Navigating Insurance in the NIL Era: What It Means for Universities, Athletes, Brands, and Families
The landscape of college athletics is undergoing a seismic shift with the rise of name, image, and likeness (NIL) rights. As student-athletes gain the ability to monetize their personal brands, a new era of opportunity—and liability—is expanding far beyond the athletes. In addition to the student-athletes, NIL stakeholders include universities, athletic conferences and organizations, sponsors, and the athletes’ families, among others. Whether the goal is to guard against emerging liabilities or protect the NIL revenue stream itself, stakeholders should consider both traditional and specialty lines of insurance. Here’s what you need to know.
1. What Are NILs?
NIL rights allow college athletes to profit from their personal name, image and likeness—essentially, their brand—while maintaining amateur status. This includes earning income through endorsements, social media, appearances and other commercial ventures. Ever since the US Supreme Court held in 2021 in NCAA v. Alston that NCAA member institutions were free to offer education-related compensation to student-athletes, doors have opened wide for athletes to engage in business opportunities that were previously off-limits, fundamentally altering the collegiate sports economy.
2. The House Settlement: A New Precedent
In May 2025, the landmark $2.8 billion settlement reached in House v. NCAA was finalized, reshaping NIL and revenue-sharing frameworks for college athletics. Often referred to as the “House Settlement,” it resolves multiple antitrust lawsuits and paves the way for direct revenue sharing between universities and athletes. Importantly, this settlement marks a turning point, signaling the NCAA’s acknowledgment of athletes as stakeholders in the multibillion-dollar collegiate sports industry.
3. New Precedent Breeds New Risks for Stakeholders
With new rights come new risks. The expansion of NIL rights and revenue-sharing models introduces complex liability exposures for all parties involved:
Universities may face management and board-level liability for failing to adequately monitor NIL deals, ensure Title IX compliance, or for violations of the tax code that could jeopardize their 501(c)(3) tax exempt status.
Athletes risk breaching contracts, violating NCAA or institutional policies, or becoming entangled in disputes over representation and compensation.
Brands partnering with athletes must navigate reputational risks and ensure compliance with advertising and endorsement regulations.
Families of athletes, often involved in managing NIL opportunities, may inadvertently expose themselves to tax liabilities or legal disputes if not properly advised.
And, critically for all of the above, consideration must be given to the potential for injury, academic failure, disciplinary suspension or expulsion and transfer, all of which stand to impair or cut off lucrative NIL revenue streams. Interested parties will want to take appropriate steps to protect NIL revenue should a disrupting event occur.
4. Insurance Solutions to Hedge Against Liability
To mitigate NIL-related risk, stakeholders should consider both specialized and traditional insurance products tailored for the NIL era. For example, NFP’s Sports and Entertainment Group offers a suite of coverage options designed to protect athletes, institutions, and affiliated entities, including:
Permanent Total Disability (PTD) and Temporary Total Disability (TTD): Protects athletes’ future earnings in case of injury or illness.
Loss of Value (LOV): Covers the financial gap if an athlete’s projected professional value declines due to injury.
Critical Injury Coverage: Offers lump-sum benefits for catastrophic injuries.
Group Disability Plans: Customizable for universities, conferences, or NIL collectives, these plans spread risk across multiple athletes and sports.
Traditional lines of insurance—such as directors and officers liability (D&O), commercial general liability (CGL), errors and omissions (E&O), and media liability—can also protect stakeholders against NIL-related liabilities. For example:
CGL and media liability policies may provide coverage for claims arising from the advertising and use of an athlete’s NIL.
E&O and D&O insurance can protect institutions and brands from allegations of missteps in negotiating or overseeing NIL agreements.
Insurance is not just a reactive measure—it is a strategic tool that enables stakeholders to participate in the NIL ecosystem with confidence and foresight. As the NIL era continues to evolve, look for the emergence of more specialized insurance products, as well as litigation surrounding the scope and applicability of both traditional and NIL-specific coverage.
Final Thoughts
The NIL era is here, and with it comes a new set of responsibilities. Universities, athletes, brands, and families must work proactively to navigate this evolving landscape. By understanding the risks and leveraging both traditional and tailored insurance solutions, stakeholders can protect their interests while empowering athletes to thrive both on and off the field.
Texas Governor Signs HB 40, Expanding Jurisdiction of the Texas Business Court
On the final day of the 89th Legislative Session, the Texas Legislature passed House Bill 40 (HB 40) to expand the jurisdictional and operational framework of the Texas Business Court.1 The Bill has since been signed by Governor Abbott and becomes effective on September 1, 2025. The new law builds on Texas’s 2023 initiative to establish a specialized venue for complex business litigation and makes the forum more accessible to corporate litigants. The most significant changes include amendments to reduce the monetary threshold for invoking the Business Court’s jurisdiction and to expand the category of case types that may be heard.
The Bill’s amendments, coupled with broader national conversations around litigation costs and court specialization, support the Business Court playing an increasingly important role in the national corporate governance and commercial litigation landscape. The new statutory changes also make now the time for Texas businesses and in-house counsel to evaluate whether their governing documents and contracts are up-to-date to take full advantage of Texas’s new laws.
Reduced Monetary Threshold
HB 40 lowers the Business Court’s amount-in-controversy requirement from $10 million to $5 million — and allows that threshold to be met by aggregating “the total amount of all joined parties” claims — for certain case types. These include:
cases arising out of a “qualified transaction” (defined as any single transaction or a “series of related transactions” with consideration valued at or above $5 million);
actions arising out of a “business, commercial, or investment contract or transaction,” other than an insurance contract, in which the parties agree to Business Court jurisdiction;
claims involving alleged violations of the Texas Finance Code or Business & Commerce Code by an organization, its officers or other governing persons; and
certain matters relating to intellectual property rights or trade secrets disputes.
Under the initial version of the Texas Business Court Act that passed in 2023, the lower $5 million threshold applied only to fundamental internal governance and securities matters — such as derivative actions, internal affairs disputes, securities claims against an organization or related persons, fiduciary duty claims against controlling persons and managerial officials and the like. The Bill’s promulgation of a lower threshold for other claim types within the Court’s jurisdiction should ultimately make the Business Court more accessible to a broader array of commercial parties and increase the volume of cases.
Additional Claim Categories Within Business Court Jurisdiction
In a significant addition, HB 40 adds intellectual property and trade secrets claims to the statute’s jurisdictional coverage. While the 2023 Act did not authorize the Business Court to hear intellectual property matters, HB 40 now expressly permits the Court to hear trade secrets cases and other “action[s] arising out of or relating to the ownership, use, licensing, lease, installation, or performance of intellectual property.”
