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September 2, 2014

Month in Review (August), Part 1

By Martha Nimmer

Just Say No?

Early last month, the National Football League (NFL) handed Cleveland Browns receiver Josh Gordon a season-long suspension after he failed another drug test, this time for marijuana. A day later, star player Joe Thomas went before a group of reporters to decry Gordon's punishment, adding that the NFL's drug policy was out of date. "Obviously there were some oversights when they wrote the program and some cultural changes that have happened, so that the program doesn't accurately reflect the morals of society today," Thomas said.

Not wanting to miss an entire season, Gordon attempted to appealed his suspension, arguing through his attorneys that the positive drug test result was due to his inhalation of second-hand smoke; his appeal, however, was denied. Gordon served a two-game suspension last season for failing a drug test, so as a "repeat offender," he was "immediately barred from the team's practice facility," writes USA Today. After the 2014-2015 football season concludes, the NFL will decide if, and when, Gordon will be permitted to apply for reinstatement.

Joe Thomas' comments about the NFL's drug policy represent the changing attitude among many Americans about the League's--and even the federal government's--policy toward marijuana. The NFL's collective bargaining agreement still bans the illicit use of marijuana, even though medical marijuana is permitted in 23 states and the District of Columbia. Ohio, where the Browns are based, does not allow for medical marijuana usage, but does currently provide for "reduced penalties" for possession of the substance. In regard to the NFL's narcotics policy, Thomas also said, "they haven't touched it in a lot of years because it's kind of been the one thing where, when you're collective bargaining, it kind of gets put 'til the end and then when you're close on a deal you say, 'Oh, let's just leave it how it's always been,' rather than actually work on some issues that is there. The problem is, now you're sitting in a situation with a collective bargaining agreement that lasts 10 years, and in the middle of it, no one is going to want to go back and try to hash out things that may be an issue -- as they clearly are on some levels."

Given the NFL's concerns over other controversial matters, such as player head injuries, and the criticism the League received regarding player suspension for domestic violence charges, revising drug policy with regard to marijuana use is unlikely to make the NFL's to-do list for this season.



Athletic Autonomy

The National Collegiate Athletic Association (NCAA) voted last month to give the five wealthiest conferences and their universities the power to "make their own rules on several issues affecting athletes and competition." If this decision "passes" a 60-day comment period, the Big 5, which include the Southeastern Conference, the Atlantic Coast Conference, the Pacific-12, the Big Ten and the Big 12, will be allowed to raise the amounts of their player scholarships, improve team health insurance and allow players to consult with agents, among other changes.

Supporters of this move towards greater autonomy say it acknowledges the "markedly different" situations faced by Division I schools and the pressures faced by their players, while critics of the change say that smaller schools will have a harder time recruiting talent. "I worry these changes will further escalate the arms race in college sports, which, in my opinion, is not in the best interest of intercollegiate athletics, or higher education more generally," Dartmouth University president Philip J. Hanlon said. The biggest champions of autonomy dismiss their critics, saying that autonomy is really just about giving more benefits to deserving student athletes: "[w]hat [autonomy] means is the ability to provide student-athletes with things that meet the 21st-century model of how we think about intercollegiate athletics," Mike Slive, the commissioner of the SEC, said last month.

Despite the harsh criticism of autonomy, the NCAA remains in support of the measure. As The New York Times writes, "[a]lthough only five of the board's 18 members are presidents of Big 5 universities, the steering committee that refined previous proposals last month into the current model included eight presidents, half of whom run Big 5 universities." All is not lost when it comes to defeating the autonomy measure, however. If 75 universities formally voice their disapproval of the autonomy measure during the 60-day comment period, the board will reconsider its vote. If 125 universities object to the measure, its implementation will be halted "pending that reconsideration," writes The New York Times. If the board later moves to reaffirm the decision, all Division I universities will vote, "with a five-eighths majority required to overturn."


The Art of Fraud

James Meyer, a former studio assistant to American contemporary artist Jasper Johns, plead guilty late last month to stealing 22 works from the artist's Connecticut studio. Meyer worked for Johns for over two decades and kept a studio file drawer of unfinished pieces that the artist had not authorized for sale.

Over the course of six years, from 2006 to 2012, Meyer took over 20 of these unfinished works and "had them sold by a Manhattan gallery and other purchasers." Prosecutors said that the defendant-assistant claimed that the works were gifts from Johns. According to a 2013 indictment, Meyer made $3.4 million on the transactions and "covered his tracks with fictitious inventory numbers and faked ledger book pages."

Meyer is scheduled to be sentenced on December 10th, and faces nearly four years in prison. As part of his guilty plea agreement, he forfeited almost $4 million. Meyer is also facing a civil lawsuit stemming from his illegal activity: The Francis M. Naumann Gallery of Midtown Manhattan, which sold some of the pilfered Johns artwork, sued Meyer for fraud in May.


Appealed, and Bracing for a Fight

The Washington Redskins have filed their appeal of the U.S. Patent and Trademark Office's (USPTO) June decision that canceled six team trademarks. The appeal, filed in the U.S. District Court for the Eastern District of Virginia, claims that the "Trademark Trial and Appeal Board ignored both federal case law and the weight of the evidence." Specifically, the team's appeal argues that Native Americans did not consider the name "Redskins" disparaging when the trademarks were put in place from 1967 and 1990.

Although the U.S. Patent and Trademark Office did decide that the Redskins trademarks should be canceled, the ruling left the trademarks' protections in place until the court hears the team's appeal; this appeals process could end up taking years, however. The USPTO issued a similar decision in a nearly identical case back in 1999, but the Redskins prevailed after the U.S. District Court for the District of Columbia reversed the board's decision four years later, following contentious litigation.

Anger over the name has grown in recent years, with critics calling on team owner Dan Snyder to change the team's name. Snyder, however, along with the NFL, have refused to change the name.


Studios and Guilds Attempt to Adapt to Changing Media Landscape With New Residual Agreements

By Jacob Reiser

Expect to see more reruns of your favorite TV shows in the near future on cable and digital networks. Thanks to a new agreement that changes the way residuals are calculated when studios sell reruns of television shows to cable channels and digital networks, acquiring the rights to air reruns of old classics has become more affordable than ever.

Residuals are the compensation paid to writers, directors and performers for use of television programs beyond the use covered by the initial contract. Residuals begin once a show starts re-airing or is released to video/DVD, pay television, broadcast TV, basic cable, new media and/or digital networks.

The New York Times(NYT) reported on August 25th that a new residual agreement for the licensing of TV shows has been reached between Hollywood studios, i.e., The Alliance of Motion Pictures and Television Producers, and the three major show business guilds: SAG-AFTRA, Writers Guild of America and the Directors Guild of America. The new three year agreement goes into effect immediately. (http://www.nytimes.com/2014/08/26)

Under the old residual agreement, a network interested in acquiring a show from a studio was required to pay a fixed residual payment, regardless of the amount the network also paid for licensing the show. As a result, networks frequently held off from acquiring otherwise attractive shows because the sum of the fixed residual payment together with licensing charges was too high. Under the new deal, residual payouts are based on a fixed percentage of the licensing charges the acquiring network paid or will pay to acquire reruns of the show. The hope is that the new residual agreement will allow the acquiring networks to negotiate licensing deals more in line with expected profits and thereby encourage them to acquire more reruns.

The NYT article quoted John Weiser, President of United States distribution for Sony Pictures Television, who explained that "the guilds were open to it because they fully understand how the TV landscape is evolving." The "evolution" Mr. Weiser mentioned is likely referring to the proliferation of digital networks, or "diginets," as they are more commonly known in the industry. The new residual agreement should have a huge impact in the diginet market, as reported by the NYT.

Diginets are digital networks residing in major network broadcasters' subchannels. Diginets came about when television stations were mandated by the FCC to transition from analog (the traditional method of transmitting television signals) to exclusively digital broadcasting of free over-the-air television programming. As a result of the transition, every television station now has digital channels in addition to its prime channel. For example, NBC Channel 4 in Los Angeles carries its programming on its prime channel 4.1, while broadcasting specialty programming on subchannels 4.2, 4.3, 4.4 all the way up to 4.10. While NBC's and some other stations' prime channels are carried by cable and satellite providers, most subchannels are not. However, all digital subchannels are accessible over the air by a digital ready television and a digital antenna for free. Therefore, these diginets are primarily focused on the roughly 10% of American homes that do not pay for cable or satellite service. If you have cable TV, you have probably never heard of a diginet.

Although relatively young, the most popular diginets, which include Me-TV, Antenna TV, Cozi TV and Bounce TV, deliver to defined audiences, beating out many cable channels in certain markets. For instance, in April 2014, Me-TV ranked 19th among all national cable networks in adults ages 25-54, outperforming brands like CNN, TLC, Bravo and 79 other outlets, per Nielsen data. (A three-part detailed report on diginets, including a ranking of the top 25 most viewed channels, is available at: http://www.tvnewscheck.com/tag/diginets-2014)

Many diginets offer some original programming such as local news and sports; but like cable TV in its early days, they primarily air reruns of classic shows. As a result, the popularity and ultimate success of diginets largely depend on their ability to acquire reruns of shows aimed at their target audience. Until now, diginets could not afford to acquire the licensing rights to many popular shows because the combined licensing and residual payments were too high. The new residual percentage structure should open the door to a flurry of new purchases by diginets.

Furthermore, as reported by the NYT, the change from fixed fee residual agreements may also create an opportunity for diginets to capture "broken shows" or shows that were canceled after only a few dozen episodes. Many of these shows, such as "Freaks and Geeks" or "Firefly," failed to capture the attention of the mainstream market, but nevertheless have a dedicated cult fan following. The niche nature of the audiences diginets target and cultivate makes many diginets natural candidates to purchase shows like these. Diginets will be more likely to acquire "broken shows" now that residual charges reflect a percentage of their lower licensing costs.

Although it is perhaps too early to definitively tell if the new residual agreement will have a significant and lasting impact on rerun licensing, it may already be having an effect. On August 27th, AntennaTV, one of the most popular diginets, announced that it would be adding 11 new shows to its schedule. (http://www.tribunemedia.com/?p=19403)

September 3, 2014

Month in Review (August), Part 2

By Martha Nimmer

Monkeying Around

If a monkey takes a selfie, who owns it? That is the question hounding British photographer David Slater, who is currently embroiled in a legal dispute with Wikimedia Commons over the ownership of a selfie taken back in 2011 by a crested black macaque (Macaca nigra) in an Indonesian forest. Slater spent three days in 2011 following the crested black macaques, when one day, after setting up his tripod and leaving it, the monkeys took his camera and started taking photos. When he returned, he realized that the monkeys had been snapping photos of themselves: a star--and a monkey selfie--were born. The selfies taken by the macaques quickly spread through the media. Eventually, one of the selfies appeared on Wikipedia, and then on Wikimedia Commons, which hosts images that are in the public domain. According to the Washington Post, Slater asked Wikimedia to remove the photo in 2012; the image was taken down, but it later appeared again, uploaded by another user. This time, the photo remained on Wikimedia.

