisco rejected EA's argument that its use of the likenesses was "incidental," and thus protected under the First Amendment of the U.S. Constitution.
"EA's use of the former players' likenesses is not incidental, because it is central to EA's main commercial purpose - to create a realistic virtual simulation of football games involving current and former NFL teams," Circuit Judge Raymond Fisher wrote for a unanimous three-judge panel.
The panel also rejected other First Amendment defenses that it called "materially indistinguishable" from those it had rejected in 2013, in a similar lawsuit against EA on behalf of college athletes whose likenesses were used in video games.
"We're disappointed with the panel's decision," EA spokesman John Reseburg said. "We believe in the First Amendment right to create expressive works - in any form - that relate to real-life people and events, and will seek further court review to protect it."
Tuesday's decision upheld a March 2012 ruling by U.S. District Judge Richard Seeborg allowing the case to proceed against EA, which is based in Redwood City, California.
Four former players were named as plaintiffs, including onetime Los Angeles Rams quarterback Vince Ferragamo.
Another plaintiff was Sam Keller, a former Arizona State University quarterback who was briefly under contract with the Oakland Raiders, and was a plaintiff in the college case.
Brian Henri, a lawyer for the former NFL players, did not immediately respond to requests for comment.
Last May, EA reached a $40 million settlement of claims brought in the college case on behalf of Keller and other football and basketball players.
The case is Davis et al v. Electronic Arts Inc, 9th U.S. Circuit Court of Appeals, No. 12-15737.
(Reporting by Jonathan Stempel in New York; Editing by Phil Berlowitz)