HB 40 separately clarifies the Business Court’s authority to render decisions on arbitration matters. Parties that otherwise have standing to file claims in Business Court will be permitted to use the forum to enforce arbitration agreements, appoint arbitrators, review arbitral awards or seek other judicial relief authorized by an arbitration agreement.
While the above amendments to the Business Court’s jurisdictional scope are significant, HB 40 was almost more expansive. The initial version of the Bill would have extended the Business Court’s jurisdiction to also capture insurance and indemnity contract matters, “fundamental business transactions” involving mergers and similar large corporate asset transactions, certain large banking litigations, malpractice claims filed by corporate clients and multidistrict litigation (MDL) transfer cases. However, HB 40 was repeatedly revised in committee and through the legislative process to land on a much-narrowed change in the law, at least for now.
Other Substantive Changes to Texas State Laws
HB 40 includes other amendments to Texas state laws affecting the rights and obligations of parties seeking to litigate in the Business Court. Some of the more notable such amendments are addressed below.
Venue: The Bill expressly permits parties to amend their governing documents to designate venue for Business Court matters involving derivative proceedings, governance or internal affairs disputes, fiduciary duty claims against certain corporate persons and other actions arising out of the Business Organizations Code.
Exclusion of Consumer Actions: The Bill prohibits parties from filing state and federal consumer claims in Business Court, even if supplemental jurisdiction may otherwise exist. This amendment essentially prevents large consumer class actions from flooding the Court’s gates.
Expansion of Injunctive Relief Procedure: A new provision is added to the Texas Civil Practice & Remedies Code allowing parties to seek writs of injunction from another Business Court judge if the appointed judge is unavailable to timely consider and implement the writ’s purpose.
Montgomery County Moves Division: Montgomery County (covering Conroe, The Woodlands and other areas north of Houston) is being transferred out of the non-operational Second Business Court Division and added to the Eleventh Business Court Division (Houston). Houston — as well as Dallas — has notably received a large share of the new case filings in the opening months of the Court’s existence.
Preserving Rural Business Court Divisions: The legislature modified statutory sunsetting language from the Business Court Act to preserve the six non-operational divisions of the Business Court — namely the Second, Fifth, Sixth, Seventh, Ninth and Tenth Divisions (color-coded in the white regions of the map below).2
Context: New Industry Pressure in Delaware Increases Appeal for Texas Court System
The Texas Legislature’s passaContext: New Industry Pressure in Delaware Increases Appeal for Texas Court Systemge of HB 40 — less than a month after passing another business-friendly amendment to the Texas Business Organizations Code (SB 29) — comes at a time of significant scrutiny as to whether Delaware remains the premier state for incorporation and corporate governance.
While Delaware has long been the preferred forum for resolving internal governance and fiduciary matters, recent backlash from institutional investors and industry group advocates has highlighted perceived shortcomings in the Delaware Chancery Court. The Delaware Legislature has tried to step in to curb the noise, including by amending the Delaware General Corporation Law to add new safe harbor protections for controlling stockholder transactions, exculpating controlling shareholders from liability for alleged breaches of the duty of care, and implementing limits on shareholder books and records requests.
The national discourse continues nonetheless. In fact, the same week that HB 40 made its final rounds through the Texas Legislature, a Stanford Law School study3 also made rounds through corporate boardrooms, again questioning outcomes out of the Delaware Chancery Court. The study specifically found that the Chancery Court system has increasingly allowed large fee multipliers for plaintiffs’ attorneys, often exceeding 10 times the lodestar, at higher rates than observed in cases out of the federal court system. These findings have prompted renewed criticism from corporate governance groups and further calls for reform.
The growing tension in Delaware should ultimately increase the appeal of Texas and its alternative corporate governance system.
Conclusion
The Texas Legislature was busy this session expanding corporate protections and enhancing its Business Court system. The enactment of HB 40 specifically helps Texas build out its Business Court framework by refining jurisdictional standards and procedural mechanisms to expand access to the Court. Importantly, the statutory changes this session may require corporate parties to revise their governance documents and contracts to take full advantage of these laws. Katten attorneys across multiple practice groups continue to closely monitor developments and to counsel clients on invoking new protections provided by the legislature.
[1] The Texas Legislature enacts HB 40 just weeks after passing Senate Bill 29 (SB 29) — which previously expanded the Business Court’s jurisdiction over corporate governance matters and also extended related litigation protections to domestic entities. See Texas Governor Signs New Business-Friendly Governance Law to Promote In-State Corporate Growth: Senate Bill 29 Analysis, Katten (May 14, 2025), available at https://natlawreview.com/article/texas-governor-signs-new-business-friendly-governance-law-promote-state-corporate.
[2] See Texas Business Court Divisions Map, Tex. Judicial Branch, available at https://www.txcourts.gov/media/1458995/texas-business-court-divisions-map.pdf.
[3] Grundfest, Joseph A. and Dor, Gal, Lodestar Multipliers in Delaware and Federal Attorney Fee Awards (April 30, 2025), available at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5237545.
USPTO Expands on ‘Settled Expectations’ as Basis for PTAB Discretionary Denials
The US Patent and Trademark Office (USPTO) recently issued a Director Discretionary Denial decision expanding on the “settled expectations” ground for discretionary denial of a post-grant review proceeding.
Background
On the heels of two recent memoranda reshaping the Patent Trial and Appeal Board’s (PTAB) approach to discretionary denials for parallel proceedings and nearly 20 Director Denial decisions since May, Acting Director Coke Morgan Stewart issued a decision on June 6 denying institution of an inter partes review (IPR) for “settled expectations.” The USPTO’s first memo clarified how the PTAB should address discretionary denials after the recission of the Fintiv memo, creating a holistic approach to the Fintiv factor analysis. The second memo put forward the interim procedure for institution decisions, which bifurcates between (1) discretionary considerations and (2) non-discretionary considerations and merits.
Following the implementation of the new memos and procedure for discretionary denial, Director Stewart’s June 6 decision discretionary denied the IPR petition “because one of the patents has been in force since as early as 2012 and Petitioner was aware of it as early as 2013—having cited the then-pending application that issued as the challenged patent in an [IDS] petitioner filed in its own patent application—settle expectations favor denial of institution.” IPR2025-00363, -00374, -00376, -00377, -00378, Paper 10 at 3 (PTAB June 6, 2025). Director Stewart’s decision appeared to have created a new basis for discretionary denial, even in the face of Fintiv factors weighing against denial.
Expanding upon the June 6 decision, Director Stewart issued another discretionary denial decision on June 18, applying the same “settled expectations” doctrine. IPR2025-00408, Paper 21 at 2 (PTAB June 18, 2025). This time, Director Stewart found that the expectations became settled after the patent had been in force for almost eight years, regardless of whether the petitioner had actual knowledge of the patent during that time. Id. at 2-3.
