Business Law Exam 2

Contributory Copyright Infringement

Inducing, causing or materially contributing to the infringing conduct of another with knowledge of the infringing activity.

IPO rules for emerging growth companies

Can go public with only 2 years of financial statements. They can meet with potential institutional investors to test the waters before filing with the SEC

Two methods to vote for directors

Plurality Voting and majority voting

trade secret

information that gives a business an advantage over competitors who do not know that information

3 types of patents

utility, design & plant

General Partnership

Each partner has the authority to bind the company in relationships with third parties. Advantages: subject to only one tax level - called a pass through entity because profits pass through to partners who then pay income tax. Disadvantage: individual partners are subject to personal liability for the obligations of the partnership. to be formed you need a meeting of the minds, but as little as a handshake - better to put in writing though. if there is no written agreement, the laws of the state where the parties are doing business will determine whether the relationship will be treated as a partnership or something else.

certain employees are not subject to at will employment --- 3 theories of wrongful discharge

Public Employees - employees of federal, state and local government agencies because they have tenure (like JD). also employees with individual contracts - like Harbaugh & Disney CEO. union contracts - require just cause for termination. 1. Public Policy 2. Implied Contract 3. Implied covenant of good faith and fair dealing

Patent

a government granted right to exclude others from making, using, selling or importing an invention

Benefit Corporation (B Corp)

is a FOR PROFIT corporation that uses the power of business to solve social and environmental problems. do not have any duty to maximize shareholder value, even when there is a change in control (aka revlon doesn't apply)

First Sale Doctrine -Trademarks

provides that a trademark owner cannot act against resellers of products after the first sale of the product

Inevitable Disclosure Doctrine

recognizes that former employees who go to work for a competitor in a similar capacity will rely on and disclose trade secrets gained in former employment

Rule 10b-5

was created to encourage disclosure of information relevant to the investing public, to protect investors and to deter fraud. it also prohibits insider trading Actual definition: a regulation adopted by the SEC, pursuant to the 1934 act, that prohibits individuals and companies from engaging in fraudulent, manipulative or deceptive practices in connection with the sale or offer of securities

1933 Securities Act

was enacted after the great depression, congress wanted to ensure that investors got disclosure of material information about the firm issuing securities (the issuer) and its business and the offering. promoters of securities have to register with the SEC, allows private investors to sue for damages but doesn't protect against bad quality securities or bad decisions.

Defenses

1. No Reliance - investors who know there was a misstatement or omission cannot claim to have relied on it, they are presumed to have acted despite the misstatement or omission. but investors dont need to prove they relied on it, or even read it 2. No Causation - not liable if they can show that the misstatement didn't actually cause the plaintiff to suffer any losses 3. Due Diligence - not liable for an M or O if the company acted with due diligence meaning they 1. conducted a reasonable investigation 2. reasonably thought the misstatements were true and that there were no omissions.

Requirements for Utility Patents

1. Novel - not anticipated, previously used or known by others. Prior Art doesn't count. 2. Useful - must have a practical benefit 3. Non Obvious 4. Patentable as a subject matter - a process, machine, manufacture or composition of matter

To Obtain patent protection...

1. Specifications - description 2. Claims - describe what elements the patent will protect 3. Drawings 4. Declaration by the inventor - reviewed app and thinks they are the first to invent

to establish a prima facie case...

1. plaintiff must prove that he is a member of a class of person protected by title VII. 2. he was denied a position or benefit that he sought, for which he was qualified and available and then its on the defendant to show that they didn't promote them (etc.) b/c of nondiscriminatory reasons.

Registration Statement / Prospectus

1933 act requires the registration of all offers and sales of securities in the US. the registration statement consists of filing forms, the prospectus - the disclosure document that an issuer of securities provides to prospective purchasers

Rule 10b5-2

3 situations when a person has a duty of trust or confidence for purposes of the misappropriation theory of insider trading: 1. when a person agrees to maintain confidence 2. when two people have a pattern of telling each other things and it should be expected 3. when it comes from a family member

Sole Proprietorship

Advantages: individual has complete control of the business, easiest and least costly to create, only pay one level of tax, individual gets all profits Disadvantages: risk (if the business loses money the owner is liable), harder to raise capital, can only tap into personal funds and borrow money from bank.

