Monday, July 2, 2018

Legal Geek No. 140: Supreme Court Wraps 2018 Term

Hi, and welcome back to Legal Geek. This week, we review the series of major decisions we haven't yet discussed as the Supreme Court 2018 term wrapped up earlier this week with its usual flurry of notable June decisions.  Lots of blockbusters to hit, and we'll do it rapid-fire style.


In Masterpiece Cakeshop v. Colorado Civil Rights Commission, the Supreme Court ruled 7-2 in favor of a baker who refused to bake a cake to celebrate the marriage of a same-sex couple.  Justice Kennedy wrote the opinion, which is ironic considering he also wrote the Obergefell decision 3 years ago that made same-sex marriage legal.  However, this decision was very narrowly-tailored to the facts of this case, in that the court found the Civil Rights Commission to have purposefully targeted the baker based on his religious beliefs, which leaves open the larger constitutional questions about whether such business practices are acceptable under the law.  As big as this case seemed in the news, the decision does not set much of a precedent.

In Trump v. State of Hawaii, the most recent version of the President's travel ban was challenged by Hawaii as an unconstitutional restriction on immigration based on his campaign statements from 2016 promising to shut down muslim immigration into the U.S.  After the first two versions of his executive order were thrown out in court, a third version has passed the Supreme Court in a 5-4 decision.  Justice Roberts wrote the opinion, finding that the President has broad powers under the Immigration and Naturalization Act to make decisions based on national security such as this, but Justice Kennedy wrote a concurring opinion where he noted just because something is constitutional doesn't mean it is right to do.  So the current ban against entry from 6 primarily muslim countries stands, but with major disdain from one of the majority justices.

In Janus v. American Federation of State, County, and Municipal Employees, an Illinois employee of a government agency challenged the right of a labor union to collect fair share fees from non-union members for the services labor unions provide for the benefit of all workers.  A prior 1977 Supreme Court decision called Abood had allowed this practice, but the Court overruled this in a 5-4 decision based on First Amendment concerns relating to forcing non-union members to subsidize private speech they may disagree with.  The conservative majority noted this would put a financial burden on unions, but decided this was OK because of the prior windfall from non-members under the old precedent.

One decision where the liberal justices on the court won the day was in Carpenter v. United States, in which Justice Roberts joined those 4 justices in a 5-4 decision prohibiting the government from accessing historical cell phone location records without a search warrant, deeming that practice violates the 4th Amendment of the Constitution.  This privacy law decision was surprisingly not joined by Justice Gorsuch, who has often sided against the government when it comes to privacy concerns, and that makes this a pretty solid indication that the court will remain strong in protecting citizen's rights with new technologies against government intrusion.

Finally, in National Institute of Family and Life Advocates v. Becerra, a California law requiring religious pregnancy clinics to inform clients about alternative state programs for family planning services including abortions was deemed unconstitutional in a 5-4 decision.  The conservative justices led by Justice Thomas ruled that this law was a violation of the First Amendment free speech rights because it regulates and targets certain speakers, rather than the speech itself.  The State's argument that the law was needed to outreach to low income pregnant women was not found compelling enough to save this law.

Although these are all huge decisions by the Supreme Court, perhaps the biggest news of the week is the court's senior most justice and swing vote Anthony Kennedy is retiring immediately.  We will cover his legacy and where the Court goes from here in the next couple weeks, but it is striking that this set of major end-term decision on Kennedy's final term looks a lot like the future, with a lot of conservative justice majorities with the occasional time Justice Roberts sides with the liberal justices.

The Bottom Line is, the Supreme Court tackled a lot of big issues in the first full term with a full roster since the long break with 8 justices when Antonin Scalia died.  Now the Court will have a new make-up, but you can expect many similar issues to reach the court where the President or lawmakers continue to push boundaries to see what is constitutional.  We will continue to watch to see how the Court shifts on these major issues in future segments.

