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On June 30, 2004 an Involuntary Petition under Chapter 11 of the Bankruptcy Code was filed against NorVergence, Inc., the New Jersey telecommunications company. While this filing represented the likely end of a telecommunications company which, at its zenith, employed 1500 people, with more than 11,000 equipment leases in effect worth some $200 million, it also marked the beginning of litigation arising out of those leases now being waged in various state and federal courts across the country involving thousands of lessees, scores of finance companies and dozens of governmental agencies.
While this litigation is of obvious importance to the finance companies and the lessees involved, these actions could also have far-reaching consequences on the entire leasing industry and those businesses that rely on leasing as a cost-effective and tax-friendly means of acquiring equipment. Of particular consequence is the enforceability of the open-ended, or “floating,” forum-selection clauses that are contained in the Equipment Rental Agreements at issue in this litigation. The typical forum-selection clause at issue in these cases provides: “This agreement shall be governed by, construed and enforced in accordance with the laws of the State in which Rentor's [referring to NorVergence] principal offices are located or, if this Lease is assigned by Rentor, the State in which the assignee's principal offices are located, without regard to such State's choice of law considerations and all legal actions relating to this Lease shall be venued exclusively in a state or federal court located within that State, such court to be chosen at Rentor or Rentor's assignee's sole option.”
Various lessees have attacked these clauses on the grounds that the absence of an identifiable forum at the time of execution of the lease renders these clauses unconscionable and unenforceable. While the lessees, and indeed certain governmental bodies, are attempting to characterize these leases as consumer leases, in an effort to advance their cause, it is clear that not only are the leases involved in these cases Article 2A finance leases between commercial entities, but also that the forum-selection clauses at issue represent the next logical step in furthering the negotiability of Article 2A finance leases and are entirely consistent with the modern view of these clauses.
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
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