Breeders Cup Provides Crossroads of Business and Entertainment

     As the Breeders Cup weekend approaches, it is clear that various opportunities now exist to not only be a spectator of the “Sport of Kings” but also to become a part of the business.  Sports gaming and most particularly, horse racing, has always had various level of opportunities for participation.  At the simplest level, “spectators” have existed since the days of the Roman Coliseum. But, since then, fans have felt the need to add to the experience by gambling (legal or otherwise) on the event to which they are watching.  Though these two activities have existed for hundreds of years, more recently, it has become obvious the greater participation can be achieved by legitimate business endeavors.

     Business opportunities have expanded which not only provide the excitement of participation but also can be lucrative (or at least affordable).  In horse ownership, rather than purchasing and being responsible for all matters as an individual, a “horse racing partnership” allows fans of horse racing an easy and less demanding pathway to be a part of all aspects of the “action”.  Members of partnerships are not solely responsible for the management decisions regarding their horse or horses to which they own a percentage.  Horse racing partnerships allow those who want greater participation to be involved but do not require the time, money or experience of individual ownership.  Most of the “day-to-day” decisions can be provided by those who manage the partnership and have the experience and background to manage the racing career of the horse(s) and all of the ancillary issues, such as race selection, training, transportation and healthcare.  The members of the partnership can usually decide how much they want to be involved and contribute to the decisions but also can learn all aspects of racing.  Further, the business and investment issues regarding horse ownership, whether individual or in a partnership can be very beneficial if used correctly.  Finally, as most members of partnerships have businesses outside of horse racing, the ability for business development and networking is tremendous.

     Additionally opportunities can be achieved through hospitality opportunities.  Restaurants, bars and local entertainment establishments can provide tremendous venues that can provide business opportunities based on events in sports, such as the Breeders Cup Championship.  As gaming expands, such opportunities in simulcasting of horse racing may become more available to increase the amount of funding into horse racing but also, to increase the business opportunities to the hosting venues.  Much like a Super Bowl parties, local venues can take advantage of the ability to not only provide the hospitality environment but can potentially have the ability to collaborate with “race tracks” to obtain simulcasting rights to increase “brand” and recognition of the venue.  Simulcasting licenses may not be available in all states at this time, but all gaming opportunities are becoming more available as business work with legislatures to provide mutually beneficial collaborations for state tax revenue, race tracks and private business entrepreneurs.

- Joseph DiDonato

Copyright - Cooking recipes are they protectable?

    This question shows up a surprising number of times.

    A recent case from the Court of Appeals for the Sixth Circuit, Tomaydo-Tomahhdo, LLC, et al v. Vozary, Case No. 15-3179, Oct. 20, 2015 (not for publication), affirmed that, in that case, the recipes and the recipe book in question are not copyrightable.  See Opinion (I am hosting a copy of the decision on Mega.co.nz).

    The Court found that the recipes are not copyrightable.  "The list of ingredients is merely a factual statement, and ... facts are not copyrightable."  See Opinion at 5.  Moreover, a "recipe's instructions, as functional directions, are statutorily excluded from copyright protection."  See Opinion at 5.

    Additionally, although recipe books can be protected as a compilation, the Court also found that this recipe book was not copyrightable.  See Opinion at 6.  The Court found that plaintiff-appellant never "point[ed] to anything to demonstrat[e] that the recipe book is an original compilation." See Opinion at 6.  The plaintiff-appellant failed to identify the selection process for the recipes, what order to place the recipes, and how the recipes were arranged in the book.  See Opinion at 4.

    I believe the Court's conclusion that recipe instructions cannot be protected is overbroad.  While I agree that the underlying process described in the instructions is not eligible for protection under 17 U.S.C. § 102(b), the description of the instructions may be eligible for protection.  If you describe a instruction step with minimal verbage (e.g., "put egg in water"), then that description would not be eligible for protection.  However, if you describe the instruction step with flowery illustrative verbage (e.g., "gently place the egg using a slotted spoon into the moderately boiling water using care not to immerse the egg to quickly"), then that original description should be eligible for protection. See U.S. Copyright Office, Compendium of U.S. Copyright Office Procedures, 3rd Ed. (Dec. 22, 2014) at § 716.


- Henry Park

USPTO and Java v8 update 65 build 17

    On my Macintosh, I received a notice that there is an updated version of Java.



    I called the US Patent Electronic Business Center on October 21st, and the representative I spoke to said that this version has NOT been tested with their systems, and that the representative suggested delaying the upgrade.  

    On October 27th, the representative (Agent 37) said that the update still has not yet been tested for Mac or PC, but that some users have reported success with the update.

- Henry Park

updated on 10/27 to add information from the representative

Fourteenth Amendment - Birthright citizenship and Texas birth certificates

    In the aftermath of the U.S. Civil War, the Fourteenth Amendment to the U.S. Constitution was adopted on July 9, 1868.  The Fourteenth Amendment includes a Citizenship Clause, which states:

All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside.

This clause has been read to mean that any child born in the U.S. or its territories is automatically a U.S. citizen.  Acquiring citizenship by the circumstances of one's birth, such as place of birth, is known as birthright citizenship; and approximately 33 countries offer birthright citizenship.

    Against the backdrop of birthright citizenship, there has been a concern that illegal immigrants are having children in the U.S. that become U.S. citizens.  See CNN link.  As the U.S. does not keep any records of births, that duty falls to the states, and each state determines what documentation is required to obtain a birth certificate.  In Texas, the Department of State Health Services determined that it would no longer accept as proof of identification a foreign photo identification card issued by Mexican consulates known as a Mexican matriculas. 25 Tex. Admin. Code § 181.28(i)(11)(D); Serna v. Texas Dep't of State Health Services, Case No. 1-15-cv-446 RP, Dkt 82 at 17-18 (To prevent link rot, I am hosting a copy of this decision through Mega.co.nz). As a result of that decision, a lawsuit was filed by immigrant parents who could not obtain birth certificates for their children.  Serna v. Texas Dep't of State Health Services, Case No. 1-15-cv-446 RP.