Practical Considerations
The latest Director Discretionary Denial decision provides several key takeaways for both patent owners and petitioners alike. First, petitioners need to do more than just respond to a patent owner’s discretionary denial arguments; they should “provide any persuasive reasoning why an [IPR] is an appropriate use of Office resources.” Second, there is no bright-line rule for when expectations become settled but “in general, the longer the patent has been in force, the more settled expectations should be.” Third, actual notice of the patent “is not necessary to create settled expectations.” Going forward, petitioners should be prepared to seek review earlier in a patent’s life-cycle where possible and provide rationale for why institution is an appropriate use of USPTO resources. Conversely, patent owners should be prepared to include justifications beyond the Fintiv factors as to why the totality of circumstances, including settled expectations, favor denial.
Nebraska Attorney General Files Lawsuit Against Temu Alleging Consumer Protection Violations
On June 12, 2025, Nebraska Attorney General Michael T. Hilgers filed a lawsuit against Chinese e-commerce company Temu and its affiliates (PDD Holdings Inc. (formerly Pinduoduo Inc.) and Whaleco Inc.), alleging consumer protection violations ranging from malware concerns to deceptive trade practices.
In a press release, the Attorney General’s office states, “Temu unlawfully harvests data, including from kids, utilizes multiple deceptive practices to encourage purchases, allows infringement and counterfeits to thrive, and engages in deceptive marketing to greenwash its image.” The press release continues: “Once Nebraskans download the Temu app, they lose all control over their personal data, which may ultimately end up in the hands of a hostile foreign power.”
“Temu is putting Nebraskans’ privacy at risk and running a platform rife with deceptive listings, unlawful promotional practices, and products that rip off Nebraska brands and creations,” Hilgers said. “Our office will hold Temu accountable for its exploitation of Nebraska consumers, brands, and creators and fight hard for honesty and safety in the online marketplace.”
Nebraska’s Allegations
1.
Malware & Spyware Installation: The lawsuit alleges that Temu’s app automatically installs software to a user’s phone without consent and, in essence, functions as malware intended to exfiltrate sensitive user information without consent and to spy on user behavior. The lawsuit cites to interventions by the dominant app marketplaces as proof that Temu’s code is intentionally created to prevent third parties from uncovering their bad acts, with code designed to detect and evade forensic tools.
2.
Privacy Violations: The lawsuit alleges that Temu’s app purports to be an e-commerce app but is instead designed to collect users’ personally identifiable information (PII) by misrepresenting, omitting, and deliberately concealing the app’s behavior. The lawsuit alleges that Temu does this to “prevent the user from knowing that said PII is subject to unfettered use by other individuals and an adversarial government,” (i.e., China). That the alleged privacy violations are executed through code, making it difficult or impossible for a layperson to discover, makes it that much more egregious and harmful to Nebraskans.
3.
Intellectual Property Infringement: Temu is accused of hosting numerous products that infringe on copyrights and other intellectual property rights, potentially harming legitimate businesses and creators. According to the lawsuit, Temu frequently sells counterfeit, knock-off products in violation of the law. For example, the lawsuit alleges that Temu was reported for selling knockoffs and continued to do so even after the issue came to light.
4.
Forced Labor: One of the lawsuit’s more serious accusations is that Temu uses forced labor in the production of its goods, which, if true, would be a human rights violation. The lawsuit cites a 2023 Los Angeles Times exposé of Temu, as well as U.S. congressional reports finding that Temu’s products are manufactured in China’s western province of Xinjiang, which is a region with known links to forced labor and detention camps.
5.
Fake Reviews: The lawsuit alleges that Temu compensates users to write reviews, which are then skewed positive. It also alleges that Temu mischaracterizes reviews as “five star” when the language of the review is clearly negative.
6.
Deceptive Representations as to Product Quality: The lawsuit asserts that, according to the Better Business Bureau, hundreds of consumers have complained in the past year alone, earning Temu a 2.1 out of 5 rating. The lawsuit references consumer complaints of Temu’s poor-quality goods and deceptive marketing practices, including the fact that the goods received often do not resemble the photos advertised, where such advertisements appear to be copied directly from other sellers on other consumer retail sites. Attorney General Hilgers also highlights the allegedly deceptive nature of Temu’s product listings, saying, “Product descriptions and pictures are often blatantly wrong. This is exacerbated by artificially skewed positive reviews paid for by Temu and Temu’s made-up ‘market price’ that makes the real price look great by fake comparison.”
7.
False Reference Pricing: The lawsuit alleges that Temu engages in false reference pricing, inflating the full price of a product in order to trick consumers into thinking they are receiving a discount which never actually existed (also known as dark pattern advertising).
8.
Unauthorized Charges: The lawsuit alleges that consumers have complained about receiving and being charged for goods they did not order, with Temu reusing consumer information provided at checkout for legitimate purchases.
Foreign Government Data Misappropriation
The lawsuit asserts that Temu’s data collection practices are subject to Chinese law, requiring that Chinese companies provide user data to the government upon request. These laws include, but are not limited to, the National Security Law, Cybersecurity Law, and National Intelligence Law, which are all part of “an interrelated package of national security, cyberspace, and law enforcement legislation” that “are aimed at strengthening the legal basis for China’s security activities and requiring Chinese and foreign citizens, enterprises, and organizations to cooperate with them.”
The lawsuit further explains that under China’s Data Security law, even “a company holding data belonging to a US citizen stored on a Chinese server may not be able to legally hand over that data to the US government without proper approval.” More specifically, companies “are prohibited from providing any data stored in China, regardless of the data’s sensitivity level and whether or not the data was initially collected in China, to any foreign judicial or law enforcement agency without the prior approval of the relevant [Chinese Government] authorities.”
Finally, the lawsuit alleges that Chinese law enforcement and intelligence services interpret Chinese law as applying to any data, wherever it is stored, if China has a national security interest in that data. Chinese authorities have forced even refugees from China to hand over data stored outside of China to Chinese authorities under such circumstances, citing Chinese law.
Legal Actions and Remedies
The Attorney General is seeking to protect Nebraska consumers and hold Temu accountable for its alleged unlawful practices. The lawsuit requests civil penalties, restitution for affected consumers, and injunctions to prevent further deceptive practices.
Takeaways
This lawsuit underscores the importance of consumer protection and the need for transparency in business practices. As the case unfolds, it will be crucial to monitor its impact on both Temu and the broader e-commerce landscape.
Privacy Tip #447 – Understanding Cybersquatting
We are seeing an increase in cybersquatting incidents. What is cybersquatting and how can it affect you?
According to Sentinel One, cybersquatting, or domain squatting, “involves the registration, selling, or use of an Internet domain name in bad faith to profit from the goodwill of a trademark that belongs to someone else.” Cybersquatting spoofs real brands to try to get consumers to click on a fraudulent domain to pay for goods or services that are counterfeit or never sent to the consumer after purchase, or obtaining advertising revenues through pay-per-click advertising, where the cybersquatter collects users’ information to make false purchases.
