Sports & Entertainment Beat

California Adopts Bill Allowing Athletes to Earn Money from Marketing Promotions or Endorsement Deals

On Monday, September 30, 2019, California Governor Gavin Newsom signed into law SB 206, the "Fair Pay to Play Act," which is a bill that could fundamentally transform collegiate athletics amateurism rules. The bill allows college athletes to earn money from the use of their name, image or likeness through sponsorships and/or endorsements, which is in direct conflict with the National Collegiate Athletic Association (the "NCAA") amateurism rules.[1] The Fair Pay to Play Act will go into effect in 2023 and will apply to all 58 California NCAA-affiliated schools.[2]

The Fair Pay to Play Act does not require colleges to pay their athletes, but rather will prohibit schools from upholding rules preventing student athletes from participating in intercollegiate athletics because the athlete is being compensated for the use of their name, image or likeness.[3] This prohibition will apply to institutions and organizations affecting California student athletes, including the athlete’s academic institution, the NCAA and collegiate athletic conferences such as the Pac-12.[4] However, colleges will be able to control the types of sponsorships or endorsements students may enter into, so that student deals will not directly conflict with preexisting school sponsorship deals.[5]

The Largest College Admissions Bribery Scandal Erupted in the United States With a Number of Celebrities as Targets

In the early weeks of March, news broke of the largest college admissions scandal in the country's history, nicknamed "Operation Varsity Blues".  At least 40 people were charged with conspiracy to commit mail fraud and honest services mail fraud for their alleged participation in the scheme. Among those charged was actress, Lori Loughlin, who is most famous for her role as Aunt Becky on ABC's hit sitcom series Full House. Charges against her allege that, in order to get her children into the University of Southern California ("USC"), Loughlin paid $500,000 to have her daughters designated as crew recruits, although it is reported that they did not participate in that sport. One day after 14 parties involved in the scheme agreed to plead guilty, 16 parents, including Loughlin and her husband, were charged in a second indictment for conspiring to commit fraud and money laundering. Loughlin has refused to plead guilty and plans to fight these charges.

This post was originally published on GSB's website as a GSB client update on April 2, 2019.

On March 4^th, the Supreme Court ruled that copyright owners must wait to file an infringement suit until the Copyright Office has registered the work. The unanimous opinion, authored by Justice Ruth Bader Ginsburg in Fourth Estate Public Benefit Corp. v. Wall-Street.Com, LLC, affirmed the Eleventh Circuit and resolved a split among the circuit courts of appeal. The decision has significant implications for copyright holders and contract or legislation drafters, and comes at a time of change.

Social media platforms provide a powerful, and efficient means for brands to partner with celebrity “influencers” and reach millions with something as simple as a photograph and a few lines of text. However, as demonstrated by the recent actions initiated by the leading consumer protection agency in the United States, the Federal Trade Commission (FTC) stressing to influencers and marketers the importance of clear and conspicuous disclosure of brand relationships when promoting products on social media, these strategies are rife with pitfalls for brands and influencers, alike.[1] So, how do individuals and brands comply? There are no hard and fast rules, but the FTC's Guides Concerning the Use of Endorsements and Testimonials in Advertising[2] (the “Guides”), provide a general roadmap within which to operate.

This post was originally published on GSB's website as a GSB Client Update on August 13, 2018.

Is Sports Betting Legal?

Until a recent Supreme Court decision addressed the question, the answer was fairly straightforward: sports betting was allowed in only four states. All other states were prohibited from legalizing sports betting.

On May 14, 2018, in Murphy v. NCAA, the Supreme Court struck down the Professional and Amateur Sports Protection Act (“PASPA”) on grounds that the Constitution prevents Congress from “commandeering” the legislative decision of states.        

This post was originally published on GSB's website as a GSB Client Update on July 9, 2018.

Although Section 411(a) of the U.S. Copyright Act states clearly that “Although Section 411(a) of civil action for infringement of the copyright in any United States work shall be instituted until . . . registration [or refusal of registration] of the copyright claim has been made,” not every judicial circuit in the United States has agreed how to interpret this requirement. The U.S. Supreme Court’s recent grant of a petition for writ of certiorari in the case, Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC, may resolve the current federal circuit split, deciding for the country whether a copyright must be fully registered or just applied-for before a copyright infringement lawsuit can be filed.

Simon Tam of the Asian rock band, The Slants, probably was not envisioning an 8-year-long legal battle when he chose the group’s name. Slant is known as a racial slur for Asians. Tam hoped to strip the term of its derogatory purpose and “reclaim” it by choosing it as a name for his Asian-American band, with hopes of giving it a sense of empowerment.[1] Tam’s attempt to trademark the name with the federal government failed. The U.S. Patent and Trademark Office (PTO) denied the application under the Lanham Act, 15 U.S.C. §1052(a), citing the registration as disparaging.[2] The provision prohibits registration of those marks that “consist of…matter which may disparage…persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt, or disrepute.” [3] Tam contested the Trademark Trial and Appeal Board’s (TTAB) decision and the dispute eventually reached the Federal Court.

In March 2016, the popular music streaming service, Spotify, reached a settlement with the National Music Publishers Association (“NMPA”) to cover billions of unlicensed streams from member publishers dating back to the service’s U.S. launch in 2011.[1] Spotify will pay $25 million to publishers and songwriters and $5 million in punitive damages—a sum many are calling an easy break for the billion dollar streaming service.[2] Those who had their mechanical license rights infringed had until June 30, 2016, to opt-in to a settlement agreement between the NMPA and Spotify. The NMPA negotiated the settlement with Spotify on behalf of its members.^[3]The pros and cons of opting-in have been hotly debated as class action lawsuits, such as those brought by singer David Lowery and singer-songwriter Melissa Ferrick, have been filed.

“It is time to stop the ageism that permeates Hollywood’s casting process,” wrote SAG-AFTRA President Gabrielle Carteris.[1] On September 24, 2016, California Governor Jerry Brown took a controversial step toward achieving such a goal when he signed the Customer Records bill, AB-1687 (effective January 1, 2017), into law. This new state law requires that Internet Movie Database “IMDb” remove an actor’s listed age upon request by that actor.[2] IMDb is a well-known website in the entertainment industry that offers information about movies, television shows, and actors. Its subscription service, IMDbPro, allows actors to create their own profile page and access job listings posted by industry professionals. Industry professionals directly use the website for casting calls and auditions and have been known to frequently filter out potential actors though information posted on the website. Thus, the broader goal of this law is to alleviate age discrimination in an industry that has been alleged to phase out ageing actors in a discriminatory fashion.

Brexit, the United Kingdom’s (UK) decision to leave the European Union (EU), has made headline news in recent months.  Brexit is already impacting trademark rights in Europe, including in the sports and entertainment industry.

New UK Filings Required.  Trademark rights are conferred on a jurisdiction-by-jurisdiction basis.  Going forward, brand owners will not be able to rely on a single EU trademark filing to cover the same geographic territory in Europe.  In light of Brexit, brand owners now need to file trademark applications in the UK as well as the EU to protect their trademarks in the same geographic territory.  For years, separate trademark filings in Norway and Switzerland (and other European countries falling outside the EU) have been required.  Brexit adds the UK to the list of countries requiring separate trademark applications in Europe.