You Shook Hands – But Do You Have a Deal?

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Courts have held that, in business negotiations, “Handshakes are significant. When people shake hands, it means something.”  Unfortunately, they have also held that when people shake hands, “several meanings are possible.”

In Rennick v. O.P.T.I.O.N. Care, the Ninth Circuit Court of Appeal considered a party’s contention that a deal was struck when, after months of discussion and a 4-hour negotiating session, the parties “got up and circulated around the room and shook hands with each other on having made the deal.”  The Rennick case observed that a jury could reasonably find that “the handshake was confirmation of a contract, or that it was an expression of friendship and the absence of ill will after a day of hard bargaining.”  So, given the uncertainty of its meaning, should we stop shaking hands when discussing business?  Of course not.  Indeed, the Court noted that, “By custom, it is a rude insult to reject an outstretched hand in most circumstances, and to do so at the end of a long business meeting would likely prevent a future deal.”

The issue of the parties’ intent upon shaking hands is not a small one.  In August 2014, Charles Wang, the owner of the New York Islanders was sued by a hedge fund manager who claimed that the parties had shaken hands on a deal to buy the NHA hockey team for $420 million, and that Wang had breached their agreement by demanding more money.  The frustrated purchaser sued to either enforce an apparently unsigned 70-page agreement to conclude the sale of the team, or recover a $10 million break up fee that he claims was among the terms agreed upon with a handshake.

Courts struggle with this kind of issue, with or without handshakes.  In contract disputes, courts try to enforce the parties’ expressed intentions. For example, where the parties clearly express that they do not intend to be bound until they sign a formal written contract, courts will try to honor that intention by finding that no contract exists unless a written agreement was fully signed.  Indeed, negotiating parties usually can express almost any manner of requirement before an agreement becomes enforceable.  Quentin Tarantino’s civil war era film Django Unchained featured a climactic scene in which the odious character Calvin Candie extorted Dr. King Schultz into signing an outrageous contract, and then insisted that the signed contract was meaningless unless Dr. Schultz also shook his hand.  As a general point of law that was a doubtful proposition even in Mississippi in 1858, but if the parties had been careful to express that intention in their written agreement it probably would have been an enforceable prerequisite to the validity of the contract.

In reality, too often there is no such clear delineation.  If the parties do not eliminate such possibilities by an express statement of their intentions, oral expressions or an exchange of emails or text messages might create an enforceable agreement.  That is because, when the parties aren’t careful about expressing their intentions, courts are left to divine whether the parties intended an agreement with or without signatures on paper.  Courts consider testimony about what was said and evidence of what was written and the activities that took place before, during and after the time of the purported agreement to draw conclusions about what the parties’ intentions really were. Often, the parties’ contemporaneous correspondence is the most important evidence of whether the parties intended to have a binding agreement immediately, or whether the parties intended only to express their good will or intention to negotiate further.

To avoid unnecessary disputes, a cautious businessperson should make a point to express clearly his or her intentions.  The best approach is to plan ahead and be as clear as possible in a written expression as to when the deal is considered enforceable.  The Conkle law firm counsels and represents businesses in negotiations to achieve those ends, or in disputes that can arise when the businesses handled negotiations themselves and come to Conkle, Kremer & Engel attorneys only after things did not turn out as intended.

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The Conkle Firm Participates in PCPC California Lobby Day to Educate Lawmakers About Personal Care Products Industry Concerns

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Conkle, Kremer & Engel attorney John Conkle recently participated in the Personal Care Products Council’s California Lobby Day, an annual PCPC event held at the Capitol in Sacramento, California.  The Personal Care Products Council (PCPC) represents the personal care and cosmetic industry at the federal, state and local level on issues of interest to the industry.
California Lobby Day represents a unique opportunity for industry leaders to meet with legislators, state officials, and their staff members and engage in open discussions about legislative and regulatory issues affecting the personal care industry.