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Monday, June 25, 2018

Legal Geek No. 139: Sales Tax Everywhere and Westworld Game Ripoffs

Hi, and welcome back to Legal Geek. This week, we cover the interesting Supreme Court sales tax decision from this week and then dive into a new lawsuit alleging that the Westworld phone game app is simply a ripoff and infringement of Fallout Shelter.

https://archive.org/details/LegalGeekEp139

The Supreme Court ruled in a case entitled South Dakota v. Wayfair that internet retailers such as Overstock, Wayfair, and Amazon can be required by states to collect sales tax on product sales to consumers regardless of whether they have a significant physical presence in the state.  This 5-4 decision overturns a 1992 case called Quill in which it was decided that the Constitution bars states from collecting sales taxes unless a seller has a so-called substantial connection to the state.  That opened the loophole for online retailers to avoid paying sales taxes in some or many states, which was a competitive advantage over local brick-and-mortar stores.

The decision is a victory for local businesses and for the states themselves, which have missed out on a lot of sales tax revenue over the past 25 years.  The biggest negative impact will be felt by small online sellers who now have to figure out how to comply with up to 50 different state laws and tax codes.  The dissent in this decision raised that very concern, but with the named defendant being one of the major online retailers who can handle such logistics, that argument did not win the day.  So expect to pay more sales tax online if you prefer the convenience of online retail.

Turning to our second topic of the week, Bethesda Softworks sued the Canadian game developer Behavior Interactive and Warner Brothers for allegedly ripping off Bethesda's popular Fallout Shelter game when making the recently-released Westworld game app.  Behavior was contracted by Bethesda to help make Fallout Shelter, and they were contractually obligated to confidentiality as well as turning over all intellectual property in this work to Bethesda.

However, it appears from the similar core mechanics of Westworld and Fallout Shelter that some of the game design and/or source code may have been re-used when Behavior worked on the Westworld game for Warner Brothers.  That's precisely what Bethesda is claiming, leading to charges of copyright infringement, breach of contract, and misappropriation of trade secrets.  

The rapid development of the Westworld app by the same team that had previously done Fallout Shelter does raise some red flags, particularly in view of the significant similarities and overlap between the games outside the themes.  While companies have a right to compete in the marketplace following work on a business deal, they must do so while avoiding any intellectual property and contractual issues.  It is typical for companies like Bethesda to protect their investment in the work they pay companies like Behavior to do, both by contract and by work made for hire copyright assignments, and this is done to prevent easy shortcuts to competition, as may have happened here.

If the court finds a contract breach or IP infringement, Behavior and WB may be estopped from continuing the Westworld game or could have to turn over all profits to Bethesda.  In the meantime, if you enjoy Fallout Shelter, you'll probably also enjoy the Westworld game.  We'll keep an eye on this case to see what develops between these parties. 

The Bottom Line is, when there's profit to be made, and with over 120 million players, Fallout Shelter has proven there's profit in this game design, companies will use whatever legal protections they have to keep that profit as long as possible.  While the larger entities here in Bethesda and WB will probably be inclined to settle this dispute at some point, the lesson for the small company Behavior will be to avoid making such mistakes in future contracts or game design work.

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Tuesday, June 19, 2018

Legal Geek No. 138: Gerrymandering Update and a Triple Crown TM Fight

Hi, and welcome back to Legal Geek. This week, we update you on the Supreme Court gerrymandering case we discussed in a segment last September, and then cover a recent dispute over Triple Crown trademarks that is timely considering we had a second Triple Crown winner in the last 4 years happen when Justify achieved the feat a couple weeks ago.

Back in September, we did a deep dive into a Wisconsin dispute over partisan gerrymandering at the Supreme Court.  The Wisconsin plaintiffs sought to have the courts step in and stop the drawing of voting district lines in such a manner that was heavily biased towards one political party, AKA, whoever controls the state legislature when the lines are drawn.  That case, Gill v. Whitford, was disposed of this week with a remand to the lower courts based on procedural issues.  The Supreme Court declined to decide this on the merits because the individual plaintiffs did not have standing to challenge the entire state map, just their own district.  

