By: Matthew Bellavia

For decades, earning a star on the Hollywood Walk of Fame signified a celebrity’s cultural impact and longevity in the entertainment industry. Today, launching a crypto coin seems to be the modern equivalent—a digital marker of influence and status. Just as millions once flocked to Hollywood Boulevard to see their favorite celebrities’ names immortalized in terrazzo and brass, fans now collectively invest ridiculous sums of money into celebrity-backed tokens.

As quickly as these tokens appear, they commonly see massive price swings up or down—leaving fans and investors with empty wallets, much like a poorly received film that flops on opening weekend. However, these dubious investments attract more than just movie stars and social media influencers, including U.S. President Donald Trump and Argentinian President Javier Milei. The past decade has seen a surge in high-profile controversies including personal-brand crypto coins and broader blockchain project endorsements. While some of these ventures have been legitimate efforts to engage with Web3 technology, others have ended up as failures or outright scams. Many of these projects have led to lawsuits and penalties from the SEC and FTC, yet few have been legally classified as securities. Why is that?

The U.S. Securities and Exchange Commission (SEC) determines whether an asset is a security under the Howey Test, a legal standard established in 1946. Many celebrity-backed tokens exploit loopholes in this definition to avoid classification as securities, thus sidestepping strict SEC regulations and investor protections. However, beyond securities law, other legal frameworks, including consumer protection laws and fraud statutes, could provide additional safeguards for investors who lose money in these crypto projects. This article discusses how these tokens evade securities laws, examines other potential legal remedies, and considers whether future legislative developments could offer better protections for consumers.

Security Classification

When an asset is classified as a security, there are generally more requirements for registration and disclosure, as well as more fines and restrictions for non-compliance with the law. The Howey Test classifies assets as securities when they involve the following: (1) an investment of money, (2) in a common enterprise, (3) with an expectation of profits, and (4) are derived from the efforts of others. Celebrity crypto coins often fall into a gray area—if they are purely community-driven, decentralized, and lack a central entity promoting profit expectations, they may not meet the Howey criteria. Specifically, their decentralization suggests a lack of a common enterprise, and their lack of any discernible cash flows or assets backing their valuation suggests no expectation of profits.

However, if these assets are marketed with promises of financial gains, heavily promoted by influencers or developers, and controlled by a centralized team that influences their value, regulators like the SEC could find they qualify as securities. One potential avenue away from security classification is providing “utility” beyond simply an expectation of profits. For example, rapper Iggy Azalea’s crypto coin is accepted as payment by a telecom startup, of which she is a co-founder. Other potential utilities could include access to exclusive content or participation in governance matters for coin holders. These projects might evade security classification, but still often implicate consumer protection and tort laws, especially when involvement fades and the coin’s value rapidly collapses.

Recent SEC Interventions

Despite efforts to exploit loopholes in the law, the SEC has acted against several high-profile celebrity-backed crypto projects. In 2022, Kim Kardashian was fined $1.26 million by the SEC for failing to disclose that she was paid $250,000 to promote EthereumMax. Similarly, in 2018, Floyd Mayweather and DJ Khaled were fined by the SEC for promoting Centra Tech, an initial coin offering (ICO) later found to be a scam. In both cases, the underlying crypto assets were deemed securities, obligating the celebrities to disclose all consideration paid for their promotion.

Could the Government Change the Rules?

Two active legislation proposals seek to clarify the gray areas of digital asset regulation. The Digital Asset Market Structure and Investor Protection Act (introduced in the U.S. House of Representatives in 2023) and the Financial Innovation and Technology for the 21st Century Act (passed by the U.S. House of Representatives in May 2024) both seek to separate the duties of the FTC and SEC with clear guidelines. Neither proposal has been enacted into law. Additionally, Congress has the power to strengthen consumer protection frameworks, to require more disclosures and regulations on celebrity endorsements of financial products. Moreover, several upcoming court cases could fundamentally change the regulation of crypto coins.