Cybersquatting is damaging to companies because it confuses consumers because they are unable to identify the real website for a brand. If a company is the victim of cybersquatting, consumers may refuse to purchase items online because they are unsure of the correct website. In addition, cybersquatting directs traffic to false sites, and when consumers purchase something from these sites or provide their credentials to the threat actor, they suffer a loss, and as a result, the consumer will no longer trust the brand, causing financial harm to the brand.
In addition, cybersquatting affects the reputation of a company when it is associated with fraudulent sites.
There are different types of cybersquatting, including domain warehousing, where cybersquatters register expired available domain names, then try to sell them back to the legitimate business. “Businesses should stay alert in renewing their domain registration to avoid such risks.”
Typo cybersquatting is when cybersquatters file domain names that are misspelled but similar to brand names to get consumers to click on the fake domain to launch phishing or malware campaigns.
Name jacking is when the names of celebrities or public figures are registered without the individual’s permission. The name jacker will use that individual’s name to impersonate them to make a profit or attempt to sell the domain at a high price.
Identity theft cybersquatting is when a cybersquatter files a domain that is a close variation to the real company’s domain (such as the name with a transposed letter or additional words attached to the company’s name) in an attempt to get consumers to click on the wrong domain and provide personal information or credentials to steal their identity or personal or financial information.
According to Sentinel One, there are several steps that can be taken in the event of a cybersquatting incident:
Seek the services of legal experts to take legal action
Make a complaint under the Uniform Domain Name Dispute Resolution Policy
Send a cease-and-desist letter to the cybersquatter
Buy the domain
Use a domain monitoring company to track domain registrations and take down false domains
Educate consumers
Cybersquatting incidents increased in 2024 and are expected to increase even more in 2025. It is crucial to understand how cybersquatters can damage your company so you can prepare and prevent your organization from becoming a victim.
Interview with Liu Yue of the Christian Silvain Foundation on the Highest Damages Awards in a Chinese Fine Arts Case
Marking the conclusion of a long legal battle, the Beijing Higher People’s Court recently affirmed an August 24, 2023 decision by the Beijing IP Court against Sichuan Academy of Fine Arts Professor Ye Yongqing. The Beijing IP Court ruled that Ye infringed the copyright of Silvain in his paintings and ordered Ye to pay Silvain 5 million RMB, publish an apology and cease infringement. That apology was published in China’s Legal Daily on January 23, 2025.
The Beijing IP Court found that 122 of Ye’s works had plagiarized 87 of Silvain’s. Ye is a well-known artist selling about $24 million USD of paintings at auctions per the Global Times. Ye’s most expensive painting sold for just over 1 million Euros and many of his works sold for about 200 thousand to 500 thousand Euros. In contrast, Silvain’s artworks often sell for 5,000 to 15,000 Euros.
On April 30, 2025, the Beijing IP Court listed Silvain’s case in the Court’s annual list of 2024 IP cases along with 6 other IP cases.
Left: Artwork by Silvain in 1990. Right: Artwork by Ye from 1994.
Wininger: Can you introduce yourself – what is your title, company, and role in the litigation? Liu: I’m Liu Yue, a member of the Christian Silvain Foundation. When the news involving Ye Yongqing’s copying of Silvain’s work became an international story spanning China and Belgium, I took an active role in supporting Mr. Silvain’s legal efforts. My responsibilities included securing legal representation, putting together the evidence, and facilitating communication with his lawyer, Mr. Wu Tao, a trusted friend who handled the case.
Wininger: There appear to be infringing works dating back to at least 1994. How did the artist first learn about the infringement?
Liu: Long before the plagiarism became public, people close to the artist had mentioned to him that they’d seen paintings suspiciously similar to his. However, he couldn’t confirm who was behind them or if it was even the same artist. He was vaguely aware that his art might have been copied abroad, but it wasn’t until 2018—when Ye Yongqing planned an exhibition in Brussels—that Silvain pieced everything together and took action.
Wininger: Was there any communication with Ye Yongqing to resolve this matter without litigation? Did he respond?
Liu:Ye posted on social media claiming he had tried to reach out to Silvain. However, Silvain’s position was always clear: he would only accept a public apology and declined to engage in any further communication with Ye.
Wininger: Why did you decide to litigate?
Liu: Ultimately, the decision rested with the artist. Over time, it became evident that Ye had no intention of issuing a public apology voluntarily, leaving litigation as the only viable recourse. Silvain’s choice to pursue legal action was courageous, particularly given the widespread skepticism in the West about intellectual property enforcement in China. Many believed that plagiarism was culturally tolerated in China and that a foreign artist stood little chance in a Chinese court. Silvain’s case challenged those assumptions.
Wininger: Initially, it looks like the Jinniu District People’s Court of Chengdu City didn’t accept the case? That must have been a blow to the artist. It was a criminal case and then you switched to civil case? Why did you first try for criminal prosecution?
Liu: Actually, from the very beginning, we pursued parallel paths – a civil claim for copyright infringement alongside a criminal complaint for academic fraud. This dual approach served two key purposes: first, the civil case would establish the factual basis of plagiarism, while simultaneously, the criminal one was meant to demonstrate our seriousness about pursuing all legal avenues. The Chengdu court’s decision to defer the criminal case was reasonable and expected, as establishing plagiarism in civil court was a necessary first step.
After we won the second civil judgment and Ye issued his public apology, we chose not to pursue the criminal case further as our primary objectives had been achieved.
Wininger: What was your strategy at the Beijing IP Court to prove infringement?
Liu: Our legal team’s approach was straightforward: place Ye’s copied works side by side with Silvain’s originals and analyse their similarities in detail. This method left little room for doubt.
Wininger: Why do you think it took over five years for Ye to issue his apology?
Liu:I can’t say for certain, but I suspect Ye’s legal team may have advised him to prolong the proceedings, exhausting every legal avenue in hopes that we would abandon the case.
Wininger: Has Ye paid the judgment in full? Liu:Yes, besides issuing the apology he has paid the full judgement of 5 million RMB.
Wininger: Is the artist satisfied with the judgment?
Liu: Absolutely. For the artist, the public apology was everything—far more important than any financial compensation. Actually, He has directed all financial damages from the judgment to properly acknowledge and reward the legal team and key supporters whose tireless efforts made this victory possible over the past 5 years. Not a single cent was retained for himself. The apology was the only vindication he sought.
Wininger: Has the market value of Ye’s artwork declined while Silvain’s has risen since the judgment?
