Supreme Court Upholds Inventor’s Ownership of Patent Rights Under the Bayh-Dole Act

On Monday, June 6, 2011, the Supreme Court held that the Bayh-Dole Act does not disturb the long-standing rule of patent law that ownership of patent rights vest in the inventor. In Bd. of Trs. of the Leland Stanford Junior Univ. v. Roche Molecular Sys., Inc.,the Supreme Court affirmed the Federal Circuit’s ruling and held that the Bayh-Dole Act clarified “the order of priority of rights between the Federal Government and a federal contractor in a federally funded invention that already belongs to the contractor. Nothing more.” (Slip. Op. at 12). For the contractor to have rights in a patent, the inventor must have executed a valid assignment in favor of the contractor.

The Stanford case arose from a joint research program in which a Stanford researcher conducted HIV-related research at Cetus Corp. Roche is the successor of Cetus. The researcher had “agree[d] to assign” any inventions to Stanford, and later did execute an assignment to Stanford for the specific patents. However, in the interim, the researcher signed a confidentiality agreement that provided he “will assign and do[es] hereby assign” to Cetus inventions arising out of the use of Cetus’s facilities. Following its precedent, the Federal Circuit ruled that the language in Stanford’s agreement to assign did not actually effect an assignment whereas the language of the assignment to Cetus did. Accordingly, Roche was the owner of the invention unless the Bayh-Dole Act vested ownership in Stanford. The Federal Circuit held it did not. (See our previous alert for a more detailed history.)

In affirming, the Supreme Court characterized the concept that the inventor owns the patent rights as basic to our patent laws since the passage of the first Patent Act in 1790. It found that Congress has divested inventors of this right in the past only by unambiguous language. It cited two instances, inventions concerning nuclear material or atomic energy and inventions made pursuant to contracts with NASA, where Congress unambiguously specified that the title would vest in the government. The Court observed that the language that divested the inventor’s rights in those instances was notably absent from the Bayh-Dole Act. Further, the Supreme Court found other language in the Bayh-Dole Act supported its view.

Justice Sotomayor wrote a concurring opinion to make clear that she did not view the majority opinion as resolving whether the Federal Circuit’s precedent was correct in interpreting Stanford’s agreement to assign as not actually effecting an assignment, particularly where the Bayh-Dole Act is implicated. Since Stanford did not challenge the Federal Circuit’s decision on that ground, she nonetheless agreed affirmance was appropriate.

Justice Breyer, joined by Justice Ginsburg, dissented. The dissent would have vacated and remanded the case because in their view, the answer to the question presented turned on matters on which the parties had not had a full opportunity to argue. One such matter was the Federal Circuit’s precedent on the interpretation of assignment agreements. The dissent did not view the majority opinion as foreclosing argument on this point by similarly situated parties in the future. The second matter not fully addressed was whether the Bayh-Dole Act should be interpreted to create a presumption of assignment by federally funded employees. While the concurring and dissenting Justices made clear their view that the Federal Circuit’s case law regarding the proper construction of agreements to assign remains open to challenge, the Federal Circuit’s precedent will remain controlling unless overruled by that court en banc or by the Supreme Court. Both are unlikely.

Thus, the first and best line of protection for academic and research institutions as well as private recipients of federal research dollars is the same as for other employers: review with competent counsel your policies and practices regarding assignments of inventions and the forms and agreements used in connection with such assignments and with agreements to assign. These must be drafted with the understanding that ownership initially vests with the inventor or, where more than one person contributes to the conception of the invention, with the inventors jointly.

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Patent Law Unchanged by Microsoft Supreme Court Decision

Despite all of the anticipation surrounding the outcome of the Microsoft v. i4i case, on June 9, 2011, the Supreme Court upheld the current state of patent law rather than change long-held precedent. Specifically, the Court held unanimously that when an accused infringer alleges that a patent is invalid, such an allegation needs to be proven by clear and convincing evidence.

This “clear and convincing evidence” standard has been defined as requiring “evidence indicating that the thing to be proved is highly probable or reasonably certain.” This standard provides a relatively high hurdle for accused infringers to overcome in order to invalidate a patent and, thus, provides a rather stable environment for patents.

