Law & Entrepreneurship News

Anticipatory Breach of Employment Contracts Are No Longer Unique

Lyn Whitman was ready to begin a successful career as the chief marketing officer for ING Bank. To her surprise, weeks before the start date of her position she was notified by the ING corporate office that her offer for employment and contract had been revoked. The letter Whitman received regarding the revocation of her position stated that an "internal candidate" would be filling the position and did not even attempt to apologize for the circumstances.

Practicing employment attorneys comment that this revocation of employment is not that uncommon. Howard Levitt, an employment attorney stated that having a job offer rescinded with or without a contract happens more often than most people would think. This anticipatory breach of contract is when someone is fired in anticipation of officially starting their position.

Breaches of employment contracts are not as well known because 99% of these cases settle out of court. Under these circumstances, employers want to avoid litigation, and will offer to pay settlements to keep prospective employees out of court. Out of court settlements allow employers to avoid bad publicity as well. 4% of 1900 U.S. corporations and government agencies rescind offers in the midst of an economic downturn, restructuring, or internal pressures.

The Ethical and Legal Issues of an Internet-Brokered Organ Transplant

Recently, Rob Smitty donated a kidney to Bob Hickey in Denver, Colorado. This arrangement was made through the Internet. Both Smitty and Hickey argue that the organ donation was merely an act of kindness. But, critics believe that Smitty agreed to donated his kidney for alternative reasons.

Critics believe that Smitty agreed to this Internet brokered transplant arrangement because he owes up to $10,000 in back child support. There is currently a warrant out for his arrest because he has failed to make any payments on this substantial amount. Hickey, the donee of the transplant paid Smitty approximately $5,000 for his donation. Hickey argues that this amount merely covered the costs of transportation, hotel accomodations, and medical services related to the transplant.

This potentially unethical agreement has an added twist. As Hickey was recovering from his transplant surgery, he was being sued by a party alleging a breach of contract. Hickey sold a 1967 Jaguar to a California collector on E-bay for $50,000. The car collector is alleging a breach of contract because the car turned out to be a lemon. The attorney for the car collector stated that his client has given Hickey every opportunity to live up to the contract.

Update: Bob Hickey contacted L&E News regarding this article and empahsized that a judge will decide the merits of his case, and not the critics of this exchange with Rob Smitty.

New York Adult Homes Regulated Under State Law

All adult homes in New York State will be regulated by the Department of Health. This regulation was signed under state law by New York Governor George Pataki.

Under the Department of Health regulations, the authorities of adult facilities and assisted living centers must be licenced by the state.

Because many of the adult homes were unregulated and not licensed by the state, these facilities on occassion were able to undercut their operating costs. An adult residence home that markets itself as an assisted living center must adhere to the licensing requirements. Currently, there are some facilities that provide housing, but contract for medical services and separate home care.

Under the revised Department of Health standards, senior citizens won't have to make disruptive and costly relocations to nursing homes. Facilities that operate outside the Department of Health regulations have an unfair advantage over licensed homes since there is no firm count as to their residents. The Department of Health law requires facilities that provide care and services for seniors to meet the same standard that is already required of licensed adult homes and assisted living centers.

Absentee Blogger

I apologize that this section has been inactive for the past few days. The links below lead to some of my favorite Patent Blogs and Technology News sites:
Topix.net
Technewsworld.com
Shashdot (Of course!)
Patently Obvious
Groklaw
Freedom To Tinker

Here is one of my all time favorite patents! Proving yet again that “anything under the sun that is made by man," is patentable subject matter under in the United States.

Back in a flash! Enjoy!

Joint Venture to Bring Broadband to 16M in Argentina

WebSky Inc. announced that it is forming a joint venture with a local telecommunications company to develop a wireless broadband internet system for Buenos Aires. This is a major product for Websky considering the service area to be covered by the agreement has a population of over 16 million.

A report issued by the United Nations in September stated that there were 110,000 broadband subcribers in all of Argentina at the end of 2003, though most were within the service area covered by the agreement. According to local observers this figure had increased to 155,000 in July. Yet despite this increase, only 10% of all internet subscribers use broadband.

WebSky Inc. is a San Fracisco based company that controls licensed radio frequencies in seven U.S. cities. In addition to the joint venture in Buenos Aires, Websky has entered preliminary joint venture agreements with companies in India, Thailand, and Indonesia.

This information was taken from Business Wire.

Trademark Infringement Threat to Domestic Security?

The Oregon-based Pufferbelly Toys was visited by agents for the Department of Homeland Security (DHS) and ordered to remove a toy called the Magic Cube from shelves. According to DHS agents, the toy infringes on the trademark and patent of the popular Rubik's Cube.

