Tuesday, April 30, 2013

Are you using a domain name with someone else's trademark in it?

Cybersquatting is the act of registering, trafficking in, or using a domain name of a trademark or business name with the bad faith intent to profit from that activity. Some cybersquatters use close variants of a trademark, which is commonly called "typosquatting." In the late 1990s and early 2000s, cybersquatting was more common than today, because the Internet and company websites were still relatively new. But today, you do still occasionally hear about incidents of cybersquatting. With the expansion of generic top-level domains (gTLDs), the FTC and trademark owners are concerned about a re-emergence of cybersquatting and fraudulent schemes.

I occasionally hear of someone registering a domain name with someone else's trademark in the hope of making money down the road. This is the essence of bad faith intent to profit, which is prohibited by the Anticybersquatting Consumer Protection Act. If you are using a domain name or close variant to complain about a company, consisently with the First Amendment, you may be able to get away with it. But if you are using a domain name with someone else's trademark in order to make money, you likely will not get very far.

Monday, April 29, 2013

Agricultural and harvester's liens in four paragraphs.

When people think of liens, they think of mechanic's liens. There are a number of other liens, two of which are agricultural and harvester's liens. Neither can be completely summarized in four paragraphs. Very generally, an agricultural lienor is a supplier and a harvesting lienor is a "farmhand." Agricultural liens have a broader scope than harvester's liens. An agricultural lien is an interest in farm products or livestock securing payment for goods or services provided in connection with a debtor's farming operation (and a few other circumstances mainly dealing with the rental or lease of land).

Harvester's liens apply only to "harvesters." Harvesters bale, chop, combine, cut, husk, pick, shell, stack, thresh and windrow crops. Under Iowa law, crops include corn, soybeans, hay, straw, and crops produced on trees, vines or bushes. If a harvester works on a farm, they have an agricultural lien on the crops harvested for the reasonable value of the services they provided. As with other liens, the harvester's lien needs to be "perfected." In order to perfect a harvester's lien, the lienor needs to file a financing statement. The lien becomes capable of perfection when the services are rendered. So in theory, the moment you have provided harvesting services for a farmer, you have a lien capable of perfection for the reasonable amount of the services provided.

If you are a farmer and do not know whether you will get paid or not, you only have 10 days during which you must perfect your harvester's lien. So, even if you think the person on whose farm you worked ("farmowner") will eventually pay you, it might behoove you to file a harvester's lien to protect your interest.

Moreover, a perfected lien protects your rights in the event the farmowner becomes insolvent after you worked for them but before you get paid. If you do work for the farmowner and he or she becomes insolvent, your rights might be foreclosed because your lien is not perfected. The same is true for the agricultural lienor. If you have an agricultural lien and do not "perfect," you are not necessarily entitled to anything in the event that the person against whom you have the lien becomes insolvent.

Cable TV and bundling channels.

What happened:
A New York cable provider, Cablevision, sued Viacom for antitrust violations in connection with its practice of wholesale bundling, in which it forces cable providers to purchase packaged channels owned by the wholesaler.

How it affects you:
Wholesale and retail bundling of TV channels may both violate antitrust law. Wholesale bundlers sell TV channels to retailers. Retail bundlers sell TV channels to consumers. The current lawsuit focuses on wholesale bundling, but could have implications for retail bundling, including eventually allowing consumers to select the channels they want. All readers of this blog who have cable service inevitably have access to cable channels they never watch. This is retail bundling, and there are two primary ways retailers bundle their channels. Sometimes it is done by genre of channel. For example, there are sports packages that include ESPN, FOX sports and CBS sports channels. Sometimes channels are bundled by wholesale company. For example, Viacom owns Comedy Central and MTV, and those are often packaged together.

In both wholesale and retail bundling, consumers are forced to buy channels they do not want. More investigation is needed to ultimately determine whether the practice violates antitrust law. Bundling entails the provision of more than one item or service to a customer as a package, in which the purchase of one item is conditioned on the purchase of the other or others. The practice is inherently suspect for two primary reasons. First, it requires the customer to purchase one or more items or services they do not want or need. Second, it creates a situation in which predatory pricing may arise. If there are multiple items or services, the bundler can offer discounts on the product with high demand, and then spread the cost of that item or service over the remaining bundled items.

In the cable TV context, there is no current indication of predatory pricing, because there is no indication that individual channels are being offered at deep discounts but conditioned on the purchase of other higher priced channels. Both wholesale and retail bundling, however, are suspect and worth more investigation. If the procompetitive justification outweighs the anticompetitive effects, then wholesale bundling will not run afoul of antitrust law. If the anticompetitive effects outweigh the procompetitive justification, wholesale bundling will violate antitrust law. We do not have enough information to make a sweeping announcement whether the practice does or does not violate antitrust law. Fortunately, the practice is getting examined. We will have to wait and see about retail bundling.