The whirlwind day included briefings in the Governor’s Office by the executive department personnel and meetings with staff in the offices of members of the State Legislature, as well as a reception for members of the California Legislature, personnel from the Office of Governor Brown, and PCPC members and staff. Among those in attendance were Martha Guzman-Aceves (Deputy Legislative Secretary); Grant Cope (Deputy Secretary for Environmental Policy, California Environmental Protection Agency (Cal EPA)); Meredith Williams (Deputy Director of Safer Products and Workplaces Program, Department of Toxic Substances Control (DTSC)); Jacqueline Shea (United States Environmental Protection

In addition to meeting with PCPC personnel and other PCPC member representatives, the day provided a solid overview of California’s current regulatory scheme and upcoming legislation and regulations.Agency (US EPA)); and Rick Brausch (Legislative and Policy Director, DTSC).  In addition, a number of staff members from the offices of California Senators Loni Hancock and Kevin De Leon and California Assemblymembers Brian Nestande and Susan Bonilla spoke with PCPC members. The proposed pieces of legislation of most interest to the PCPC were the prohibition on the use of plastic microbeads in cosmetics, legislation to allow county weights and measure officials to regulate the information that is required to be disclosed in the sale of cosmetics, the characterization of cosmetics as unsalable hazardous waste at the retailer level, and prohibitions on animal testing.

Conkle, Kremer & Engel is proud to be an active member of the Personal Care Products Council.  Over the years, CK&E has provided legal expertise to the PCPC and its member companies by presenting at conferences organized by the PCPC on legal and regulatory matters, as well as representing many PCPC member companies.  CK&E has also been a frequent sponsor of conferences organized by the PCPC and has participated in numerous events hosted by the PCPC.

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Nagoya Protocol: Response to Biopiracy Becomes Effective October 2014

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The Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization became effective on July 14, 2014, with its 50th ratification.  The Nagoya Protocol will begin to have a direct impact on the personal care and cosmetics industry on October 12, 2014.

With the increased consumer demand for natural and organic products, a growing number of companies in the beauty industry are drawing on biodiversity for its rich variety of native ingredients and as a way to differentiate their products.  The use of exotic ingredients sourced from countries rich in biodiversity means that companies need to be aware of the Nagoya Protocol and the country-specific “Access and Benefit Sharing” laws and regulations that exist and are being enacted.  The use of indigenous ingredients in hair care, skincare and cosmetics formulations – such as baobab oil extracted from the fruits of the baobab trees found across Africa or katafray bark extract from the katafray trees of Madagascar – may be a violation of the Nagoya Protocol if Access and Benefit Sharing requirements are not met.

The Nagoya Protocol is an international treaty focused on Access and Benefit-Sharing, which was adopted in 2010 by the United Nations’ Nagoya, Japan Convention on Biological Diversity.  The Nagoya Protocol arose from the interest of national governments to conserve and promote sustainable use of their countries’ biodiversity and protect against commercial biopiracy.  The purpose of the Nagoya Protocol is to support fair and equitable sharing of benefits arising from the utilization of genetic resources and associated traditional knowledge.

Generally, the Nagoya Protocol requires that access to a participating country’s genetic resources and associated traditional knowledge be subject to the “prior informed consent” of the party providing such resources.  The Nagoya Protocol also requires the sharing of the benefits arising from the commercialization of genetic resources and associated traditional knowledge with the owners of biodiversity, including the local communities and the indigenous people, on “mutually agreed terms.”

The Nagoya Protocol itself establishes only international norms and a framework for Access and Benefit Sharing measures, and does not impose Access and Benefit Sharing laws itself.  That is left to national legislation, and requires the contracting parties to implement their own Access and Benefit Sharing measures and to designate a competent national authority on ABS.  Many countries, including Brazil, Chile, Colombia, Costa Rica and India, already have national enabling laws and regulations.

