flag the shooter · by justin s. wales and farah z. alkayed 9 he book e 2 gument e d departments...

THE MAGAZINE OF THE LOS ANGELES COUNTY BAR ASSOCIATION

PLUS

FEBRUARY 2020—PART 1 OF 2 / $5

EARN MCLE CREDIT

Los Angeles lawyer Charles G. Bakaly IVdiscusses the various types of gunviolence restraining orders and relatedprocedures involved in requestingand applying these orders underCalifornia lawpage 16

ProtectingInfluencers’Rightspage 22

BY THE BOOK

The Chief:The Life andTimes of Chief JusticeJohn Robertspage 29

ForeignToken Sales

page 12

Flag the Shooter

Los Angeles Lawyer February 2020 3

16 Flag the ShooterBY CHARLES G. BAKALY IV

In recent years, California has adopted measures to restrict gun violence by allowing law enforcement and family members to petition courts for injunctive relief to prevent volatile individuals from access to firearms

22 Protecting InfluenceBY OLIVER BAJRACHARYA AND DREW WILSON

The ever-increasing rise in status and income potential of social influencersvia the Internet has created a commensurate need to protect influencers'rights of publicity in the manner traditionally afforded celebrities and otherpublic figures

PLUS: Earn MCLE credit. MCLE Test No. 296 appears on page 25.

F EATU RE S

Los Angeles Lawyer

the magazine of

the Los Angeles County

Bar Association

February 2020

Volume 42, No. 11

COVER PHOTOS CREDIT:TOM KELLER

02.20

8 President's PageA salute to LACBA’s dedicated staff for a job well doneBY RONALD F. BROT

10 Barristers TipsNovel approaches to correcting the gender wage gap BY NICHOLAS STARKMAN

12 Practice TipsForeign token sales may be subject to U.S. securities lawsBY JUSTIN S. WALES AND FARAH Z. ALKAYED

29 By the BookThe Chief: The Life and Turbulent Times of Chief Justice John Roberts REVIEWED BY TERRI KEVILLE

32 Closing ArgumentNetworking within a sphere of personal and professional influenceBY DAVID L. HOFFMAN AND PRESTON HOWARD

DE PARTM E NTS

LOS ANGELES LAWYER (ISSN 0162-2900) is publishedmonthly, except for a combined issue in July/August, by theLos Angeles County Bar Association, 1055 West 7th Street,Suite 2700, Los Angeles, CA 90017 (213) 896-6503. Period -icals postage paid at Los Angeles, CA and additional mailingoffices. Annual subscription price of $14 included in theAssociation membership dues. Nonmember subscriptions:$38 annually; single copy price: $5 plus handling. Addresschanges must be submitted six weeks in advance of nextissue date. POSTMASTER: Address Service Requested. Sendaddress changes to Los Angeles Lawyer, P. O. Box 55020,Los Angeles CA 90055.

4 Los Angeles Lawyer February 2020

Visit us on the internet at www.lacba.org/lalawyerE-mail can be sent to [email protected] Los Angeles Lawyer on Twitter at@LALawyerMag

EDITORIAL BOARDChairTYNA ORREN

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Copyright © 2020 by the Los Angeles County Bar Assoc ia -tion. All rights reserved. Reproduction in whole or in partwithout permission is pro hibited. Printed by R. R. Donnelley,Liberty, Missouri. The opinions and positions stated insigned material are those of the authors and not by the factof publication necessarily those of the Association or itsmembers. All manuscripts are carefully considered by theEditorial Board. Letters to the editor are subject to editing.

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LACBA EXECUTIVE COMMITTEE

PresidentRONALD F. BROT

President-ElectTAMILA C. JENSEN

Senior Vice PresidentBRADLEY S. PAULEY

Vice PresidentJO-ANN W. GRACE

Vice President Of Diversity, Inclusion & OutreachPHILIP H. LAM

Immediate Past PresidentBRIAN S. KABATECK

TreasurerKRISTIN ADRIAN

Assistant Vice PresidentTBD

Assistant Vice PresidentTBD

Barristers/Young Attorneys PresidentDIANA ARIELLE SANDERS

Barristers/Young Attorneys President-Elect SHARON GELBART

Executive Director/Secretary STANLEY S. BISSEY

BOARD OF TRUSTEES

KRISTIN ADRIANSARVENAZ BAHARJULIA L. BIRKELDAMON MICHAEL BROWNBRANT H. DVEIRINGARY A. FARWELLJOHN F. HARTIGANAMOS E. HARTSTONROY J. JIMENEZRICHARD L. KELLNEREVE LOPEZJEFFREY B. MARGULIESJEANNE L. NISHIMOTOANN PARKBENJAMIN G. SHATZED SUMMERSKENDRA THOMASKEVIN L. VICK

AFFILIATED BAR ASSOCIATIONS

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MEXICAN AMERICAN BAR ASSOCIATION (MABA)

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SOUTHERN CALIFORNIA CHINESE LAWYERS ASSOCIATION (SCCLA)

WOMEN LAWYERS ASSOCIATION OF LOS ANGELES (WLALA)


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Tyna Thall Orren is the 2019-20 chair of the Los Angeles Lawyer Editorial Board. She is anappellate attorney and a partner in the firm of Orren & Orren in Pasadena, California.

a gratifying experience. The free month for auto-payers, free MCLE, andsimilar member-friendly business innovations, plus several substantive up -grades in what LACBA offers members comprise a welcome process forwhich President Ron Brot, in this month’s President’s Page, gives due creditto LACBA’s professional staff. Los Angeles Lawyer takes pride in being partof the process. Thanks, Ron, for the shout-out for our dedicated and amazingprofessional editors.

So, what does Los Angeles Lawyer have for you in February 2020?As always, there is really cheap ($20), if not free, MCLE. This month, it is

for reading the article on “Protecting Influence” on page 22 and taking ourMCLE test on page 25. Authors Oliver Bajracharya and Drew Wilson offer alively and illuminating explanation of trademark rights and rights of publicity,the distinctions between them, and the uses that social media “influencers”like Kylie Jenner and Kim Kardashian make of both.

Rounding out a quartet of substantive law discussions, gun violence restrain-ing orders, as provided in Penal Code sections 18100 and following, are thefocus of Charles Bakaly’s informative piece on California’s efforts to combatgun violence and mass shootings.

Justin Wales and Farah Alkayed take on the intriguing question of whether“tokens” (virtual assets similar, but not identical, to bitcoins and other block -chain “coins”) are “securities,” subject to federal securities laws. The authorsidentify the circumstances in which tokens may, or may not, be subject tofederal regulations or may be entitled to exemptions.

Nicholas Starkman examines the persistent and resistant problem of gen-der-based inequalities in pay for equal work. He outlines Congress’s slowand largely ineffectual efforts, over the course of 60 years, to fix the inequities.He then describes three promising ways in which several states, includingCalifornia, are taking charge.

Terri Keville’s review of The Chief, Supreme Court journalist Joan Biscupic’srecent biography of Chief Justice John Roberts, is excellent. When I startedreading it, I was one of those who, in the reviewer’s words, “want[ed] todislike” Roberts. By the time I finished, I found myself actually eager to keepan open mind about him—a goodly distance to go in two pages.

Finally, David Hoffman and Preston Howard offer some concise and solidadvice on effective networking. There’s way more to it than handing outbusiness cards at business breakfasts.

We hope you benefit from and enjoy this month’s issue of Los AngelesLawyer. We welcome your comments. n

Igot a pleasant surprise when I went online to renew my Los Angeles County Bar Association membershipyesterday—a month for free if I enrolled for auto-pay.

I jumped at that, hit “submit,” and then learned I had alsoearned a voucher for some free MCLE. Altogether, it was


I AM MORE THAN PLEASED with the unmis-takable resurgence of the Los Angeles CountyBar Association this year. We are gratefulfor the leadership of our executive director,our elected officers, and the board of trustees,who have given purpose and direction toour efforts. Likewise, our sections and com-mittees have contributed greatly. The signif-icant progress we have experienced this yearis also due to the unsung accomplishments

of our staff. Without the efforts of our tirelessLACBA personnel, our aspirations would belargely unfulfilled.

As we have moved to increased financialresponsibility, our LACBA staff has beenreduced in size while we insist on continuedservice. Remarkably, our staff has not onlyaccepted this challenge but has raised thebar with overall increased performance inthe services we provide to our members and the public.

First Contact and Beyond

The LACBA experience begins when someone walks off the elevator,enters our lobby, and is greeted cheerfully by our gracious receptionstaff, Demi Clark and Shirleen Yorke. They provide a welcomingatmosphere for our members and guests.

Our events are produced by our Events, Multimedia, and Con -tinuing Legal Education department staff led by Tom Walsh. Eventsare presented with uncanny consistency, especially in view of thenumber of programs presented by our sections and committees aswell as by LACBA itself. Imagine being an events specialist orsupervisor responsible for programming for multiple sections, aswell as for presenting programs and events for our committeesand LACBA. Coord inating, marketing, arranging venues, preparingmaterials, insuring proper seating, selecting menus, and staffingthe events are commonplace duties for our staff. Imagine also thetime and effort we put into planning a home birthday party, or ananniversary celebration. Our events department does this againand again on a routine basis with remarkable results.

LACBA has recommitted to a new and energetic marketingplan with Lynz Floren who manages the Marketing and BusinessDevelopment department. Lynz is working with our outside mar-keting agency to develop a new marketing strategy both for ourLACBA membership and our community. LACBA does so manyoutstanding things that our members, the legal community, andthe general public should be made aware. I know that Lynz hasgreat plans for the near future.

Our Publications department has always been important toLACBA and continues to thrive with Editor-in-Chief Susan Pettitand Advertising Director Linda Bekas. We continue to be proud

of Los Angeles Lawyer and our other publications and are gratefulfor the enthusiastic work of our staff.

Our Member Services department led by Phyllis Hauser isasked not only to maintain accurate membership records butalso to accommodate changes in membership policies, procedures,and protocols without missing a beat. As I have maintained akeen focus on our membership changes and demographics, Ihave been amazed at her ability to provide me with what I needon short notice. We are grateful for the fine work we have cometo expect from this department.

The Information Technology department directed by MichaelOssou keeps our systems operational under the most trying cir-cumstances. Their role is vital to our continued success.

Our Web Services department led by Tom Horne has been busyfacilitating our efforts to utilize ever changing technology in multiplephases of our operations. Have you noticed our social presence,tried the LACBA App, or participated in online CLE? These arebut a few of the products from the exciting work of this department.We have come to expect constant change in this area mirroringthe constant change in technology itself. We are fortunate to havesuch a talented and dedicated department to meet these challenges.

Financial and Personnel Management

Operating a complex organization such as LACBA requires sig-nificant accounting support. Our Finance department, led by BruceBerra and Glenn Benitz, has played a significant role in helping usachieve financial stability for LACBA. We are grateful for thecooperation and dedication the entire accounting team has shownin working with the President’s Task Force on Financial Stabilityand Sustainability and with the board’s Finance Committee. Withtheir help we found a way to achieve financial stability.

Managing the LACBA personnel is no small feat, and we aregrateful for the fine work of our Human Resources departmentmanaged by Karen Benjamin. We appreciate her significant con-tribution in maintaining the smooth workflow of our operations.

Space does not allow me to single out every department and

president’s page BY RONALD F. BROT

A Salute to LACBA’s Dedicated Staff for a Job Well Done

LACBA is filled with dedicated individuals who truly care about our

association, our lawyer members, and the work that we do.

The 2019-20 president of the Los Angeles County Bar Association, Ronald F.Brot is a founding partner and chairman of Brot Gross Fishbein and a notedfamily law attorney. He is a past chair of LACBA’s Trial Lawyers Section (nowthe Litigation Section) and Family Law Section, among others.

staff member, al though far more are worthyof mention and praise. We continue to oper-ate a robust Attorney-Client Mediation andArbitration Services (ACMAS) ably directedby Sharron McLawyer. Seth Chavez like -wise ably directs our active Lawyer ReferralService (LRS), which provides the publicwith referrals to affordable counsel, providesour members with client opportunities, and generates revenue for LACBA. We ap preciate the continuing importance ofACMAS and LRS, and the fine work doneby Sharron, Seth, and their staff.