Mechanic's liens in five paragraphs.

I must note that the entirety of the law of mechanic's liens cannot be summarized in five paragraphs. This is just a primer on the law of mechanic's liens -- in Iowa -- although general principles of lien law typically translate across a multitude of jurisdictions. There are a number of requirements in order to file and enforce a mechanic's lien, and the specifics differ among jurisdictions. You are entitled to file a mechanic's lien if you provided labor or material for, or performed labor on any structure on a given parcel.

In Iowa, a builder-owner or general contractor must post notice of commencement of work within 10 days of beginning work in order to properly file and enforce a mechanic's lien. The notice is only effective as to work and material provided after it is posted. If you are a subcontractor and the owner or general contractor failed to post such notice, you can cure the defect by posting it in conjunction with the preliminary notice that is required to be posted of all subcontractors.

If you have successfully navigated the preliminary requirements and are able to file a mechanic's lien, the person against whom you filed the lien can provide written demand for you to bring suit to foreclose the lien within 30 days. If you do not bring suit to foreclose the lien within 30 days, then the lien is forfeited.

If written demand to foreclose the lien is not provided, you do not have unlimited time to enforce it. You have two years plus ninety days from the last date on which labor or material was provided to foreclose the lien. Additionally, you will need to "perfect" the lien before you can foreclose.

If collateral is provided as security before work is complete, you cannot file a mechanic's lien. If security is provided after work is complete, you can still file a mechanic's lien. As you can see, there are nuances in the law of mechanic's liens, and these examples are illustrative, not exhaustive. If you do not do it right, you may end up forfeiting your right to file and foreclose the lien.


International and domestic sales of goods.

It is increasingly common to make transactions with businesses in other countries. If you are purchasing goods not for personal or household use, Article 2 of the Uniform Commercial Code ("UCC art. 2") or the United Nations Convention on Contracts for the Sale of Goods ("CISG") apply.

All 50 states have enacted the UCC. As of December 2012, 78 nations ratified the CISG. Wikipedia, United Nations Convention on Contracts for the Sale of Goods, http://en.wikipedia.org/wiki/United_Nations_Convention_on_Contracts_for_the_International_Sale_of_Goods (last visited February 21, 2013). Parties can generally contract around UCC art. 2 or the CISG, as long as other requirements for a valid contract exist. There are some things that cannot be varied by agreement, such as good faith, diligence, reasonableness and care. (If a party enters a contract in bad faith with the intention to take advantage of the other party, the other party would likely have a cause of action for fraud.)

In many cases, the parties do contract around the provisions of the UCC or CISG. In international transactions, when the parties are both contracting states and the contract is silent regarding choice of law, the CISG applies.

There are minor differences between the two. CISG art. 18 provides that acceptance of an offer is valid when it reaches the offeror. In American law, acceptance is valid when dispatched, when that is the method by which acceptance is to be effectuated. CISG art. 19 provides that a reply to an offer that appears to be an acceptance but adds additional terms or limitations operates as a rejection and counteroffer. UCC art. 2 provides that such a reply operates as an acceptance, unless the acceptance is expressly conditioned on the adoption of those terms or limitations in the contract. CISG art. 11 does not require contracts for goods over $500 to be in writing. In American law, the Statute of Frauds and the UCC require such a contract to be in writing, electronically or otherwise.

There are no likely changes in the foreseeable future to either the UCC or CISG, so any practical differences between the two are likely to remain minimal. But there are situations when the two differ, as noted above, in which case legal consequences can vary quite widely.

Price fixing and the Apple e-books litigation.

Apple, Inc. is the only one of six defendants remaining in a price fixing suit alleged by the Department of Justice. All other defendants have settled. The other defendants were book publishers who contracted with Apple when Apple began offering iBooks with the iPad, to compete with Amazon's Kindle. Before the introduction of the iPad, the publishers provided their books to Amazon, and Amazon would then sell the e-books for $9.99. Foer and Patterson, American Antitrust Institute, E-books and Amazon, http://antitrustinstitute.org/~antitrust/sites/default/files/Ebooks%20and%20Amazon.pdf (last visited February 20, 2013). Apple alleges that Amazon's $9.99 price was predatory, but Amazon is not a party to the case. Amazon might be investigated for predatory pricing, but I have seen nothing authoritative substantiating the proposition that Amazon will be investigated -- only that they should be. Id.

The $9.99 price at which Amazon sold e-books prevented competitors from entering the market, and Apple contracted with the other defendants to allegedly fix prices in order to force Amazon to raise its price. The publishers threatened to withhold well over half of their fiction titles from Amazon in order to coerce Amazon to raise its prices. Eventually, Amazon agreed to adopt the publishers' price structure. Id. Consumers were harmed, because the prices of e-books rose.