So unfortunately, we will not find out if the so called "efficiency gap" or other statistical measures presented in this case would be enough to convince the swing vote Justice Kennedy that the courts could have an objective standard to step in for such circumstances.  The fight in election law over gerrymandering will continue in a different venue for now.  

We will update on further major Supreme Court decisions as they wrap up the term in the next couple weeks.

Turning to the other story for today, the horse Justify became just the 13th Triple Crown winner when he won the Belmont Stakes a couple weeks ago.  Ironically, this occurs as two horse-related retailers are duking it out on court over the rights to a Triple Crown trademark.

Triple Crown Nutrition is a Minnesota company that sells feed for horses, and they filed an opposition to an application for trademark on the name "Triple Crown Custom" for saddles and other equestrian equipment by Ireland-based Horseware Products.  Triple Crown Nutrition has had their name registered at the Trademark Office for a number of years, which is the grounds for bringing this challenge to the new application.  

Now here's the interesting bit of the conflict: trademarks are registered to cover certain types of goods and services offered under the mark.  The goods don't really overlap here, as the Minnesota company sells feed and pharmaceutical preparations, while the Ireland company seeks to sell saddles and collars.  But Triple Crown Nutrition argues that because these different goods are marketed to the same consumers, a likelihood of confusion would occur for consumers and that should be enough to cancel the latter trademark application for Triple Crown Custom.

However, we also know from marks like Delta that different companies selling different products and services can co-exist.  But the overlap is not as close as in this case, and trademark conflicts often occur when product lines change and merge over time to overlap with other companies.  

The Bottom Line is, the risk of such eventual overlap seems high in this case, which would favor the Minnesota company.  But there's no current overlap, and that could undermine this challenge as these two horse sellers race to the finish line.  It will be an interesting close call to watch in trademark law, as we get over our frustrations at the Supreme Court punting on a fascinating gerrymandering case based on mere procedural issues.

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Monday, June 11, 2018

Legal Geek No. 137: Supreme Court allows Voter Roll Purging in Landmark Decision

Hi, and welcome back to Legal Geek. This week, we cover the landmark election law decision from the Supreme Court this week on the practice of purging inactive voters from the voter rolls and registries.


The Supreme Court decided Husted v. A. Philip Randolph Institute this week, which was a case regarding a massive purge of Ohio voters from the state's voter registry.  The purge was enacted a few years ago in Ohio by using a voter's failure to vote in elections as evidence that the voter has moved, and therefore should not be on the rolls anymore.  Of course, if the voter then returns to try and vote without having re-registered to do so, which needs to happen 30 days in advance of the election, they cannot vote or their vote is made on a provisional ballot which undergoes heavier scrutiny before being included in the counts.

The law on point from the challengers of this practice is the National Voter Registration Act of 1993, commonly called the Motor Voter Act.  This law requires states to provide a number of different types of voter registration, including whenever a driver's license is renewed or obtained, and it also requires states to maintain voter registration lists accurate and current.  The goal is to make it easier and more understandable for people to get to the polls and vote.  In the latter requirement about keeping registrations lists current, voters being removed for moving away or for non-voting can only be done so after meeting certain requirements, AKA, safeguards against improper removal of voters.

So you may ask, what safeguards did Ohio use to avoid removing voters improperly?  Here's how the purge works.  Ohio sends notices to registrants who have not engaged in any voting activity for a period of two consecutive years.  These voters are removed from the rolls if they do not respond to these notices, and then continue to be inactive for another four years.  Thus, it takes 6 years to remove a voter from the registration lists, and Justice Alito, writing for the Court's majority, found this to be acceptable as a purge mechanism under the law.