We are also fortunate to have more thancapable directing attorneys leading ourIndigent Criminal Defense Appoint mentsProgram (Zeke Perlo) and our IndependentJuvenile Defender Program (Cyn Yama -shiro). We take pride that these programsalso allow LACBA to help those in need ofrepresentation and assist lawyers in searchof clients.

Executive Director

Last but certainly not least, we saluteExecutive Director Stan Bissey for his ser-vice during the past two years. Stan hasdone remarkably well in learning the in -tricacies of the LACBA operation andhelping set an enthusiastic course for avibrant future. Stan has stood his groundin difficult times and should be com-mended for his unwavering leadership.Anyone familiar with LACBA appreciatesthe incredible work of Executive Assist -ant and Corporate Governance Admin i -strator Vanessa Villa gomez. With her signature willingness to help whereverneeded, Vanessa is the go-to person forStan and for the president. I cannot sayenough to thank Vanessa for her supportthrough out my term in office. Also, I of -fer a special thank you to Admin istrative Speci alist Jazmine Ramirez for taking onVanessa’s responsibilities last fall whenVanessa was on leave. Jazmine’s excellentwork provides us needed depth in ourexecutive administration both for the pre-sent and in the years ahead.

The LACBA staff is far more than anorganizational flow chart. LACBA is filledwith dedicated individuals who truly careabout our association, our lawyer mem -bers, and the work that we do. They areproud to be a part of an energized, suc-cessful bar association. So, when the oppor-tunity arises, show them how much youappreciate them. Don’t forget to acknowl-edge the many things that go right, notjust the things that do not. After all, weare all part of this exceptional organizationthat has reestablished itself as the vibrantvoice of the legal community in Los AngelesCounty. Join us. n


WELCOMETO OUR

NEWEST MEMBERS

Celeste Ahl, II

Cheryl Bigos

Corey D. Boddie

Nikki R. Brown

Alexis Bastian Cruz

Christa Anne Daley

Jessie Belle Duncan

Rocky Elkaddoum

Cheryhan A. Elrawi

Robert D. Estrin

Jason Louis Galaif

David S. Galperson

Hayim Mayer Gamzo

Paruyr Ghazaryan

Hila Golchet

Silvia Gonzalez

Jodi S. Green

Marianne Ostrow Greene

Michael Guitar

Megan Nicole Guzman

Ann Haberfelde

Holly Hancock

Joel Holstad

George Frederick Johannessen

Erin Margaret Kansy

Shamica E. Kennedy

Lilian M. Loh

John Man

Niloufar Massachi

Monique G. Matar

Mayank Mohan

Mary L. Mucha

Carter Lee Norfleet

Brian P. O'Connell

Marcy A. Pettitt

Nicholas Poper

Dennis Raglin

Douglas D. Raphael

Casey Reagan

Ron Reitshtein

David J. Richardson

Jessica Elise Rico

Timothy Alvin Ryan

Ana Lucia Sanchez

Scott Aaron Sasser

Teal Madison Schoonover

James Shin

Ashley St. Johns

Dennis J. Stankie

Elizabeth Treckler

Arpi Vardanyan

Michael J. Waldren

Michele Weiss

Theodore Jason Weiss

Erika Williams

Michael J. Wise

Patrick Zakhary

Jason Ziven


barristers tips BY NICHOLAS STARKMAN

FEDERAL EQUAL PAY LEGISLATION in the United States has ahistory of major initiatives followed by years of inactivity. In1963, Congress passed the Equal Pay Act,1 which prohibits sex-based wage discrimination between men and women whoperform “equal work.” Then, for nearly 50 years, there was adearth of federal legislative activity on equal pay until Congresspassed the Lilly Ledbetter Fair Pay Act of 2009.2 This lawclarified that liability for pay discrimination based on age,religion, national origin, race, sex, and disability will accrueeach time an employee receives a discriminatory paycheck. Therehas not been a major federal equal paystatute since 2009, despite the persistenceof an average gender wage gap of 85 centsper dollar in 2018, according to the PewResearch Center.3

In recent years Congress attempted un -successfully to pass the Paycheck FairnessAct,4 a comprehensive bill that, among otherthings, narrows employer defenses to sex-based wage discrimination and creates anationwide ban on using salary history tojustify pay decisions. However, in light ofrecent social movements highlighting wage inequality and high-profile pay discrimination lawsuits, it appears that federal inac-tivity on equal pay is becoming untenable. Into this void stepindividual states and localities, which have come up with novel,creative approaches to closing the wage gap. These initiativesinclude employer equal pay “safe harbors,” local and statewidesalary history bans, and pay data reporting.

An equal pay “safe harbor” is a legislatively backed incentivefor employers to conduct “equal pay audits,” or self-evaluations,of their own compensation structures and make salary adjust-ments based on their findings. (Employers cannot reduce payto equalize wage disparities,5 so these adjustments will be paybumps). The benefit to employers is that they can avail themselvesof an affirmative defense, thereby avoiding some or all liabilityin state equal pay lawsuits. Massachusetts, Oregon, and Coloradohave rolled out their own versions of equal pay safe harbors inrecent years.6

Equal Pay Audit

To obtain the benefit of a safe harbor, an equal pay audit mustgenerally 1) be completed within a certain time frame prior tothe filing of an equal pay complaint or administrative charge,2) be completed in good faith, 3) be reasonable in detail andscope in light of the size of the employer’s operations, and 4) berelated to the protected class asserted by the plaintiff.7 Withsome variance, the employer must also demonstrate reasonableprogress toward eliminating unlawful gender-based wage dif-ferences revealed by the audit.8 By incentivizing employers to

systematically review and adjust their pay practices, state gov-ernments have found a creative way to fill in the gaps left byfederal legislative inactivity.

Salary History Bans

Salary history bans are another creative legislative approach toaddressing persistent pay gaps. Salary history bans can takeseveral forms but are generally aimed at preventing employersfrom capitalizing on the persistence of the wage gap in settingpay, thereby perpetuating the gap further.9 Salary history bans

may prohibit employers from inquiring about an applicant’sprior history. They may also prohibit retaliation against employeeswho discuss their wages with their colleagues. Others may gofurther and make it impermissible for employers to base paydecisions on prior compensation. The website HRDive keeps arunning list of the states and localities that have enacted salaryhistory bans. As of October 31, 2019, the list includes 17 states(including California) and 19 localities (including San Fran -cisco).10 Other states and localities may soon follow.

A third, novel approach to rectifying wage discriminationcomes from across the pond. In April 2017, Great Britain beganrequiring certain employers with 250 or more employees toreport and publish data on their institutions’ gender pay gaps(including bonuses).11 This data is publicly available and search-able on a government website.12 The pay data requirement canbe thought of as an experiment in sunshine legislation—byobligating employers to publicize their compensation issues,industries will be pressured to align themselves with equal paybest practices.

New Jersey adapted this approach, requiring certain publiccontractors to submit an “equal pay report” to the government.Public contractors must report covered employees’ wages bypay bands that are disaggregated by sex, race, exempt status,and ethnicity.13

Novel Approches to Correcting the Gender Wage Gap

Without significant federal legislative activity on equal pay, state

and local lawmakers likely will continue to act with creative and

novel intiatives to equalize wages.

Nicholas Starkman is in-house counsel at Trusaic, a software company. Heserves on the Barristers Networking Committee of the Los Angeles CountyBar Association.


In California, lawmakers proposed,but were unsuccessful in passing, a pay data reporting obligation similar to that required by the U.S. Equal Em ploy - ment Opportunity Com mission in thecon tro versial EEO-1 “Component 2”report, which is currently being liti gat - ed.14 Cal if ornia Senate Bill 171 wouldhave re quired employers with 100 or more em ployees to submit a pay data re port with data points for compensa -tion, race, ethnicity, sex, and job type.15

Depend ing on the future of the EEO-1Com ponent 2, Cal ifornia and other statesmay try again to enact a pay data report-ing requirement.

While there are many contributors to the persistent wage gap, states andlocalities increasingly view themselves as part of the solution. Without signifi -cant federal legislative activity on equalpay, state and local lawmakers likely will continue to act with creative and novelinitiatives to equalize wages. n

1 The Equal Pay Act of 1963, 29 U.S.C. §206(d) (1963)[hereinafter Equal Pay Act].2 The Lilly Ledbetter Fair Pay Act of 2009, Pub. L.No. 111-2, §2000a, 123 Stat. 5 (2009).3 Nikki Graf, et al., The Narrowing, but Persistent,Gender Gap in Pay, PEW RESEARCH CENTER, Nov. 19,2019, available at https://www.pewresearch.org/fact-tank/2019/03/22/gender-pay-gap-facts.4 Paycheck Fairness Act, H.R. 7, 116th Cong. (2019-2020).5 See Equal Pay Act, supra note 1, at §206(d)(1).6 See, e.g., The Oregon Equal Pay Act of 2017, OR.REV. STAT. §§652.210 et seq. (2018).7 Id. at §652.235.8 See, e.g., An Act to Establish Pay Equity, MASS. GEN.LAWS ch. 149, §105A(d) (2016).9 See, e.g., Rizo v. Yovino, 887 F. 3d 453, 456 (9thCir. 2018), cert. granted, judgment vacated, 139 S.Ct. 706 (2019).10 HRDive, Salary history bans: A running list of statesand localities that have outlawed pay history questions,(Nov. 19, 2019), https://www.hrdive.com/news/salary-history-ban-states-list/516662 (last viewed Dec. 29,2019).11 Francis Perraudin, What is Gender Pay Gap Re -porting, and What Does it Mean?, THE GUARDIAN

(Nov. 19, 2019), available at https://www.theguardian.com/society/2019/feb/28/what-is-gender-pay-gap-reporting-and-what-does-it-mean.12 GOV.UK, Search and compare gender pay gap data,https://gender-pay-gap.service.gov.uk (last viewed Dec.29, 2019).13 James M. McDonnell, New Jersey Labor DepartmentRevises Equal Pay Act Data Reporting Requirements,jackson�lewis (Nov. 20, 2019), https://www.jacksonlewis.com/publication/new-jersey-labor-department-revises-equal-pay-act-data-reporting-requirements (lastviewed Dec. 29, 2019).14 See National Women’s Law Center v. Office ofManagement and Budget, 358 F. Supp. 3d 66 (D.D.C., 2019).15 Jackson Lewis P.C., Like EEO-1 Component 2,California Pay Data Reporting Stalls, NAT’L LAW

REV. (Sept. 23, 2019), https://www.natlawreview.com/article/eeo-1-component-2-california-pay-data-reporting-stalls.

PLEASEVOTE!

ELECTION DAY — MARCH 3 —

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Judicial CandidateRatingsavailable at

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THE TERM “TOKEN” AS APPLIED to virtual assets encompasses awide array of technologies and financial instruments. As thepopularity of virtual assets grows (and shrinks and grows), ques-tions regarding the application of securities regulations to theissuance and sale of tokens and other virtual assets becomedifficult to answer. The U.S. Securities and Exchange Commission(SEC) recently issued a framework elaborating how it analyzestoken sales and has published several settlements of enforcementactions that are instructive and provide guidance on the applicationof federal securities laws to virtual currencies.

Despite an increasing yet, still unsettled body of guidance,many mistakenly believe that limiting a token sale to foreignpurchasers shields them from the reach of U.S. law. This is notthe case, and token issuers must recognize that this strategy posespotential long-term risks. Practitioners dealing with tokens mustconsider these risks and how foreign and U.S. token issuers maymitigate the prospect of noncompliance when selling tokensoutside the United States.

