Tax Cuts for Law Firms
With the compromise-laden Federal tax cut now law, what if any are the implications for law firms? Members of this newsletter's Editorial Board and several other recent contributors were asked to address that question.
E-mail: The Prosecutor's New Best Friend
Over the past 10 years, e-mail has replaced the telephone as the favored method of communication within Fortune 500 companies. The typical employee might send or receive dozens of e-mails per day, with the amount of e-mail traffic growing exponentially the higher up the employee sits on the corporate ladder. In a large company, the CEO might receive hundreds of e-mails daily, leaving to an assistant the task of 'screening' them. This explosive growth in e-mail has not been lost on prosecutors. In case after case, prosecutors are securing convictions with carelessly written e-mail.
Adding to the Franchisor's Arsenal
Franchisors have long packaged a business model along with a collection of intellectual property that includes service marks, trademarks, trade names, logos, trade secrets, and copyrighted materials (<i>eg</i>, operating manuals, product information sheets, and advertising collateral), in order to form a business opportunity that is attractive to potential franchisees. In order to protect franchisees from unfair competition, franchisors have always had federal copyright, trademark, and trade dress infringement actions and state law trade secret and unfair competition actions as part of their legal arsenal against such competitors. This arsenal also includes state law breach-of-contract causes of action against insurgent franchisees failing to 'follow the rules' of the business model (<i>ie</i>, failing to honor the obligations set forth in the franchise agreement crafted by the franchisor). In today's economic and technological climate, one more option should be considered for inclusion in a franchisors' arsenal — business-method patents and the threat of a federal patent infringement suit against unfair competitors and insurgent franchisees.
South Korea Enacts Franchise Legislation
The recently enacted South Korean Act on Fairness in Franchise Transactions (AFFT) went into effect on Nov. 1, 2002. According to the Korean government, the purpose of the AFFT is to establish 'fairness in franchise transactions and promote balanced and mutually complementary development on even terms between a franchisor and a franchisee for purposes of advancement of consumer welfare and a sound national economy.'
Automobile Lessors Beware: Vicarious Liability in Three States
A Rhode Island Supreme Court decision has caused lessors to think twice about leasing motor vehicles in the State of Rhode Island. In <i>Oliveira v. Lombardi</i>, 794 A.2d 453 (R.I. 2002), the Rhode Island Supreme Court held that two automobile leasing companies may be held vicariously liable under Rhode Island's vicarious liability statutes for the negligence of drivers operating motor vehicles titled in the leasing companies' name.
Mediation Before Litigation: Delaware Court's Expanded Jurisdiction Offers Remedy in Franchise Disputes
On May 29, 2003, the Governor of Delaware, Ruth Ann Minner, signed into law new legislation that may signal the willingness of courts to facilitate the resolution of disputes before the parties have passed the 'point of no return' and resorted to litigation. If the new model proposed in Delaware meets with success and is broadened and adopted by other courts, the development could be meaningful for both franchisors and franchisees, given that disputes frequently arise in franchise systems. Both would benefit from early resolution that would preserve the strength of the system and maintain the important relationships between the franchisor and the franchisee during the balance of the term of the franchise agreement.
Bits & Bytes
Bridgeway Software, Inc. has added two new e-invoicing services to enhance its eCounsel product. These new Bridgeway services offer the choice of using either secure Web transport or flexible and simple e-mail to receive invoices. Both eCounsel Cost Management services enable corporate legal departments to receive invoices electronically from law firms directly into eCounsel, reducing processing time and eliminating manual data entry.
Technology at Work: A Review of Syngence Services
Late last year, an old case was resurrected after an appeal resulted in our winning summary judgment being overturned. With the equivalent of 54 Bankers Boxes' worth of documents loaded on CDs as TIFF images without any associated indexing or coding, we were faced with the weighty task of processing those documents in a very short amount of time. The key issues were cost and functionality. We quickly needed usable data that could be manipulated, at a price acceptable to our client. Upon investigating our options regarding either manual or automated coding, we were introduced to the Syngence services by American Legal Copy ' our reprographics vendor in San Diego. We decided to give Syngence a try because their Syndex automated indexing service promised a basic database of information in a matter of days and their Synthetix-related content search feature intrigued us.
Non-disclosure Agreements in Venture Capital Transactions
Occasionally a venture fund will receive a request from a potential portfolio company for the venture fund to sign a non-disclosure agreement prior to commencement of due diligence. The proposed non-disclosure agreement would commit the venture fund to maintaining the confidentiality of the company's information disclosed to the venture fund in the course of the due diligence investigation. Entering into non-disclosure agreements could restrict the future investing and disclosing activities of the venture fund or its principals.
