Listen to this post

Meta Platforms (parent company of Facebook) and OpenAI (creator of ChatGPT) have individually filed a Motion to Dismiss the class-action lawsuit filed by comedian Sarah Silverman and authors Richard Kadrey and Christopher Golden for alleged copyright infringement. These lawsuits highlight the potential legal consequences industry leading AI technologies will begin to face as these technologies become more mainstream. Both Meta and OpenAI moved to dismiss all claims except the direct infringement claim, as the companies plan to contest this claim later as a matter of law.

Meta and OpenAI moved to dismiss the authors’ claims alleging vicarious copyright infringement, violation of the Digital Millennium Copyright Act (DMCA), unfair competition, negligence, and unjust enrichment “so that [this case does] not proceed to discovery and beyond with legally infirm theories of liability.” OpenAI claimed that the authors “misconceive the scope of copyright, failing to take into account the limitations and exceptions (including fair use) that properly leave room for innovations like the large language models now at the forefront of artificial intelligence.”

OpenAI argued that the purpose of copyright law is “to promote the Progress of Science and useful Arts” by protecting an author’s expression of their ideas but “not the underlying idea itself, facts embodied within the author’s articulated message, or other building blocks of creative”, which are arguably the elements of authors’ works that would be useful to OpenAI’s ChatGPT training model. According to OpenAI, Silverman’s attempt to convince the court that every ChatGPT output represents a derivative work, “regardless of whether there are any similarities between the output and the training works” is an “erroneous legal conclusion.” 

While both Meta and OpenAI stated that their use of the books when training their respective AI programs was of “quintessential fair use,” it appears the parties plan to address the question of fair use more thoroughly at a later date, with a more complete record. As predicted, OpenAI cited the 2nd Circuit Court’s decision in Authors Guild v. Google and reminded the court that “while an author may register a copyright in [its] book, the ‘statistical information’ pertaining to ‘word frequencies, syntactic patterns, and thematic markers’ in that book are beyond the scope of copyright protection.” OpenAI stated that “[u]nder the resulting judicial precedent, it is not an infringement to create ‘wholesale cop[ies] of [a work] as a preliminary step to develop a new, non-infringing product, even if the new product competes with the original.” Because fair use is an affirmative defense (to be proven by the defendant), Meta and OpenAI will likely explore this issue further at a later stage of the case.

As this case continues to develop, the court will have to address the fast-paced innovation in the artificial intelligence space and decide how it will address potentially novel intellectual property ownership issues. If Meta and Open AI succeed in their dismissal of the majority of the authors’ claims, the only thing left for the court to decide would be whether their training models directly infringe the authors’ respective copyrights under the law. The authors are unlikely to give up without a fight, as it is their opinion that generative AI represents a copy of “human intelligence” that has been “repackaged and divorced from its creators.”

Listen to this post

In just over two years since the inception of college Name, Image, and Likeness (NIL) rights, a groundbreaking lawsuit has emerged, alleging a violation of Florida’s NIL laws. On September 1, 2023, Gervon Dexter Sr., a former University of Florida Gator and current Chicago Bear, filed a lawsuit aimed at invalidating an NIL contract that he signed during his junior year at the University of Florida. The contract in question exemplifies the very concerns that advocates for increased oversight and regulation in the NIL landscape have been cautioning against. 

Dexter’s lawsuit, brought in the Northern District of Florida, seeks to void his NIL agreement with Delaware-based entity Big League Advance Fund II, LP (BLA). His claims revolve around the contract’s alleged violations of Florida’s Athlete Agent Act and NIL law. Under the terms of the agreement, BLA pledged to pay Dexter $436,485 for the use of his NIL during an “initial term” and an “extended term.” The initial term commenced upon contract signing and concluded with Dexter’s ineligibility under NCAA rules. In contrast, the extended term started after his NCAA eligibility ended and spanned an astonishing 25 years. During this extended period, Dexter was obligated to allocate 15% of his pre-taxed NFL earnings to BLA. Notably, Dexter signed this contract in May 2022, ahead of his junior collegiate season and declared for the NFL Draft in December 2022. Dexter was subsequently drafted by the Chicago Bears in the second round of the April 2023 NFL Draft. Dexter signed a four-year contract worth $6,723,732 with the Bears on June 16, 2023, that included a $1,889,983 signing bonus. As such, Dexter would potentially owe BLA over $1 million from his initial four-year deal alone. 

BLA was founded seven years ago, with a business model focused on “investing” in athletes by providing upfront lump sum payments in exchange for potential future earnings. In the beginning, BLA was primarily focused on Minor League Baseball players who received immediate lump sums in exchange for a percentage of their future earnings. With the inception of college NIL, BLA has expanded its business model to include college athletes. Essentially, BLA gives college athletes a chunk of money upfront in exchange for a piece of their future earnings, and they get to keep the upfront cash even if they don’t make it big in professional sports. According to BLA’s website, “BLA is not a bank that you need to pay back.  The capital players receive from BLA is not a loan.” Notably, Dexter is not the only college athlete to ink an NIL deal with BLA.  Former Georgia defensive standout and first-round pick Nolan Smith purportedly also signed an NIL deal with BLA.

