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By: Claire Reynolds-Peterson

The Inflation Reduction Act (IRA) passed on August 16th, 2022, introduced a novel and historic power to the Centers for Medicare and Medicaid Services (CMS): the ability to negotiate prices of covered prescription medications directly with pharmaceutical companies.[1] This landmark legislation aims to address one of the underlying causes of the healthcare cost crisis that has raged in the United States for many years, the exorbitant cost of name-brand prescription medications. The first ten drugs selected for price negotiation were announced on August 29th, 2023, targeting therapeutically unique drugs and biologicals that have been licensed for at least 7 or 11 years respectively.[2] The selected drugs represent the highest contributors to covered prescription drug costs under Medicare Part D.[3] All of the affected manufacturers have agreed to participate in negotiations, though many of them are challenging the constitutionality of the IRA in ongoing litigation.[4]

The pharmaceutical giants challenging the legislation argue government interference in drug pricing will stifle innovation and curtail their ability to invest in novel drug development.[5] However, federal investigation of drug pricing revealed that revenue targets have often been tied to increasing executive pay, with companies spending more on stock buy backs than research and development.[6] Furthermore, pharmaceutical companies rarely perform basic scientific research, instead relying on taxpayer-funded academic research to identify drugs likely to produce commercial success based on extant preliminary data.[7] This argument is also undermined by the staggering discrepancy between prescription drugs costs in the United States versus other wealthy nations.

The United States spent $11,702 per capita on healthcare in 2020, a stunning 18.82% of the national gross domestic product (GDP).[8] Germany, France, and the United Kingdom, countries that negotiate pharmaceutical drug prices, put 12.82, 12.21, and 11.98 percent of GDP respectively to healthcare spending in 2020.[9] Approximately one in seven dollars of US healthcare spending goes to prescription drugs alone, leading to the highest per capita spending on drugs of any country— and US drug prices continue to rise rapidly.[10] Between 2016 and 2020, branded prescription drug prices rose 36%, four times the rate of inflation.[11] Germany, France, and the UK all impose control over drug price increases by prohibiting cost increases without additional regulatory review and government approval, in addition to negotiating starting prices immediately upon drug licensing.[12]

As a case study of the effects of price negotiation and capping, the cost of the multiple sclerosis drug Gilenya® was compared between these countries.[13] In the US, the drug costed approximately $84,461 per person per year (in 2022 adjusted dollars), which rose to $116,193 by 2022.[14] In Germany, France, and the UK, the drug costed $43,450, $40,899, and $39,120 US dollars per person per year, with statutory measures preventing price increases over time.[15] This result is on-par with the general trend of US brand-name drugs costing 256% of the average price other countries pay for the same medications.[16] If Medicare had been able to pay the French negotiated drug prices for the six individual drugs that incurred the greatest expenditures in 2017, the government would have saved an estimated $5.1 billion dollars.[17]

As it stands, the IRA negotiation procedures are unlikely to produce results comparable to these other countries. While the European countries set prices upon licensing, the IRA only begins negotiation after a protected period of seven or eleven years during which the pharmaceutical company may set their own price.[18] The IRA then sets a price ceiling based on average non-government manufacturer price from 2021 adjusted in accordance with the increase in the consumer price index, or the first full year after market entry if licensed after 2021.[19] This ceiling price is then reduced by a flat percentage based on how long the drug has been on the market.[20]

The IRA does not reference drug prices in other countries to aid in establishing a fair price, instead relying on domestic free market competition to control the starting price.[21] In contrast, Germany, France, and the UK do not rely on free market pricing. Instead, they look to measures including pricing in other countries (sometimes specifically excluding the US), pricing of alternative treatments, of other treatments in the same therapeutic class, and the actual cost-effectiveness of the treatment in terms of quality-adjusted life-years.[22] Given the common use of anticompetitive strategies to suppress competition and the general failure of market competition to adequately control prices, this appears to be a losing strategy for addressing unreasonable US drug costs.[23]

With lawsuits from six pharmaceutical companies and two industry groups ongoing, the longevity of the IRA provisions for Medicare drug price negotiation remains to be determined.[24] The pharmaceutical companies argue the potential reduction in their profits will stifle innovation and lead to the development and licensing of fewer new drugs in the future.[25] On the other hand, Americans across the political spectrum approve of the new negotiation power and view industry challenges to the legislation very unfavorably.[26] Based on the Congressional investigation into factors underlying drug pricing, including corporate expenditures, the threatened decrease in pharmaceutical innovation could be offset by directing a higher proportion of revenue towards research and development in the future.[27] If reining in astronomical drug prices in the US truly does have the catastrophic drawbacks threatened by the pharmaceutical industry, it may be time to question why the burden of paying such disproportionate costs in support of pharmaceutical innovation falls uniquely on American consumers.

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Citations:

1. Inflation Reduction Act of 2022, Pub. L. No. 117–169, 136 Stat. 1818 (codified as amendments to one hundred thirty-eight different U.S.C sections); Price Negotiation Program to Lower Prices for Certain High-Priced Single Source Drugs, 42 U.S.C.A. § 1320f (Westlaw through Pub. L. No. 118-13).
2. Medicare Drug Price Negotiation Program: Selected Drugs for Initial Price Applicability Year 2026, CTRS. FOR MEDICARE & MEDICAID SERVS., (Aug. 2023), https://www.cms.gov/files/document/fact-sheet-medicare-selected-drug-negotiation-list-ipay-2026.pdf.
3. Id.
4. Sydney Lupkin, All in: Drugmakers say yes, they’ll negotiate with Medicare on price, so reluctantly, NPR (Oct. 4, 2023, 5:00 AM), https://www.npr.org/sections/health-shots/2023/10/04/1203417818/medicare-drug-price-negotiations-begin.
5. Id.
6. STAFF OF H.R. COMM. ON OVERSIGHT AND REFORM, 117TH CONG., REP. ON DRUG PRICING INVESTIGATION, at 40–42, 164–67 (Dec. 10, 2021). https://oversightdemocrats.house.gov/sites/democrats.oversight.house.gov/files/DRUG%20PRICING%20REPORT%20WITH%20APPENDIX%20v3.pdf
7. Id. at 175.
8. Global Health Expenditure Database, WORLD HEALTH ORGANIZATION (Oct. 10, 2023), https://apps.who.int/nha/database/country_profile/Index/en (select United States of America from drop down menu).
9. Global Health Expenditure Database, WORLD HEALTH ORGANIZATION (Oct. 10, 2023), https://apps.who.int/nha/database/country_profile/Index/en (select Germany, France, and United Kingdom respectively from drop down menu); Leah Z. Rand & Aaron S. Kesselheim, Getting the Price Right: Lessons for Medicare Price Negotiation from Peer Countries, 40 PHARMACOECONOMICS 1131, 1131 (2022).
10. Rand, supra note 9, at 1131.
11. H.R. COMM. ON OVERSIGHT AND REFORM, supra note 6, at iii.
12. Rand, supra note 9, at 1134, 1135, 1138.
13. Id. at 1136.
14. Id.
15. Id.
16. ANDREW W. MULCAHY ET. AL., INTERNATIONAL PRESCRIPTION DRUG PRICE COMPARISONS XV (RAND Corporation 2021)(eBook)
17. Rand, supra note 9, at 1135.
18. Id. at 1139; CTRS. FOR MEDICARE & MEDICAID SERVS., supra note 2.
19. 42 U.S.C.A § 1320f-3(c) (Westlaw through Pub. L. No. 118-13).
20. Id.
21. Rand, supra note 9, at 1139.
22. Rand, supra note 9, at 1132, 1134–35, 1137–38.
23. H.R. COMM. ON OVERSIGHT AND REFORM, supra note 6, at i–ii, 80, 94–95, 173.
24. Joshua Cohen, Lawsuits to Block Medicare Drug Price Negotiations are Unpopular Among Voters, FORBES (Oct. 1, 2023), https://www.forbes.com/sites/joshuacohen/2023/10/01/lawsuits-to-block-medicare-drug-price-negotiations-are-very-unpopular-among-american-voters/?sh=6f589a932d28.
25. Id.
26. Id.
27. See H.R. COMM. ON OVERSIGHT AND REFORM, supra note 6.

