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Companies relying on arbitration clauses in their contracts must be more careful, particularly in employment discrimination claims, about how the arbitration is conducted, making sure that the proper procedures are followed. Otherwise, the lack of an adequate forum may rebound and render their arbitration agreement a nullity. People expect arbitration awards to be "final and binding," as arbitration clauses often recite. The Federal Arbitration Act and state laws provide for an extremely limited judicial review of such awards, restricted only to cases of an arbitrator's fraud, manifest disregard of the law, conflict of interest, transcendence of his or her authority or similar egregious conduct. There is no explicit authority for a court to re-examine the factual determinations. In a rare example of theory-meets-practice, occasions where courts have overturned awards are almost … [Read more...] about When A “Kangaroo Court” Becomes A Boomerang: The Un-Finality of Arbitration Awards

p>Many U.S. distributors have faced the problem of the importation of gray goods into the United States (i.e., goods of foreign manufacturer, legally acquired abroad, bearing a legally affixed foreign trademark identical to a mark registered in the United States, and then imported without consent of the U.S. trademark holder). The importer purchased these goods innocently, with no knowledge of the U.S. distributor's trademark rights or exclusive territory in the U.S. The U.S. distributor is then faced with a problem it did not expect to have when it registered its mark or bargained for exclusivity – competition with foreign sources who seemingly have the absolute right to sell products wherever they wish, including in the United States. These U.S. trademark owners and distributors have attempted to cease the importation of gray goods through trademark infringement actions. In … [Read more...] about Barring the Importation of Gray Market Goods by Demonstrating “Material Differences”

In a landmark decision destined to cause significant reverberations in the apparel industry, the United States Supreme Court reversed and remanded Wal-Mart Stores Inc. v. Samara Bros, Inc. (Spring 2000 Quarterly "Trade Dress For Product Designs") and held that product designs can never qualify for trade dress protection by virtue of inherent distinctiveness and can only be protectable trade dress upon a showing of secondary meaning.1 It also advised courts , when in doubt as to whether the trade dress at issue is a product design or a product's packaging, to require plaintiffs to demonstrate the existence secondary meaning. The Supreme Court, in a rather terse opinion, held that product designs primarily serve an aesthetic purpose, as opposed to a source identifying purpose, and stressed the interests of the consumer, reasoning: "The fact that product design almost invariably serves … [Read more...] about Wal-Mart and the Supreme Court’s Diminishment of Inherent Distinctiveness

Personal jurisdiction is the power of a court to adjudicate and enforce its orders over a person (or entity). Under both federal and state common law, when a lawsuit is commenced, a defendant must raise its objection to personal jurisdiction, if there is one, either in its answer or in a pre-answer motion to dismiss the complaint. If the defense is raised in an answer, the defendant must ultimately move to dismiss at some point in the proceeding. If not timely raised, the defendant waives or forfeits the defense. Most people want no part of the technicalities of raising a jurisdictional defense, and leave it to their attorney's to handle these details. But clients should be aware of certain fundamental principles and the consequences of not abiding by them. A recent decision handed down by the U.S. Court of Appeals for the Second Circuit (New York, Connecticut and Vermont) … [Read more...] about Procrastination and Forfeiture of the Personal Jurisdiction Defense

Most of us can recognize a garden variety trademark when we see one. A brand name such as "Coca Cola®" or "Nike®" immediately identifies the source of the product and represents the quality standards and good will of a particular company. But can the design of product, which appears to have only an aesthetic purpose, obtain the benefit of trade dress protection? The Court of Appeals for the Second Circuit says, in some circumstances, it can. In Samara Brothers Inc. v. Wal-Mart Stores, Inc.,[1. 165 F.3d 120 (2d Cir. 1998).] the Court of Appeals affirmed a jury's finding that the design of Samara's spring/summer seersucker children's garments were protectable as trade dress and, subsequently, use of a confusingly similar design constitutes trade dress infringement. Trade dress consists of the overall appearance of a product as it is packaged or presented and used to denote the source of … [Read more...] about Trade Dress Protection for Product Designs