Dexter’s lawsuit contends that the NIL agreement is invalid for multiple reasons. First, he argues that the extended term violates Florida’s NIL law because it extends beyond his period of student-athlete eligibility. Florida’s NIL law explicitly prohibits NIL contracts from extending beyond a student-athlete’s participation in an athletic program at a postsecondary educational institution: 

The duration of a contract for representation of an intercollegiate athlete or compensation for the use of an intercollegiate athlete’s name, image, or likeness may not extend beyond her or his participation in an athletic program at a postsecondary educational institution. Fla. St. § 1006.74(2)(j).

Moreover, Dexter alleges that the agents representing BLA were not licensed as agents in the state of Florida, thus rendering the agreement in violation of Florida’s Athlete Agent Act. Dexter’s argument hinges on the assertion that the contract authorized BLA to represent him in marketing his athletic ability and reputation, effectively constituting an agent contract. Furthermore, he contends that since the extended term surpassed his student-athlete eligibility, the agreement should have included the conspicuous notice mandated by Florida’s Athlete Agent Act.  Pursuant to Florida law, an agent contract must include a boldface type, capital letters notice in close proximity to the student athlete’s signature stating:





Fla. St. § 468.454(3). 

Additionally, Dexter contends that BLA, failed to provide the University of Florida’s athletic director notice of the agreement, in violation of Florida law.  Pursuant to Florida’s Athlete Agent Act, within 72 hours of entering into an agent contract, “the athlete agent must give notice in a record of the existence of the contract to the athletic director of the educational institution at which the student athlete is enrolled.”  Fla. St. §468.454(6). 

The Dexter NIL contract serves as a stark warning to those navigating the complex NIL landscape, underscoring the importance of prioritizing student-athletes’ best interests. It also highlights the crucial need for student-athlete education and resources to help them navigate the intricate world of NIL agreements. Notably, neither BLA nor Dexter informed the University of Florida about the existence of the agreement, raising questions about whether the university’s involvement could have prevented its approval. Whether or not Dexter succeeds in having his contract voided, the lawsuit underscores the critical importance of implementing at least some measure of regulations, whether at the state or federal level, to safeguard student-athletes from entering contracts without a full understanding of the implications.

Listen to this post

The U.S. District Court for the District of Columbia recently found that human prompting of AI-generated works does not satisfy the “authorship” requirement for copyright protection. Under the Copyright Act of 1976, copyright protection attaches “immediately” upon the creation of “original works of authorship fixed in any tangible medium of expression,” provided those works meet certain requirements. Human authorship is one such requirement. In order to sure up protection, a copyright claimant can register their work with the Register of Copyrights. Through this process, the Register will confirm that the work is indeed eligible for copyright protection and ultimately — assuming the work is copyrightable — issue a certificate of registration. However, where the Register denies an application for registration for lack of copyrightable subject matter, the work at issue was never subject to copyright protection at all.

The district court considered whether the Copyright Office was correct in denying Stephen Thaler’s copyright application for a piece of art generated by a computer system he owns — the Creativity Machine. The district court found that “the Copyright Office acted properly in denying copyright registration for a work created absent any human involvement.”

In Thaler’s original application, “he identified the author as the Creativity Machine, and explained the work had been ‘autonomously created by a computer algorithm running on a machine,’ but that plaintiff sought to claim the copyright of the ‘computer-generated work’ himself ‘as a work-for-hire to the owner of the Creativity Machine.’” In its most basic sense, work made for hire is work that “the employer or other person for whom the work was prepared is considered the author for purposes of this title . . . [and] owns all of the rights comprised in the copyright” (17 U.S.C. § 201). Neither the Copyright Office nor the district court were persuaded by Thaler’s argument.

The district court ultimately decided that the “single legal question presented… is whether a work generated autonomously by a computer falls under the protection of copyright law upon its creation.” The district court acknowledged that copyright is designed to adapt with the times but that there “has been a consistent understanding that human creativity is the sine qua non at the core of copyrightability, even as that human creativity is channeled through new tools or into new media.” Further, “[h]uman involvement in, and ultimate creative control over, the work . . . [is] key to the conclusion that [a] new type of work [falls] within the bounds of copyright.” The district court acknowledged that it is dealing with “new frontiers in copyright as artists put AI in their toolbox…” but was unwilling, at least for now, to relax the 1976 Copyright Act’s human authorship requirement.

 This decision does not act as a complete ban on any and all AI-generated work. The district court was instead more nuanced in its decision, finding that “the Copyright Office acted properly in denying copyright registration for a work created absent any human involvement.” This leaves open the question of just how much human involvement is necessary for a work to qualify for copyright protection. Bradley will continue to stay abreast of these development as the courts begin to address this question, among others.

Listen to this post

A trio of senators have joined the list of federal lawmakers circulating drafts of federal college name, image, and likeness (NIL) bills. This time, Sens. Richard Blumenthal (D-CT), Jerry Moran (R-KS), and Cory Booker (D-NJ) are joining across party lines to create the College Athlete Protection and Compensation Act. We’ll refer to it as the “CAPC Act” (mainly because nobody wants to read “College Athlete Protection and Compensation Act” over and over). As discussed in previous posts, NIL rules and laws are currently a unique blend of NCAA rules and varying state laws, which many within the NCAA and college athletics believe to be problematic. While not the first federal NIL bill released or introduced this legislative session, and likely not the last, the CAPC Act signals some bipartisan support for federally standardized NIL regulation.

