Fall 2005

In This Issue

Questions or Comments?

Contact the Editor.

Message from the General Counsel

What's in a name? A lot! And the answer to the question brings into focus a highlight from this month's The Foreseeable Future. Our lead article tackles a hot topic at UT System these days--naming. The article was written by Allison Akers, a new name in OGC, so let's start there.

Allison is our newest attorney. She was hired in August and works in the Business Law Section. Allison comes to us from Environmental Resources Management, an environmental consulting company, where she was senior counsel. Before then, she spent a couple years as a corporate associate at Skadden, Arps, the law firm she went to after graduating from Cal Berkeley. Allison will be applying her skills to assist with contracts, real estate matters and transactions and tax matters in the charitable giving area.

That last area of practice has landed Allison right in the middle of UT System's efforts to refine its naming policy in the midst of what can only be described as a boon in the business of naming requests fueled by tax breaks passed by Congress in the wake of Hurricanes Katrina and Rita, an oil and gas industry flush with profits and the general mood of the holiday season. UT System is seeing a record number of requests by both corporate and individual donors seeking naming opportunities. The Regents will soon consider and likely approve a revised naming policy. In the meantime, Allison's article gives a primer on the relevant issues.

We hope you find the naming article and others useful as you deal with your workload this holiday season. As always, please give us any feedback you have on The Foreseeable Future.

<back to top>


Naming Facilities Requires Careful Consideration

by Allison Akers (Business Law Section)

Vice Chancellor for External Relations Randa Safady has introduced a proposal for the Board of Regents to consider a System-wide policy for corporate namings of institutional facilities. To date, no UT academic facilities have been named after a corporate entity, but three athletic facilities – the Helen of Troy Softball Complex at UT El Paso and recently-named UFCU Disch-Falk Field at UT Austin and Citizens 1st Bank – Perkins Soccer Complex at UT Tyler – are named after corporations. As companies seek new ways of finding a voice in local communities, and as higher education seeks new sources of funding, institutions are increasingly finding themselves in discussions about corporate namings.

Regents’ Rules and Regulations, Rule 80307, outlines the current procedures for naming major facilities, but does not specifically address the issue of corporate namings. As institutions process new opportunities for corporate namings, it will be ever more important to consider the numerous potential issues and address those concerns in sensible naming agreements.

You may have heard about some of the more prominent namings that have caused problems for academic institutions and sports facilities. For example, you surely noticed that a certain non-Texas baseball team won the World Series in Minute-Maid Park, and not in Enron Field, as the park had been named previously. Also, last year the University of Missouri built the $75 million Paige Sports Arena with a donation from the parents of Paige Laurie, a Wal-Mart heiress. Only weeks after the arena was opened, Paige’s freshman roommate announced on national television that Paige had paid her about $20,000 over several years to write her college papers and complete other homework assignments. Paige’s parents agreed to relinquish their naming rights, but it is unclear whether the University of Missouri had to return any of their donation. Mergers, acquisitions, bankruptcies, major Securities and Exchange Commission or other regulatory problems and other legal changes or difficulties for the corporate donor can also present problems for the recipient institution.

Concerns about the financial and ethical health of any corporation whose name may be displayed on or closely associated with a UT facility can and should be addressed up front in a naming agreement that at least gives UT institutions options to consider if these contingencies develop. Moreover, the institution may wish to think about limiting the number of years during which the name will be used, and about reserving the right to name other spaces within the facility after other individuals or entities. Any naming agreement should provide for what will happen if circumstances change, such as if the corporation is involved in a merger or bankruptcy, if the facility has to be moved or remodeled, or if the facility is significantly funded by other sources. Finally, if bond financing is used for the facility, a host of other special considerations, including Internal Revenue Service rules and regulations, must be addressed with the name donor.

The Bottom Line:  The naming of major facilities is a distinguished honor that should be undertaken only after careful consideration and in accordance with the Regents’ Rules and Regulations, in consultation with the Executive Vice Chancellor for Academic or Health Affairs, the Office of External Relations and OGC, and, at least in the case of corporate namings, pursuant to a written naming agreement.