The Court based this decision on section 282 of the Patent Act of 1952, which grants to patents a presumption of validity. The Court noted that “Congress specified the applicable standard of proof in 1952 when it codified the common-law presumption of patent validity.” Relying on previous Supreme Court precedent, the Court cited Justice Cardozo, who stated, “There is a presumption of validity, a presumption not to be overthrown except by clear and cogent evidence.”

In this case, Microsoft asserted an invalidity defense to an allegation of infringement which relied on evidence that had not been considered by the United States Patent and Trademark Office (USPTO) during examination. Microsoft alleged that i4i sold a version of the software covered by U.S. Patent No. 5,787,449 (“the ’449 patent”) more than a year before the patent was filed. Microsoft presented evidence that suggested the software at issue was previously marketed and sold to another company. The evidence included various documents describing the software such as manuals, a funding application, and letters to potential investors, etc. However, i4i maintained that the software that was sold did not include the contents of the patent at issue in this case. Unfortunately, the code at issue was destroyed and was not available for a comparison to the patent. The lower courts determined that the evidence presently did not clearly and convincingly show that the software sold was the same as the software described in the ’449 patent. While one might be able to infer that fact from the evidence in question, it did not meet the clear-and-convincing standard of proof. Therefore under the Court’s interpretation the patent remains valid.

Further, the Court determined that the standard of evidence should be consistent regardless of whether the evidence was previously considered by the USPTO. However, the Court also stated that juries may be instructed to give more weight to evidence not previously considered by the USPTO when considering the issue of patent validity. Thus, in cases, such as Microsoft, where some material was not before the USPTO during prosecution, the jury may be instructed to give these materials more weight during consideration. Unfortunately for Microsoft, no such request was made of the district court.

With respect to the policy arguments put forth, the Court found itself “in no position to judge these policy arguments.” The Court relied instead on the almost thirty-year history of interpretation and congressional action regarding section 282 of the Patent Act of 1952. During this time frame, the Court noted that the evidentiary standard has been left “untouched.”

The Court affirmed the current standard of proof for invalidity. Many patent holders are now breathing a sigh of relief.

Now the question is, will Congress take up the challenge set forth by the Court when it stated, “Any recalibration of the standard of proof remains in its hands.”

U.S. Supreme Court Decision May Dramatically Affect California Employee Arbitration Agreements

On April 27, 2011, the Supreme Court of the United States handed down its opinion in AT&T Mobility LLC v. Concepcion. The High Court held that California’s Discover Bank rule, which required most consumer (and employee) contract arbitration agreements to allow for class arbitration, was preempted by the Federal Arbitration Act (FAA) and thus invalidated.

Standing alone, this ruling is good news for California employers, since it may allow them to avoid costly and burdensome class action lawsuits with their employees. InConcepcion, the plaintiffs filed a class action lawsuit in federal court against AT&T, alleging false advertising and fraud for charging sales tax on phones that AT&T advertised as free. The High Court held that arbitration agreements in standard form contracts that waive the right to pursue a class action are enforceable, and that the FAA preempts the Discover Bank rule. Specifically, the High Court held that theDiscover Bank rule interferes with arbitration in a manner inconsistent with the FAA’s purpose by allowing consumers/employees to insist upon class-wide arbitration. The High Court held that class-wide arbitration, unless consensual, sacrifices arbitration’s informality, slows down the process and makes it more costly. Moreover, the High Court found that there is also little incentive for defendants to arbitrate class-wide claims because (1) class actions impose significant risks and (2) arbitrations are poorly suited to resolve such high-stakes matters.

Navigating California Case Law

For employers considering adding a class action waiver to their arbitration agreements or those wanting to begin implementing arbitration agreements with their California employees, California case law has placed other restrictions on those agreements that were not explicitly addressed by the High Court in Concepcion. (Although, as we shall see, the holding does place some of those existing restrictions in doubt).

In 2000, the California Supreme Court ruled in Armendariz v. Foundation Health Psychcare Services, Inc., a decision that, like Discover Bank, relied on a mix of public policy and common law unconscionability in limiting how employers could structure mandatory arbitration agreements. In Armendariz, the California Supreme Court found that mandatory arbitration agreements for employees must meet the following requirements in order to be enforceable:

  1. The agreement must provide the employee all remedies available in a court action.
  2. The agreement must provide for enough discovery to allow employees to gather necessary evidence to prove their claims.
  3. The agreement must provide for a written decision that will allow meaningful review.
  4. The employee cannot be required to pay any additional costs beyond those routinely faced in court litigation.
  5. The employer cannot limit the types of claims subject to arbitration such that only claims typically brought by employees are subject to arbitration.

