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JIPEL Blog

The JIPEL Blog features articles on new developments and current challenges within the areas of IP and entertainment law, written by students, professors, and legal practitioners. If you would like to discuss writing a guest post, you can get in touch with us via email at online.submissions.jipel@gmail.com.

ICANN’s gTLD Expansion: Internet Innovation, Hijinks, and IP Headaches

%ecpt_author% | November 18, 2014 8:16 am

Last month registration opened for web addresses using the new generic top-level domain (gTLD) .nyc, and more than 50,000 domain names have been registered, making it the most prolific city-based gTLD after .berlin. In fact, someone has already registered NYUlaw.nyc and redirected the domain to a satirical law school website. Other New Yorkers have taken the opportunity to vent their frustrations, registering GlobalAmbassador.nyc and directing it to a video lampooning the city’s appointment of Taylor Swift as its “Global Ambassador.” While these may be examples of harmless fun, the potential for less benign uses is obvious. Legal counsel for former Mayor Bloomberg certainly realized as much, as they defensively registered 400 new .nyc domain names on his behalf, running the gauntlet from expected choices to more surprising acquisitions like mikebloombergisadweeb.nyc.

The creation of .nyc is merely one small part of a staggering expansion of available gTLDs put in motion by the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit corporation that controls the Internet’s Domain Name System (DNS) and stands as the effective source of Internet governance. For an evaluation fee of $185,000 and additional operating costs, anyone can apply with ICANN to create a new gTLD and then offer registration of domain names in the new gTLD to others. Some have criticized this endeavor as merely a moneymaking scheme for ICANN, speculating that most of the new gTLDs created will not be popular enough to turn a profit for their creators through domain name registrations after the hefty required payout to ICANN.

With over 1,400 new gTLDs approved by ICANN for introduction over the next several years, the challenge of protecting intellectual property rights like trademarks from use in infringing domain names will become exponentially more complex. The process for resolving disputes over domain name ownership involving intellectual property rights is ICANN’s Uniform Dispute Resolution Policy (UDRP)—a necessity due to the frequently international nature of such disputes. Under the UDRP, a party who seeks to gain control over an existing domain name registered in violation of a standing claim to trademark or intellectual property rights can choose from one of several venues offered by ICANN through which they are able to engage in a binding arbitration process under guidelines defined by ICANN. Whenever a domain name is registered with ICANN, the registering party signs a contract including the stipulation that the UDRP be used to settle any future disputes that may arise over the domain name.

In his paper “International Dispute Settlement at the Trademark-Domain Name Interface,” Duke Law School Professor Laurence Helfer distills four principal virtues embodied in the UDRP: “it is simple, cheap, quick, and easily accessible by parties located anywhere in the world.” Pleadings are usually filed digitally and the final cost of proceedings usually averages between $750 and $2,500 per domain name. Most decisions are published online within forty-five days of the initial complaint being filed. The problem is that those costs can now easily scale exponentially. With over a thousand new gTLDs becoming available and each one offering the potential for countless new infringing domain names, the cost for enforcing IP rights could quickly become unmanageable for anyone other than gargantuan corporations. And beyond mere cost is the problem of actually finding infringing domain names, now that the list of gTLDs is growing so vast.

In response to this concern, ICANN is launching the Trademark Clearinghouse, a centralized database for trademarks, which will notify trademark owners who have registered with the system of any infringing domain names that are registered across all the gTLDs going forward, as well as giving owners the first chance to register domain names with their trademarks during an early “sunrise period” for all new gTLDs. However, critics have already taken issue with the fact that the Clearinghouse will only notify owners when there are exact matches to their trademarks in new domain names, requiring separate registration and fees for any permutations of a trademark that an owner also wants to protect. And this service does not come free, but rather at a cost of up to $150 dollars per trademark per year. While this stands to be a less costly option than having to file and win individual UDRP claims for each domain name that a trademark owner wants and would not have been able to register without the sunrise period, the cost is not insignificant and can easily add up for large trademark portfolios. And unless the owner takes the “Mayor Bloomberg approach” and registers every conceivable, bothersome domain name up front, they may still need to pay for UDRP cases down the line.

The gTLD expansion seems like it will be a double-edged sword when it comes to combating cyber-squatters—people who register domain names they predict will be desirable with the intent to resell them for a profit. While all the new gTLDs will offer many new opportunities for cyber-squatters to make a profit, it will also offer more opportunities to circumvent them by devaluing the worth of any single domain name, since it can likely always be registered on another gTLD.

One would hope the liberalization of gTLDs will lead to a more helpfully organized internet by breaking websites out from the .com / .edu / .org / .net standards of old, into new, more content-specific labeling systems. However, acceptance of such alternative gTLDs is far from certain, as shown by the reluctance of pornographic and “adult” websites to make use of the .xxx TLD made available a few years ago. Right now, no one seems enthusiastic to abandon the traditional .com ingrained in Internet culture, even though many .com websites are far from commercial in nature. It may be that the only way to get site owners to migrate to new, content-specific gTLDs is through new legal incentives.