Personal care product companies in particular also should be aware that their marketing and advertising of the products as containing native ingredients or drawing on traditional knowledge could subject them to a claim of biopiracy by national governments, local communities, and even non-governmental organizations.

Although the United States is not a contracting party to the Convention on Biological Diversity or the Nagoya Protocol, companies in the United States whose products utilize genetic resources or traditional knowledge from a member state, or are sold in a member state, must comply with the access and benefit sharing requirements.  It is imperative for companies to exercise due diligence to ensure that their raw material or ingredient suppliers have obtained prior informed consent for access to genetic resources or associated traditional knowledge used in their products, and mutually agreed terms for the sharing of benefits.

As a leader in providing legal services to the personal care products industry, CK&E can assist companies in instituting internal policies and procedures to help ensure compliance with the Nagoya Protocol.  CK&E will continue to monitor and provide updates about developments in the Nagoya Protocol.  The first meeting of the Conference of the Parties to the Nagoya Protocol will be held in October 2014 in Pyeongchang, South Korea, concurrently with the Conference of the Parties to the Convention on Biological Diversity.

Full text of the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization.  The countries that have ratified or acceded to the Nagoya Protocol to date are:

  • Albania
  • Belarus
  • Benin
  • Bhutan
  • Botswana
  • Burkina Faso
  • Burundi
  • Comoros
  • Côte d’Ivoire
  • Denmark
  • Egypt
  • Ethiopia
  • European Union
  • Fiji
  • Gabon
  • Gambia
  • Guatemala
  • Guinea-Bissau
  • Guyana
  • Honduras
  • Hungary
  • India
  • Indonesia
  • Jordan
  • Kenya
  • Lao People’s Democratic Republic
  • Madagascar
  • Mauritius
  • Mexico
  • Micronesia (Federated States of)
  • Mongolia
  • Mozambique
  • Myanmar
  • Namibia
  • Niger
  • Norway
  • Panama
  • Peru
  • Rwanda
  • Samoa
  • Seychelles
  • South Africa
  • Spain
  • Sudan
  • Switzerland
  • Syrian Arab Republic
  • Tajikistan
  • Uganda
  • Uruguay
  • Vanuatu
  • Vietnam

 

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California Attorney General Reports Businesses Paid $17 Million to Settle Private Prop 65 Cases in 2013

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And that’s the “good news” – in 2012 it was $20 million.

The California Attorney General’s Office recently released its annual report of Proposition 65 settlements.  The report confirms what most businesses are already painfully aware:  Proposition 65 continues to be a thriving business for private Proposition 65 plaintiffs and their lawyers, who make millions of dollars in the name of the “public interest.”

While private plaintiffs did not reap as much in 2013 as they did in 2012 ($20 million), they did manage to collect $17 million.  That represents the third largest haul for bounty hunters since 2000, when the Attorney General’s Office began collecting the data and publishing annual reports.net

The summary reveals that in 2013 alone, private Proposition 65 plaintiffs acting in the “public interest” and their lawyers entered into a whopping 350 private settlements or consent judgments with businesses alleged to be in violation of Proposition 65, and collected $16,812,396.  In contrast, the Attorney General and local District Attorney each filed a single action.

Proposition 65 requires the State of California to publish a list of chemicals known to cause cancer, birth defects or other reproductive harm.  Businesses are required to warn consumers before exposing them to any one of more than 800 listed chemicals, by either labeling or posting a notice.  If a business does not comply, it can be liable for substantial civil penalties of up to $2,500 per day.

Proposition 65 has become a disturbingly lucrative operation for private enforcers, frequently called “bounty hunters,” who serve dozens if not hundreds of Notices of Violation on unsuspecting businesses.  These bounty hunters threaten to sue unless they are paid off in private settlements.  If a private settlement cannot be reached, they proceed with a lawsuit and try to force a settlement to avoid the cost of defense.