Any future government action is unclear under the new administration. In January 2025, President Trump issued an executive order titled “Strengthening American Leadership in Digital Financial Technology,” highlighting the importance of regulatory clarity and promoting innovation. President Trump’s policy decisions are likely influenced by the fact that, according to estimates from three analysis firms, the entities behind his personal crypto coin accumulated close to $100 million in trading fees in less than two weeks, despite the value of the coin dropping nearly 75% since his inauguration day. President Trump’s decision to release his crypto coin has sparked anger in the cryptocurrency world. If the current administration is serious about regulating cryptocurrencies, perhaps they should start looking within their own house.

The Future of Celebrity Cryptocurrencies and Investor Protections

While some celebrity-backed crypto projects are outright scams, others attempt to create legitimate ecosystems. The challenge lies in distinguishing between the two and ensuring investors are protected. Despite high-profile lawsuits and fines, many celebrity-backed crypto projects continue to exploit legal loopholes to avoid being classified as securities. However, securities law is only one piece of the puzzle. Strengthening consumer protection laws and fraud enforcement mechanisms could provide broader safeguards for retail investors.

The SEC has taken steps to increase enforcement, but unclear legal definitions still allow many crypto coins to operate in a gray area. Moving forward, investors should be wary of celebrity-endorsed tokens, as they often rely on hype rather than substance. Meanwhile, courts and lawmakers have the power to close the loopholes allowing these questionable projects to thrive, but their plans are uncertain. The next wave of crypto enforcement may bring sweeping changes, but for now, the legal battle over celebrity crypto coins and consumer protections remains ongoing.

#WJLTA #crypto  #celebritytokens #securities

By: Teagan Raffenbeul

The entertainment industry has experienced a significant shift with the rise in streaming platforms. While streaming platforms date back to the early 2000s when Netflix first offered services for users to stream movies and TV shows on their computers, the streaming industry has surged in popularity in recent years. With convenience and accessibility top priorities for many consumers, companies have evolved to facilitate the “new era of on-demand content consumption.” It is estimated that 65% of media consumption comes from streaming platforms for individuals under 35. Numerous companies including Paramount, Max, Peacock, and Apple TV have launched their own streaming platforms, with Walt Disney Company (“Disney”) being no exception. In 2019, Disney launched its own streaming service, Disney+. Disney also owns a variety of other entertainment brands, including Fox, FX, Star+, ABC Television Network, Freeform, National Geographic, and other popular streaming platforms like Hulu and ESPN+.

While streaming film is effortless for consumers, a lot of advanced technology operates behind the scenes. Various innovations enable key methods and processes to power streaming platforms, with video encoding technology being particularly crucial. Video encoding technology allows for a reduction in the size of video files. This technology compresses data to allow for fast and efficient on-demand video streaming. Many of these video encoding technologies are patented, requiring companies wishing to use them in their streaming platforms to negotiate licensing agreements. Under 35 U.S.C., a patent grants the patent holder the exclusive rights to exclude others from making, using, and selling the patented innovation for a limited period. When licenses are not granted and companies use the technology without authorization, they are committing patent infringement. This is exactly what InterDigital, a global research and development company based in the U.S., has alleged Disney of engaging in. 

InterDigital’s Patent Infringement Lawsuit

On February 2^nd, 2025, InterDigital filed a patent infringement claim against Disney and its streaming platforms Disney+, Hulu, and ESPN+. InterDigital not only filed a lawsuit in the Federal District Court in the Central District of California, but also in Brazil, Germany, and at the Unified Patent Court. The Unified Patent Court consists of members from all European Union states and is designed to create a more simplistic and efficient process and results in decisions taking effect in all member states.