Ultimately, more podiums means more speakers on the Internet’s stage, for better or worse. Those critical of the intellectual property system’s grip on language use itself will likely view the increased access to domain names as a welcome opportunity to take language back from corporations and opportunistic cyber-squatters. It’s a matter of balancing the interests of free speech, expression, and innovation against new potentials for abuse, fraud, harassment, and infringement. Whether being able to register essentially anything as a domain name will be a boon to Internet innovation, a colossal headache for intellectual property owners, or both, remains to be seen. But internet culture will have fun with it either way.

David J. Cottrell is a J.D. Candidate, ’16, at NYU School of Law.

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Saving Face, Not Players: The NCAA’s Concussion Settlement

%ecpt_author% | November 17, 2014 9:24 am

The NCAA reached a $75 million settlement this summer regarding a concussion lawsuit arising from the NCAA’s policy of allowing individual schools to create their own concussion protocols, which plaintiffs claimed put players at risk. While former college athletes still have the ability to personally take legal actions against the NCAA or their school, the settlement prevents future class action suits and provides no money for injury settlements. This is largely attributed to the NFL concussion litigation, wherein the league will pay former players diagnosed with concussion related conditions.

The settlement was the first of its kind, applying to all collegiate athletes dating back decades. Attorney Joe Siprut stated that “[n]ever before in the history of the NCAA have we seen a mandatory and consistent set of return to play guidelines that are enforced by the NCAA, and the medical monitoring program is the first of its kind.” However, the settlement does not provide actual medical treatment. Instead, the settlement establishes a “50-year medical monitoring program for all current and former athletes in any sport, with $70 million going toward screening for long-term brain damage and $5 million going to research.”  Additionally, the NCAA must issue a concussion-protocol that all schools in the NCAA will be required to follow. These new protocols are meant to provide a more stringent guideline to be followed in order for an athlete to participate in a game following any traumatic hit to the head. The changes include:

  • Preseason baseline testing for every athlete for each season in which he or she competes.
  • Prohibition from return to play on the same day an athlete is diagnosed with a concussion. Generally accepted medical protocols recommend athletes not return to play the same day if they exhibit signs of a concussion or are diagnosed with one, but a 2010 survey of certified athletic trainers conducted by the NCAA found that nearly half reported that athletes had returned to play the same day.
  • Requirement that medical personnel be present for all games and available for practices for all contact sports, defined in the settlement as football, lacrosse, wrestling, ice hockey, field hockey, soccer and basketball. Those personnel must be trained in the diagnosis, treatment and management of concussions.
  • Implementation of concussion tracking in which schools will report concussions and their resolution.
  • Requirement that schools provide NCAA-approved training to athletes, coaches and athletic trainers before each season.
  • Education for faculty on the academic accommodations needed for students with concussions.

While this all sounds nice on paper, many schools have already implemented identical or similar protocols. For example, The Big Ten has already issued an almost identical protocol and Ohio State football coach Urban Myer has said that the settlement would not change his program as they are “already following what’s been proposed.”

The settlement could be seen as the NCAA’s attempt to avoid a larger suit, such as the NFL’s, or an honest attempt to provide a safer, more responsible approach to head trauma. Unfortunately, I doubt it’s the latter. Many schools have already made concussion protocol a priority, and the fact that the settlement will not affect their approach suggests that the NCAA is merely trying to avoid suits and public scrutiny. By taking this long to issue an NCAA-wide concussion policy, the NCAA has failed to protect the student-athletes. As one representative of former college players has already pointed out, the settlement is “going to benefit no one here in any real way except for the NCAA and the plaintiffs’ lawyers.” While offering free evaluation is a step in the right direction, the settlement does not provide any medical treatment if the evaluation shows concussion-related issues. The NCAA has ultimately managed to foreclose future class action lawsuits without actually offering any solutions to concussion-related issues.

In a similar concussion case, the NFL recently had its $765 million settlement rejected by a District Court judge, who questioned whether the settlement “was sufficiently funded to address the medical needs of thousands of plaintiffs.” By comparison the NCAA, whose number of student-athletes far surpasses the number of NFL players, made out like bandits. That’s especially true considering that the NCAA’s settlement covers only diagnostic medical expenses, unlike the NFL’s rejectedproposal. Though the NCAA’s settlement seems a step in the right direction, it’s more a distraction than a solution. Now we’ll just have to see whether the federal court approves.

Jason Sosnik is a J.D. Candidate, ’16, at NYU School of Law.

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Recognizing the Perfect “Monkey Selfie”

%ecpt_author% | November 14, 2014 5:14 am

Back in 2011, an Indonesian macaque snapped a grinning self-portrait. Naturally, it became an Internet sensation. The camera owner, British wild-life photographer Daniel Slater, is now suing Wikipedia for copyright infringement, as the non-profit organization had posted the image to Wikimedia Commons, an online repository of free-use media.