It will be interesting to see how the case is resolved. The trial is scheduled for June 5, 2013. Apple is a corporate giant. Many companies do not have the resources that Apple has in fighting the government in an antitrust suit.

Courts take several steps in conducting a price fixing analysis. First, the court asks whether alleged price fixing is illegal on its face. If it is, the case is over and the defendant loses. If it is not, the second step is for the plaintiff to show the anticompetitive effects of the arrangement. "Anticompetitive effects" are the bad things that happen in the market as a result of the putative price fixer's conduct.

The third step is for the defendant to provide a plausible procompetitive justification. A "procompetitive justification" is when conduct literally constituting price fixing has a good reason for the restriction. The good reason for the restriction must benefit competition and the market.

If the defendant cannot provide a plausible procompetitive justification, the case is over after the second step. If the defendant can provide a plausible procompetitive justification, the fourth step is to check whether a very obvious less anticompetitive alternative exists. If there is, the defendant will be required to provide a very good explanation as to why it did not adopt the obvious less anticompetitive alternative. If the defendant provides a good explanation as to why it did not adopt the less anticompetitive alternative, the final step is a "Rule of Reason" balancing analysis.

The fact-finder, which is usually the jury, typically decides the outcome in a Rule of Reason analysis. It is a balancing of the anticompetitive effects and procompetitive justification. If the anticompetitive effects outweigh the procompetitive justification, the plaintiff wins. If the procompetitive justification outweighs the anticompetitive effects, the defendant wins. In antitrust law, Rule of Reason balancing is something of a "no holds barred" inquiry. There is no roadmap or set of factors that a court consults to determine whether the procompetitive justification outweighs the anticompetitive effects, or whether the anticompetitive effects outweigh the procompetitive justification.

Price fixing requires concerted action. Obviously, Amazon "fixed" its $9.99 price. Since it was a single company, Amazon cannot be guilty of price fixing. When Apple entered the e-books market, Amazon reportedly had about a 90 percent market share. Predatory pricing occurs if the prices complained of are below a measure of a rivals' costs, and the alleged predator had a reasonable probability of recouping its investment from below-market pricing. If a defendant prices its goods at or below its average variable cost, there is a very heavy burden on the defendant to show that their prices are not predatory. To have a reasonable probability of recouping one's investment, the defendant practically has to have monopoly power.

With a 90 percent market share, id., Amazon certainly had monopoly power when Apple entered the e-books market with the iPad. If Amazon engaged in predatory pricing, consumers would have been harmed, because the predator has to eventually raise prices in order to recoup its investment. Since Amazon is not a party to the suit, we do not know whether Amazon is in fact engaging in predatory pricing. Those are just the allegations.

When Apple and the other publishers coerced Amazon to adopt their pricing structure, the price of e-books rose, harming consumers. If the Department of Justice wins the case, which is probable, Apple's ability to compete in the e-books market is diminished. This would essentially give monopoly power back to Amazon, which could harm consumers again if it engages in predatory pricing.

The case has not been tried yet, so we do not how many steps the court will need to dispose of the case. The biggest question is whether Apple's conduct will get Rule of Reason treatment, or whether the government will win after Apple's asserted procompetitive justification regarding Amazon's conduct. I would be surprised if Apple ends up winning. If they do, it will certainly be in a Rule of Reason analysis.

Registering your work of authorship with the Copyright Office.

In another post, I discussed the low-bar for copyright registration. In short, as long as your work is "fixed" and "original," it can be protected. Even without registration, your work can be copyrighted work, but there are clear advantages to registering your work.

A copyright is available for the expression of a work, but not its underlying ideas. Here is a list of the types of works that can be copyrighted. In order to copyright your work, you need to file it with the Copyright Office. To properly file, you need to fill out the application, make payment, and deposit your work. Some works can be deposited online, and some require hard-copies. Even when a hard-copy is required, the application without deposits of work can be completed online. After filing, it takes a little while before you get the registration certificate. So, prepare for the process to take several months.

Friday, April 26, 2013

On the University of Oregon's trademark dispute with Okoboji (Iowa) High School.

A lot of trademark disputes do not end this easily. Okoboji (Iowa) High School uses the University of Oregon's trademark "O" for its school's athletic teams. The university wanted the high school to change its logo, in order to protect the distinctiveness of the trademark. Okoboji has agreed to comply.

There are schools that use university trademarks, but they pay a licensing fee in order to use the mark. Evidently, there was no licensing fee here, or Oregon changed its mind.

"Eat mor chikin" vs "Eat More Kale," in a trademark dispute.

This is a good overview of how trademark disputes sometimes go when involving a small company and a big company with a federally registered mark. The small company uses "Eat More Kale" in commerce, and has tried to obtain a federal registration on the mark. Since at least 2006, Chick-fil-A has tried to get the company to stop using the mark. Most recently, the company was preliminarily denied registration of the mark, on the basis of a likelihood of confusion with Chick-fil-A's mark.