The CAPC Act formalizes federal NIL rights, establishes an NIL clearinghouse, and offers protections for student-athlete scholarships and medical expenses. The bill broadly prohibits schools, conferences, and athletic associations from punishing or prohibiting a student-athlete from earning money from the use of their NIL. Uniquely, the bill would allow schools to prohibit college athletes from entering NIL contracts that are contradictory to the school’s code of conduct or for moral reasons. As with all NIL-related rules and laws, the bill also contains a restriction on pay-for-play NIL deals by prohibiting NIL compensation from being used as an inducement for recruits or retention of current players.

Under the CAPC Act, schools cannot engage in representing college athletes in endorsement contracts, regulate their representation, certify individuals for such representation, or influence the choice of representation for college athletes. However, schools may allow third parties to use the school’s intellectual property in endorsement contracts, but the school must not be involved in determining the amount of compensation provided to the college athlete.

Similar to the other federal bill drafts, the CAPC Act also contains a reporting requirement. College athletes would be required to provide a copy of each endorsement contract to the school within seven days after entering the contract. Additionally, recruits would be required to provide all current and expired NIL contracts to a school before signing a letter of intent with that school. The contents of the disclosed NIL contracts and financial information provided to the schools would not be subject to public disclosure or open-records laws. However, in an attempt to provide transparency regarding the NIL value of student-athletes, schools would be required to submit annual reports of NIL deals, including information about average and total value, which would then be used for a national public database.

The bill also contains several provisions aimed at protecting college athletes from potentially exploitative or unfair NIL deals or agent representation. For example, college athletes who are no longer participating in college athletic competitions would be able to cancel NIL contracts with more than one year remaining without liability for breach and without returning previously earned payments.

In addition, the bill establishes the College Athletics Corporation (CAC), which would serve as a clearinghouse for NIL contracts and provide guidance to safeguard the interests of student-athletes. The CAC would be responsible for enforcing rules, investigating violations, certifying agents, and certifying endorsement contracts for college athletes. As proposed, the CAC would be comprised of 15 voting members, including current and former college athletes, school representatives, NCAA representatives, athletic conference administrators, and professionals with expertise in sports marketing, contracting, and public relations.

The CAC would have express authority to establish rules and investigatory processes to enforce the CAPC Act. It would also be authorized to bring actions to enforce the CAPC Act with respect to agents, schools, conferences, and the NCAA for violations of the act or CAC rules. The NCAA would be granted authority to enforce the CAPC Act and the standards established by the CAC. This includes the power to declare college athletes ineligible, withhold one or more revenue distributions from schools that breach NIL rules, and suspend or remove from involvement any athletic personnel who violate the NIL regulations. Notably, the CAC would also have subpoena power enabling it to gather necessary evidence, conduct investigations, and take appropriate actions against entities or individuals that may have violated the act or its established rules and standards. The ability to subpoena documents and testimony could have significant implications on the CAC’s ability to enforce NIL rules, especially in contrast to the current status quo where, to date, the NCAA has only issued one NIL infraction-related ruling.

Additionally, the bill would expressly preempt state NIL laws. One noticeable absence in the bill is any provision regarding the employee status of student-athletes, an issue that is currently before the U.S. Court of Appeals for the Third Circuit and the subject of a National Labor Relations Board complaint in California.

The bill does contain several non-NIL related provisions. For example, under the bill, schools would be required to honor scholarships of college athletes until they complete their undergraduate degree. Former college athletes who had received scholarships while enrolled but did not complete their undergraduate degree due to pursuing a career in professional sports would continue to receive grants-in-aid to cover tuition, books, and fees. However, schools would still be able to revoke scholarships for reasons such as transferring to another school or not meeting academic or conduct standards. Additionally, the bill would permit college athletes to enter a professional sports draft and retain eligibility if they do not receive compensation from a professional sports league, team, or agent and declare their intent to resume college athletic competition within seven days after the draft’s completion. The bill would require schools making in excess of $20 million in athletic revenue to cover medical expenses for student-athletes for at least two years after their final competition. And schools making $50 million or more would be required to cover medical expenses for student-athletes for at least four years after their final competition. The bill would also require the CAC to establish a medical trust fund for college athletes, and schools making $50 million or more in athletic revenue would be required to contribute to the fund annually. The purpose of this trust fund is to provide financial support and coverage for medical expenses related to injuries and health conditions incurred during the student-athlete’s participation in intercollegiate athletics.

For the CAPC Act to have a chance of being passed during this legislative session, it must be introduced soon. With an upcoming election cycle on the horizon, the prospects for the bill to make significant progress in the coming years are slim. However, the approach to standardizing NIL regulations without making sweeping changes and bipartisan support may improve the chances for this bill as compared to other federal NIL bills that have been circulating. In particular, as an increasing number of state laws continue to lift NIL restrictions, the pressure on the NCAA to establish national NIL standards is mounting. Thus, the attempt to address the issue of varying NIL rules and laws across states could position the CAPC Act as a potential solution to the ongoing debate surrounding college athlete compensation. As the discussions evolve, it will be crucial for lawmakers, the NCAA, and other stakeholders to work together to find a balanced and fair resolution that benefits college athletes while also addressing the concerns of educational institutions and the broader sports community.