Sarbanes - Oxley Act of 2002

Created the PCAOB - Public Company Accounting Oversight Board to regulate and inspect the public accounting firms that provide audit reports for publicly traded companies. SOX prohibits the provision of nonaudit servies to audit clients to avoid conflicts of interest.

Where to incorporate?

Delaware's laws are the most pro management and CA is the most pro shareholder.

Patents can be infringed in 3 ways

Direct Patent Infringement, Indirect and Contributory Patent Infringement

Clawback Provisions

Directors and officers have a responsibility to ensure the accuracy and completeness of public company filings with the SEC - if there was a mistake and they need to restate their earnings, officers can be required to pay back bonuses and other incentives - called a clawback provision

To be copyrightable, must have 2 things..

FIXED - the works must be fixed in a tangible medium from which they can be perceived, reproduced or communicated ORIGINAL - the works must be sufficiently original, meaning they have some degree of creativity to qualify for protection.

Defenses to Trademark infringement

First Sale Doctrine Fair Use Nominative Use Genericity FIrst Admendment if these dont work - most common remedy is injunctive relief

Sexual Stereotyping

Homosexual employees may state this claim under Title VII against employers who discriminated against them because they were not manly enough men etc

Limited Liability Company

LLC combines tax advantages of a pass through entity with the limited advantages of a corporation. Even for controlling members, their liability is limited to the amount invested. Main advantages over an S Corp is the lack of restrictions on shareholders and the ability to have more than one class of securities

Defenses to Patent Infringement

Non Infringement Invalidity of the patent misuse of the patent innocent infringement first sale doctrine

Regulation Analyst Certification

Regulation AC - prohibits analysts from issuing reports that they do not personally believe to be true and requires the disclosure of any analyst compensation arrangements related to a specific recommendation

Pierce the Corporate Veil

Regulators will pierce the corporate veil (make shareholders liable for claims against the corporation) if the corporation is unable to pay its own debts. two theories...

Federal Trademark Dilution Act of 1995

The owner of a famous mark can sue for injunctive relief from a party whose commercial use of a mark begins after the mark has become famous and causes dilution of the quality of the mark. Dilution can result from blurring or tarnishment

Bona Fide Occupational Qualification BFOQ

Title VII provides that an employer may lawfully hire an individual on the basis of religion, sex, or national origin if those traits are necessary to the normal operation of that business. not available for race or color. has to prove that those people would have been unable to perform that job

Elements of Rule 10b-5

To recover damages the plaintiff must show... 1. Misstatement or omission of fact 2. the M or O must be material 3. the M or O was in connection with the purchase or sale of a security 4. Scienter (M or O was made intentionally or recklessly) 5. Reliance 6. Loss Causation lawsuit can be brought by department of justice, SEC or shareholders (private parties)

Sarbanes - Oxley Act (SOX)

Whistleblower protection for terminated employees says that a company cannot retaliate against an employee who tells or threatens to tell authorities about misconduct. this is the federal law that is more broad than the state one. includes contractors to public companies not just employees -- i feel as though that it important

Misappropriation Theory of Insider Trading

a Rule 10b-5 violation occurs when a person breaches a fiduciary duty to the source of the nonpublic information by trading on that information after secretly misappropriating it for his own use

Fanciful Marks

a coined term that had no prior meaning until used as a trademark in connection with a particular product EXXON

First Sale Doctrine - Copyright

a copyright owner has exhausted its statutory right to control distribution of a copyrighted item once the owner sells the item and puts it in the stream of commerce

Bespeaks Caution Doctrine - Rule 10b-5

a court can determine that the inclusion of sufficient cautionary statements in a document render immaterial any misrepresentation or omission. only applies to projections, estimate, and forward looking statements. protects statements in any context.

Another Defense: Bespeaks Caution Doctrine - Litigation Reform Act

a court may determine that the inclusion of sufficient cautionary statements in a prospectus render immaterial any misrepresentations contained therein

Nominative Use

a defendant is not liable for infringement if its use is nominative use - that is if it uses the mark to reference the product, even if the goal is to describe its own product.