Since then, hundreds of decisions have come down that have further refined theArmendariz rules, usually by placing additional restrictions.

Even though the Concepcion court did not purport to ban states from imposing any limitations on arbitration agreements, the decision may have an impact on theArmendariz restrictions. While the Concepcion court opined that a state could legitimately enact a law “requiring class-action-waiver provisions in adhesive arbitration agreements to be highlighted” or other laws requiring adequate notice of arbitration agreements that do not “conflict with the FAA or frustrate its purpose to ensure that private arbitration agreements are enforced according to their terms,” some of the Armendariz limitations may violate this rule as laid out by the High Court inConcepcion.

The first three Armendariz limitations listed above do not appear to be invalidated by the Concepcion reasoning. In other words, requiring at least minimal discovery, precluding restrictions on remedies and requiring the arbitrator to furnish a written decision are all wholly consistent with the FAA and do not serve to chill employers from instituting mandatory arbitration.

The last two Armendariz provisions, however, may be successfully challenged in light of the Concepcion ruling. For example, under Armendariz, the employer is responsible for all forum costs (except for a trivial filing fee that cannot exceed the cost of filing an action in court), making arbitration significantly less appealing from an employer’s point of view. This follows because arbitration is rarely resolved by a pretrial motion since arbitrators have strong incentives (e.g., the desire to seem fair to employees and the fact that the majority of their pay is generated by conducting evidentiary hearings) to allow a full hearing before issuing a decision. As a result, employers can virtually always expect arbitration claims to either settle or involve a full evidentiary hearing, with an arbitrator charging them tens of thousands of dollars per case.

On the flip side, employees who know they could be held responsible for sizable arbitration costs if they do not prevail would likely be dissuaded from bringing even meritorious claims. Before Concepcion, a state was presumably free to weigh pro-arbitration public policy against public policy that protects employees. But Concepcionfound that the FAA preempts states’ rights to engage in such a balancing exercise. As a result, the Armendariz requirement that employers pay all the costs of arbitration cannot be defended on public policy grounds, but must instead be defended by trying to show that such a requirement does not burden arbitration—despite the arguments above that it does burden arbitration.

Likewise, the Armendariz requirement that all claims must be arbitrated, rather than just those typically filed by employees, appears to burden arbitration. The court inConcepcion noted that “parties may agree to limit the issues subject to arbitration.” If that is true, there is no reason to assume that parties could not rationally agree that only a particular type of claim (e.g., wrongful termination claims) would be subject to arbitration. Indeed, the rationale underlying Armendariz that no rational employee would agree to that restriction rests on a premise that arbitration is an inferior forum for the employee. Whether or not this is the case, that rationale is hostile to arbitration and is a clear burden.

The Road Ahead for Employers

Despite the High Court’s ruling in ConcepcionArmendariz is still technically the law in California and no employer wants to be the test case for an arbitration provision that conflicts with it. Thus, employers with mandatory arbitration programs in California fashioned under the Armendariz strictures should not immediately change their agreements (unless, of course, they are willing to become a test case). That being said, the continuing viability of Armendariz’s restrictions on employee arbitration agreements is bound to be raised eventually by employers. In light of Concepcion, some employers may decide to take the risk of running afoul of Armendariz in return for more favorable arbitration agreements that will potentially reduce costs. Alternatively, Armendariz may be tested by an employer after the denial of a motion to compel arbitration where the employer failed to follow all the Armendariz factors. The true power of Concepcion is that trial and appellate courts evaluating agreements cannot overturn those agreements solely because they run afoul of state public policy.

Supreme Court Upholds “Clear and Convincing” Standard of Proof for Patent Invalidity While Suggesting Juries Be Instructed on the Weight of the Evidence

On June 9, 2011, the Supreme Court in an 8-0 decision authored by Justice Sotomayor, affirmed the long-standing rule that a challenger must demonstrate invalidity of a patent by “clear and convincing evidence.” Microsoft Corp. v. i4i Ltd. Partnership, 564 U.S.__, slip op. at 20 (June 9, 2011).  Microsoft had argued for a more relaxed “preponderance of the evidence” standard in a case where the prior art that formed the basis for the challenge had not been considered by the Patent Office.  While the holding puts to rest speculation over whether the Court would apply the lesser standard of proof, the Court endorsed the use of a jury instruction on the weight to be given prior art evidence that had not been considered by the Patent Office, stating that such an instruction, “when requested, most often should be given.”  Id.at 17.

