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Earnings Claims and the Amended FTC Disclosure Rule: Lamenting a Lost Opportunity
Let's not be overly critical of the Amended FTC Disclosure Rule, which was promulgated in January 2007 after being 10 years in the development stage. As Stephen Toporoff of the Federal Trade Commission ('FTC') has convinced me in recent discussions, amending a federal regulation is an arduous task. In this instance, it required an extensive amount of background research on the history of the original Disclosure Rule, several hearings, careful review of the hundreds of comments, careful examination of the UFOC Guidelines and their origins and assumptions, comparing them with the original Disclosure Rule's format, and testing in many cases the care and thought that went behind the original language of the UFOC Guidelines. The Amended Disclosure Rule was no shot from the hip. In light of this background information, and considering simply the politics of federal agencies, it is not very surprising that it took a decade for the FTC to issue the Amended Disclosure Rule.
But given the existence of the UFOC Guidelines as a pre-existing roadmap for disclosure and the almost 30-year track record of franchise disclosure and sales regulation, the substantive changes made to the Amended Disclosure Rule, as they affect the type and quality of disclosure given to franchise prospects, were, overall, not earth-shattering. The disclosure documents we will be seeing later this year will in most respects be identical to what we have seen since the UFOC Guidelines were last amended in 1993. There are a couple of notable exceptions, such as the expanded litigation disclosures required under Item 3, and the disclosure of information about franchisee associations, which will appear in Item 20. In my mind, the most notable accomplishments of the Amended Disclosure Rule will be: 1) the clarification that it is generally not applicable to international transactions; and 2) bringing the mechanics of the disclosure process into the 21st century. Neither of these relates to the substantive disclosure given to franchisees.
However, in one area ' earnings claims ' now renamed 'financial performance representation' ('FPR') (the change of name, itself, being a notable improvement) ' the FTC missed the boat. By not attempting to mandate disclosure of FPRs when it had the opportunity, the FTC failed to clean up one of the real deficiencies of franchise sales regulation. While on many of the tough issues that the FTC had to address, the FTC, I believe, could comfortably rely upon grounds such as it did not have the authority to make required changes (e.g., private right of action), or that the record of the rule-making did not support the conclusion that changes to the Disclosure Rule were, on balance, necessary (e.g., adding franchise relationships to the scope of activities governed by the Disclosure Rule), in the case of FPRs, this was not the case. The FTC's report provided ample opportunity for the FTC to have concluded that mandatory FPRs were appropriate and in the public's best interest. Instead, the Commission concluded, on balance, that the scales tipped in favor of the status quo, except that franchisors are now required to state that they have decided not to provide FPRs, but were not legally prohibited from doing so.
Major Differences In UK, U.S. Copyright Laws
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.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?