The complaint filed in the U.S. identifies five patents InterDigital claims Disney has infringed upon. Three of these patents relate to data compression, covering encoding systems, block pixel predictions, and continuity procedures. The fourth patent focuses on a process to correct color discrepancies, while the fifth pertains to a method of improving user interfaces. InterDigital has highlighted the significance of their technology to the streaming industry, noting that without their patented technology, downloading a 130-minute movie would take over 4 ½ days. However, with their patented technology that same movie can be downloaded in just a few minutes. According to InterDigital, Disney has been able to create a profitable business, generating approximately $25 billion in revenue through its streaming platforms, due to their use of InterDigital’s patented methods and processes.

Licensing Agreements

A patent license grants another party the right to use the patented invention, typically in exchange for a fee. By participating in such exchanges, companies are able to access and use valuable inventions that could significantly benefit their business, while inventors generate revenue and that can be invested in further research and development. While InterDigital expressed a preference for amicable negotiations leading to licensing agreements, they have stated that enforcement is sometimes necessary to ensure fair compensation for their “groundbreaking research,” which also supports funding of future research to develop new technological innovations.  

InterDigital wants companies to use their innovations, as they believe their technological advancements have fueled industry growth. However, they expect those who benefit from their intellectual property, especially entities who benefit as substantially as Disney has, to pay for a license to use the patented technology. The complaint states that InterDigital reached out to Disney in 2022 to request licensing of their patents. However, no licenses were ultimately issued, and Disney has allegedly continued to use InterDigital’s patents without authorization. 

Other Intellectual Property Claims Disney Has Faced

Unfortunately for Disney, this is not their first intellectual property infringement lawsuit. In 2024, Adeia Inc., a research and development company that creates technology for the media industry, filed patent infringement lawsuits in the United States, Europe, and the Unified Patent Court. These patents are related to content delivery technology and various aspects of media streaming. Additionally, a lawsuit was filed under U.S. copyright law alleging Disney’s Moana 2 “ripped off” the work of another animator and writer. 
While Disney has won several intellectual property lawsuits, including numerous Mickey Mouse copyright infringement claims and a trademark infringement dispute against a Canadian animated film entitled Frozen Land,  they have also experienced some losses. Among their more notable losses was an order to pay over $600,000 in damages due for using motion-capture technology without permission in the live-action remake of Beauty and the Beast. This should indicate to InterDigital that taking on an entertainment giant as resourceful and powerful as Disney is not an automatic defeat, especially considering InterDigital has had success in similar cases against companies around the world.

#PatentInfringement #Disney #WJLTA

By: Jacqueline Purmort-LaBue

During my two years living in Chicago, there was a live music venue that I returned to time and time again. Radius is a large, multi-room warehouse-style venue that hosts acts ranging from the dark, pumping techno of I Hate Models, to the indie-psychedelic rock beats of Unknown Mortal Orchestra, and the wrist-flicking tech house sets of Chicago native, John Summit. Located in Chicago’s East Pilsen neighborhood, Radius was previously an old steel factory and has since been transformed into a pillar of the electronic music scene. 

The Incident

Earlier this month, during dubstep trio Levity’s set at Radius, a non-structural wood ledger that was attached to a steel frame fell from the venue’s ceiling, striking attendees. The two individuals affected were a 29-year-old man who reported shoulder and neck pain and a 26-year-old woman who sustained a laceration to the back of the head. Both were taken to Stroger Hospital in good condition. 

Chicago’s History of Venue Negligence 

Suing and slugging it out in court is the American way, so we can definitely expect a lawsuit (or two). This is not the first time the Chicago electronic music scene has faced structural tragedy and legal scrutiny. In 2014, four people attending a DJ Datsik concert at Concord Music Hall, located in Chicago’s Logan Square neighborhood, were injured when part of the ceiling came crashing down on their heads. Tina Somic, one of the victims who had suffered multiple head injuries, including a concussion, filed a premises liability suit naming Concord Music Hall, LLC and Club 2047, LLC as defendants. The complaint claimed that the venue’s owners were negligent for failing to keep the ceiling in a structurally safe condition or warn concertgoers about the hazard it posed, and that the venue negligently allowed performers to perform at dangerously high volumes, which increased the risk for a collapse. The demand for damages was $50,000. The suit never went to trial and the parties settled the matter (Agreed Order at 1, Somic v. Club 2047, LLC, 2015 Ill. Cir. LEXIS 9909 (2015) (2014-L-002082). 