Ultimately, Chick-fil-A will likely win, if nothing else because of the coffers available to it. Big companies can sustain long legal battles much better than small companies can. The company contends that it will continue selling tee shirts with the "Eat More Kale" mark on it, which may result in an infringement lawsuit by Chick-fil-A. At this point, Chick-fil-A is just opposing the company's registration. If the company does not get the registration and continues using the mark, Chick-fil-A likely will end up suing for infringement.

Thursday, April 25, 2013

Use of a trademark "in commerce" and the redux of the Johnny Football example.

Elsewhere, I briefly discussed the requirement that a trademark must be used in commerce to be valid. In the linked post, I provide that Johnny Manziel would not be able to obtain valid trademark rights under U.S. law until he leaves college, because he would have to use his nickname "Johnny Football," in commerce. Using the nickname in commerce would sacrifice his college football eligibility, because he would be generating money from his likeness in violation of NCAA rules. Accordingly, the prudent thing to do is for Manziel's attorney to an file intent-to-use application, which would not sacrifice his eligibility. An intent-to-use application provides that the mark owner has a legitimate intent to use the mark in commerce in the near future (6-24 months).

If you think you have a catchy nickname like Manziel, it needs to be used on or in connection with goods and services to be protected as a trademark. Otherwise, it is just a nickname, and anyone can take it and use it in commerce for his or her own trademark.

Wednesday, April 24, 2013

The "College Football Playoff" and Intent-to-Use trademark applications.

You can determine a lot about a state of affairs by searching the Trademark Electronic Search System (TESS) database on the USPTO website. Just yesterday, it was announced that the name of the new four-team playoff to decide major college football's national champion beginning in the 2014 season, will be called the "College Football Playoff." The name's simplicity confused some when they heard that it was trademarked on March 28, 2013.

Well, it was sort of trademarked on March 28, 2013. The mark owners, BCS Properties, LLC (BCS), submitted intent-to-use service mark and trademark applications on that date. I briefly discussed intent-to-use applications in the fourth paragraph of this post. Basically, the BCS said it has a legitimate intent to use "College Football Playoff" on goods and services, but that it has not done so yet.

The confusion over the name was how such a plain term can be trademarked. If a mark has secondary meaning, it can be trademarked so long as it is not "generic" or "merely descriptive." Since "College Football Playoff" has been referred to in recent years as the college football playoff, it already has secondary meaning among consumers. Accordingly, the mark can be registered as both a service mark and trademark when the BCS first uses "College Football Playoff" in commerce.

The BCS must use "College Football Playoff" in commerce before the expiration of six to 24 months, depending on how many extensions the applicant files. Given that the first playoff game will be played within two years, this will not be difficult.

Tuesday, April 23, 2013

Collegiate conference realignment and a horizontal restraint of trade.

In a previous post, I defined a horizontal restraint of trade as "concerted anticompetitive conduct by competitors in the distribution chain in order to eliminate, lessen, prevent or foreclose competition from another competitor or competitors." The definition is apt in the context of collegiate conference realignment. Recently, member institutions have been granting their media rights to the conferences with which they are affiliated, which may be such a horizontal restraint.

A grant of media rights is when a conference member agrees that all of its television revenue will go to the conference with which it is currently affiliated for X number of years. This holds true even if that school is no longer a member of the conference when the period expires. Effectively, the grant makes it cost-prohibitive for a school to change conferences during the grant period, because the school would forfeit all of its television revenue to its former conference for the remainder of the grant.

Grants were originally implemented to stabilize conference membership. They have done so. At its simplest, an antitrust violation occurs if the anticompetitive effects of conduct outweigh any plausible procompetitive justification. Some conduct is so anticompetitive that there is no need to weigh the conduct against the procompetitive justification. So, the procompetitive justification of stabilizing conference membership would be weighed against the anticompetitive effects.

A grant of rights is anticompetitive conduct, because it prevents a school from freely changing its conference affiliation to make the most money. The conduct is by competitors, because the conferences are in competition with each other, and the schools are in competition with each other. Finally, the goal of the conduct is to lessen competition among competitors. Thus, a horizontal restraint is effected.

Whether a grant of rights is ultimately enforceable depends on how any procompetitive justification would be weighed against any anticompetitive effects, assuming the grant is not per se illegal. If the procompetitive justification of conference stability outweighs the anticompetitive effects of a grant of rights, the grant would be enforceable. If not, the grant would be unenforceable. It is also likely that the conference in question would argue for some kind of collective bargaining exemption, as is done with the statutory and nonstatutory labor exemptions.

We may never see this in court, because a school would need to challenge the grant of rights in the first place. It would be a risky proposition, given the consequences of losing in court. If we see such a challenge at all, it would be near the expiration of the grant period, because less money would be at risk.

