Bits & Bytes
February 27, 2004
News and developments in legal tech.
A New Reality for Lessors in Synthetic Leasing Transactions
February 10, 2004
In a discussion of the Financial Accounting Standards Board (FASB) Interpretation No. 46, Consolidation of Variable Interest Entities, in the November 2003 issue of this newsletter, Jeffrey Ellis wrote that: "accountants will be struggling to implement the guidance in FIN 46 for a while longer." The multiple FASB staff positions issued, ongoing public comment, and lengthy discussions at FASB meetings concerning changes to existing guidance on consolidation of variable interest entities, continuing almost a full year after issuance of the rules, confirm his conclusion. The effective date for certain applications of FIN 46 was delayed until Dec. 31, 2003, but all of the Big Four firms continued to clamor for guidance. With that new deadline only days away, FASB issued FIN 46-R on Dec. 24.
FTC Approves 'Merger to Monopoly' in Innovation Market
February 10, 2004
The intersection of intellectual property and antitrust has been the subject of much fanfare over the past decade. The antitrust agencies have held numerous workshops where enforcement officials and practitioners have debated the scope and limitations of antitrust when such principles intersect with IP rights. The most notable work product generated as a result of this focus has been the 1995 Guidelines setting forth antitrust policy for the Licensing of Intellectual Property issued by the Department of Justice (DOJ) and the Federal Trade Commission (FTC).
The Evolution of a Lease Provision: Sublease and Assignment
February 09, 2004
In the absence of a lease provision restricting subleasing and assignment, common law permits a tenant to freely sublease its leased premises or assign its leasehold interest in the leased premises. In order to provide for maximum landlord control over a tenant's ability to sublease or assign its leasehold interest, while at the same time balancing the need of tenants for an exit strategy, modern forms of leases contain extensive assignment and sublease provisions. This article traces the manner in which those provisions have evolved over the years.
Risk Assessment and Post-Market Programs
February 09, 2004
How do the medical device industry and the FDA prevent risks to the end user once the product is marketed? There is no simple answer to this question. Post-market vigilance in terms of risk assessment involves complex issues. These issues involve a cost/benefit analysis in terms of a "best approach" to post-market co-vigilence.
FDA Cannot Force an Over-the-Counter Drug Switch
February 09, 2004
Does the Food and Drug Administration have authority to force manufacturers of prescription drug products to switch those products to over-the-counter (OTC) distribution against their will? The FDA is currently grappling with this issue, a dispute that has generated substantial controversy, including statements by FDA officials and coverage in leading newspapers.
Official Committee Members: Fiduciary Duty Liability
February 09, 2004
Members of official creditors' committees in Chapter 11 cases owe a fiduciary duty to the entire body of unsecured creditors. <i>See Woods v. City National Bank</i>, 312 U.S. 262, 268-69 (1941). As fiduciaries, committee members should have undivided loyalty to those they serve, free of any conflict of interest. <i>Id</i>. The imposition of such a broad duty to unsecured creditors generally might be otherwise unremarkable, except that committee members themselves obviously have significant selfish interests in the outcome of the bankruptcy case.
Discovery of Trade Secrets: How Courts Analyze Disclosure Issues
February 09, 2004
The first part of this series, published last month, addressed the definition of trade secrets in the context of discovery. As efforts to obtain trade secret information increase, a clear definition of trade secret is vital for the courts to analyze this issue correctly. This second installment addresses that analysis, and the standards and terminology courts apply to decide whether trade secrets should be disclosed, the arguments and evidence that parties resisting this discovery can present to the trial court, and strategies to limit the potential for additional damage if trade secrets are ordered produced.
The Act and Your Annual Report
February 06, 2004
As widely reported, the Sarbanes-Oxley Act of 2002 (the Act) and rules adopted by the Securities and Exchange Commission pursuant to the requirements of the Act have added numerous requirements to the obligations of companies filing periodic reports pursuant to the Securities Exchange Act. A number of significant provisions are first effective with respect to annual reports filed with the SEC for fiscal years ended Dec. 31, 2003. This article provides a checklist and brief summary of each of these new requirements.