<back to top>


Lights, Camera, Action, Lawyer! Institutional Film Location Agreements

by Barbara Holthaus (General Law Section)

Regents’ Rules and Regulations, Rule 80107 sets forth the general requirements for film location agreements . “The safety of students, faculty and staff; the potential for damage to buildings, facilities or property and for disruption of administrative or academic programs or other scheduled activities; and the subject matter of the film shall be of primary consideration in determining whether to grant a filming request.” Rule 80107, Section 1. The agreement must be in writing and “approved pursuant to U.T. System procedures.” Id.

Process and Procedure. Rule 80107 provides that the Chancellor or president of an institution shall determine whether to authorize the use of System property or buildings for filming motion pictures or television productions on “a case by case basis.” Id. Obviously, each agreement will turn on the specifics of the proposed production. The production company will probably have a standard form they want the institution to sign and a deadline of yesterday for signing it. Obtain a copy of their standard agreement up front and make sure the production company understands the final agreement will probably require material revisions before a UT institution may sign it. Electronic versions that are not locked or protected are best. If necessary, OGC can scan a paper copy and convert it to a document for editing and markup.

As with most contracts, the more time the institution spends in its initial discussion with the production company explaining the System’s contracting requirements, the easier it will be to get a signed agreement. At the outset, urge the production company to use one point person to negotiate the terms of the agreement. Ideally, that person should be able to make decisions on behalf of the company or obtain approval for changes quickly from management. Similarly, institutional staff involvement should be funneled through one or two key institutional representatives. Involving institutional counsel and/or OGC at the outset can avoid many common issues, including inadvertently committing to something that System requirements prohibit. As a general rule, any issue discussed in this article or any other issue central to the negotiation of the agreement should be reflected as a term in the final written agreement.

Artistic Control vs. Protection of the Institution’s Reputation: Rule 80107, Section 3 requires that the institution review and approve film or television scripts or the topic and format for a live or unscripted program. Realistically, do not expect to get script approval in your agreement. The film company will undoubtedly demand total control over the final product and insist on a specific clause prohibiting the institution from seeking injunctive relief to limit the release of or require changes to the final product. Instead, use the script review process as your opportunity to conduct an assessment of the likely effect of the final product on the institution’s interests. Determine the identities of the individuals or entities with an interest in the production company. (See Rule 80107, Section 4.) It is also essential to understand the specific nature of the production, nail down the extent to which the production will explicitly or inadvertently identify the institution, and identify any potential use of the University’s logo, trademarks, institutional symbols, etc. Based on this information, you can decide whether the proposed project is worthy of your institution’s participation. If you decide to go forward, be sure that all of this information is captured in the final agreement.

Scheduling: The agreement should specifically identify the area(s) where filming is permitted and the time period(s) when filming may occur. Rule 80107, Section 2 requires the institution to ensure that scheduled time and locations for filming do not interfere with administrative and academic programs or other scheduled activities of System or its institutions. Consider, for example, the location of nearby dorms and class schedules. Factor in additional space the company may require for cameras, lighting and production staff. The production company will probably demand flexibility to reschedule, since shooting is subject to weather delays, casting problems and even union disputes. Make sure the terms of the written agreement specify that your institution must agree to any rescheduling.

Safety and Liability: The institution should work closely with its campus police department to review all of the terms requested by the company. Rule 80107, Section 1 requires the institution to grant a request to film on University property “following consultation with campus security personnel.” Additionally, the agreement should include an indemnification clause requiring the company to use, at a minimum, reasonable care to prevent damage to University property and to indemnify it against all possible claims arising from the agreement. This language should be in addition to a specific clause that requires the company to ensure that all institutional property accessed by the company be returned to its original condition. Finally, any agreement involving a project that has the potential to involve filming of University students, faculty, staff or other individuals not employed by the production company should include a term requiring the production company to bear sole responsibility for obtaining any required releases from those individuals.

Insurance: Production companies, particularly smaller ones, should be informed up front that Rule 80107, Section 5 requires the company to provide comprehensive general liability insurance and property damage under a policy from a licensed Texas insurance company naming the institution and/or System, including the officers, employees and Board of Regents as additional insureds. The policy must provide liability limits of at least $2 million for personal injury or death and $1 million for property damage. The institution is responsible for determining the particular scope and limits of the coverage required by the specific nature of the filming project.

