In The News

Guns in Licensed Establishments

The 2010 Legislative session saw passage of a revised gun bill that is designed to survive a court challenge.  The Legislature legalized bringing firearms by licensed handgun carriers into any place that sells beer or alcoholic beverages, unless the place opts out.

In a surprisingly friendly move to the alcoholic beverage industry, the legislature now allows places to opt out by posting the international circle-slash no gun sign.  Although the sign needs to be large enough to be plainly visible to patrons entering the business, the international no gun sign is considerably preferable to the alternative sign, which was the only mechanism to opt out under the 2009 gun law.  The alternative sign must contain language “substantially similar” to the following:

AS AUTHORIZED BY T.C.A. § 39-17-1359, POSSESSION OF A WEAPON ON POSTED PROPERTY OR IN A POSTED BUILDING IS PROHIBITED AND IS A CRIMINAL OFFENSE.

The 2009 gun law allowed licensed handgun carriers to bring firearms into restaurants, but not bars.  At the time, the liquor laws did not distinguish between restaurants and bars, and a court threw out the gun law as being unconstitutionally vague.

The new law has taken effect.  Licensed establishments that desire to opt out are advised to post the international no gun sign at every entrance.

Because the law requires the posting to be plainly visible, we suggest that establishments use signs that are at least three inches or larger.  “Plainly visible” has not been defined, but larger signs are probably better than smaller signs.

The Rest of the Story: 2010 Liquor Laws that Failed to Pass

Often, some of the most interesting legislative news relates to bills that failed to pass.  The 2010 session was no exception.

Perhaps the most notable was a bill by Representative Todd and Senator Fowlkes to shut down liquor and beer service at midnight across the state.  With the fiscal note for eliminating sales from midnight until 3:00 a.m. rather daunting, the legislation failed to advance.

As was widely suspected, the “wine at retail food store license” was dead on arrival this year.  We expect that wine in grocery stores will be a hot topic of discussion after the election and encourage readers to check with our blog Last Call.

In an effort to address the widespread failure of bars, music venues and other places to meet the minimum food service requirements, Representative Todd proposed that all licensees submit an oath of percentage of food sales in connection with license renewals.  Representative Todd later became a primary backer of the limited service restaurant license bill, which more-effectively addresses the food service issue.

Efforts to make the sale of alcohol to minors a crime punishable by a mandatory period of imprisonment of forty-eight hours failed to gain momentum.

The Rest of the Story: 2010 Liquor Laws that Failed to Pass

Often, some of the most interesting legislative news relates to bills that failed to pass.  The 2010 session was no exception.

Perhaps the most notable was a bill by Representative Todd and Senator Fowlkes to shut down liquor and beer service at midnight across the state.  With the fiscal note for eliminating sales from midnight until 3:00 a.m. rather daunting, the legislation failed to advance.

As was widely suspected, the “wine at retail food store license” was dead on arrival this year.  We expect that wine in grocery stores will be a hot topic of discussion after the election and encourage readers to check with our blog Last Call.

In an effort to address the widespread failure of bars, music venues and other places to meet the minimum food service requirements, Representative Todd proposed that all licensees submit an oath of percentage of food sales in connection with license renewals.  Representative Todd later became a primary backer of the limited service restaurant license bill, which more-effectively addresses the food service issue.

Efforts to make the sale of alcohol to minors a crime punishable by a mandatory period of imprisonment of forty-eight hours failed to gain momentum.

Ninth Circuit Offers Best Guidance on Issues of Copyright Registration Requirement to Initiate Litigation

On March 2, 2010, the Supreme Court issued its decision in Reed Elsevier v. Muchnick.  In that decision, the Court clarified that Section 411(a) of the Copyright Act "does not restrict a federal court's subject-matter jurisdiction."  Instead, Section 411(a) is merely a "precondition to filing a claim."  Importantly, the plurality explicitly declined to address "whether Section 411(a)'s registration requirement is a mandatory precondition to suit that . . . district courts may or should enforce sua sponte by dismissing copyright infringement claims involving unregistered works."  Instead, the Court left that issue unresolved.