Section 282 of the Patent Act of 1952 provides that “[a] patent shall be presumed valid” and “[t]he burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.”  35 U.S.C. § 282. While § 282 expressly places the burden of proof regarding validity of the patent upon an accused infringer, it does not expressly address the standard of proof.  Microsoft argued that the preponderance standard applied generally or, in the alternative, at least where the prior art asserted had not been considered by the Patent Office.  The Court rejected both contentions.

The Supreme Court rejected Microsoft’s first contention by finding that Congress had adopted the heightened standard from the common-law in 1952 when it enacted § 282.  The Court determined that by the time of the 1952 Act, the common law presumption of validity reflected the “universal understanding” that the preponderance standard was insufficient.  That understanding was reflected in the holding of Radio Corp. of America v. Radio Engineering Laboratories, Inc., 293 U.S. 1 (1934). In that case, the Supreme Court held that an accused infringer must overcome the presumption of validity by “clear and cogent evidence.” Id.at 2.  Accordingly, the Court held that the codification of the presumption in § 282 brought with it its common-law meaning, including the heightened standard proof, and there was no reason to “drop” the heightened standard simply because §282 does not explicitly recite it.

In arguing for the lesser “preponderance of the evidence” standard of proof when the prior art was not considered by the Patent Office, Microsoft relied in part on the Supreme Court’s dicta in KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 426 (2007), that at least in cases where the invalidating prior art was not before the Patent Office, the presumption of validity “seems much diminished.”

Notwithstanding its earlier observation, the Supreme Court rejected the notion of a variable standard of proof.  The Court acknowledged language found in “numerous courts of appeals” cases before the 1952 Act, that referred to the presumption of validity being “weakened” or “dissipated” when the evidence was not considered by the Patent Office.  However, it explained that such language could not be read as supporting a different standard.  “Instead, we understand these cases to reflect the same common sense principle that the Federal Circuit has recognized throughout its existence—namely, that new evidence supporting an invalidity defense may ‘carry more weight’ in an infringement action than evidence previously considered by the Patent Office.”   Slip op. at 17.  Accordingly, “new evidence” of invalidity may make it “easier” for a challenger to meet the “clear and convincing” standard.

The Court suggested that the weight to be given this new evidence be explained in an instruction to the jury:

[A] jury instruction on the effect of new evidence can, and when requested, most often should be given. When warranted, the jury may be instructed to consider that it has heard evidence that the PTO had no opportunity to evaluate before granting the patent. . .  [T]he jury may be instructed to evaluate whether the evidence before it is materially new, and if so, to consider that fact when determining whether an invalidity defense has been proved by clear and convincing evidence.

Id.at 17.  This language will undoubtedly increase the frequency of requests for a specific instruction on the weight of the new evidence and on the use of such instructions.

Justice Breyer, joined by Justices Scalia and Alito, wrote a concurring opinion which emphasizes the need to pay careful attention to the distinction between fact questions and legal questions, noting that the standard only applies to evidence of the facts.  The Court’s opinion, slip op. at 2, does note that the ultimate question of patent validity is a question of law and that the same factual questions underlying the Patent Office’s original examination will also be present in an infringement action.  Id.  While this language is suggestive, the Court’s opinion never expressly states that the standard of proof applies only to the factual questions.  The concurrence thus raises the question of whether a court should refrain from applying the clear and convincing standard to legal conclusions, such as whether given facts render an invention obvious.  Further, the observations of the concurrence may impact the specific questions put to the jury in the form of a special verdict and instructions regarding the standard of proof.

Thus, the development of the patent law may be more affected by dicta from Microsoft Corp. v. i4i Ltd. Partnership than by its holding, which affirms the long-standing “clear and convincing” standard.

Domain Name Registrant Found to Lack Bad Faith in UDRP Proceeding Later Loses Against ACPA Claim

Considering whether a domain name registrant who prevailed in a Uniform Domain Name Dispute Resolution Policy (UDRP) proceeding possessed legitimate rights in the domain name in a subsequent court action for federal cybersquatting, the U.S. Court of Appeals for the Fourth Circuit affirmed a grant of summary judgment to plaintiff, finding that the defendant domain name registrant ceased to possess rights in the underlying domain name when it changed the content of its website to content concerning a geographical location referenced by the mark to content targeting the same type of products sold by a trademark owner under the mark.   Newport News Holdings Corp. v. Virtual City Vision, Inc., Case No. 09-1947 (4th Cir., Apr. 18, 2011) (Duncan, J.)