Slater maintains that he owns the copyright to the monkey selfies, and "[t]he fact that they have been, essentially, distributed for free on the Internet through the Wikimedia Commons Web site has cost him untold amounts of money," explains the Washington Post. "This is ruining my business," Slater lamented. "If it was a normal photograph and I had claimed I had taken it, I would potentially be a lot richer than I am." Last month, Wikimedia revealed in its first ever transparency report just why it had denied Slater's removal request: essentially, Wikimedia stated, Slater was arguing that the person who took the photo should own the copyright in the photo. We know, however, that he did not take the photo; in fact, no human did. "Monkeys don't own copyrights," Wikimedia Foundation's Chief Communications Officer Katherine Maher said. "What we found is that U.S. copyright law says that works that originate from a non-human source can't claim copyright." For Slater to make a successful copyright claim, Maher explained, he would have to make "substantial changes" to the image in question--not just mere "cropping, color correcting and other cosmetic adjustments." Absent those alterations, Slater would have no basis for claiming a copyright in the selfie. Consequently, Wikimedia concluded, "if the photographer doesn't have copyright and the monkey doesn't have copyright then there's no one to bestow the copyright upon," Maher stated, and therefore it has remained on the website.

Slater remains determined, however, to find a way to assert his rights in the now famous monkey selfie. The photographer says that he is currently seeking legal counsel in the United States, where the Wikimedia Foundation is based, and in Britain.



Another Legal Headache for Lindsay Lohan?

Take-Two Interactive Software, Inc., the makers of wildly popular video game series Grand Theft Auto (GTA), says that Lindsay Lohan sued the company earlier this summer as a way to "get attention." The former "Mean Girls" star claimed that Take-Two Interactive and subsidiary Rockstar Games used her voice and likeness when creating blonde, bikini-clad GTA character Lacey Jonas.

In response to Lohan's suit, Take-Two and Rockstar Games filed papers in Manhattan federal court, calling the actress' case "frivolous" and a ploy "for publicity purposes." The defendants are seeking a dismissal of the suit, and asking the court to make Lohan pay the company's legal fees.


Fighting Fakes

Fashion powerhouses Gucci, Balenciaga, Yves Saint Laurent and others have Alibaba and its founder, Jack Ma, in their crosshairs. In July, the companies went to federal court in Manhattan and accused the Chinese e-commerce giant of making billions of dollars "by helping 'an army of counterfeiters' sell fake products." The lawsuit, filed on July 10th, was unsealed on July 24th, and names Alibaba Group Holding and nine Alibaba affiliates as the lead defendants. Nineteen other online merchants, all based in either China or Hong Kong, are also included as defendants.

In the 147-page lawsuit, the plaintiffs claim that Alibaba and its subsidiaries "facilitate and encourage the sale of an enormous number of counterfeit products." "The Internet has opened the door for unauthorized merchants to reach a wide range of consumers in their efforts to sell counterfeit versions of the plaintiffs' products, which bear the plaintiffs' marks even though they are not manufactured, licensed, or approved by plaintiffs ('counterfeit products')," the complaint details. It continues on to say that "the sellers of such products not only copy the designs, patterns, and color schemes associated with plaintiffs' products, but also expressly use plaintiffs' marks in their advertising and marketing and on the counterfeit products themselves." The plaintiffs also accuse Alibaba and its affiliated companies of actively "encouraging" online merchants' infringement, by providing support services and a marketplace for the knock-off goods. Additionally, the e-retailer also offers credit card processing and shipping services, and helps merchants come up with and buy keywords that attract customers who are looking for authentic couture items.

Despite numerous investigations into and complaints about the advertising and sale of knock-off goods on its e-commerce platforms, Alibaba has done "little" to stop counterfeiters from selling fake merchandise, the lawsuit claims. Additionally, although Alibaba has said that it monitors and prevents sellers of counterfeit products from accessing and using the site, Alibaba has refused "to ban such merchants permanently or prevent them from offering counterfeit goods for sale," the plaintiffs state. Gucci, along with its co-plaintiffs, seek an injunction and punitive damages for trademark infringement, unfair competition and RICO violations.

Founded in 1999, Alibaba is an online-based retailer, like Amazon, which "provides online platforms for the sale and purchase of products." Alibaba's initial public offering (IPO) in the United States is expected to launch sometime this month, and could be worth as much as $200 billion, according to some analysts.


September 5, 2014

Week in Review

By Martha Nimmer

Domestic Violence & the NFL

After receiving harsh criticism for suspending Baltimore Ravens running back Ray Rice for just two games following revelations that Rice dragged his wife out of an Atlantic City casino elevator after knocking her unconscious, the National Football League (NFL, League) announced stricter penalties for domestic violence violations. The new personal conduct policy, unveiled last month by NFL Commissioner Roger Goodell, requires a six game suspension for domestic violence-related offenses. Additionally, the new policy stipulates that "second-time offenders" be banned from the League, but allows for a banned NFL member to apply for reinstatement after one year. Goodell stated that this policy and its accompanying punishments apply to members of the League, even if they are not convicted of domestic violence charges.

Speaking to a group of reporters on Wednesday, however, Goodell seemed somewhat hesitant to apply the new League personal conduct policy to the latest case of NFL domestic violence: on Sunday morning, San Jose, CA police arrested San Francisco 49ers defensive tackle Ray McDonald on felony domestic violence charges related to "an alleged incident at his 30th birthday party that police say left the victim with 'visible injuries.'" McDonald was released from jail after posting $25,000 bail. In response to questions about this latest incident, Goodell urged the media to allow the legal "process to play, [to] wait to get the facts, and make sure you understand all the circumstances." He added, "[w]e don't (know the facts) right now and we're obviously following it very closely. But the policy will be applied uniformly across players, coaches, executives, commissioners."



Google Refunds Un-"app"-roved Purchases

The Federal Trade Commission (FTC) announced yesterday that Google would refund $19 million of in-app purchases as part of a settlement with the agency regarding unauthorized purchases made by children. As part of the settlement agreement, Google must also change its billing practices and obtain "express, informed consent" before charging a user's account.

The FTC's complaint against Google accuses the company of violating "the FTC Act's prohibition on 'unfair' commercial practices by billing consumers for charges by children made within kids' apps downloaded from the Google Play store." In-app charges are part of many apps available on the Google Play app store, and range in price from 99 cents to as much as $200. According to the FTC, in many apps geared towards children, "users are invited to accumulate virtual items that help them advance in the game, [but] the lines between virtual money purchases and real money purchases can be blurred." To make matters worse for unsuspecting consumers, when Google first introduced in-app charges in 2011, Google would charge users for those purchases "without any password requirement or other method to obtain account holder authorization." In other words, children could "incur in-app charges simply by clicking on pop-up boxes within the app as they used it." Unsurprisingly, numerous consumers reported "hundreds of dollars" of such unauthorized charges.

To address the problem of unauthorized in-app purchases, in 2012 Google introduced a pop-up box that asked for the user's password before applying in-app charges. Unfortunately for these users, however, the new pop-up failed to include any information about the pending purchase, and Google failed to inform "consumers that entering the password opened up a 30-minute window in which a password was no longer required, allowing children to rack up unlimited charges during that time." According to the FTC, thousands of customers contacted Google for refunds, but were often told by Google customer service to seek refunds from the individual app developer. Happily for consumers, however, the FTC settlement will require Google to provide "full refunds of unauthorized in-app charges incurred by children." Additionally, the company must inform all consumers who made in-app purchases of the refund process for unauthorized in-app charges by children.


Fashion Faux Pas

A federal judge in Manhattan has ruled that Dwayne Walker Jr., a Bronx-based fashion designer, may go forward with a lawsuit against rapper Jay Z for royalty payments stemming from Jay Z's alleged us of a logo that Walker says he designed for Jay Z's Roc-a-Fella Records and its product lines. Walker initiated this action two years ago against the famed singer, his former manager Damon Dash, Jay Z's music label Roc-a-Fella Records, its co-founder Kareem Burke, Universal Music Group and Island Def Jam Music Group. Walker seeks $2 million in damages.

Walker originally paired up with Roc-A-Fella in 1995, agreeing to design and license a logo for the defendants in exchange for $3,500 cash and "2 percent of all revenues made from the sale of items ... bearing the logo for ten years after the first year of use, payable at the end of that period," according to the complaint. After putting the agreement in writing, Walker says that his relationship with Jay Z's former manager Damon Dash soured; eventually, in 2010, Walker applied for and received copyright registration for the logo he created. He filed the lawsuit two years later, which Jay Z and his co-defendants attempted to dismiss. After that strategy failed, the defense tried to strike what it called "redundant, immaterial and impertinent" aspects of the complaint. U.S. District Judge Andrew L. Carter Jr. denied the defense's motions, however, noting that there nothing in the complaint that was "redundant, immaterial, impertinent, or scandalous matter," the standard for striking a portion of a complaint.

No word yet from Jay Z on whether he still has 99 problems, or if this lawsuit bumped the count up to 100...


A New 'Czar' in Town

Late last month, the Obama administration announced that it would nominate Daniel H. Marti to be the intellectual property enforcement coordinator in the Executive Office of the President. Created by the Senate in 2008, the intellectual property enforcement coordinator -- colloquially referred to as "IP czar" -- is charged with coordinating IP enforcement issues across government branches and their various agencies. The position has been vacant since August 2013 following the resignation of Victoria A. Espinel.

Marti is currently an attorney with the Washington, D.C. office of Kilpatrick Townsend & Stockton. His practice, according to Bloomberg News, deals with intellectual property protection, management and enforcement in the U.S. and abroad. Marti served as co-chairman of his firm's intellectual asset acquisitions and transactions team from 2010 to 2013, and is currently a member of the International Trademark Association (INTA) Internet Committee.


September 15, 2014

Ray Rice video shows: Cameras should do the talking

By Jaimie McFarlin

Jaimie McFarlin is a third-year student at Harvard Law School and member of the Harvard Black Law Students Association, which launched the #HandsUpDontShoot Campaign.

In both tragedies of domestic violence and alleged police brutality, the victim can be silenced. Cameras can't. In a domestic violence incident, the victim can be silenced through the psychological trap of the relationship. In cases of alleged police brutality, victims can be silenced through death. So let the cameras talk.

On July 24th, the National Football League (NFL, the league) suspended Ray Rice for two games in the wake of aggravated assault charges stemming from domestic violence against his then-fiancee, now-wife Janay Palmer. On Sept. 8th, the NFL banned him indefinitely from the league. Only one thing changed after the NFL had completed its initial investigation -- TMZ released the video of Rice's knockout punch in the hotel elevator to the public. Pressured to take further action, the Ravens and the NFL punished re-punished Rice to avoid a public relations nightmare. For once, the executives doling out the repercussions could not ignore the realities of domestic violence.

While domestic violence is an inherently vicious act, the visual accompaniment exposed the ruthlessness of Rice's actions. The words "domestic violence" are now accompanied by an image of brutality. The camera spoke to the violence of Rice's punch in a way that mere words could not.