Picking up where Reed Elsevier left off, the Ninth Circuit specifically addressed that issue in a decision on May 25, 2010, namely what it means to "register" a copyrighted work.  See Cosmetic Ideas, Inc. v. IAC/InteractiveCorp, 606 F.3d 612 (9th Cir. 2010).  The Cosmetic Court issued a thoughtful decision that concluded "registration" under 411(a) is accomplished upon mere "receipt by the Copyright Office of a complete application."  In so holding, the Ninth Circuit adopted what many courts refer to as the "application" approach, rather than the "registration" approach. 

The Cosmetic Ideas decision provides the best analysis on the issue to date.  In amplifying the sound reasoning of La Resolana Architects, PA v. Clay Realtors Angel Fire, 416 F.3d 1195, 1202-04 (10th Cir. 2005), the Cosmetic Ideas opinion examined the plain language of Section 411(a), the Copyright Act as a whole, and even the purpose of the Act.  It found the plain language unhelpful in defining "registration," and it found five sections of the broader Copyright Act to be instructive, but not clearly supporting either the application approach or the registration approach. In examining the purpose of the Copyright Act, the court concluded that "the application approach better fulfills Congress's purpose of providing broad copyright protection while maintaining a robust federal register." 

Specifically, the Cosmetic Ideas Court noted that the application approach offers these benefits over the registration approach: (a) "avoids unnecessary delay in copyright infringement litigation . . . [g]iven that copyright owners will ultimately be allowed to proceed regardless of how the Copyright Office treats the application"; (b) "avoids delay without impairing the central goal of copyright registration"; and (c) avoids the "worst-case scenario" under the registration approach, which "could cause a party to lose its ability to sue." 

One benefit of the application approach that Cosmetic Ideas missed is that it puts U.S. works on equal footing with non-U.S. works.  Under the Berne Convention, foreign works may not be subject to registration formalities prior to initiating litigation.  The registration approach actually treats non-U.S. works better than U.S. works, because it requires owners of U.S. works to wait for registration prior to filing an infringement action.  By adopting the application approach, U.S. works are given equally favorable treatment.

Look for the Cosmetic Ideas opinion to be the new road map for courts across the country as they grapple with deciding whether to adopt the application or registration approach.  More courts should follow the analysis in Cosmetic Ideas and reach the same conclusion.

Finally, many of the courts that adopted the registration approach did so while dismissing the complaint before them for lack of subject matter jurisdiction.  That is, many of them held that since 411(a) required a copyright plaintiff to obtain registration prior to filing suit (i.e., the registration approach), the court lacked subject matter jurisdiction.  See Specific Software Solutions, LLC v. Institute of WorkComp Advisors, LLC, 615 F. Supp. 2d 708, 716 (M.D. Tenn. 2009).  As Cosmetic Ideas notes in note 4, however, many of these cases have been abrogated, in part, by Reed Elsevier.  Knowing that should help lawyers and litigants who are seeking to persuade courts to abandon the registration approach and adopt the application approach instead.

Bars Legalized

On the eve of adjournment, the legislature created a new liquor license that allows establishments selling fifteen percent or more of “prepared food” to obtain a new limited service restaurant license.  The law legalizes the vast majority of bars and entertainment venues that did not qualify as a “restaurant” under prior law, which required that the sale of food be the “primary business.”  The legislation also clarified the existing definition of “restaurant,” by requiring that a restaurant derive fifty percent or more of its income from the sale of food.

The new limited service restaurant license has graduated license fees ranging from $2,000 to $4,000, depending on the percentage of food sales.  The license also requires adequate security and a number of other minor modifications to the existing restaurant law.

The law has taken effect and the ABC is accepting applications.

Bars Legalized

On the eve of adjournment, the legislature created a new liquor license that allows establishments selling fifteen percent or more of “prepared food” to obtain a new limited service restaurant license.  The law legalizes the vast majority of bars and entertainment venues that did not qualify as a “restaurant” under prior law, which required that the sale of food be the “primary business.”  The legislation also clarified the existing definition of “restaurant,” by requiring that a restaurant derive fifty percent or more of its income from the sale of food.

The new limited service restaurant license has graduated license fees ranging from $2,000 to $4,000, depending on the percentage of food sales.  The license also requires adequate security and a number of other minor modifications to the existing restaurant law.

The law has taken effect and the ABC is accepting applications.