In case the monkey’s rights were unclear, the U.S. Copyright Office timely released an updated Compendium of U.S. Copyright Office Practices that explicitly rejects photographs taken by monkeys as an example of failing to meet copyright’s “Human Authorship Requirement.” For Wikipedia the debate stops there. But determining that the monkey has no rights is not the only inquiry. Depending on the the facts, Slater himself could still be the author.

According to Slater he fraternized with the monkeys for days, attempting to become one with their barrel. Ultimately aiming for a perfect monkey selfie, Slater wanted to make the monkeys comfortable enough to allow leaving a camera with a remote shutter release. After going through hundreds of blurry and ill-composed photos, Slater selected and posted the now famous shot on the web.

According to the Supreme Court in Burrow-Giles Lithographic Co. v. Sarony, it wouldn’t matter if the monkey hit the button so long as Slater was the creative genius behind it all. The monkey was simply following Slater’s direction, acting as an assistant of sorts. But Slater may have admitted to it all being an accident in which he absent mindedly left thousands of dollars worth of equipment, set up for a perfect monkey-selfie, alone in a jungle full of monkeys. Fortuitously, he came back just in time to save the camera from destruction and to discover this perfect shot. Likelihood issues aside, it seems accidental genius is still genius in the eyes of the law, and ownership vests in the eye creative enough to recognize it.

A photograph must be at least minimally creative to obtain copyright protection. Such originality can be met in one of three ways: rendition (at issue in Burrow-Giles), creation (e.g., Cindy Sherman’s photography), or—at issue here—timing. Timing is perhaps the most controversial, given the luck’s strong role in achieving the outcome. Garry Winogrand’s “street photography” is a prime example of originality in the timing. Known for his portrayal of mid-century American life, Winogrand is said to have snapped a roll of film walking only a block. Shooting full-frame and trusting his initial choices, he scarcely edited in the dark room. He captured his famous shots partially by virtue of being in the right place at the right time, and partly by being creative enough to notice what was worth capturing. Central Park Zoo, for example, depicts a black man and a white woman each holding chimpanzees that are dressed like children. Winogrand not only saw a well-composed image through his lens, but recognized a light-hearted twist to a spectacle wrought with racial tension.

But for all we know, Winogrand could have snapped the shot without recognizing the shot’s aesthetic value until he was staring at the contact sheet back in the studio. Thankfully, copyright law makes no distinction as to when the photographer has the idea. Some, like wild-life photographer Thomas Mangelsen, seemed to have the idea in mind well before the shot. To capture Catch of the Day, he journeyed to Brooks Falls, Alaska at the height of the annual salmon run. Though there are of course evidentiary issues to artistic intent, there are evidentiary, why should we bother trying to qualify intent when rewarding post-shot creative recognition provides the exact sort of incentive to innovate that copyright strives for?

If Slater truly had the idea to ‘take’ a ‘monkey selfie’ all along, he seems to have done everything he could to achieve it, and persistence and luck worked in his favor just as it did for Mangelsen. If Mangelsen used a self-timer or an assistant to capture his shot, there would still be no question whether he held the copyright. And who’s to say that the artist who foresees an image’s aesthetic value is more creative than one who recognizes it? Certainly not the art world. Just see the fame endured by Winogrand and his contemporaries like Alfred Eisentaedt, Henri Cartier-Bresson, and Robert Frank. Copyright law rewards the creative eye that recognizes the art, not the hand that happens to press the shutter release. Even a monkey could do that.

Nicole Lieberman is a J.D. candidate, ’16, at NYU School of  Law. 

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Botnet Mitigations by the FBI, DOJ, and Microsoft Stop Cyber Attacks But May Trample on User Rights

%ecpt_author% | November 12, 2014 2:48 am

Of all the software tools associated with cybercrime, botnets have perhaps the most widespread impact on commerce and on the operation of American businesses. The term “bot” has many meanings, but in criminal law it refers to a type of malicious software that infects a user’s computer and receives instructions from a criminal’s “command-and-control” server. Accordingly, the cyber-criminal can instruct the software to perform automated tasks such as sending requests, spam, or another malicious traffic. Criminals use “botnets”—networks of these infected computers—to target websites, servers, and other targets with disruptive requests, spam, and other unwanted traffic. In 2012, cyber-criminals specifically began targeting the U.S. financial industry, focusing on banks such as Wells Fargo or JP Morgan Chase and causing service disruptions. In total, botnets have caused an estimated damage of $9 billion in the U.S. and $110 billion globally.

In response the FBI, the DOJ, and Microsoft have used a process involving temporary restraining orders (TROs) and injunctions to take down many of these botnets. Firstly, the DOJ (partnered with the FBI) or Microsoft acquires an ex parte TRO and/or injunction for domains facilitating botnet traffic. Although the plaintiffs may identify several botnet operators, many defendants are listed as “John Does.” After obtaining the order, they then seize the infringing domains and direct the traffic to Microsoft/FBI servers. Finally, the plaintiffs will then send out a “curative file” to the infected computers in the botnet to stop malicious activity.