As the investigation into the death of Michael Brown in Ferguson, Missouri, unfolds, the lack of video evidence is unsettling, as police officer and witness testimony are creating a disputed timeline of events. Darren Wilson, the police officer who shot and killed the 18-year-old Brown, says Brown bum-rushed him, fought over his gun, and was then preparing to attack again. One witness says that the officer was the aggressor, and that the unarmed Brown turned to surrender before he was shot six times while his hands were raised. Although cameras may not be completely objective, they provide independent evidence, integral to a comprehensive investigation.

The Rice domestic violence incident and the Brown death have their differences. First, even before the video was released, the Rice incident involved substantially less disagreement over the events in the elevator. In both instances, the victims cannot be vocal advocates for their cases. So it is only the presence of a video that allows one of those voices to be heard.

Cameras have been playing an increasingly critical role in changing interactions between law enforcement and the community. A 2013 study revealed that wearing cameras was associated with dramatic reductions in complaints against officers and use-of-force in the Rialto, California, police department. The authors concluded: "The findings suggest more than a 50 percent reduction in the total number of incidents of use-of-force compared to control-conditions, and nearly 10 times more citizens' complaints in the 12-months prior to the experiment."

A small number of police departments across the country utilize body-worn cameras. But 39% of local police departments lack the less intrusive dashboard cameras. While a few of the 18,000 police departments across the country have started to equip their officers with body-worn cameras, municipally instituted policies are not enough.

In counties like St. Louis, with over 80 police departments, local departments have taken a haphazard and unsupervised approach to using camera technology. The Ferguson police department had dashboard cameras, but due to installation costs, they sat in storage. Furthermore, local policies provide insufficient oversight to mitigate privacy concerns that accompany camera-related police tactics. Instead of patchwork policies, state and federal legislation is necessary to ensure that all police departments are equipped with dashboard and body worn cameras.

The footage of Ray Rice's brutal assault reveals the urgent need for body-worn cameras on cops to capture independent, visual evidence in incidents that usually hinge on testimonial proof. This incident has made it clear: Cameras matter.

September 16, 2014

Week in Review

By Martha Nimmer

Goodell Under Fire

National Football League (NFL, league) Commissioner Roger Goodell has come under increased pressure in the last two weeks for his handling of the Ray Rice domestic violence scandal. Goodell first found himself at the center of the controversy after he decided to suspend the Baltimore Ravens player for just two games after it was revealed that Rice had hit his then-fiance, Janay Palmer, in an Atlantic City casino in February. Goodell later upped Rice's punishment to a lifetime suspension from the NFL after the commissioner reportedly viewed a surveillance video, released last week by TMZ, that showed Rice hitting Janay Palmer.

Now, Goodell finds himself on the defense again: last week, the Associated Press (AP) reported that law enforcement officials had sent the surveillance video to NFL officials back in April. This revelation has taken on a line of questioning harkening back to the days of the Watergate break-in during the Nixon Administration, with many observers asking "what did Roger Goodell know, and when did he know it?" The AP report stated that "a source played a voicemail from April 9 that came from a phone number at the NFL offices, in which a female voice says the tape was received, expresses thanks and says: 'You're right. It's terrible.'" According to the AP, the source could not verify if anyone at the NFL offices had viewed the video.

This disclosure by the AP has raised many more questions than it has answered, with football fans demanding to know who at the NFL received and watched the video, and whether it was shown to Commissioner Goodell. The NFL responded to the AP story by continuing to insist that no one at the league had seen the video before its release by TMZ last Monday: "[w]e have no knowledge of this. We are not aware of anyone who possessed or saw the video before it was made public on Monday. We will look into it." Unsatisfied with the league's response and Goodell's lack of transparency, some observers have called on the commissioner to step down.

To complicate matters further, Ray Rice announced yesterday that he intends to appeal his indefinite suspension. He will be represented by the NFL Players Association and his attorney. Commissioner Goodell will preside over the appeal, but Rice "could ask that a third-party hearing officer be designated to the case due to potential bias," writes SB Nation.




Search engine powerhouse Google announced earlier this month that it had reached a settlement with a group of photographers and visual artists over the unauthorized use of their intellectual property in Google Books. The photographers and artists filed suit against the company in April 2010 for copyright infringement.

Although the exact terms of the settlement are confidential, Google's statement makes clear that the agreement "includes funding for the PLUS Coalition, a non-profit organization dedicated to helping rightsholders communicate clearly and efficiently about rights in their works." Additionally, the agreement does not include any admission of liability by Google. Finally, because "the settlement is between the parties to the litigation, the court is not required to approve" the agreement's terms.


Read the Google press release here: http://googlepress.blogspot.ca/2014/09/google-photographers-settle-litigation.html

Dungeons & Dragons and Lawsuits, Oh, My

The quest to make a documentary film about the fantasy role-playing game "Dungeons & Dragons" has ended with a lawsuit. Anthony Savini, the director of Dungeons & Dragons: A Documentary , has sued his former partners for launching another documentary on the same topic.

Like so many great dramas, this one begins in New York City. While working together on the acclaimed crime show Law & Order, Savini and Andrew Pascal, one of the producers of the "upstart" Dungeons & Dragons documentary, The Great Kingdom, began playing the game. According to the New York Times, "a Dungeons & Dragons game involves user-created characters who interact in combat, diplomacy and other adventures, in encounters that can last several hours or even days." During one of these gaming sessions, Savini claims that he and two friends came up with the idea of making a documentary about the game. Pascal, however, disputes Savini's recollection, claiming instead in an affidavit submitted in State Supreme Court in Brooklyn that he (Pascal) had learned in late 2010 about the game's history, and posed the idea for a documentary to his friend James Sprattley, a cameraman based in Los Angeles. The two men, Pascal claims, later approached Savini a few months later and asked him to direct the film.

As the men worked together to raise funds through Kickstarter for the documentary, "tensions simmered." According to Pascal's affidavit, Savini accused Pascal and Sprattley in June 2012 of "trying to steal his [Savini's] movie after we, as part of our job, merely offered suggestions for a possible narrative for the film." Unfortunately for the three partners, even a welcomed capital injection from Kickstarter could not salvage the relationship: "The Dungeons & Dragons faithful had pledged more than $195,000 in exchange for rewards like an autographed copy of 'Beyond the Wall: Exploring George R. R. Martin's 'A Song of Ice and Fire' for $65 or more, and associate-producer credits for $1,000 or more. But by April 2013, Mr. Savini was asking for mediation, which failed."

Eventually, attorneys for the two embattled sides reached an agreement that gave Savini creative control of the film, while allowing Pascal and Sprattley to retain half of the ownership rights. Earlier this year, however, Savini and his new partner, Cecily Tyler, discovered that his former partners were making their own film, called The Great Kingdom, which also happened to be about Dungeons & Dragons. Pascal and Sprattley also began reaching out to the same people who were interviewed for the original documentary. Pascal even began a new Kickstarter campaign, referring to "creative differences" with Savini and promising a "new direction" for the new documentary.

Last month, however, Savini received some good news, when Justice Carolyn E. Demarest granted his request for an injunction and ordered The Great Kingdom creators to cease work indefinitely on their project, "ruling that, as former partners in the original film, they had a fiduciary responsibility not to damage it." The Great Kingdom filmmakers filed an appeal last month, and the two sides have started settlement negotiations.


NFL Releases New Concussion Data

Playing professional football is a dangerous business, a fact made even more apparent by concussion data released last week by the NFL. Specifically, information released on Friday "suggests that nearly 30% of former NFL players will end up developing Alzheimer's disease or dementia across their lifetime, placing them at a significantly higher risk than the general population."

This startling research was compiled as part of the former NFL players' ongoing concussion lawsuit against the league. According to the report by the Analysis Research and Planning Corporation, an actuarial firm commissioned by the players, "about 14% of all former players will be diagnosed with Alzheimer's disease; and another 14% will develop moderate dementia." In response to these disturbing figures, lead counsel for the retired players said, "[t]his report paints a startling picture of how prevalent neurocognitive diseases are among retired NFL players, and underscores why class members should immediately register for this settlement's benefits." As part of its concussion lawsuit settlement, the NFL had originally allocated $675 million for an estimated pool of 21,000 eligible former players. After presiding Judge Anita Brody expressed concern that the funds set aside would be insufficient, the NFL "relaxed the cap on that fund this summer, saying it would pay an unlimited amount to settle player claims," according to Forbes. Under the terms of the NFL's settlement, players are eligible to receive compensation based on a "sliding scale linked to how many years they played in the NFL," and how old they were at time of diagnosis.


September 18, 2014

Kienitz v. Sconnie Nation LLC.- Seventh Circuit

By Barry Werbin

A significant new decision (9/15/14) by the Seventh Circuit has affirmed the district court's finding of fair use in Kienitz v. Sconnie Nation LLC, but expressly rejected the concept of transformative use. This was a well-publicized case that used a posterized, low resolution, photograph of Paul Soglin, the mayor of Madison, Wisconsin, on a T-shirt to make a political commentary about his having participated in the Mifflin Street Block Party many years earlier.

This is the first Circuit court to expressly reject transformative use, and it has done so rather emphatically. The court found it unnecessary to address transformative use, finding that it was "not one of the statutory factors" under Section 107, despite the Supreme Court having previously mentioned it in Campbell v. Acuff-Rose Music. It specifically expressed skepticism about the Second Circuit's application of transformative use in the Cariou case, emphasizing that: "asking exclusively whether something is 'transformative' not only replaces the list in §107 but also could override 17 U.S.C. §106(2), which protects derivative works. To say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under §106(2). Cariou and its predecessors in the Second Circuit do not explain how every 'transformative use' can be 'fair use' without extinguishing the author's rights under §106(2)."

The Court ultimately affirmed the finding of fair use based on a direct application of the four factors in §107, placing particular emphasis on the fourth factor concerning the effect on the potential market for the copyrighted photograph: "A t-shirt or tank top is no substitute for the original photograph. Nor does Kienitz say
that defendants disrupted a plan to license this work for apparel. Kienitz does not argue that defendants' products have reduced the demand for the original work or any use of it that he is contemplating." The Court further emphasized that Kienitz had licensed the photograph to Soglin (which had been taken at Soglin's 2011 inauguration) for "no royalty" and was "posted on a public website for viewing and downloading without cost."

The fact that the defendant intended the shirt to make a political statement also influenced the Court's decision under the first factor. Nevertheless, the Court took the further unusual step of noting its displeasure with "lazy appropriators," who were not intended to be protected by §107, emphasizing that the defendant did not need to use the plaintiff's photograph to create its lampoon, and that the T-shirt was not used to mock (parody) the photograph itself but Mayor Soglin. The Court further noted that Kienitz, as a photographer, could have his livelihood negatively affected if his clients going forward believed portraits taken for dignified purposes could end up on T-shirts and be used in a derogatory manner. Nevertheless, because Kienitz failed to raise these additional arguments, the Court was compelled to find fair use.

