Shijiazhuang Market Supervision Bureau Fines Trademark Agency 50,000 RMB for Attempting to Trademark Olympic Gold Medalist’s Social Media Account

On May 18, 2022, the Shijiazhuang Yuhua District Market Supervision Administration issued an Administrative Penalty Decision against a Shijiazhuang trademark agency for attempting to trademark the name of Eileen Gu’s Douyin account (TikTok’s sister app in China). Eileen Gu won three gold medals in the Beijing Winter Olympics earlier this year and has become extremely popular in China.

On February 11, 2022, Wang XX, the legal representative of the trademark applicant Hebei Yi Biotechnology Co., Ltd., contacted Wang YY, a staff member of a trademark agency in Shijiazhuang, China, to apply for trademarks for Frog Princess Eileen in English and Chinese.  Frog Princess Eileen is the name of the 2022 Winter Olympics champion and model Eileen Gu’s (Gu Ailing) Douyin registered account. This account has released videos since August 29, 2018.  Ms. Gu won gold medals in big air and halfpipe and a silver medal in slopestyle at the 2022 Winter Olympics in Beijing. She then received a lot of media coverage and became famous, with a great reputation and influence. Therefore, Ms. Gu has the prior rights to the names of her Douyin registered account “Frog Princess Eileen” and due to their high popularity and influence, the scope of protection for “Frog Princess Eileen” is more powerful than the general right of trade names.

 

A promotional image from Gu’s recent campaign with Louis Vuitton. Credit: Louis Vuitton

 

At the same time, Ms. Gu made outstanding contributions to my China’s gold medal list in this Winter Olympics. Applicants other than Ms. Gu herself that register and apply for the trademarks “Frog Princess Eileen”  not only damages the prior rights of the Winter Olympic champion Gu but also damages the public interests of the society, which is easy to cause social damage and adverse effects. In this case, the trademark agency in Shijiazhuang, as a trademark agency agency for many years, nonetheless applied for a trademark even though it should have known or knew that the trademark would damage the existing prior rights of others.

Accordingly, the trademark agency was fined 50,000 RMB and Wang YY and Li (business personnel) were each fined 5,000 RMB.

The full text of the punishment is available here (Chinese only) courtesy of 知识产权界: 行政处罚决定书.

© 2022 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

NLRB, Labor Laws and the Impact on NCAA Athletes

Can—and should—college athletes be classified as employees? The answer to that question may be in flux. In a recent episode of the In-House Roundhouse Podcast, Womble Bond Dickinson attorney and host Mark Henriques welcomed Womble Bond Dickinson attorney Mike Ingersoll and University of North Carolina School of Law Professor Barbara Osborne to discuss the latest developments. Both guests were scholarship student-athletes themselves during their college days, adding to their perspective on the many issues pertaining to college athletes as employees. This article is derived from that conversation and is the latest installment in Womble Bond Dickinson’s Opportunity Economy series.

Just when you think you have all the answers about college athletes as employees, the National Labor Relations Board changes the questions.

NLRB General Counsel Jennifer Abruzzo’s September 2021 memorandum states that her office will consider some college athletes to be employees moving forward. But a number of significant questions—including whether Abruzzo’s memo has the full support of the NLRB—remain unanswered.

The NLRB Memo: What it Says

Ingersoll explained that Abruzzo’s memo dovetailing off of the NLRB’s 2015 Northwestern University decision—which really was a non-decision. In that case, the NLRB failed to render a decision as to whether or not Northwestern University’s scholarship football players were university employees under the National Labor Relations Act. That non-decision created a gray area of the law that Abruzzo’s memo seeks to fill.

“Essentially, she has decided her office will prosecute disputes brought by students under the NLR Act as if they are employees,” Ingersoll said. “She said any mischaracterization of players as ‘student-athletes’ – which is a nomenclature that has been used for decades – will itself be consider a violation of the NLRA as far as her office is concerned.”

The NLRB hasn’t adopted this as its official position, though, and the memo appears to be limited only to private colleges and universities, because the NLRA only applies to private schools.

“The memo itself raises more questions than it answers,” Osborne said. “I think it invites student-athletes to file claims that they deserve to be paid as employees, and that opens a whole new can of worms.”

“The memo itself raises more questions than it answers. I think it invites student-athletes to file claims that they deserve to be paid as employees, and that opens a whole new can of worms.”

BARBARA OSBORNE, PROFESSOR AT UNIVERSITY OF NORTH CAROLINA SCHOOL OF LAW

So should the term “student-athlete” be scrubbed from the college sports lexicon?

Ingersoll believes colleges and universities should avoid using it, at least in the short term, if they believe they are at risk of having to defend employment claims in front of the NLRB.

“I always thought of myself as a student-athlete and was proud of that,” Osborne said. “I don’t necessarily know that using that term misidentifies, but you need to classify those people as employees.”

Unanswered Questions in the NLRB Memo

However, as Osborne notes, this raises the first of many serious unanswered questions. The NLRB memo would require at least some college athletes to be classified as employees. However, this is at odds with NCAA rules, which prohibit athletes from being institutional employees.

“So we have a conundrum,” she said.

Another question: Which athletes are covered by the memo? Ingersoll said that is unclear.

“The memo distinguishes ‘Certain Players’ as a capitalized term – but it doesn’t actually define the term,” he said. The NLRB only has jurisdiction over private colleges and universities, not state-supported schools.  The Northwestern University case applied only and explicitly to scholarship football players at Northwestern. It provided no opinion on other players in any other sport or at any other university, Ingersoll noted.

So to which students and sports does the memo apply? Only scholarship players or all varsity athletes? Both men’s and women’s athletics? Only so-called “revenue sports” or any officially sanctioned sport? To date, college officials and athletes don’t have any answers to these questions.

“Wait and see how it gets enforced,” Ingersoll said. “My assumption would be that it is intended to apply as broadly as the GC’s office can make it apply.”

Osborne said, “The ‘Certain Players’ term is very unclear. The only sport she mentions is football, but it’s hard to say if it’s just about football. But if the memo only applies to scholarship football players, you are leaving everybody else vulnerable.”