Liu: The shift happened as soon as the scandal broke in 2019—once the news went public, the plagiarism was so blatant that the market reacted immediately. Ye’s reputation suffered, while Silvain’s recognition grew. For Silvain, however, the court’s ruling and Ye’s public apology carried far greater personal significance than any impact on their respective art valuations.
Wininger: Thank you for taking the time to answer these questions. I’m glad to see justice was served.
Liu: My pleasure, thank you for having me.
Antitrust Labor Markets: $2.8 Billion NCAA Settlement Reshapes College Athletics
A federal judge for the U.S. District Court for the Northern District of California recently approved a groundbreaking, nearly $2.8 billion settlement that promises to reshape college athletics by allowing schools to share revenue directly with college athletes. The settlement stems from antitrust litigation—focused on the labor market of college athletes—that alleged National Collegiate Athletic Association (NCAA) rules restricting or prohibiting athletes from being paid for use of their names, images, and likenesses (NIL) are unlawful restraints on trade that suppressed the labor market for college athletes.
Quick Hits
A federal judge approved a historic $2.8 billion settlement allowing college athletes to receive direct revenue sharing from their schools, fundamentally changing the landscape of college athletics.
The settlement requires the NCAA and Power Five Conferences to pay over $2.5 billion to athletes for prior use of their NIL, while also permitting direct revenue sharing with athletes moving forward.
While the settlement does not constitute a judgment on the competitive impact of the challenged conduct, it represents a significant victory for antitrust enforcement in college sports.
Other labor issues were not addressed or resolved in the settlement agreement.
On June 6, 2025, U.S. District Judge Claudia Wilken granted final approval to the settlement agreement in In Re: College Athlete NIL Litigation, consolidated litigation brought by a class of nearly 400,000 current and former NCAA Division I college athletes against the NCAA and the biggest college athletics conferences, the so-called Power Five Conferences.
The consolidated litigation addressed claims that NCAA rules restricting or prohibiting compensation for using athletes’ NIL, compensation for athletic services, and scholarship limits violated antitrust law. Essentially, the suits alleged that NCAA rules denied athletes the chance to be compensated for endorsements and media appearances.
Under the settlement agreement, the NCAA and Power Five Conferences will pay college athletes more than $2.5 billion for use of their NIL going back to 2016, and the NCAA will allow schools to start sharing $20 million in revenue directly with college athletes beginning in the 2025-26 school year.
The NCAA’s NIL policies have been a contentious issue for years, with numerous lawsuits challenging the restrictions on athletes’ ability to profit from their own likeness. This settlement marks a pivotal moment in the ongoing debate over athletes’ rights and compensation.
However, payments are on hold as the settlement is facing two appeals that the back payment distributions violate Title IX of the Education Amendments, which prohibits sex-based discrimination in education programs. The appeals reportedly will not impact the revenue-sharing portion.
While the settlement does not constitute a judgment on the competitive impact of the challenged conduct, it represents a significant victory for antitrust enforcement in college sports. Here, we delve into the details of the settlement and its far-reaching implications for antitrust restraint of trade claims that focus on labor markets (as distinguished from product markets).
Key Terms of the Settlement
The settlement stems from three lawsuits: the consolidated House v. National Collegiate Athletic Association and Oliver v. National Collegiate Athletic Association lawsuits, which challenged rules that restricted athletes from being compensated for the use of their NIL and prohibited conferences and schools from sharing revenue received from third-parties for commercial use of the athletes’ NIL; Carter v. National Collegiate Athletic Association, which alleged the NCAA’s rules prohibiting pay-for-play violated antitrust law; and Hubbard v. National Collegiate Athletic Association, which raised claims related to athletes receiving allowed academic achievement awards.
Damages
Under the settlement agreement, the NCAA and the Power Five Conferences will contribute $2.576 billion to a settlement fund over the next ten years to pay former college athletes for the past use of their NIL going back to 2016. The NCAA and Power Five Conferences also agreed to pay $200 million into a settlement fund for class members who competed between 2019 and 2022 to settle the Hubbard claims.
The agreement calls for a $1.976 billion settlement fund for NIL-related injuries, including NIL in broadcasts for certain college football and men’s and women’s basketball players. The settlement agreement also calls for establishing a $600 million fund for class members with pay-for-play claims.
Injunctive Relief
In addition, the NCAA agreed to modify existing rules to allow schools to provide direct benefits and compensation to college athletes worth up to 22 percent of the Power Five schools’ average athletic revenues each year, starting at more than $20 million per school in 2025-26 and growing to $32.9 million per school in 2034-35.
The settlement requires eliminating NCAA scholarship limits, potentially resulting in more than 115,000 additional scholarships annually. However, the NCAA will be permitted to adopt roster limits for Division I sports. Class members who may have roster spots taken away due to the implementation of the settlement will be exempted from the limits and not counted toward their schools’ roster limits for the remainder of their college athletics careers.
Under the settlement agreement, the NCAA will modify rules to allow NIL payments from third parties, except that the NCAA will be allowed to restrict NIL payments from certain third parties associated with schools (i.e., “boosters”).
Finally, the settlement agreement requires that disputes arising from the enforcement of third-party NIL restrictions be resolved via neutral arbitration, changing the current system in which the NCAA makes enforcement decisions and resolves disputes concerning third-party NIL pay prohibitions.
Antitrust Claims
The plaintiffs brought claims under Section 1 of the Sherman Act for unreasonable restraint of trade, alleging that the NCAA’s rules constituted a horizontal agreement that caused anticompetitive effects in the labor market for college athletes. Specifically, they alleged that the rules unlawfully deprived college athletes of compensation for the use of their NIL and “artificially limited supply and depressed compensation” paid to college athletes for their NIL and their athletic service.
The settlement marks a significant shift in how college sports are governed and how athletes are compensated. Most significantly, it allows college athletes to share in the revenue generated by college athletics, allows colleges to offer more athletic scholarships, and prohibits restrictions on NIL pay from unaffiliated third parties.
The elimination of scholarship limits is particularly noteworthy. Under the previous rules, the NCAA capped the number of scholarships schools could offer. By removing these caps, the settlement allows schools to provide more scholarships, thereby increasing access to higher education for many athletes. However, the NCAA will still be able to set roster limits for sports, potentially reducing slots for walk-on (nonscholarship) athletes.
In its seventy-six page opinion approving the settlement, the court repeatedly found that approving the class action settlement had a positive benefit when it comes to contributing to securing a more competitive market for the labor of Division I athletes.
Labor Market Impact
The settlement agreement comes after years of upheaval in college sports amid a barrage of antitrust lawsuits challenging the NCAA’s “amateurism” rules, culminating in the 2021 Supreme Court of the United States ruling in Alston v. National Collegiate Athletic Association, in which the Court held that regulations that limited education-related pay and benefits are unlawful under federal antitrust law. Additionally, several lawsuits have challenged NCAA transfer restrictions with differing outcomes.