Misstatement

a misrepresentation of fact - a lie. a prediction about the future can be a misstatement, bt only if the person making the prediction does not believe it at the time. simply becasue information is material doesn't mean the company has a duty to disclose it.

Joint Venture

a one time partnership of two or more parties.

Limited Liability Partnership LLP

a partnership with no personal liability for other partners debts. designed for groups of professionals, accountants etc. have pass through taxation treatment, same as the general partnership. The purpose is to insulate partners from vicarious liability for partnership obligations such as liability arising from malpractice, or negligent or wrongful conduct of another partner

Traditional Discrimination Claims - Disparate Treatment

a plaintiff claiming disparate treatment must prove the employer intentionally discriminated against him by denying a benefit for privilege of employment becuase of his race, color, religion, sex or national origin.

Poison Pill

a plan that would make any takeover not approved by the directors prohibitively expensive. a self tender - is an offer by a corporation to buy back a stated amount of its securities or shareholder rights for a fixed price.

The role of Underwriters

a public offering of securities is typically, though not necessarily, underwritten by one or more investment banking firms

What actually is the prospectus?

a selling document, designed to present the best view of the investment and the company. its also a disclosure document, an insurance policy against claims of securities fraud.

Quid Pro Quo Harassment

a specific, job related adverse action, such as denial of a promotion, in retaliation for a person's refusal to respond to the supervisor's sexual advances is a violation of Title VII

Dodd Frank Wall Street Reform and Consumer Protection Act

adds further whistleblower protections, employees who suffer adverse employment actions becuase they gave info to the SEC can ring a retaliation claim under Dodd-Frank.

At will employment

american rule is that an employment agreement of indefinite duration is an at will contract, the employee can quit at any time and the employer can discharge the employee at any time, for any or no reason, with or without advance notice.

First Sale Doctrine - Patent

an authorized sale of a patented article exhausts the patent holders exclusive rights as to that article, to the extent that the article embodies the invention. then, the holder is precluded from obtaining any further royalties of imposing any further restrictions on the article or its sale or transfer

Classical Theory of Insider Trading

an insider is a person with access to confidential information about a company and an obligation to disclose nonpublic material information to other traders before trading in those securities. You can have traditional insiders and temporary insiders

Investment Contract

an investment can be a security even if it involves the transfer or an interest in real property or another physical asset. any transaction that involves an investment of money in a common enterprise with profits to come solely from the efforts of others is deemed to be an investment contract = security

Intellectual Property

any product or result of a mental process that is given legal protection against unauthorized use. 4 types: patents, copyrights, trademarks and trade secrets.

Undercapitalization Theory

applies when the corporation is a separate entity but its deliberate lack of adequate capital allows it to skirt potential liabilities. if intentionally undercapitalized, then its fraud = pierce the veil.

Proxy Contests

are when insurgents propose their own slate of directors or rally to oppose a board proposal by sending out their own proxy statement and soliciting proxies for their candidates. this is an important way to get control of a publicly traded company

Business Judgement Rule

arises in cases challenging board decisions for breach of the duty of care. it states that as long as certain standards have been met, a court will presume that the directors have acted in good faith and in the honest belief that the action was taken in the best interest of the company. this relies on the fact that the directors made an informed decision - can rely on officers and experts but not fully...

Title VII

bans discrimination based on race, color, religion, national origin or sex. claims fall into 4 categories: traditional discrmination, harassment, failure to accomodate religious beliefs & retaliation

Master Limited Partnership

business structure available to mineral or natural resource companies. can raise money on public exchanges and doesnt have to pay corporate income tax.

Indirect Patent Infringement

called inducement to infringe, is a party's active inducement of another party to infringe on a patent.

First Admendment

can claim this when their use of another's trademark is part of their communicative or expressive message and is protected as free speech.

S Corporations

closely held corporations that are taxed as a pass through entity.

Low Profit Limited Liability Companies L3C

entity with both business and charitable or educational purposes - can distribute profits to investors while serving a philanthropic purpose.

Need Disinterested Directors

even when the board makes an informed decision, the business judgement rule is not applicable if the directors have a financial or other personal interest in the transaction at issue.

