Wednesday, April 25, 2012

The Value Of A Student-Athlete's Jersey

LaMichael James has been a college football star at the University of Oregon, and will be drafted pretty high in this week's NFL draft. The University of Oregon is doing spring cleaning this week. What do these two things have in common?

The University of Oregon has a lot of excess football gear in storage that it is trying to get rid of. This makes perfect sense since the UO football team wears an assortment of jerseys, pants, helmets, socks and shoes in different color and style combinations. Images displaying a wide assortment of the "can't figure out what to wear" team is located here. So, with all of this stylish apparel, is it any wonder that the team needs to clear out its cupboards of old gear so as to make room for this fall's new fashions? Of course not. Who wouldn't?

So, the University of Oregon is auctioning off the jerseys and other equipment worn by players, including well-known NFL draft-eligible players such as LaMichael James. The gear auction is happening now at Some of the LaMichael James gear is commanding an auction price in excess of $600. And we know that the gear was genuinely worn by these famous players because the website says so. The gear is Oregon authentic!

All of which caused LaMichael James to go onto Twitter recently and inquiry "How much do I get?" Good question. Most likely, NOTHING.

Most states in the U.S. have some form of right of publicity law that protects a person's image and persona from commercial appropriation by third parties. The states of California and Washington, each bordering Oregon to the south and north, have right of publicity laws. But not Oregon. Nope. Oregon is one state that does not recognize a person's right of publicity. A person who wants to protect their image or persona from crass commercial appropriation by another without permission is basically out of luck in Oregon. If LaMichael James played football at a school in California or Washington -- heaven forbid! -- he would certainly have the ability to call up the athletic department and request his cut of the proceeds from the auction of his worn and valuable jersey. But because he played in Oregon, and because the appropriation of his persona is occurring in Eugene and not in Seattle or LA, he gets nothing.

Let's be clear. The reason the UO athletic department is holding an auction of LaMichael James' jersey, together with the gear of a lot of other well-known players, is because these worn jerseys represent a gold mine to the school. These worn jerseys have no inherent value beyond the reasonable value that any used apparel might bring in a thrift store. But because these jerseys were worn by well-known college football stars, there is extra value to be gained. These jerseys were sweat stained. They were put on, tugged at, yanked, tackled, rolled on the turf and otherwise abused during the course of athletic play by college football stars. The public is offering to pay extra for this gear because of the star-association with these players.

So, the UO athletic department may end up pocketing hundreds of extra dollars for each auctioned item rather than the lower mark-up that it usually gets from retail sales of new gear. The extra margin exists because of the player. The skill and renown of the player created this extra value. These players, such as LaMichael James, paid their dues to the school, left the school and its football program, and are now free citizens who should have the ability to control their fame, their name, their persona and their innate value.

But not in Oregon.

Friday, April 20, 2012

A Grand Dame at 100

A ball park constructed on cheap land in a backwater area of Boston has become over the past 100 years a national treasure. Boston's Fenway Park hosted its first professional baseball game on this date 100 years ago: April 20, 1912. Then, the Boston Red Sox beat the New York Highlanders (later renamed the Yankees) 7 - 6 in 11 innings.

There aren't many things that survive and remain useful for 100 years. Many large, modern ballparks have been constructed in other towns that are sterile and uninspired (e.g., the old Riverfront Stadium in Cincinnati and the ugly Kingdome in Seattle, now each thankfully torn down and replaced). Many recent parks have gone for the retro look (Baltimore's Camden Yards started this trend twenty years ago). But Fenway doesn't need the retro look -- it is retro! Indeed, its foul lines are now too short, its seating capacity provides a challenge for last minute ticket buyers and parking stinks. But it's a good thing to appreciate oldness. Not everything old needs to be destroyed and rebuilt. Sometimes old things, like the U.S. Constitution, stand the test of time.