By: Rebekah Gil

For years, social media platforms have been the main source of news and political information for users across the globe. However, those platforms have also been questioned on the reliability of the content published and promoted throughout their apps.

In August 2021, Texas passed House Bill 20 which prohibits large social media platforms from moderating content based on a user’s viewpoint and geographic location.[1] The bill additionally states that it applies to platforms regardless of whether the viewpoint is expressed on a social media platform or through another medium.[2] Some of those large social media platforms are represented by trade associations whose mission is to make the internet safe.[3] NetChoice is an example of one association, created in 2001, that represents some of the largest social media platforms like Meta, TikTok, and X.[4] Their specific mission states they “work to make the Internet safe for free enterprise and free expression”.[5]

Right before the H.B. 20 bill passed, NetChoice filed a suit against Texas, arguing the bill violated social media platforms’ First Amendment right to free speech.[6] The main argument was focused on the idea that social media platforms are similar to newspapers and similarly have a constitutional right to protected speech in the form of editorial discretion.[7]

On September 16, 2022, after back and forth between the courts, the Fifth Circuit upheld Texas’s law entirely.[8] In agreement with Texas’s main argument, the Fifth Circuit labeled social media platforms as “common carriers”.[9] Meaning, they facilitate the transmission of speech, like phone companies and postal services.[10] The court concluded that the platform’s censorship is not speech under the First Amendment, and therefore the House Bill remains constitutional.[11] This ruling contradicts an Eleventh Circuit decision decided just five months prior.

Similar to Texas, Florida passed SB 7072 which also regulates social media platforms, and limits their ability to censor and remove content based on political viewpoints.[12] However, unlike the Fifth Circuit, the Eleventh Circuit struck down the social media law in a similar case in which NetChoice was also a party.[13] The court disagreed with the notion of social media platforms acting as “common carriers”.[14] It instead declared that “[p]latforms are private enterprises, not government … entities”, siding with NetChoice that the law violates companies’ free speech rights.[15]

Other tech companies have entered the discussion saying the social media laws, should they remain enacted, will stop tech companies from controlling what content gets published, some of which could be potentially harmful.[16] While the states argue that the law will make sure users have equal access to the platforms.[17]

With both circuits at odds, the Supreme Court granted certiorari of both cases and said on September 29th that it would decide the constitutionality of the social media laws in both Texas and Florida.[18]

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Citations:

1. H.R. 20, 87th Leg., 2 Sess. (Tex. )
2. Id.
3. NetChoice, https://netchoice.org/about/ (last visited Oct. 13, 2023)
4. Id.
5. Id.
6. Nithin Venkatraman, NetChoice, L.L.C. v. Paxton: 5th Circuit Sets Up Supreme Court Battle over Content Moderation Authority of Social Media Giants, Harvard Journal of Law and Technology (Oct. 21, 2022), https://jolt.law.harvard.edu/digest/netchoice-l-l-c-v-paxton-5th-circuit-sets-up-supreme-court-battle-over-content-moderation-authority-of-social-media-giants

7. Rebecca Kern, 5th Circuit Upholds Texas Law Forbidding Social Media ‘Censorship’ — Again, Politico, https://www.politico.com/news/2022/09/16/5th-circuit-upholds-texas-law-forbidding-social-media-censorship-again-00057316 (last updated Sept. 16, 2022).
8. Amicus Brief Moody v. NetChoice, Knight First Amendment Institute at Columbia University, https://knightcolumbia.org/cases/moody-v-netchoice (last visited Oct. 13, 2023)
9. Mark Joseph Stern, The 5th Circuit’s Reinstatement of Texas’ Internet Censorship Law Could Break Social Media, Slate, https://slate.com/technology/2022/05/texas-internet-censorship-social-media-first-amendment-fifth-circuit.html ( May 12, 2022)
10. Id.
11. Netchoice, L.L.C. v. Paxton, 49 F.4th 439, 444
12. Adi Robertson, Florida’s Social Media Moderation Ban Is Probably Unconstitutional, Says Court, The Verge (May 23, 2022, 4:23 PM), https://www.theverge.com/2022/5/23/23138172/eleventh-circuit-blocks-florida-content-moderation-ban
13. Id.
14. Id.
15. Id.
16. Ashley Capoot, Supreme Court to Hear Texas and Florida Social Media Cases over Right to Moderate Content, CNBC, https://www.cnbc.com/2023/09/29/supreme-court-to-hear-texas-and-florida-social-media-cases.html (last updated Sept. 29, 2023)
17. Id.

18. Amy Howe, Justices Take Major Florida and Texas Social Media Cases, SCOTUS Blog (Sept. 29, 2023, 9:48 AM), https://www.scotusblog.com/2023/09/justices-take-major-florida-and-texas-social-media-cases/

By: Nathan McKay

With a recent fall in venture capital funding the Electronic Sports industry (Esports) has fallen on tough times.[1] Esports is a catchall term referring to any competitive video game league. Esports organizations will often field multiple teams each specializing in a particular game, each with its own associated league. Esports has always been a dynamic industry and while there are longstanding staples such as League of Legends and Call of Duty, recent years have seen entire leagues rise and fall and occasionally rise again.[2] This means that larger organizations find themselves in a precarious situation, wanting to field teams in new leagues while minimizing risk in the event that any particular league or team doesn’t gain traction. 

To understand the risk esports organizations face one must understand what makes esports different from the traditional sports industry. Importantly, one must understand how esports teams generate revenue. Whereas traditional sports organizations generate revenue from a variety of sources, esports teams are limited to their post-publisher cut share of league revenue (usually spent entirely on player salaries, another topic of discussion), and any revenue generated from sponsorships and merchandising.[3] Unlike traditional sports organizations, generally, esports organizations don’t own arenas, they don’t sell their own tickets to games, and they don’t sell concessions and other high-margin items to fans. In fact, only a small portion of esports games are actually played in front of a large arena audience.[4] Most games are live-streamed via Twitch and YouTube in smaller studios with occasional attendance room for a small number of dedicated fans and only the larger end-of-season tournaments being held in large arenas.[5] As a result, sponsorships and merchandising are the primary sources of revenue for esports teams, unlike traditional sports teams who usually only rely on these for about 10% of their revenue.[6]

For most of the large games, including League of Legends, the game publisher retains league rights and with it the ticket sales and a large cut of streaming revenue. Riot Games, the publisher of League of Legends, a game with one of the largest esports followings, owns and operates leagues in each major region around the world, with teams paying, currently, around $20 million dollars for a slot in North America. Riot uses live venue revenue to cover costs, usually running the league at a loss as an advertisement for their game and service for the fans.[7]Organizations that field teams within the league are afforded a portion of league revenue, dependent on the league and its associated publisher, but this often isn’t enough to offset costs alone. 