She explained that the NLRA is all about the ability to unionize and engage in activities related to exploring unionization, with the employer being prohibited from interfering.

“What she’s saying is that if these athletes want to unionize, we’re going to support that and (the colleges) can’t interfere. Again, though, that opens up so many more questions than there are answers,” Osborne said. For example, which athletes may organize? Can only private school athletes organize? And what exactly are “revenue sports?” This may vary from school to school. For example, the University of Georgia’s Gymnastics program is a profitable operation, while many schools actually lose money on football.

Another key question is that if athletes can organize, may they then collectively bargain with the NCAA about its rules and requirements. Ingersoll said all of this is unprecedented territory for college sports.

“From a legal standpoint, there’s been no union activities among college sports that I’m aware of,” he said. “As an athlete, it’s made clear to you early on that when you participate on a team, you are part of a dictatorship, not a democracy. There is no forcing the coaching staff or administration to do something they don’t want to do.”

Osborne said, “I absolutely agree that it’s not something athletes think about doing – they’ve got too much personally at stake…. The flip side is that we do see student-athletes, through the free speech aspect, uniting for causes. I see that as a more hospitable way to open up a dialogue as to what could be done to make things better, but I don’t see that in union terms.”

“From a legal standpoint, there’s been no union activities among college sports that I’m aware of. As an athlete, it’s made clear to you early on that when you participate on a team, you are part of a dictatorship, not a democracy.”

MIKE INGERSOLL

As an example, Ingersoll noted the 2020 college football season, in which a number of teams influenced their conferences to hold the season amid COVID-19 concerns.

What’s Next for Athletes as Employees?

The NLRB memo isn’t the only significant development related to the employment status of college athletes.

An Eastern District of Pennsylvania case brought by college athletes alleges employment status under FLSA demanding wages. The claim survived a motion to dismiss and is now up on appeal. This is quite different from the Seventh Circuit precedent in Berger, which the Appeals Court dismissed because it decided college athletes weren’t employees and, thus, aren’t subject to the FLSA.

“We’ll see what ends up happening at the appellate level in light of these decisions,” Ingersoll said. “At the time of the Berger decision (in 2016), the landscape was significantly different than it is now.”

Also, the NLRB hasn’t adopted the Abruzzo memo as its official position and is limited in scope. But Ingersoll said the memo may “bleed into” state and federal litigation—litigation he expects to increase in volume.

One factor driving increased litigation surrounding college athletes-as-employees is Supreme Court Justice Brett Kavanaugh’s concurrence in this year’s NCAA v. Alston decision. The case opened the door for college athletes to use their name, image and likeness for commercial purposes

“At the point where you get favorable state and federal decisions in court, you get some teeth behind this notion of athletes as employees,” he said.

“At the point where you get favorable state and federal decisions in court, you get some teeth behind this notion of athletes as employees.”

MIKE INGERSOLL

Osborne pointed out that there may be many unintended consequences if student-athletes are reclassified as university employees. For example, scholarships would be considered taxable income, and athletes may even be owed wages. Employment status also may impact Pell Grants or need-based financial aid eligibility. For student-athletes who are dependents on families, how would family taxes be impacted? “There are all sorts of tax implications,” Osborne said.

Such a change in status also could require colleges and universities to provide Worker’s Compensation coverage for student-athletes who are hurt on the job.

And then there is the NLRB memo itself. Is it effective without board adoption? And what would happen if the board does (or does not) adopt it?

“The memo essentially means that Abruzzo and her office will investigate and prosecute claims with the assumption that the athlete is a university employee,” Ingersoll said. However, he said the full board ultimately will have to make a decision on the memo and stake out a position.

“If the board were to reject Abruzzo’s position, that essentially kills it—Abruzzo is bound by the board. The board is going to have to stake out an official position. If the board adopts it, that will be the NLRB’s position and as long as the athlete meets the criteria, then the case will have to proceed under the assumption the athlete is an employee under the NLRA.”

“If the board were to reject Abruzzo’s position, that essentially kills it—Abruzzo is bound by the board. The board is going to have to stake out an official position.”

MIKE INGERSOLL

But the NLRB’s position certainly could change later under a different administration. “The real teeth are in state and federal litigation decisions. That’s when you will see a bit of a sea change,” he said.

“The thing that stops that wave of litigation would be if we have federal legislation—which we’ve had a lot of lobbying for,” Osborne said. Proposals on the table run the gamut from supporting everything the NCAA has done in the past to the proposed College Athlete Bill of Rights, which would provide compensation and revenue sharing for student-athletes. Osborne wonders if the uncertainty created by the memo might force some form of Congressional action.

In addition, she notes that 37 court cases decided that state student-athletes are not employees and do not have rights associated with employment. “We have to reconcile those precedents,” she said.

So the path forward remains uncertain, with many questions still left to be decided.

Ingersoll said, “Justice Kavanaugh did provide a road map for these challenges to move forward. But right now, the NLRB memo is limited in its scope and impact. There should be no rush to judgment until we have some binding case law.”

Also, click here to read “Alston Aftermath: NLRB General Counsel Memo Confirms Employment Status for Certain College Football Players Under the National Labor Relations Act and Declares an End to the ‘Student-Athlete’” by Mike Ingersoll.

Copyright © 2021 Womble Bond Dickinson (US) LLP All Rights Reserved.

For more articles on employment law, visit the NLR Labor & Employment section.

FBI Issues Cyber Attack Alert Against Tokyo Olympics Service Providers

On July 19, 2021, the Federal Bureau of Investigations issued a Private Industry Notification to service providers and “entities associated with the Tokyo 2020 Summer Olympics that cyber actors who wish to disrupt the event could use distributed denial of service (DDoS) attacks, ransomware, social engineering, phishing campaigns, or insider threats to block or disrupt live broadcasts of the event, steal and possibly hack and leak or hold hostage sensitive data, or impact public or private digital infrastructure supporting the Olympics.”

According to the Notification, “Malicious activity could disrupt multiple functions, including media broadcasting environments, hospitality, transit, ticketing, or security.”