Proposition 65 allows private enforcers to keep 25 percent of all civil penalties collected, with the remaining 75 percent going to the California Office of Environmental Health Hazard Assessment (OEHHA).  In addition, private enforcers pocket 100% of so-called payments in lieu of penalties, or PILPs.  Whereas OEHHA would receive 75% of monies designated as civil penalties, OEHHA does not receive any portion of monies designated as PILPs.  Finally and most significantly, private enforcers’ lawyers are entitled to reasonable attorneys’ fees and costs under the State’s private attorney general doctrine.

The 2013 report shows that only one-tenth of all monies collected by private enforcers went to the State of California.  The rest of the money went to the bounty hunters and their lawyers:

  • $12,426,052, or 74%, went directly to the private enforcers’ lawyers as attorneys’ fees and costs
  • $596,977.25, or 3.6%, went directly to private-enforcer plaintiffs
  • $1,998,435, or 12%, went indirectly to private-enforcer plaintiffs as a payment in lieu of penalty
  • $1,790,931.75, or 11%, went to OEHHA.

The report also shows continued aggressive activity by a handful of Proposition 65 private enforcers.  At the top of the list are:

  • Center for Environmental Health (represented by Lexington Law Group) with 62 settlements or consent judgments totaling more than $3.3 million
  • Russell Brimer (represented by Chanler Group) with 60 settlements or consent judgments totaling more than $2.4 million
  • Peter Englander (represented by Chanler Group) with 46 settlements or consent judgments totaling more than $1.6 million
  • John Moore (represented by Chanler Group) with 41 settlements or consent judgments totaling more than $2 million
  • Environmental Research Center (represented by various law firms including Law Office of Karen A. Evans and Michael Freund & Associates) with 34 settlements or consent judgments totaling more than $2.8 million
  • Consumer Advocacy Group (represented by Yeroushalmi & Associates) with 25 settlements or consent judgments totaling more than $1.3 million

The Prop 65 outlook for businesses in 2014 does not look much better.  In particular, the June 2013 listing of cocamide DEA, a common ingredient in beauty and personal care products, such as liquid soaps and shampoos, has spawned dozens of lawsuits and hundreds of businesses have been named as defendants.  Numerous settlements have already been approved by the Alameda Superior Court this year, leading to speculation that the total settlements in 2014 will likely exceed the total settlements in 2013.

Conkle, Kremer & Engel routinely represents businesses against Proposition 65 claims and lawsuits brought by private enforcers, as well as counsels businesses on compliance with Proposition 65 in order to avoid becoming a future target of private enforcers.

 

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The Conkle Firm Teaches International Entrepreneurs in BIMA Program

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Conkle, Kremer & Engel attorneys Mark Kremer and Amy Burke have been honored to participate in and contribute to the revolutionary Beauty Industry Market Access (BIMA) program through the Center for International Trade Development (CITD).  The BIMA program was developed and is led by beauty industry guru Patty Schmucker and international trade expert Cesar Arellanes, the Director of CITD in Long Beach.   BIMA is a five week intensive international trade and business education program taught by leading health and beauty industry experts. BIMA participants focus on key program principles distinct to conducting business overseas, receive bi-monthly objectives for assessing their business, and ultimately produce an export growth plan exclusive to their business. Participants also have access to upcoming trade missions to the world’s largest emerging market beauty trade shows – effective venues for executing learned principles and business plans.

Amy and Mark contribute to the BIMA educational program by teaching modules on domestic and foreign intellectual property protection, domestic regulatory compliance, and international distribution agreements.   Participants are particularly interested in cost-effective methods of protecting their intellectual property internationally, such as international trademark registrations through the Madrid System.  The Madrid System offers a centralized application process for trademark registration in over 90 countries based on a brand owner’s domestic application or registration.  Participants are also interested in CK&E’s practical approach to domestic regulatory compliance, including California’s evolving green chemistry initiative, Safe Cosmetics Act and Proposition 65.  Participants have also benefited from CK&E’s tips for forging fruitful business relationships with distributors, based on decades of experience representing clients in the personal care products industry.