Whether this signifies a slow shift among courts away from transformative use remains to be seen, but if so, that would be a sea change. Kienitz v Sconnie Nation - 7th Circuit.pdf

Photographers Action Against The Google Book Project Is Settled

By Joel L. Hecker

This suit, American Society of Media Photographers, Inc. et al v. Google, Inc., Case No. 10-CV-02977 (DC) in the Southern District of New York, arose out of the 2005 Authors Guild and Association of American Publishers class action lawsuit against Google (the Authors Guild Litigation) in connection with Google's scanning of books from university libraries, without the consent of the copyright owners of the books scanned, which became known as the Google Book Search Project litigation. The Authors Guild Litigation alleged that Google's acts, as part of the Google Book Search Project, constituted copyright infringement.

The Authors Guild Litigation eventually reached the point where a proposed settlement was submitted to the court for approval. However, the Amended Proposed Settlement specifically excluded almost all photography and graphic art works. As a result, the American Society of Media Photographers (ASMP), Graphic Artists Guild (GAG), Picture Archive Council of America (now known as Digital Media Licensing Association (PACA)), North American Nature Photography Association (NANPA), and various other organizations and individual photographers attempted to intervene in the Authors Guild Litigation and thereby have such organizations and the visual artists they represented be included in any resulting settlement.

On November 4, 2009, Judge Denny Chin, who was assigned to the case, denied the motion and refused to permit such intervention, concluding that these visual artists had acted too late (the case was then four years old), and in his view, the Google Book Search Project primarily involved textual content and not visual works. Judge Chin stated in his denial of the motion that: "Frankly, in the context of an online database that is searchable using keywords, it makes sense to prioritize the rights of word-based material." [It should be noted that these words, written in 2009, have basically been made obsolete by technology and circumstances, as searchable pictorial content is very much an everyday occurrence in 2014.]

ASMP and the others disagreed and filed their own class action lawsuit against Google on April 7, 2010, alleging copyright infringement by Google of visual artwork arising out of the Google Book Search Project.

The ASMP Complaint

The 21 page complaint alleged that it was "designed to redress the most widespread, well-publicized and uncompensated infringement of exclusive rights in images in the history of book and periodical publishing." That "evil" was, of course, the Google Book Search Project, under which Google was essentially scanning entire library collections and thereby creating digital archives of what eventually was intended to be an online database of all of the world's books.

All in all, the complaint can be summarized as alleging that Google was committing massive copyright infringements of visual works similar to its infringements of text-based works (as alleged in the Author's Guild Litigation) and that the visual artists must be included in the process.

Dismissal of the Authors Guild Litigation

Judge Chin, now an appellate judge sitting on the Second Circuit Court of Appeals, initially approved class action status in the Authors Guild Litigation, which decision was reversed by the Second Circuit as premature since he had not first ruled on the Fair Use defense raised by Google. On remand, Judge Chin found that Google's acts did indeed constitute fair use and accordingly dismissed the Authors Guild complaint. That decision is now on appeal.

The Photographers Action Settlement

The parties to the photographers' case issued a press release on September 10, 2014 indicating that they are "pleased to have reached a settlement that benefits everyone and includes funding for the PLUS Coalition, a non-profit organization dedicated to helping rights holders and users communicate clearly and efficiently about rights in works."

Further terms of the agreement are apparently confidential. The parties pointed out that since the settlement is only between the parties to the litigation, court approval of the terms of the settlement is not required. This is so because, although the action was commenced as a class action on behalf of photographers and other visual artists similarly situated, no motion had yet been made to confirm a class or classes in the litigation, and therefore this settlement will not be binding on any party other than the parties to the action.

The settlement also does not affect the current appeal in the Authors Guild Litigation from Judge Chin's dismissal of their class action against Google on the grounds that Google's Book Project constituted fair use.

Ray Rice's Appeal Could Be One of NFLPA's Biggest Victories to Date: Here's Why

By Max Horowitz

Let's be clear about something up front: At this point, it would be approaching futility to try and find anyone who wants to defend Ray Rice.

However, as of Tuesday, the National Football League Players' Association (NFLPA) became tasked with one of the more difficult assignments in its 58 year history: it has to defend him. Not his actions (those are indefensible), but rather his rights.

The NFLPA's formal filing of an appeal of Ray Rice's indefinite suspension to the National Football League's (NFL's)offices in New York City comes as no surprise to those familiar with the law. Yes, Rice's actions have sparked intense reaction and debate across "NFL Nation" about exactly to what sort of standard of personal conduct that professional sports leagues should hold their player-employees, but that is not the issue at hand for the NFLPA. As the legal representative of the NFL players as a whole, it is the job of the NFLPA to ensure that each and every player is secure in his rights under the Collective Bargaining Agreement (CBA), federal labor law, and general principles of constitutional law as a whole. Based on NFL Commissioner Roger Goodell's responses to the Rice situation, coupled with the evidentiary timeline and the relevant provisions of the CBA, it seems almost certain that the NFLPA will be able to do just that.

The Evidentiary Timeline

The most critical piece of the Ray Rice appeal is the evidence that will be presented to the neutral arbitrator at the upcoming hearing of this case (the date will be set within 10 days from Tuesday's filing, pursuant to the CBA). Pending any sudden surprise reveals by either party, the following timeline lists the compelling components of the Rice-Goodell saga:

• February 15: An altercation in a casino elevator between Ray Rice and Janay Palmer occurs in Atlantic City, New Jersey. A police complaint says that Rice "attempted to cause bodily injury" to Palmer, and that Palmer "attempted to cause bodily injury" to Rice. Both are charged with simple assault-domestic violence, though Atlantic City prosecutors would later drop Palmer's charge.
• February 19: TMZ Sports releases security video showing Rice dragging Palmer out of an elevator.
• March 27: A New Jersey grand jury indicts Rice on the charge of third degree aggravated assault. At the time, the Baltimore Ravens release a statement supporting Rice.
• April 9: A law enforcement officer allegedly sends NFL executives a video of Rice striking Palmer. In an interview with The Associated Press on September 10th, the officer reveals this information, and also plays a 12-second voicemail from an NFL office number confirming that the video arrived, in which the caller allegedly says "You're right, it's terrible."
• May 1: Rice pleads not guilty and applies for the state's pretrial intervention program. Prosecutors offer Rice a plea bargain, sparing him jail time in exchange for anger management counseling. Prosecutor Diane Ruberton claims that the State has video beyond the February 19th TMZ video that, along with other evidence, would "confident[ly]...secure a conviction at trial."
• May 20: Rice is approved into the state intervention program.
• July 24: The NFL suspends Rice for two games for domestic violence.
• August 28: After significant backlash from public criticism of the NFL's handling of Rice's incident, the NFL's Personal Conduct Policy is changed. First-time domestic violence offenders are to be given an automatic six-game suspension.
• September 8: TMZ Sports releases the full video from inside the Atlantic City casino elevator, which showed Rice punching Palmer in the face, rendering her unconscious, and dragging her out of the elevator. That same day, the Ravens terminate Rice's contract, and the NFL increases Rice's suspension to indefinite. Both Ravens Head Coach John Harbaugh and NFL Vice President of Corporate Communications Brian McCarthy assert that their organizations had only that day seen the video from inside the elevator.
• September 10: CBS News airs interview with Commissioner Goodell in which he says he cannot rule out Rice never playing in the NFL again. That same day, Goodell sends a memo to all NFL team owners that the NFL asked law enforcement officials for the video from inside the elevator on multiple occasions, but that the office was told that releasing evidence from an ongoing criminal investigation was illegal in New Jersey. This is also the day that a law enforcement official told The Associated Press that someone in the NFL received the elevator interior video back in April.
• September 16: The NFLPA files an appeal to the NFL offices, seeking a hearing to overturn the indefinite suspension by the NFL.

The Legal Arguments: What Evidence Will Rule the Day?

The relevant provision of the 2012 NFL-NFLPA CBA in this case comes from Article 46, entitled "Commissioner Discipline." Section 4, entitled "One Penalty," states: "The Commissioner and a Club will not both discipline a player for the same act or conduct. The Commissioner's disciplinary action will preclude or supersede disciplinary action by any Club for the same act or conduct (emphasis added)."

Looking directly at strict textual interpretation, the CBA's only express prohibition of multiple punishments for the same conduct is between the Commissioner and the Club, in this case Goodell and the Ravens, respectively. Some, including those within the NFLPA who are addressing Rice's options, might argue that the Commissioner's decision to increase the two-game suspension to an indefinite period would trump the Ravens' decision to terminate Rice's contract with the team. Though a plausible argument based on what the text offers, it is less likely to succeed based on what the Ravens did in this case.

The Club decided to back its player at the outset of this case in March, and maintained that position up until the September 8th release of the elevator interior, at which point it terminated his contract. Granted, it was a sudden decision by the team, one which came a few hours after the TMZ video was released and which was handed down before the NFL decided to increase the length of Rice's suspension. Nevertheless, to say that the termination of a player's contract for conduct detrimental to the team --- a fixed condition of employment found in every Standard Player Contract -- is equivalent to "discipline" or "disciplinary action" under Article 46, Section 4 would be a logical, yet easily deflected argument. Think of the difference this way: releasing a player from his contract would be the equivalent of the dropping of a bad habit altogether, whereas imposing discipline on a player would be the equivalent of punishing a player for that bad habit. The former is a contract law principle, one that the CBA's reach skims but does not control, while the latter is a provision born and cemented into the CBA's language, and therefore has compelling control. That likely explains why the NFLPA is planning to take Rice's appeal on a different, more fundamental route, and not the one offered in the CBA text.

The other route, which the NFLPA will likely argue at the upcoming hearing, is that of traditional federal constitutional law: the Double Jeopardy Clause of the Fifth Amendment. Article 70 of the CBA, entitled "Governing Law and Principles," makes it clear that the CBA is to be construed pursuant to governing federal law, and if not covered by such law, then the laws of the State of New York, where the NFL's offices are located (New York constitutional law does not differ from federal law when it comes to Double Jeopardy, so it will not be discussed as it is implied from this article's federal law treatment). Note, however, that the CBA in Article 46, Section 4 does not specifically condemn the practices of federal Double Jeopardy as stated in the U.S. Constitution, which prohibits a criminal defendant from being punished twice for the same offense.

The reconciliation between the CBA's version of "One Penalty" and the Federal Constitution's version of "Double Jeopardy" is where this appeal will achieve precedent status. As the CBA states in Article 70, the default governing law for CBA disputes is that of federal law. Due to the CBA's lack of a rule to apply when a final NFL punishment decision for a personal conduct violation is later increased, the CBA would therefore impliedly be interpreted to include the principle of federal Double Jeopardy in order to fill that gap. This would mean that once Commissioner Goodell and the NFL executives made the decision in July to suspend Ray Rice for two games under the Personal Conduct Policy, it became the final decision on the matter. Concurrently with the NFL's decision, Rice's New Jersey criminal case and resulting penalty were also finalized. Therefore, once that sequence of activity ended, that theoretically should have been the end of the discipline, regardless of how fans and media personnel may have reacted to the NFL's decision.