Monday, April 22, 2013

Integration clauses in form contracts.

In earlier posts, I discussed things to look for in a basic contract, and tips for when you contract with larger companies. Those are all good, but there are a few other items that you should know about when contracting. This post will introduce integration clauses, which are found in most contracts. An integration clause is "boilerplate," which means that it is found in almost all form contracts without negotiation.

Sometimes, an integration clause is prominently noted in a contract. Sometimes it is not. It typically states that any oral or other agreement between the parties is ineffective, unless it is contained in the signed contract. Modifications to a contract after it is signed may still be effective, depending on the facts and the law of the jurisdiction in which you are located. An integration clause is only effective for agreements leading up to and at the time of the contract's signing.

Friday, April 19, 2013

The RG3 trademark dispute.

This is interesting. Robert Griffin III is seeking a federal trademark registration on "RG3." The registration is opposed by a motorcycle parts company that claims use of "RG3" since 1999. A trademark registration is published for opposition before it becomes official. If there is no opposition or the opposition is not successful, the mark becomes federally registered.

The motorcycle company is seeking to prevent Griffin's registration, but I do not have a lot of sympathy for it. It did not file a trademark application until 2013, a year after Griffin filed his application. The company had almost 15 years during which it could have filed an application. A term like "RG3" would not have required secondary meaning to be registrable, because it is inherently distinctive. It would have been registrable sua sponte -- right away.

When the company did file its application, it only filed for the class of goods in which it opposes Griffin's application. So, the company did not file its application for the bike parts it actually makes, but only for the "RG3" merchandise it seeks to sell. It is safe to say that the company's motives are not genuine.

The contention is over the class of goods specified when filing a trademark application. The USPTO does not allow trademark registrations in the same class of goods. Both parties want to sell "RG3" merchandise. If there are two entities that want to sell "RG3" shirts, consumers will be confused when they encounter those shirts in the marketplace. Consumers will not know if a given "RG3" shirt refers to the motorcycle company or the athlete.

Since the motorcycle company used the mark since 1999 (or so it says), it might be allowed to use the mark in a limited geographic area based on prior use. However, that is determined in court, not by the USPTO. A trademark is prima facie valid throughout the entire United States. So, if the motorcycle had any rights to use the mark at all, it would have to spend a lot of money in trademark litigation to determine the extent of its rights. Plus, the company would have to show that it sold the merchandise since 1999, not just that it used the "RG3" name on its tools. This situation underscores the importance of getting a federal registration on your business name.

With business entities, what does the "P" mean in PLLC and P.C.?

I regularly get asked what the "P" means in business names (i.e., PLLC, P.C.), and why some businesses have it while others do not. In short, it means "professional." If you are in a profession that requires a license to practice, you can generally form a professional company. In Iowa, which adopted the Uniform Limited Liability Company Act, practitioners in the following professions can form a PLLC or P.C.:

  • certified public accountancy
  • architecture
  • chiropractic
  • dentistry
  • physical therapy
  • physician assistant
  • psychology
  • professional engineering
  • land surveying
  • landscape architecture
  • law
  • medicine and surgery
  • optometry
  • osteopathic medicine and surgery
  • accounting
  • podiatry
  • real estate brokerage
  • speech pathology
  • audiology
  • veterinary medicine
  • pharmacy
  • nursing

A licensed marital and family therapist can form a PLLC, but not a P.C.

Unlike an LLC or regular corporation, a professional company cannot engage in business activities outside the specific profession in which it is licensed. For instance, a law practice formed as a PLLC or P.C. cannot do anything but practice law. An LLC or corporation, on the other hand, can be formed for any lawful purpose.

PLLCs and professional corporations must be completely managed by individuals licensed to practice in the profession the company practices. The same is not true for LLCs and regular corporations. Otherwise, LLCs and corporations are very similar to PLLCs and professional corporations.

Thursday, April 18, 2013

Pennsylvania governor's antitrust lawsuit is without merit and illustrates the "antitrust standing" requirement.

Oral argument is set for May 1, 2013, in Pennsylvania governor Tom Corbett's antitrust lawsuit against the NCAA. The oral argument is over a motion to dismiss, filed by the NCAA against the governor's claim. Corbett is seeking to overturn and remove the penalties levied against Penn State University in connection with the Jerry Sandusky sex-abuse scandal. Penn State signed a consent decree with the NCAA, so it is interesting that the governor is bringing suit. Simply put, Corbett's lawsuit has virtually zero chance of success. In fact, I would be surprised if it is not dismissed after May's oral argument.