Amy will accompany Patty Schmucker and several graduates of the BIMA educational program to Cosmoprof Worldwide in Bologna in April 2014.  Amy and Mark look forward to the next BIMA session, which begins on June 26, 2014.  Click for further information about joining the BIMA program: BIMA_Summer-Fall_2014

 

 

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gTLDs are Already Causing Confusion – Just Ask Wayne Knight and TMZ

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Actor Wayne Knight (best known as Newman on Seinfeld) was forced to tweet his “proof of life” on Twitter, after a website that uses the domain name TMZ.today reported that he was killed in a traffic accident and the story went viral.  It has been reported that many users credited the story of the death of Wayne Knight because it was circulated with attribution to the website TMZ.today.  TMZ is well known as a major source of real entertainment news and celebrity gossip.  TMZ uses the domain name TMZ.com, but the domain name TMZ.today links to an entirely different website called ebuzzd.com that is actually an unrelated, deliberately fake news website – a website dedicated to hoaxes.

Wayne Knight’s concerns aside, this story presents important lessons for trademark holders and domain name registrants:  New generic Top Level Domains (gTLDs) are here and must be reckoned with.  TMZ.com is not TMZ.today, but it’s a good bet that a substantial portion of the consuming public does not know that.  Will the consuming public realize that your company website “XYZ.com” is not affiliated with XYZ.Today, XYZ.News, XYZ.Info, XYZ.Web, XYZ.Blog, XYZ.Corp, XYZ.Inc, XYZ.London, XYZ.Charity or XYZ.Porn, or any of the 600+ other non-branded gTLDs that are available now and coming online within the next two years?

For a trademark holder, it can be a daunting prospect to try to police that many possible confusing domain names, but there are cost-effective brand protection strategies and solutions.  They begin with recognizing the issue, and making sure that you have taken all appropriate steps to protect your trademarks and domain names.  The most basic step is to obtain U.S. trademark registrations for your important trademarks – especially for your primary brand.  That is the key to many of the solutions that are offered at http://trademark-clearinghouse.com/, the administrative service established by ICANN to help control issuance of gTLDs.   Then, set a strategy that includes monitoring the “Sunrise Periods,” during which registered trademark holders can take the most efficient steps to protect against spurious registrations of confusingly similar domain names with the new gTLDs.

The best and most cost-effective methods of protection against gTLD infringers and domain name cybersquatters will be discussed in future blog posts.  Available methods include preemptive registration, blocking and various forms of policing.  Conkle, Kremer & Engel routinely guides its clients to protect their valuable intellectual property and domain names, including taking proactive steps to address the new threats to trademarks posed by gTLDs.  Contact us if you have questions and need assistance.

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Protecting Your Company When a Top Executive Leaves to Join a Competitor

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What do you do when a key member of your team goes to work for a rival firm? Or, perhaps worse, how do you react when you receive a competitor’s demand that your latest hire, a new sales manager, stop working for you?

John Conkle recently participated in a discussion of experienced practitioners which looked at these and related topics at the 2014 American Bar Association (ABA) Section of Litigation, Corporate Counsel Committee’s Continuing Legal Education Seminar held in Rancho Mirage, California. The topic of the presentation was what actions inside and outside counsel need to take when a top executive of the company leaves to joins a competitor, when the company’s reputation, confidential information, and business could all be at risk. The panel addressed practical and legal strategies to help navigate the pitfalls presented by this high-stakes dilemma.

Protecting Your Company - ABA 2014

John was joined on the panel by the Hon. Gail Andler, Judge of the Orange County California Superior Court; Elizabeth K. Deardorff, Associate General Counsel of Hewlett-Packard Company; and Steven A. Weiss, of Schopf & Weiss LLP, a Chicago litigation boutique firm. More than 300 attorneys from law firms and law departments throughout the United States and from several foreign countries attended this year’s seminar.

