Hank's IP Brew — Issue #3

Howdy, y'all.

This week, both stories are really about the same thing: what you thought was private, and whether it actually is.

One's about AI. One's about NIL. Both are going to surprise people who weren't paying attention.

Let's go.

Here's a scenario. You're having a legal dispute — a contract gone bad, someone stealing your content, whatever. Before you call your attorney, you open ChatGPT and start working through the situation. You draft some notes. You outline your theory of the case. You send it all to your lawyer.

Feels reasonable, right? Smart, even.

In a February ruling, Judge Jed Rakoff of the U.S. District Court for the Southern District of New York handed down a ruling that should make everybody rethink that workflow.

The case involved a client who had used a commercially available AI tool to generate documents related to his legal matter, then shared them with his attorney. Judge Rakoff ruled that those documents were not protected by attorney-client privilege — and not protected by the work product doctrine either. The court's reasoning: when you use a public AI platform to generate content, there's no reasonable expectation of confidentiality. The AI company can see your prompts. The documents don't stay between you and your lawyer. They don't carry the privacy assumptions that make privilege work.

The result: those AI-generated materials were fair game for the other side to demand in discovery.

What this means for you:

Attorney-client privilege exists to give you a safe space to be honest with your lawyer. You can tell your attorney things you'd never tell anyone else, because the law protects that conversation. The moment you route your legal thinking through a public AI tool before it reaches your lawyer, you may be punching a hole in that protection.

A few practical rules of thumb coming out of this:

If you want to use AI to help you think through a legal problem, talk to your lawyer first about how to do it. Some law firms now have enterprise AI tools — systems that aren't public, that were deployed at the direction of counsel, and that carry more defensible confidentiality protections. That's a different situation.

If you've already sent AI-generated materials to your attorney in an active dispute, mention it. Don't assume it's been thought through.

And if you're just in early research mode — not yet in a legal dispute, just trying to understand your options — AI tools are genuinely useful for that. The risk goes up when you're in active litigation and the other side can demand to see what you produced.

One ruling from one court isn't the final word. But Judge Rakoff is one of the most respected federal judges in the country, and this ruling is already being cited by practitioners across multiple firms. It's worth knowing about.

When you sign a deal at most private companies, the terms stay between you and whoever's on the other side. That's normal. That's how contracts work.

But if you're an athlete at a public university in Wisconsin — or several other states — your NIL contract may be subject to open records laws. That means a journalist, a rival school, or really anyone can file a public records request and potentially get access to the details of your deal. How much you're making. Who you're working with. What the terms are.

The Wisconsin legislature is trying to change that. A bill that just sailed through the Wisconsin Assembly would exempt NIL contracts — and revenue-sharing agreements — from the state's public records law. The bill also includes a disclosure requirement: athletes would have to report third-party contracts before signing, and deals that conflict with Board of Regents policies would be off-limits.

The argument for it is pretty intuitive. Athletes are negotiating commercial deals. Their contract terms are competitive information. Making those terms public could undermine their negotiating position, tip off competing schools, or expose them to targeting by agents or brands who know exactly what they've already agreed to.

The argument against it gets more complicated. These are public universities, funded in part by taxpayers. Revenue-sharing payments to athletes are being made by institutions that receive public money. Transparency advocates argue that exempting those payments from public records creates accountability gaps that shouldn't exist at state schools.

Here's what I'd tell any athlete regardless of how the Wisconsin bill ends up:

Assume your contract might be public. Not because it definitely will be — but because the legal landscape is unsettled and varies by state, and building that assumption into your negotiation protects you. Don't agree to terms you'd be embarrassed to have on the front page of the student newspaper.

More practically: the disclosure requirements in bills like this are where athletes get tripped up. Under the proposed Wisconsin law, athletes would need to flag third-party deals before signing. We saw at Nebraska what happens when athletes don't stay current on their reporting obligations. The reporting rules exist whether or not the underlying contracts are public.

The privacy fight in NIL is going to keep going. Wisconsin probably won't be the last state to take this up. Watch for similar legislation in other states with major public athletic programs — the incentives are clear on both sides.

See you next time,

Hank

P.S. If you found this useful, send it to a creator or athlete who'd get something out of it. That's the whole idea.

About Hank's IP Brew

Creator IP Academy helps creators understand and protect their intellectual property. Got a question? Reply to this email.