Fees: Series 80107, Section 6 of the Regents’ Rules and Regulations requires a use fee to be established and obtained in advance “based upon the nature and extent of activities.” In other words, the fee must be set to ensure that the institution bears none of the costs involved. The fee must cover the cost of moving or replacing equipment, including computers and furniture and other fixtures belonging to the company or the institution. The fee must also cover the cost of the use of institutional property, buildings and services required to accommodate the activities. Do they plan to re-landscape the quad? Include the cost of replacing those shrubs they dig up. Will filming generate a crowd of onlookers that will require overtime use of institutional security personnel? If so, calculate it into the fee.

In sum, film location agreements should provide that the interests and reputation of the institution are protected, the safety and security of the institution and its inhabitants can be maintained throughout the filming process, and sufficient remuneration is provided to ensure that the institution bears no economic cost as a result of the agreement. Okay. The agreement is signed and you have your approval memo from OGC. It’s a wrap. Now all you have to do is relax and get ready for your close up!

The Bottom Line:   UT institutions have wide latitude in determining whether to permit a production company to use institutional property or buildings for filming motion pictures or television productions. However, such agreements must be in writing and comply with specific System requirements, many of which are set forth in Regents’ Rules and Regulations, Rule 80107.

<back to top>


The Patient Safety Quality Improvement Act: Creating a Legal Infrastructure for a Culture of Safety

by Walter Mosher (Health Law Section)

On July 29, 2005, President Bush signed into law the Patient Safety Quality Improvement Act (PSQIA), which implements recommendations from the Institute of Medicine (IOM) report To Err is Human: Building a Safer Health System. The PSQIA promotes patient safety through a confidential and voluntary reporting mechanism for hospital systems and other healthcare delivery networks.

According to the IOM report, perhaps as many as 98,000 people die in hospitals each year as a result of preventable medical errors. Medical errors are defined as clinical plans that fail to be completed as intended or the use of an incorrect plan. Medical errors include adverse drug events, improper transfusions, surgical injuries, wrong-site surgery and mistaken patient identities. To reduce these errors, the IOM report specifically recommends: (1) building leadership and knowledge for patient safety; (2) developing a nationwide public mandatory reporting system and encouraging healthcare organizations and practitioners to participate in voluntary reporting systems; (3) raising performance standards for patient safety; and (4) creating safety systems in healthcare organizations.

Under the PSQIA, the Department of Health and Human Services (HHS) will certify and credential private and public groups to act as patient safety organizations (PSO). In order to qualify as a PSO, an organization’s primary activity must be patient safety and must have contracts with more than one provider to receive and review patient safety work product. The entity will collect and analyze data in a standardized manner so that it may make valid comparisons and provide assistance to minimize patient risk. All patient safety information gathered from providers is protected as privileged and confidential and may not be used in any federal, state or local civil, criminal or administrative proceeding against a provider except for very limited circumstances, such as if a court determines that the information is material in a criminal proceeding and not reasonably available from another source. The PSQIA protects individuals reporting patient safety data from adverse employment action when, in good faith, they report safety information to providers or PSOs. Moreover, accrediting bodies may not take action against a provider for collection or reporting of patient safety work product.

“Patient safety work product” includes any material prepared for and reported to the PSO or material developed by the PSO for patient safety activities. Information collected, maintained or developed separately from “patient safety work product” will be treated in accordance with current law. Thus, information gathered as part of quality assurance, risk management or peer review functions is not automatically protected as patient safety work product merely because it is reported to a PSO. Hospitals and providers will need to consider how to distinguish “patient safety work product” from other peer review or quality assurance information. The PSQIA only adds a privilege to patient safety work product and does not preempt state law. Hospitals and providers must be mindful of satisfying both the federal and state regulatory requirements to retain the appropriate privileges and confidentiality protections.

The new law also mandates HHS to create and maintain a network of patient safety databases that will serve as “an interactive evidence-based management resource” for providers, patient safety organization and other entities. HHS will use patient safety data reported by providers to analyze national and regional statistics, including patterns of healthcare errors.

As with any new law, the PSQIA raises implementation questions. The healthcare industry eagerly awaits the HHS regulations to implement these legislative objectives and clarify issues raised by the law. The Foreseeable Future will include an update article on this issue when HHS releases its regulations.