This latest litigation challenged rules restricting athletes from being paid for using their NIL. The NCAA has already relaxed such rules and has reached a separate settlement in litigation over rules restricting schools from using NIL compensation as a recruiting tool. The change has allowed current college athletes to sign endorsement deals with third parties and sparked the creation of organized groups of boosters affiliated with individual schools, known as collectives, to pool NIL money and distribute it to athletes at the school.
Under the new settlement, much of that money could be replaced with direct revenue sharing from the schools themselves. Further, the new settlement leaves room for the NCAA to seek to limit the influence of boosters by allowing restrictions on payments from associated third parties.
Still, the settlement will have profound implications for labor markets in college sports. By allowing NCAA college athletes to receive compensation for their NIL and eliminating scholarship limits, the settlement effectively recognizes college athletes’ economic contributions to the college sports industry. This recognition could lead to broader questions about college athletes’ employment status.
Labor Issues Not Addressed by the Settlement
While approving the settlement, the court specifically noted it does not address other labor rights of NCAA college athletes. For example, the settlement does not prohibit college athletes from attempting to unionize, from pursuing wage and hour claims under the Fair Labor Standards Act, or any other federal labor laws or analogous state labor laws.
Potential Future Legislation
The settlement may prompt federal lawmakers to consider new legislation that addresses the employment status of NCAA college athletes and provides the NCAA with clearer guidelines on NIL compensation. The outcome of these legislative efforts could further reshape the landscape of college athletics.
The NCAA has also been pushing the U.S. Congress to pass legislation that would prevent college athletes from being deemed to be employees of schools and to provide the NCAA with an antitrust exemption or immunity to allow it to enforce rules related to transfers and other potential compensation guardrails. The likelihood of such legislation passing remains uncertain.
Next Steps
The settlement is a landmark decision that will have lasting effects on antitrust and labor markets in college sports. Still, further legal questions remain, including regarding the influence of boosters, the lawfulness of certain transfer restrictions, and whether college athletes could be considered employees. Additional litigation over these issues is possible, as is federal legislation addressing college athletes and potential antitrust protection for the NCAA.
Snack Wars: Mondelez Challenges Aldi’s Packaging Design Strategy in Trademark Infringement Lawsuit
The Aldi supermarket chain has built a loyal and growing following—Aldi is on pace to open more than 225 new stores this year and promotes itself as a lower-cost alternative to traditional brands. Aldi’s slogan is “like brands, only cheaper.” Under this business model, and similar to many other large retailers, Aldi promotes its private-label branded products. But food giant Mondelez International Brands is now alleging that Aldi has taken their slogan too far when it comes to product packaging of some of Mondelez’s brands.
Mondelez is challenging Aldi’s packaging design strategy, filing a lawsuit in the U.S. District Court for the Northern District of Illinois alleging Aldi’s store brand packaging designs are too “like brands” Oreo, Wheat Thins, Nutter Butter, Chips Ahoy, Ritz, Premium, and Nilla Wafters, all owned by Mondelez. The suit was filed May 27, 2025, and accuses Aldi of willful trade dress infringement and unfair competition.
The goal of trademark and trade dress protection is twofold: (1) to protect consumers from being misled or confused about the origin of the product so consumers can reasonably identify and select products based on the brand expecting a certain quality and reputation; and (2) to safeguard the goodwill and reputation a business has built around a brand, ensuring that others do not unfairly profit from or dilute that investment. For instance, if a customer picks up a package of Oreo cookies, based on the goodwill that Mondelez has built up the Oreo brand, that customer reasonably knows what to expect in terms of quality.
At the heart of this case is what Mondelez claims to be the systemic copying by Aldi of the visual design of at least seven of its most recognizable brands. These identical types of products (i.e., cookies and crackers) are alleged to have packaging designs with similar colors, fonts, layouts, and imagery as the Mondelez brands.
For example, Aldi’s Original Sandwich Cookies with Vanilla Filling are packaged in a blue and white bag, with the cookies in the center and a red logo in the upper left corner. The layout, design, and color scheme resemble the Oreo packaging design. But the question for the court is, “Does this similarity constitute trade dress infringement?”
Mondelez argues that it does, calling Aldi’s packaging in question “blatant copies” that are “likely to deceive and confuse” customers. Mondelez is seeking monetary damages and injunctive relief.
Last year, Aldi lost a similar lawsuit in Australia. An Australian court ruled that its packaging infringed the copyrights of Hampden Holdings’ Baby Bellies, a children’s snack brand.
While it is common for private-label brands to share some general features with their national brand equivalent products, signaling to consumers that this is a lower-cost alternative, this case could have broad implications on how closely the private-label brands can resemble national brands without violating trademark and trade dress infringement.
Will more major brands be increasingly willing to litigate to protect the look and feel of their products, and not just their names as retailers like Aldi grow their private-label offering and increasingly complete directly with national brands? This case underscores what appears to be a growing tension between national brand owners and retailers over how far private labels can go in mimicking established protects.
Companies should ensure their products designs are distinctive and legally defensible, balancing cost-effective branding and clever marketing with legal compliance to avoid infringement claims. Like for trademarks, clearance research and analysis should be done for trade dress, including packaging designs, prior to use.
The case is Mondelez International, Inc. et al. v. Aldi Inc.
NIL Rules Apply to High School Athletes! Well, Almost
College athletics in the United States underwent a substantial change in July of 2021 after individual states began enacting laws to permit student-athletes to legally monetize their name, image, and likeness (NIL) without the fear of losing either their athletic scholarship or eligibility. These state laws, for the most part, now allow college athletes to receive compensation from brands, marketing firms, broadcasting, and social media companies, or any other entity that wishes to retain their services. As college athletes began to capitalize on their individual NIL, the question became – what about high school athletics? Could a student-athlete competing at the high school level earn compensation from their NIL comparably to a college athlete? The answer – depends on the state in which that athlete is competing.
Currently, forty states, in addition to the District of Columbia, permit high school athletes to earn money from selling or licensing their NIL rights without forgoing eligibility or the right to participate. Of the ten remaining states, five have legislation currently pending that could eventually permit such activities.1 Interestingly, one state that previously banned NIL practices was North Carolina – that was until a lawsuit was filed against the state’s Board of Education compelling them to do otherwise.