Plaintiff Newport News Holding Corporation sells women’s clothing and accessories under the mark NEWPORT NEWS and has been in existence for more than 20 years.  The plaintiff sells its products through catalogs and the internet at the domain name Newport-news.com, which it purchased in November 1997.  The plaintiff attempted to purchase the domain name Newportnews.com at that time, but it had already been acquired by defendant Virtual City Vision.  Virtual City Vision owns at least 31 domain names incorporating the names of geographic locations, including the domain name newportnews.com.

The plaintiff brought a UDRP complaint against the defendant in 2000, seeking the transfer of the domain name newportnews.com, but did not prevail.   Acknowledging that while the domain name and trademark were identical, the UDRP panel determined that no likelihood of confusion existed because the defendant’s website explicitly provided information about Newport News, Virginia, and had no connection whatsoever to women’s fashions.  The panel further held that defendant’s website provided “bona fide service offerings” consisting of disseminating city information towards tourism, finding there was a “total absence” of competition between the parties.

Approximately four years after obtaining the UDRP decision in its favor, the defendant began running occasional advertisements for women’s clothing on its Newportnews.com website.  Between 2004 and 2008, the defendant’s website shifted its focus from offering information about Newport News, Virginia, to one emphasizing women’s fashions.  The website also ran advertisements for women’s apparel.  In 2007, the plaintiff made an offer to purchase the defendant’s domain name.  The defendant rejected the offer, demanding more $1 million or an arrangement whereby the defendant would sell the plaintiff’s goods on its website for a commission.

In 2008, the plaintiff filed an action against the defendant for trademark infringement, false advertising, unfair competition, cybersquatting and related claims.  The plaintiff later filed a motion for summary judgment on its cybersquatting claim under the Anti-Cybersquatting Consumer Protection Act (ACPA).  The district court granted summary judgment to the plaintiff on its ACPA claim pertaining to the domain name newportnews.com, finding that the defendant possessed bad-faith intent to profit and awarding statutory damages and attorneys’ fees.  The defendant appealed, arguing that the district court erred in finding that it acted in bad faith.

On appeal, the 4th Circuit upheld the district court’s finding of bad faith.  While the defendant argued that it offered a legitimate service under the domain name by providing information about the city of Newport News, the court pointed to clear evidence that the defendant had shifted its focus away from providing information about Newport News and became a website devoted primarily to women’s fashion.  It would undermine the purpose of the ACPA, the court explained, if a domain name registrant was permitted to profit from another company’s trademark simply by providing some minimal amount of information about a legitimate subject as the defendant did here.  Further, the 4th Circuit pointed to the UDRP decision as additional proof of the defendant’s bad faith.  The UDRP panel found the defendant’s use proper precisely because its business of providing city information was unrelated to the plaintiff’s clothing business.  However, “in the face of the cautionary language [from the UDRP decision],” the court noted, “Defendant purposefully transformed its website into one that competed with Plaintiff by advertising women’s apparel.”

Further, the 4th Circuit further found no abuse of discretion in the district court’s award of attorneys’ fees to the plaintiff, agreeing with the district court’s finding that the defendant’s conduct was exceptional in light of the timing of the transformation of the site—the defendant had changed its website content clearly after it had been made aware by the UDRP panel that only lack of competition between the parties made the defendant’s use of the domain name legitimate.  Similarly, the court affirmed the district court’s statutory damages award of $80,000, finding the amount appropriate given the particularly egregious nature of the defendant’s conduct.

e-Verify Will Not Magically Solve Our Immigration Woes

The Magician and his Special Hat

Here we go again with the next round of “how we’re going to look tough on immigration without actually accomplishing anything.” This year, mandatory E-Verify is the magic bullet of choice. On Tuesday, House Judiciary Committee Chairman Lamar Smith (R-TX) introduced the “Legal Workforce Act,” which would expand the E-Verify program, making it mandatory for all employers in the United States. A hearing on the bill was held today in the Immigration Policy and Enforcement Subcommittee.