However, as the story goes, public outcry became too much for the NFL to handle. The policy change on August 28th was a clear example of Goodell and the NFL attempting to slap a Band-Aid on a punctured artery. Nevertheless, despite the fact that first-time offenders would now be subject to an automatic six-game suspension, such an increase in punishment could not have been, and was not in actuality, applied to Ray Rice's two-game suspension. Rice had already been tried criminally by the State of New Jersey and investigated privately by the NFL, so his punishment could not be overturned under federal Double Jeopardy principles.

In the same vein, the NFLPA will seek to argue that the increase of Rice's suspension from two games to indefinitely is a similar violation of federal Double Jeopardy. Although the NFL may argue that it never saw the elevator interior video of Rice punching Palmer unconscious until September 8th, the NFLPA will likely counter with evidence of the law enforcement officer's September 10th interview with The Associated Press, which alleged that the NFL knew of and viewed that same interior elevator video earlier on April 9th, three months before the two-game suspension was assessed. In other words, the window for discovery and investigation was wide open by the time Rice was investigated by the NFL for this incident. It would therefore be crippling for the NFL (and, conversely, clinching for the NFLPA) if a neutral arbitrator were to find that the NFL did in fact know about and/or view the graphic elevator interior video when they gave Rice his two-game suspension, as the increase in punishment on September 8th would be clearly violative of Double Jeopardy principles if that were the case.

Where Do We Go From Here?

The hearing to come will be one to pay close attention to, as it will become the starting point for future NFL Player Conduct Policy violations down the line. While both disregarding and recognizing how impressively vague the textual construction of that policy had been for years, there is still a sign for hope out of this appeal. Granted, there is an inherent systemic problem in the NFL culture that it took this long, vast and varying public outcry, and a slowly forming lynch mob forming around Roger Goodell's tenure as Commissioner to finally get an appropriate policy advancement for domestic violence abuse by NFL players. Still, progress is progress, and this appeal will hopefully provide some sort of benchmark with which a standard can be set as to what professional sports leagues expect of the personal conduct of their player-employees.

It also must not be forgotten that this ruling will have immediate effect on the Player Conduct Policy's implementation, as more and more personal conduct incidents have been coming out of the NFL woodwork as of late. Minnesota Vikings Running Back Adrian Peterson's two child abuse allegations, Carolina Panthers Defensive End Greg Hardy's assault and death threat conviction and appeal, San Francisco 49ers Defensive End Ray McDonald's domestic violence allegation, and others are currently awaiting the resolution of their criminal cases, but they all are in the Ray Rice boat as well: they are waiting to see what the NFL, their employer, does with them. This appeal, the starting point, will be the immediate catalyst to the NFL's personal conduct problems, and will be helpful in allowing a league historically relaxed on player off-field conduct to finally get on the proper track back towards a positive reputation.

Max Horowitz is a graduate of the Syracuse University College of Law, Class of 2014, where he obtained a Certificate of Completion for the Entertainment and Sports Law Certificate Program. He graduated from Florida State University in 2010 with a Bachelor of Arts in Creative Writing. Max blogs about any and all sports law topics, but his true specialty lies within the legal issues surrounding the National Hockey League.

September 19, 2014

An Examination of the Legal Issues Surrounding Ray Rice's Indefinite Suspension and Contract Termination


On February 15th, Baltimore Ravens running back Ray Rice and his then-fiancée, Janay Palmer, were involved in a physical altercation in a casino elevator in Atlantic City, New Jersey. The fallout from this incident has dominated headlines in recent weeks, culminating with the announcement that the Ravens have terminated Rice's contract and National Football League (NFL, the league) Commissioner Roger Goodell has suspended the running back indefinitely. This saga presents a plethora of moral and legal questions -- many of which are addressed below -- but before we get to those, take a brief review of the events that led us to this point.


Following the altercation, which occurred at the since-closed Revel casino, Atlantic City police arrested both Rice and Palmer (http://www.baltimoresun.com/sports/ravens/ravens-insider/bal-ravens-running-back-ray-rice-arrested-after-incident-in-atlantic-city-20140216,0,132362.story) and charged them with Simple Assault-Domestic Violence. Shortly after the incident, leaked casino security footage hit the internet, showing Rice dragging his unconscious fiancée out of the elevator. Charges against Palmer were ultimately dropped, but a grand jury indicted Rice on third-degree aggravated assault in March (http://espn.go.com/nfl/story/_/id/10960822/ray-rice-baltimore-ravens-accepted-pretrial-diversion-program), and he pleaded not guilty in May. Rice was accepted into a pretrial intervention program, avoiding trial. Upon completion of the program (a minimum of one year), the charges against him will be dismissed.

On July 24th, the NFL announced that after meeting jointly with Rice and Palmer, who had by then married, Commissioner Goodell had informed Rice in a letter that he would be suspended without pay for two games, and fined one additional game check. (http://espn.go.com/nfl/story/_/id/11257692/ray-rice-baltimore-ravens-suspended-2-games) This decision was met with nearly universal criticism (http://espn.go.com/espnw/news-commentary/article/11245489/espnw-baltimore-ravens-ray-rice-nfl-domestic-violence-problem), as most observers considered the punishment far too lenient (http://baltimore.cbslocal.com/2014/08/01/u-s-senators-criticizing-nfls-2-game-punishment-for-ray-rice/), particularly in light of the heavy-handed suspensions the league hands down for lesser offenses (more on this below). (http://www.myfoxtwincities.com/story/26104180/comparing-ray-rices-2-game-suspension-for-punching-fiancee)
In the wake of the public outcry over Rice's two-game suspension, the NFL announced that it was enacting a new, stricter domestic violence suspension policy. (http://www.nytimes.com/2014/08/29/sports/football/roger-goodell-admits-he-was-wrong-and-alters-nfl-policy-on-domestic-violence.html?_r=2) The policy, which also covers assault, battery and sexual assault involving physical force, calls for first time offenders to receive a six game suspension. Second time offenders are to be banned indefinitely, but can apply for reinstatement after one year.

In a letter to all 32 NFL owners, Commissioner Goodell addressed the Rice suspension:
"I take responsibility both for the decision and for ensuring that our actions in the future properly reflect our values. I didn't get it right. Simply put, we have to do better. And we will." Then, on Monday, TMZ released a "new" security video recording of the assault. This recording, taken from a security camera inside the elevator, showed Palmer strike (and perhaps spit on) Rice, who immediately responded with a devastating punch to her face. Palmer flew backwards into the elevator wall and was left unconscious. Seconds later, the door opened and Rice dragged her out of the elevator.

Unsurprisingly, this video created an immediate media firestorm. Commentators renewed their harsh criticism of Commissioner Goodell's decision to suspend Rice for only two games. The reaction of the NFL, and of the Ravens, to the release of this video was swift. By midday, the news broke (http://espn.go.com/nfl/story/_/id/11489134/baltimore-ravens-cut-ray-rice-new-video-surfaces) that Rice had been released by the Ravens and suspended indefinitely by the NFL.

Shortly after announcing the increased suspension, the NFL released a statement declaring that:"We requested from law enforcement any and all information about the incident, including the video from inside the elevator. That video was not made available to us and no one in our office has seen it until today." (http://www.nfl.com/news/story/0ap3000000391538/article/ray-rice-released-by-ravens-indefinitely-suspended)
The commissioner, in an interview on CBS This Morning with co-host Norah O'Donnell, reiterated the NFL's denial that anyone within the league office had seen the video showing the punch prior to its public release, and that its gruesome nature, combined with Rice's allegedly misleading testimony, prompted him to dramatically increase the suspension. (http://www.cbssports.com/nfl/eye-on-football/24703865/roger-goodell-no-one-in-the-nfl-saw-second-ray-rice-video) He told O'Donnell that the league office "assumed that there was a video. We asked for video but we were never granted that opportunity." (http://www.cbssports.com/nfl/eye-on-football/24703147/goodell-on-rice-nfl-asked-for-didnt-receive-surveillance-video)

The Ravens, who had not taken any disciplinary action against Rice until this point (and were prohibited from doing so by the Collective Bargaining Agreement (CBA) - see below), promptly released its starting running back once the video became public. The video "changed things," said the team's head coach, Jim Harbaugh(http://www.cbssports.com/nfl/eye-on-football/24701716/john-harbaugh-seeing-the-ray-rice-video-changed-things)
In the wake of these events, numerous stories have emerged regarding what the NFL office knew, when its people knew it, and whether the commissioner or anyone else saw the video prior to its release. On Thursday, the NFL announced that it had ordered an independent investigation to be conducted by former FBI director Robert S. Mueller. (http://espn.go.com/nfl/story/_/id/11505460/former-fbi-director-probe-rice-case) The investigation is to be overseen by two prominent and well-respected NFL owners, Art Rooney of the Pittsburgh Steelers and John Mara of the New York Giants.

On Tuesday, the players' union, the NFL Players Association (NFLPA, the union), announced that it is appealing Rice's suspension. (https://abcnews.go.com/Sports/union-appeals-ray-rices-suspension-nfl/story?id=25552666) The appeal would normally be heard by Commissioner Goodell, though in this case because the commissioner will serve as a witness, it is expected that an outside arbitrator will be appointed.

This case raises a plethora of interesting legal questions, such as:

• Why was Rice initially suspended for only two games, when players who commit far less serious infractions are handed much stiffer penalties?

• Does the commissioner have the power to suspend a player twice for the same infraction, or to modify an existing suspension? Does that violate the protection against double jeopardy afforded by the Fifth Amendment?

• Under the terms of the CBA, can Rice be punished by both his club (release) and the league (suspension)?

• Finally, when it levied the initial two-game suspension, did the NFL already know exactly what had occurred in that elevator? Had league executives already seen the video? Does it matter?

Personal Conduct v. Drug Policies

As alluded to above, the NFL's initial two-game suspension of Rice was met with stinging criticism from fans and media members alike. Many were quick to point out that seemingly minor infractions, such as testing positive for marijuana or Adderall, can carry much harsher penalties than the one Rice received.

It is important to note, however, that not all suspensions are created equal. Violations of the NFL's recreational and performance-enhancing drug policies carry uniform suspensions that have been negotiated and defined through collective bargaining between the league and the NFLPA. The league's Personal Conduct Policy (http://www.cbssports.com/nfl/eye-on-football/24703147/goodell-on-rice-nfl-asked-for-didnt-receive-surveillance-video), on the other hand, does not carry uniform punishments for specific infractions. Rather, it grants the commissioner broad power to consider each case individually and determine the proper sanction given the facts at hand. This all-encompassing policy covers criminal acts as well as other conduct deemed below the standard expected by the league.

While criminal activity is clearly outside the scope of permissible conduct, and persons who engage in criminal activity will be subject to discipline, the standard of conduct for persons employed in the NFL is considerably higher. It is not enough simply to avoid being found guilty of a crime. Instead, as an employee of the NFL or a member club, one is held to a higher standard and expected to conduct oneself in a way that is responsible, promotes the values upon which the league is based, and is lawful.