These organizations have taken measures to protect the privacy and security of the owners of the infected computers. In Microsoft’s legal memo supporting the Coreflood mitigation, for instance, the company asserted that it had evaluated and tested the “stop” command sent to malware on users computers to ensure it will “not cause any damage to the victim computers on which the Coreflood software is present, nor will it allow the Government to examine or copy the contents of the victim computers in any fashion.”  Microsoft’s memorandum argued that sending the command to the malware on users’ computers would not violate the fourth amendment prohibition against seizures because it was at most “de minimis.”  Few, if any, computer owners were likely to claim significant “possessory interests” in having or running malicious software on their computers.

However, in late June 2014, Microsoft filed for and received a temporary restraining order against No-IP.com, an online company that provides customers with static hostnames. As Microsoft noted, malware operators utilized nearly 18,472 No-IP subdomains to control and distribute malicious software. However, when Microsoft transferred domain name registries in accordance with the order, it cut off service to over 5,000,000 subdomains, servicing—in addition to the malware operators—legitimate customer websites and devices. Microsoft did eventually return most of the subdomains two days after the initial seizure, but that downtime could have seriously impacted users and businesses relying on those subdomains.

Microsoft has also received criticism for its take-down of another botnet, Citadel, which disrupted honeypot servers set up by botnet researchers. That disruption did not harm businesses and users unrelated to botnets or botnet research. Nonetheless, both the No-IP case and the disruptions associated with the Citadel take-down demonstrate the potential collateral damage of an unregulated mitigation.

In response to the success of these botnet mitigations, the Senate Judiciary committee has held a hearing to consider legislation that would facilitate botnet mitigation. Although the hearing produced many constructive suggestions for legislative reform, including a proposal by the DOJ, there is concern that the committee did not address the potential collateral damage incurred by innocent third-party users and organizations as a result of these mitigations. During the hearing, Online Trust Alliance Director Craig Spiezle pointed out three major considerations: “1) the risk of collateral damage to innocent third parties, 2) errors in identifying targets for mitigation and 3) respecting users’ privacy.” Any effective legislation facilitating the mitigation of botnets must address these issues.

In addition, effective legislation should also address the liability for private corporations engaged in mitigation as well as the possibility of redress for innocent third-parties affected. Microsoft and No-IP ultimately settled their dispute out of court. But it’s unclear whether the terms of the settlement between Microsoft and No-IP covers damage done to No-IP itself or its clients. Legislation facilitating the mitigation of botnets should clarify the rights of innocent third-parties—including both intermediaries such as No-IP and the end-users themselves—to damages due to a botnet mitigation. Accordingly, botnet legislation should also clarify the liability incurred by private organizations such as Microsoft in executing these botnet mitigations.

David G. Krone is a J.D. Candidate, ’16, at NYU School of Law. 

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Is Our Thirst for Knowledge Being Slaked?: An Overview of Knowledge Commons Governance

%ecpt_author% | November 10, 2014 3:16 pm

A desert watering hole attracts all kinds, with many predators foregoing easy meals in exchange for the water’s precious benefits. Arguably, sharing the water provides a net benefit to the community well beyond each party’s individual costs. Taking a lesson from nature, innovators are increasingly sharing their knowledge rather excluding others from their advancements. Resource sharing in the natural environment is known as a commons. Drawing from this nomenclature, a commons in the cultural environment is referred to as a knowledge commons.[1]

Wikipedia is one example of a tremendously successful knowledge commons. Not only do members continually and voluntarily contribute to the website, but the community also monitors those contributions. The result is a self-governed knowledge commons. Why Wikipedia functions so well and other knowledge commons have failed has fascinated a growing body of researchers.[2] Professor Strandburg, New York University School of Law’s Alfred B. Engelberg Professor of Law, has directed her research towards identifying the factors underlying the success of knowledge commons to better inform policy decisions regarding their governance. If policy-makers have a better understanding of what motivates innovators to contribute to these knowledge commons, they can create a legal framework that maximizes innovative and creative production, ultimately benefiting society as a whole.

While comparisons to natural environment commons have been useful in establishing a preliminary framework for understanding how knowledge commons work, the relationships between parties in knowledge commons has posed unforeseen complexities. In her new book, Governing Knowledge Commons, Professor Strandburg discusses the example of rare disease clinical research networks, such as the Ureal Cycle Disorder Consortium. The research network brings together patients suffering from the rare disease with physicians who study the disease. The physicians aim to create treatments and share their advancements within the community while the patients function as a sort of pooled resource. But unlike water at a watering hole, the patients are also active contributors in the knowledge commons: through their feedback they can drive the direction of physicians’ contributions to the network. So any governance of such a knowledge commons must take into account both the resource and the creator’s motivations.