I discussed antitrust standing in a previous post. It is hard to see how the governor would have standing to bring the suit in the first place. To have standing, the governor must have suffered an antitrust injury due to anticompetitive conduct. The state must have suffered the type of injury that the antitrust laws were designed to prevent. Corbett argues that the NCAA's penalties against Penn State are anticompetitive. For a multitude of reasons, Corbett's argument has no merit.

For one, the antitrust laws protect competition, not competitors. In the context of collegiate athletics, Penn State is a "competitor." Harming Penn State does not harm other schools. Second, Penn State would seemingly have to bring the lawsuit, not the governor. Even though Penn State is a state-funded institution, it is hard to fathom how the governor is harmed by the penalties that must be paid by the athletic department. Third, consent decrees are valid and enforceable in court. Fourth, the NCAA is a single-entity that promulgates rules for effective competition. In order for an antitrust violation here, concerted action would be needed. "Concerted action" requires multiple entities. So, it would have to be other schools that made the decision to penalize Penn State, which is not true. The NCAA levied the penalties against Penn State. The NCAA is pretty clearly a separate entity from the schools that comprise its membership.

This would not be the first time the governor has been opportunistic. Eight days before Jerry Sandusky was indicted, he and his staff rented hotel rooms in State College, so he could be front-and-center when the Sandusky story broke. So, bringing a lawsuit without merit is about par for the course for him.

Wednesday, April 17, 2013

The importance of tangible evidence.

Evidence in the law is like a playbook in football. The more evidence you have, the more plays you can run. If you do not have evidence, there is a limit on what you can do. Not all evidence has to be good evidence; it just needs to give context to a situation. Although oral testimony is evidence, written or otherwise tangible evidence is much better to have.

In daily life, it is best to get things in writing when possible, even if you do not anticipate being in litigation. It is possible that you might end up in litigation, or otherwise find yourself in a dispute. Written evidence is as powerful in an informal dispute out of court as it is in formal court proceedings. Court procedure mirrors informal dispute resolution procedure. Both parties are heard and put on evidence. Then, a decision is made. This is the same for formal and informal proceedings.

Tangible evidence is important, because it is common for people to think that they can say something in court that they heard someone else say, but this is usually not true. Such is hearsay. There are exceptions, but those are relatively rare. Basically, if someone else said it, you cannot testify to their statement in court.

People change their minds. If you remember someone saying something, they may not also remember it. Accordingly, they may not testify for you. They may not want to get involved as a witness in a legal dispute. They may forget what they said. They may remember it differently than you do. This is very common. As a result, valuable evidence that could be in writing is lost. Accordingly, your case suffers.

So, get tangible evidence whenever you can. If you are given a special deal, or exception from standard procedure, whether it is from the cable company, bank, auto shop, etc., it is prudent to ask for it in writing. The individual to whom you are speaking will not want to do this. It may allay some of that person's fears to say that you are not trying to get them in trouble and that your request is not directed toward them at all. You simply want to have something in writing in the event that you talk to another person from the same company who does not know of your agreement. If you follow this principle regarding tangible evidence, it could reduce frustration when you find yourself in a dispute.

Tuesday, April 16, 2013

Recent U.S. Supreme Court case has implications for NCAA student-athlete likeness antitrust litigation.

In a recent case, the U.S. Supreme Court made it more difficult for the student-athletes in the NCAA student-athlete antitrust litigation to obtain class certification. In an earlier post, I discussed the requirements for a class action.

The Comcast ruling means that the student-athletes in the NCAA case will need to be able to prove damages with specificity; not necessarily at the class certification stage, but later. It just needs to be shown at the class certification stage that damages are ascertainable. Comcast poses a problem, because the proposed subclasses in the NCAA case (current and former basketball and football players) contain players of vastly different talents and potential licensing values. Since some of the players' licensing values are so disparate from others, it might preclude class certification because of the difficulty or impossibility of proving damages.

Monday, April 15, 2013

Some things to look for in a basic contract.

I previously discussed contracting with larger companies. That information applies here, but there some additional things to note when signing a contract.

1. Companies generally disclaim implied and express warranties.

If a company has a written warranty, they will probably disclaim any implied and express warranties to the extent permitted by law. The company will not be able to do this all the time, because implied warranties cannot always be disclaimed. Also, express warranties sometimes override a written disclaimer, if the disclaimer is not conspicuous enough for the customer to reasonably notice it.

2. Consequential damages are likely excluded.

When you contract for product A, consequential damages are unforeseeable damages that result to products B, C, and D. They are damages beyond the items or services for which the parties contracted. From a merchant company's perspective, these damages are variable for each customer, because not all customers have the same items in their home or business that are susceptible to damage. For that reason, it is prudent for businesses to exclude consequential damages.

3. Severability.

Severability is the concept that if a court of law determines one part of the contract to be void or unenforceable, the remainder of the contract will remain in effect. Companies usually put this provision in a contract.

4. If you have much less bargaining power than the company with whom you are contracting, the contract terms must be within your reasonable expectations to be enforceable.