The Notification points out that large events attract extra attention from cybercriminals and nation-state actors such as the attacks during the 2018 PyeongChang Winter Olympics. The FBI indicted Russian-based actors for intrusions during the Winter Olympics, including one that disrupted the Opening Ceremony.

The FBI encourages “service providers and other relevant partners to maintain business continuity plans to minimize essential service interruptions, as well as preemptively evaluate potential continuity and capability gaps…the FBI encourages regularly monitoring networks and employing best practices.” The Notification then provides details on what those best practices are.

Frankly, the list of best practices provided by the FBI are best practices for all companies, including those supporting the Tokyo Olympics.

Copyright © 2021 Robinson & Cole LLP. All rights reserved.

For more articles on cybersecurity, visit the NLRCommunications, Media & Internet section.

The College Athlete Right to Organize Act – Labor Unions Enter the Pay-for-Play Debate

The debate about compensating college athletes has presented itself in many forms recently, including a recent argument before the United States Supreme Court. As that notion gains momentum, U.S. legislators have stepped in by presenting legislation to ensure that labor organizations have their place at the table. On May 27, 2021, Senators Chris Murphy (D-CT) and Bernie Sanders (I-VT) and several members of the House of Representatives introduced legislation that would extend collective bargaining rights and the other protections of the National Labor Relations Act (NLRA or Act) to any athlete who receives any form of compensation from their public or private college or university and is required to participate in an intercollegiate sport. They call it the “College Athlete Right to Organize Act.”

The 2014 Union Petition by Northwestern Football Players

This legislation is not the first attempt to gain bargaining rights for college athletes. In 2014, members of Northwestern University’s football term filed a petition with the National Labor Relations Board (Board) asking that the University recognize the College Athletes Players Association as their exclusive representative for purposes of bargaining. While the Regional Director, Peter Sung Ohr (who is now the Board’s Acting General Counsel), agreed that players who receive scholarships are employees entitled to the rights and protections of the NLRA, the Board declined to assert jurisdiction. It did so without deciding whether the players are employees under the Act. In part, the Board declined because it does not have jurisdiction over public institutions, meaning that it maintains jurisdiction over only 17 of the 125 colleges and universities that participate in the same football division as Northwestern. The others are public institutions exempt from the Act.

The College Athlete Right to Organize Act Declares College Athletes Common Law Employees and Would Cover Both Private and Public Universities

The College Athlete Right to Organize Act addresses both of those issues. First, after denouncing the NCAA and its member institutions’ practices as “exploitive and unfair,” the College Athlete Right to Organize Act broadly declares that college athletes meet the common law definition of an “employee” because they “perform a valuable service… under a contract for hire in the form of grant-in-aid agreement.” Second, and more significant, the Act extends the NLRA to public institutions of higher education with respect to the employment of college athletes. Currently, the NLRA broadly excludes government entities.

Mandatory Multiemployer Bargaining Within an Athletic Conference

The College Athlete Right to Organize Act also introduces multiemployer bargaining as a matter of right by stating that “college athletes must be able to form collective bargaining units across institutions of higher education that compete against each other.” Thus, the College Athlete Right to Organize Act provides that the “Board shall recognize multiple institutions of higher education within an intercollegiate athletic conference as a multiemployer bargaining unit, but only if consented to by the employee representatives” of the players, meaning that multiemployer bargaining may proceed without the consent and over the objection of the colleges and universities. This change could have significant implications for colleges and universities operating within the same athletic conference, as it would require institutions with different resources, priorities and goals to approach negotiations with players in a generally uniform manner, which may not be suitable for a particular institution.

The Act’s Future

Whether the College Athlete Right to Organize Act gains any momentum remains to be seen. What’s clear is that debate around the issue of compensating college athletes is intensifying. As that debate matures, it seems that at least some legislators want to ensure that labor unions have a seat at the table.

Copyright © 2021 Robinson & Cole LLP. All rights reserved.


For more articles on college sports, visit the NLREntertainment, Art & Sports section.

Game On: Are New Opportunities Opening Up for Brands to Use Student Athletes’ Name, Image and Likeness Rights?

The debate over the extent to which student athletes should be compensated is hardly new, but antitrust challenges brought against the NCAA, and new state legislation allowing athletes to receive compensation for the use of their name, image or likeness (commonly abbreviated as “NIL”) has shone a fresh light on the issue. This state legislation, along with a call for national action, may drastically change the world of collegiate athletics as we know it. Will this change be for the better or worse? Views differ, and time will tell.

New legislation in several states, such as the Fair Pay to Play Act in California, will not limit the academic institutions’ ability to use an athlete’s name, image and likeness to generate revenue, marketing and sponsorship deals, but it will allow for sponsors and brands to contract directly with a student athlete for deals concerning their NIL. These laws are contrary to current NCAA rules.

Pre-Game Background and the O’Bannon Decision

The NCAA is the governing body behind college athletics. Although it is a nonprofit organization, college sports is big business, and the NCAA’s massive television contracts, global media power, and strict policies have a direct effect on the sports industry and the student athletes that are its lifeblood. Significant revenues are generated in connection with college sports, and, for the most part, student athletes do not share in the wealth.

Historically, the NCAA has ensured that student athletes (also known as “amateur athletes”) were prohibited from receiving pay for their NIL rights through Article 12 of the NCAA Bylaws (the Bylaws), which provides that “only an amateur student athlete is eligible for intercollegiate participation in a particular sport” (emphasis added).1 While the NCAA does not explicitly define “amateurism” in the Bylaws, it does define a “professional athlete” as “one who receives any kind of payment, directly or indirectly, for athletics participation except as permitted by the governing legislation of the Association.”2 Student athletes lose eligibility if they, among other things, get an agent, enter a professional draft after enrollment, or accept pay in any form in their sport.3 The requirement that student athletes maintain their “amateur status” has created a hurdle for student athletes with any hope of seeing a cut of profits from use of their NIL.