Written materials distributed at the seminar included an article written by John and Bill Garcia, Director of Legal Project Management at Thompson Hine LLP:    First Response to Surprise Departure of Top Executive to Marketplace Rival.  The article outlines first response actions to be taken by counsel in response to an executive’s departure. Bill Garcia had been scheduled to moderate the panel, which he helped conceive and orchestrate, but he was unfortunately snowed in and unable to leave Washington, D.C.

Losing a key executive to a competitor can be a serious and sensitive matter. CK&E is well versed in the options available to a company whose top executive leaves. CK&E has also represented the interests of the company acquiring the executive and employs various strategies and defenses to help resolve disputes over such hirings. CK&E lawyers have represented both sides of these issues, from recruitment of an entire sales team to competition by a former owner of an acquired business or product line.  CK&E’s vast experience in the area of employment law, non-competition and protection of trade secrets allows the firm to efficiently assist in-house counsel to reach a desired objective with a minimum of business disruption.

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National Article Profiles the Conkle Firm’s $6.2 million Judgment for Unpaid Sales Commissions

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Conkle, Kremer & Engel’s $6.2 million judgment against an electronics manufacturer is the subject of a feature article in the monthly publication of Manufacturers’ Agents National Association (MANA).  The article, Fallout From an Oral Contract, appears in the January 2014 issue of Agency Sales Magazine.

The article profiles Plaintiff Peter Reilly, a sales representative who was denied his commissions.  Author Jack Foster chronicles how CK&E lawyers Eric S. Engel and H. Kim Sim marshaled the facts and developed the law of the California’s Independent Wholesale Sales Representatives Contractual Relations Act to win a treble damages judgment for Mr. Reilly.

The Independent Wholesale Sales Representatives Contractual Relations Act is a little-known statute that requires a signed written contract containing specific terms in some commission agreements between manufacturers and sales representatives.  A willful failure to have a written contract that complies with the Act, or to account for and pay commissions as required by the written contract, can result in an award to the sales rep of three times the amount proved at trial, in addition to attorney fees.  In the Reilly v. Inquest case, the jury awarded the sales representative $2.1 million for unpaid commissions, which was trebled by the Court to more than $6.2 million.

The California Court of Appeal affirmed the award in full.  The Reilly v. Inquest Technology decision was unprecedented, because it is the first published decision to endorse the full scope of remedies available under the Independent Wholesale Sales Representatives Contractual Relations Act.

The Agency Sales Magazine article follows an article about Reilly v Inquest that appeared in the Los Angeles Daily Journal.

CK&E’s lawyers are well versed in issues affecting manufacturers and sales representatives.  CK&E lawyers litigate and resolve disputes over sales commissions and terminations, and use that knowledge to help manufacturers and sales representatives draft more effective contracts.  CK&E is a member of MANA and the Electronics Representatives Association (ERA).

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Kirtsaeng Holds Copyright First Sale Doctrine Trumps Importation Rights

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The Copyright Act gives a copyright owner the exclusive right to sell copies of the copyrighted work. But once a genuine copy is sold, a lawful owner of that particular copy can resell or transfer what he bought without infringing the copyright – the copyright owner can no longer use the copyright to control the resale of that particular copy.  This copyright limitation has become known as the “First Sale Doctrine.”

A quirk in copyright law arose because the Copyright Act has a provision that prevents importation of a copyrighted work into the U.S. without the copyright owner’s permission.  (17 U.S.C. 602(a)(1)).  This ability of the copyright owner to prohibit importation seemed to conflict with the First Sale Doctrine when a copy is first sold outside of the United States.