Listen to this post

Comedian Sarah Silverman and authors Richard Kadrey and Christopher Golden recently filed class-action lawsuits against Meta Platforms (parent company of Facebook) and ChatGPT maker OpenAI (backed by Microsoft Corp.) for allegedly using their copyrighted content without authorization to train artificial intelligence (AI) language models. Meta and OpenAI’s AI language models, known as large language models, aim to replicate human conversation and automate tasks. The lawsuits, filed in San Francisco federal court, highlight the legal challenges faced by developers of chat bots who rely on copyrighted material to create realistic responses.

Silverman, Kadrey, and Golden allege that Meta and OpenAI used copies of the authors’ books without their permission by copying illegal online “shadow libraries” that contain the texts of thousands of books. Specifically, the lawsuit against Meta cites the company’s own research paper “LLaMA: Open and Efficient Foundation Language Models” published in February 2023, which explains the large-language model Meta uses to train its chatbots. This paper outlines the dataset used by Meta, which the authors allege demonstrate that “the copyrighted materials were copied and ingested as part of training,” because “many of the plaintiffs’ books appear in the dataset that Meta admitted to using.” In the suit against OpenAI, the authors allege that summaries of the plaintiffs’ work generated by ChatGPT demonstrate that the bot was trained on their copyrighted content. In fact, a summary of Silverman’s memoir “The Bedwetter” composed by ChatGPT was provided as an exhibit to the complaint. The plaintiffs are seeking awards for damages and injunctive relief on behalf of a nationwide class of copyright owners whose works were allegedly infringed upon.

One hurdle plaintiffs may struggle to overcome is the 2nd Circuit Court’s decision in Authors Guild v. Google. Authors Guild was a copyright case concerning fair use in copyright law and the transformation of printed copyrighted books into an online searchable database through scanning and digitization. Under the fair use doctrine of the U.S. copyright statute, it is permissible to use limited portions of a work including quotes, for purposes such as commentary, criticism, news reporting, and scholarly reports. The court found that “Google’s unauthorized digitizing of copyright-protected works, creation of a search functionality, and display of snippets from those works are non-infringing fair uses. The purpose of the copying is highly transformative, the public display of text is limited, and the revelations do not provide a significant market substitute for the protected aspects of the originals. Google’s commercial nature and profit motivation do not justify denial of fair use.” While not dispositive, this case addresses the issue of the fair use defense in a context similar to that at issue here, and the court may find fair use by Meta and OpenAI.

These lawsuits highlight the potential legal consequences faced by developers who utilize copyrighted material without proper authorization. Attorneys for plaintiffs assert that “much of the material in the training datasets used by OpenAI and Meta comes from copyrighted works — including books written by plaintiffs — that were copied by OpenAI and Meta without consent, without credit, and without compensation.” These lawsuits are not only intended to assert the plaintiffs’ rights in their copyrighted material, but also have the potential to begin the process of defining the appropriate boundaries for artificial intelligence and what role copyright laws will play in the continued development of AI.

Listen to this post

Earlier this month, prominent figures in the realm of college sports gathered on Capitol Hill to advocate for federal name, image, and likeness (NIL) legislation. Currently, one NIL bill has been introduced in the House, and there are multiple other draft bills circulating in both the House and Senate. For example, as previously discussed, one of the House draft bills proposes the establishment of a new regulatory agency to oversee college NIL activities. On the Senate side, Sens. Tommy Tuberville and Joe Manchin have drafted a bill that sheds light on the potential federal NIL rules. The draft Senate bill grants the NCAA greater authority in managing NIL instead of creating a new regulatory body.

While the draft Senate bill encompasses numerous changes, there are several key provisions that could significantly impact the NIL landscape. According to the draft bill, college athletes would be prohibited from entering into NIL deals until they are enrolled at the school and have completed at least one semester of coursework. Additionally, the draft bill introduces a reporting requirement for college athlete NIL deals. Under this provision, college athletes must disclose their contracts to their schools within 30 days of entering into an NIL agreement, including compensation amounts, contract duration, and other details.

The draft also proposes the creation of a trust funded by revenue-generating, college-level tournaments, such as the College Football Playoff and NCAA basketball tournament. This trust would cover travel expenses for athletes’ immediate family members and out-of-pocket medical costs related to injuries sustained during college sports. Managed by the NCAA, the trust would provide coverage for athletes for eight years after their eligibility expires or until they turn 28.

Regarding enforcement under the draft Senate bill, the responsibility primarily falls on the NCAA, which would investigate and ensure compliance. Certain NIL violations would be treated as unfair and deceptive acts under the Federal Trade Commission Act. The NCAA would possess the authority to investigate, audit, and impose penalties, including the revocation of licenses for participation in NIL. Additionally, the NCAA could refer violations to the FTC for further action. Failure by the NCAA to fulfill its obligations under the bill could result in the revocation of its tax-exempt status. Notably, the draft does not expressly categorize college athletes as students rather than employees. The issue of employment status for college athletes has become a highly debated topic, with California being at the forefront of the discussion.

It is important to note that the draft bill is not final and may undergo changes based on feedback from college leaders and other stakeholders. The true impact of this draft in comparison to previous lobbying efforts and other NIL bills remains uncertain, as none of the previous bills have reached full committee debate.