Judge Rules for State in Software Sales Tax Case

In a case followed by companies throughout the state that modify off-the-shelf software before use, a Dane County Circuit Court judge overruled the Wisconsin Tax Appeals Commission, saying the Wisconsin Department of Revenue was correct to collect sales tax on a multi-million dollar software system purchased by Menasha Corp. from German software vendor SAP. Dane County Circuit Court Judge Steven Ebert ruled that the programs were off-the-shelf software, which makes them subject to sales tax. Last year the Tax Appeals Commission, an independent board set up to rule on disputes between the state and taxpayers, ruled in favor of Menasha Corp., which argued that the changes it made to the programs made them customized software, which is tax-exempt. Judge Ebert points out that who made the changes is more important than the fact that changes were made, and the more changes that were made by the vendor or with input from the vendor, the more likely the software is off-the-shelf, and thus taxable.

The case is being closely followed by other companies, some of whom contributed to Menasha's $70,000 legal bill. Menasha seeks a $500,000 refund including interest, but the Department of Revenue estimates that $260 million plus interest are at stake based on this ruling, which is a significant portion of the $3.9 billion in sales tax the state collects annually. Some are concerned this ruling will keep companies that purchase a lot of software from moving to Wisconsin and encourage companies already here to relocate their data processing deparments. Menasha is in the process of deciding if it will appeal. Read the Milwaukee Journal Sentinel story here.

Forum Selection Clause Unpersuasive in Connecticut District Court

Despite a forum selection clause in its franchise agreement, Virginia-based Liberty Tax Service, Inc. failed to persuade a federal district judge to grant its motion to transfer a franchise dispute. The court acknowledged the existence of Liberty's forum selection clause, but held that it constituted just one of many important considerations in deciding whether to grant a transfer. Ultimately, the court held that other factors outweighed the clause and denied Liberty's motion.

Connecticut business Sherman Street Associates, LLC, sued JTH Tax, Inc. and Liberty Tax Service, Inc. (collectively "Liberty") for breach of their franchise agreement, Civil Action No. 3:03 CV 1875 (CFD), 2004 U.S. Dist. LEXIS 21102, 2004 WL 2377227 (D. Conn.) Sherman Street brought the action in Connecticut Superior Court, and Liberty successfully removed the case to the U.S. District Court for the District of Connecticut based on diversity of citizenship. In its attempt to then transfer the case to the U.S. District Court for the Eastern District of Virginia, Liberty relied on 28 U.S.C. § 1404 and Liberty's forum selection clause, stating that any suit brought the company must be brought in the U.S. District Court closest to Liberty's headquarters.

The Connecticut district court acknowledged that 28 U.S.C § 1404 authorizes transfer, but cited Stewart Organization, Inc. v. Ricoh Corporation, 487 U.S. 22, 101 L. Ed. 2d 22, 108 S. Ct. 2239 (1988), for the proposition that while a forum selection clause should be a "significant factor" in determining venue, it should not be the dispositive factor. "Section 1404(a) directs a district court to take account of factors other than those that bear solely on the parties' private ordering of their affairs. The district court must also weigh in the balance the convenience of the witnesses and those public-interest factors of systemic integrity and fairness that, in addition to private concerns, come under the heading of 'the interest of justice.'"

Sherman Street argued that the Connecticut Franchise Act's anti-waiver provision (Con. Gen. Stat. § 42-133f) voided the franchise agreement's forum selection clause. The court disposed of this argument by citing Stewart, where the Supreme Court held that § 1404(a) preempts state policy.

Instead, the court enumerated nine criteria to be considered for purposes of forum selection:
· The convenience of witnesses.
· The availability of process to compel attendance of unwilling witnesses.
· The locus of the relevant evidence.
· The convenience of the parties.
· The locus of operative facts.
· The relative means of the parties.
· A forum's familiarity with the governing law.
· The weight accorded to plaintiff's choice of forum.
· Trial efficiency and the interests of justice.
After analyzing each criterion in turn, the court held that the merits slightly favored Sherman Street and denied Liberty's motion to transfer the case to Virginia, and took the teeth out of Liberty's forum selection clause in this case.

AvantIQuick Offers Free Trademark Search

A quick search with AvantIQuick, provided by Markenbusiness, checks 18 international trademark databases, accounting for over 14 million registrations.

Lexmark Loses Printer Cartridge Appeal

Lexmark International lost its appeal attempting to prevent third-party manufacturers from competing with the company in production of printer ink cartidges.

Lexmark printers will only work with the company's proprietary print cartridges. To work around this, Static Control Components (SCC) manufactured the Smartek chip, which could be added to a third-party cartridge and would then fool the Lexmark printer in functioning normally. Lexmark sued SCC under the DMCA, an approach that was successful and earned Lexmark a preliminary injunction against SCC. However, in reversing the lower court's judgment, the 6th Circuit Court of Appeals held, "companies like Lexmark cannot use the DMCA in conjunction with copyright law to create monopolies of manufactured goods."

Read the full opinion [PDF].