In the 1998 decision Quality King Distributors, Inc. v. L’Anza Research, Int’l, Inc., the Supreme Court held that a copyrighted product manufactured in the U.S., but first sold in a foreign country, was subject to the First Sale Doctrine.  The result was that the copyright owner could not prohibit importation of the copyrighted product into the U.S.  But the question remained whether the First Sale Doctrine also applied to copyrighted works that were both manufactured and first sold outside the U.S.

In March 2013 the Supreme Court answered the question by applying the First Sale Doctrine regardless of where the copyrighted work is manufactured or first sold.  In Kirtsaeng dba Bluechristine99 v. John Wiley & Sons, Inc., the products involved were textbooks manufactured and first sold in Thailand by the copyright owner, then later imported into the U.S. for resale without the copyright owner’s permission.   In a split decision, the Supreme Court held that the Copyright Act requires that the First Sale Doctrine applies to authentic, unaltered products that were lawfully manufactured and first sold by the copyright owner in a foreign country as well as in the U.S.

The Kirtsaeng decision provides no protection for sale of modified, adulterated, pirated or counterfeit copies, regardless of where they were made or sold.  Nor does it insulate parties from participation in fraud, breach of contract, unfair competition or other wrongful acts that are independent of copyright protections.  Conkle, Kremer & Engel has long recommended that its clients take a multi-faceted approach to preventing and remedying product diversion and counterfeiting, so they are able to effectively address the problem no matter where and how the misconduct occurs.

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Starting a Fire: "Tris" Listing Increases Risks of Prop 65 Claims

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Tris / TDCPP is a common flame retardant additive used in the manufacture of polyurethane foam, resins, plastics, textile coatings and rubber. Tris / TDCPP is found in a wide variety of common products such as upholstered furniture and padding. California’s Office of Environmental Health Hazard Assessment (OEHHA) recently added the chemical Tris(1,3-dichloro-2-propyl) phosphate (chlorinated Tris or TDCPP) to its ever-growing list of chemicals “known to the State of California to cause cancer or reproductive toxicity.” As a result, Tris / TDCPP is now subject to Proposition 65, California’s Safe Drinking Water and Toxic Enforcement Act of 1986.

Prop 65 has a well-earned reputation as a “bounty hunter” statute, and is presently the subject of reform legislation, AB 227. This notorious “right to know” law does not ban any particular chemical from being used in products. In most cases it simply requires a generic warning label if a product contains chemicals found on the OEHHA’s Prop 65 list.

Because of the recent addition of Tris / TDCPP, products containing that chemical now must have a warning label in order to comply with Prop 65. Manufacturers and distributors who use outdated labeling and inadvertently fail to include the required warning are likely to be targeted by lawyers and claimants looking for violations on which they can capitalize. The penalties imposed by Prop 65 include fines as well as liability for the plaintiff’s attorney’s fees and costs.

Prospective Prop 65 plaintiffs are required to serve a “Notice of Violation” and wait at least 60 days before they can file a lawsuit. (California Health and Safety Code section 25249.7(d)) A review of the 159 Notices of Violation with respect to Tris / TDCPP served in the past 6 months reveals that just two law firms are actually behind the onslaught of Prop 65 notices regarding Tris / TDCPP:

  • The Chanler Group of Berkeley, California, through attorney Josh Voorhees and the firm’s “usual plaintiffs” (Peter Englander, Laurence Vinocur, Russell Brimer and John Moore) – 146 of the 159 Notices (92%).
  • Lexington Law Group of San Francisco, California, through attorney Mark N. Todzo and the firm’s plaintiff, Center for Environmental Health – 13 of the 159 Notices (8%).

The products identified in these notices have included foam-cushioned upholstered furniture, such as chairs, ottomans, stools and benches, foam-cushioned mattress toppers, back and seat cushions, car seats, and foam mats and pads for children and infants.

Manufacturers and distributors should promptly assess whether their products contain Tris / TDCPP. CK&E’s lawyers are experienced in helping clients take action to protect themselves from Prop 65 liability, and to help put out the fire if a Notice of Violation is delivered.

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