Due to limited revenue options, esports organizations depend on their sponsors more so than other comparable sports organizations as it is one of the few large revenue sources available. Therefore, any loss in sponsorship revenue presents an immediate problem. Sponsors have begun treading carefully around the esports industry [8] and as organizations sell or dissolve specific teams in an effort to adapt to current challenges, sponsors may attempt to cease payment for promotional deals citing a loss in viewership and value to the bargain. Sponsors can potentially defend this breach with the doctrine of frustration of purpose. The strength of this defense will depend on the specificity of deliverables and other provisions within each agreement, particularly any special recognition of the viewership value of specific teams within an organization. Absent these kinds of unique provisions it is highly unlikely that the sale of one or even two high viewership teams under an organization would result in a defensible breach under the frustration of purpose doctrine. This is because it is unlikely that advertisement with a single specific team would be found to be the basis of the contract in a deal where the deliverable is stated as promotion across an organization, its teams, and its players with no additional language pointing to specific teams or players. 

Frustration of purpose, a defense to enforcement, requires a party’s principal purpose to be substantially frustrated without their fault by the occurrence of an event the non-occurrence of which was a basic assumption on which the contract was made.[9] The frustrated purpose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense. [10]The doctrine applies when a change in circumstances makes one party’s performance virtually worthless to the other.[11]

A distinction often made is that between a ticket to view an event and a prepaid taxi to an event venue purchased at a markup due to the event. If the event is canceled the ticket holder is due repayment (or is excused for breach through non-payment) because the sole purpose in purchasing the ticket was to view the event, a purpose that was frustrated by the cancelation of the event making the ticket worthless. Conversely, there is no defensible breach in the purchase of a prepaid taxicab to the venue because the rider can still receive what they bargained for, transportation to the venue, it might’ve lost significant value, however, it is not virtually worthless.[12]

Esports organizations will likely have enforceable contracts where the language supports a bargain for advertisement across an organization, without pointing to the particular team or player. Ideal wording, resistant to the frustration of purpose defense in the wake of a team or player sale, where esports organizations seek to enforce sponsorship contracts, would be very general in nature avoiding the identification of specific teams and players. An example might be “[Organization] is to promote [Sponsor] across its Teams, Content Groups, Creators, and Players…”. This kind of wording would suggest that the sponsor bargained for promotion across the organization as a whole and the sale of even the highest viewership team would not render the principle purpose of the sponsor “virtually worthless”. Similar to the taxicab, the sponsor can still receive promotion across the organization, even if such promotion has lost value. For the performance under a general provision to be rendered virtually worthless, the organization would have to dissolve a substantial number of teams and player contracts, such that there is almost no viewership for the sponsor. At this point, other problems would be of greater concern. 

Recently in esports news, Team Solo Mid (TSM), a large and very popular esports organization with teams across multiple popular games including Apex Legends, Dota 2, Tom Clancy’s Rainbow 6 Siege, and more, announced they would selling their slot in the League Champion Series (the League of Legends North American league) and would searching for opportunities in other regions.[13] This calls to question what might happen with their current sponsors. TSM has multiple sponsors including GEICO, Grubhub, Lenovo, Mountain Dew Game Fuel, and more. TSM’s LCS League of Legends team pulled massive viewership, especially in larger games, peaking at an all-time high of 1.7 million viewers during the 2020 League of Legends World Championship.[14] It is without a doubt that TSM’s LCS team represented a valuable component when sponsorship agreements were made. With the LCS team gone and at least a year until TSM fields another League of Legends team in a different region one can be almost certain that sponsors are bringing TSM to the table to have a discussion about deliverables. Retaining sponsor capital will be paramount for TSM, especially in the wake of their former title sponsor FTX going under in the recent crypto crash.[15]

It remains to be seen what will happen. Sponsors will likely raise frustration of purpose as a defense to non-payment, however, TSM might make offers to proportionally reduce payments in light of the recent change. Everything will depend on how provisions surrounding specific deliverables have been worded. If sponsorship contract deliverables fail to mention any specific team or player then it is likely that TSM will have a solid foundation upon which they can stand their ground and demand full payment under threat of further litigation. However, these deals do not exist in a vacuum, and one must consider if enforcement of the current deal over a mutual renegotiation is worth any potential loss of future goodwill among sponsors. A consideration especially prudent during a time when the Esports industry is undergoing massive change and uncertainty.

——

Citations:

1. Cecilia D’Anastasio, The hype around esports is fading as investors and sponsors dry up, LOS ANGELES TIMES (Dec. 8, 2022, 11:31 AM PT), https://www.latimes.com/business/story/2022-12-
08/esports-hype-fading-investors-sponsors-dry-up.

2. Michael Crossman, Top 5 companies that failed in esports, CLAIM YOUR FAME (Sept. 22, 2020) https://claimyourfame.gg/top-5-companies-that-failed-in-esports/.

3. Tim Maloney, How Do Esports Teams Make Money? ROUNDHILL INVESTMENTS (Jan. 31, 2022), https://blog.roundhillinvestments.com/how-do-esports-teams-make-money.

4. David Bloom, Esports Stadiums Are Popping Up Everywhere, FORBES (May 31, 2019, 10:44 AM EDT), https://www.forbes.com/sites/dbloom/2019/05/31/esports-stadiums-are-popping-up-everywhere/?sh=5c011ece2521 (the industry is working to catch up, building its own arenas to lower long term venue costs and increase fan bases).

5. RIOT GAMES, https://lolesports.com/article/2023-lcs-summer-split-primer–ticketing-
information/blt91bc05103f15f4d4 (last visited Oct. 13, 2023).

6. Michael Beach, NFL Franchise Values Soar Driven by Ever Expanding Media Rights, CROSS SCREEN MEDIA (Sept. 8, 2022), https://crossscreen.media/state-of-the-screens/nfl-franchise-values-soar-driven-by-ever-expanding-media-rights/.

7. Ormi Wallach, How Do Esports Companies Compare With Sports Teams?, VISUAL CAPITALIST (Jan. 29, 2021), https://esporthow.com/how-does-the-lcs-make-money/.

8. Billy Studholme, Sponsors are wising up to deals with esports teams and adjusting spending accordingly, DIGIDAY (Apr. 5, 2023), https://digiday.com/marketing/sponsors-are-wising-up-to-deals-with-esports-teams-and-adjusting-spending-accordingly/.