The Bottom Line:    The Patient Safety Quality Improvement Act implements the IOM's recommendation in creating a “culture of safety” by establishing new confidential and voluntary medical error reporting systems. Healthcare professionals, hospitals and healthcare systems should achieve significant gains in reduction of medical errors by participating in these federally credentialed patient safety organizations while gaining litigation protection in doing so.

<back to top>


Search Engine Giant Draws Fire Over Mammoth Digital Library Project

by Georgia Harper (Intellectual Property Section)

Last winter, Google began an ambitious project to digitize books from five large library collections and make the works’ contents searchable online. The Google Print Library Project (“Library Project” or “Project”) involves the libraries at Harvard, Stanford, University of Michigan and Oxford, and the New York Public Library. Google will digitize works in the public domain, that is, works whose copyrights are expired, as well as works still under copyright protection. Protected works will not be available to the public. Google will use the full text versions of those works only “behind the scenes” in a database capable of being queried by searchers using Google’s popular web-based search engine interface. If a user’s search term appears in a protected work, the search results page will show “snippets” of text surrounding the search term (a sentence or two) to provide context. The search results item would also show links facilitating purchase of the work, if it is available, and links to library collections where a physical copy may be found. If the search term appears in a public domain work, the entire work will be available when one clicks on the search result. Everyone agrees that digitizing public domain works poses no copyright problems, but for those works still protected, copyright issues came to a head in September when The Author’s Guild filed suit against Google in New York, home to the publishing industry. Five major publishers, all members of the AAP (Association of American Publishers), quickly followed suit filing their own complaint on October 19. Courts in New York have considerable experience with complex copyright issues. They will need it.

The Library Project promises a fascinating legal dispute. Ostensibly, the battle revolves around the issue of whether the Project makes fair use of the literary property of others, since digitizing a protected work in its entirety makes a copy, and making a copy would otherwise be an infringement. But that’s only part of the story. This case is fundamentally about what we as a society should do with our older books sitting on library shelves gathering dust. As such, the Library Project will present opportunities to examine copyright principles, to explore the meaning of recent technological advances and the implications of digital technologies for decades to come and, of course, to really understand the effect our law has on the achievement of its own ends in light of these changes.

As is always the case when technological changes make new uses of old works possible, the essential question facing the court will be simply who should get the benefit of the novel use of old works, the copyright owner or the person or entity who wants to use the copyright owner’s work in a new way? Should the copyright owner’s rights include the right to digitize and to authorize others to digitize a work in its entirety for the purpose of including the work in a searchable Internet index? Will giving this right exclusively to copyright owners or reserving the right to the public best promote the progress of knowledge?

Perhaps the most interesting issue in this case arises literally from the grave. Awarding the right to the copyright owner would normally lead to negotiations with indexers who want to make use of the new right. But for an estimated 75-85% of all published works still under protection, awarding the new right to the copyright owner will not lead to any negotiations at all, because in those cases, there won’t be anyone at the negotiating table to represent the copyright owner. For a majority of protected works found on America’s library bookshelves today, placing the right with the content owner is simply throwing the right away, literally, giving it to the dead. This problem is referred to as the “orphan works issue,” the market failure at the heart of this case: no market can form around this right if in most cases it belongs to someone who is either dead and buried or who does not know or care that he has the right.

This market failure would be a major problem for indexers if a court awards the benefit of this novel use of their works to the copyright owners since in that case a majority of protected published works will remain incapable of being indexed until they enter the public domain. Normally, such massive market failures support the case for fair use. Thus, the albatross of orphan works threatens the infringement claims of the owners of more recent works who are clearly identifiable and able to profitably utilize this new right. Not coincidentally, the Copyright Office has begun to address the orphan works issue and hopes to recommend to Congress a solution that will give all those who want to use such works (even other content owners themselves) a way forward. To succeed, the Copyright Office must recommend a workable solution to the problems posed by works whose copyright owners cannot be identified or located, or who do not respond to inquiries. But any recommendation that proposes public uses of protected works will face perhaps insurmountable resistance by some copyright owners. Congress will not pass a bill opposed by powerful content community interests. Can Congress broker a compromise that preserves the rights of owners of orphan works who ultimately come forward without so hobbling the public’s ability to use these works that the use right is useless?