The factors underlying a successful knowledge commons may vary across fields. Such variance has posed substantial challenges to academics in search of unifying principles, but researchers have made progress identifying the types of atmospheres where knowledge commons tend to arise. Professor Strandburg believes communities choosing knowledge commons over other forms of intellectual property protection tend to be not entirely competitive and have shared benefits from resource pooling. Because of the heavy costs associated with sharing information in overly competitive environments, such environments impede the creation of knowledge commons, while environments where contributors receive benefits from each other’s information tend to experience knowledge commons.

These two factors don’t always align, and for Professor Strandburg this creates an interesting milieu for determining what factors underlie innovation framework selection. Why is intellectual property protection not selected? How did the community overcome costs associated with competition? Scientific research provides an interesting example to answer these questions. Researchers are internally competitive. Their scientific advancements directly correlate to their career success, future jobs, and grant funding. However, sharing information results in benefits that could not be obtained if researchers only operated independently. Professor Strandburg hypothesizes that reputational benefits accompanying the information sharing may overcome the competitive costs in some circumstances. Identifying the reputational benefits that push the community’s cost-benefit analysis towards knowledge commons is crucial to creating a productive governance scheme. But reputational benefits alone may not do the trick. To ensure continued participation, there must be a way to monetize the associated benefits. Whereas academic researchers’ reputational benefits are essentially “cashed-out” through salary benefits and job opportunities, according to Professor Strandburg purely recreational pursuits may experience difficulty maintaining contributions to a knowledge commons.

If governing bodies can pinpoint the factors affecting the cost-benefit analysis in innovation schemes, they can better sculpt those factors and affect innovators’ decisions. Government adjustment of competition’s boundaries can be seen in recent Supreme Court decisions regarding patent eligible subject matter under 35 U.S.C. § 101, such as Alice and Myriad. By limiting those fields which are covered under patent law, the Court forces those fields to seek out alternative innovation schemes.

Researchers have made significant strides in understanding how and when knowledge commons work, and the the knowledge commons research community has grown substantially in the last six years alone. New York University Engelberg Center on Innovation Law and Policy’s annual Conference on Knowledge Commons is in its second year, and the long standing Open and User Innovation Conference has seen more attention to governance issues. As more individuals focus their studies on understanding the complexities of knowledge commons, we’ll increase our understanding of the unifying principles. Ultimately, researchers hope that those unifying principles will allow policy-makers to increase informational and creative contributions so that society as a whole may better slake its thirst for knowledge.

Margaret Diamond is a J.D. candidate, ’16, at the NYU School of Law.

[1] Michael J. Madison, Brett M. Frischmann & Katherine J. Strandburg, Constructing Commons in the Cultural Environment, 95 Cornell L. Rev. 657 (2010).

[2] Brett M. Frischmann, Michael J. Madison, Katherine J. Strandburg, Governing Knowledge Commons Introduction (Brett M. Frishchmann et al. eds., 2014).

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Nuclear Fusion, Again

%ecpt_author% | November 4, 2014 10:23 am

Lockheed Martin’s famed Skunk Works, renowned for developing advanced weaponry like the U-2 spy plane and the F-117 stealth fighter, has filed multiple patents relating to a new nuclear fusion reactor design. For those who follow this sort of news, you may be overwhelmed with a kind of muted excitement. Why is this? For decades, scientists and engineers from around the world have promised fusion power “in the next ten years,” while time slipped persistently by.

The enthusiasm people feel for nuclear fusion power requires some knowledge of what fusion entails. Unlike nuclear fission reactors used today, which split atoms in order to harness the power expressed by Einstein’s famous equation, E=mc^2, fusion power relies on the energy released by the combination of atoms. While fission has been used in nuclear weapons and all nuclear power facilities to date, fusion has the potential to give us the power of the sun (literally), without some of the drawbacks of traditional nuclear power. Our sun, like all active stars, produces its energy from fusion reactions occurring in its core. The primary fuel for the sun is hydrogen, which fuses to form helium in the core of the star.

As one can imagine, it requires tremendous feats of engineering and imagination to create a stable environment for a similar reaction process here on earth. Experiments focus on heating gas so that the atoms separate into ions and electrons, at which point the ions fuse and release remarkable amounts of energy. The primary problems encountered have been producing more energy than consumed and containing the plasma in a stable environment.

The design proposed by Skunk Works has been worked on for about four years, and the team is now emerging with a request for partners in the private sector and government. What makes the design very exciting is that it is compact, about 90% smaller than previous concepts. This might enable the team to experiment on more compressed time frames and facilitate production and use. The proposed reactor would use deuterium-tritium fuel (two isotopes of hydrogen) in power plants, along with potential applications on ships and airplanes. Lockheed proposes that it should have a concept reactor ready within the decade. Though a path wrought with risk and uncertainty, if such a reactor succeeds, we would be able to harness ten million times the energy as we do with the same amount of fossil fuels.