9. Krell v. Henry, [1903] 2 KB 740 (Eng.)

10. Shmaltz Brewing Co., LLC v. Dog Cart Mgmt. LLC, 163 N.Y.S.3d 659, 663 (2022)

11. Id.

12. Krell, [1903] 2 KB 740 (Eng.)

13. Field Level Media, TSM Sell LCS franchise to Shopify Rebellion for reported $10M, REUTERS (Sept. 22, 2023 11:28 AM), https://www.reuters.com/article/esports-lol-shopify-rebellion-tsm/tsm-sell-lcs-franchise-to-shopify-rebellion-for-reported-10m-idUSFLM2qZ0Mc.

14. ESPORTS CHARTS, https://escharts.com/teams/lol/tsm.

15. Rohan, What does the FTX collapse mean for TSM and the esports industry, (Nov. 10, 2022),https://esports.gg/opinion/esports/ftx-collapse-mean-for-tsm-and-gaming/.

By: Bryan Hudson

On September 5th, 2023, New York City (NYC) began enforcing its short-term rental ban, known as Local Law 18.[1] NYC initially adopted Local Law 18 on January 9th, 2022, in an effort to address the city’s growing housing crisis. The law mandates short-term rental hosts to register with the Mayor’s Office of Special Enforcement (OCE), and prohibits booking service platforms, such as Airbnb and VRBO, from facilitating transactions for unregistered short-term rentals. The new law also imposes significant fines for those who violate it, with hosts facing penalties of up to $5,000 if they fail to register with the OSE, and booking platforms potentially incurring penalties of up to $1,500 for processing unverified transactions.[2]

In response to Local Law 18, Airbnb filed suit against the OCE, seeking injunctive relief to halt its enforcement.[3] In its petition Airbnb argued that the rules the OCE promulgated were arbitrary and capricious, as they were burdensome, ineffective, costly, and failed to account for reasonable alternatives. However, Justice Bluth, writing for The New York State Supreme Court disagreed. In her opinion she wrote that it is not the task of this courts to assess whether a problem is addressed in the most effective way, rather it is to assess whether the rules have a rational basis and these rules, although not perfect, are sufficiently rational and logical responses to address the prevalence of illegal short-term rental.
Since the States Supreme Court’s ruling, reports have indicated that the number of short-term Airbnb’s available in NYC has dropped to about 30 percent of what it once was.[4] Despite this dramatic drop in listing as of September 8, 2023, NYC still had more than 39,000 listings, making it the city with second-most Airbnb’s in the United States. As for Airbnb’s share price, it appears to not have been impacted by the ban, holding at a share price of 142.75 as of September 15, 2023. One reason for why this might be the case, is because although NYC drove over $85 million in annual net revenue for Airbnb in 2022, it only constituted a little more than 1% of the company’s 8.4 billion in annual revenue.[5] However, despite these seemingly optimistic reports it’s important to keep in mind that only time will show the true impact this law will have on companies like Airbnb and whether other jurisdictions will follow in the footsteps of NYC.

Citations:

1. Short-Term Rental Registration and Verification by Booking Services, NYC OFFICE OF SPECIAL ENFORCEMENT (last visited, Sep. 15, 2023), https://www.nyc.gov/site/specialenforcement/registration-law/registration.page
2. Stacey Leasca, New Restrictions Are Coming for NYC Airbnbs This Fall – What to Know, TRAVEL AND LEISURE (Sep. 7, 2023), https://www.travelandleisure.com/nyc-vacaton-rental-law-airbnb-vrbo-7966085#:~:text=The%20new%20rules%20require%20hosts,to%20%241%2C5000%20per%20transaction.
3. Airbnb, Inc. v. N.Y.C. Mayor’s Office of Special Enf’t, 2023 N.Y. Slip Op. 32740 (N.Y. Sup. Ct. 2023)
4. Naomi Buchanan, Early Impacts of New York City’s ‘De Facto Ban’ on Airbnbs, INVESTOPEDIA (Sep. 10, 2023), https://www.investopedia.com/new-york-city-enforces-de-facto-ban-of-airbnbs-7967344#:~:text=New%20York%20City%20adopted%20the,of%20Special%20Enforcement%20(OSE).
5. Suzanne Rowan Kelleher, Why Airbnb Can Survive a ‘De Facto Ban’ In New York City, FORBES (Jun. 7, 2023), https://www.forbes.com/sites/suzannerowankelleher/2023/06/07/why-airbnb-can-survive-a-de-facto-ban-in-new-york-city/?sh=6c1877037570

By: Reanna Hughes

As the number of people concerned about climate change increases, businesses are taking pledges to help combat the effects of pollution; companies are turning over a new leaf as they advertise their plans to have a green thumb. Delta Air, an air travel company, announced that by 2030 they will invest one billion dollars to the efforts of mitigating all emissions.[1] However, in 2022, Delta announced that they have transitioned their focus from carbon offset towards decarbonization; this means that Delta is now investing in biofuels.[2]

Carbon dioxide is approximately seventy percent of the exhaust that is emitted from an airplane.[3] The carbon dioxide that is emitted will mix into the air and produce a warming effect; unfortunately, it will take hundreds of years just for fifty percent of that carbon dioxide that is released into the air to disappear.[4] Carbon dioxide emissions have accelerated in the most recent years due to commercial air traffic.[5] The Environmental Protection Agency (“EPA”) states that over ten percent of the United States transportation emissions equates to three and a half percent of the total human involvement in global warming in the years 2011 and 2018.[6] It is also anticipated that the total annual number of international passengers to and from the United States will roughly be 446 million by 2041, this is a drastic increase from 67 million in 2020.[7] Commercial airlines need to implement alternatives to carbon dioxide output to mitigate the emission that they produce. Due to technology increasing, there are more viable options for alternatives: one being going electric or hybrid.[8] When the world realized the amount of carbon dioxide cars emitted, we turned to the technology of electric cars; now we are doing the same for airplanes.[9] Aribus is a company that is focusing on hybrid or electric airplanes to help combat carbon emissions.[10] Norway, a country with many islands, has promised they will have all their short-haul flights electric by 2040.[11] Even this change from one country could make a big difference in our environment.[12] The aviation industry has also thought of a different way to eliminate carbon emissions: alternative fuels.[13] These companies have looked into using vegetable oil and even diapers in jet fuels.[14] If airlines switch to biofuels, the carbon pollution that is caused by airlines could decrease by almost sixty percent.[15]

When there are big industries polluting, the government eventually has to step in and try to control the pollution to the best of their ability. The Clean Air Act, passed by Congress in 1970, allows for the EPA to have broad regulatory authority to implement emission standards for any class of aircraft engines.[16] Along with the EPA, the Federal Aviation Administration (“FAA”) created an aviation climate action plan that, if followed, will achieve net zero emissions by 2050 for the aviation industry.[17] This plan also highlights the need for more efficient engine and aircraft technologies in order to reach this goal.[18]

With the prediction that the growth of air travel will only increase, airlines need to focus their efforts on making their company more energy efficient and eliminating emissions that are being released from their planes. The aviation industry needs to implement the new technology that is available to prevent the exacerbation of climate change. Since climate change has become more prevalent as the years go on, there is an upward trend of people caring about the environment. This is exemplified by the class action lawsuit that is taking place due to Delta Airlines changing their company’s pledge of mitigating all emissions to investing in biofuels.[19] The need for people to come together to highlight the issue of emissions and fund new technologies that will achieve the goals of zero emissions is critical. The laws that are being put in place as well as the class action against Delta, convey that people have come to the realization that environmental issues are intensifying, and the aviation industry is only exacerbating the issue.