Wednesday, April 18, 2012

A Second Bite Of The Patent Apple

The Supreme Court ruled today that inventors whose patent applications are denied by the PTO, and by its Board of Patent Appeals and Interferences, can either appeal the denial to the Federal Circuit or can institute a new civil action in the district court against the PTO Director. In Kappos v. Hyatt, the Supreme Court expressly permits a do-over by allowing a patent applicant to present new evidence in a district court proceeding, and requiring the district court to review all evidence de novo.

For these reasons, we conclude that there are no limitations on a patent applicant’s ability to introduce new evidence in a §145 proceeding beyond those already present in the Federal Rules of Evidence and the Federal Rules of Civil Procedure. Moreover, if new evidence is presented on a disputed question of fact, the district court must make de novo factual findings that take account of both the new evidence and the administrative record before the PTO.

The basis of today's Supreme Court decision is §145 of the Patent Act, permitting a patent applicant who is refused a patent registration by the Board of Patent Appeals and Inferences to either appeal the administrative denial to the Federal Circuit or to maintain a new action against the PTO Director.

35 U.S.C. 145 Civil action to obtain patent.
An applicant dissatisfied with the decision of the Board of Patent Appeals and Interferences in an appeal under section 134(a) of this title may, unless appeal has been taken to the United States Court of Appeals for the Federal Circuit, have remedy by civil action against the Director in the United States District Court for the District of Columbia if commenced within such time after such decision, not less than sixty days, as the Director appoints. The court may adjudge that such applicant is entitled to receive a patent for his invention, as specified in any of his claims involved in the decision of the Board of Patent Appeals and Interferences, as the facts in the case may appear, and such adjudication shall authorize the Director to issue such patent on compliance with the requirements of law. All the expenses of the proceedings shall be paid by the applicant.

This opportunity to retry in district court a case, with new evidence and de novo review, is certainly rare. But today's decision may open the litigation floodgates for inventors whose patent applications are denied by the PTO administrative process. That is, rather than appeal directly to the Federal Circuit -- which is not permitted to receive new evidence or to evaluate the record de novo -- the inventor can now bring a new proceeding with new evidence, obtain independent and de novo review, and thereafter seek appellate review with the Federal Circuit based on the new evidence and new argument. In effect, the administrative proceeding before the PTO will become mere trial preparation for the more significant district court case.

Wednesday, April 11, 2012

Misuse Of Your Employer's Computer System Is Not A Crime In The U.S. West Coast

The Ninth Circuit has confirmed what many employees have understood for a long time: while it may be beyond inappropriate for an employee to use access to a workplace computer in a way that misuses the employer’s confidential data, it is not a crime.

In my post from May 2, 2011, and again on December 27, 2011, I discussed the Ninth Circuit's criminal case of U.S. v. Nosal. The Justice Department accused Mr. Nosal under the Computer Fraud and Abuse Act (CFAA) of aiding and abetting the criminal misuse of his employer’s computer.

Nosal’s conduct was absolutely outrageous, assuming the allegations against him are correct. The Ninth Circuit explains:

David Nosal used to work for Korn/Ferry, an executive search film. Shortly after he left the company, he convinced some of his former colleagues who were still working for Korn/Ferry to help him start a competing business. The employees used their log-in credentials to download source lists, names and contact information from a confidential database on the company's computer, and then transferred that information to Nosal. The employees were authorized to access the database, but Korn/Ferry had a policy that forbade disclosing confidential information. The government indicted Nosal on twenty counts, including trade secret theft, mail fraud, conspiracy and violations of the CFAA, The CFAA counts charged Nosal with violations of 18 U.S.C. §1030(a)(4) for aiding and abetting the Korn/Ferry employees in “exceed[ing their] authorized access” with intent to defraud.

The Ninth Circuit wrestled with the question whether the CFAA criminalizes the conduct of an employee who is not a hacker but merely misuses employer data. The Court determined that Congress intended the CFAA to prevent hacking – the unauthorized access to a computer system – and that the CFAA does not address the unauthorized use of data taken from a properly accessed computer system.