As mentioned, the Lockheed team is not alone in its pursuit of an economical fusion reactor. Notably, there is a large international effort to build a fusion reactor in France called ITER. It relies on something called a “tokamak,” like most fusion experiments, to contain the superheated plasma which fuels the reaction. Though it is hoped that the reactor will produce more energy than it consumes, delays and cost overruns have set the project back to 2027 and a cost of $50 billion.

As government efforts centered on ITER stall in a quagmire of delays, might the private sector come to the rescue?  It appears that the creators of fusion reactor designs are turning to both the patent system and trade secret to protect their potentially world changing inventions. For example, a patent was filed last year by a researcher in Spain for a fusion reactor using inertial confinement. In addition, a secretive company called Tri Alpha seems to be relying on trade secret to protect its project, which ultimately hopes to fuse protons with an isotope of boron in a linear reactor, as opposed to using conventional tokamak technology. The boron process would require higher temperatures to create fusion, and some skeptics warn that the alternative design needs a lot more work before it might be commercially viable.

So while some of the world is wary of nuclear power after the meltdown at Fukushima, Lockheed Martin, or some other player in the field, may pave a way forward for cheap, environmentally friendly nuclear power.

Matthew Sumner is a J.D. candidate, ’16, at the NYU School of Law.

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What Does Termination of the “Redskins” Trademarks Mean for Washington’s Football Team?

%ecpt_author% | November 3, 2014 2:46 pm

The name was never a label. It was, and continues to be, a badge of honor. – Daniel Snyder

Merrit Meets the Enemy. Victory over our Frontier Foes. Thirty-Seven Redskins Sent to the Happy Hunting Grounds. The Indian Problem Reaching a Conclusion. – Rocky Mountain News, October 8, 1879

Since the 1960s, Native American activists have pushed for schools, colleges and sports teams to end the use of Indian-themed names and mascots, which they consider offensive and demeaning. Two-thirds of these schools have dropped these names, mostly voluntarily and without incident. Professional sports teams, reaping billions of dollars in revenue, however, have been far more resistant to change, even as the tide of public opinion turns increasingly against use of such names and mascots. The name of Washington’s football team, the “Redskins,” has come under particular scrutiny recently. In response to this pressure, Dan Snyder, owner of the team, declared, “We’ll never change the name. It’s that simple. NEVER – you can use caps.”

Although the team’s management has vowed to resist public pressure to end its use of the name and Native American imagery, a recent decision by the Trademark Trial and Appeal Board (TTAB) to cancel the team’s registrations may make protecting the team’s interest in the name and associated imagery more difficult. The TTAB is an administrative body within the United States Patent and Trademark Office responsible for adjudicating certain kinds of cases involving trademarks, including those in opposition to trademark registrations filed under Sections 2(a) and 14(3) of the Lanham Act.

Section 2(a) of the Lanham Act prohibits the registration of a mark that “[c]onsists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” Section 2(a), however, only applies to registration applications. A challenge to an already registered mark must take place under Section 14(3) of the Lanham Act, which provides that a petitioner may seek cancellation of a registration that the petitioner believes was registered in violation of Section 2(a). To prevail in such action, a petitioner must demonstrate that a “substantial composite” of the relevant population considered the term to be disparaging at the time of registration.

This is the second time that the TTAB has heard a challenge to the Redskins trademarks under the Lanham Act. In Harjo v. Pro Football, Inc., decided in 1999, the Board held that the Redskins trademarks were disparaging to Native Americans at the time of their registration and cancelled the registrations. On appeal, the United States District Court for the District of Columbia reversed the cancellations, finding that the petitioners did not carry their burden of showing that the marks were disparaging at the time of registration. The court also rejected the action as barred by the equitable doctrine of laches, by which the petitioners’ failure to assert their rights in a timely matter caused the claim to be barred. The matter was ultimately resolved by the D.C. Circuit solely on the grounds of laches, providing the Native American activists another opportunity to attack the marks before the TTAB, provided they could find younger plaintiffs, who unarguably had not waived their rights.

Undeterred, a new group of petitioners, led by then-eighteen-year-old Amanda Blackhorse filed suit. On June 18, the TTAB ruled 2-1 in Blackhorse v. Pro-Football, Inc. that the trademark registrations of the Redskins “must be cancelled because they were disparaging to Native Americans at the respective times they were registered, in violation of Section 2(a) of the Trademark Act of 1946, 15 U.S.C. § 1052(a).” In the opinion, Administrative Judge Marc A. Bergsman was careful to note that the case did not concern the current controversy over whether the term “redskins” was disparaging to Native Americans today, rather, the relevant standard required asking whether the evidence in the record established that the term “redskins” was disparaging to a substantial composite of Native Americans at the time each of the challenged registrations were issued.

The TTAB examined two different categories of evidence dating to the relevant time period: the first focusing on the “general analysis of the word,” and the second on the specific views of Native Americans during the period during which the marks were registered. For the first category, the Board was informed heavily by dictionary definitions that indicated the term “redskins” was offensive, disparaging and contemptuous. The TTAB found that form 1859 to 1965, no dictionary included such reference, but beginning in 1966, the term began to be labeled offensive with increasing regularity, until it was universally considered offensive, all during the relevant time period. The Board also considered expert testimony, news articles and reference books and found they supported its conclusion that the term was generally considered to be disparaging during the relevant time period.