This is called an adhesion contract. Whether a contract provision is within your reasonable expectations is objectively determined. In other words, it does not matter if you were actually aware of a given contract provision; it matters whether a reasonable person -- as determined by a court -- would expect the provision to be part of the contract.

Friday, April 12, 2013

All about trade secrets.

Earlier this week, I posted my trademark compendium. On this Friday afternoon, I thought I would do the same for trade secrets:

- Introduction to Trade Secrets.
- Part 2, Introduction to Trade Secrets.
- Trade secrets and inventiveness.
- What is an example of a trade secret?
- If you think you have a trade secret, you must protect it.

The law of trade secrets is interesting, because it is governed by state law. Most states have enacted the Uniform Trade Secrets Act, but the lack of federal governance differs from copyrights, patents and trademarks. The latter are governed by the Copyright Office and Patent and Trademark Office, respectively.

Thursday, April 11, 2013

The NFL vs. 4,200 former players with head injuries.

This is a good overview of the lawsuits involving the NFL and a group of 4,200 former players on the damaging effects of head trauma. The plaintiffs, who are former players, allege that the NFL neglected to publicize and inform them of just how damaging concussive brain injuries are. The NFL is arguing that the issue is covered by the collective bargaining agreement, which would likely prevent the players from bringing suit. It will be interesting how this one turns out, because it will help determine the limits of what constitutes a "collectively bargained agreement."

Regardless of what happens at the district court-level, this is likely to be appealed.

Wednesday, April 10, 2013

The basic anatomy of a civil lawsuit.

Civil lawsuits arise in a number of ways, depending on the claim or claims involved. They can be based on a contract, injury, or something else. In any civil suit, there is always a dispute between the parties. Many civil suits begin with an amicable relationship that subsequently deteriorated.

If you have been involved in such a dispute, you probably tried to resolve the matter without resorting to the courts. To many people, resorting to the courts is anathema. As it should be. The legal process should not be used to get someone to do your bidding. It should only be used when you have exhausted all other options.

If a lawsuit is required, the petition or complaint is prepared and filed. This is the first "pleading" in a civil action. It outlines the plaintiff's basic understanding of the facts of the dispute and the legal basis on which the plaintiff is proceeding. A set number of days after the defendant is provided with notice of the suit, the defendant must respond with a motion or answer.

The discovery phase begins after the petition or complaint, and motion or answer. Discovery is where the parties gather evidence to support their case. To do this, attorneys use interrogatories, requests for admission, requests for production of documents, depositions, and combinations of those. In effect, interrogatories request essay answers to specific questions. In effect, requests for admission ask for multiple choice answers (admit or deny) to specific questions. Requests for production ask for documents and other tangible information that the other party has. A deposition is basically testimony outside of a courtroom. A deposition is to a trial as a dress-rehearsal is to a performance of a play or musical. Your deposition testimony needs to match your trial testimony, or you will be called out on it.

Discovery takes a while. Even at its quickest, the process will ordinarily take a few months. If the case proceeds to trial, there will be deadlines for submitting evidence and a list of witnesses you intend to use at trial. It is imperative that you remain in contact with your attorney during this time. If you do not, or if you do not provide your attorney with the information he or she needs, you may not be able to use that evidence or those witnesses at trial.

Tuesday, April 9, 2013

All about trademarks.

I have written about trademarks in a number of previous posts. For reference, here they are:

- Introduction to trademarks.
- Introduction to trademarks, part 2.
- On deceptive and deceptively misdescriptive trade names.
- Deceptive and deceptively misdescriptive marks clarified.
- More clarification on deceptive and deceptively misdescriptive trademarks.
- On primarily geographically misdescriptive trade names.
- Secondary meaning in trademarks.
- The conflict between U.S. trademark law and NCAA rules: The "Johnny Football" scenario.
- On trademark infringement.
- The importance of conducting trademark searches.
- Surprisingly, the rapper "Pope Emeritus" has virtually no chance in a trademark infringement suit against Benedict XVI.
- The "Redskins" mark should not be entitled to federal trademark protection.
- More on "Redskins" trademark cancellation proceeding.
- Do you need copyright, patent or trademark protection?
- Is your company's trade name federally registered by someone else?
- A good IP Awareness Assessment for businesses and entrepreneurs.
- Trademark FAQs (from USPTO).
- Trademarks vs. Antitrust.
- A trademark dispute in Cornhusker country.

The USPTO also has a good link for trademark basics, which can be found here.

Monday, April 8, 2013

An antitrust lawsuit against Minor League Baseball.

This is an odd case brought under antitrust law. The plaintiff is a former umpire who was fired for racist and offensive activities. The case just survived a motion to dismiss, in which Minor League Baseball argued that the antitrust exemption applied to the minor leagues. The court said that the exemption did not apply, and that the case could proceed to the discovery phase. In other posts, I have discussed Major League Baseball's antitrust exemption (Why does Major League Baseball have an antitrust exemption?, More on the antitrust exemption in baseball).