In short, Alito argues that it is not the lack of voting that causes the purge, but instead, this is just a piece of evidence indicating someone has moved which then eventually can lead to a purge.  Justice Breyer writes a dissent that argues that a system which assumes you have moved based on a lack of voting and does not kick into action otherwise puts the impetus on the non-voting, which by itself cannot be a factor used to remove voters from the rolls under the law.  Both sides make what I consider to be plausible interpretations of the law to reach their respective conclusions, although both are very complicated and above the depth of our normal coverage here.  The law is ambiguous enough to allow for this, and so we end up with a 5-4 split decision at the highest court accordingly.

The Ohio practice is therefore deemed legal for purging voters from the registration rolls, and the practice can continue there as well as perhaps be more widely adopted in other states.  That's also what happened following up on the Supreme Court's similar decision in a 2008 case called Crawford in which an Indiana voter ID requirement was upheld as constitutional, leading to voter ID laws in a majority of states in the past decade.

These safeguards and measures are made in the name of preventing voter fraud, but studies have shown voter ID laws and even this Ohio purging the rolls practice ends up suppressing the votes of legitimate voters who want to participate.  Indeed, these studies show a disproportionate effect of many of these measures on the impoverished and minorities.  That begs the question of whether these practices are enacted to serve those who don't want such types to vote, or if they really are for prevention of fraud.  The debate is a core background to these election law cases.

The Bottom Line is, the openness of the polls in Ohio to all potential voters arguably closed a bit this week thanks to this voter purge practice being upheld, but it will be a few years before we see if this has the same impact as voter ID laws have had nationwide.  One can hope that we stop politicizing ballot access because we as citizens should all have a fair voice in this thing we call government, for better or for worse.

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Monday, June 4, 2018

Legal Geek No. 136: Cocky-gate rocks the Romance Novel World

Hi, and welcome back to Legal Geek. This week, we cover a story brought to our attention a few weeks ago by author and friend of the network J.F. Dubeau, a controversy now known in publishing circles and the romance novel world as Cocky-gate.

LINK 

Faleena Hopkins is a self-published online romance novel author who writes stories about the fictional Cocker brothers.  All her books are entitled Cocky something, such as cocky marine and cocky senator, for example.  So Hopkins sought a trademark registration for covering the word Cocky in the field of a series of downloadable e-books or regular books in the field of romance.  That trademark was registered by the U.S. Trademark Office earlier this year.

Hopkins then began sending a bunch of cease and desist letters to other romance novel authors who happened to use Cocky in their book titles.  She also had Amazon take a bunch of titles off the Kindle store based on her trademark.  This led to a firestorm within the romance novel and broader publishing community, as enforcement of such a trademark effectively takes one of the most popular words in romance novels off the table as an option for an author.

Our friend JF asked a few weeks ago whether this trademark was legal and what the likely outcome would be.  Well, with a couple more weeks of progress behind us, the answer appears to be developing. 

First, a retired lawyer decided to file a petition to cancel the trademark at the Trademark Office, which is a procedure by which third parties can challenge the validity of registered trademarks.  An IP law firm out of New York and a trade association called the Romance Writers of America have taken over this petition to try and remove this trademark from the register.  

Turning to the merits of this cancellation petition, there does appear to be earlier use by other authors, and the opponents argue that the term is generic or descriptive in this field.  In other words, Hopkins was not the first to commercialize the term, nor should she be able to lock up a term that other novelists in the field often need to describe the plots of their books and the characters within.  While the original Examining Attorney for the trademark came to an opposite conclusion, it seems that this cancellation petition has a good chance of success.

Earlier this week, another development occurred against Ms. Hopkins' position.  She had been sued by the aforementioned Romance Writers of America and The Authors Guild in federal court in New York to stop her from enforcing the trademark.  The district court judge ruled this week that summary judgment should be granted to The Authors Guild because Hopkins was not likely to succeed on the merits of her claims.  The Guild argued that "cockiness" is prevalent in romance novels and thus consumers in the field do not rely on such terms to distinguish the source or author of the book, but instead, the author's name instead.  The court appears to have agreed that a term like "cocky" cannot function as the signifier of a single author or source in this genre.