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Citations:

1. DELTA AIR: Class Action Over Carbon-Neutral Claim Pending, Lexis Plus, (Sept. 1, 2023), https://plus.lexis.com/document/?pdmfid=1530671&crid=00ef709b-368a-4ea6-b27c-950d46990d30&pddocfullpath=%2Fshared%2Fdocument%2Flegalnews%2Furn%3AcontentItem%3A692T-86W1-F10V-7018-00000-00&pdcontentcomponentid=332176&pdworkfolderlocatorid=NOT_SAVED_IN_WORKFOLDER&prid=47160194-92bb-4fb5-b15f-f7637542eb31&ecomp=n74k&earg=sr13

2. Id.

3. Jeff Overton, The Growth in Greenhouse Gas Emissions from Commercial Aviation, Environmental and Energy Study Institute (June 9, 2022), https://www.eesi.org/papers/view/fact-sheet-the-growth-in-greenhouse-gas-emissions-from-commercial-aviation

4. Id.
5. Id.
6. Id.
7. Id.
8. Hybrid and electric flight, Airbus, https://www.airbus.com/en/innovation/low-carbon-aviation/hybrid-and-electric-flight, (last visited Sept. 9, 2023)

9. Id.
10. Id.

11. Jackie Snow, Greener air travel will depend on these emerging technologies, National Geographic, (Jan. 15, 2021), https://www.nationalgeographic.com/travel/article/greener-air-travel-will-depend-on-these-emerging-technologies

12. Id.

13. Id.

14. Id.

15. Id.

16. Sungjoo Ahn, EPA’s New Aviation Emissions Standard: Why It’s Already Obsolete, Environmental and Energy Law Program, (Feb. 25, 2021), https://eelp.law.harvard.edu/2021/02/epas-aviation-emissions-standard/#:~:text=Section%20231(a)(2)(A)%20of%20the%20Clean,which%20in%20his%20judgment%20causes%2C

17. Aviation Climate Action Plan, Federal Aviation Administration, https://www.faa.gov/sustainability/aviation-climate-action-plan, (last updated June 16, 2023).

18. Id.

19. DELTA AIR: Class Action Over Carbon-Neutral Claim Pending, Supra note 1.

By: Elle Borgdorff

The Health Insurance Portability and Accountability ACT (HIPAA) was passed on August 21, 1996. Following rapid advances in electronic technology, Congress recognized that these advances could endanger the privacy of health information. [1] In the nearly three decades since, privacy concerns have only continued to grow, specifically surrounding private health data connected to technology, and digitized healthcare platforms. Under HIPAA, healthcare providers and insurers must safeguard privacy and security of patients’ personal data.[2] What many Americans do not know is that health data that is collected by non-covered entities is not afforded protection under HIPAA.[3] Non-covered entities include apps and websites that are used to monitor fertility, fitness, sleep, mental health, and more.[4] In contrast, as defined in HIPAA, covered entities are health care clearinghouses, health plans, and “health care providers who electronically transmit any health information in connection with transactions for which HHS has adopted standards”.[5]

Recently, a first of its kind law seeking to protect personal health data, beyond HIPAA protections, was passed in Washington state. On April 27, 2023 the My Health My Data Act was signed into law by Governor Jay Inslee.[6] The Act will not go into effect until March 31, 2024.[7] The My Health My Data Act was developed due to an increased need to protect patient data, in an ever digitizing health care landscape. The Act protects patient’s health data stored by non-covered entities, from being collected and shared without consent. Under this new law, there are specific requirements for regulated entities. These entities now must follow requirements regarding how and when they may collect and share an individual’s personal health data.[8] Washington is not the only state passing laws seeking to protect health data, and they most likely won’t be the last. In 2021, Connecticut’s Governor Ned Lamont signed An Act Concerning Data Privacy Breaches into law, which amended Connecticut’s data breaching law to provide more protection for patient medical information and data.[9] In July 2023, Nevada also enacted a health data-specific privacy law – Nevada’s Consumer Health Data Privacy Law (SB 370), which is very similar to Washington’s law.[10]

Citizens in Washington State, like many Americans, hold their privacy rights as an “essential element of their personal freedom”.[11] Because information related to one’s personal health is “among the most personal and sensitive” categories of private data, the Washington legislature found it critical to enact a broader sweeping protection for its citizens than HIPAA alone provides.[12] The Act works to “close the gap between consumer knowledge and industry practices”, by ensuring stronger protections for individuals’ health data.[13] It does so by: requiring disclosures about collection, sharing, and using information – and requiring consent from consumers to use data in this way; providing consumers the right to have their data deleted; allowing the sale of consumer health data, only with valid authorization by the consumer themselves; and making it illegal to use a geofence around facilities that provide health care services.[14] Companies that break the new law’s provisions, can face enforcement actions and even penalties up to $7,500 per violation from the Attorney General of Washington State.[15] The law also permits civil lawsuits from consumers, which makes it one of the few data privacy mandates in the country that allows private right of action.[16]

Washington’s law provides an incredible amount of safeguards for individual health data that companies frequently collect.[17] The type of personal health data that is collected includes information from telehealth platforms, period tracking apps, and users geo-location records that may reveal visits to health care facilities – including abortion clinics.[18] After the Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization in 2023, which overruled Roe v. Wade and Planned Parenthood v. Casey, returning to individual states the right to regulate abortions [19]; privacy and civil liberties advocates have warned that states limiting abortions could seek to use information from apps, internet searches, and location records to find folks seeking abortions.[20] After a Nebraska woman was charged with two felonies related to an abortion, Meta Platforms Inc., was scrutinized because information about her pregnancy was used from private messages on Meta’s Facebook messenger. [21]The American Civil Liberties Union (ACLU) of Washington has supported the My Health My Data Act, stating that the act is a “critical step toward reducing barriers to abortion and gender-affirming care.”[22]

In response to growing concerns about the impact of Dobbs, in early 2023 the Health and Human Services Department proposed a rule titled HIPAA Privacy Rule To Support Reproductive Health Care Privacy.[23] The proposed change would modify the existing standards that permit use and disclosure of health information. Under the proposed rule, uses and disclosures of health information related to “criminal, civil, or administrative investigations or proceedings against individuals, covered entities, or their business associates” would be prohibited in instances where the reproductive health care being provided, is lawful under the circumstances.[24]

Citations:

1. Institute of Medicine (US) Committee on Health Research and the Privacy of Health Information: The HIPAA Privacy Rule; Nass SJ, Levit LA, Gostin LO, editors. Beyond the HIPAA Privacy Rule: Enhancing Privacy, Improving Health Through Research. Washington (DC): National Academies Press (US); 2009. 1, Introduction. Available from: https://www.ncbi.nlm.nih.gov/books/NBK9576/
2. Andrea Vittorio, Washington Shields Abortion Data in First-in-Nation Privacy Law, BLOOMBERG LAW (Apr. 27, 2023, 1:07 PM) https://news.bloomberglaw.com/privacy-and-data-security/washington-shields-abortion-data-in-first-in-nation-privacy-law
3. H.R. 1155, 2023 Leg., 68th Sess. (Wash. 2023).
4. Vittorio, supra note 2.
5. To Whom Does the Privacy Rule Apply and Whom Will It Affect?, U.S. DEP’T. OF HEALTH AND HUMAN SERV. NATL. INST. OF HEALTH.
   https://privacyruleandresearch.nih.gov/pr_06.asp#:~:text=Covered%20entities%20are%20defined%20in,which%20HHS%20has%20adopted%20standards. (Last visited Oct. 11, 2023).
6. Protecting Washingtonians’ Personal Health Data and Privacy, WASH. STATE OFFICE OF THE ATTORNEY GENERAL, https://www.atg.wa.gov/protecting-washingtonians-personal-health-data-and-privacy (last visited Oct. 2, 2023).
7. Vittorio, supra note 2.
8. WASH. STATE OFFICE OF THE ATTORNEY GENERAL, supra note 5.
9. Jill McKeon, How Digital Health Companies Navigate the Patchwork of State Data Privacy Laws, HEALTHITSECURITY (Sept. 28, 2023) https://healthitsecurity.com/features/how-digital-health-companies-navigate-the-patchwork-of-state-data-privacy-laws.
10. McKeon, supra note 20.
11. H.R. 1155, supra note 3.
12. Id.
13. Id.
14. Id.
15. Vittorio, supra note 2.
16. Id.
17. Vittorio, supra note 2.
18. Vittorio, supra note 2.
19. Dobbs v. Jackson Women’s Health Org., 142 S. Ct. 2228, 2284 (2022).
20. Vittorio, supra note 2.  ^[
21. Id.
22. Id.
23. HIPAA Privacy Rule To Support Reproductive Health Care Privacy, 88 Fed. Reg. 23506 (April 17, 2023).
24. Id.

By: Caroline Cirella

Scientists at Israel’s Weizmann Institute have grown a model that closely resembles the early stages of a human embryo without using sperm, eggs, or a womb. [1]The rapid advancement of embryo models has allowed the models to become increasingly similar to natural embryo development in humans.
The scientists at the Weizmann Institute are hopeful that work with embryo models could lead to advancements in testing the effects of drugs on pregnancies, better understanding of miscarriages and genetic disease, and even growing transplant tissues and organs. [2] Stem cell-derived embryo models are “self-organized, three-dimensional structures” that mimic the developmental processes observed in early embryos.[3] These models allow scientists to study the earliest stages of development in embryos and gain insight into the medical and genetic needs of embryos.
The team of scientists shared that their “embryo model” resembled a fourteen-day-old human embryo; it even released hormones that turned a pregnancy test positive.[4] This model marks the furthest scientists have advanced in developing an embryo model and the most similar the model has been to an actual embryo.
The team took stem cells originating from adult human skills along with others cultured in a lab and subsequently altered the cells back into an earlier stage when cells can mature into various cell types.[5] Next, they manipulated these cells with chemicals to create four cells which created the foundation for something that would resemble an embryo. A total of 120 of these cells were mixed in a precise ratio, and about 1% of the cell mixture spontaneously formed itself into a structure similar to an embryo.[6] This structure developed until it reassembled an embryo fourteen days after fertilization.[7]

However, the scientists are careful to differentiate between an embryo and what they created, an embryo model. [8]
Currently, the legal cut-off for embryo model development is fourteen days in many countries. [9] After developing to resemble a fourteen-day-old embryo, the model has developed internal structures but has not yet created the foundations for body organs. [10] Rapidly developing technology may allow scientists to develop embryo models past the point of not yet creating the foundations for body organs, while simultaneously altering the models to resemble human embryos more and more closely.
Although embryo models remain legally distinct from embryos, as time goes on, the models’ ever-developing similarity to embryos raises ethical issues that call for heightened regulation in this field. In addition to the expectation that these models will become increasingly difficult to distinguish from human embryos, we also must consider regulations regarding the cut-off of the development of these models.

Moreover, scientists have not yet reported allowing or having the ability to develop these models to a stage where they develop more complex structures like the foundation for organs. As we approach the point of developing the technology to advance to this point, it is necessary to ensure that ethical principles are adhered to in the testing and use of these embryo models.

As models become increasingly difficult to distinguish from embryos and we approach the advent of technology that can allow them to be sustained into further stages of development, it is also important that clear guidelines that ensure informed consent are enacted for participants who provide their stem cells or other specimens to create these models. Finally, given the global impact of scientific research, creating a consistent framework for research involving embryo models would be most effective for advanced regulations in an international setting.

Citations:

1. James Gallagher, Scientists grow whole model of human embryo, without sperm or egg, BBC News, https://www.bbc.com/news/health-66715669/ (last visited 09.10.23 10:00 PM EST).
2. Id.
3. The Science of Integrated Human Embryo Models, International Society for Stem Cell Research, https://www.isscr.org/upcoming-programs/embryo-models-webinar/ (last visited 09.13.23 8:00 AM EST).
4. Supra. Note 1.
5. Id.
6. Id.
7. Id.
8. Id.
9. Id.
10. Rami Amichay and Ari Rabinovitch, Israeli scientists create model of human embryo without eggs or sperm, Reuters, https://www.reuters.com/science/israeli-scientists-create-model-human-embryo-without-eggs-or-sperm-2023-09-07/ (last visited 09.10.23 10:00 PM EST).

By: Ahmad Salman

Technology has spearheaded our propulsion into the future, but not without risk. The way we work and learn has transformed in a post-Covid world with the prevalence of remote work empowered by Teams, Zoom and Blackboard. The conveniences afforded to us by remote work and learning come at the cost of social interaction and personalization, a void that breakout rooms and 1:1 meetings haven’t been able to fill. The realm of digital entertainment is no exception. Video games are one of the hallmarks of digital entertainment, an industry that will be worth US$334bn in 2023 [1]. It would be naive to assume that the growth in video games popularity and its mass adoption would not come with a slew of challenges to be navigated and addressed.

Video game companies have benefited from record-breaking revenues over the years. How do video game companies make their money? Classically, video game companies develop games and sell them for an upfront payment. Once a customer has purchased a game, the game belongs to the customer to use and enjoy indefinitely [2]. Over the last few years, video game companies have diversified their revenue streams. Freemium models have also been increasingly popular with videogames, where a segment of the game is available to play for free, and the rest of the game lies behind a paywall [3]. One particular revenue stream that video game companies have implemented, with a great deal of success, is microtransactions.

