THE JOURNAL OF COLLEGE AND UNIVERSITY LAW ARTICLE A Critical Analysis of Collegiate Licensing Policies and Procedures Richard L. Irwin David K. Stotlar Aaron L. Mulrooney Unreasonable Compensation: The Hidden Issue in the IRS College and University Examination Guidelines Bertrand M. Harding, Jr. Edgar D. McClellan The Law of Higher Education and the Courts: 1992 in Review Fernand N. Dutile STUDENT NOTE ‘‘Where Did You Dig Up That Old Fossil?”’: Will Universities Own the Research Specimens that They Collect or Purchase? Marc Villarreal Elaine Zacharakis STUDENT CASE COMMENT EEOC v. Board of Governors of State Colleges and Universities: Collective Bargaining Agreements and Age Discrimination in Employment Act Claims: What Counts As Retaliation under ADEA Section 4(D)? Edward C. Lyons PUBLISHED BY THE NATIONAL ASSOCIATION OF COLLEGE AND UNIVERSITY ATTORNEYS AND THE NOTRE DAME LAW SCHOOL VOLUME 20 FALL 1993 NUMBER 2 NATIONAL ASSOCIATION OF COLLEGE AND UNIVERSITY ATTORNEYS The National Association of College and University Attorneys (NACUA), established in 1961, is a nonprofit organization serving the needs of attorneys representing institutions of higher educa- tion. NACUA now serves nearly 2,500 attorneys who represent some 1,300 campuses (about 660 institutions). The Association’s purpose is to improve the quality of legal assistance to colleges and univer- sities by educating attorneys and administrators on legal issues in higher education. NACUA accomplishes this goal through its publications, conferences, and workshops. NACUA also operates a clearinghouse for references through which attorneys share knowledge and work products on current legal problems. With its headquarters in Washington, D.C., NACUA monitors govern- mental developments having significant legal implications for its member institutions, coordinates the exchange of information concerning all aspects of law affecting higher education, and cooperates with other higher education associations to provide general legal information and assistance. Accredited institutions of higher education in the United States and Canada are the primary constituents of NACUA. Each member institution may be represented by several attorneys, any of whom may attend NACUA meetings, perform work on committees, and serve on the Board of Directors. Approximately one-half of NACUA member institutions are private, nonprofit institutions of higher education with enrollments below 5,000 students and current fund expenditures below $50 million per year. Collectively, these institutions enroll approximately 650,000 students. The remaining member institutions, whose budgets range up to $4 billion per year, collectively enroll more than six million students. NACUA 1993-94 Board of Directors President Members-at-Large David M. Donaldson Radcliffe College 1991-94 Vanderbilt University ; Karen Davis Saint Louis University on ee nooo ttn Oettin Flora B. Devine Board of Regents of the “mes y y University System of Georgia Becky R. French University of North Carolina First Vice President General Administration Michael C. Weston Northwestern University Lawrence White Georgetown University Second Vice President Philip Burlin Boston College PaulJ .W ard Arizona University System a - Mary Ann Connell University of Mississippi Shelley Sanders Kehl College of Aeronautics Secretary and Manhattan College Sheila Trice Bell Northern Kentucky University Jean S. Sagan University of Alaska Statewide System Treasurer Raymond W. Schowers Eastern New Mexico Byron H. Higgins University of Illinois University Immediate Past Presidents Adrian Arima Stanford University : Joanne Blauer Cornell University Eliesheth Pso o “sn9 3 ag: Eileen K. Jennings Central Michigan University Mary Elizabeth Kurz chigan State University David R. Scott Rutgers, The State University President 1991-92 of New Jersey Beverly E. Ledbetter Brown University Barbara L. Shiels University of Minnesota Executive Director Associate Executive Director Manager of Publications Phillip M. Grier Edythe M. Whidden Linda E. Henderson NOTRE DAME LAW SCHOOL Notre Dame Law School, the oldest Roman Catholic law school in the United States, was founded in 1869 as the nation’s third law school. The Notre Dame program educates men and women to become lawyers of ex- traordinary professional competence who possess a partisanship for justice, an ability to respond to human need, and a compassion for their clients and colleagues. Notre Dame Law School equips its students to practice law in every state and in several foreign nations. The school raises and explores the moral and religious questions presented by the law. The learning program is geared to skill and service. Thus, the school is committed to small classes, especially in the second and third years, and emphasizes student participation. In order to further its goal of creating lawyers who are both compe- tent and compassionate, Notre Dame Law School is relatively small. The Admissions Committee makes its decisions based on a concept of the ‘‘whole person.’’ The Law School offers several joint degree programs, including M.B.A./J.D. and M.Div./J.D. Notre Dame Law School is the only law school in the United States which offers study abroad for credit on both a summer and year-round basis. Instruction is given in Notre Dame’s own London Law Centre under both American and English pro- fessors. Notre Dame Law School serves as the headquarters for The Jour- nal of College and University Law. The Center for Civil and Human Rights, the Institute for International Peace Studies, the National In- stitute for Trial Advocacy and the Thomas J. White Center on Law and Government all enrich the Notre Dame Law School experience. The University of Notre Dame The Notre Dame Law School Officers of Administration Officers of Administration Presii dent Dean , Rev. Edward A. Malloy, C.S.C., Ph.D. David T. Link Provost Associate Dean Timothy O’Meara, Ph.D. } Fernand N. Dutile Executive Vice President — the cone Rev. F. WillMi.aDmi v.B,e auJ.cDh.a mp, C.S.C. Roger anFa. Jac“oibsss,oc iaMt.e A.L.S.in, J.D. Viic e Presiid ent and Associate Dean Associate Provost William O. Malasa. M.A. Roger A. Schmitz, Ph.D. Associate Dean Walter F. Pratt, Jr. THE JOURNAL OF COLLEGE AND UNIVERSITY LAW EDITORIAL BOARD Eileen K. Jennings, Chair Central Michigan University Barbara A. 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In addition to scholarly articles on current topics, the Journal of College and University Law regularly publishes case comments, scholarly com- mentary, book reviews, recent developments, and other features. In 1986, the Notre Dame Law School assumed publication of the Journal, which had been published at the West Virginia University College of Law from 1980-1986. Correspondence regarding publication should be sent to Fernand N. Dutile, Faculty Editor, The Journal of College and University Law, Notre Dame Law School, Notre Dame, IN 46556. The Journal is a refereed publication. The views expressed herein are to be attributed to their authors and not to this publication, the National Association of College and University Attorneys or the Notre Dame Law School. The materials appearing in this publication are for information purposes only and should not be considered legal advice or be used as such. For a special legal opinion, readers must confer with their own legal counsel. THE JOURNAL OF COLLEGE AND UNIVERSITY LAW Volume 20 Fall 1993 Number 2 ARTICLES A Critical Analysis of Collegiate Licensing Policies and Procedures Richard L. Irwin David K. Stotlar Aaron L. Mulrooney As colleges nationwide have implemented licensing programs to protect and promote their institutional marks, limited em- pirical data relative to program operations has been made available. The purpose of this Article is to provide university legal counsel, individuals actively involved in licensing- program policy development and administration, with an in- stitutional administrative paradigm derived from an extensive review of literature and data collected from collegiate and sport licensing organizations. The results of this investigation revealed, among university licensing programs, a lack of operational harmony and of policies and procedures con- sidered to be significant for effective licensing-program ad- ministration. Therefore, recommendations are provided for in- dividual program operational methodology as well as col- legiate licensing-industry standardization. Unreasonable Compensation: The Hidden Issue in the IRS College and University Examination Guidelines . Bertrand M. Harding Edgar D. McClellan At the end of 1992, the IRS issued proposed examination guidelines for audits of colleges and universities. One of the most significant and potentially controversial issues raised in those guidelines is alluded to only briefly, namely, whether the amount of compensation paid by a college or university to its officers, athletic coaches, faculty, or other employees is ‘‘unreasonable.’’ This Article traces the historical interest of Congress and the IRS in the amount of compensation paid to employees of exempt organizations, and sets forth a detailed analysis of the legal bases underlying an allegation of unreasonable compen- sation, as well as potential defenses to such an allegation by the IRS. The Law of Higher Education and the Courts: 1992 in Review Fernand N. Dutile 125 In 1992, the volume of litigation affecting higher education continued unabated. This, the seventh of the Journal’s Annual Reviews of judicial pronouncements on the law of higher education, provides a concise and organized look at the work of the courts during 1992. The piece seeks not only to convey the most important developments during that year, but also, like the cases themselves, to mirror higher education’s dynamism and ferment. Following an introduction, the Article reports on cases addressing institutional powers; the First Amendment; the Fourth Amendment; tort liability; institu- tional contracts; immunities; access to records and meetings; funding; employment; adverse academic, disciplinary and licensing decisions; and discrimination against students. A section treating miscellaneous areas of interest and a conclu- sion round out the Article. STUDENT NOTE ‘‘Where Did You Dig Up That Old Fossil?’’: Will Universities Own the Research Specimens that They Collect or Purchase? Marc Villarreal Elaine Zacharakis STUDENT CASE COMMENT EEOC v. Board of Governors of State Colleges and Universities: Collective Bargaining Agreements and Age Discrimination in Employment Act Claims: What Counts As Retaliation under ADEA Section 4(D)? .......c.cc .ce.e e.ee e Edward C. Lyons 241 A CRITICAL ANALYSIS OF COLLEGIATE LICENSING POLICIES AND PROCEDURES RICHARD L. IRWIN* DAvip K. STOTLAR** AARON L. MULROONEY*** I. INTRODUCTION This publication has previously discussed the burgeoning area of collegiate licensing,’ typically focusing on the legal issues associated with protecting the college and university trademarks. Many contem- porary trademark infringement cases involve the ‘‘pirating’’ of unli- censed logo products.? While universities historically have pursued protection of the goodwill associated with their names,’ today colleges and universities protect a significant financial interest as well. For example, consumer demand for collegiate merchandise has enabled the University of Notre Dame, Pennsylvania State University, and the Uni- versity of Michigan to generate licensing revenues near $1 million for each institution.