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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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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The Conkle Firm Attends IECSC and IBS Beauty Industry Shows in Las Vegas

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CK&E attorney Kim Sim recently attended the International Esthetics, Cosmetics and Spa Conference (IECSC) and International Beauty Show (IBS), two of the premier trade shows for manufacturers and distributors in the personal care products industry.  The trade shows were held June 12 through 14, 2014 at the Las Vegas Convention Center in Las Vegas.

IECSC Las Vegas is the country’s largest spa and wellness conference and expo, with more than 600 exhibitors, including manufacturers, distributors, spas and wellness centers, and thousands of professionals attending from the national and international spa and wellness market.  In addition, this year’s IBS Las Vegas, a beauty show focused primarily on salon-only and professional-grade products, featured more than 350 exhibitors.  Many of CK&E’s industry clients exhibited at both IECSC Las Vegas and IBS Las Vegas to widespread interest by show attendees.  Both IECSC Las Vegas and IBS Las Vegas offer a unique opportunity for CK&E to meet and interact with clients as well as other professionals in the beauty industry, and stay on the inside track about the industry’s latest developments and trends.  Kim was pleased to be able to catch up with BonBliss Beauty founders Elissa and Jay Choi.

CK&E’s next trade show attendance will be at Cosmoprof North America, one of the world’s top trade shows for the personal care products industry.

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BIR Article Features the Conkle Firm at Cosmoprof Bologna’s California Pavilion

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Tireless reporter Mike Nave attended Cosmoprof Bologna in April 2014, and this month published the Beauty Industry Report (BIR) article detailing his observations.  BIR featured Conkle, Kremer & Engel attorney Amy Burke and her participation in the California Pavilion.  As previously posted in this blog, Cosmoprof Bologna is a preeminent global conference for the personal care products industry, with over 207,000 visitors and 2,450 exhibitors from 69 countries, and participation by manufacturers, distributors and industry organizations.  Amy was proud to be able to assist The California Pavilion, orchestrated by the California Trade Alliance.  Amy joined Beauty Industry Market Access (BIMA) directors Patty Schmucker and Cesar Arellanes, and several graduates of the BIMA program, and was pleased to offer immediate assistance in international distribution and brand protection issues.

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The Conkle Firm is Featured in April 2014 Beauty Industry Report

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Conkle, Kremer & Engel is proud to again be the subject of a feature interview in the industry-leading publication, Beauty Industry Report (BIR).  BIR is a monthly 24-page executive newsletter for professionals that focuses on the emerging trends affecting the beauty industry.  CK&E’s feature interview assessed the latest legal trends, based on CK&E’s decades of experience in the industry.  Topics covered included trademark and brand protection, both international and domestic, regulatory compliance issues such as California’s Proposition 65 and the Safe Cosmetics Act, issues in manufacturer-distributor relationships, and more.

The attached article includes links to topical blog posts and websites referenced in the interview.  CK&E wishes to thank BIR’s Mike Nave for taking the initiative to disseminate information about these important industry issues.  BIR proved again that working in the beauty industry without reading BIR is like working in finance without reading The Wall Street Journal.

BIR Feature Interview of CK&E

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The Conkle Firm Participates in California Pavilion at Cosmoprof Bologna

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CK&E attorney Amy Burke attended Cosmoprof Worldwide in Bologna, Italy, the international professional beauty industry trade show, in April 2014.  Cosmoprof Bologna is a preeminent global conference for the personal care products industry, with over 207,000 visitors and 2,450 exhibitors from 69 countries, and participation by manufacturers, distributors and industry organizations.  Highlights included the dynamic USA Pavilion and California Pavilion, orchestrated by the California Trade Alliance.  Amy joined Beauty Industry Market Access (BIMA) directors Patty Schmucker and Cesar Arellanes, and several graduates of the BIMA program, as they put into practice the concepts taught at the intense educational program designed for entrepreneurs entering international markets.  To learn more about the BIMA program in which CK&E attorneys participated, click here.

As developed in discussions at Cosmoprof, a critical issue for many U.S. exhibitors entering the EU market is the July 2013 Cosmetics Regulation (EU Reg. 1223/2009) that overhauled the European Union’s regulatory landscape for personal care products.  The Regulations introduced a number of new requirements, including labeling for nanomaterials such as titanium dioxide, claim verification standards and an EU-wide ban on animal testing.  As a brief introduction to the new requirements, the EU distilled the July 2013 Cosmetics Regulation into the simplified infographic shown here.

Under the new Regulation, each manufacturer selling cosmetic products into the EU must designate a person or business entity physically located in the EU that will serve as the manufacturer’s designated “responsible person” for compliance with the Regulation.   CK&E has strong working relationships and regularly works with such “responsible persons” who can be engaged to assist businesses seeking to expand into the EU.  CK&E is pleased to participate in industry events such as Cosmoprof Bologna and programs such as BIMA, to help U.S. entrepreneurs expand into the EU and to assist foreign manufacturers develop and secure markets for their products in California and throughout the United States.

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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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Spain Enjoins ISP from Allowing User to Infringe Copyrights

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The Barcelona Court of Appeal recently issued a judgment holding an Internet Service Provider (ISP) subject to injunction due to copyright infringement by one of its users.  This ruling is consistent with the EU’s Copyright Directive, Recital 59, which provides:

In the digital environment, in particular, the services of intermediaries may increasingly be used by third parties for infringing activities. In many cases such intermediaries are best placed to bring such infringing activities to an end. Therefore, without prejudice to any other sanctions and remedies available, rightholders should have the possibility of applying for an injunction against an intermediary who carries a third party’s infringement of a protected work or other subject-matter in a network.