In 2008, UCLA basketball standout Edward O’Bannon saw himself in avatar form in a videogame.4 The character looked like him, played for the same team, and wore his jersey number. He had not consented to this use of his NIL and received no compensation for it. In O’Bannon v. NCAA, O’Bannon was drafted as the lead plaintiff in a federal lawsuit against the NCAA.5 He claimed that the NCAA’s restriction on Division I Men’s basketball and football players’ ability to receive pay for use of their NIL was an unlawful restraint on trade prohibited by the Sherman Antitrust Act.6

The trial court agreed, holding that NCAA rules are not immune from the antitrust laws and that, when challenged, they must be tested by the Rule of Reason, a three-step, burden-shifting process applied in antitrust challenges, where the court considers (1) the anti-competitive effects of the alleged restraint in a given market, (2) the pro-competitive effects, and (3) whether less restrictive alternatives could achieve the same legitimate objectives.7 The court held that the NCAA prohibition on paying athletes for NIL use was anti-competitive in the relevant market; that maintaining “amateurism” in college sports was a legitimate pro-competitive objective because it increased consumer demand for college sports and integrated academics and athletics; and that the plaintiffs had shown less restrictive alternatives for achieving that objective, namely, allowing schools

  1. to provide scholarships to athletes up to the full “cost of attendance” and
  2. to pay cash compensation of up to $5,000 per year to be held in trust until after graduation.8 The US Court of Appeals for the Ninth Circuit largely agreed and affirmed on appeal, though it limited the injunction only to the first of the proffered alternatives. As to the $5,000 per year trust payment, the appellate court determined that allowing a student to be a “poorly-paid professional athlete” would not be virtually as effective as retaining full amateur (non-professional) status.9 Thus, the court held that a rule prohibiting cash payments unrelated to education was not an antitrust violation.10 This case was perhaps a win for student athletes, but it can hardly be called an upset — compensation for NIL use could be capped at whatever remained for the cost of attending the school.

Student Athletes Get a Rematch

Since August 2015, the Bylaws have allowed many exclusions to their no-pay rules, authorizing a wide range of above-cost-of-attendance payments, both related and unrelated to education, including athletic participation awards, disbursements for tutoring, study abroad expenses, car repair, insurance policies, mandatory medical care, per diem charges, and many other expenses.11 But, the general prohibition on receiving pay remains. In In re NCAA, three classes of athletes comprising FBS football players, Division I men basketball players, and Division I women basketball players, again, challenged the NCAA’s amateurism rules as unlawful restraints of trade.12 Their argument was similar in nature to O’Bannon, but the relaxed rules on permissible compensation allowed the plaintiffs to target additional gaps in the NCAA’s pro-competitive defense, more broadly attacking the interwoven set of NCAA rules that restrict the amount of compensation students may receive in exchange for their athletic-related services.

The district court entered a permanent injunction, implementing less restrictive alternatives to the NCAA rules, namely (1) allowing the NCAA to continue limits on grants in aid at no less than the cost of attendance, (2) allowing the NCAA to continue to limit compensation and benefits unrelated to education, and (3) enjoining limits on most compensation and benefits related to education but allowing certain limitations.13 The NCAA appealed.

On appeal, the Ninth Circuit emphasized the district court’s conclusion that “not paid” and “amateurism” are not synonymous, as shown, in part, by the numerous carve-outs allowing money to go to student athletes unrelated to education expenses.14 The Ninth Circuit affirmed and reiterated that the crux of the problem comes from the actual price-fixing of student athlete compensation.15 The NCAA echoed its pro-competitive argument from O’Bannon, but the Ninth Circuit found that only some of the challenged rules were pro-competitive. Preventing the receipt of “unlimited cash payments akin to professional salaries” was justified, but rules restricting “non-cash education-related benefits” did not foster or preserve demand for college athletics.16

The relaxation of payment to student athletes since O’Bannon affirmed that “non-education-related cash payments in excess of cost of attendance are no longer a ‘quantum leap’ from current NCAA practice,” as they were once described in O’Bannon (emphasis added).17 The Ninth Circuit affirmed, holding that “NCAA limits on education-related benefits do not ‘play by the Sherman Act’s rules.’”18 The Supreme Court granted certiorari on December 16, 2020, and arguments are currently scheduled for March 31.

Full Court Press: The Rulebook is Changing

In the wake of O’Bannon and In re NCAA, states around the country quickly began passing legislation allowing athletes to receive payment for their NIL rights. California’s Fair Pay to Play Act (the California FPPA) was the first of its kind and paved the way for other states to follow suit. The California FPPA blatantly went against the rules of the NCAA. Effective January 1, 2023, the California FPPA not only allows athletes to receive compensation for NIL rights, it also bars the NCAA from retaliating against players or teams for pursuing such compensation. Florida, Colorado, Nebraska, and New Jersey have passed similar legislation, with Florida’s new law on Intercollegiate Athlete Compensation and Rights (SB 646) taking effect July 1, 2021.19 All states so far have included prohibitions against a student athlete entering into a contract involving NIL rights where a provision of that contract would conflict with a provision in the team’s contract.20 For example, if UCLA has an endorsement deal with Under Armour, a player on that team may not enter into a conflicting contract with Nike to use his likeness in advertising.

With multiple state laws poised to go into effect and grant NIL rights to student athletes, the federal government and the NCAA are now considering a uniform body of laws regulating NIL rights compensation. In addition to benefiting college athletes, uniform regulations would benefit the NCAA, allowing it to regulate compensation for NIL rights in a uniform fashion, rather than on a state-by-state basis. In turn, the NCAA could help maintain competitive fairness in college athletics. Companies would have the opportunity to sponsor players across the country — not just in those states that passed NIL rights legislation — allowing them to maximize profits generated through student-athlete endorsement deals. There is, of course, another side: if student athletes are poised to see more revenue, that money has to come from somewhere. There is a risk that the line between college and professional athletics is further blurred.

The NCAA has called on Congress to pass federal legislation regulating NIL compensation and has even presented Congress with its own version of legislation: The Intercollegiate Amateur Sports Act of 2020. Although the NCAA’s proposal was not introduced, multiple bills have been. There’s US Senator Roger Wicker’s Collegiate Athlete and Compensatory Rights Act, US Senator Marco Rubio’s Fairness in Collegiate Athletics Act, US Representatives Anthony Gonzalez’s and Emanuel Cleaver’s Student Athlete Level Playing Field Act, and US Senators Cory Booker’s and Richard Blumenthal’s College Athletes Bill of Rights, all of which were introduced during the last session of Congress. One issue that differs in the various proposals is whether a new law would protect the NCAA from future antitrust challenges. All of the proposals would permit student athletes the right to earn compensation for use of their NIL.