That lawsuit, brought by Rolanda Brandon, on behalf of her minor son Faizon Brandon (a highly rated 5-star quarterback), was filed on August 23, 2024, in North Carolina’s General Court of Justice, Superior Court Division against the North Carolina State Board of Education and North Carolina Department of Public Instruction. Per the complaint, the Brandons asserted that although the state of North Carolina’s legislature did direct the North Carolina State Board of Education to regulate how high school athletes could monetize their NIL, that the Board, in lieu of regulating, prohibited it outright.2 Because the Board of Education exceeded their delegated statutory authority, the Brandons claimed, its NIL prohibition was arbitrary and capricious and therefore invalid pursuant to N.C. State Stat. Section 1-253 and the North Carolina Rule of Civil Procedure 57. The Brandons sought a preliminary injunction against the Board’s NIL ban due to the fact that Faizon and his family would be irreparably harmed financially because it precluded them from entering into a formal licensing and endorsement agreement with NIL Sponsor 1, while also foreclosing any additional opportunities with other businesses in the future.3
By way of background, in September of 2023, the North Carolina state legislature adopted a bill directing the Board of Education to “adopt rules governing high school interscholastic athletic activities conducted by public school units” including “student amateur status requirements, and rules related to use of a student’s name, image, and likeness.”4 On July 1, 2024, the North Carolina State Board of Education, in lieu of adopting a set of regulatory rules, instead outright banned every public high school athlete from using his or her name, image, or likeness for commercial purposes.5 That outright prohibition, however, apparently was an overreach by the Board of Education because on October 1, 2024, Superior Court Judge Graham Shirley granted the Brandons’ motion for preliminary injunction and enjoined the Board from prohibiting any athlete attending a public school in the state of North Carolina from exercising his or her right to monetize their NIL.
Although the state of North Carolina’s ruling is not legal precedent for the other remaining states currently foreclosing high school athletes from monetizing their NIL, those states should take notice and understand that their prohibition may be vulnerable to a legal challenge. That being said, with no national standards regarding NIL, most of the forty states that do allow for monetization rest upon their high school athletics governing bodies to formulate any and all rules and regulations. This leads to a variation of standards between states, but there are a few key restrictions present in most of these rules that high school athletes should be aware of:
High school athletes typically may not refer to or include their school’s uniforms, logos, colors, or facilities of the state’s high school athletic association in their NIL activities.
High school athletes are typically prohibited from partnering with gambling, alcohol, tobacco, weapons, firearms, ammunition, and other adult categories of brands.
In those states where NIL opportunities are allowed, high school athletes have a chance for a significant financial windfall. However, athletes, their parents, and those advising them must ensure that any NIL agreement is in accordance with the applicable rules of their state, since noncompliance could lead to loss of eligibility to participate in athletic competition, which will certainly jeopardize any future athletic and financial opportunities.
1 Michigan, Delaware, Wyoming, Texas, and Alabama.
2 Brandon v North Carolina Board of Education, et al, 24CV026975-910
3 24CV026975-910 Complaint at page 20.
4 2023 N.C. Sess. L. 133 Section 17. (a) (N.C. Gen Stat. Section 115C-407.55(1)(h))
5 ATHL-008 (NIL Prohibition).
When Is a Car a Character? The Ninth Circuit Revisits Copyrightability in Halicki v. Carroll Shelby Licensing
The Copyright Act does not expressly address the protection of individual characters in expressive works, but courts have long recognized that certain characters, particularly those with strong visual or narrative identities, may be independently copyrightable. The Ninth Circuit crystallized this principle in DC Comics v. Towle, 802 F.3d 1012 (9th Cir. 2015), where it held that the iconic Batmobile, as depicted in both comics and films featuring the Caped Crusader, qualified as an independently protectable character.
Towle established a three-part test for character copyrightability. Under the Towle test, in order to be independently copyrightable, a character must: (1) have “physical as well as conceptual qualities”; (2) be “sufficiently delineated to be recognizable as the same character whenever it appears” and display “consistent, identifiable character traits and attributes”; and (3) be “especially distinctive” and contain “some unique elements of expression.” This framework has guided courts in assessing whether a creative element is merely a prop or a protectable character.
In Towle, the Ninth Circuit concluded that the Batmobile satisfied its three-part test. Among other things, the Ninth Circuit noted that the Batmobile appeared across decades of media as a high-tech, weaponized vehicle with a bat-inspired aesthetic and narrative agency, consistently assisted Batman, exhibited unique traits, and was integral to the storylines of the works in which it appeared. In subsequent cases, courts have applied the Towle test to a range of creative works, reinforcing the notion that only characters with enduring, distinctive, and expressive features merit copyright protection. But what happens when the line between character and object blurs—when the “character” is a car without personality, dialogue, or autonomy?
This was the issue in the Ninth Circuit’s recent decision in Carroll Shelby Lic., Inc. v. Halicki, No. 23-3731, 2025 WL 1499052 (9th Cir. May 27, 2025), in which the Ninth Circuit considered whether “Eleanor” – the name given to various Ford Mustangs that have appeared in the Gone in 60 Seconds films – qualified as a copyrightable character. In the original 1974 film, Eleanor was a customized 1971 Ford Mustang Sportsroof and assigned the feminine codename by the film’s protagonists. Multiple Mustangs donned this moniker over the three subsequent films, yet none possessed consistent attributes. For example, the 2000 remake featured a gray Shelby GT500 Mustang, also dubbed Eleanor, which sparked a long-running dispute over whether that depiction gave rise to character protection.
Procedurally, the case arose when Denice Halicki, widow of Gone in 60 Seconds creator H.B. Halicki, sued Carroll Shelby Licensing and others for allegedly infringing her claimed copyright in Eleanor by licensing others to produce Eleanor-style cars. The district court granted summary judgment for defendants, and the Ninth Circuit affirmed in part. Applying the Towle framework, the Ninth Circuit concluded that Eleanor failed all three prongs of the test. First, the Ninth Circuit found that Eleanor lacked “conceptual” traits beyond its function as a vehicle; it showed no “anthropomorphic qualities” such as acting with agency or volition, displaying sentience and emotion, or otherwise acting in any humanized way. Second, Eleanor’s form changed dramatically between, and even within, the Gone in 60 Seconds films, from a yellow fastback in the original 1974 film, to a beat-up junker in the 1982 film The Junkman, to a gray Shelby in the 2000 remake, undermining any claim of consistent identity. Third, the Ninth Circuit found that Eleanor’s design was not especially distinctive, and its name was deliberately generic. In short, Eleanor was merely a ‘“stock’ sports car.”
Distinguishing Towle, the Ninth Circuit found that, unlike the Batmobile, which operated as a supporting character with a recognizable form, role, and set of abilities, Eleanor was a rotating cast of cars with no fixed identity or expressive uniqueness. As the Ninth Circuit explained, Eleanor was closer to a prop than a character, lacking sentience, symbolism, or visual continuity. The decision reinforces the relatively high bar Towle sets for character protection over objects such as automobiles, clarifying that even beloved or branded objects may not qualify for independent copyright protection unless they demonstrate conceptual (i.e., human-like) qualities, a distinctive and stable persona, and expressive features that transcend mere design.