Beware of opponents bearing standard agreements. When a party to a lawsuit that is asked by its opponent to sign a protective order, the party is almost always told that the agreement is "standard." When that party shows reluctance to agree to the "standard" protective order, it is often accused of ulterior motives; after all, why object to the order, unless the intent is to violate it? Because these orders have nothing to do with the substance of the litigated dispute, and because they sound so reasonable and innocuous, parties often do not wish to expend precious time, energy and resources fighting the inevitable. This article focuses on the issues commonly created by protective orders in the context of commercial litigation, taken from the perspective of the party seeking the disclosure, and the steps that party can take to minimize the adverse effects. Protective orders are … [Read more...] about Negotiating Protective Orders: Pointers and Pitfalls

This is the second of two parts of our outline of the law of fiduciary obligations and its expansion beyond the traditional fiduciary relationship. We return to the case, mentioned at the beginning of the first part of this series, of the medical equipment distributor who was suddenly terminated by the manufacturer. On appeal to the intermediate appellate court of New York State from the lower court's denial of the defendant's request for summary judgment in that case (Zimmer-Masiello, Inc. v. Zimmer, Inc.),[1. Zimmer-Masiello, Inc. v. Zimmer, Inc., 159 A.D.2d 363 (1st Dept. 1990).] the appellate court affirmed and rejected the defendant's application for the immediate dismissal of plaintiff's claim of breach of fiduciary relationship and the case proceeded to trial. That decision on appeal followed precisely the blueprint of Rampell and determined that the dominance-dependence … [Read more...] about The Fiduciary Relationship: A Study In The Process Of The Development Of The Law — Part 2

Are there, within the ambit of normal arms-length business transactions, situations in which the law will impose upon one of the parties in a continuing relationship, a criterion of dealing with the other party that is higher than the standard of the marketplace, and even higher than the standard selected by the parties themselves in their negotiated arrangements? A distributor of medical equipment in New York City selling, for over eleven years, the products of a major medical equipment manufacturer and supplier under an exclusive territorial arrangement covering New York and Bronx counties is visited one day by several executives of the supplier who arrive at the distributor's office without notice and inform the distributor's founder and sole shareholder that his successful distributorship, cultivated by him over that eleven year period has been terminated, effective immediately. … [Read more...] about The Fiduciary Relationship: A Study In The Process Of The Development Of The Law — Part 1

If you are the seller (or one of the sellers) of the shares of stock or of the assets of a Company operating a going business, and the buyer finances the acquisition by borrowing through a bank or other financial institution, there are circumstances where the sellers may be liable to the lending bank even though the acquisition transaction and contract is entirely between the sellers and the buyer. Picture it: the sales price of the business is substantial and, therefore, the loan financing is also large; during the period prior to the signing of the acquisition agreement, the sellers and executives of the Company meet with representatives of the buyer for purposes of negotiation of the contract and due diligence investigation; in the course of these meetings, the sellers and the Company executives also meet with representatives of the lending bank for purposes of explaining the … [Read more...] about Mergers and Acquisitions: Sellers’ Liability To The Buyers’ Financing Bank For Misrepresentations

Credit reporting agencies maintain positions of great power and responsibility. Their opinions can make or break the ability of any company to conduct business. So what happens when a credit reporting agency provides false information in a business information report and/or attributes, without support, a poor credit rating to a company? Is there any recourse to a company whose business and reputation is injured due to the distribution of an erroneous credit report, even if the report was seemingly put forth in good faith? Many courts have provided a remedy in such instances based on state libel laws. Usually, libel is not an easy thing to prove where an alleged false statement is made in the public arena (ie. newspapers, magazines, etc.). In actions for libel involving the reporting of public or newsworthy events, freedom of expression under the First Amendment is the paramount issue … [Read more...] about Not Giving Credit Where Credit Is Due: Liability Of Credit Agencies For Misstatements