While the NCAA and college leaders continue to push Congress for a federal NIL bill, states are taking matters into their own hands by amending their own NIL laws to gain a competitive edge. Legislatures in Arkansas, Colorado, Missouri, Montana, New York, Texas, and Oklahoma have recently introduced or passed bills that aim to prevent the NCAA and conferences from investigating or penalizing schools for NIL rule violations. It is worth highlighting, that the Texas NIL bill was signed into law on June 10, 2023, and will go into effect on July 1. Given Texas’s influence, other states are likely to take steps to align their own NIL laws with Texas’s provisions, if they have not already done so. As the saying goes, everything is bigger in Texas, and its NIL law will likely have a domino effect on the actions of other states.

Most recently, New York passed an NIL bill that currently awaits the governor’s signature. The New York bill closely resembles the NIL bills passed in Oklahoma and Texas. It includes a provision that is becoming more common in state legislation, which the NCAA aims to quash with the enactment of a federal NIL law. Specifically, the New York bill states that athletic associations, conferences, or other entities with authority over intercollegiate athletics, including the NCAA, cannot hinder a college’s participation in intercollegiate athletics based on a student-athlete’s ability to earn compensation from the use of their name, image, or likeness. Moreover, they cannot take adverse actions against colleges for engaging in protected activities or for involvement in a student-athlete’s NIL. The bill also prevents penalization or prevention of a college’s participation in intercollegiate athletics due to violations of collegiate athletic association rules or regulations regarding a student-athlete’s NIL by individuals or entities supporting or benefiting the college or its athletic programs.

The competition within the NIL landscape is expected to intensify as more states pass their own laws and amendments, while the NCAA continues its pursuit for a federal bill. However, the prospects for a comprehensive federal NIL law gaining sufficient support in the current legislative climate remain uncertain. As the landscape evolves, college sports stakeholders will need to navigate through a complex web of state regulations and closely monitor the progress of any proposed federal legislation.

Listen to this post

Can you still have noncompete agreements with your employees? What if you explicitly state that the agreement protects trade secrets or other proprietary information? There has been a lot of buzz about this issue, and recently the general counsel of the National Labor Relations Board joined the conversation with a memorandum, GC 23-08, opining that noncompete and non-solicitation agreements violate the National Labor Relations Act. This continues a recent trend of government activity focused on noncompete and non-solicitation agreements. For more information on prior actions by the Federal Trade Commission (FTC) and other entities, please see Bradley’s prior coverage here.

This guidance is not a surprise. The NLRB’s General Counsel Jennifer Abruzzo previewed this position back in March, when she published GC 23-05 seeking to clarify the board’s decision in McLaren Macomb, which held that overly broad confidentiality and non-disparagement provisions violate the NLRA. At the end of GC 23-05, she noted that “non-compete clauses; no solicitation clauses; no poaching clauses” and other provisions in separation agreements interfere with employees’ exercise of rights provided under Section 7 of the NLRA. (This and other general counsel memorandums can be found here.) It is an unfair labor practice, in violation of Section 8 of the NLRA, “to interfere with, restrain, or coerce employees in the exercise of the rights” guaranteed in Section 7.

Is the Protection of Trade Secrets a “Legitimate Interest[]” That May Support Restrictive Covenant Obligations?

According to the general counsel, the (1) offer, (2) maintenance, and/or (3) enforcement of restrictive covenant obligations each constitute an unlawful labor practice under the NLRA unless they are “narrowly tailored to special circumstances justifying the infringement on employee rights.” 

While state laws certainly differ, many states permit individuals and entities in employment and other relationships to enter into mutually beneficial restrictive covenant agreements. These agreements can support a host of legitimate business interests. For example, a Georgia statute identifies various legitimate business interests, including, but expressly not limited to, (1) the protection of trade secrets; (2) the protection of valuable confidential information; (3) relationships with specific prospective or existing customers, patients, vendors, or clients; (4) customer, patient, or client good will associated with ongoing business practices, trade names, trademarks, service marks, or trade dress, specific geographic locations, specific marketing or trade areas; or (5) specialized training. The Alabama Code has a similar list of protectable interests.

The general counsel’s memorandum challenges what legitimate business interests might constitute sufficient “special circumstances” to justify post-employment restrictions. According to the general counsel, the mere desire to avoid competition is not a legitimate business interest, nor are “interests in retaining employees or protecting special investments in training employees” if there are less restrictive means to protect such interests. The general counsel seems to acknowledge that “protecting proprietary or trade secret information” is a legitimate business interest associated with restrictive covenant agreements but argues that they can be protected with certain unspecified “narrowly tailored workplace agreements that protect those interests.” Finally, the general counsel argues that an employer would be “unlikely” to establish a sufficient business interest if the provisions are imposed on “low-wage or middle-wage workers who lack access to trade secrets or other protectible interests, or in states where non-compete provisions are unenforceable.” The latter reference could be an indication that the NLRB might take the position that a provision that is made enforceable only through “blue penciling” a restrictive covenant agreement violates the NLRA.