Power Forward

Thus far, the current session of Congress has not taken up any of the bills introduced last session or introduced any new bills concerning NIL rights for student athletes. And, the NCAA, despite voting unanimously last year to permit student athletes to benefit from the use of the NIL and directing

updates to the Bylaws, announced on January 11 that it was tabling the proposal, citing “external factors, including recent correspondence with the U.S. Department of Justice.”21 Electronic Arts (EA), a videogame producer who was involved in the O’Bannon case but settled and has refrained from releasing any college football videogames since 2013, just announced that it plans to bring the game back, but it will be different. Pursuant to a deal reached with the NCAA’s licensing company, the game will feature real teams, uniforms and logos, but it will not include any player-specific NIL.22

But Florida’s law is set to go into effect this summer, ahead of the start of the next college football and basketball seasons. While the NCAA and Congress may continue to struggle with the task of compensating student athletes while preserving the amateur nature of college athletics, it is reasonable to expect that some form of NIL rights compensation regulation is coming on a larger scale. With athletes able to receive NIL rights compensation, brands should be prepared for new endorsements or sponsorship deals. The world of college sports remains an interesting area to watch.

This article is based, in large part, on an article written by Jennifer Vliet and Quincy Wolff during their time participating in Katten’s 2020 Summer Associate Program. The project was supervised by Chicago Intellectual Property partner Jeffrey Wakolbinger and New York Litigation associate Zachary Beal. The content has been updated to reflect ongoing developments. Jennifer and Quincy will be joining Katten as new associates upon their graduation from law school.

(1) NCAA Bylaws, Article 12.01.1 (2020) available at https://www.ncaapublications.com/productdownloads/D110.pdf.

(2) Id. § 12.02.11

(3) Id. § 12.1.2.

(4) O’Bannon v. Nat’l Collegiate Athletic Ass’n, 802 F.3d 1049, 1055 (9th Cir. 2015).

(5) Id.

(6) Id.

(7) Id. at 1057, 1070.

(8) Id. at 1052–53.

(9) Id. at 1076–77.

(10) Id. at 1079.

(11) In re Nat’l Collegiate Athletic Ass’n Athletic Grant-in-Aid Cap Antitrust Litig. 958 F.3d 1239, 1244–45 (9th Cir. 2020).

(12) Id. at 1247.

(13) Id. at 1251–52.

(14) Id at 1258–59.

(15) Id at 1254.

(16) Id. at 1257–58.

(17) Id. at 1255.

(18) Id at 1265–66 (quoting O’Bannon, 802 F.3d at 1079).

(19) Fla. Stat. § 1006.74.

(20) See, e.g., Id. § 1006.74(2)(h); Cal. Educ. Code § 67456(e)(1).

(21) See Division 1 Council tables proposals on name, image, likeness and transfers, Jan. 11, 2021, available at https:// www.ncaa.org/about/resources/media-center/news/ division-i-council-tables-proposals-name-image-likeness-and-transfers.

(22) Sarah E. Needleman & Laine Higgins, EA to Return to College Football Arena, Wall St. J., Feb. 2, 2021, at B8

©2020 Katten Muchin Rosenman LLP

For more, visit the NLR Entertainment, Art & Sports section.

Supreme Court to Weigh in College Sports: The Intersection of Antitrust and “Amateurism”

The Supreme Court announced Wednesday that it would hear arguments in the long-running NCAA dispute over student-athlete compensation, granting and consolidating two cases, National Collegiate Athletic Association v. Alston and American Athletic Conference v. Alston, that seek to overturn a May decision by the U.S. Court of Appeals for the Ninth Circuit. The case will be argued in early 2021, with a decision expected by the end of June. This will be the first time in over 35 years that the Court has heard an antitrust matter involving college athletics.

NCAA v. Board of Regents

In 1984, the Supreme Court, in a 7-2 decision in NCAA v. the Board of Regents, stripped the NCAA of its control over television broadcast rights for college football games. Although the Court held that the NCAA’s broadcast restrictions were in the nature of a per se illegal restraint on trade, the majority explicitly declined to apply a per se rule to the case because “a certain degree of cooperation is necessary if the type of competition that [the NCAA] seek[s] to market is to be preserved.” The Court instead applied the less stringent Rule of Reason to the NCAA’s restrictions because the NCAA needed “ample latitude” to play “a critical role in the maintenance of a revered tradition of amateurism in college sports.” Writing for the majority, Justice Stevens advised future courts that “[it] is reasonable to assume that most of the regulatory controls of the NCAA are justifiable means of fostering competition among amateur athletic teams and therefore procompetitive because they enhance public interest in intercollegiate athletics.” This language has allowed the NCAA for decades to argue for special treatment under antitrust law with regard to any of its bylaws that further amateurism. In his dissent, Justice White was concerned that the majority’s opinion would not further the NCAA’s stated purpose to “keep university athletics from being professionalized to the extent that profit making objectives would overshadow educational objectives.” Some now argue that Justice White’s fears have come to fruition – the NCAA has evolved into a monolith generating billions in revenues on the backs of student-athletes.

O’Bannon v. NCAA

The most recent case before Alston was a class action brought in 2009 by former UCLA basketball player Ed O’Bannon that challenged the NCAA’s use of the images of former student-athletes for commercial purposes. O’Bannon argued that a former student-athlete should be entitled to financial compensation for the NCAA’s commercial use of his or her image, while the NCAA contended that paying its student-athletes would be a violation of its concept of amateurism. In 2014, Judge Claudia Wilken of the U.S. District Court for the Northern District of California found for O’Bannon, holding that the NCAA’s rules and bylaws operate as an unreasonable restraint of trade violating federal antitrust law. In 2015, the Ninth Circuit rejected the NCAA’s arguments based on Board of Regents and affirmed the NCAA’s violation of the Sherman Act. The court stated “we are not bound by Board of Regents to conclude that every NCAA rule that somehow relates to amateurism is automatically valid.” Both sides appealed to the Supreme Court—the NCAA challenged the court’s affirmation that its compensation rules were an unlawful restraint of trade, and O’Bannon challenged the court’s conclusion that preserving amateurism is an important goal and that any compensation athletes might receive had to be related to education. The Supreme Court declined to hear the case.