Legal Implications

Premises liability law is a theory of negligence that holds a property owner responsible for any damages arising out of an injury on that person or entity’s property. The justification is that owners that occupy a property must make a reasonable effort to maintain a safe environment for visitors to it. Different states follow different criteria to determine who may recover under premises liability theory and under what circumstances, and usually fall into one of two camps: (1) focusing on the status of the person visiting the property or (2) focusing on the state of the property and the owner’s and visitor’s actions. 

Who Can Recover? Two Schools of Thought

Under the first camp, a visitor can be considered an invitee, licensee, or trespasser. An invitee is somebody invited onto a property for a commercial purpose, whereas a licensee is present on the property at the invitation or by permission of the property owner or occupant. The invitation creates an implied promise of safety. Some states draw differentiations between the standard of care between invitees and licensees while others hold them to the same standard. In many states, trespassers (visitors with no right to be there) cannot recover at all under premises liability, and only under strict conditions may have a pathway to recovery, such as increased likelihood of trespassers or in the case of a child trespasser. 

Under the second camp, different factors are considered when making a judgement, such as the circumstances in which the visitor came to be on the property, the reasonableness of the owner’s actions to repair and maintain the property or warn visitors, and the foreseeability of the injury. Generally speaking, owners or occupants have the duty to keep a property reasonably safe by regularly inspecting it, making repairs, and warning visitors of any hazardous conditions. 

Bars to Recovery

Most states, including Illinois, follow a comparative negligence regime in which an injured person who is partially or fully responsible for what happened cannot recover in full for damages arising out of a dangerous property condition. The justification for this is that visitors have a duty of care to themselves to prevent their own injury. Under a comparative negligence regime, a plaintiff who was found to be 20% responsible for the injury would only receive $80,000 of a $100,000 damages award. 

While it remains to be seen whether the injured concertgoers from the Radius incident will file a lawsuit, the venue could face legal scrutiny over its maintenance and safety protocols. Given the history of structural issues at music venues in Chicago, this incident serves as a stark reminder of the responsibilities that venue owners bear in ensuring the safety of their patrons.

As the Chicago electronic music scene continues to thrive, the balance between immersive, high-energy experiences and fundamental safety precautions remains crucial. Whether through stricter building inspections, enhanced venue regulations, or changes in how liability is determined in cases like these, one thing is certain: when the bass drops, the ceiling should not. 

#WJLTA #personalinjury #premisesliability #Chicago #music

By: Penny Pathanaporn

Today, artificial intelligence (AI) has pervaded nearly every aspect of our daily life. Residents and visitors alike in California, Phoenix, and now Texas can experience what it feels like to ride in a self-driving taxi. Over the past few years, internet users have flocked to ChatGPT for assistance on both serious and trivial matters, from creating a travel itinerary to drafting a work email. And, more recently, Elon Musk announced the highly anticipated development of Tesla Optimus, a humanoid robot that can perform everyday tasks such as grocery shopping. Considering the role that AI plays in making our lives more convenient, it is no surprise that AI has been integrated into the employment sector to increase the efficiency of the hiring process. 

How is AI used in the employment sector?

Artificial intelligence has been used to supplement several workplace procedures. For example, AI can be used to help employers screen potential candidates by filtering application materials for specific experiences or buzzwords. Employers have also used AI to review recorded interviews throughout the hiring process,  monitor employees’ computer activity,  track employees’ locations, and determine who gets promoted or laid off.