Under the Securities Act of 1933, a company that offers orsells a security, regardless of the form of the offering, where it islocated, or to whom it is sold, must either register its securitieswith the SEC or otherwise qualify for an exemption from regis-tration. Two recent announcements by the SEC offer guidanceon the application of federal securities laws to token sales. UnderSection 2(a)(1) of the Securities Act, a security is:

any note, stock, treasury stock, security future, bond,debenture, evidence of indebtedness, certificate of interestor participation in any profit-sharing agreement, collat-eral-trust certificate, preorganization certificate or sub-scription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractionalundivided interest in oil, gas, or other mineral rights, anyput, call, straddle, option, or privilege on any security, cer-tificate of deposit, or group or index of securities (includingany interest therein or based on the value thereof), or anyput, call, straddle, option, or privilege entered into on anational securities exchange relating to foreign currency,or, in general, any interest or instrument commonly knownas a “security,” or any certificate of interest or participationin, temporary or interim certificate for, receipt for, guaranteeof, or warrant or right to subscribe to or purchase, any ofthe foregoing.Unless a token represents an equity interest in a company, a

note, any profit-sharing interest in a company, or another of theenumerated items set forth in the definition, the determinationof whether the tokens are securities requires an analysis ofwhether the offer and sale of these tokens constitute an “investmentcontract” under Section 2(a)(1) as that term has been definedunder case law, interpretative releases of the SEC, and prior no-action letters.

The term “investment contract” has been broadly construedby the courts to encompass a variety of financial activities. Forexample, the U.S. Supreme Court’s 1946 opinion in SEC v. Howey1

sets forth a test with several factors for determining whether asale constitutes an investment contract that, if applied, mightsubject tokens to securities regulations and registration. Theseinclude determining whether there is 1) an investment of money2) in a common enterprise 3) where the investor has an expectationof profits from the investment 4) and the expectant profits arederived from the efforts of the promoter or third party.2

Thousands of judicial decisions analyze and apply the Howeyfactors to all sorts of investment contracts, but there is relativelylittle to no guidance analyzing how the Securities Act applies tothe numerous and ever increasing types of virtual currencies.Notably, on April 3, 2019, the SEC issued its first no-actionletter to a virtual currency issuer called TurnKey Jet, Inc., a U.S.-based air carrier and air taxi service. The letter stated that the

practice tips BY JUSTIN S. WALES AND FARAH Z. ALKAYED

Foreign Token Sales May Be Subject to U.S. Securities Laws

Justin S. Wales is senior counsel at Carlton Fields in Century City, California,and co-chair of the firm’s Blockchain and Digital Currency Practice. FarahZ. Alkayed is an associate at the firm whose practice focuses on corporate,real estate, and capital market transactions, including mergers and acqui-sitions, private equity investments, public finance, and cannabis invest -ment projects.

SEC’s Division of Corporate Finance wouldnot recommend an enforcement action ifTurnKey sold its tokens without registeringits offering with the SEC. The TurnKeyno-action letter marks the first time theSEC has affirmatively stated that a tokensale would not be deemed the sale of a“security” subject to SEC regulation andenforcement.

The facts provided by TurnKey to theSEC demonstrate that it intends to conducta limited token sale that prevents the pos-sibility of a secondary market for its tokenand that prevents the price of the tokenfrom increasing. Additionally, TurnKey’splatform would be fully functional anddeveloped upon its token’s issuance, andno funds from the token sale would beused to build out the platform. Finally,TurnKey’s token would be marketed forits functionality as a token to purchase aircharter service rather than the potentialfor increasing its market value in the future.

The SEC’s view that the TurnKey tokenis not a security is consistent with the SEC’s recently published Framework forInvestment Contract Analysis of DigitalAssets, which has been criticized as leavingmuch uncertainty to token issuers andpotentially creating an impractical set ofrequirements that make it difficult todevelop platforms more robust and lesscentralized than TurnKey that require avirtual currency to operate.3

Second No-action Letter

Almost four months after its first no-actionletter and before expanding or clarify ingits recent framework, the SEC issued a second no-action letter to Pocketful ofQuarters (PoQ). Pocketful of Quarters is acryptocurrency exchange for video gameplayers (also known as gamers), which en -ables gamers to retain the Quarters theyaccumulate when they quit playing a certaingame. In issuing its second no-action letter,the SEC focused on the same factors relatedto the TurnKey tokens, resulting in boththe Quarters and TurnKey tokens fallingoutside the realm of an SEC-regulated“security.” Indeed, the PoQ Quarters, like the TurnKey tokens, will be sold at a fixed price. Also, both TurnKey tokensand Quar ters are intended specifically for use within their respective platforms,restricting transfers to outside platformsor wallets. Additionally, Quarter ownerscan use the tokens immediately for onlinegaming once they are sold, like those ofthe TurnKey’s digital coins for air charterservices. Finally, the Quarters, like theTurnKey tokens, will not be used to de -velop the respective platforms as both plat-forms are fully operational and developed.

Hence, the limited use and restrictions ren-dered both Turnkey’s tokens and PoQ’sQuarters outside the scope of a security.

Notwithstanding the SEC’s brief no-action letters, the determination of whethera token sale is or is not the sale of a securitynecessarily requires an analysis of the par-ticular facts and circumstances surroundingthe sale and marketing of the token offer-ing to determine whether it is an “invest-ment contract” under the Securities Act.Although the virtual currency industrycould certainly benefit from clearer guid-ance and the development of case lawinterpreting the application of U.S. federalsecurities regulations on token sales, issuerscould attempt to shield their offeringsfrom U.S. oversight by limiting their tokensales to only foreign purchasers. Whiledoing so potentially eases the issuers’ U.S.regulatory burden, it does not completelyshield the issuer from U.S. jurisdictionand, if not done properly, may cause sig-nificant regulatory concerns for issuerswho wish for their platforms to eventuallyhave U.S. customers or users.

Registering the sale of a security withthe SEC can be an impractically long andexpensive process. Luckily, the SecuritiesAct provides several registration exemp-tions that permit issuers to offer and sellsecurities without undertaking this bur -den. The most commonly used exemp -tions from registration (and most suitablefor the sale of tokens that are, or couldbe, considered securities), are found inRule 506(b) and 506(c) of Regulation Dof the Securities Act and Regulation S ofthe Securities Act. Although the exemptionsunder Regulation D permit the sale ofsecurities to individuals located in theUnited States, generally those individualsneed to be “accredited in vestors.”4

Under Regulation D, if the sale is tobe generally advertised to the public, theissuer has an obligation to verify that allpurchasers are accredited by requiringthem to provide documentation evidencingthey qualify as such, which can be a costlyand cumbersome process. Given the in -come or asset threshold for qualifying asan accredited investor and the costs asso-ciated with verification, a token sale thatcomplies with this Reg ulation D safe harborcould severely restrict the pool of potentialpurchasers of the tokens.

For token issuers who wish to sell theirtoken to nonaccredited investors, Regu -lation S provides a safe harbor from reg-istration so long as the offer and sale ofsecurities occur solely outside the UnitedStates (whether the buyers are U.S. or for-eign investors).5 Otherwise, the issuers willbe subject to SEC regulation and enforce-

ment. Indeed, the SEC filed an emergencyaction and obtained a temporary restrain-ing order against two offshore entities,Telegram Group Inc. and its wholly ownedsubsidiary TON Issuer Inc., which offer acloud-based mobile and desktop messagingapplication, as well as media, chat, securityoptions, and data encryption solutions.6

The SEC’s complaint provides that Tele -gram and TON conducted an allegedunregistered, ongoing digital token offeringin the United States and overseas of itscryptocurrency, the Gram, at discountedprices to 171 initial purchasers, includingmore than one billion Grams to 39 U.S.purchasers.7 The SEC is now seekinginjunctive reliefs and penalties againstTelegram and TON for violation of theSecurities Act.8

Regulation S Compliance

However, issuers can benefit from Reg -ulation S by complying with two basic conditions. First, the offer and sale of thesecurities must be made in an offshoretrans action, meaning, the offer to buy mustnot have been made to a person in theUnited States, and either the buyer is, or isreasonably believed to be, physic ally locatedoutside the United States, or the transac -tion is executed on an offshore market.Second, there can be no “directed sellingefforts” in or into the United States of thesecurities offered under Regulation S.9

To reasonably ensure that tokens aresold in offshore transactions and that nodirected selling efforts in or into the UnitedStates are made, the issuer should restrictpersons located in the United States fromparticipating in the token sale and notmarket the tokens, or the platform inwhich they will be used, in the UnitedStates. It may also be good practice toprevent sales to investors registered, orthat reside, in the United States, even ifat the time of purchase those individualswere located outside the United States, inorder to further ensure that the transac-tions occurred offshore.

For an offering to meet the requirementsof the safe harbor of Regulation S, addi-tional conditions also may need to be sat-isfied, depending on the status of the issuer,the type of securities offered, and the like-lihood that the securities will flow into theUnited States. For a company with no pub-lic market for its securities on an exchangeprior to the offering to comply with Reg -ulation S, the company must take reason-able steps to restrict any resales of thesecurity into the United States for a periodof one year.10 Moreover, in order to rea-sonably ensure that the tokens do not flowinto the United States within this one-year


period, the issuer should, where possible,create technical barriers that enforce applic-able restrictions on transfers to U.S. walletholders. Additionally, if the issuer lists the tokens on an exchange, a conservativeapproach would be to make sure the ex -change does not accept U.S. accounts toprevent any resale into the United States.

Issuers of tokens sold outside the Unit -ed States may be subject to federal securi -ties laws if the token sale meets the SEC’sdefinition of an “investment contract.”Whether such a sale would be consideredthe sale of a security is a complicated question that often yields unclear answers.As a result of this uncertainty, issuers may be tempted to domesticate their saleoffshore in order to comply with the foreignsale of securities registration exemptioncontained in Regulation S of the SecuritiesAct.

These issuers should take the followingsteps to ensure that they are not in viola-tion of U.S. rules: implement IP addressrestrictions to prevent potential purchasersloca ted in the United States from purchas-ing the tokens and reject potential pur-chasers who use technology that wouldobscure their Internet Protocol addresseslike TOR, proxy servers, virtual privatenetworks, or anonymizing technology; do

not market the token or the platform inthe United States; prevent any sales topurchasers registered, or that reside, inthe United States, even if at the time ofpurchase these individuals were locatedoutside the United States, to further ensurethat the transactions occurred offshore;create smart contracts or impose othermechanisms that restrict the sale of thetokens into the United States or to a U.S.-located person for a period of one yearafter issuance; and list only the tokens onan exchange that, pursuant to its termsof use and listing contract, does not acceptany U.S. accounts or that can segregateU.S. accounts and U.S. persons from pur-chasers who are provided an opportunityto purchase tokens.

If the SEC determines that the issuerhas taken sufficient steps to prevent a secu-rity sold in an offshore transaction fromredomesticating to the United States, itwill be deemed to have complied with thesafe harbor provisions of Regulation S,and the sale would not be a violation ofU.S. federal securities laws. n

1 Securities and Exchange Comm’n. v. W.J. HoweyCo., 328 U.S. 293 (1946).2 Id. at 298.3 The SEC framework is not a rule but merely the cur-

rent understanding of the Commission on the appli-cation of securities regulations to token sales. Thedocument’s reasoning relies heavily on prior commis-sion guidance, including its “DAO Report” (ExchangeAct Rel. No. 81207 (July 25, 2017)) and WilliamHinman’s remarks regarding “Digital Asset Trans -actions: When Howey Met Gary (Plastic)” at theYahoo Finance All Markets Summit: Crypto (June 14,2018). U.S. Sec. & Exch. Comm’n, Framework for“Invest ment Contract” Analysis of Digital Assets,available at https://www.sec.gov/corpfin/framework-investment-contract-analysis-digital-assets (last accessedJan. 1, 2020).4 Accredited investors who are individuals must havea net worth, or joint net worth with that person’sspouse, that exceeds $1 million, or individual incomein excess of $200,000 in each of the two most recentyears, or joint income with that person’s spouse inexcess of $300,000 in each of those years, and a rea-sonable expectation of reaching the same income levelin the current year. 17 C.F.R. 230.501(a)(6) (2019).5 The issuer must make sure the issuance is conductedin compliance with the laws and securities regulationsof the country in which each of the purchasers of theirtokens reside. The cost and burden of compliance withthe laws of multiple countries may suggest limitingthe scope of the foreign offering. 6 SEC v. Telegram Grp. Inc., No. 1:19-cv-09439-PKC(S.D. N.Y. Oct. 11, 2019), available at https://www.courtlistener.com/recap/gov.uscourts.nysd.524448/gov.uscourts.nysd.524448.3.0.pdf.7 Id. at 2.8 Id. at 29-30.9 17 C.F.R. 230.903(a)(2019).10 17 C.F.R. 230.903(b)(2019).