Microtransactions are prevalent in the gaming industry, and often, the lifeline of many companies in 2023. Earlier it was explained that video game companies would make money by developing games, and selling them to customers upfront for a fixed fee. This is a “macro transaction”, a big purchase in exchange for complete access to a game. Video game companies of today like Epic Games and Riot Games have taken an alternate approach. These companies offer their most popular games for free, and have made billions of dollars doing so [4]. Let’s square that circle – how does a company make billions of dollars by offering its product for free? Through microtransactions. Players may freely access the games and can play for hundreds of hours without spending a cent. The video game company makes money by offering their players customizable features for in-game characters, cosmetic items, and upgrades to the overall playing experience. If a character in a game has blue colored hair by default, a player may choose to spend the equivalent of a few dollars to change their character’s hair color to pink. Over the course of playing a game, a user may spend hundreds of dollars through a series of microtransactions to regularly upgrade their in-game character’s fashion. In essence, video game companies offer their games for free and are banking on the fact that players will want to spend money to enhance their gaming experience.

So what’s the issue?
Microtransactions are commonly grounded on chance. Popular games like NBA 2K, FIFA, League of Legends, Fortnite, and Counter-Strike make billions of dollars from “loot box” microtransactions. A loot box microtransaction is one where players use real, fiat currency, in exchange for digital, in-game “boxes”. These opaque digital boxes are opened by players with a promise of containing virtual items, cosmetic upgrades for character or other gameplay altering commodities [5]. When purchasing the loot box, the player has no idea what item they’ll be receiving, and instead, will play the odds of the loot box in hopes of receiving high-value prizes.

There are several contentions with loot box microtransactions. Considering that in games like Counter-Strike, the real-world value of in-game digital knives obtained from loot boxes can be worth thousands of dollars [6] , loot box microtransactions opens a regulatory can of worms. Is a loot box just a digital slot machine that should be regulated by state law as such?

A major problem with the microtransaction world is that microtransactions are common in games that are free to access. The accessibility of free games populates their player base with minors. While the majority of gamers are not under the age of 18, roughly 20% are [7]. Is it wise for a 14-year old, who cannot gamble legally in any state [8], to have unrestrained access to loot box microtransactions which encourages gambling-like consumer spending?

The Federal Trade Commission (FTC) posted a staff perspective on this exact issue, highlighting the existing and potential dangers of the loot box economy that pervades the gaming industry today.[9] The FTC concludes its publication by encouraging the industry to self-regulate and communicate the risks of loot box microtransactions transparently with its customers.[10] Relatedly, the FTC fined Fortnite’s Epic Games US$245 million for engaging in deceptive practice to increase consumer microtransaction spending earlier this year .[11] It remains to be seen if the gaming industry will insulate its players from pernicious practices on its own, or if regulatory regimes and the law will need to step up.

Gaming is one of America’s most popular hobbies across age demographics. It is imperative that lawmakers, regulators and stakeholders in the gaming industry are aware of the pound of flesh that its popularity may demand.

Citations:

1. Video Games – Worldwide, Statista Market Forecast https://www.statista.com/outlook/dmo/digital-media/video-games/worldwide.
2. Raymond Kenney, How do Gaming Companies Make Money? The Inside Story, Anonymistic (Dec. 14, 2022), https://www.anonymistic.com/how-do-gaming-companies-make-money/.
   
3. Riddhima Pal, Top 7 gaming companies in 2023, (Apr. 7, 2023), https://firstsportz.com/esports-best-gaming-companies/.
4. Id.

5. FTC Video Game Loot Box Workshop, (Aug. 13, 2020), https://www.ftc.gov/system/files/documents/reports/staff-perspective-paper-loot-box-workshop/loot_box_workshop_staff_perspective.pdf.

6. Calum Patterson, All CSGO Knives: Most expensive knife, cheapest, and best knives to buy, Dexerto (Sept. 6, 2023), https://www.dexerto.com/csgo/all-csgo-knives-most-expensive-cheapest-and-best-knives-to-buy-1923754/.

7. Bojan Jovanovic, Gamer Demographics: Facts About the Most Popular Hobby, (Apr. 11, 2023), https://dataprot.net/statistics/gamer-demographics.

8. https://www.playusa.com/us/gambling-age/.

9. FTC Video Game Loot Box Workshop, (Aug. 13, 2020), https://www.ftc.gov/system/files/documents/reports/staff-perspective-paper-loot-box-workshop/loot_box_workshop_staff_perspective.pdf.

10. Id.

11. FTC Finalizes Order Requiring Fortnite maker Epic Games to Pay $245 Million for Tricking Users into Making Unwanted Charges, Federal Trade Commission (Mar. 14, 2023), https://www.ftc.gov/news-events/news/press-releases/2023/03/ftc-finalizes-order-requiring-fortnite-maker-epic-games-pay-245-million-tricking-users-making.

By: David Buko

Traditionally lawyers have not played well with non-lawyers in the realm of providing legal services. However, with the rapid advancement of artificial intelligence (AI) [1] and the ever-widening access to justice gap wherein low-income Americans receive no help or inadequate help for ninety-two percent of their most important civil legal problems. [2] However, a paradigm shift is in process. Companies such as Rocket Lawyer and LawGeex use AI technology to provide expedited and affordable legal services without paying the exorbitant prices charged by most lawyers. [3] Both companies would not be allowed to operate in more than three-quarters of the jurisdictions in the United States under the rules of professional responsibility (MRPC).[4]
Rule 5.4. of the MRPC has stood as a barrier to interdisciplinary innovation in the provision of legal services for decades.[5] That has changed to resounding positive results in one United States Jurisdiction: Utah. [6] The Utah State Supreme Court oversees the first United States based regulatory sandbox. [7] In a regulatory sandbox normally enforced regulations such as the state’s version of rule 5.4 are suspended, allowing for unprecedented collaboration and investment from non-law entities. [8] This results in legal services that transcend the cost barrier that prevents most people from seeking legal help.[9]
Proponents of regulatory sandboxes argue that the data generated is invaluable when it comes to implementing new technologies and assessing their real-world impacts without a constant fear of regulatory retaliation.[10] In turn this freedom spurs investment which increases the effectiveness of the technology and increases competition in the legal field. [11] Furthermore, regulatory sandboxes help provide transparency and protect consumers because any potential harms are closely monitored and weighed against the potential benefits. [12] If the harm is greater the services are no longer allowed to participate within the scheme. [13] In the three years that the program has been in operation there have only been only seven harm related complaints from over 55,000 distinct legal services being delivered. [14]
Opponents like the ABA caution that regulatory sandboxes do not come without risks. [15] Such risks include but are not limited to: incompetently delivered legal services, the sale of unnecessary legal services to clients, less pro bono work done by lawyers due to a faulty perception that distinctly tailored approaches are no longer needed, and the development of a two- tiered system of inferior AI justice which lower SES status Americans would be forced to utilize while the wealthy benefit from a more robust hybrid system of the best human lawyers augmented with the best AI that only the largest law firms can afford to calibrate and utilize.[16]
While the dangers are ominous, the domestic success of the Utah sandbox is a beacon of promise with the benefits clearly outweighing the harms substantially.[17]

—————-

Citations:

[1] Bernard Marr, The Future Of Lawyers: Legal Tech, AI, Big Data And Online Courts, Forbes (Jan. 17, 2020, 7:00 AM)

[2] Legal Services Corporation, The Justice Gap: The Unmet Civil Legal Needs of Low-income Americans 7 (2022)

[3] Ryan Nabil, Regulatory Sandbox Programs Can Promote Legal Innovation and Improve Access to Justice, The Hill (Oct. 9, 2021, 8:00 AM)

[4] Sam Skolnik, California Bar ‘Sandbox’ May Rattle Legal Competition for Firms, Bloomberg Law (May 11, 2021, 8:14 AM)

[5] Drew Simshaw, Access to A.I. Justice: Avoiding an Inequitable Two-Tiered System of Legal Services, 24 Yale J.L. & Tech 150, 221 (2022)

[6] Utah Innovation Office, Activity Report: July 2023 (2023)

[7]  Supra. note 3.