    On October 16th, federal district court judge, the Honorable Robert L. Pitman, issued an order denying plaintiffs' request for a preliminary injunction that the Department of State Health Services accept the Mexican matriculas as proof of identification for issuance of birth certificates in Texas.  Serna v. Texas Dep't of State Health Services, Case No. 1-15-cv-446 RP, Dkt 82. 

    As a procedural matter, it is important to note that a preliminary injunction is "an extraordinary remedy and the decision to grant a preliminary injunction is to be treated as the exception rather than the rule."  See Opinion at 5.

    Judge Pitman found that there was a substantial threat of irreparable injury to the Plaintiffs' children.  "[I]t simply begs credulity for Defendants to argue a birth certificate is not a vitally important document.  The rights and privileges of citizenship inure to those who are citizens.  The lack of a birth certificate, or other documentation establishing citizenship, presents a clear bar to access to those rights."  Opinion at 5-9.  Additionally, Judge Pitman found that there was a substantial threat of irreparable injury to the Plaintiff parents because the lack of the birth certificate affects family integrity.  Opinion at 9-11.

   Judge Pitman, however, did not find that the Plaintiffs were likely to succeed with their claims based on the evidence that was presented.  First, the Plaintiffs failed to show that Defendants lacked a compelling interest in protecting the issuance of birth certificates.  Opinion at 14.  Second, the Plaintiffs failed to show that law was not narrowly tailored to be the least restrictive means of achieving the compelling government interest.  This analysis is "not solely a question of law, but rather a mixed question of law and fact."  Opinion at 14.  Texas purported to be concerned with identity theft, reliability of identification documents, and fraud when it decided to no longer accept the Mexican matriculas.  Opinion at 17-19.  However, by singling out the Mexican matriculas compared to other foreign photo identification documents, current student identification, or medical insurance cards, that could lead to an underinclusive policy which would violate strict scrutiny.  Opinion at 19-20.  However, Plaintiffs failed to present any such evidence.  "[T]he arguments of Plaintiffs, while heartfelt, compelling and persuasive, are not enough without substantiating evidence to carry the burden necessary to grant relief to Plaintiffs at this early stage of the proceedings."  Opinion at 22.

   Therefore, Judge Pitman denied Plaintiffs request for a preliminary injunction and requested a full evidentiary hearing on this matter.


- Henry Park

Fantasy Sports - Nevada bans daily fantasy sports

   On October 16th, State of Nevada's Office of the Attorney General issued a memorandum to the Nevada Gaming Control Board concerning the legality of daily fantasy sports under Nevada law.

   Under the Unlawful Internet Gambling Enforcement Act of 2006, the question of whether fantasy sports are permissible depends on whether fantasy sports are chance-based or skill-based.  31 U.S.C.A. §§ 5361-5367; see earlier blog post.  However, under Nevada law, that distinction does not matter because "games of skill, games of chance, and hybrid games of both skill and chance ... are gambling games".  Memo at page 4.

    According to the Nevada Attorney General's Office, under Nevada law, daily fantasy sports are (1) considered sports pools, see Memo at pages 8-13, (2) are considered gambling games, see Memo at pages 13-15, and (3) may be considered lotteries, see Memo at pages 15-16.  Because of these findings, businesses offering daily fantasy sports must be licensed within the state of Nevada.

    Although the Memo addressed "daily fantasy sports, which track player performance over a single game", its logic similarly applies to "traditional fantasy sports, which track player performance over the majority of a season."  Memo at page 2.


- Henry Park

Privacy - EU-US Safe Harbor Framework Invalidated

    On October 6, 2015, the European Court of Justice invalidated the EU-US Safe Harbor Framework that was used by many businesses to transfer personal data from the EU to the US.  See Case C-362/14 opinion.  This decision had been expected given the European Court of Justice's Advocate General Yves Bot's conclusion that the September 23rd opinion.  See Case C-362/14 opinion.

    The Safe Harbor Framework was put into place because EU data protection law prohibits the transfer of personal data to any country outside of the European Economic Area unless "adequate" protection is in place.  The Safe Harbor Framework allowed US businesses to transfer personal data from the EU to the US provided that a US business agreed to certain data protection principles regarding the usage, disclosure, and protection of personal data broadly based on the EU model.  See European Commission Decision 2000/520.

    Now that the Safe Harbor has been invalidated, US businesses need to look at alternative methods to ensure that data can be transferred, such as (1) express consent by a user, (2) use of EU-approved model clauses to allow the data transfer (see European Commission Decision 2010/87/EU, Annex 1 dated February 5, 2010), or (3) binding corporate rules.  Eventually, there may be another option as there are current discussions between the Department of Commerce and the European Commission concerning a revised Safe Harbor Agreement.

    However, the validity of at least two of the alternative methods has been questioned.  On October 14th, one of the German Data Protection Authorities (Unabhängiges Landeszentrum für Datenschutz Schleswig-Holstein) stated in a position paper that (1) a broad consent is invalid and that an effective informed consent must provide information about the purposes of the processing, the risks of the data processing, and the level of protection, and (2) parties using the second method "now need to consider terminating the underlying standard contract with the data importer in the United States or suspending data transfers."  The underlying reasoning for the defect in the second method appears to be that U.S. laws do not provide sufficient protection to E.U. citizens data.

- Henry Park

updated on 10/8, 10/16 (added new last paragraph, and cite to model clauses)