MIC

HA

EL C

ALL

AW

AY

by CHARLES G. BAKALY IV

ver the past several years, Californiahas experienced several of the nation’smost horrific acts of gun violence andmass shootings. In 2014, a former

Santa Barbara City College student usedsemiautomatic handguns and knives to killsix people and injure 14 more in Isla Vista.The following year a government healthinspector and his wife used AR-15 stylerifles, semiautomatic handguns, and pipebombs to murder 14 people and injure 24more at the Inland Regional Center in SanBernardino. Three years later, a U.S.Marine Corps veteran used a semiauto-matic handgun and a knife to take 12 livesat the Borderline Bar and Grill in ThousandOaks. Three individuals were killed in July2019 when a 19-year-old opened fire atthe Gilroy Garlic Festival with a semiau-tomatic rifle. Most recently, a high schoolstudent took the lives of two classmatesat Saugus High School in Santa Claritawith a semiautomatic handgun, which hassince been characterized as a “ghost gun.”1

California is one of several states toadopt “red flag laws” that allow law en -

forcement agencies and family membersto petition the courts for injunctive reliefas a means to prevent volatile individualsfrom controlling, owning, purchasing, pos-sessing, or receiving firearms. In Califor -nia,This injunctive relief is known as agun violence restraining order (GVRO).

AB 1014

The California Legislature enacted Assem -bly Bill 1014, which was signed into lawby Governor Jerry Brown on September30, 2014, in response to the Isla Vistamass shooting. In part, AB 1014 addedsections 18100 et seq. to the Penal Codeand there by created the GVRO petitionprocedure.

A GVRO is a civil order that prohibitsa subject individual from controlling, own-ing, purchasing, possessing, or receivingfirearms or ammunition (or attemptingthe same) for the duration of the order.2

GVROs are similar to other types of civilrestraining orders available in California,which include domestic violence restrain -ing orders,3 civil harassment restraining

orders,4 elder or dependent adult abuserestraining orders,5 and workplace violencerestraining orders.6 All of these restrainingorders include provisions that prohibit thesubject individual from owning, possessing,purchasing, or receiving a firearm for theduration of the order. They also requirethe subject individual to relinquish anyfirearm in his immediate possession orcontrol.7

Of course, there are instances in whichvolatile individuals, who should not haveaccess to firearms, have neither committedan act that would subject them to a “con-ventional” restraining order nor committeda crime subjecting them to criminal pros-ecution. Until creation of the GVRO pro-cedure, California had no legal mechanismto promote public safety by temporarilypreventing such persons from accessingfirearms. For example, when an adult withaccess to firearms makes comments onlinethat he wants to “shoot up” a school orretaliate against someone who has slightedhim, these are significant warning signsthat the individual may commit violence

Charles (Chase) G. Bakaly IV is an associate in the Litigation Department at Richards, Watson & Gershon in Los Angeles. He represents police departmentsand law enforcement officers and has obtained numerous gun violence restraining orders.

Despite challenges that California’s gun violence restraining order lawsthreaten civil liberties, supporters say they will be a major combativeforce against the rise of gun violence and mass shootings


against himself or others with a firearm.Before AB 1014 was signed into law, ifsuch an individual had not yet committeda crime or an act that would support theissuance of a domestic violence restrainingorder, civil harassment restraining order,elder or dependent adult abuse restrainingorder, or workplace violence restrainingorder, not much could be done to preventhim or her from controlling, owning, pur-chasing, possessing, or receiving firearms.Therein lies the purpose of the GVROpetition process.

Under AB 1014 three types of GVROsmay be granted by the courts: a temporaryemergency gun violence re straining order(Emergency GVRO), an ex parte gun vio-lence restraining order (Ex Parte GVRO),and a gun violence restraining order afternotice and hearing (GVRO).

Emergency GVRO

A law enforcement officer may request an Emergency GVRO from a judicial offi-cer on an ex parte basis to prohibit thesubject individual from controlling, own-ing, pur chasing, possessing, or receivingany fire arms or ammunition (or attemptingthe same).8 In practice, a law enforcementofficer will request an Emergency GVROfrom the field (e.g., in response to a dis-turbance or request for assistance) by call-ing the court and speaking with a judgeor commissioner.

To obtain an Emergency GVRO, a lawenforcement officer must make two asser-tions. The first is that the subject individualposes an immediate and present danger ofcausing personal injury to himself or tosomeone else, by controlling, owning, pur-chasing, possessing, or receiving a firearmor ammunition. The second is that anEmergency GVRO is necessary to preventpersonal injury to the subject individualor someone else “because less restrictivealternatives either have been tried andfound to be ineffective or have been deter-mined to be inadequate or inappropriate”under the circumstances.9

If the judicial officer finds reasonablecause to believe that both assertions aretrue, the issued Emergency GVRO willremain in effect for 21 days.10 If an Emer -gency GVRO is issued pursuant to an oralrequest (e.g., made via a call from the fieldto the court), the law enforcement officermust sign a declaration under penalty ofperjury reciting the oral statements providedand must memorialize the court’s order onthe approved Judicial Council form (EPO-002).11 The law enforcement officer mustthen serve the subject individual (if he orshe can be reasonably located), file a copyof the Emer gency GVRO with the court

as soon as practicable, and have the Emerg -ency GVRO entered into the CaliforniaDe partment of Justice’s computer databasesystem for protective and restraining ordersmaintained.12

Once the subject individual is servedwith an Emergency GVRO, he is prohibitedfrom controlling, owning, purchasing, pos-sessing, or receiving any firearms or ammu-nition (or attempting the same) for theduration of the order.13 The law enforce-ment officer who serves the subject indi-vidual with the Emergency GVRO mustask whether he has any firearm, ammuni-tion, or magazine in his possession or under

his custody or control.14

In 2018, the legislature enacted PenalCode Section 18148, which requires thata hearing on issuance of a GVRO mustbe held within 21 days after issuance ofan Emergency GVRO. In theory, Section18148 should streamline the GVRO peti-tion process so that the hearing is auto-matically scheduled once the Emer gencyGVRO is filed with the court. In practice,it should not be assumed that a hearingwill be scheduled once the EmergencyGVRO is filed. Even if an EmergencyGVRO is issued, the law enforcement offi-cer (or, practically speaking, the legal coun-sel for the law enforcement agency) shouldalso request an Ex Parte GVRO.

Ex Parte GVRO

A law enforcement officer or an immediatefamily member of the subject individualmay petition the court for an Ex ParteGVRO to prohibit the subject individualfrom controlling, owning, purchasing, pos-sessing, or receiving any firearms or ammu-nition (or attempting the same).15 The term“im mediate family” includes any spouse,domestic partner, parent, child, or personrelated by consanguinity or affinity withinthe second degree to the subject individ-

ual.16 The term also includes any personwho regularly resides in the same householdas the subject individual, or who did sowithin the prior six months.17

California Assembly Bills 12 and 61,which were signed into law by GovernorGavin Newsom on October 11, 2019, willsoon amend Penal Code Section 18150 toexpand the pool of individuals who maypetition a court for an Ex Parte GVRO.In addition to law enforcement officersand immediate family members, the listof potential petitioners will include: anemployer of the subject individual, acoworker of the subject individual (if the

coworker has had substantial and regularinteractions with the subject individualfor at least one year and has obtained theap proval of the employer), and an em -ployee or teacher of a secondary or post-secondary school that the subject individ-ual has attended in the last six months (ifthe employee or teacher has obtained theapproval of a school administrator or aschool administration staff member witha supervisorial role). These new laws gointo effect on September 1, 2020.

To obtain an Ex Parte GVRO, the peti-tioner must establish that there is a sub-stantial likelihood of two grounds. Thefirst is that the subject individual poses asignificant danger, in the near future, ofcausing personal injury to himself or her-self, or to someone else, by controlling,owning, purchasing, possessing, or receiv-ing a firearm. The second is that an ExParte GVRO is necessary to prevent per-sonal injury to the subject individual orsomeone else “because less restrictive alter-natives either have been tried and foundto be ineffective, or are inadequate or inap-propriate” under the circumstances.18

These two grounds must be supported byan affidavit, made in writing and signedby the petitioner under oath, which sets

forth the facts tending to establish thegrounds of the petition or the reason forbelieving that they exist.19

Whether the subject individual poses a “significant danger” of causing person -al injury is determined by evaluating sev -eral evidentiary factors.20 In determiningwhether to issue an Ex Parte GVRO, thecourt must consider all evidence of the fol-lowing: a recent threat of violence or actof violence by the subject individual directedtoward someone else or toward himself; aviolation of an emergency protective orderissued for either stalking or domestic vio-lence that is presently in effect; a recentviolation of an unexpired protective order;a conviction for any offense listed in PenalCode Section 29805; and a pattern of vio-lent acts or violent threats within the past12 months, including threats of violenceor acts of violence by the subject individualdirected toward himself, or toward someoneelse.21

In determining whether to issue an ExParte GVRO, the court may also considerany other evidence of an “increased riskfor violence.” This includes evidence ofthe following: the subject individual’sunlawful and reckless use, display, or bran-dishing of a firearm; the history of thesubject individual’s use, attempted use, orthreatened use of physical force againstanother person; the subject individual’sprior arrest for a felony offense; the subjectindividual’s history of violating an emer-gency protective order issued for eitherstalking or domestic violence; the subjectindividual’s history of violating an unex-pired protective order; documentary evi-dence of either the subject individual’srecent criminal offenses that involve con-trolled substances or alcohol, or ongoingabuse of controlled substances or alcohol;and evidence of the subject individual’srecent acquisition of firearms, ammunition,or other deadly weapons.22

Immediate Action

The court generally must act on a re questfor an Ex Parte GVRO on the same daythat the petition is submitted.23 However,if the petition is filed too late in the day,the request may be granted or denied onthe next court day.24

If the court determines that bothgrounds to issue an Ex Parte GVRO exist,then the order will be issued and willremain in effect for 21 days.25 An issuedEx Parte GVRO must provide, in part, astatement of the grounds supporting theissuance of the order, the date and timethe order expires, the address of the supe-rior court in which any responsive pleadingshould be filed, and the date and time of

the scheduled hearing.26

A law enforcement officer or a personwho is at least 18 years of age and not aparty to the action must then serve thesubject individual (if he can be reasonablylocated).27 If a law enforcement officerserves the subject individual with the ExParte GVRO, the officer must ask whetherhe has any firearm, ammunition, or mag-azine in his possession or under his custodyor control.28

Upon being served with an Ex ParteGVRO, the subject individual is prohibitedfrom controlling, owning, purchasing, pos-sessing, or receiving any firearms or ammu-nition (or attempting the same) for the dura-tion of the order.29 Then, within 21 daysafter the petitioner’s request for an Ex ParteGVRO has been either granted or denied,the court will conduct a hearing to determinewhether a GVRO should be issued.30

Petitioning a GVRO

The petitioner of a GVRO (a law enforce-ment officer or immediate family mem -ber, or, beginning September 1, 2020, anemployer, coworker, or employee or teach -er of a secondary or postsecondary school)may petition the court for a GVRO, afternotice and a hearing, to prohibit the sub-ject individual from controlling, owning,purchasing, possessing, or receiving anyfirearms or ammunition (or attemptingthe same) for a period of one year.31

Once AB 12 and AB 61 go into effect,Penal Code Section 18170 will be amend -ed to allow the courts to issue a GVROfor a period of one to five years. One ofthe stronger criticisms of the GVRO peti-tion procedure has been that issued orderspossess a lifespan of only one year (unlessa request to renew is made). Com par -atively, longer lifespans are available inother conventional re straining orders such as dom estic violence restrainingorders (up to five years),32 civil harassmentre straining orders (up to five years),33

elder or dependent adult abuse restrain -ing orders (up to five years),34 and work-place violence re straining orders (up tothree years).35 The forthcoming amend-ments to Penal Code Section 18170 willaddress this criticism.