[8] C. Thea Pitzen, Can Nonlawyers Close the Legal Services Gap?, GPSolo eReport, Apr. 21, 2022, at 11-13, American Bar Association

[9] Supra. note 3.

[10] OECD, Regulatory Sandboxes in Artificial Intelligence, OECD Digital Economy Papers, No. 356, at 13-15 (July 2023

[11] Id.

[12] Office of Legal Services Innovation, Innovation Office Manual at 1 (21st ed. 2021).

[13] Id.

[14] Id.

[15] Supra. note 8.

[16] Supra. note 5.

[17] Supra. note 6.

By: Katelin Schaub

Dungeons & Dragons (D&D) is a tabletop role-playing game that was released commercially in 1974.[2] The game operates with player characters created and piloted by members of the group and a Dungeon Master who acts as the author, narrator, and judge of potential disputes. [3] All the characters make their way through the game by creating a story using dice to determine their successes and failures. [4] D&D became much more popular during the pandemic, with sales jumping by 33%, leading to more curiosity about how the game’s intellectual property is protected. [5] The game itself is part of the intellectual property of the Wizards of the Coast, who protect intellectual property through trademarks.[6]
A trademark can be a work, design, symbol, or combination identifying a specific good or service. [7] Trademarks help customers connect the product or service to its source instead of any competitors. [8] For example, Wizards of the Coast currently owns a trademark in “DUNGEONS & DRAGONS” for “Entertainment services, namely, the provision of movies and ongoing television shows featuring fantasy stories and fantasy characters delivered by television, satellite, portable electronic devices or the internet; organizing and conducting game tournaments and entertainment exhibitions in the field of fantasy role-playing games; production and distribution of movies.” [9] Wizards of the Coast does not own the phrase “Dungeons & Dragons.” [10] They have the rights to “Dungeons & Dragons” being used with the stated goods or services.[11] Wizards of the Coast has registered 451 different trademarks, including the word “chainmail” as it pertains to fantasy role-playing war games.[12]
Wizards of the Coast also uses copyright protection. Copyright extends to an original work of authorship fixed in a tangible medium of expression.[13] The idea for a game of D&D, including the basic mechanics and rules of the game, cannot be copyrighted.[14] Instead, the written descriptions or plot lines, artwork associated with the manual, or even an especially distinct character could have access to copyright protection.[15] So, no one is allowed to copy or prepare derivatives of this material.[16]
It may be possible to get a patent for the mechanics of a game. The qualification requirements for a patent are that the invention must be new and useful and either a process, machine, manufacture, or composition of matter. [17]The invention must also be novel and non-obvious. [18] Wizards of the Coast has even patented an on-trading card game method of play for one of the other intellectual properties.[19] However, for D&D, the Wizards of the Coast have chosen two options for people to use their content: the open gaming license (OGL) with the System Reference Documents (SRDs) and Creative Commons.
Wizards of the Coast allows the use of their content in System Reference Documents (SRDs) through either the current original gaming license (OGL 1.0a) or through Creative Commons.[20] The open gaming license is an open content license that allows people to use the information contained in the SRD as long as they comply with the OGL 1.0a.[21] While Wizards of the Coast still hold their trademarks and protects the brand in this fashion, they have made these rules available to the D&D community. [22] The OGL 1.0a has some requirements for the use of their content, including that any open game content they distribute must contain a copy of the OGL 1.0a. [23] Creative Commons allows creators to use any content in the SRDs as long as they include an attribution statement. [24] Wizards of the Coast states that they chose to have Creative Commons as there are fewer restrictions than the OGL, and creators can be sure that Wizards of the Coast “can never revoke or deauthorize SRD 5.1 content.” [25] Both of these options allow users to design content or create their own stories and worlds using the rules and mechanics of D&D Fifth Edition.[26] With trademarks, copyrights, the OGL, and Creative Commons, Wizards of the Coast has fostered a vibrant community where players can become creators and continue to grow and improve the many worlds of D&D while still managing to protect and monetize their brand.

Citations:

[1] Cate Puglia, Photograph of TheWizardsVault Treasure of Atlantis dice set and Personal Notebook, https://www.etsy.com/listing/1206345346/treasure-of-atlantis-dice-set-liquid?click_key=29ebb85f1ebeaac430164caa8f6fc91e96550de3%3A1206345346&click_sum=3827c229&ref=shop_home_active_7&pro=1&sts=1

[2] Giuseppe Roberto Tarantino, If You Love Something, Set it Free? Open Content Copyright Licensing and Creative Cultural Expression (Nov. 22, 2019) (Ph.D. dissertation, Osgoode Hall Law School of York University), https://digitalcommons.osgoode.yorku.ca/cgi/viewcontent.cgi?article=1058&context=phd.

[3] Id.

[4] Id.

[5] Sarah Whitten, Dungeons & Dragons had its biggest year ever as Covid forced the game off tables and onto the web, CNBC, (Mar. 13, 2021, 9:08 AM), Dungeons & Dragons had its biggest year despite the coronavirus (cnbc.com)

[6] Tarantino, supra note 2.

[7] What is a Trademark?, USPTO, https://www.uspto.gov/trademarks/basics/what-trademark (Jul. 18, 2023, 9:10 AM).

[8] Id.

[9] DUNGEONS & DRAGONS, Registration No. 86,757,217.

[10] What is a Trademark?, Supra note 8.

[11] Id.

[12] CHAINMAIL, Registration No. 75,289,174.

[13] 17 U.S.C. § 102 (a).

[14] Id.  

[15] U.S. COPYRIGHT OFF., COMPENDIUM OF U.S. COPYRIGHT OFF. PRACTICES § 714 (3d ed. 2021).; DC Comics v. Towle, 802 F.3d 1012 (9^th Cir. 2015).

[16] 17 U.S.C. §§ 106 (1)-(2).

[17] 35 U.S.C. § 101.

[18] 35 U.S.C § 102.; 35 U.S.C. § 103.

[19] U.S. Patent No. 5,662,332 (filed Oct. 17, 1995).

[20] Systems Reference Document (SRD), Dnd.Wizards, https://dnd.wizards.com/resources/systems-reference-document

[21] Tarantino, supra note 2.

[22] Id.

[23] V5.1 Systems Reference Document (including the OGL), Dnd.Wizards, https://media.wizards.com/2016/downloads/DND/SRD-OGL_V5.1.pdf

[24] V5.1 Systems Reference Document (including the Creative Commons), Dnd.Wizards, https://media.wizards.com/2023/downloads/dnd/SRD_CC_v5.1.pdf

[25] Id.

[26] Id.