Minds have wandered since the beginning of time and the computer gives employees new ways to procrastinate, by g-chatting with friends, playing games, shopping or watching sports highlights. Such activities are routinely prohibited by many computer-use policies, although employees are seldom disciplined for occasional use of work computers for personal purposes. Nevertheless, under the broad interpretation of the CFAA, such minor dalliances would become federal crimes. While it is unlikely that you’ll be prosecuted for watching Reason.TV on work computer, you could be. Employers wanting to rid themselves of troublesome employees without following proper procedures could threaten to report them to the FBI unless they quit. Ubiquitous, seldom-prosecuted crimes invite arbitrary and discriminatory enforcement.

This decision of the Ninth Circuit is in line and consistent with similar interpretations of the CFAA from several district courts in New York, Arizona, Georgia and Maryland. However, the Eleventh Circuit, the Fifth Circuit and the Seventh Circuit have seen things differently, extending the criminal reach of the CFAA to use restrictions, even when hacking is not involved.

Should most people care about how the CFAA is interpreted and applied? Is this a real problem, really?

For example, it's not widely known that, up until very recently, Google forbade minors from using its services. See Google Terms of Service, effective April 16, 2007—March 1, 2012. §2.3, (“You may not use the Services and may not accept the Terms if … you are not of legal age to form a binding contract with Google …”) (last visited Mar. 4, 2012). Adopting the government’s interpretation would turn vast numbers of teens and pre-teens into juvenile delinquents—and their parents and teachers into delinquency contributors. Similarly, Facebook makes it a violation of the terms of service to let anyone log into your account. See Facebook Statement of Rights and Responsibilities § 4.8 (“You will not share your password, … let anyone else access your account, or do anything else that might jeopardize the security of your account.”) (last visited Mar. 4, 2012). Yet it’s very common for people to let close friends and relatives check their email or access their online accounts. Some may be aware that, if discovered, they may stiffer a rebuke from the ISP or a loss of access, but few imagine they might be marched off to federal prison for doing so.
Note to the world: any comments to this post must only contain nice thoughts.

Thursday, April 5, 2012

Justice Kennedy: Say It Ain't So

This blog deals with intellectual property and not the present legal issues relating to Obamacare, nor the limits of Congressional power under the Commerce Clause. And so, to comment on last week's oral argument at the Supreme Court regarding Obamacare, the following tie-in with the U.S. Copyright Act is offered.

Focusing on the one justice who may end up writing the majority opinion, Justice Kennedy made the following comment:

"And here the government is saying that the Federal Government has a duty to tell the individual citizen that it must act, and that is different from what we have in previous cases and that changes the relationship of the Federal Government to the individual in the very fundamental way."

Examples have been provided recently of instances in which the U.S. government requires citizens to act, or risk adverse consequences. It has been pointed out that citizens are required to contribute to Social Security and Medicare even if they don't elect to do so. It's mandatory.

So, here is the IP tie-in that may help Justice Kennedy understand that his observation is not rationally based. The U.S. Copyright Act, at Section 407, requires that all copyright owners shall deliver -- free of charge -- to the Library of Congress two best copies of a published work within three months of publication, or risk paying a fine. This obligation to donate two copies of a work applies whether or not the copyright owner seeks to register the copyright. This obligation applies to everyone who owns a work published in the U.S. The purpose of this "donation" requirement, of course, is to assist the Library of Congress in developing its collection. 

Congress certainly has no problem requiring a tribute of two free copies of a work for its library -- with no quid pro quo to its citizens, other than a nicely developed federal library. And no one has previously expressed the view, as best as can be determined, that this donation requirement fundamentally changes a citizen's relationship with government. 

Justice Kennedy, as you think through the issue of Obamacare, the Commerce Clause, and the power of Congress, reflect that there are many onerous obligations to act imposed on citizens by government, but ultimately Congress gets to decide if these are publicly beneficial.