Your Image Here: The NCAA Settles with Athletes Over Rights of Publicity

We’re all familiar with video games involving computer-generated depictions of real-life athletes; they are a multi-billion dollar industry.  Under pressure from consumers to make such games more and more realistic, software companies like Electronic Arts, Inc. have mined team rosters to allow gamers to field virtual versions of their favorite sports teams: a virtual Peyton Manning with the same height, weight, jersey and number, skill set and even facial features as the real Peyton Manning can be fielded alongside the rest of the virtual Denver Broncos®.  The NFL Players Association receives roughly $35 million annually from EA to compensate NFL players for consumers’ ability to tackle a virtual Tom Brady with a virtual Terrell Suggs.  Video games depicting college athletes and teams similarly utilize the likenesses and characteristics of those athletes.  Unlike the pros, though, student athletes are not paid for this.

That is, until last week, when a class-action suit brought by several NCAA athletes settled against the last remaining defendant, the NCAA, for $20 million.  Last week’s settlement followed a $40 million payout by EA and the Collegiate Licensing Co., the organization authorized to manage licensing rights on behalf of NCAA institutions.

The landmark settlement concludes the first of its kind case in which non-professional, student athletes have attempted to be compensated for the commercialization of their individual likenesses to sell video games.  The payout resolves the student athletes’ claims that defendants had violated their “rights of publicity”, a state law right held by every person to control the commercial use of his or her identity, by using their likenesses in EA’s “NCAA Football” and “NCAA Basketball” video game series.  One of the most expansive rights of publicity exists under the Indiana Code, a violation of which the plaintiff-athletes asserted as one of their many claims, where the publicity right extends to an individual’s name, voice, signature, photograph, image, likeness, distinctive appearance, gestures and mannerisms.

While this case will not redefine the boundaries of the rights of publicity doctrine, it is indeed precedential as to the context in which that doctrine is applied.  The resolution of the athletes’ intellectual property claims also implicates many aspects of the current and lately heavily scrutinized NCAA model, including whether the settlement funds will be deemed “payment” to sufficient to disqualify the athletes from NCAA eligibility or to entitle them to employment benefits.  A parallel antitrust suit involving the same basic parties went to trial on Monday.

Supreme Court: Federal Circuit got §271(b) wrong and maybe §271(a) as well.

At its heart the Internet is an information distribution network and the ease with which all manner of information can be shared instantly has led to numerous innovative methods of doing, well, most anything. A hallmark of patents on such methods is that the various steps are carried out by multiple actors as information is passed around the Internet. Often the actors between which the steps of the patented method are divided have only the most tenuous connection with one another. In a case that is reshaping our understanding of what it means to infringe a method patent in the digital age, the Supreme Court reversed the Federal Circuit’s ruling on such divided infringement in Limelight Networks v. Akamai Tech. Read More »

Naturally, litigation results from unsupported advertising claims and undefined terms.

The WSJ Corporate Intelligence blog has an interesting article today that highlights the risks inherent in un-vetted advertising claims.  Apparently Proctor & Gamble took issue with “99% Natural” claim that toothpaste maker Hello Products, LLC was making with respect to its toothpastes which come in unusual flavors (for toothpaste) like pink grapefruit mint and mojito mint. Neither the FDA nor FTC have guidelines for what constitutes “natural” or “all natural” products.  In practice, the FDA takes the position that it will “not object[] to the use of the term if the food does not contain added color, artificial flavors, or synthetic substances,” but you are apparently on your own to determine what exactly is or is not a “synthetic substance.”  Because of the regulatory confusion over the meaning of “natural,” litigation over what does or does not qualify often resorts to claims sounding in state false advertising, unfair trade practices, or consumer protection statutes, or alleging common law fraud or breach of warranty.  Some clarity as to what it means to be natural that we can all agree on (or at least rely on) would be helpful from both the consumer and advertiser perspective, much like the USDA’s National Organic Program that tries to put some meaning into that word as used on food labels.  Apparently, though,  it is difficult from a food science perspective  to define a food product that is natural “because the food has probably been processed and is no longer the product of the earth,” according to the FDA.  That seems to have been part of P&G’s problem as the maker of one of the country’s leading toothpastes, Crest,  asserted that some of the Hello Product’s toothpaste’s ingredients, like fluoride, were chemically processed and thus not “natural.”

For its part, Hello Products offered to change its packaging after it had sold its existing stock but that did not satisfy P&G which filed suit and obtained an injunction to block the sale of the offending toothpaste. The upside for those of you in NYC tomorrow is that Hello Products plans to give away the 100,000 tubes it can no longer sell as free samples on the streets of Manhattan. Grab a tube (I recommend the grapefruit) and remember that FTC truth-in-advertising rules require that:

  1. advertising must be truthful and non-deceptive;
  2. advertisers have evidence to back up their claims; and
  3. advertisements are not unfair.

SCOTUS Joins Team Anti-Troll

HiRes

Just a few short months after the house passed the Innovation Act, HR 3309 (now before the Senate Judiciary Committee), a bill pointedly aimed at curbing the practices of non-practicing entities, or patent trolls, as reported earlier on this blog, the Supreme Court has now issued two decisions not as deliberately aimed but nonetheless injurious to the patent troll business model.