Premier Tourist Resorts Gain Liquor Licenses

As usual, the legislature added a long list of premier-type tourist resorts and other special legislation to allow liquor licenses in places that are otherwise dry.  Rejoice Sewanee Tigers, you can now legally purchase wine and spirits at The Sewanee Inn.  The following is our compilation of the new watering holes, based on the best information available:

Blackberry Farms (expansion) Buckhorn Inn, outside of Gatlinburg Center for Southern Folklore, Memphis Clayton Center for the Arts, Blount County East Fork Stables, Jamestown Laurel Cove, College Grove Majestic Theatre, Chattanooga Meadow Creek Mountain Rustic Resort, Cocke County Pine Crest Golf Course, Gibson County Richmont Inn, Townsend, Tennessee Roxy Regional Theatre, Clarksville The Sewanee Inn, Sewanee Slingo Marina on Center Hill Lake

In a departure from tradition, the Majestic Theatre in Chattanooga appears to be the first for-profit theater that is licensed for wine and liquor service.  The handful of other theaters previously legalized for the sale of alcohol are all nonprofit.

Premier Tourist Resorts Gain Liquor Licenses

As usual, the legislature added a long list of premier-type tourist resorts and other special legislation to allow liquor licenses in places that are otherwise dry.  Rejoice Sewanee Tigers, you can now legally purchase wine and spirits at The Sewanee Inn.  The following is our compilation of the new watering holes, based on the best information available:

Blackberry Farms (expansion) Buckhorn Inn, outside of Gatlinburg Center for Southern Folklore, Memphis Clayton Center for the Arts, Blount County East Fork Stables, Jamestown Laurel Cove, College Grove Majestic Theatre, Chattanooga Meadow Creek Mountain Rustic Resort, Cocke County Pine Crest Golf Course, Gibson County Richmont Inn, Townsend, Tennessee Roxy Regional Theatre, Clarksville The Sewanee Inn, Sewanee Slingo Marina on Center Hill Lake

In a departure from tradition, the Majestic Theatre in Chattanooga appears to be the first for-profit theater that is licensed for wine and liquor service.  The handful of other theaters previously legalized for the sale of alcohol are all nonprofit.

Alcoholic Beverage Group Provides Update on New Liquor Laws

Distilleries: The legislature allowed distilleries to charge for tours and tastings conducted in connection with tours.  Previously, no charge could be required for tastings, which prevented distilleries from requiring patrons to attend a paid tour in order to participate in tastings.  The legislature also authorized distilleries to provide samples for marketing purposes, after all taxes have been paid, and tweaked the location restrictions.

Collector License: The legislature created a new license for collectors of commemorative bottles that contain alcoholic beverages.  Readers may recall the seizure of collectable Jack Daniels bottles a few years ago, which drew national attention when it appeared that the seized inventory would be destroyed.  The new collector license legalizes the practice that led to the seizure.

Transportation: The laws concerning the amounts of alcohol one can legally transport through dry and other counties were modified to uniformly legalize transportation of less than five gallons of alcoholic beverages or wine for personal or household use.  Previously, the amounts varied and were arguably in conflict.

Lakewood: The legislature passed a technical correction that allows liquor stores licensed within the area formerly known as Lakewood to be issued renewal licenses and to stay in business.

Alcoholic Beverage Group Provides Update on New Liquor Laws

Distilleries: The legislature allowed distilleries to charge for tours and tastings conducted in connection with tours.  Previously, no charge could be required for tastings, which prevented distilleries from requiring patrons to attend a paid tour in order to participate in tastings.  The legislature also authorized distilleries to provide samples for marketing purposes, after all taxes have been paid, and tweaked the location restrictions.

Collector License: The legislature created a new license for collectors of commemorative bottles that contain alcoholic beverages.  Readers may recall the seizure of collectable Jack Daniels bottles a few years ago, which drew national attention when it appeared that the seized inventory would be destroyed.  The new collector license legalizes the practice that led to the seizure.

Transportation: The laws concerning the amounts of alcohol one can legally transport through dry and other counties were modified to uniformly legalize transportation of less than five gallons of alcoholic beverages or wine for personal or household use.  Previously, the amounts varied and were arguably in conflict.

Lakewood: The legislature passed a technical correction that allows liquor stores licensed within the area formerly known as Lakewood to be issued renewal licenses and to stay in business.