The problem with AI: furthering institutional biases 

Despite its ability to streamline employment processes, AI is far from perfect and its use can lead to harmful outcomes. The successful performance of AI models is dependent on factors such as the type of data that it has been fed and AI training techniques. Unfortunately, data that has been entered into AI models typically reflect institutional biases that exist in our society today. For instance, an AI hiring model formerly developed by Amazon was trained by a dataset that mostly consisted of men. Consequently, the AI algorithm demonstrated a preference for applications that include buzzwords mostly used amongst men. Once the bias had been discovered in the development process, Amazon ceased all work on their AI project. 

Additionally, AI models that have been trained to prioritize key traits such as optimism, outgoingness, or the ability to work well under pressure may inadvertently put candidates with disabilities (or even candidates from cultural demographics that do not value those traits) at a disadvantage. Accordingly, employers using AI tools in their hiring practices run the risk of committing employment discrimination based on sex, race, nationality, age, disability and other protected demographics.

Legal Implications of AI Usage in the Employment Sector

Under both federal and state laws, disparate treatment discrimination and disparate impact discrimination are not permitted. Disparate treatment discrimination entails intentional discrimination against protected groups, while disparate impact discrimination entails the use of facially neutral policies that disproportionately impact protected demographics.

Although actions taken by employers who use AI tools in good faith may not fall under disparate treatment discrimination, their actions are still at risk of falling under disparate impact discrimination. For example, as seen by the AI model formerly developed by Amazon, AI hiring tools trained on biased datasets are likely to prefer traits that do not correspond with certain protected groups, leading to a disproportionate impact on minorities. 

When determining whether hiring practices may disproportionately impact protected demographics, the EEOC recommends that employers utilize the “four-fifths” rule. Based on the “four-fifths” rule, if the proportion of candidates selected from one demographic is “substantially” different from the proportion of candidates selected from another demographic, then the hiring practices employed may be discriminatory. A ratio that is less than 80% between the two different proportions selected is considered to be the benchmark for “substantial” difference. 

Nevertheless, employers may be permitted to use hiring practices that disproportionately impact certain protected groups if they can demonstrate that the use of those practices is (1) related to the employment and (2) necessary for business purposes. For instance, if the job the candidates have applied for, along with the employer’s business, necessitates a fitness exam, the fact that more men than women pass the exam may not trigger disparate impact discrimination. Either way, employers should still adhere to the least discriminatory practice available in all circumstances. Lastly, employers should be very cautious of AI usage because they can still be held liable for discrimination even if the AI tools were owned or managed by third parties.  

The Crackdown on AI Use in Employment Practices 

The rapid developments in AI technology has undoubtedly led to the rise in AI-related lawsuits in the employment sector. In May 2022, the Equal Employment Opportunity Commission (“EEOC”) filed a lawsuit against “iTutorGroup” (a tutoring company). The EEOC claimed that iTutorGroup violated the Age Discrimination in Employment Act of 1967 (“ADEA”) through their use of AI in hiring practices. In August 2023, the EEOC and “iTutorGroup” settled the case, which marked the very first AI-discrimination lawsuit to be settled.

Currently, there is also an ongoing AI-discrimination class action lawsuit against a company named “Workday” in federal court. The plaintiff, Derek Mobley, alleged that Workday’s use of an AI software in screening applicants had resulted in discrimination based on age, race, and disability status. Although the federal court has not issued a final judgment on the case, the fact that the court has enabled the case to proceed as a class action lawsuit should signal to employers that they must remain vigilant when it comes to AI use. 

Looking Towards the Future 

Today, employers are highly advised to utilize third parties or external experts to assess their AI tools for any possible discrimination. Additionally, both Congress and state legislatures have begun taking legislative action to minimize the discriminatory impact of AI, such as introducing bills that require employers to notify candidates of AI usage. 

Ultimately, the functions of AI platforms are merely a reflection of the biases and prejudices that already exist in our society today. Laws, policies, and legislation can help detect and minimize the enforcement of these biases through AI. But perhaps grassroots advocacy can also provide an alternative avenue for promoting just AI usage.

#EEOC #AI #employmentlaw