As silly as this case is, the broader implications were what troubled the publishing field.  Another author was already trying to trademark "forever," and you can imagine how awkward it would be if other generic-type terms like "space" for sci fi novels was locked up by a single party.  Thus, Cocky-gate appears to have led to an affirmance that common words in a field cannot be trademarked at all unless they develop a strong association in the minds of the public with a particular author or source.  That's not the case for Hopkins in the crowded romance novel field, so her claim appears destined to fail.

The Bottom Line is, sometimes the cutting edge of legal fields comes from those you least expect it from.  While Hopkins was within her rights to pursue and then enforce her trademark, it seems to better follow our rules and norms if that type of registration is cancelled or not allowed to register in the first place.  The Trademark Office is not perfect, and that's why we have cancellation proceedings and the courts to rely on, as in this case.

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Monday, May 14, 2018

Legal Geek No. 135: Sports Gambling Wins at SCOTUS and Star Wars Fictional Card Game in Court

Hi, and welcome back to Legal Geek. This week, we cover the breaking news of this week's Supreme Court decision to allow sports gambling nationwide, followed by coverage of how a fictional card game from Star Wars is being enforced by Disney in a copyright lawsuit.

https://archive.org/details/LegalGeekEp135

In 1992, Congress passed the Professional and Amateur Sports Protection Act or PASPA, a law that barred state-authorized sports gambling outside the state of Nevada.  That left Nevada and specifically Las Vegas as the only places where a person could legally bet on the outcome of any single sports game, and the profits obviously rolled in there.

This law was challenged as unconstitutional by the state of New Jersey, which obviously has a bustling casino scene in Atlantic City and other places.  While New Jersey lost at every federal court case leading up to the Supreme Court appeal, the highest court in the land ruled 6-3 this week in the case Murphy v NCAA that the PASPA was unconstitutional.

Ironically, the Court's decision was written on the basis of federalism by conservative Justice Alito, while opening up similar arguments for other progressive causes like marijuana legalization and sanctuary cities to be regulated by the states instead of the federal government.  More specifically, PASPA was deemed to violate the anti-commandeering doctrine from the 10th Amendment, which bars the federal government from compelling state officials to implement federal policy.  So forcing states to maintain their bans on sports gambling to serve federal law interests was not constitutional.  So what does this decision mean?

Basically, it's now left to the states to decide whether to enact laws to allow such gambling, just like with state-run lotteries and the like.  New Jersey hopes to be up and running in a couple weeks, while other states like Pennsylvania, West Virginia and Delaware have legislation pending already in hopes to be open for gambling business by football season.  This decision will also hopefully curtail the illegal betting markets and pressures that have been present since PASPA's introduction in the early 90s.  So sports and betting fans, stay tuned for some local betting near you soon.

Turning to our second story, a mobile game app developer named Ren Ventures and Sabacc Creative Industries created a virtual card game called sabbac.  Lucasfilm and Disney took umbrage to this because the game sabacc first appeared in the novelization of the 1980 movie The Empire Strikes Back, and the app developer allegedly uses several copyrighted images and characters from the Star Wars universe to promote their game on Facebook and Twitter.  Thus, after a Cease and Desist letter in April 2017, a lawsuit was filed last December.

Last week, Lucasfilm moved for a summary judgement win by claiming that Ren Ventures is clearly willfully infringing on the copyrights and trademarks of Star Wars.  Ren Ventures has counterclaimed based on its registered trademark for the game name sabacc, saying that Lucasfilm is infringing its trademark.

So who wins in this battle of the sci fi stars?  While it's true that Ren Ventures has a trademark for the name sabacc for computer games and apps as of 2016. Lucasfilm likely has the superior claim thanks to the much older copyrighted materials.  The mere concept of a game described in a piece of literature would not be automatically protected by copyright or trademark, but Ren Ventures probably crossed the line more clearly with marketing materials used on social media.