The petitioner of a GVRO must provetwo elements by clear and convincing evi-dence: 1) the subject individual poses asignificant danger of causing personalinjury to himself or herself, or to someoneelse, by controlling, owning, purchasing,possessing, or receiving a firearm or ammu-nition; and 2) a GVRO is necessary to pre-vent personal injury to the subject indi-vidual or someone else “because lessrestrictive alternatives either have been

tried and found to be ineffective, or areinadequate or inappropriate” under thecircumstances.36 The evidentiary factorsconsidered for this evaluation are the sameas the factors considered for an Ex ParteGVRO petition.37

If the court finds there is clear and con-vincing evidence for a GVRO, the orderwill be issued and will prohibit the subjectindividual from controlling, owning, pur-chasing, possessing, or receiving any fire -arms or ammunition (or attempting thesame) for a period of one year (or, afterSeptember 1, 2020, for a period of one tofive years).38 If the court does not find byclear and convincing evidence that a GVROshould be issued, the court must dissolveany previously issued Emergency GVROor Ex Parte GVRO.39

An issued GVRO must provide, in part,a statement of the grounds supporting theissuance of the order, the date and timethe order expires, and the address of thesuperior court of the jurisdiction in whichthe subject individual resides.40

A subject individual may submit onewritten request for a hearing before thecourt to terminate the GVRO during theeffective period.41 The court must terminatethe GVRO if, after the hearing, it findsthat the grounds for issuance of the orderare no longer supported by clear and con-vincing evidence.42

A petitioner may request a hearingbefore the court to renew the GVRO atany time within three months before theGVRO expires.43 The court may renewthe GVRO if, after the hearing, it findsthat the grounds for issuance of the ordercontinue to be supported by clear and con-vincing evidence.44 A renewed GVRO willprohibit the subject individual from con-trolling, owning, purchasing, possessing,or receiving any firearms or ammunition(or attempting the same) for a period ofone year (or, after September 1, 2020, fora period of one to five years).45 Once AB12 and AB 61 go into effect on September1, 2020, Penal Code Section 18190 willbe amended to allow any law enforcementofficer, immediate family member, employer,coworker, or employee or teacher of a sec-ondary or postsecondary school to requesta renewal of a GVRO, even if that indi-vidual did not petition the court for theoriginal GVRO.

Misdemeanor Offenses

A petitioner who files a petition for anEmergency GVRO, Ex Parte GVRO, orGVRO knowing the information in thepetition is false, or who files the petitionwith the intent to harass the subject in -dividual, is guilty of a misdemeanor.46


Similarly, a person who owns or possessesa firearm or ammunition with knowledgethat he or she is prohibited from doingso pursuant to an Emergency GVRO, ExParte GVRO, or GVRO is guilty of a mis-demeanor.47 Further, such a person shallbe prohibited from controlling, owning,purchasing, possessing, or receiving anyfirearms or ammunition (or attemptingthe same) for a five-year period, whichbegins on the date the existing Emer - gency GVRO, Ex Parte GVRO, or GVROexpires.48

Rarely Used Mechanism

Although the GVRO petition procedurehas been law for several years, it remainsa rarely utilized mechanism to temporarilyprohibit volatile individuals from con-trolling, owning, purchasing, possessing,or receiving firearms. According to datafrom the California Department of Just -ice,49 only 86 GVROs were issued in 2016.In 2017 and 2018, the number of issuedGVROs increased slightly to 104 and 424,respectively. From 2016 to 2018, the coun-ties of San Diego (203), Los Angeles (63),and San Bernardino (55) experienced thehighest numbers of GVROs. More than adozen counties have yet to issue a GVRO.

The GVRO procedure is not without

significant criticism. The National RifleAssociation’s Institute for LegislativeAction, for example, criticized the sign -ing of AB 12 and AB 61 as the legisla -ture’s “continuing the assault on ourSecond Amendment rights in the GoldenState.”50 The American Civil LibertiesUnion also criticized the enactment, statingthe laws pose “a significant threat to civilliberties.”51

No law is perfect, and few legislativeactions enjoy a position of universal con-sensus. Legal challenges to the GVRO pro-cedure will continue (and will likely in -crease), especially after AB 12 and AB 61become effective next fall. While, at present,no appeals have been filed in court, it isonly a matter of time before constitution -al and/or due process claims are allegedas to an issued GVRO as a case of firstimpression.

Time will tell whether the GVRO peti-tion procedure will assist in combating the ever increasing instances of gun vio -lence and mass shootings that plague ourcommunities. Like many proactive meas -ures, it is difficult to calculate how manytragedies will be avoided through effectivelaw enforcement. However, a single in -stance of preventing a volatile individualfrom harming himself, herself, or others

through the issuance of a GVRO is worththe effort. n

1 The term “ghost gun” usually refers to a firearmthat is made by the owner using separately acquiredparts. Because such a firearm has no serial number,the owner can effectively bypass registration require-ments and background checks. See, e.g., Ben Chris -topher, How California got tough on guns, Cal -Matters (Nov. 14, 2019), https://calmatters.org/explainers/california-gun-laws-policy-explained andBrain Shatz, People Are Making Completely Un -traceable Guns in Their Homes—Driving a NewKind of Crime, MOTHER JONES, Dec. 13, 2017, avail-able at https://www.motherjones.com. 2 PEN. CODE §18100.3 FAM. CODE §6200 et seq.4 CIV. PROC. CODE §527.6.5 WELF. & INST. CODE §15657.03.6 CIV. PROC. CODE §527.8.7 CIV. PROC. CODE §527.9; FAM. CODE §6389.8 PEN. CODE §18125.9 Id.10 Id.11 PEN. CODE §18140.12 Id.13 PEN. CODE §18125.14 PEN. CODE §18135.15 PEN. CODE §18150.16 PEN. CODE §§18150, 422.4.17 Id.18 PEN. CODE §18150.19 Id.20 Id.21 PEN. CODE §18155.22 Id.23 PEN. CODE §18150.24 Id.25 PEN. CODE §18155.26 PEN. CODE §18160.27 Id.28 Id.29 PEN. CODE §18155.30 PEN. CODE §18165.31 PEN. CODE §18170.32 FAM. CODE §§6200 et seq.33 CIV. PROC. CODE §527.6.34 WELF. & INST. CODE §15657.03.35 CIV. PROC. CODE §527.8.36 PEN. CODE §18175.37 PEN. CODE §18150.38 PEN. CODE §18175.39 Id.40 PEN. CODE §18180.41 PEN. CODE §18185.42 PEN. CODE §§18185, 18175.43 PEN. CODE §18190.44 PEN. CODE §§18190, 18155.45 PEN. CODE §18190.46 PEN. CODE §18200.47 PEN. CODE §18205.48 PEN. CODE §18205.49 Bryan Anderson, California Employers, SchoolsCan Now Seek Gun Restraining Orders on “danger-ous” Individuals, SACRAMENTO BEE, Oct. 11, 2019,available at https://www.sacbee.com/news/politics-government/capitol-alert/article235959727.html.50 NRA-ILA, California: Governor Newsom Signs Anti-gun Bills Into Law (Oct. 11, 2019), https://www.nraila.org/articles/20191011/california-governor-newsom-signs-anti-gun-bills-into-law.51 Assoc. Press, Gov. Newsom Signs Law GivingCalif ornia Broadest Rules For Seizing Guns in theU.S., KTLA 5 NEWS, Oct. 11, 2019, available at https://ktla.com.


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An influencer is defined as “one who exertsinfluence: a person who inspires or guidesthe actions of others often, specifically: a

person who is able to generate interest in some -thing (such as a consumer product) by postingabout it on social media.”1 According to a recentstudy, 17 percent of children ages 11-16 want tobe a social media influencer when they grow up,outranking teacher and veterinarian.2 Who canblame them? Some of the more popular socialmedia influencers such as Kylie Jenner, an influencerwith 149 million Instagram followers—an audiencelarger than the population of all but the world’seight most populous countries—can earn as muchas $1 million from a single sponsored post.3 That’sright: $1 million per post.

Since an influencer can “generate interest” bymerely posting on social media, a successful influ-encer then generates such interest usually by sellingmore products, driving more people to an event,and convincing other people to donate to a group.As such, the influencer needs a platform to easilycommunicate his or her message to a significantnumber of people. Of course, the platform is theInternet and the audience is an estimated 40 percentof the entire world.4

Having a platform and an audience, the influ-encer now needs a hook, a reason for fans to buymore products, go to that music festival, or donateto the influencer’s cause. Often, that hook is fame,i.e., the state of being recognized. The influencer’s“influence” is based on the public’s ability to rec-ognize his or her name, image, or likeness. Generally,the more public recognition, the more influence,and because the Internet provides an enormousimmediate audience, fame is now attainable inways not possible 30 years ago.

Famous people, including movie stars, athletes,and musicians, are inherently influencers. A numberof the top 10 influencers neatly fall within one ofthese categories. Selena Gomez, the second highestpaid influencer,5 is a musician turned movie star.Cristiano Ronaldo, the third highest paid influencer,6

is a world famous soccer player. Beyoncé Knowles,the fourth highest paid influencer,7 is a famous popmusician, and Dwayne “The Rock” Johnson is notonly the sixth highest paid influencer8 but also thehighest paid movie star in the world.9

What about spots one and five? They belongto a pair of sisters: Kylie Jenner and Kim Kar -dashian, respectively, who are part of a new breedof influencers.10 Whereas The Rock became an

Oliver Bajracharya is a partner at Lewis Roca Rothgerber Christie in Glendale, California, who practices intellectual propertylaw. Drew Wilson also is an attorney with the firm whose practice focuses on intellectual property litigation, as well astrademark portfolio maintenance and prosecution.

MCLE ARTICLE AND SELF-ASSESSMENT TEST

By reading this article and answering the accompanying test questions, you can earn one MCLE credit.

To apply for credit, please follow the instructions on the test answer sheet on page 25.

ProtectingInfluenceSince trademark rights prevail nationwide under the federalLanham Act and rights of publicity do not vest in all circumstances,influencers are well advised to file trademark applications for their services

by Oliver Bajracharya and Drew Wilson

influencer after first becoming a moviestar, and Beyoncé was a singer long beforeshe was ever one of the queens of Insta -gram, Kylie Jenner became famous as aninfluencer first (“famous for being fam -ous”), and then leveraged that fame intoother markets such as beauty and makeupsupplies.

One need not be a marketing jugger-naut to earn a respectable living as aninfluencer. According to Forbes Magazine,an Insta gram user with 100,000 followerscan command $5,000 for a single postmade in partnership with a company orbrand.11 Influencers with a base of a mil-lion followers can command $50,000,while the seven million-plus follower clubcan expect $150,000 per post. These posts,while un doubtedly requiring some level ofcreativity, skill, and other professional hair,lighting, makeup, and photography, hardlyinvolve the effort of shooting a televisioncommercial, let alone a movie. Instagramposts are usually just single photos or aseries of related photos.

Rights of Publicity and Trademarks

It is evident that fame—even, or particu-larly, “Internet fame”—sells, and that thisfame is lucrative, which begs the question,“How can fame be legally protected?”Influencers primarily can take advantageof two different avenues to protect theirname, image, and likeness: 1) via theirrights of publicity and 2) via trademarkrights.

The right of publicity generally protectsthe economic value, or “drawing power,”of one’s name, image, or likeness. Eachperson has a right of publicity, but suchright for famous people, who are morepublicly recognizable, has more value.Therefore, a third party using such rightwithout permission could result in a claimfor misappropriation of the right of pub-licity with significant monetary ramifica-tions. Notably, there is no federal right ofpublicity statute, alhtough some versionof the right of publicity is recognized in35 states (22 by statute and 11 by commonlaw).12

A trademark is a word, name, or symbolused to identify and distinguish the goodsor services of one party from the goodsand services of another party and to indi-cate the source of the goods. There is afederal trademark statute protecting trade-mark rights, and trademarks may be reg-istered with the U.S. Patent and TrademarkOffice (USPTO). Famous, i.e., well-recog-nized, brand names such as COCA-COLA,ROLEX, and GOOGLE are registeredtrademarks, and each mark likely imme-diately conjures a mental image that one

associates with the products and servicesoffered by each company. Personal namesof a living person, such as Peyton Manningand Beyoncé, can be registered as trade-marks if the person consents and if thepublic associates that name with the goodsor services provided in connection with thename.