Some states also require, and some businesses voluntarily offer, additional compensation or other consideration (including equity interests) in connection with entering into restrictive covenant agreements. The general counsel’s memorandum does not address this issue. Also, supervisors and owners are not protected by the NLRA, so restrictive covenant agreements with management employees and owners may be unaffected by this guidance. But be careful: The general counsel’s recent memorandum regarding McLaren Macomb (23-05) suggests that there may be retaliation circumstances where a supervisor would be protected. Accordingly, the NLRB might investigate or challenge restrictions in separation agreements or agreements executed after an individual is hired, even with supervisors.

Interagency Cooperation and Potential Damages Even Without Employer Enforcement

The memorandum recommends that investigators submit to the NLRB’s Division of Advice on any agreements “that are arguably unlawful under the analysis summarized herein” and seek make-whole relief for employees who miss out on employment opportunities “even absent additional conduct by the employer to enforce the provision.” So, even if you don’t seek to enforce the restrictive covenant, the NLRB may pursue this issue. The memorandum advises investigators to “seek evidence of the impact” of certain restrictions on employees to determine whether certain relief should be offered.

The general counsel also reiterated her commitment to interagency collaboration on workplace mobility issues, citing the memorandum of understanding that the NLRB entered into last year with the FTC and the Department of Justice’s Antitrust Division.

Review Agreements and Seek Assistance from Counsel

While employers that are already the subject of unfair labor practice investigations should have a heightened sensitivity to this new guidance, the NLRB and its active cooperation with other federal agencies means that all employers should be on guard. Whether you have a union in place or not, the NLRB applies to you, and you should assess the potential impact of this recent investigative focus. Bradley attorneys in the Labor and Employment and Intellectual Property practice groups are available to assist with any questions or concerns that you may have.

Listen to this post

Last week, the Federal Circuit issued another precedential decision on inventorship.  However, unlike in HIP, Inc. v. Hormel Foods Corporation (22-1696) where the appellate panel found the purported inventor’s contribution to be “insignificant in quality . . . [when] measured against dimension of the full invention,” the panel in Blue Gentian, LLC v. Tristar Products, Inc. (21-2136) found the inventorship to be in need of correction. So, what made this set of facts different? In short, contribution, corroboration, and collaboration, each of which is discussed in more detail below. 

First, a little background. Blue Gentian sued Tristar for infringement of six patents, all of which relate to an expandable hose and named a sole inventor Michael Berardi: U.S. Patent Nos. 8,291,941, 8,291,942, 8,479,776, 8,757,213, D722,681, and D724,186. Tristar counterclaimed to correct inventorship and, more specifically, to add Gary Ragner as a named inventor. The district court agreed that Ragner should be added as an inventor. 

As made clear in the appellate opinion, a single meeting in August 2011 was central to the district court’s inventorship holding and the basis for Blue Gentian’s appeal. In that meeting, Ragner and six others from Ragner Technology Corporation met with Berardi. The appellate panel sets the scene for the meeting discussing a) Ragner Tech’s interest in finding investors to help the company commercialize an expandable hose branded MicroHose, b) Ragner’s advanced degrees in physics and aerospace engineering and other expandable hose patents, c) Berardi’s sociology degree and lack of knowledge or experience in hose design, and d) Berardi’s claim of nebulous conception prior to the meeting. Many of the details of the discussion during the meeting were found to be corroborated by testimony from three of the six participants from Ragner Tech.

During the meeting, the manufacturing process and inner components of the MicroHose were shown to Berardi. For example, the document shared with Berardi described an inner “TPU Elastomer” layer and a reinforcement layer made of polyester yarn. In addition, Ragner presented a prototype of the MicroHose. While the prototype of the MicroHose had a yarn valley cord attached to the outside of the hose rather than the full fabric cover that Ragner Tech wanted to include on the commercial version, the prototype also had a vinyl inner tube for water to flow through and a wire coil spring that allowed the hose to return to a retracted state after expansion. According to Ragner, Berardi asked whether the wire spring could be replaced with elastic, to which Ragner responded affirmatively and described previous prototypes that employed surgical tubing to allow for the hose retraction. Berardi denies asking this question or having any discussion of prior prototypes and only vaguely remembered possibly hearing about elastomer from Ragner. The three testifying Ragner Tech participants were not able to confirm either of Ragner’s or Berardi’s accounts in this regard.

Berardi testified that he went to Home Depot a few hours after the Ragner Tech meeting and purchased materials to make his own expandable hose prototype where water flowed through an outer tube and an inner elastic tube was used for retraction. Three months later, Berardi filed his first expandable hose patent application (which was eventually issued as the ʼ941 patent). After several more patents issued, Blue Gentian (licensee of Berardi’s patents) sued Tristar (licensee of two of Ragner’s patents).


Since the named inventors of a patent are presumed correct, Tristar was required to show by clear and convincing evidence that Ragner should have also been named. Moreover, Ragner’s testimony needed to be sufficiently corroborated. On this front, the district court found the testimony to be sufficiently corroborated under the rule of reason test, i.e., where “all pertinent evidence is examined in order to determine whether the inventor’s story is credible” overall. The appellate court found no error in the lower court’s fact-finding. In particular, the opinion notes that corroboration is based on evaluation of the evidence as a whole and that no single piece of evidence alone was needed to establish the credibility of Ragner’s account of inventorship. In this aspect, the panel found no error in the lower court’s consideration of Ragner’s other expandable hose patent, the prototype, and other individual witness testimony to establish corroboration. To rub further salt in the wound, the panel also explained that Berardi’s first prototype (physical evidence created within a day of the meeting) provided a strong indication that Ragner’s story was credible.