Tyler Mahomes also contributed to this article.
In Determining Subject Matter Eligibility, the Name of the Game Is the Claim
The US Court of Appeals for the Federal Circuit overturned a district court grant of summary judgment of patent eligibility under 35 U.S.C. § 101 in connection with a patent directed to remote check deposit technology, explaining that details in the specification but not recited in the claims could not be relied on to meet the test for abstraction. United Services Automobile Association v. PNC Bank N.A., Case No. 23-1639 (Fed. Cir. May 6, 2025) (Dyk, Clevenger, Hughes, JJ.)
The patent in issue was directed to a system for allowing a customer to deposit a check using the customer’s handheld mobile device and claimed a “system configured to authenticate the customer using data representing a customer fingerprint.”
After the United Services Automobile Association (USAA) sued PNC for infringement of the patent, both parties filed motions for summary judgment seeking an adjudication as to whether the claims were patent eligible under § 101. The district court granted USAA’s motion, finding that the claims were not directed to an abstract idea and therefore were patent eligible. After a five-day trial, the jury found no invalidity of the asserted claims and found that PNC had infringed. PNC appealed.
The Federal Circuit found that the asserted claim was directed to the abstract idea of depositing a check using a handheld mobile device. At Alice step one, the Court found that the invention claimed steps for carrying out the process of a mobile check deposit by “instructing the customer to take a photo of [a] check,” “using [a] wireless network” to transmit a copy of the photo, and having the configured system “check for errors.” The Court determined that this amounted to a routine process implemented by a general-purpose device. The Court further found that the claim recited routine data collection and analysis steps that have been traditionally performed by banks and people depositing checks – namely reviewing checks, recognizing relevant data, checking for errors, and storing the resultant data.
USAA argued that “accomplishing check deposit on a consumer device required the development of extremely non-obvious algorithms.” The Federal Circuit rejected this argument, noting that the Court focuses on the claims, not the specification, to determine eligibility, because “the level of detail in the specification does not transform a claim reciting only an abstract concept into a patent-eligible system or method.” Since the claims did not recite the algorithms and neither the specification nor the claims contained a “clear description of how the claimed system is configured,” but only “a concept of improving the check deposit process,” the Court found that the claimed subject matter was directed only to an abstract idea.
At Alice step two (not addressed by the district court, which concluded that the claims passed muster at Alice step one), the Federal Circuit considered whether the claim elements contained an inventive concept sufficient to transform the abstract idea into a patent-eligible application. The Court found no inventive concept present, as computer-mediated implementation of routine or conventional activity is not enough to provide an inventive concept.
USAA, citing the 2014 Federal Circuit case of DDR Holdings, LLC v. Hotels.com, L.P., argued that the claim read as a whole, considering the ordered combination of elements, contained an inventive concept because it solved the technological problem of accurate detection and extraction of information from digital images of checks using general purpose mobile devices. The Court disagreed, concluding that the claim recited nothing more than routine image capture, optical character recognition, and data processing steps, which were all well known and routine: “here, there is no technological improvement – though the claim recites a system that makes the remote check deposit process easier and more convenient for bank customers, there is no fundamental change to how any of the technology functions, because it is all operating in a conventional way.”
Finding that there were no genuine disputes of material fact preventing resolution of the § 101 analysis on summary judgment, the Federal Circuit reversed.
Jurisdiction Affirmed: Trademark Ripples Reach US Shores
Addressing for the first time the issue of whether a foreign intellectual property holding company is subject to personal jurisdiction in the United States, the US Court of Appeals for the Eleventh Circuit reversed a district court’s dismissal and determined that the holding company, which had sought and obtained more than 60 US trademark registrations, had sufficient contacts with the US to support exercise of personal jurisdiction. Jekyll Island-State Park Auth. v. Polygroup Macau Ltd., Case No. 23-114 (11th Cir. June. 10, 2025) (Rosenbaum, Lagoa, Wilson, JJ.)
Polygroup Macau is an intellectual property holding company registered and headquartered in the British Virgin Islands. Jekyll Island is a Georgia entity that operates the Summer Waves Water Park and owns a federally registered trademark for the words SUMMER WAVES. In 2021, Jekyll Island discovered that Polygroup Macau had registered nearly identical SUMMER WAVES marks. After Polygroup Macau asked to buy Jekyll Island’s domain name, summerwaves.com, Jekyll Island sued Polygroup Macau for trademark infringement and to cancel Polygroup Macau’s marks. The district court dismissed the case for lack of personal jurisdiction, finding that “the ‘causal connection’ between Polygroup Macau’s activities in the United States and Jekyll Island’s trademark claims was too ‘attenuated’ to support personal jurisdiction.” Jekyll Island appealed.
The Eleventh Circuit reviewed whether personal jurisdiction was proper under Federal Rule of Civil Procedure 4(k)(2), also known as the national long-arm statute. Rule 4(k)(2) allows courts to exercise personal jurisdiction over foreign defendants that have enough contacts with the US as a whole, but not with a single state, to support personal jurisdiction. To establish personal jurisdiction under Rule 4(k)(2), a plaintiff must show that:
Its claim arises under federal law.
The defendant is not subject to jurisdiction in any state’s courts of general jurisdiction.
“[E]xercising jurisdiction is consistent with the United States Constitution and laws.”
The parties agreed that the first two elements were satisfied; the only dispute was whether the exercise of jurisdiction was consistent with due process.
The Eleventh Circuit noted that in the patent context, the Federal Circuit determined that a foreign defendant that “sought and obtained a property interest from a U.S. agency has purposefully availed itself of the laws of the United States.” The Eleventh Circuit found that a trademark registration is even stronger than patent rights because a “trademark registrant must show that he is already using the mark in U.S. commerce to identify and distinguish goods or intends to soon.” Polygroup Macau had more than 60 registrations and allowed other companies and customers to use those marks, which was enough to establish that it had sought out the benefits afforded under US law.
Additionally, while Polygroup Macau did not license its trademark rights, it permitted other related companies to use the SUMMER WAVES trademark to identify their products. Products marked with Polygroup Macau’s registered mark were sold in the US through dozens of retailers. Although there were no formal written agreements, the Eleventh Circuit found that Polygroup Macau exercised some degree of control over the marks. And, since the trademark rights themselves flowed from the mark’s use in domestic commerce, the Court found that Polygroup Macau “should have known that [the marks] would be used in United States commerce by related Polygroup companies.” The Court found that Polygroup Macau’s actions, taken together, displayed its attempts to exploit the US market and supported a finding of personal jurisdiction.
Finally, the Eleventh Circuit concluded that allowing related entities to use the marks was sufficiently related to the underlying trademark infringement action and found that requiring Polygroup Macau to appeal in a Georgia court was not unfair.