One way or the other, we are likely to see changes in the areas of copyright law that affect our ability to utilize works in the way Google proposes. The undeniable social benefit of digitizing and indexing a large proportion of this country’s, and perhaps the world’s literary assets is compelling. Given the significant market failure preventing achievement of that goal, we might reasonably expect to see either a meaningful legislative solution to the orphan works problem, or a finding that index-related digitization and the display of snippets of text in response to queries to an index is a fair use.

The Bottom Line:    These cases and the Copyright Office’s Orphan Works initiative signal imminent change in copyright law. We are likely to see either Congressional action to allow the public to utilize older works whose copyright owners are difficult or impossible to identify or locate, or who are not responsive, or a resolution of the authors’ and publishers’ lawsuits against Google clarifying whether online indexers may rely on fair use to digitize others’ works for indexing.

<back to top>

Legislative Changes to the Emergency Loan Program and the Installment Tuition Option

by Hannah Huckaby (Claims & Bankruptcy Section)

During the last regular session, the Texas Legislature passed two bills that directly affect the emergency tuition loan (ETL) program and the installment tuition option. An ETL is a loan from the university to the student, funded by a tuition set-aside. The installment tuition option enables a student to pay tuition and fees in installments over the course of a semester or summer term rather than pay them in full at the beginning of the semester or summer term.

SB 1227 changes the ETL program, found at Tex. Educ. Code § 56.051 – 56.055, in two important ways. First, an ETL may be used to pay for books as well as for tuition and fees. Formerly, ETLs were to be used for tuition and fees only. Second, if there is insufficient money to provide loans to each eligible applicant, the institution may select recipients based on financial need. The Higher Education Coordinating Board has not issued any guidelines on how to structure an ETL program based on financial need, so for now an institution will have flexibility in determining how to set up the program if it chooses to consider financial need in the application process (i.e., a window for applications that will be considered as a group). Formerly, ETL recipients were selected on a first-come, first-serve basis. These changes begin with the 2006 Spring Semester. ETLs still “ must be evidenced by a promissory note that bears interest at a rate of not more than five percent per year.”  Tex. Educ. Code § 56.053(a)(2).

SB 1227 also adds language to Tex. Educ. Code § 54.007 to address the option to pay tuition and fees by installment, providing that a student with available financial aid to cover the total amount of tuition and fees may not pay by installment. Upon receiving notice that a student has chosen to pay by installment, the institution shall apply any financial aid award administered for the student toward tuition and fees due for that semester (or summer session) until they are paid in full and release any remaining award money to the student. In exigent circumstances as determined by the institution, the institution is not required to apply the award toward tuition and fees but may release funds to the student. These changes begin with the 2006 Spring Semester.

Finally, SB 1227 changes the due date for tuition and fees for students with delayed financial aid. The changes are in the new § 54.0071 of the Texas Education Code. The institution may postpone the regular due date for the payment of tuition and fees if the student has financial aid pending and the student has signed an agreement that the aid, when received, will be applied first to outstanding tuition and fees charges. For more detail, read the proposed amendments to 19 Tex. Admin. Code § 21.4 found in 30 Tex. Reg. 5481 and 5482. These changes begin with the 2006 Spring Semester.

According to SB 1528, beginning with the 2006 Fall Semester, a student who elects to pay tuition and fees by installment must enter into a “written agreement” reflecting the terms and conditions required by the installment option (these terms and conditions are found in Tex. Educ. Code § 54.007). The requirement of a “written agreement” is new. It is up to the institution as to what this “written agreement” will entail. It may take the form of a promissory note which contains the terms and conditions of the installment option and is signed personally by the student. However, the student’s personal signature is not required as part of this “written agreement.” Thus, this “written agreement” may take the form of the student agreeing online to the terms and conditions of the installment option, as long as the institution is able to track the student’s agreement and produce that agreement in a hard copy.

The Bottom Line:    ETLs may be used to pay for books as well as tuition and fees, and, if an institution chooses, it may select ETL recipients based on financial need. Tuition and fees’ due dates may be postponed for students with delayed financial aid. The agreement to pay tuition and fees by installment must be in writing.

<back to top>


Resources from this e-Newsletter

<back to top>


Office of General Counsel
201 W. 7th Street
Austin, TX 78701
Tel: 512.499.4462
Fax: 512.499.4523
www.utsystem.edu/ogc/