The right of publicity is the right thata person has to control his or her likeness(i.e. name, signature, image) when usedfor commercial purposes. Unlike trademarklaw that is codified in the federal LanhamAct13 as well as a wide variety of state reg-istration systems, rights of publicity lawsare state-specific, and can vary wildly fromstate to state, both in what rights are pro-tected and the duration of the protection.Some states, like Delaware and Colorado,do not even recognize a right of publicity.

Rights of publicity have a number ofadvantages over trademark rights. In div -iduals inherently have such rights wherethey are recognized and will continue tohave them for the term provided by law.In order for one to acquire a valid and pro-tectable trademark, he or she must be usingthat mark for a particular good or service.One cannot simply “squat” on a trademarkto keep others from using the mark. Failureto make ongoing use of a mark by thetrademark owner in connection with theparticular good or service can result inabandonment of the mark.14

Similarly, trademarks are narrower inscope than a right of publicity. Under trade-mark law, someone can only prevent third-party use of a trademark on the same orrelated goods to those on which the ownerof the mark is currently using the mark.For example, Tiger Woods has a trademarkregistration for “TIGER WOODS” for“entertainment in the nature of competit -ions in the field of golf; entertainment ser-vices, namely, personal appearances by asports celebrity; providing a website on aglobal computer network featuring infor-mation about appearances, accomplish-ments, exploits and biography of a pro-fessional golfer.” With this registration,Tiger Woods could easily prevent a thirdparty from creating the Tiger Woods golftournament without his authorization.However, he might not be able to use thistrademark registration to prevent Cadillacfrom branding one of its models of carsthe “Tiger Woods” or using his image intelevision commercials for a car.

His rights of publicity, however, coulddo exactly that. Such rights prevent useof a third party’s likeness for commercialpurposes regardless of whether the personhad used his likeness in relation to a par-ticular commercial purpose, which is a sig-

nificantly broader protection than trade-mark rights offer in this respect.

California Rights of Publicity

The right of publicity in California is cod-ified in California Civil Code Section 3344.It protects against the unauthorized useof another’s “name, voice, signature, pho-tography or likeness” on products or mer-chandise for the purpose of advertising or promotion.15 The unauthorized usemust be “knowing.”16 California also hasa descendible postmortem right that lastsfor the same duration as copyright: thelifetime of the person plus 70 years.17 Theowner of a postmortem right of publicitymust register that right with the Californiasecretary of state and cannot recover dam-ages for acts of infringement that occurredprior to registration.18

In a right of publicity law suit, the pre-vailing plaintiff is entitled to his or heractual damages or $750 dollars (whicheveris greater) and the profits resulting fromthe unauthorized use.19 Punitive damagesand equitable relief may also be awarded,along with the potential for an award ofattorney’s fees.20

Despite the strength and longevity ofthe California right of publicity statute,there are also a number of codified de -fenses. For example, when the cause ofaction arises from the use of a plaintiff’slikeness as part of an image or motion picture, that person must be individuallyidentifiable by the naked eye from thatimage or motion picture.21 If they are sim-ply one of a number of people in a crowd,no cause of action exists.

When the plaintiff is an employee ofthe defendant and a photograph or likenessof the plaintiff is only incidental and notessential to the purpose of the publicationin which it appears, there is a rebuttablepresumption that the use was not a “know-ing” use of the employee’s photograph orlikeness.22

Use of a likeness in connection with any news, public affairs, sports broadcast,or political campaign does not require consent.23

The statue also protects the owners andemployees of a broadcast medium, suchas a newspaper, radio station, televisionstation, and magazine publisher from lia-bility for an advertisement that infringesa third party’s right of publicity, unless theowner or employee had knowledge of theunauthorized use of the person’s right ofpublicity.24

New York Rights of Publicity

New York has codified its right of publicitylaw as part of its right of privacy statue,



MCLE Answer Sheet #296

PROTECTING INFLUENCE

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INSTRUCTIONS FOR OBTAINING MCLE CREDITS

1. Study the MCLE article in this issue.

2. Answer the test questions opposite by markingthe appropriate boxes below. Each questionhas only one answer. Photocopies of thisanswer sheet may be submitted; however, thisform should not be enlarged or reduced.

3. Mail the answer sheet and the $25 testing fee($35 for non-LACBA members) to:

Los Angeles County Bar Association Attn: Los Angeles Lawyer Test P.O. Box 55020 Los Angeles, CA 90055

Make checks payable to: Los Angeles County BarAssociation.

4. Within six weeks, Los Angeles Lawyer willreturn your test with the correct answers, arationale for the correct answers, and acertificate verifying the MCLE credit you earnedthrough this self-study activity.

5. For future reference, please retain the MCLEtest materials returned to you.

ANSWERS

Mark your answers to the test by checking theappropriate boxes below. Each question has onlyone answer.

1. n True n False

2. n True n False

3. n True n False

4. n True n False

5. n True n False

6. n True n False

7. n True n False

8. n True n False

9. n True n False

10. n True n False

11. n True n False

12. n True n False

13. n True n False

14. n True n False

15. n True n False

16. n True n False

17. n True n False

18. n True n False

19. n True n False

20. n True n False

MCLE Test No. 296The Los Angeles County Bar Association certifies that this activity has been approved for Minimum ContinuingLegal Education credit by the State Bar of California in the amount of 1 hour. You may take tests from backissues online at http://www.lacba.org/mcleselftests.

1. Influencers using the Internet as a platform canreach 40 percent of the entire world.

True.False.

2. Rights of publicity are recognized in 35 states, in -cluding 22 by statute and 11 by common law.

True.False.

3. California has a descendible postmortem right ofpublicity that lasts for the life of the person plus 90years.

True.False.

4. In California, use of a person’s likeness in connec -tion with a political campaign requires consent.

True.False.

5. In New York, there is no postmortem right of publicity.

True.False.

6. A federally registered trademark can last forever,as long as the mark is actually being used.

True.False.

7. In New York, the rights of publicity statute of limit -ations starts when the plaintiff discovers the use.

True.False.

8. The same defenses are available for a rights of publicity cause of action as for trademarks under theLanham Act.

True.False.

9. In California, a rights of publicity cause of actiononly exists for use of a person’s likeness in an imageor motion picture when that person can be identifiedby the naked eye.

True.False.

10. Of the Polaroid factors, the Southern District ofNew York considers the degree of similarity betweenthe marks to be a key factor in determining the likeli-hood of confusion.

True.False.

11. Trademark rights only vest for the goods and/orservices for which the mark was actually used.

True.False.

12. Rights of publicity protect against the use of a per-son’s likeness even if he or she has never used his orher likeness in connection with a particular good orservice.

True.False.

13.An award of damages for infringing rights of publicityin California includes the infringer’s profits.

True.False.

14. An award of the defendant’s profits in the NinthCircuit for trademark infringement requires a showingof willfulness.

True.False.

15. A person’s voice is one of his or her rights ofpublicity that can be misappropriated.

True.False.

16. A company’s use of a robot that features notableand distinguishing elements of a celebrity can constitutemisappropriation of that celebrity’s right of publicity.

True.False.

17. One must be a celebrity to enforce a right of publicity.

True.False.

18. California protects owners and employees of mediums of advertising from rights of publicity law -suits unless it is established that such owners oremployees had knowledge of the unauthorized use ofthe person’s likeness.

True.False.

19. A person must elect to sue under his or her rightof publicity or trademark rights but not both for thesame use infringing use of the person’s name, voice,signature, photograph, or likeness.

True.False.

20. One must have a federally registered trademarkin order to sue for trademark infringement in federalcourt.

True.False.

New York Civil Rights Law sections 50(Right of Privacy), and 51 (Action forInjunction and Damages). The law allowsany living person to prevent the unautho-rized use of his or her name, portrait, pic-ture, or voice for advertising purposes orthe purposes of trade, without the writtenconsent of the person.25 Unlike California,there is no postmortem right of publicity.26

Once a person dies, all rights disappear.This also differs from federal trademarkrights, which continue after death, so longas they are being used.

A plaintiff in a right of publicity lawsuitdoes not need to have previously commer-cialized his or her identity in order toenforce associated rights of publicity. Thestatute of limitations is decidedly short:one year.27 Unlike many other torts, acause of action based on the right of pub-licity does not follow the “discovery” rule.It begins to run from the date of the firstpublication that uses the plaintiff’s likenessrather than from when the plaintiff dis-covers the use.28 Remedies include equi-table relief (such as an injunction) andactual damages. If the misappropriationwas willful, the jury in its discretion mayalso award exemplary damages.29

There are also a number of statutorydefenses available under New York law.There is no cause of action if the work isan expressive, artistic work that does notmeet the criteria for advertising or tradepurposes.30 A biography or using famousfigures in a historical context would beconsidered such a work. Photographersmay show photographs that they havetaken of people in their own gallery unlessthey receive actual written notice by thesubject of the photo. There are a numberof other minor exceptions.31

Trademark Rights

The Lanham Act governs federal trademarklaw and was enacted to protect consumersfrom false designations and misrepresen-tations and to protect trademark ownersfrom being associated with products theydo not produce or endorse. The LanhamAct is not, however, particularly suited asa full substitute for a right of publicitystatute. It can be a powerful supplement.Trademarks are intended to act as sourceidentifiers and are not intended to protecta person’s name, image, or likeness per se,despite being able to provide some pro-tection in a valuable, yet limited capacity.Trademarks are likely most useful for pro-tecting an influencer’s name, which theycan register for use with particular productsand services.

Trade mark rights have two primarybenefits over rights of publicity. First, trade-

mark rights are homogenous nationwide.Because trademark rights are federally pro-tected under the Lanham Act, each stategenerally will provide the same protectionsfor a federally registered trademark as anyother state. This differs drastically fromrights of publicity as some states do noteven acknowledge the existence of the right.In addition, the United States is a party toa number of international treaties, such asthe Madrid Agreement Concerning the

International Registration of Marks, thatallow trademark owners to register theirmarks in foreign jurisdictions that mightnot even recognize rights of publicity.

Second, a trademark can last forever,as long as the mark is actually being used.On the other hand, the right of publicityin New York terminates on the death ofthe person, or in California, the rightsextinguish after 70 years, like copyrights.

When a celebrity has registered his orher name as a trademark associated withparticular goods and services, the LanhamAct can provide grounds to enforce suchtrademark via a trademark infringementclaim. For example, Beyoncé Knowles-Carter (of course, more commonly knownas simply Beyoncé) registered the trademarkBEYONCÉ for various items of clothingincluding shirts and sweaters. Clothingbearing the BEYONCÉ mark was sold onher website, and t-shirts and sweatshirtsretailed for between about $35 and $70.32

After Beyoncé registered her trademark,an entity called Feyoncé, Inc. began sellingclothing items bearing the name FEYONCÉ(rhymes with “Beyoncé”). Beyoncé suedthe entity in the Southern District of NewYork33 for trademark infringement, unfaircompetition, and trademark dilution andrequested that the issues be resolved on

summary judgment.The court indicated that to prove trade-

mark infringement under the Lanham Act,a plaintiff must show 1) that its mark isentitled to protection (of which a trade-mark registration constitutes prima facieevidence) and 2) that “defendant’s use ofthe mark is likely to cause consumers con-fusion as to the origin or sponsorship ofthe defendant’s goods.”34

With respect to the likelihood of confu-

sion, the court applied the so-called Polaroidfactors,35 which evaluate the strength ofthe senior mark, the similarity of the marks,and the proximity of the products in themarketplace, among other factors. Of thelisted factors, “[t]he degree of similaritybetween the marks is a key factor in deter-mining likelihood of confusion.”36

In this case, the court found the marksto be “extremely similar in text, font, andpronunciation”37 noting that “the differ-ence between the two is the first letter,which in other cases was not enough tosave an allegedly infringing junior markfrom a finding of a likelihood of confusionas a matter of law.”38 However, the courtfurther noted that “[b]y replacing the ‘B’with an ‘F,’ Defendants have created amark that sounds like ‘fiancé,’ i.e., a personwho is engaged to be married. As a result,FEYONCÉ is a play on words, which coulddispel consumer confusion that might oth-erwise arise due to its facial similarity tothe BEYONCÉ mark.”39

The court analogized the present caseto another case in which the Seventh Circuitfound that when deciding whether to buyclothing bearing the word MIKE with aswoosh logo instead of NIKE with aswoosh logo, consumers might understandthe pun, but “the ‘ultimate question’ was


whether the pun was sufficient to dispelconfusion among the consuming public.”40

Like the Nike case, where evidence showedthat many purchasers of the MIKE prod-ucts were actually named Mike, evidencein this case showed that many purchasersof the FEYONCÉ products were, in fact,engaged.41 In denying the motion for sum-mary judgment, the court found that con-sumers may have understood the punrather than confusing the brands, andnoted that “whether a parody would besufficiently strong to overcome the potentialfor consumer confusion was an issue offact.”42

Even though Beyoncé was not success -ful at the summary judgment stage, thiscase illustrates a subtle difference betweentrademark rights and rights of publicity.While Beyoncé could use her rights of pub-licity to protect against commercial use ofher name, she could use the trademarkrights she developed in her name to protectagainst use of designations that were con-fusingly similar to her name. Thus, thiscould potentially give her broader protec-tion in a trademark context. Influencers,therefore, can use trademark rights to morebroadly protect their names.