Regarding punishment, the policy grants the commissioner enormous leeway in determining the proper discipline in each case. The specifics of the disciplinary response will be based on the nature of the incident, the actual or threatened risk to the participant and others, any prior or additional misconduct (whether or not criminal charges were filed), and other relevant factors.

The vagueness of this policy, and the fact that Commissioner Goodell himself (or his appointee) hears all appeals under it, has come under intense criticism from players and observers alike. This tension memorably came to a head in 2012, during the infamous New Orleans Saints bounty scandal. (http://www.si.com/more-sports/2012/09/07/saints-suspensions-overturned) Regardless, the terms of the policy in effect at the time of the original two-game suspension did give Commissioner Goodell free reign to determine for how long Rice would be suspended. Conversely, as mentioned above, drug policy violations carry well-defined punishments, negotiated between the league and union, which explains why Cleveland Browns wide receiver Josh Gordon received a one-year suspension for his third marijuana violation.( http://espn.go.com/nfl/story/_/id/11418388/josh-gordon-cleveland-browns-suspended-one-year)

The Commissioner's Power to Modify an Existing Suspension, and the Prohibition on Double Penalties

The NFL Personal Conduct Policy, to which the players contractually assented through collective bargaining, grants the commissioner the power to discipline a player for "conduct detrimental to the integrity of and public confidence in the National Football League." Article 46 of the 2011 NFL CBA (http://nfllabor.files.wordpress.com/2010/01/collective-bargaining-agreement-2011-2020.pdf), which outlines the commissioner's disciplinary authority, limits the extent to which a player may be disciplined more than once for the same "act or conduct": "Section 4. One Penalty: The Commissioner and a Club will not both discipline a player for the same act or conduct. The Commissioner's disciplinary action will preclude or supersede disciplinary action by any Club for the same act or conduct."

Importantly, while this clause does prohibit the discipline of a player by both his club and the commissioner, it does not include a "double jeopardy" clause (prohibiting prosecution for the same offense twice following acquittal or conviction) like the one found in the Fifth Amendment of the U.S. Constitution. Therefore, the commissioner is not expressly barred from revisiting an existing suspension (or other discipline) in the event that new facts or evidence come to light. Further, because the suspension of a player is not a criminal matter tried in a court of law, but rather an employer-employee disciplinary matter governed by a CBA, the Fifth Amendment's protection against double jeopardy does not apply.

Therefore, in the event that the league discovers evidence that the player lied, his conduct was more reprehensible than originally thought, or of a separate infraction entirely, the commissioner can impose increased discipline. Here, the question of whether Rice was entirely truthful and forthcoming in his June disciplinary meeting with Commissioner Goodell remains unresolved, and NFL and club sources have given conflicting answers when asked just that.

Commissioner Goodell told CBS that details of Rice's story were "not consistent" with what appears on the video (http://www.cbssports.com/nfl/eye-on-football/24704435/roger-goodell-ray-rices-original-story-not-consistent-with-second-video), and that "it was ambiguous about what actually happened." (http://www.cbsnews.com/news/ray-rice-controversy-commissioner-roger-goodell-defends-nfl-says-league-didnt-see-second-video/) In even stronger terms, Commissioner Goodell's letter to the NFLPA outlining the justification for Rice's increased suspension stated that the new video "shows a starkly different sequence of events" than what Rice told him during his June disciplinary meeting. (http://nymag.com/daily/intelligencer/2014/09/report-ray-rice-will-appeal-his-suspension.html) Conversely, Ravens General Manager Ozzie Newsome -- who was in the room when Rice met with Goodell -- publicly declared that the story Rice told to Ravens officials matched the video. "What we saw on the video was what Ray said. Ray didn't lie to me," Newsome said. (http://www.cbssports.com/nfl/eye-on-football/24704595/ravens-gm-ray-rice-didnt-lie-to-me-goodell-says-rice-story-not-consistent)

As noted above, while the commissioner does have the authority to modify an existing suspension in light of new facts or previous false testimony, Article 46 of the CBA prohibits the discipline of player by both the league and his club for the same act or conduct. Here, Rice was ultimately suspended indefinitely by the commissioner and released from his contract by the Ravens. At first glance it appears that he was disciplined by both the league and his club for the same act or conduct. However, "discipline" imposed by a team refers to monetary fines or suspensions. A club is permitted to terminate a player's contract for any lawful reason, and conclusive video evidence of domestic violence is certainly a lawful justification for releasing a player. Therefore, Rice's release likely did not constitute "discipline," and did not violate Article 46 of the CBA. Nonetheless, NBC Sports' Mike Florio reported on Sunday night that Rice has not ruled out the possibility of filing a Non-Injury Grievance against the club under CBA Article 43, alleging that the Ravens improperly terminated his contract.

What the NFL Knew, When, and Why it Matters

Upon announcing Rice's increased suspension, and in the days that followed, Commissioner Goodell maintained that no one in the NFL had seen the elevator video, or knew exactly what transpired that night, at the time the initial two-game suspension. However, mounting evidence indicates that this is not entirely true.

In February, one day after the assault, Deadspin reported: "A witness who saw the altercation at Revel claimed that Rice hit Palmer 'like he punched a guy, knocked down and dragged her out of the elevator by his feet' before security arrived." (http://deadspin.com/ray-rice-arrested-in-atlantic-city-after-altercation-wi-1524046109) Further, the Atlantic City Police Department's report from the time of the incident noted: "After reviewing surveillance footage it appeared both parties were involved in a physical altercation. The complaint summons indicates that both Rich [sic] and Palmer struck each other with their hands."

The criminal complaint, filed in Atlantic City Municipal Court on February 15th, alleges Rice committed "assault by attempting to cause bodily injury to J. Palmer, specifically by striking [her] with [his] hand, rendering her unconscious, at the Revel casino." The complaint is a public record. (http://www.espn.go.com/pdf/2014/0818/otl_rayrice_complaint.pdf)

Additionally, contrary to what the commissioner told CBS, ESPN Outside the Lines reported last week that at his June 16th disciplinary hearing with Goodell, Rice confessed to hitting his fiancée in the face, knocking her unconsciousness. (http://espn.go.com/espn/otl/story/_/id/11509397/ray-rice-told-nfl-roger-goodell-june-had-hit-wife)
Finally, a law enforcement official speaking on condition of anonymity told the Associated Press last week that he had sent the video showing the punch to an NFL executive in April (http://www.cbssports.com/nfl/eye-on-football/24704465/ap-nfl-executive-was-sent-copy-of-ray-rice-video-in-april), and that the league had acknowledged its receipt and contents. It should be noted that in a letter to NFL owners last Wednesday, the commissioner emphasized that: "Once a criminal investigation begins, law enforcement authorities do not share investigatory material (such as the videos here) with private parties such as the NFL . . . As the New Jersey Attorney General's office said yesterday, 'It would have been illegal for law enforcement to provide [the] Rice video to [the] NFL.'"( http://static.nfl.com/static/content/public/photo/2014/09/10/0ap3000000392546.pdf)

Similarly, in a statement released the day after the announcement of the increased suspension, the league said:
We do not interfere with law enforcement investigations. We cooperate with law enforcement and seek any information that can be appropriately provided. (http://www.nfl.com/news/story/0ap3000000391538/article/ray-rice-released-by-ravens-indefinitely-suspended)

The commissioner stated in the letter to the owners that the NFL did not request the video directly from the casino because New Jersey law prohibited the casino from turning over material to a third party during a law enforcement proceeding. His emphasis that New Jersey law prohibited the league from obtaining the video from either the police or the casino perhaps implies that even if the NFL did receive the video from a rogue law enforcement source (as the Associated Press story alleges), he and his fellow high-ranking NFL executives intentionally did not view it.

Regardless, whether or not league officials saw the video prior to Rice's initial suspension, there was little doubt about what occurred in the elevator that night. In fact, Rice himself told Commissioner Goodell as much back in June, and the police report and criminal complaint are quite clear.

Clearly, questions abound as to who, if anyone, inside the NFL office knew what -- and when. Whether Rice chooses to challenge the suspension through a grievance under the CBA, a petition for a court injunction lifting the suspension, the NFLPA filing an unfair labor practices charge, or even suing the league for monetary damages, the critical questions will be whether the second video actually revealed any new information to the league office, and whether Rice lied or left out crucial details when he met with the commissioner in June.

If the NFL truly had no knowledge of what transpired inside the elevator -- or at least cannot be proven to have known -- Rice will have a very difficult time getting his suspension overturned. However, there is considerable evidence that the second video did not in fact shed any new light on the incident at all. Certainly, public outrage reached a boiling point in the hours following the video's release. However, whether or not anyone within the league office had seen the video prior to the decision to only suspend Rice for two games, it can hardly be argued that the new video revealed any additional material facts of the case, considering the content of the first video, witness statements, police report, criminal complaint, and Rice's June admission.

If it turns out that NFL executives were already aware of what happened in the elevator when levying the original suspension, Rice may well succeed on his anticipated challenge to the indefinite suspension. In that case, a judge could reasonably declare that the commissioner's actions were "arbitrary and capricious," and award Rice monetary damages and/or grant him an injunction lifting the indefinite suspension. Similarly, an arbitrator could overturn the suspension on appeal, holding that the video did not provide sufficient additional evidence to warrant the drastically increased suspension. That is, of course, unless the NFL can demonstrate that Rice lied to or misled the commissioner during their June disciplinary meeting.

Did the NFL Fail to Adhere to Its Own New Policy?

Another question regarding the NFL's handling of the Ray Rice case relates to the league's new domestic violence policy, enacted in the wake of the public outcry against Rice's initial two-game suspension. The new policy calls for a six-game suspension for a player's first offense. Left unanswered to this point is why, so soon after enacting the new policy, Commissioner Goodell declined to follow it when Rice had no recorded history of domestic violence. It has been suggested that the act of dragging Palmer from the elevator could be considered a separate violation -- different "act or conduct" -- than punching her just moments before. (http://www.si.com/nfl/2014/09/10/ray-rice-roger-goodell-nfl-suspension-elevator-video-legal-options) That argument is, I believe, unconvincing.

A more convincing argument could be made that the act of assaulting his fiancée constituted the first offense, and lying to the commissioner constituted the second offense. This seems to be the justification offered in Commissioner Goodell's letter to the NFLPA explaining the basis for the increased suspension. However, as described above, the extent to which Rice lied to or misled the commissioner is in question, as league and club officials have offered conflicting reports.

Courts' Deferential Standard of Review

Were Rice to seek an injunction lifting the indefinite suspension, it is important to remember that courts employ an extremely deferential standard when reviewing an organization's interpretation and enforcement of its own rules. The NFL would argue, as it has successfully in the past, that as a member of the NFLPA, Rice has contractually assented to resolve disputes through the league's collectively bargained rules and appeals process, rather than through challenges in court. (http://www.si.com/nfl/2014/09/10/ray-rice-roger-goodell-nfl-suspension-elevator-video-legal-options)

To secure an injunction, Rice would need to demonstrate that the NFL had abused its power, rendering its actions "arbitrary and capricious." This would likely require a showing that one or more high-ranking league executives exhibited flagrant dishonesty or deception, and that his increased suspension was not based on reasonable grounds. Mere ineptitude does not suffice.