In examining the specific views of Native Americans, the Board primarily looked to the passage of a 1993 resolution by the National Congress of American Indians, which stated that the term was historically disparaging. Since the NCAI represented thirty percent of the Native American population at that time, its resolution was “clearly probative on the views of Native Americans held at the referenced time period.” The TTAB also cited to deposition testimony, letters of protest and other efforts by Native Americans from the 1960s onward to have the name “Redskins” abandoned.

Taking all the evidence together, the TTAB found that, at a minimum, approximately thirty percent of Native Americans – considered to be a substantial composite – found the term “redskins” used in connection with the football team to be disparaging during the relevant time period. Having found this burden met, the Board rejected as immaterial evidence suggesting that some Native Americans did not find the term offensive: “once a substantial composite has been found, the mere existence of differing opinions cannot change the conclusion.”

The TTAB also rejected the invocation of the laches doctrine. The Board found difficult justifying balancing any economic harm to the team against human dignity, noting that courts “routinely held that where there is a broader public policy concern at issue, the equitable defense of laches does not apply.”

What then is the practical effect of the cancellation of the Redskins’ trademarks? At the present moment, nothing. Decisions of the TTAB may be appealed to a United States district court or to the United States District Court of Appeals for the Federal Circuit. The team has appealed the decision in the United States District Court for the Eastern District of Virginia, arguing that the Board’s decision should be reversed and raising further constitutional claims that the TTAB is not empowered to adjudicate. The registrations of the team’s marks remain enforceable until judicial review is completed.

The decision, if upheld, does not technically affect the team’s right to use the “Redskins” name or other marks at issue. TTAB determines only whether a mark can be registered with the federal government, but lacks the statutory authority to prevent its use. Only courts have the power to enjoin use of a trademark. If affirmed, however, Pro Football will lose the substantial legal benefits conferred by federal registration. The primary benefits attaching from registration are the creation of legal presumptions of ownership and nationwide scope of rights in the marks, the ability to use the federal registration symbol (®) and the ability to record registrations with Customs and Border Patrol, empowering them to block incoming counterfeit products. Losing these protections will limit the ability of the Redskins to stop unauthorized third party use of its marks. Although it may rely on other provisions for relief (such as a claim for dilution of the marks), registration affords the ability to seek statutory damages against counterfeiters, which may be up to $2 million per counterfeited mark. So while an ultimate victory for the Blackhorse petitioners won’t foreclose use of the “Redskins” name and associated imagery, it will hit the team where it hurts – in the wallet.

It is unclear how the TTAB’s decision will fare on appeal, as its earlier ruling cancelling the trademarks in Harjo was reversed. The TTAB seems to have taken lessons from the reversal to heart: the opinion methodically cites to evidence in the record supporting its conclusion of that a substantial composite of Native Americans found the term disparaging at the time of registration. The dissent, however, argues that the petitioners’ reliance on the same evidentiary record as Harjo must be fatal, as that evidence was found insufficient on appeal. The team’s choice for appellate review may influence the outcome: an appeal before the Federal Circuit would use only the existing record, while in district court, both parties will be allowed to introduce new evidence. Regardless of the outcome, the conversation started in the 1960s regarding the appropriation of Native names and images for schools and sports will continue. As Seattle Seahawks linebacker and Super Bowl MVP Malcolm Smith tweeted, “There is no room for bigotry in American sports. It takes courage to change the culture.”

Kelsey Nussenfeld is a J.D. candidate, ’16, at the NYU School of Law.

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Upcoming CLE Conference – Trade Secrets: The New Frontier in a Changing IP Landscape

%ecpt_author% | October 29, 2014 9:22 am

On December 3rd, JIPEL contributing author Adam Waks will be part of the faculty for the International Intellectual Property Institute-Bloomberg BNA CLE “Trade Secrets: The New Frontier in a Changing IP Landscape.” The conference will provide an overview of current trade secret law, the proposed Defend Trade Secrets Act of 2014, and strategies for creating policies and procedures that protect trade secrets. Waks will be presenting on trade secrets and employment in the current era, including:

  • Entrance interviews, employment contracts, and acknowledgment forms
  • Employee records and exit interviews
  • The Inevitable Disclosure Doctrine
  • When employees start their own companies

Waks previously discussed these topics for our Spring 2014 issue in “Where the Trade Secret Sits: How the Economic Espionage Act Is Inflaming Tensions in the Employment Relationship, and How Smart Employers and Employees Are Responding.”

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Cutting Costs: Tax Deductions for Artists

%ecpt_author% | October 29, 2014 8:24 am

Under the Internal Revenue Code § 183, individuals or corporations cannot take deductions for activities if “such activity is not engaged in for profit.” The IRS does not want to provide a subsidy for people engaging in hobbies for their own enjoyment; deductions are meant to accurately reflect the costs that individuals and corporations incur in the course of doing business.