The panel opinion reminds us that, to be added as a joint inventor, the individual(s) must demonstrate that he or she “contributed significantly to the conception — the definite and permanent idea of the invention — or reduction to practice of at least one claim.” The appellate panel reiterated that “[t]he determination of whether a person is a joint inventor is fact specific, and no bright-line standard will suffice in every case.” However, this line seems to shine fairly brightly. Indeed, the panel found no error in the district court’s finding that Ragner disclosed three key elements of the hose to Berardi at the August 2011 meeting – i.e., (1) an inner and outer tubes attached only at the ends, (2) a fabric outer tube, and (3) an elastic inner tube that can provide force to retract the hose without a metal spring – and that these elements were a significant contribution to at least one claim in each of the six asserted patents. 

While the appellate panel seemed to suggest that the district court could have been more detailed about the presence of those contributions in the claims, it found this arguable error to be harmless. In addition, the panel explained that the elements identified by the district court to be Ragner’s contribution were significant at least by virtue of the use of these very elements to distinguish over the prior art during prosecution. In fact, “it follows that contributing such materially distinguishing features ‘is not insignificant in quality, when th[e] contribution is measured against the dimension of the full invention.’” In this aspect, the opinion clarifies that the same standard of contribution/inventorship applies to design patents as utility patents.

Furthermore, Blue Gentian attempts to persuade the court that the supposed error at least partially resided in the failure of the lower court to construe the claims before deciding on inventorship. In this vein, the opinion clarifies that a lower court is not required to define all claim terms in a patent before ruling on an inventorship dispute (unless there is a fundamental dispute as to certain terms). Simply put, the lower court “is not required to prospectively address hypothetical claim construction disputes.” While Blue Gentian had identified a claim term that should be construed – i.e., a flexible elongated inner[/outer] tube – it did make any attempt to explain to the lower court why/how it might benefit from the particular term’s construction to evaluate inventorship.


The panel also found Blue Gentian’s argument regarding lack of collaboration unpersuasive. In fact, the appellate panel discerned no error in the lower court’s finding of sufficient collaboration between Berardi and Ragner based on the information exchanged at the meeting. In this aspect and in response to Blue Gentian’s contention that Ragner’s contributions needed to be provided with the intent to invent the hose that was ultimately claimed, the opinion explains that

‘[p]eople may be joint inventors even though they do not physically work on the invention together or at the same time, and even though each does not make the same type or amount of contribution.’

. . .

‘The interplay between conception and collaboration requires that each co-inventor engage with the other co-inventors to contribute to a joint conception,’ . . . not that each co-inventor independently conceives of the entire invention ultimately claimed.  

As such, Ragner was not, as contended by Blue Gentian, required to be intent on inventing the full invention ultimately claimed before he started collaborating with Berardi at the August 2011 meeting. It was enough that i) Ragner shared with Berardi details about manufacturing plans and previous hoses that he had designed and provided verbal explanations of alternative designs, and ii) Berardi used those contributions to assemble prototypes that were ultimately claimed in the asserted patents.

Key Takeaway

Joint inventorship is a fact-specific question that requires a significant contribution to the invention, corroboration of that contribution, and collaboration. Since errors/omissions in inventorship may be corrected after issuance, patentees should carefully evaluate any potential attacks on inventorship before bringing an infringement suit. While hindsight is 20/20, it is puzzling that Blue Gentian chose to sue Tristar with such an uncertain claim to sole inventorship by Berardi.

Listen to this post

The Supreme Court unanimously sided with Jack Daniel’s in the much-anticipated trademark case pitting trademark protection against parodic products. However, SCOTUS did not reach a final conclusion on whether VIP Products’ Bad Spaniels dog toy will live to see another day as a parody of the Jack Daniel’s whiskey bottle. Instead, the Court focused on the legal framework used for analysis of parodic products and remanded the case back to the lower courts.

In particular, SCOTUS noted that a product that uses a trademark as a source-designating symbol is the “heartland” of the Lanham Act and should not be entitled to the First Amendment offramp of the Rogers test. The relevant inquiry should be the standard likelihood-of-confusion analysis, in which the parodic nature can be taken into account.

The Background

In March, we covered the oral arguments made by both parties and the government. The Bad Spaniels dog toy joined VIP Products’ line of Silly Squeakers toys in 2014. The squeaky bottle mimics the Jack Daniel’s Old No. 7 whiskey bottle in appearance, but it replaces key phrases with dog-themed scatological jokes. Jack Daniel’s claims that VIP Products has committed trademark infringement (based on a likelihood of consumer confusion) and trademark dilution (based on a harm to reputation).

The central question before the Supreme Court was whether the Rogers test for First Amendment protection of expressive works applies to an artistic/humorous trademark use, which would trump the standard likelihood-of-confusion analysis. Second, SCOTUS examined whether the parodic use qualified as “noncommercial” and, therefore, precluded a dilution by tarnishment claim.