Therefore, should Rice bring his case to the courts (as he has indicated he might http://www.baltimoresun.com/sports/ravens/ravens-insider/bal-sources-ray-rice-nflpa-contemplating-legal-grievance-options-20140914,0,905928.story), he will have to clear a very high threshold to convince a judge to intervene and issue an injunction. Without conclusively demonstrating that Goodell or other high-ranking league executives had viewed the elevator video and therefore flagrantly abused their power and acted arbitrarily in increasing his suspension, it seems unlikely that such a claim will succeed.

Moving Forward

Clearly, this situation is not going away any time soon. A plethora of unanswered questions remain, and more information should surface in the coming days and weeks. It will be fascinating to learn what the NFL-ordered internal probe directed by former FBI director Mueller will uncover, and how the arbitrator appointed to hear Rice's appeal will rule. Seemingly, the ultimate resolution to the saga will come down to whether the NFL saw the video and lied about it, and/or whether Rice was dishonest in his meeting with Commissioner Goodell -- and whether either side can prove any of it.

September 20, 2014

Sony and Viacom Ink Landmark Deal: Part I

By Jacob Reiser

Last week, Viacom announced it had reached an agreement with Sony to stream at least 22 of Viacom's networks on Sony's forthcoming web-based TV service, which Sony expects to roll out sometime this year. The agreement amounts to the first shot fired against the traditional cable model and could mark the beginning of a new era in television.

Viacom is a programming giant whose network offerings include such popular networks as Comedy Central, MTV and Nickelodeon. The agreement immediately lends credibility to Sony's new service and demonstrates that major content providers view web-based TV as a legitimate new distribution platform and a viable alternative to cable TV.
Web-based TV is aimed at so called "cord cutters", or those unwilling to pay for Cable TV. According to a source quoted by the New York Times (NYT), this year marked the fourth consecutive year in which the number of viewers cancelling their cable subscription rose. According to the NYT article, this trend is pronounced in 25 to 34 year olds, the demographic most coveted by television advertisers. Increasingly, Millennials are simply unwilling to pay upwards of $80 a month for cable subscription when so many low cost alternatives are available, such as Netflix and Hulu. (http://www.nytimes.com/2014/09/11)

Although much about Sony's anticipated new service is still unknown, it will likely cost significantly less than cable. According to the same NYT article, one television executive estimated that the service will be priced somewhere between $15 and $30 dollars a month. Like Netflix and Hulu, Sony's web-based service will provide video-on-demand programming; but in contrast to those companies, Sony's service will also provide live original programming, which until now was only available on network or cable TV.

Cable companies are not oblivious to the new trend among viewers and are also scrambling to position themselves for the future. Dish Network, DirecTV and Verizon have all announced plans to create new web-based TV services. Yet Sony is the first to strike a deal with a major content provider of Viacom's stature. By securing a deal with Viacom, Sony is positioning itself to hit the market with the most attractive content.

Sony may have another advantage over those cable companies -- it also sells consumer electronics. In its press release announcing the Viacom deal, Sony announced its plan to offer its service to owners of PlayStation game consoles and Sony internet-enabled devices, such as smart TV's and Blu-ray players. According to Sony, over 75,000 people already own a Sony internet-enabled device, thereby presenting a captive audience to whom Sony can market its new service. Additionally, Sony's distribution platform is a huge incentive for content providers to join with Sony, because the young demographic that providers covet is precisely the one that owns PlayStation consoles. Viacom currently enjoys a 25.9% viewership share among young people aged two to 34 years.

Sony and Viacom Ink Landmark Deal: Part II

By Jacob Reiser

Viacom recently announced an agreement with Sony to provide at least 22 of Viacom's networks for Sony's planned new web-based TV service. A major selling point of Sony's new service is expected to be its cheaper price as compared with cable TV for similar live programming offerings. The announcement of the agreement with Viacom is somewhat ironic, as Viacom is currently facing an antitrust lawsuit in Federal Court, accusing it of contributing to high cable TV prices.

In a sealed Complaint, Cablevision alleged that Viacom's policy of "bundling" popular networks with unpopular ones violates antitrust law and amounts to coercing distributers to pay for networks that their customers don't want. Cablevision's complaint asserts that Viacom engaged in a "per se" illegal tying arrangement in violation of both Federal Antitrust Law and the New York State Donnelly Act, the latter of which parallels Federal Antitrust Law. As the Complaint was sealed and not yet made available to the public, all information about the allegations contained in the Complaint are taken from Cablevision's press release concerning the lawsuit, available at: http://www.cablevision.com/pdf/news/022613.pdf.

Bundling is the practice of selling networks to cable and satellite providers in a package, where, for example, if a cable company wants to buy highly rated networks, such as MTV and Comedy Central, it must also buy lower rated networks. Comcast alleged that in Viacom's case, some of its networks are so popular that they are "commercially critical" and cable distributers are forced to buy them at any price. By wielding control of the "tying" product, i.e., the must-have networks, Viacom is able to insulate the "tied" product, i.e., the low rated networks, from competition. According to Cablevision, bundling forces consumers to pay for networks they've never wanted and is a major factor in high cable bills.

For the lawsuit to succeed, Cablevision must prove that Viacom's licensing practice not only harms consumers but also impairs competition by forcing Cablevision to carry networks they don't want, instead of competing networks that could be potentially more profitable.

Viacom argues that it does not demand that distributors buy anything. It only encourages cable companies to purchase smaller networks by providing incentives in the form of lower prices for bigger networks when purchased together with smaller ones. "Viacom's programming licensing arrangements are flexible, competitive and the result of good-faith negotiations with distributors," the company said in a statement.

However, the U.S. District Court for the Southern District of New York does not concur with this characterization. The court recently denied Viacom's motion to dismiss, stating that "Cablevision has pleaded facts sufficient to support plausibly an inference of anticompetitive effects." (http://www.scribd.com/doc/Motion-to-Dismiss)

The terms of Viacom's agreement with Sony were not disclosed and it is unclear if Viacom maintained its ordinary licensing practices in the deal. However, a quick look at the 22 networks Viacom agreed to provide Sony reveals that many of the lower rated networks Cablevision alleges would not be purchased but-for Viacom's oppressive bundling policy, such as Centric, Logo and Palladia, are included in the deal. Sony, for its part may be willing to stomach the cost of the bundle if the web-TV service is only part of a more comprehensive strategy to sell more game consoles and other consumer electronics, in which case Sony would recoup the bundling costs on the increased sales of hardware.

September 22, 2014

Center for Art Law Case Updates

The following case selection first appeared in this week's Center for Art Law newsletter:

• Statkun v. Klemens Gasser & Tanja Grunert, Inc, 13 Civ. 5570 (S.D.N.Y. Mar. 2014) -- J. Kaplan found VARA/Copyright Act Sec. 106A violation and awarded $3,500 statutory damages to the artist who's work was cut down to size by an art dealer.

• Matter of Richard L. Feigen & Company, 824996. (N.Y.T.C, July 22, 2014) -- J. Winnifred Maloney of the Division of Taxation denied art dealer Richard Feigen sales tax refund claim from 2011 seeking $215,626 on the sale of a forged Max Ernst painting "La Foret" that was sold in 2004. To recover the sales tax, the dealer should have claimed his refund within a three-year window after filing sales tax return, which closed in 2008. While the dealer argued he should have been able to avail himself of the statute of limitations contemplated by the CPLR 213, and thus have six years, the decision was based on Tax Law §1139(c), which stipulates that financial matters close sooner. The decision upheld earlier determinations of the Division of Taxation's Audit Division and the Bureau of Conciliation and Mediation Services. In other words, this ruling allows the US government to reap financial benefits from unfortunate sales of fake art; whether the risk is to be born exclusively by the dealer may yet be revisited on appeal. Attorney for Feigen, Malcolm Taub, partner at Davidoff Hutcher & Citron.

• Anders Karlsson v. John Leo Mangan III, Art Possible LLC, et al.,2:14-cv-04514-R-JPR (S.D.C.A, Jun. 11, 2014) -- Arizona Plaintiff is seeking damages from residents in New York, Florida, Colorado and California alleging multiple fraudulent schemes to sell fake artworks of famous artists together with fake authentication and provenance documents. Plaintiff is seeking, among other reliefs, compensatory damages, actual damages, punitive damages and attorney fees. Attorney representing Plaintiff is Meir Westreich.

• Sotheby's v. Kwok (UK, June 2014) -- Auction house sues a client for £3m for failure to pay for purchases. (http://www.telegraph.co.uk/culture/art/art-news/10932158/Sothebys-sues-art-sale-glamour-girl-for-3m-after-client-fails-to-pay.html?utm_source=Center+for+Art+Law+General+List&utm_campaign=d8c39e7b14-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_022731d685-d8c39e7b14-346773625)

The Center for Art Law strives to create a coherent community for all those interested in law and the arts. Positioned as a centralized resource for art and cultural heritage law, it serves as a portal to connect artists and students, academics and legal practitioners, collectors and dealers, government officials and others in the field. In addition to the weekly newsletter (http://cardozo.us2.list-manage.com/subscribe?u=78692bfa901c588ea1fe5e801&id=022731d685), the Center for Art Law subscribers receive updates about art and law-related topics through its popular art law blog (http://itsartlaw.com/blog/)and calendar of events (http://itsartlaw.com/events/). The Center for Art Law welcomes inquiries and announcements from firms, universities and student organizations about recent publications, pending cases, upcoming events, current research and job and externship opportunities. To contact the Center for Art Law, visit our website at: www.itsartlaw.com or write to itsartlaw@gmail.com.

Week in Review

By Martha Nimmer

Unleash the Secret Weapon: McBrunch

First there was the McRib, and now, it appears that fast food giant McDonald's has its sights set on a new venture: brunch, or, "McBrunch," specifically. With fast food dining options increasing around the world, and with the move towards more health-conscious food choices becoming more popular at home, the world's largest restaurant chain seems eager to regain some its lost market share by launching "a new secret weapon," i.e. brunch. To that end, McDonald's has begun the process of securing a trademark for the term "McBrunch," according to documents filed this summer with the U.S. Patent and Trademark Office.

This move into the brunch market suggests that McDonald's intends to "expand its late-morning weekend menu in an effort to boost sales." A report released earlier this month by Fortune showed that the burger giant's global sales fell 3.7% in August, while sales decreased domestically by 2.8% during the same period. This change in the U.S. is due, in part, to new breakfast options being offered by Taco Bell and Starbucks.

Hopefully, McDonald's knows not to offer McEggs Benedict.