I find it hard to believe that the plaintiff will make it very far in this case. He contends that the minor leagues run an illegal monopoly, but even if the defendants have a monopoly over umpiring in baseball, there is no monopolizing conduct. To be an illegal monopoly, you need to have monopolizing conduct. So, basically, it is an interesting case, but one the plaintiff is extraordinarily unlikely to win.

Friday, April 5, 2013

More on "Redskins" trademark cancellation proceeding.

This is a pretty good link for additional information on the dispute regarding potential cancellation of the "Redskins" federal trademark registration. I have discussed it before, but this provides good supplemental information.

Wednesday, April 3, 2013

More on NCAA student-athlete likeness antitrust litigation.

This is a great overview from Sports Illustrated on the NCAA student-athlete likeness antitrust litigation. It provides a plain explanation of the ramifications of an NCAA or student-athlete win. I discussed the case briefly in a few recent posts (Publicity rights and NCAA student-athletes; and How class-certification works in connection with the NCAA student-athlete antitrust litigation). Some NCAA rules have violated antitrust law, but generally, the rules governing competition have been upheld. This case involves a little of both: competition and noncompetition.

If the student-athletes win, many schools would have to eliminate a number of sports programs in order to pay current and former football and basketball players. Some schools would have to drop down to Division III status where no athletic scholarships are offered. Only the behemoths of college athletics would survive with reasonable certainty.

If the NCAA wins, nothing would really change. I find this result unlikely. There is no reasonable justification for retaining former football and basketball players' likenesses after they graduate. Hence, I think this NCAA policy will fall. As a result, former football and basketball players would be able to monetize their college likeness after they graduate, as long as it does not run infringe the schools' intellectual property. So for instance, this would mean that Mike Rozier, the 1983 Heisman Trophy winning running back for the University of Nebraska, would be able to make money off his likeness being used in EA Sports' NCAA Football series of video games.

I doubt student-athletes will get the right to negotiate licensing deals for themselves on an individual basis while in college, because history shows NCAA rules are not so unreasonable that a court will strike them down in their entirety. The amateur model is reasonable, but given the amount of money involved in college athletics today, a revision to the rules is needed. A reasonable revision is that the student-athletes get a per capita portion of licensing revenue placed in trust, that is accessible upon graduation. That way, the amateur model remains, but student-athletes do get compensated after their eligibility expires. (If this comes to fruition, the next lawsuit would be one involving a former student-athlete who did not graduate but seeks payment from trust because the amount has legally "vested". He would probably be entitled to that amount without graduating, but that is an issue for another day.)

Tuesday, April 2, 2013

Although antitrust violations are fairly common, you must have "standing" to bring suit.

In antitrust suits, one of the most commonly overlooked requirements is "standing," which refers to the validity of the plaintiff's grounds for bringing the lawsuit. In other words, the plaintiff must have suffered an antitrust injury, or suffered damages due to a defendant's anticompetitive conduct. The damages must be of the nature that the antitrust laws were designed to prevent. There must also be a causal link between the damages and the anticompetitive conduct.

It is relatively frequent in everyday business to suffer detriment in connection with other companies' anticompetitive conduct. But the anticompetitive conduct is not always the direct cause of the damages. The detriment to the plaintiff is not always of the nature that the antitrust laws were designed to prevent. So, if you lack the causal link, you cannot bring an antitrust suit even if you are damaged. There may be other grounds on which you can bring suit, but you would not be able to do so on an antitrust theory.

Monday, April 1, 2013

A trademark dispute in Cornhusker country.

This is not an unusual situation with businesses in college towns, especially when a college mascot is named after the official state nickname (e.g., "The Hawkeye State"). The article describes a dispute between the University of Nebraska athletic department and a local Lincoln business owner. The business owner used the word "Husker" in his bar name, and the University does not want to be associated with it. As you would expect, the University has trademarks on the terms associated with the school's athletic programs. When it does attach its name to a local business, it charges a fee to do so.

The article is another example of the headaches that result from choosing a business name that is a federally registered trademark of another company. When you go to college towns, you will often see "Husker," "Cyclone," "Hawkeye," or another nickname on a business unrelated with the local school. The nickname you see depends on the town you are visiting. Business owners that choose such names should be careful, because the school can make them change it if they want. The school does not always do so, because they do not want to upset the same people who support the sports programs. But they can.

More on the antitrust exemption in baseball.

Here is a good piece on why Major League Baseball is largely exempt from antitrust law. The article is written by a law professor from UCLA. It contains much of the same information from my post, but written by a different author. On opening day, I figured it was a good time to rehash the topic.