But what does it mean to “engage in an activity for profit”? With the possibility of deductions on the line, many people would be tempted to argue that various endeavors are engaged in “for profit.” Should the size of the expected profit matter? Should the fact that expectations of profit are rational matter? The standard outlined in the Internal Revenue Code is “ordinary and necessary” business expenses, which in common English is typically defined as those expenses that are appropriate and helpful in running business. But even this definition is extremely vague.

The Tax Court recently examined the issue where an artist is also and an art professor. Professor Susan Crile is a tenured studio art professor at Hunter College, and her works can be found at the Metropolitan Museum of Art, the Guggenheim Museum, the Phillips Collection and other major art institutions. When Professor Crile filed her taxes she routinely deducted for the costs that went into her art production, even though she only made a profit for two taxable years. Each other year she suffered losses from the costs of creating art.

The IRS argued that because three out of 20 plus years were profitable, and because Professor Crile earned substantial annual income from her professorship, she could not claim to be engaged in art “for a profit” and could not deduct her art expenses. Professor Crile responded that she was an artist long before she became a professor and that art, unlike other occupations, is uniquely prone to the vacillating whims of the market and should be treated differently than other types of business.

To evaluate 183 claims, the IRS typically employs nine factors:

  1. Manner in Which Activity is Conducted

The IRS examines whether the taxpayer keeps accurate records of costs and revenues. The more detailed the record, the more closely the activity resembles a business as opposed to a hobby that might be more loosely structured.

  1. Expertise of Taxpayers and Advisors

The IRS looks at the level of expertise that the taxpayer has in the particular area that the taxpayer is engaged in. Is the taxpayer a beginner to this area or is the taxpayer considered to be expert within this field?

  1. Taxpayer Time and Effort

The IRS evaluates the amount of time and effort that the taxpayer expends on the activity.

  1. Expectation of Appreciation in Value

If the taxpayer does not make a profit in a given year, is there a reasonable expectation that the taxpayer will make a profit in the following years? Is there a market for the work that the taxpayer is engaged in?

  1. Taxpayer’s Success in Other Activities

If the taxpayer is reliant on other areas to finance the taxpayer that a stronger indication that the financially sound activities might be the true “for profit” activities and the unprofitable activities might only be hobbies.

  1. History of Income and Loss

The IRS looks at the patterns for how much revenue and costs the taxpayer incurs in the activity and how these numbers have changed historically.

  1. Amount of Occasional Profits

How many years has the taxpayer actually made a profit while engaged in this activity?

  1. Taxpayer’s Financial Status

This evaluates how dependent the taxpayer is on the financial success of the activity. If the taxpayer is more dependent, that is a strong indicator that the activity is engaged in for profit.

  1. Elements of Personal Pleasure

The IRS analyzes the extent to which the activity contains “large personal elements” to see if it is simply a pleasurable hobby.

The Tax Court concluded that IRS won on criteria 6 and 7, but the remaining criteria were favorable (or at least neutral) towards the taxpayer, and Professor Crile could classify her art as a valid profit-seeking activity and deduct for the valid costs. While the taxpayer will still need to prove that the claimed deductions were appropriately in pursuit of creating art, this case should prove important for future cases. We still may not know to what extent the individual factors need to be satisfied, but it’s clear that favorable tax treatment doesn’t require that artists satisfy every factor.

Amy Rosenthal is a J.D. candidate, ’16, at the NYU School of Law.

 

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JIPEL Symposium

%ecpt_author% | October 27, 2014 6:35 pm

You finally got a gig as a standup comedian and your competitor stole your best joke?

Your favorite chef created a new culinary masterpiece and a week later the restaurant down the street started serving the same thing?

You heard on the news that Google is making millions of dollars off of Android even though it is based on Linux, an operating system notoriously fighting for free software?

You bought a beautiful dress for $500 and find the same dress an hour later for 30 bucks?

Have you ever been in any of the above situations and said to yourself that the law should do something about that? If so, then come hear why lawyers and non-legal folk in the comedy, software, food and fashion industries (dis)agree with you. This event is open to anyone interested in the above industries – no legal experience required!

What? JIPEL’s first annual symposium: “Innovation without Regulation: How Necessary is Intellectual Property Law?”

When? 9AM on November 21

Where? Greenberg Lounge, Vanderbilt Hall, NYU School of Law, 40 Washington Square South, New York, NY 10012

Details to follow at http://jipel.law.nyu.edu/symposium/. Such as:

  1. Lineup of panelists
  2. Topics of discussion
  3. Registration and RSVP
  4. Full event schedule
  5. More exciting reasons to attend the event!

For any questions, please email Symposium Editor Christoffer Stromstedt at christoffer.stromstedt@law.nyu.edu.

This event has been approved for up to 3 CLE credits for both experienced and newly admitted attorneys.

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