Alston v. NCAA

The current case was brought by former West Virginia football player Shawne Alston and others. In May of this year, the Ninth Circuit ruled that the NCAA violated Section 1 of the Sherman Antitrust Act when it limited schools from offering certain education-related benefits to student-athletes in Division I basketball and Football Bowl Subdivision football programs. The opinion affirmed an injunction issued by District Judge Claudia Wilken in Alston v. NCAA that would prevent the NCAA from adopting rules that prohibit member schools from limiting the non-cash education-related benefits that can be provided to student-athletes. The case does not focus on the contentious issue of pay for college athletes and concerns only non-cash benefits related to education, such as computers, science equipment, musical instruments, study abroad and post-graduate scholarships, and paid internships. Schools would not be required to provide these types of benefits, and individual conferences may restrict such benefits. The NCAA also still may set limits on compensation that is not education-based. However, that model may change radically next year with the NCAA Board of Governors’ adoption of the Final Report and Recommendations of its Federal and State Legislation Working Group concerning modernization of the NCAA rules applying to student-athletes’ rights to commercialize their name, image and likeness.

In Alston, the NCAA argued that Board of Regents required plaintiffs attacking an NCAA rule promoting amateurism to meet a heavier burden in a Rule of Reason analysis. The Ninth Circuit rejected the NCAA’s arguments, noting that it had previously found the Board of Regents language relied upon by the NCAA to be dicta in its O’Bannon decision. In his concurring opinion, Judge Milan Smith states his concern that “[t]he treatment of Student-Athletes is not the result of free market competition” and instead “is the result of  a cartel of buyers acting in concert to artificially depress the price that sellers could otherwise receive for their services. Our antitrust laws were originally meant to prohibit exactly this sort of distortion.” Judge Smith’s concerns are consistent with the growing weight of academic opinions that the NCAA’s amateurism rules should not enjoy a special exemption from antitrust scrutiny. The amateurism rules, like any other trade association’s rules, should be defensible under antitrust law only if they yield procompetitive benefits and enhance overall consumer welfare. (See, for example, literature published by Case Western Reserve Law ReviewMichigan Law ReviewTennessee Law ReviewHarvard Journal of Sports and Entertainment LawWashington and Lee Law Review and The John Marshall Law Review.)

The Supreme Court

After the Supreme Court denied a request from the NCAA to freeze the lower court rulings, the NCAA in October successfully petitioned the Supreme Court to review the Ninth Circuit’s decision. The NCAA argues that the Ninth Circuit’s ruling “will fundamentally transform the century-old institution of NCAA sports, blurring the traditional line between college and professional athletes.” On the other side, players argue that the top athletic teams are operating a system that acts as a classic restraint of trade in violation of Section 1 of the Sherman Act. Without those restraints, they argue that student-athletes would be compensated at a level more commensurate with their value to their universities, conferences, and the NCAA.

The Supreme Court’s decision could fundamentally change the economics and structure of college sports. On the one hand, a decision holding that the NCAA’s amateurism rules violate federal antitrust law could open the door to significant competition between schools for athletes and likely would lead to more benefits for players whose collegiate sports careers allow their schools, conferences and the NCAA to reap billions in television and other revenue. On the other hand, a decision siding with the NCAA could foreclose that type of competition, allowing the NCAA to maintain its restrictions on benefits for the nation’s top student-athletes. The Court’s decision also has implications for how the currently constituted Court views the Rule of Reason mode of antitrust analysis and how that analysis is properly applied to labor markets. We will continue to monitor this important case and will report back after the Supreme Court renders its decision.


© Copyright 2020 Cadwalader, Wickersham & Taft LLP
For more articles on sports, visit the National Law Review Entertainment, Art & Sports section.

Eight Nebraska Football Players Commence Litigation Against the Big Ten Seeking Reinstatement of Their Season and Monetary Damage

On August 27, 2020, eight Nebraska football players commenced litigation against the Big Ten Conference in the District Court of Lancaster County, Nebraska. The lawsuit asserts that the Big Ten Conference’s cancellation or possible delay of the 2020 college football season was “arbitrary and capricious.” In support of the same, the student-athletes point to the SEC’s, Big 12’s and ACC’s decisions to move forward with their college football seasons.

The lawsuit alleges the contractual procedures required to cancel or delay the season were not followed. Moreover, the lawsuit asserts that although, the players are not parties to that contract, they enjoy certain rights as third-party beneficiaries and therefore have standing to assert those claims. Legally, the players’ assertion that they somehow enjoy third-party status is in my opinion extremely weak. Under Nebraska law, in order for the players to enjoy third-party beneficiary statute, “it must appear by express stipulation or by reasonable intendment that the rights and interests of such unnamed parties were contemplated and provision was made for them.” Properties Inv. Group v. Applied Communications, 242 Neb. 464, 470 (1993). In other words, the Court is likely to look to the express language of the contract or governing documents between the member institutions to determine whether or not it expressly or reasonably confers the rights to student-athletes to sue for violating the same. I expect that the express language of the contract between the 14 schools in the Big Ten does not give rights to their student-athletes to sue.

The lawsuit also alleges that because these players were permitted under Nebraska state law to sell their name and likeness the Big Ten’s decision to cancel or delay the season will result in damages. The players’ lawsuit alleges that the Big Ten tortuously interfered with their business expectancies. Factually, those claims are problematic because a review of the rooster, reveals that most of the plaintiffs are redshirt freshman with little to no playing experience. Moreover, based upon both the short and long term uncertainty concerning COVID-19, it will be extremely difficult, perhaps impossible for the players to prove that the Big Ten’s decision was “arbitrary and capricious.” Douglas Cnty v. Archie, 295 Neb. 674, 688 (2017). Nebraska law holds that an “action is ‘arbitrary and capricious’ if it is taken in disregard of the facts and circumstances of the case, without some basic which would lead a reasonable and honest person to the same conclusion.” In my opinion, based upon the medical and scientific data and the member institutions concerns for the health and well-being of their students, it will be next to impossible for the plaintiffs to meet that extremely high burden. Even if it turns out that the Big Ten made the wrong decision will not be dispositive to this issue.