Yesterday, Justice Sotomayor delivered two nearly unanimous decisions of the Court (available here and here) that collectively lower the hurdle for prevailing defendants to obtain attorneys’ fees against the plaintiff.  The previous standard, oft implemented by the Federal Circuit, the federal Court of Appeals for patent cases, required “material inappropriate conduct” or both “subjective bad faith” and “objective[] baseless[ness]” on the part of the plaintiff in bringing the case before fees could be awarded against it.  Such conduct is commonly complained of by those targeted by patent trolls, entities named for their practice of acquiring patents in the hopes of collecting damages through infringement lawsuits, but is rarely punished.  Small businesses and individuals who are sued by patent trolls often pay a fee to settle the case rather than incur the expense and exposure of litigation.  Yesterday’s dual Supreme Court decisions may change that.

The Court started by rejecting the Federal Circuit’s strict standard for awarding fees and announced a comparably lenient one, stating that fees can be awarded whenever a case “stands out from others with respect to the substantive strength of a party’s litigating position or the unreasonable manner in which the case was litigated.”  In a related decision, the Court curbed the Federal Circuit’s ability to overturn fee awards made by lower federal courts.  Although applicable to all patent cases, the implication to trolls is clear: bring a baseless lawsuit to intimidate a payment out of a defendant, and jeopardize your own bottom line as well.

Fan Fiction Gets Weird

Popular author L.J. Smith of the Vampire Diaries series was terminated by her publisher and replaced with a ghostwriter. Some fans are content to continue reading the now ghostwritten series. Other fans are buycotting. What did L.J. Smith do? She is writing new Vampire Diaries stories as “fan fiction”. Fan fiction is understood as meaning stories written by amatuer writers based on their favorite book, television or movie characters.
While some media companies routinely prosecute copyright infringement lawsuits against fan works, others have embraced fan fiction, such as the publisher of Fifty Shades of Grey series. Originally fan fiction (or slash fiction)based on the Twilight series, Random House successfully published the books after the author removed the Twilight characters.
The Wall Street Journal reports that Amazon has been making deals with publishers and fan fiction writers for the rights to use characters and fan writing to identify new blockbusters like Fifty Shades.

Gov. Chris Christie’s Four Liter Jersey Traffic Jam

Jimmy FallonIrresistable mash-up by “the Bosses” for the Gov, delighting both my “Jersey Girl” and copyright lawyer personalities.

A new Picasso — and a hefty tax bill.

Jeffrey Gonano of Wexford in western Pennsylvania won the lottery for the 1914 Picasso painting L’Homme au Gibus (Man in the Opera Hat).  Mr. Gonano had purchased one of the 50,000 lottery tickets that had been sold for 100 euros (approximately $137) each.  The lottery was held to benefit two Arts and Cultural Projects in a UNESCO World Heritage city in Lebanon.

However, because the painting is valued at approximately $1 million, the win may come with a tax bill as large as $365,000.  And, unlike a lottery with a cash prize, Mr. Gonano cannot pay the taxes out of the proceeds, unless he decides to sell the painting.  Of course, Mr. Gonano can avoid the tax liability by donating the painting to a charity or museum.  Mr. Gonano is currently exploring his options.

http://www.goerie.com/article/20131223/NEWS06/312239957/Picasso-may-pose-$365000-tax-dilemma-for-raffle-winner

Pushing Patent Trolls Into the Light of Day: Congress Attacks the Practices of Non-Practicing Entities

HiResThe Innovation Act, H.R. 3309, was overwhelmingly passed by the House (325-91) last week.  The Senate version seems poised to pass soon, and the White House is reportedly also in favor.  The legislation was introduced by House Judiciary Committee Chair Bob Goodlatte (R-VA) to address the growing problem of non-practicing entities (NPEs), a.k.a “patent trolls.”

Patent trolls are so named for their practice of acquiring patents that they have no intention of bringing to the market.  Instead, trolls demand damages or licensing fees from unsuspecting businesses, sometimes including consumers, who use a device or method allegedly covered by the troll’s patents.  The Patent Examiner reports that Innovatio IP Ventures, which claims to have a portfolio of patents covering wifi technology, sues businesses such as Caribou Coffee and Panera Bread for providing wifi in their businesses. The trollish penchant for “shell” companies makes it nearly impossible to determine who owns the patents at issue. Read More »

US Supreme Court to take on the patentability of software. Can the decision reduce the incidence of troll attacks?

Mathmatical algorithms are unpatentable. Software is a collection of algorithms expressed in machine code. Under current law, only software that involves a specific machine or physical result. The U.S. Supreme Court accepted cert in a case,  Alice Corporation Pty. Ltd. v. CLS Bank International (docket 13-298), involving financial software to mitigate risk in settlement transactions. The trial court decided the software is unpatentable because it merely uses “the abstract idea of employing an intermediary to facilitate simultaneous exchange of obligations”. the U.S. Court of Appeals for the Federal Circuit split on the decision, teeing it up for the Supreme Court.

Timothy Lee of the Washington Post points out that if the Supreme Court broadly invalidates the software patents, it would allieviate the nuisance suits by ‘non-producing entities’ or ‘trolls’, since most involve software. Would it discourage Congress from its present mission to identify a legislative solution to the troll problem? Read More »

Win a Picasso and Own a Masterpiece! But Hurry!

UK2This is no joke (although it is extremely awesome!):  A drawing will be held on December 18, 2013 for a Picasso entitled  L’Homme au Gibus (Man in the Opera Hat), completed in 1914.  Here is a copy of the painting:

Tickets cost a mere 100 Euro (approximately $135).  Only 50,000 will be sold.  Proceeds will benefit two Arts and Cultural Projects in a UNESCO World Heritage city in Lebanon.  Tickets can be purchased here: http://www.1picasso100euros.com/?lang=en

Good luck!!