The Opinion

In the unanimous opinion penned by Justice Elena Kagan, the Supreme Court emphasized that this was only a “narrow” decision. The Supreme Court concluded that the likelihood-of-confusion analysis (rather than the Rogers test) should apply to commercial products that use “trademarks as trademarks.” The dog toy is using “Bad Spaniels” as a source identifier, which is the definition of a trademark. Accordingly, the standard Lanham Act-based test should be used, rather than the Rogers test’s unique “shortcut to dismissal” that applies to expressive works. Similarly, the “noncommercial” exclusion to a dilution claim does not apply to marks that are source-identifying.

Although the Supreme Court agreed with Jack Daniel’s analysis of the law, it is not a total loss for VIP Products. Justice Kagan specifically wrote that Bad Spaniels’ parodic nature will still be considered in the likelihood-of-confusion, multi-factor analysis in the lower courts. The primary purpose of this opinion was not to decide on the underlying facts of Jack Daniel’s versus Bad Spaniels, but rather to prevent the Rogers test from expanding further and to clarify that a trademark being used in connection with a commercial product will be squarely governed by the Lanham Act instead of the First Amendment.

The Concurrences

In addition to the 9-0 opinion, two brief concurrences provide some additional insight into concerns of the justices going forward. Justices Sonia Sotomayor and Samuel Alito wrote a cautionary note about consumer surveys. Because Jack Daniel’s had relied heavily on the results of a survey that indicated consumer confusion, the concurrence warned lower courts to examine the methodology of these surveys with a keen eye. Without careful scrutiny, powerful brands could use surveys as a tool for “silencing a great many parodies.”

Next, Justices Neil Gorsuch, Clarence Thomas, and Amy Coney Barrett reiterated that the Rogers test is not overruled within its appropriately cabined context (that is, primarily expressive works or titles). Nevertheless, Justice Gorsuch indicated some discomfort with the Rogers test and recommended that the lower courts should handle it “with care.” 

The Implications

The narrow grounds of the Supreme Court’s opinion make it more difficult to anticipate whether this decision will drastically change the commercial landscape. While the big companies that wrote amicus briefs in favor of Jack Daniel’s may be celebrating this victory today, hope is not lost for parodists. Even though the Rogers test will no longer be an easy escape route to evade litigation for commercial products, parodists can take comfort that a likelihood-of-confusion analysis may still weigh in their favor. As long as parodic products are not committing trademark law’s “cardinal sin” of confusing customers as to source, then these products may remain on the shelves.

Listen to this post

A sneak peek into the potential future of federal name, image, and likeness (NIL) regulations has emerged with the release of a draft bill. This development marks the first significant step towards a federal NIL law since the 2022 election, following the congressional hearing on NIL held in March of this year. The circulation of draft bills indicates Congress’ interest in establishing more standardized laws surrounding NIL, aiming to supersede the increasingly complex web of state regulations and enforcement.

Although the bill has yet to be formally introduced, a draft of the Fairness Accountability and Integrity in Representation of College Sports Act, known as the “FAIR College Sports Act,” is now available for review. This proposed federal NIL bill outlines several key provisions designed to address the current challenges and concerns in collegiate NIL, including:

  1. Safeguarding student-athletes who have entered into NIL agreements from retaliation by institutions of higher education.
  2. Protecting athletes’ rights to earn compensation from NIL opportunities and sign with agents.
  3. Prohibiting boosters, collectives, and other third parties from enticing student-athletes with inducements to attend or transfer to specific schools, effectively banning pay-for-play practices.
  4. Requiring registration within 30 days for agents, boosters, and collectives involved in NIL deals.
  5. Allowing associations, conferences, and institutions to restrict NIL deals related to the promotion of gambling, tobacco, alcohol, controlled substances, lewd and lascivious behavior or material, or any other product or service inconsistent with an institution’s religious values. These entities would also have the authority to impose “reasonable” limits on the amount of time student-athletes can engage in endorsement activities tied to NIL agreements.
  6. Establishing a new regulatory body responsible for formulating and enforcing rules pertaining to collectives, boosters, and student-athlete NIL contracts.
  7. Preempting existing state laws.

Most notably, the bill proposes the creation of a new regulatory body, the United States Intercollegiate Athletics Committee to oversee the collegiate NIL landscape. It is worth noting that the acronym – USIAC – when pronounced, sounds oddly similar to “you suck.” This committee will be tasked with setting NIL rules, enforcing compliance, and providing guidance to athletes and collectives involved in the NIL process.

According to the draft, a booster is defined as an individual or entity that has made a sports-related donation to a school exceeding a specified annual amount (to be determined by the USIAC) within the past five years. Additionally, a booster would qualify if he/she/it has provided employment to at least one student-athlete during that period. Collectives are defined as organizations consisting of two or more boosters. Agents will be required to register with the USIAC, and student-athletes must report their NIL deals to the USIAC, providing certain information, including the compensation amount.

Any entity found to be in violation of the regulations outlined in the bill will face appropriate disciplinary actions. Enforcement of these regulations will fall under the purview of “existing agencies,” including state attorneys general, for matters concerning agents and third parties. It’s important to note that the NCAA will still retain oversight over athlete misconduct.

As the first federal NIL bill in the current Congress, this proposed legislation seeks to establish a unified framework for governing NIL rights in college sports. However, it is unlikely that this version of the bill will progress, as its sweeping NIL changes and establishment of a new regulatory body will almost certainly face opposition. Nevertheless, the release of the draft bill signifies an interest from lawmakers in attempting to provide some uniformity to the NIL landscape.