The players’ lawsuit is also legally flawed because Nebraska law holds that damages cannot be speculative or conjectural. Pribiil v. Koinzan, 266, Neb. 222, 227-228 (2003). Although, the players assert that if they were given the opportunity to play, it would have resulted in them being able to sell their name and likeness, I suspect none of these players had contracts, endorsements or agreements when the Big Ten decided to cancelled or delay its college football season. If so, I believe the players’ damages would be speculative or conjectural and not subject to recovery. Because this is a legal issue, not a factual question, I suspect, the claim is likely to be dismissed at some point in the litigation.

I expect the Big Ten to file a pre-answer motion seeking the dismissal of the entire. I expect the Big Ten to assert that the players do not enjoy third-party beneficiary status, the decision was not arbitrary and capricious and that the alleged damages as asserted in the case are speculative and conjectural. While the Court in deciding a pre-answer motion to dismiss is required to assume all of the facts contained in the lawsuit are truthful and accurate, I suspect that most, if not all of the claims asserted in this lawsuit will be dismissed. Even if the damages issue were to survive a pre-answer motion to dismiss, I suspect after the completion of discovery the remainder of the case would be dismissed by way of summary judgment motion.


COPYRIGHT © 2020, STARK & STARK
ARTICLE BY Scott I. Unger of  Stark & Stark
For more articles on sports, visit the National Law Review Entertainment, Art & Sports section.

How To Stay Safe On a Boat This Summer

The weather is already heating up, and you may be thinking about getting out on a boat to enjoy some summer fun with your friends and family. Despite the ongoing COVID-19 pandemic, many people may choose to safely enjoy their time on the water. However, boating accidents can lead to significant injuries for those on board. During the latest reporting year of data, the US Coast Guard states that there were 4,145 total boating accidents across the country. These incidents led to thousands of injuries and more than 600 deaths. If you are going to be spending any time on the waterway this summer, there are various safety tips then we want to discuss with you today.

Always Have a Life Jacket

Life jackets are an essential part of boating safety, whether you are on a motorized or non-motorized water vessel. Statistics from the US Coast Guard show that approximately 75% of all boating deaths are due to drowning and that 84% of drowning victims were not wearing a life jacket when they went into the water.

We need to point out that even skilled swimmers need to wear life jackets when they are on a boat. A fall from a boat can lead to a personal injury that involves an individual hitting their head and becoming disoriented or injured, making these kinds of boat injuries difficult to stay above water. Every life jacket needs to be the appropriate fit for the wearer’s size and weight. Always ensure that the life jacket properly fastens.

Use Good Judgment

When boating, good judgment goes a long way. This can include the following:

  • Never operating a boat while under the influence of alcohol or drugs as this can affect judgment, vision, balance, and coordination.
  • If the weather looks rough or if the forecast for the day does not look good, you need to consider not going out on the boat. Bad weather conditions can create tremendous hazards for boaters.
  • Always operate at a safe speed. Open waters can be deceptively dangerous, and operating at high speeds increases the risk of a collision with other boats, docks, the shoreline, and obstacles in the water.

Be Careful When Participating in Water Sports

Many people in and around our area like to participate in various popular water sports, including water skiing, tubing, wakeboarding, kneeboarding, etc. If you or your family members will be participating in these activities, you need to thoroughly understand how to safely use all materials and objects involved.

  • Learn how to get out of the water safely and how to use the tow rope.
  • Understand basic hand signals and how to use a spotter in the boat.
  • Make sure that the tow line does not get caught in the propeller of the boat or wrapped around any person.
  • Wait for a propeller to stop moving before getting back on the boat.
  • Only participate in water sports during the daytime.

Ensure a Boat has Been Properly Maintained

The truth is that boats are high maintenance vessels. If you and your family own a boat or are enjoying time on a friend’s boat, ensure that the vessel has been properly inspected and maintained. If you will be enjoying boating activities or water sports on a rented boat, make sure you only work with accredited businesses with extensive experience handling boats.

Be Mindful of Social Distancing

Boats are not conducive to the social distancing measures necessary to stop the spread of COVID-19. This summer, you should consider only going out on a boat with those who live within your household. Failing to do so could risk you or somebody you love contracting the virus, which is not something you want to experience.


© 2020 by Console and Associates. All rights reserved.

See the Personal Injury law section of the National Law Review for similar topics.

How Outdoor Sports and Recreation Operations Can Legally Protect Themselves in a Post COVID-19 Environment

There is a world history of pandemics that, at one point or another, crippled civilizations or dynasties.  In America’s more recent history, our country has experienced the Spanish Flu (1918 – 1920), the Asian Flu (1957 – 1958), and the H1N1 Swine Flu (2009 – 2010).  Though the Swine Flu is in our society’s most recent memory, the current Coronavirus infection and death numbers have already surpassed the total Swine Flu infection and death numbers.  The Coronavirus (COVID-19) has wreaked havoc on Americans and their interactions with each other because of the rapid rate at which the virus spreads.  Businesses have been impacted due to governmental orders to temporarily close or greatly reduce their services.  But with proper action, the spread of the virus will slow, the economy will rebound, and people will return to the extracurricular activities they enjoy.

As our country presses forward, the Coronavirus will change the way business owners conduct business – including operators in the outdoor sports and recreation business.