Spain authorized injunctions against intermediaries in article 8(3) of its Copyright Act.

In the Barcelona case Promusicae, an association of Spanish music producers, learned that someone was using the Direct Connect P2P network to make available in a shared folder 5,000 music files including copyrighted music.  In Spain, ISPs are not obligated to identify their users for purposes of civil lawsuits, so the only identification of the user available to the claimants was a nickname and IP address.

Without identifying the primary infringer, the copyright holders sued the ISP, R Cable y Telecomunicaciones Galicia.  The appellate court found that there was infringement and that the copyright holders were entitled to an injunction against the ISP that was providing internet access to the infringer, enabling the infringement.  The injunction required the ISP to permanently stop providing internet access to the infringing user, stopping the infringement.

This was the first ruling of its kind in Spain, but analogous rights against intermediaries are available in the U.S. and EU countries.  Conkle, Kremer & Engel assists its clients to protect and enforce their IP rights in copyrights, trademarks and patents worldwide.

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China Finds Parallel Imports Constitute Trademark Infringement

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Chinese trademark law has no specific prohibitions against sale of gray market products diverted into the Chinese market, also known as parallel importation.  An important breakthrough occurred recently when the Suzhou Intermediate Court enforced trademark holders’ rights against an unauthorized reseller of gray market goods imported into China.

Pernod Ricard China (Trading) Co., Ltd. is the exclusive trademark licensee of Absolut Vodka (Images II-IV) in China.  Pernod Ricard and the trademark owner, Absolut Company Aktiebolag, brought a lawsuit in China against a local retailer of parallel imports of Absolut Vodka products, asserting trademark infringement and unfair competition.  The key facts were that the imported products had manufacturers’ identification codes removed and had added labels bearing Chinese characters for “Absolut” (Image I) and identifying an unauthorized importer and distributor.  The code removal and label addition infringed consumers’ right to know about the product origin, interfered with the trademark owners’ ability to track products to maintain product quality, and undermined the integrity and beauty of the genuine product.   The removal of the manufacturers’ identification code violated Article 52.5 of China’s Trademark Law, which is a catchall term prohibiting impairment of an exclusive right to use a registered trademark, and constituted unfair competition.  The addition of unauthorized labeling violated Article 52.1 & 52.2, prohibiting use of an identical or similar mark on the same or similar goods without the permission of the owner of the registered trademark, and infringed the exclusive right to use the registered trademark.

Absolut Vodka Images

Absolut Vodka Images

Conkle, Kremer & Engel works to protect its clients’ brands in the United States and abroad.

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Conkle Kremer & Engel Presents Brand Protection in Brazil

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Daniel Advogados presenting at CK&E's Brand Protection in Brazil

Daniel Advogados presenting at CK&E’s Brand Protection in Brazil

Conkle, Kremer & Engel recently teamed up with its international correspondent lawyers from the Brazilian intellectual property firm Daniel Advogados, Andrew Bellingall and George de Lucena, to give a presentation about what companies can do to protect their brands in Brazil, including helpful information about doing business in Brazil.  Conkle, Kremer & Engel’s Mark D. Kremer emceed the event and moderated the informative Q&A that followed the presentation.

Brazil is the world’s fifth-largest country in the world in terms of land mass and population.  Brazil is also a founding member of BRICS – the acronym for the five major emerging economies of Brazil, Russia, India, China and South Africa.  Its growing middle class, stable currency, and high demand for its commodity exports have all made Brazil a very desirable place for companies to expand. And it does not hurt that Brazil will host both the 2014 World Cup and the 2016 Olympic games.

Kyle Baker shows his 3Expressions 3D Tablet innovation to John Conkle and George Mendonça de Lucena

Kyle Baker shows his 3Expressions 3D Tablet innovation to John Conkle and George Mendonça de Lucena

Because our clients’ intellectual property and brand protection needs extend beyond the U.S. border, Conkle, Kremer & Engel has established working teams with leading international intellectual property law firms around the world.  It is Conkle, Kremer & Engel’s mission to stay on top of developments in all foreign and domestic markets where our clients currently operate or look to expand.

Conkle, Kremer & Engel wishes to thank all those who attended the presentation, as well as our friends and colleagues from Daniel Advogados, Andrew Bellingall and George de Lucena.   We are pleased to be able to confirm that the presentation was approved by the State Bar of California for 1.0 hour of participatory MCLE credit for all lawyers and paralegals in attendance.  For all questions regarding MCLE credit, please contact Martinique E. Busino at 310-998-9100.

Slideshows from Brand Protection in Brazil:

Daniel Advogados – Doing Business in Brazil

Daniel Advogados – Combating Counterfeiting and Piracy in Brazil

Topics covered in the presentation and the Q&A session included:

Strategies for entering the Brazilian market

  • Exporting goods bearing the owner’s trademark
  • Doing business through a subsidiary
  • Licensing use of trademarks to an unrelated third-party
  • Joint ventures with Brazilian companies
  • Franchise agreements with Brazilian companies

 Protection of trademarks in Brazil

  • Best practices for brand protection
  • An overview of trademark prosecution and enforcement in Brazil
  • Procedures and delays at the Brazilian Patent and Trademark Office
  • Legal remedies available to intellectual property owners
  • Court procedures in Brazil for actions involving intellectual property
  • Registration of domain names in Brazil

The latest developments at the Brazilian Patent and Trademark Office regarding trademarks

  • Issues related to Brazil’s possible adoption of the Madrid Protocol
  • Adoption of multi-class and multiple owner applications

Combating counterfeiting and piracy in Brazil

  • Ramifications of intellectual property infringements, which are crimes in Brazil
  • Using criminal remedies and border control measures as intellectual property protection solutions

 

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