Kardashian et al. Cases

The Kardashians know how to maximizethe protection of their persona and thusare the owners of a number of register - ed trademarks that consist of variationsof their names in association with cosme -tic products.43 The Kardashians licenseboth their trademarks and publicity rightsto com panies that put out cosmetic prod-ucts.44 Through a series of license acqui-sitions, Hillair Capital Management, LLC,eventually came to acquire a license toproduce cosmetics in association with theKard ashian’s trademarks and publicityrights.45 After a period of time, the Kar -dashians revoked the license pursuant toa termination clause in the license agree-ment that Hillair had acquired.46 Despitethe termination, Hillair continued to usethe Kardashian’s trademarks and public -ity rights in connection with the sale ofcosmetics.47

The Kardashians sued, bringing claimsfor both trademark infringement and misappropriation of their rights of public -ity. In granting the Kardashians’ motionfor a preliminary injunction, the courtnoted that “celebrities have unique prop-erty interests in their names, images, andlikenesses.”48 “Because of this unique inter-est, celebrities often cannot be adequatelycompensated by money damages for vio-lations of their right of publicity,” whichstrongly supported a preliminary injunc-

tion.49The court also noted that here theright of publicity cause of action essentiallymirrored the trademark cause of action.51

However, even the number one influ-encer in the world does not necessarilyhave an absolute right to her name, asKylie Jenner found out some years ago.In 2015, Jenner filed three trademark appli-cations, two for the word KYLIE for usein connection with 1) advertising andendorsement services and 2) entertainmentservices, and one for KYLIE COSMETICSfor use with cosmetics. After learning of Jenner’s filings, Kylie Minogue, herselfa celebrity singer who has sold over 70 million records worldwide, filed trademarkoppositions to Jenner’s applications toattempt to prevent the USPTO from reg-istering Jenner’s marks.51 Minogue is theowner of the mark KYLIE for educationand entertainment services, jewelry, dolls,and various other goods as well as theowner of the mark KYLIE MINOGUE(and design) for perfume, skin moisturizers,and body lotions.52 Having used and reg-istered her marks before Jenner, Minogueargued that if Jenner’s marks were allowedto be registered, the public would likelybe confused as to Jenner’s products bear-ing the KYLIE marks as actually beingMinogue’s, thereby resulting in harm toMinogue.53

Kylie and Kylie Settlement Terms

After negotiations, Kylie and Kylie wereable to agree on settlement terms thatresulted in Minogue’s withdrawing heropposition, allowing Jenner’s marks to reg-ister in 2018.54 In mid-2019, Kylie Minoguelaunched her own line of beauty products,including eyeshadow, lip oil, glitter, andlip gloss, all branded with the KYLIE markand available on Minogue’s website.55

Unless Jenner later objects, the previoushistory between the two parties suggeststhat part of the settlement terms may haveincluded Minogue’s being able to launch abeauty product line using the KYLIE namewithout Jenner’s objecting to or otherwisepreventing such use. It remains to be seenwhether both Kylies can continue to useKYLIE as a trademark without causingactual consumer confusion.

This case also shows another subtle dif-ferent between trademark rights and rightsof publicity. While both Kylies are ableconcurrently to protect their personas,including their name, through rights ofpublicity, arguably only one of the Kyliescan control trademark rights in the markKYLIE used with particular goods. Toallow otherwise would risk consumer con-fusion. In the trademark context, the firstuser of a mark with goods has priority to

that mark and can prevent later users fromusing a confusingly similar mark. Thus,influencers interested in protecting theirnames as trademarks will want to movepromptly so as to be the senior user oftheir name as a trademark.

It should be noted that Kylie Jennerhas filed about 60 trademark applicationsfor various KYLIE marks for a number ofgoods and services over the last six months.As the most influential influencer, sheclearly intends to protect her valuable per-sona to the fullest extent.

Lanham Act Defenses

Although the Lanham Act is not necessarilydirected to protecting a person’s name,image, or likeness, claims for false endorse-ment and unfair competition are sometimesused as a substitute for a federal right ofpublicity claim. However, there are severaldefenses available under the Lanham Actthat are not available for right of publicityclaims, including statutory fair use, nom-inative fair use, and lack of likelihood ofconfusion.

Because rights of publicity automaticallyvest in many instances and do not exist inothers, influencers should begin filing trade-mark applications for the services that theyprovide in order to secure some of theirrights against those who would attempt tofreeride on their goodwill. It is only througha combination of trademark rights andrights of publicity that an influencer canmost effectively protect themselves fromunauthorized third-party exploitation. n

1 MERRIAM-WEBSTER UNABRIDGED DICTIONARY, avail-able at https://www.merriam-webster.com/dictionary/influencer.2 Paul Skeldon, Young affiliates: Nearly a fifth of Brit -ish children aspire to be social media influencers,Tele media Online (Jan. 31, 2019), https://www.telemediaonline.co.uk/young-affiliates-nearly-a-fifth-of-british-children-aspire-to-be-social-media-influencers.3 Zameena Mejia, Kylie Jenner Reportedly Makes $1 Million per Paid Instagram Post, CNBC Make It(July 31, 2018), https://www.cnbc.com/2018/07/31/kylie-jenner-makes-1-million-per-paid-instagram-post-hopper-hq-says.html [hereinafter Mejia].4 Internet World Stats: Usage and Population Statistics,Internet Users Distribution, https://www.internetworld-stats.com/stats.htm.5 Mejia, supra note 3.6 Id.7 Id.8 Id.9 John Lynch, The Rock was the highest-paid actor inthe history of Forbes’ Celebrity 100 for this year’s listat $124 Million, Businessinsider.com. (July 17, 2018),https://www.businessinsider.com/the-rock-highest-paid-actor-history-forbes-celebrity-100-2018-7.10 Mejia, supra note 3.11 Claire O’Connor, Earning Power: Here’s How MuchTop influencers can Make on Instagram and YouTube,FORBES (Apr. 10, 2017), available at https://www.forbes.com/sites/clareoconnor/2017/04/10/earning-power-heres-how-much-top-influencers-can-make-on


-instagram-and-youtube/#319e11b324db.12 Two states, Arizona and Louisiana, have a statutoryright of publicity for soldiers only. Right of Publicity,Statutes & Interactive Map, https://rightofpublicity.com/statutes.13 15 U.S.C. §1051 et seq.14 15 U.S.C. §1127.15 CIV. CODE §§3344(a), 3344.1(a).16 Id.17 CIV. CODE §3344.1(e)(3).18 CIV. CODE §3344.1(f)(2).19 CIV. CODE §3344(a); §3344.1(a).20 Id.21 CIV. CODE §3344.1(i).22 CIV. CODE §3311(c).23 CIV. CODE §3344.1(d).24 CIV. CODE §3344(f), 3344.1(l).25 N.Y. CIV. RIGHTS LAW §51.26 James v. Delilah Films, Inc., 544 N.Y.S. 2d 447,451 (N.Y. Sup. Ct. 1989).27 Comolli v. Huntington Learning Ctrs., Inc., 117 F.Supp. 3d 343, 349 (S.D. N.Y. 2015).28 Id. (“New York courts apply the single publicationrule to Section 51 claims, according to which the causeof action “accrues on the date the offending materialis first published.”)29 N.Y. CIV. RIGHTS LAW §51.30 Id.31 Id.32 Shop Beyoncé, Apparel, https://shop.beyonce.com(last visited Dec. 28, 3019).33 Knowles-Carter v. Feyoncé, 347 F. Supp. 3d 217,224 (S.D. N.Y. 2018).34 Virgin Enterprises Ltd. v. Nawab, 335 F. 3d 141,146 (2d Cir. 2003).35 Polaroid Corp. v. Polarad Elecs. Corp., 287 F. 2d492 (2d Cir. 1961) identifies eight nonexclusive factorsthat are relevant to a court's likelihood of confusionanalysis: 1) strength of the senior user’s mark, 2) sim-ilarity of the marks, 3) similarity of the products orservices, 4) likelihood that the senior user will bridgethe gap, 5) the junior user’s intent in adopting themark, 6) evidence of actual confusion, 7) sophisticationof the buyers, and 8) quality of the junior user’s prod-ucts or services.36 Louis Vuitton Mallatier v. Dooney & Bourke, Inc.,454 F. 3d 108, 117 (2d Cir. 2006)37 Knowles-Carter, 347 F. Supp. 3d at 22538 See Pfizer v. Y2K Shipping & Trading, Inc., No.00CV 5304, 2004 WL 896952 (E.D. N.Y. 2004). 39 Knowles-Carter, 347 F. Supp. 3d at 225.40 Nike, Inc. v. “Just Did It” Enters., 6 F. 3d 1225,1228 (7th Cir. 1993).41 Knowles-Carter, 347 F. Supp. 3d at 226.42 Id.43 2Die4Kourt v. Hillair Capital Management, LLC,Not Reported in Fed. Supp., No. SACV 16-01304JVSC(DFMx) 2016 WL 4487895 at *1-2, Aug. 23,2016).44 Id.45 Id.46 Id. at *3.47 Id.48 Id. at *8.49 Id.50 Id. at *10.51 KDB Pty Ltd. v. Kylie Jenner, Inc., T.T.A.B. Opp.No. 91230590 at 1 available at http://ttabvue.uspto.gov/ttabvue/ttabvue-91230590-OPP-6.pdf (last visitedDec. 28, 2019). 52 Id.53 Id.54 Id. at 855 Kylie, https://store.kylie.com (last visited Dec. 28,2019).


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READERS WHO WANT TO dislike Chief Just -ice John Roberts should like The Chief. Thosewho want to learn about the U.S SupremeCourt’s inner workings and the role of thechief justice will find this book enlighten -ing. The Chief includes inside baseball ac -counts of how the Court reached its decis -ions in cer tain high-profile cases such asNational Feder ation of Independent Busi -ness v. Sib elius,1 the decision that, sur pris ing -ly, upheld the in di vidualman date in the Obamaad min istra tion’s health-care re form legislation,

the Affordable Care Act (ACA). Unfor tun -ately, however, readers who want to under-stand John Roberts, the jurist, are likely tobe disappointed in The Chief.