Immigration restrictionists argue that imposing a mandatory employment verification system will ensure that unauthorized workers are not able to get jobs in the U.S. and will choose to leave, leaving millions of jobs wide open for unemployed U.S. citizens. Of course, this ignores the fact that there are 11 million unauthorized immigrants in the U.S.—many of whom have deep roots in their communities; that unscrupulous employers can simply not verify the status of certain workers and hire them “under the table”; that E-Verify fails to identify unauthorized workers approximately half of the time (i.e. it doesn’t work); that mandatory E-Verify will be another expensive mandate for small businesses (the opposite of what is needed to stimulate job growth); and many U.S. citizens and legal permanent residents could lose their jobs due to errors in the system.

The Smith bill ignores all of these concerns. Under the bill, E-Verify would be phased in by size of employer, and nearly all employers would have to use the system within two years. The agriculture industry, which has been making noise about how devastating mandatory E-Verify would be, would get three years to implement the system. Also for agriculture, returning seasonal workers would not count as new hires and would not have to be verified through the system.

Unlike the current system, the Smith bill would allow employers to verify a worker’s status before he or she is hired. It would also require that certain workers be re-verified well after they were hired, and would allow employers to re-verify their entire current workforce, provided it is done in a nondiscriminatory manner. In addition, the Smith bill would significantly limit the types of documents that could be used to prove identity and work authorization. The bill would also increase the penalties for knowingly hiring unauthorized workers. Employers would not be penalized for hiring unauthorized workers if they have used E-Verify and relied on it to verify the work authorization of their workforce. And the bill exacts strict penalties for workers who knowingly use false identification documents to secure employment.

During today’s hearing, proponents of the bill continued to tout the magical powers of E-Verify despite the abundance of evidence to the contrary. Rep. Ken Calvert (R-CA) made the improbable claim that “E-Verify is an extremely effective program” and “is ready for mandatory use.” Rep. Smith proclaimed that his bill “could open up millions of jobs for unemployed Americans.” And he lauded E-Verify as “free, quick and easy to use.”

Others were not so enamored of Smith’s bill and E-Verify. Barry Rutenberg, First Vice Chairman of the National Association of Home Builders, cautioned that “E-Verify may be a first step, but it should not be the only step. It is vitally important that Congress continue to work towards a revision and improvement of the nation’s broken immigration and visa systems, and to seek a pathway for workers to legally enter the United States for employment when the economy needs them.”

Tyler Moran of the National Immigration Law Center testified that “making use of E-Verify or any electronic employment eligibility verification system mandatory, outside of broader reform of our immigration system, will undermine American jobs and ultimately impose new burdens on our economy, workers and businesses.” Moreover, she noted that “E-Verify has faltered in detecting undocumented workers” and, due to database errors, would “prevent millions of American workers from getting a job.”

We can expect the conversation about E-Verify to continue for the next several months. Unfortunately, this means that the more constructive and necessary conversation about the broader steps needed to fix our broken immigration system will not be taking place. Yes, employment verification is an important element of immigration reform. But without the other elements of reform, mandatory E-Verify could prove to be a disaster for U.S. employers and workers.

Photo by shutterstock.

Former Student Athletes’ Right of Publicity and Antitrust Claims Will Proceed Against the NCAA and Electronic Arts

Closely watched class action lawsuits by former student athletes against the National Collegiate Athletic Association (“NCAA”), its licensing arm, the Collegiate Licensing Company (“CLC”), and the popular video game maker, Electronic Arts, Inc. (“EA”) will proceed following a May 2, 2011 decision by Judge Claudia Wilken of the United States District Court for the Northern District of California. See In re NCAA Student-Athlete Name & Likeness Licensing Litigation Case No. 4:09-cv-01967-CW (N.D. Cal. May 2, 2001) (the “May 2 Order”).

The stakes in the NCAA Student-Athlete Name & Likeness Licensing Litigation are high. If the student athlete plaintiffs are successful, the NCAA, as well as its member conferences and universities, could face significant liability, and the NCAA would need to substantially change the way in which it approaches its licensing efforts and student-athlete relationships. The resolution of the licensing and First Amendment issues also has the potential to cause significant repercussions across the entertainment industry, including the motion picture industry, as courts grapple with determining the breadth of First Amendment protection in an age of realistic computer generated depictions that could arguably be mistaken for the real thing.