DEVELOPMENTS OF NOTE
August 19, 2003
The Small Webcaster Settlement Act (Pub.L. 107-321) became law in December. It provides for alternative royalty-rate setting among certain small and noncommercial Webcasters by agreement with receiving agent designated by the copyright office to accept royalty payments for works covered by sound recording copyrights.
Maturing Internet Leads to Fewer Domain-Name Squabbles
August 19, 2003
The wild wild Web is getting tamed. Cybersquatters no longer freely roam its highways looking for easy marks and trademark owners who once went after anyone who crossed their path are now choosing their battles much more carefully.
e-Commerce DOCKET SHEET
August 19, 2003
A notice accompanying packaged and downloadable software purporting to restrict purchasers from publishing product reviews or disclosing benchmark test results without seller's permission is unenforceable and may be sanctionable under New York law prohibiting deceptive business acts and practices (People v. Network Associates Inc., No. 400590/02, N.Y. Sup. Ct. N.Y. Cty. Jan. 14, 2003).
Don't Settle For Just a Warranty
August 19, 2003
Software license agreements can appear deceptively easy to draft, particularly in an age when form contracts are readily available. The danger, however, lies in overlooking subtleties that truly define parties' contractual intentions and obligations. If the licensee will be paying for custom software or modifications to pre-existing software, then warranties will play a particularly important role.
Hotline
August 19, 2003
Recent developments of interest to corporate counsel.
Litigation Traps in Purchasing a Business
August 19, 2003
When prospective purchasers of businesses don't perform a thorough due diligence on the sellers, the result can be unneeded and protracted litigation. Due diligence should include investigation into trade secrets, other potential purchasers, covenants not to compete, seller's liabilities and insurance coverage. The purchaser should consider all 'what ifs' including claims and remedies during the due diligence period. What if the seller defaults? What if the seller breaches the representations and warranties? What if the seller violates the covenant not to compete? What if the seller discloses or has already disclosed to others acquired trade secret information? Paying too much too early to a seller without substantial assets or sufficient holdbacks are red flags. In the event of a seller's breach and purchaser's lawsuit, any resulting judgment may be uncollectible.
Supreme Court Once Again Addresses Issue of Punitive Damages
August 19, 2003
Punitive damages, traditionally a form of compensation awarded to punish the wrongdoer and simultaneously deter future misconduct, have long been a divisive issue within American law and business. For the former, centuries of law recognize the efficacy of a sizeable financial punishment, deliberately outsized in order to properly punish a larger wrong, and to make the miscreant and others similarly minded think twice before doing it again. The public policy has long outweighed the possibility that the particular victim may be rewarded with a recovery usually well in excess of the actual harm suffered. Yet business, particularly large corporations, contend that awards of punitive damages have grown monsterous, and completely out of proportion to the harm suffered. Defying rationality, such damages threaten the very existence of the business defendant, and only give windfalls to undeserving and avaricious plaintiffs and their counsel.
Qualified Legal Compliance Committees: A Useful Tool For Investigating Reports Of Material Violations
August 19, 2003
Section 307 of the Sarbanes-Oxley Act of 2002 requires the Securities and Exchange Commission (Commission) to adopt new standards governing the conduct of attorneys who represent public companies before the Commission. On January 23, 2003, the Commission adopted final rules to implement Section 307. The rules, which become effective on August 5, 2003, establish minimum standards of professional conduct for attorneys appearing and practicing before the Commission in the representation of an issuer as well as reporting procedures that must be followed if an attorney becomes aware of a 'material violation.' As discussed herein, establishing a Qualified Legal Compliance Committee (QLCC) could save issuers valuable time and create a more controlled and efficient process in identifying and rectifying potential material violations.