On May 5, 2020, North Carolina Governor Roy Cooper signed Executive Order No. 138 (the “Order”), which modifies Executive Order No. 121 (also known as The North Carolina “Stay at Home” Order).  The Order signaled the beginning of Phase 1, effective 5:00 p.m. on May 8, 2020, and the gradual reopening of North Carolina.  On May 20, 2020, Governor Cooper signed Executive Order No. 141, which outlines “Phase 2” of reopening North Carolina and will begin on May 22, 2020, at 5:00 p.m. (also known as the North Carolina “Safer at Home” Order).  The Order removes the distinction between essential and non-essential businesses, which were defined in Executive Order No. 121, thus allowing many businesses originally deemed non-essential to reopen.  Additionally, the Order explicitly provides that outdoor activities are allowed and that day camps and programs for children and teens are permitted to resume if they are able to adhere to certain guidelines and social distancing requirements.  Phase 2 allows for overnight camps for children and teens to resume, also as long as requirements are met.  As North Carolina moves through Phase 1 and into Phase 2, several state parks will reopen to the public.  Phase 2 does not permit Mass Gatherings of more than ten people indoors or more than twenty-five people outdoors nor does it allow for indoor fitness facilities to reopen.  Please click HERE for a summary of what Phase 2 allows and does not allow.

As outdoor sports and recreation businesses prepare to eventually reopen, business owners should evaluate their legal documents to determine if the business is adequately protected in the event of this continuing pandemic or another pandemic.  Two items to consider are the contractual language in event contracts and liability waivers.

Update Contractual Language Regarding Event Cancellation or Postponement

Outdoor sports and recreation businesses that provide services such as race organization, adventure vacations, guided excursions, exhibition management, or outdoor recreation conference organization have been forced to cancel or postpone events if the event was scheduled to take place during one of the many state or local government orders to shut down.

Businesses that plan these events often expend costs associated with the event as the planning progresses.  In light of the Coronavirus, most businesses should revise their contractual language involving event production, especially in cases where there is a “no refund” policy.

If the current contractual language does not address governmental orders related to government-ordered shutdowns, pandemics, or does not contain a force majeure provision, then the contract likely should be revised to include such provisions.

The contractual language that addresses pandemics and governmental orders to shut down can help limit the business’s financial liability in the event of event cancellation or postponement due to a future pandemic or governmental order to shut down.

Update Liability Waivers

Outdoor sports and recreational activities come with inherent risks for participants and sometimes even for event spectators.  When a participant or spectator gets injured during the activity, there is potential liability exposure to the other participants, the event organizers, and the activity providers.  Liability exposure is greatly reduced with a proper liability waiver signed by the participant or agreed to by the spectator before the activity begins.

There are several key components to an effective liability waiver.  One such component is the assumption of risk provision.  This provision identifies (1) the activity at hand, (2) the inherent risks associated with engaging in or observing such activity, and (3) that these risks cannot be eliminated no matter the level of care taken to avoid injury.

In light of the Coronavirus, outdoor sports and recreation business owners should examine the assumption of risk provision in their liability waivers.  They should seek legal guidance in adding language to provide that participants are at risk of coming into contact with certain communicable diseases or viruses similar to COVID-19.  The waiver should also be updated to reflect that participants agree to waive claims arising from injury, illness, or death associated with these assumed risks.

Many runners and tri-athletes are looking eagerly to the day when they will once again be allowed to sign up for and compete in races and events. Others are awaiting the return of guided white-water rafting trips, lazy days floating on a tube down a local river, or visiting an adventure center to challenge themselves on a ropes or zip line course.  Owners of these outdoor sports and recreation operations should use this time to get their documents in order to protect themselves against potential future lost revenue or liability in the event of another pandemic or if a government order to shut down occurs.


© 2020 Ward and Smith, P.A.. All Rights Reserved.

For more on the return of sports, see the National Law Review Entertainment, Art & Sports law section.

Israeli Bank to Pay $30 Million for FIFA Money Laundering Violations

In 2015, the world was shocked by well-documented revelations of widespread corruption and bribery within the Fédération Internationale de Football Association (“FIFA”). At the time, the full extent of the FIFA money laundering scandal was unknown. This month, that 2015 revelation and the subsequent investigation has led to Bank Hapoalim (“BHBM”), an Israeli subsidiary of Swiss bank Hapoalim Ltd. (“HBS”), to pay $30 million of forfeiture and criminal fines.

In an April 30, 2020 press release, Assistant Director in Charge William F. Sweeney of the FBI’s New York Field Office described the difficulty in interrupting and identifying large scale sophisticated financial crimes. “This announcement illustrates another aspect in the spider web of bribery, corruption and backroom deals going on behind the scenes as soccer games were played on the field,” Sweeney said. He further explained that “Bank Hapoalim admits executives looked the other way and allowed illicit activity to continue even when employees discovered the scheme and reported it.”

Chuck Blazer, an “insider” and a former top FIFA official, provided vital evidence relied upon by the United States in securing the indictments that served as a basis for allegations against BHBM. The key to unlocking the FIFA money laundering scandal is the long reach of U.S. anti-bribery and corruption laws, which allow any person, whether a U.S. person or not, to report international financial misconduct. Yesterday, the Department of Justice reported that Bank Hapoalim would forfeit over $20 million and pay nearly $10 million in fines as a penalty for almost five years of financial misconduct.

In 2015, the full extent of the fraud within the inner workings and financial institutions like BHBM and BHS that knowingly enabled these corrupt activities within FIFA remained undisclosed. BHBM’s admission that it conspired to launder money and did facilitate bribes to corrupt FIFA officials, and the resulting $30 million to be paid as a consequence, reinforces the value of whistleblower contributions in concrete terms. This case serves as ample evidence that backroom dealings around the world can be brought to light by brave individuals who are willing to share what they know with authorities.

Whistleblower laws are potent tools available to individuals regardless of nationality or citizenship. They also provide substantial monetary rewards. When information leads to a recovery, the whistleblower is entitled to a financial award of 10%-30% of the total recovery. Another critical component of the U.S. anti-fraud program is that whistleblowers can anonymously provide information and still recover the reward. In this case, a whistleblower could have a claim for almost $10 million of the funds paid by BHBM. Due to the strict rules regarding anonymity, the world may never know whether such a claim is paid. However, the possibility of such a significant award serves as an effective incentive to other potential insiders contemplating blowing the whistle on misconduct.


Copyright Kohn, Kohn & Colapinto, LLP 2020. All Rights Reserved.

For more on similar topics, see the National Law Review Criminal Law & Business Crimes section.