Author Joan Biskupic is a seasoned Su -preme Court journalist (currently a CNN legal analyst and Su preme Court biographer), and the best parts of this bookreflect her Supreme Court expertise. For example, she succinctlysummarizes the role of the chief justice and its importance:

The chief justice is appointed for life, as are the eight associ -ate justices. Like each of them, he is entitled to a single voteon cases. But the chief justice has special authority to overseeoral arguments and set the agenda for the justices’ privatesessions. He regularly decides who writes the opinions thatbecome the law of the land. As such, the chief justice hasbeen called “the first among equals.” To appreciate the in -fluence of a chief justice, one need only understand thatwhile there have been forty-five presidents of the UnitedStates, there have been only seventeen chief justices [p.8].Similarly, Biskupic concisely describes the lasting professional

significance of judicial clerkships (Chief Justice Roberts servedtwo clerkships, first for Second Circuit Court of Appeals JudgeHenry Friendly and then for Justice William Rehnquist beforehe became chief justice): “Clerkships offer young lawyers a highlyconfidential inside view of how legal rulings are crafted as wellas prestige in the profession. Clerks frequently identify themselvesby the judges they serve, and former clerks of the same judgeoften band together in an enduring informal guild [p. 46].”

The Chief’s tracing of Roberts’s upbringing, education, andlegal career prior to ascending the bench has some flaws andgaps. Biskupic attempts to paint Roberts as the silver-spoon scionof a wealthy family, but his forebears on both sides came fromworking-class roots. His paternal great-grandfather was anEnglish coal miner who sailed to America with his family insteerage; his paternal grandfather rose to become a mine inspector.Roberts’s parents met in a western Pennsylvania coal and steel

town where their families had settled. His mother’s familymembers “labored in the mines and also found whatever workthey could in the hotels, taverns and pool halls” (p. 17). Roberts’smother was forced to forgo her plans for a college educationand foreign travel because her father died young, leaving hermother to raise three of the couple’s five children as a singleparent. Readers might see Rosemary Roberts as a devoted wife,mother, and homemaker who made the best of her circumstancesby encouraging her husband (a steel plant manager) and chil-dren—particularly the academically gifted young John—to succeed,

but Biskupic uncharitably portrays Rosemary as a social climber.The Chief’s characterization of Roberts as a hyper-achiever is

indisputable. He wrote for his high school newspaper, participatedin student government, sang in the choir, served as a chapelassistant, competed successfully on the wrestling and footballteams, and graduated first in his class. Entering Harvard as asophomore (by earning college-level credits in high school), Robertswon a scholarship for “outstanding scholastic ability and intellec -t ual promise,” and prestigious writing awards (pp. 38-39). Thebook allocates less than two pages to Roberts’s time at HarvardLaw School (pp. 44-46), which surely must have had someinfluence on his judicial philosophy and style, but there again heexcelled, making law review and graduating magna cum laude.

Two Clerkships

Recounting Roberts’s two clerkships, Biskupic posits that thedifferences between his two judicial mentors may account forcompeting tendencies in his jurisprudence. Second Circuit JudgeHenry Friendly was already on senior status and highly respectedamong both fellow judges and academics when Roberts clerkedfor him. Biskupic describes Friendly as “a model of intellectual -ism known for his modest judicial approach and respect forprecedent” (p. 46).

Judge Friendly recommended Roberts to Justice WilliamRehnquist, whom The Chief characterizes as “a political insiderwhose service in the Nixon White House helped shape his hard-right outlook” (p. 46) as “a staunch de fender of law enforcement

by the book REVIEWED BY TERRI KEVILLE

Biskupic does note that Roberts sometimes defies what one might

expect of an inflexible right-wing ideologue.

Terri Keville is a partner in the Los Angeles office of Davis Wright Tremaine.She is a member of the firm's health care practice group and its appellatelitigation team.

The Chief: The Life and Turbulent Times of Chief Justice John Roberts

Joan BiskupicBasic Books, 2019$32.00, 432 pages

and a consistent op ponent of racial class i -fications” (p. 55). Toward the end of hisRehn quist clerkship, Roberts ex pressedinterest in working for the Reagan admin-istration. On Rehn quist’s recommenda - tion, Roberts became the new AttorneyGeneral’s special assistant. Bisk upic ob -serves that executive branch service enabledRoberts to forge “important pol itical con-nections” (p. 65). Roberts went on to workin the Justice Department, the White Housecounsel’s office, private practice as a re -nowned appellate advocate, and as DeputySolici t or General, before being appointedto the D.C. Circuit in 2003, and then in astrange twist of events, to the SupremeCourt as Chief Justice in 2005.

The Chief discusses several significantRoberts Court decisions, e.g., on schooldeseg regation/affirmative action, votingrights, and most notably the ACA, pro-viding accounts of tense horse-trading andreversals of positions. To uphold the ACA’sindividual mandate, Roberts had to adoptthe administration’s back-up legal theorythat the mandate was a tax. In anotherabout-face, he persuaded some colleaguesthat the Medicaid expansion as writtenimpermissibly coerced the states. The de -tails of how the startling decision evolvedare absorbing.

Understanding Roberts

For readers who seek understanding ofRoberts, however, The Chief offers nogenuine insights. Biskupic apparently be lieves the Chief Justice’s vi ews on vir-tually every key legal and social issue areperniciously wrong and disbelieves thatreasonable minds might differ on how theConstitution and prior Supreme Courtprecedents apply in cases involving com-plex public policies.

Biskupic might have gleaned more thana superficial understanding of the princi -ples underlying the conservatives’ votesfrom her interviews of Roberts, and thebriefs, oral arguments, and opinions in thecases, to share with her readers. Instead,The Chief takes for granted that conserv-ative justices reflexively favor the advan-taged over everyone else and that dissentingliberal justices are always correct. This isno help to Supreme Court advocates orliberal justices who would seek to win overthe current conservative majority—or atleast find middle ground—when con-tentious issues such as abortion, race dis-crimination, immigration, free speech, vot-ing rights, and consumer protection comebefore the Court. The book also indicatesthe Roberts Court has escalated the over-turning of precedents—although commen-tators say the statistics show otherwise2—

and that the Court is no longer collegial—although the justices themselves publiclysay otherwise.3 The Chief criticizes Robertsas ideological and political, but the biog-raphy invites the same criticism.

Biskupic does note that Roberts some-times defies what one might expect of aninflexible right-wing ideologue, for example,by crafting with considerable difficulty thedecision that preserved most of the ACA.She also acknowledges Roberts’s concernfor the public’s confidence in the Courtand perceptions of him as Chief Justice:

Roberts understood that public re -gard was crucial to the SupremeCourt’s stature in American life. Hehad studied the reputations of pastchief justices and had worried, too,about what history would make ofhim. ‘You wonder if you’re going tobe John Marshall or you’re going tobe Roger Taney. The answer is, ofcourse, you are certainly not goingto be John Marshall. But you wantto avoid the danger of being RogerTaney’ [pp. 9-10].In the passages of the book most sym-

pathetic to Roberts, The Chief quotes fromRoberts’s commencement address to hisson’s ninth-grade graduating class:

From time to time in the years to

come, I hope you will be treatedunfairly, so you will know the valueof justice. I hope that you will sufferbetrayal, because that will teach youthe importance of loyalty.... I hopeyou will be ignored, so you knowthe importance of listening to others.And I hope you will have just enoughpain to learn compassion [p. 323].Biskupic recognizes as well that John

Roberts may be Chief for many years tocome. Perhaps later books about him willeschew preconceived notions and considersome of the important questions left unan-swered by The Chief, with the benefit ofthe additional information that futureevents and cases will provide. n

1 National Federation of Independent Bus. v. Sibelius,567 U.S. 519 (2012).2 Michael McConnell, Precedent Is A Starting Point,Not An Ending Point, LAW360, Oct. 10, 2019;Precedent and the Roberts Court in 4 Charts, LAW360,Oct. 7, 2019; Jonathan Adler, Is This Still the StareDecisis Court?, REASON, Jun. 24, 2019.3 See, e.g., Robert Barnes, Ginsburg gently pushesback on criticism of the Supreme Court and her fellowjustices, WASHINGTON POST, Jul. 25, 2019 (quotingJustice Ginsburg’s remarks: “The court remains themost collegial place I have ever worked”; “I can saythat my two newest colleagues [Justices Gorsuch andKavanaugh] are very decent and very smart individu-als”; and “there are a number of cases this term wherewe didn’t divide along so-called party lines”).



closing argument BY DAVID L. HOFFMAN AND PRESTON HOWARD

EVERYONE HAS HEARD THE SAGE ADVICE: “You need to network.”While no one disagrees with this wisdom, it tends to leave somenagging questions. What is networking? How and where canone network? Also, if one is introverted or reserved, the wholeidea may be scary. Even the extroverted may be reluctant forvarious reasons: high annual fees for networking groups, lackof organizations in one’s profession,limited time, and many more suchreasons.

It is important to understandthat networking is more than abunch of stuffy, overdressed businesspeople getting together before theworkday starts to exchange leads.Networking is of limited effective-ness when it is approached with thedesire to find “leads.” It is mosteffective when focused on buildingrelationships. Thus, “networking”can be defined as the process ofaffiliating and participating in var-ious groups in which members getto know, like, and trust one anotherenough to form personal and pro-fessional bonds.

The word “personal” comes firstbecause it is critical to form bondsthat are prerequisite to professionalbonds. The stronger these personalbonds, the better the results of therelationship. The most effective net-working then occurs in groups in which strong personal rela-tionships are formed. When the focus of networking is creatingrelationships, it is easy to see how networking opportunitiesarise anywhere and anytime there is a relationship-buildingopportunity.

There are traditional networking groups, e.g., Valley BarNetwork™, Business Network International®, Provisors®, Womenin Business Networking™, and the local Chamber of Commerce.Many professionals who participate in these groups have a“home” or “base” group. Although other groups and industryassociations also provide an opportunity for fostering and creatingrelationships, networking relationships are not limited to suchorganizations.

Everyone has a sphere of personal and professional influence,or SPPI, which provides multiple opportunities to create net-working relationships. The SPPI diagram demonstrates the possibilities.

Thus, many opportunities for networking exist beyond tra-ditional groups. For example, fellow graduates of high school,

college, and beyond have alumni groups where one can meetand interact with others. It should be noted that while connectingcan be done in person and/or online, relationships fostered inperson generally tend to grow deeper and faster.

Networking opportunities also exist through one’s children’sschools, often at school events. Closely related to networking

through school-based relationshipsare opportunities that arise thoughactivities such as kids’ clubs, sportingteams (e.g., American Youth SoccerOr g anization), and birthday parties.

Nonprofits offer another area ofnetworking op portunities. Workingon a board or doing volunteer workwith others is a great way to formstrong per sonal bonds that can blos-som into professional relation ships.Groups such as Rotary In ter nation -al®, the ACLU, local bar as sociationslike the Los Angeles County BarAsso ciation (which has created a newprogram of Structured Net workingGroups), United Way, YMCA, St.Jude Children’s Research Hospital,and other nonprofit groups offermyriad ways to network.

Houses of worship and religiousgroups also provide opportunitiesfor networking. Much like nonprofitwork, participating in religious, com-munity, and family events provides

opportunities to not only create and foster relationships but alsoto demonstrate and observe good core values, not to mentionthat fellow worshipers may be a valuable source of referrals.

Finally, one should not overlook family and community (e.g.,neighbors) as further opportunities for networking. Networkingcan occur almost anywhere, but the situation in which it occursis less important than the attitude with which one approachesit. If networking is approached with the goal of swapping businesscards, gaining names, and acquiring “leads,” it may prove to bestressful and unsatisfying. If, however, it is approached with theintention of forming relationships and expanding knowledge offellow professionals, networking can be a rewarding and veryeffective use of one’s time. n

Networking Within a Sphere of Personal and Professional Influence

David L. Hoffman is a principal in the intellectual property firm, Hoffman PatentGroup, in Valencia, California, where he focuses on patents, trademarks, copy-rights, and unfair competition. Preston Howard, a commercial mortgage brokerin Pasadena, California, specializes in hard money transactions and multi -family apartment lending throughout Southern California.

Traditional Networking

IndustryAssociations

Houses of Worship

Family

Nonprofits & Volunteer

Groups

Community

Children’s Schools & Activities

Alumni Groups

& Schools

SPPI DIAGRAM

“Everyone has a sphere of personal and professional influence, or SPPI, which provides multiple opportunitiesto create networking relationships.”

flag the shooter · by justin s. wales and farah z. alkayed 9 he book e 2 gument e d departments...

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