The Bottom Line is, anytime something is a big money maker like sports gambling or the Star Wars franchise, it's not surprising when others come in to try and get a piece of the pie.  In the case of gambling in New Jersey, the motives are solely profit-driven, while in the case of Ren Ventures, the app may be just as much a fan homage to Star Wars as a play for profit.  If nothing else, we learn once again not to mess with Jersey casinos or Disney, the king of enforcing IP rights.

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Monday, May 7, 2018

Legal Geek No. 134: Giuliani Brews Up a Storm(y) about Campaign Finance Laws

Hi, and welcome back to Legal Geek. This week, we review the media blitz Rudy Giuliani has been on in the previous week as an attorney for President Trump, and explain why his comments regarding payments to Stormy Daniels don't paint a full picture of the issues surrounding the administration on this issue.

https://archive.org/details/LegalGeekEp134


If you aren't up to speed on the sideshow that is the Stormy Daniels story, here's a brief overview.  Stormy Daniels is an adult film star who apparently had an affair with Donald Trump about a decade ago.  Daniels was paid $130,000 in late 2016 just before the election by Trump's attorney Michael Cohen to keep her from reporting the affair to news outlets at that time.  As the FBI investigation into Russian meddling in the 2016 election led by special counsel Robert Mueller works through the process of investigating Cohen and others, this payout and the affair have become public knowledge and a source of debate of potential crimes or violations they may reveal.

Coming back to this week, Rudy Giuliani took to the cable TV news airwaves with many appearances and statements regarding the Stormy Daniels payout and his take on it.  Here's his quote regarding potential campaign finance violations:

INSERT QUOTE

Campaign finance law is a field with ever-changing parameters, as the Supreme Court often weighs in on the laws and regulations applied by the Federal Elections Commission or FEC.  Limits on individual contributions to a political campaign are set forth in Section 30116 of Title 52 of the U.S. Code, and there's a duty to report any payments made to or on behalf of a campaign so that voters can be sure who follows the fairness rules.  That latter point is where the debate will hinge.

According to Section 30116, all contributions made by a person, directly or indirectly, on behalf of a particular candidate, shall be treated as contributions from such person to the candidate, even if an intermediary is involved in some manner.  Daniels's attorney is making a public case that the payment from Michael Cohen to her was inherently related to Trump's campaign given the timing shortly before the election and the broad language of the law at hand.  Cohen certainly made the payment as an agent of Trump, and he's since been reimbursed by Trump for the payment to Daniels.  It's not as simple as Giuliani claims because the law clearly covers more than just movement of actual campaign funds.

If this hush money payment does qualify as a contribution under campaign finance laws, then it should have been disclosed.  Furthermore, there are criminal penalties for knowing or willful failures to report such contributions.  So there's a lot left to untangle in the facts surrounding Cohen and his payment to Daniels, as well as the knowledge and intent of Cohen and Trump, as there are big differences depending on whether Daniels approached Cohen to extort a payment or Cohen voluntarily sought out Daniels.

Of course, even if the FEC finds this to be a violation of campaign finance laws, another hurdle to cross is whether President Trump can actually be sued or held liable while in the executive branch.  Presidential immunity may not go so far as to protect from a lawsuit of this variety, but it would be a question of first impression at the courts if it occurs.

The Bottom Line is, Campaign finance laws are in place to allow voters to have a fair and full picture of the candidates they cast ballots for.  By obfuscating how the law actually reads and is applied, Giuliani is trying to paint a positive picture for his client Trump.  But his oversimplifications and misstatements will likely not carry the day at the FEC.  What's more interesting than the salacious nature of this affair or the one-sided comments of Giuliani is the potential effect of this issue on the Trump Administration.  While this by itself is likely not enough to remove Trump from office, it's one of a number of factors that could combine into an avalanche should something like the Russia investigation produce more problems.

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