* Earlier reports focused primarily on trademark law issues and did not provide, a comprehensive administrative model for management of * Coordinator, Sport Administration Graduate Studies Program, Kent State Univer- sity. ** Director, School of Physical Education & Kinesiology, Univ. of Northern Colorado. *** Professor, Sport Administration Graduate Studies Program, Kent State University. 1. See, Michael G. Schinner, Establishing a Collegiate Trademark Licensing Program: To What Extent Does an Institution Have an Exclusive Right to Its Name?, 15 J.C. & U.L. 405 (1989). Sheila Trice Bell & Martin F. Majestic, Protection and Enforcement of College and University Trademarks, 10 J.C. & U.L. 63 (1983). Sheldon Burshtein, Collegiate Licensing in Canada and the Statutory Advantage, 12 J.C. & U.L. 227 (1985). 2. See, University of Ga. Athletic Ass’n v. Laite, 756 F. 2d 1535 (11th Cir. 1985); University of Pittsburgh v. Champion Prod., Inc., 686 F.2d 1040, cert. denied, 459 U.S. 1087, 103 S. Ct. 571 (1982). 3. See, Trustees of Columbia Univ. v. Axenfeld, 241 N.Y.S. 4 (Sup. Ct. 1930); Dubuque German College and Seminary v. St. Joseph’s College, 169 N.W. 405 (Iowa 1918); President and Trustees of Colby College v. Colby College-New Hampshire, 508 F.2d 804 (ist Cir. 1975); Cornell Univ. v. Messing Bakeries, Inc., 128 N.E.2d 421, modified, 130 N.E.2d 601 (N.Y. 1955); Yale Univ. v. Benneson, 159 A.2d 169 (Conn. 1960); University of Notre Dame du Lac v. J.C. Gourmet Food Imports Co., Inc., 703 F.2d 1372 (Fed. Cir. 1983); University of Notre Dame du Lac v. Twentieth Century-Fox Films Corp., 207 N.E.2d 508 (N.Y. 1965). 4. Karen Grassmuck, Colleges Fight Bootleggers as Sales Boom for Goods That Bear Logos and Emblems, 36 CHRON. HIGHER Epuc. A32, (1990). 97 98 JOURNAL OF COLLEGE AND UNIVERSITY LAW [Vol. 20, No. 2 these programs. The purpose of this investigation was to develop an optimal administrative paradigm for a collegiate licensing program, through a comparative analysis of administrative policies and proce- dures of selected sport and collegiate licensing programs. The results of this investigation provide collegiate licensing administrators with an operational model that can be used as a policy-building or evaluation resource. II. METHODOLOGY A review of the literature on the operational protocol of a licensing program revealed recommendations for: (i) the inclusion of administra- tive policies and procedures that address program governance and leadership; (ii) royalty calculation and management; (iii) licensing pro- gram promotions and public relations; and (iv) mechanisms for protec- tion and enforcement.® From the literature review and exchanges with licensing professionals, a questionnaire addressing operational issues was developed and forwarded to the licensing administrator at selected sport organizationsin the Spring of 1991.6 The respondents were ques- tioned about the use of basic operational policies and procedures that the literature suggested were significant to program operations, and a frequency distribution was constructed to reflect the percentage of respondents using each operational policy or procedure.’ More specific data and descriptive information pertaining to each operational protocol item was solicited through detailed follow-up questions. Analyses were conducted to identify operational variables between agency-assisted and internally-administered collegiate licensing pro- grams, and descriptive statistic analyses and Analysis of Variance (ANOVA) were conducted, where appropriate, to evaluate significant statistical differences in response patterns. Ill. FINDINGS Representatives of various sport licensing programs and 98 of 180 collegiate programs responded to the survey. Operational protocol meas- ures are reported in Table 1: 5. Presentation by A. P. Lutzker, Proceedings of ACLA Collegiate Licensing Seminar, East Lansing, MI October 1989. Tom Harrison and Jack Revoyr, Drafting Royalty Provi- sions in Licensing Agreements, 4 MERCHANDISING REP. 12 (1985). Jack Revoyr, Some Royalty Problems Looking for Solutions, 6 MERCHANDISING REP. 8 (1987). Presentation by F. P. Gaston, Proceedings of the Second Annual CCI/ICE Licensing Seminar Atlanta, GA 1989. 6. Major League Baseball Properties, National Football League Properties, National Basketball Association Properties, National Hockey League Properties, The National Collegiate Athletic Association, the United States Olympic Committee, and universities holding membership with the Association of Collegiate Licensing Administrators. 7. Inferential statistics were not caiculated for the sport licensing data due to the limited sample size.