Return to Peru

Nine works of art by the 18th-century artist Miguel Cabrera will be returning to Peru this month, six years after having been stolen from a church in downtown Lima. Thieves in July 2008 made off with almost 80 paintings and other objects from La Casa de Ejercicios Espirituales in the Peruvian capital over the course of two separate burglaries. In October of that year, a man named Brian Bates "consigned [one of the Cabrera works] to an unspecified New York auction house." The FBI eventually seized the work, entitled "The Resurrection of Lazarus," on February 18th of this year. According to a separate forfeiture order, the remaining eight paintings were given to an auction house in Cedar Falls, Iowa. The individual who consigned the eight paintings denied "knowing that the works had been reported stolen, and the FBI seized them" in early 2009.

In a news conference announcing the works' repatriation to Peru, U.S. Attorney Preet Bharara said that no arrests had been made in connection with the stolen artwork, but noted that the investigation was ongoing.


Don't Mess With the Honey Badger

The man behind the YouTube sensation of 2011 has sued two T-shirt companies for using his trademarked phrase, "Honey Badger Don't Care," on their merchandise. Christopher Gordon, the creator of the viral video "The Crazy Nastyass Honey Badger," took old National Geographic footage of an African honey badger and dubbed the video with his own wacky, profanity-laced narration that described the animal's outlandish behavior. Gordon's video quickly went viral, and currently has more than 69 million views on YouTube. Seeking to capitalize on the wild popularity of the hit, Gordon copyrighted his video narration and trademarked the phrase "Honey Badger Don't Care" for merchandise, including T-shirts.

Now, the YouTube star is accusing companies Tanga.com and LOL Shirts of trademark and copyright infringement, trademark dilution and unfair competition. In a lawsuit filed in Los Angeles federal court, Gordon alleges that: "Defendants not only sold infringing merchandise, but strategically chose to advertise their infringing merchandise by using plaintiff's video, which was generating millions of views." The complaint goes on to state that "[d]efendants even provided a website link to plaintiff's video, right alongside their advertisements of infringing merchandise, causing customer confusion and ramping up unlawful sales in the process." Gordon claims that he asked representatives from the companies to stop producing and selling the merchandise, which they agreed to do "only after generating substantial sales" and "only after sales of the infringing merchandise began declining."


Where's the Warhol?

A Florida couple has sued a Scottsdale, Arizona-based art gallery for conversion and breach of fiduciary duty arising from the gallery's unauthorized sale of the couple's Andy Warhol painting. The painting, entitled "Red Shoes," depicts women's shoes sprinkled with diamond dust.

According to the complaint, filed in Maricopa County by Amy Koler and Stephen Meyer against American Fine Art Editions, Phillip Koss, Jacqueline Carroll and Jeff Dippold, the gallery was supposed to store the work for the couple while they relocated to Florida. The plaintiffs claim that Phillip Koss, who worked as a gallery manager at American Fine Art, and employee Jeff Dippold, "suggested that plaintiffs keep the Red Shoes piece at AFAE's gallery and an arrangement by which AFAE would agree to store and insure the piece through AFAE's business insurance in return for plaintiffs' agreement that AFAE could display the piece and use it to help market sales of other similar works." The complaint goes on to state that defendants Koss and Dippold knew from discussions with the plaintiffs that they did not want to sell the painting. Koler and Meyer claim that they even had to tell Koss and Dippold, on more than one occasion, that they wanted to keep the painting.

Eventually, the couple returned to the Scottsdale gallery and learned that "Red Shoes" had been sold. The defendants claimed that the sale had occurred months earlier, and refused to produce any paperwork from the sale or even discuss the price paid for the piece. One of the defendants offered to pay the plaintiffs $65,000--the amount the plaintiffs paid in 2005 for the work--but Koler and Meyer adamantly refused, saying the painting is worth a lot more today.

The plaintiffs are seeking the return of "Red Shoes", and damages for conversion, breach of contract, breach of fiduciary duty, negligence, fraud and unjust enrichment.


September 23, 2014

Long-Awaited NFL Drug Policy to be Put to the Test

By Alexandra Goldstein

Last week the National Football League (NFL, League) and NFL Players Association (NFLPA) unveiled a series of improvements to overhaul the League's performance enhancing substance and substance abuse policies, including the addition of human growth hormone (HGH) testing.

I. Performance Enhancing Substance Policy.

The new performance enhancing substance policy is the culmination of over three years of negotiations, which began just prior to the 2011 NFL season when the parties were negotiating a new collective bargaining agreement (CBA). At the time, the NFL pushed to implement HGH testing; the NFLPA countered that there was not a reliable test for HGH and any testing would therefore be premature. In order to ratify the CBA and move forward with the 2011 NFL season, the parties agreed to HGH testing in principle, tabling a discussion of specific methods. The final 2011 CBA codified the parties' intentions to collectively develop an HGH testing protocol over "several weeks," however once the CBA was signed, negotiations on HGH testing stalled.

The new policy ushers in changes in disciplinary procedures and appeals. A player's first violation of the policy will result in suspension without pay for up to six games. The length of the suspension will depend on the violation: a player will receive a two game suspension for the use of masking agents, such as diuretics; a four game suspension for testing positive for HGH or other banned substances; and a six game suspension in the event that the player attempts to tamper with the test. After a player's first violation, they are subject to escalating suspensions; a second violation will result in a player being suspended without pay for 10 games, and in the event of a third violation, a player will be banned from the League for a minimum of two years.

Previously, a player who tested positive during the off-season was subject to the same suspension lengths as in-season violations. Under the new policy, a player who violates the policy during the off-season will be referred to the League's substance abuse program. Due to the change to how off-season violations are handled, the NFL and NFLPA announced that three players who had previously been suspended for four games under the League's old performance enhancing substance policy had been reinstated. The suspensions of Wes Welker of the Denver Broncos, Orlando Scandrick of the Dallas Cowboys, and Stedman Bailey of the St. Louis Rams were retroactively shortened, which made them eligible to return to their teams and play in week three.

The League's new policy brings the NFL closer to being in-line with the existing Major League Baseball (MLB) and International Olympic Committee (IOC) HGH testing. The IOC began implementing HGH testing during the 2004 Athens Olympics. At the time, testing was limited to detecting HGH use within hours; in 2012, they implemented a new biomarker test capable of detecting HGH use within weeks. In January 2013, the MLB and MLB Players Association announced that they would begin random in-season HGH testing, as well as testing all players for baseline testosterone levels that could help identify changes indicative of HGH use. The NBA and NHL have yet to implement HGH testing, but both leagues have expressed interest in revising their drug policies to include HGH.

II. Substance Abuse Policy.

The NFL and NFLPA also announced updates to their substance abuse policy, which notably includes marijuana and alcohol use. While marijuana rules have been relaxed, the League is toughening-up on DUI offenses.

Under the new policy, the threshold for a positive marijuana test has been raised from 5 nanograms per milliliter (ng/ml) to 35 ng/ml. Despite more than doubling the threshold, 35 ng/ml still sits on the low-end of the spectrum for sports-based marijuana testing; the MLB rules only kick-in at 50 ng/ml and the IOC allows athletes to skate on anything below 150 ng/ml.

The new policy also adds two stages to the previous series of suspensions. Under the old substance abuse policy, a player was referred to the League's substances abuse program for his first violation of the marijuana policy, with subsequent violations receiving a four game fine, a four game suspension, and a one-year ban from the NFL. The new policy adds a two game fine before a four game fine, and a 10-game suspension will be levied before a player received a one-year banishment. Due to the implementation of additional stages, previously banned Cleveland Brown's wide-receiver, Josh Gordon, will receive a retroactive 10-game suspension, making him eligible for play beginning in week 11.

While marijuana rules have been relaxed, more stringent policies have been implemented for a DUI. A player's first offense will result in a two game suspension without pay, whereas a player will be suspended without pay for at least eight games for a second DUI. In either event, a player can be suspended for additional games, where there are extenuating circumstances, such as a death or the egregious nature of the DUI offense.

III. Impact.

Despite the lengthy negotiation period, fines and suspensions under the new policies will be implemented immediately. Under the performance enhancing substance abuse policy, HGH testing is set to begin as soon as the end of this month, though more likely during the first few weeks of October.

Reaction to the new policies has been mostly positive, with many seeing it as a long overdue response to broader attitudes about drug and alcohol use. The new policies also mark a shift in power - while under most circumstances, Commissioner Roger Goodell retained the exclusive power to hear appeals under the old policy, appeals will now be put before "third-party arbitrators jointly selected and retained by the NFL and NFLPA."

September 24, 2014

Hiring Your First Worker? Read On.

By Kristine Sova

Whether you're working with independent contractors or hiring your first employee, building a business team brings with it a whole new area for compliance: labor and employment law.

Labor and employment laws cover everything from payroll and workers compensation to workplace posters to preventing discrimination and harassment in the workplace.

Unfortunately, there is no single government agency that oversees or enforces labor and employment laws, which in turn means there isn't a central government source for the small or new employer to turn to for purposes of determining which laws do or do not apply to them. Further complicating matters for the small or new employer is the fact that different laws apply to employers of different sizes. The magic number is not the same, and it's not always a "high" number like 15 or 20. Many of the laws, particularly at the state or city level, apply to employers with only a single employee.

While these factors don't make it easy for young businesses to achieve compliance with labor and employment laws, the unfortunate truth is that difficulty is not a defense to a claim that a business violated the law. Here, we offer three early markers to assist young NYC businesses in identifying when they should be active in their labor and employment law compliance efforts.

Marker Number 1: Before you hire your first worker.

Once you've decided to hire your first worker (as either an employee or independent contractor), you should be talking to a labor and employment lawyer. A number of New York State labor laws, predominantly affecting wages, apply to employers with only one employee, as do a number of payroll obligations, such as tax withholding, wage reporting, and unemployment insurance contributions. The federal Immigration Reform and Control Act, which requires employers to verify the eligibility of their employees to work in the U.S., and the NYC Earned Sick Time Act, which mandates providing sick time to employees, also apply to employers with only one employee.
While these same laws and obligations don't apply to independent contractors, too often independent contractors are misclassified and are really employees. A check-in with counsel before hiring any worker can help ensure that a young business wards off the many problems attendant with misclassification, and otherwise assist with compliance with the applicable laws.

Marker Number 2: Before you hire your fourth employee.

NYC employers should talk to a labor and employment lawyer about further compliance measures before they hire their fourth employee. At four employees, more labor and employment laws apply, including the New York State Human Rights Law and the New York City Human Rights Law, both of which prohibit discrimination and harassment in the workplace, and also require accommodation of disabled and pregnant employees.

Marker Number 3: Before you hire your fifteenth employee.

NYC employers should talk to a labor and employment lawyer about additional compliance measures before they hire their fifteenth employee. At fifteen employees, federal anti-discrimination laws such as Title VII and the Americans with Disabilities Act apply. At twenty employees, still more laws will apply, including the federal Age Discrimination in Employment Act and two additional provisions of the New York State Labor Law requiring blood donation leave and bone marrow donation leave.

About September 2014

This page contains all entries posted to The Entertainment, Arts and Sports Law Blog in September 2014. They are listed from oldest to newest.

August 2014 is the previous archive.

October 2014 is the next archive.

Many more can be found on the main index page or by looking through the archives.