Common Enterprise

for investment contracts you invest in a common enterprise: vertical commonality = between the promoter and the investor horizontal commonality = when there are multiple investors who pool their funds and get a pro rata share of the profits or buy similar assets that are managed jointly

Limited Partnerships

general partners and limited partners. general partners are liable for partnership obligations and are responsible for management and limited partners liability is limited to their investment.

National Labor Relations Act

grants rights to employees not supervisors or contractors allowing them to self organize, form unions, bargain with employers and strike. It prohibits employers from engaging in specific activities against employees or their unions called unfair labor practices. = no interference or retaliation. a company cannot threaten employees with adverse actions if they support a union

Family Resemblance Test

helps to determine if something is a security. promissory notes and other evidences of indebtedness may or may not constitute a security, depending on the actual context.

Revlon Mode

if its determined that a sale or breakup of the corporation is in the best interests of the shareholders, directors have a duty to obtain the best available price - max shareholder value. only triggered with a change in control.

1934 Securities Act

implemented a policy of continuous disclosure. includes strict anti-fraud provisions and implements filing requirements for insiders dealing with their own stock.

Controlling Person Liability

imposes joint or several liability on every person who, directly or indirectly, controls another person who is liable under the 1934 Act unless the controlling person acted in good faith and did not directly or indirectly induce the acts constituting the violation. TO be liable as a controlling person, you must be a culpable participant in the primary violation

Unocal Proportionality Test

in a takeover directors will lose their jobs so there is self interest going on if they block it...the business judgment rules applies to this provided that directors can show that they had reasonable grounds for believing that the unwelcome suitor posed a threat to corporate policy and effectiveness.

Adverse Employment Actions - Remedies for discrimination

in most discrimination cases the employee must establish that their employer subjected him to an adverse employment action such as demotions, reduction in pay, refusal to hire, promote etc. REMEDIES include - back pay (compensation for lost salary), hiring, wage adjustment, promotion, reinstatement, injunctive relief and front pay( equal to what the employee would have gotten had they not been fired)

Aided in the Agency Relation and Supervisor Harassment

in quid pro quo, the employer is always vicariously liable under this standard when a supervisor takes a tangible employment action against a subordinate (firing etc.) company may not be held liable if they had exercised reasonable care to prevent and promptly correct any harassing behavior.

False Claims Act

includes a provision allowing a private person to file a lawsuit on behalf of the government to recover damages (qui tam suit) for FCA violations. if successful, the person bringing the suit gets a percentage of the amount recovered.

Promissory NOte

is NOT a security (need to consider): 1. the motivations that would prompt a reasonable seller and buyer to enter into the transaction 2. the plan of distribution of the instrument 3. the reasonable expectations of the investing public 4. whether some factor, such as the existence of another regulatory scheme, significantly reduces the risk of the instrument, thereby rendering application of federal securities laws unncessary.

Omission

is a fact left out of a statement that makes the statement misleading.

Tender Offer

is a public offer to all shareholders of a target corporation to buy their shares at a stated price, higher than the market price. its a way to buy the majority of the voting shares to takeover the company instead of merging. This can lead to the second-step back-end merger (gets more than 505 of shares and replaces the board with its own people and then that board approves a merger.

Duty of Good Faith

is a subset of duty of loyalty & care... mere gross negligence is not enough to constitute the lack of good faith that would subject disinterested directors to personal monetary liability.

Who can be sued?

issuer, underwriter, any member of the board, people who gave their consent to be named in the registration statement as future directors, every person who signed the statement, experts for their portion of the statement.

how is a trademark different from other IP

it doesn't protect against a competitor's duplication of a product or service, instead it protects against unfair use of a company's brand or other identifying work

Due Diligence

key process in preparing the registration statement when the underwriters and the counsel review the info about the company in the registration statement - they must back up every claim in the prospectus.

Corporation

legal entity distinct from its owners. only the corporation itself is responsible for liabilities, allowing entrepreneurs to take risks. perpetual life. Main disadvantage - C Corp, has two levels of taxation. on the corporate income tax and on the personal tax.

Things that are copyright protectable:

literary works, musical works, dramatic works, pantomimes and choreographic works, pictoral, graphic and sculptural works, motion pics, sound recordings. software, menus, designer linens, toys

Jumpstart our Business Startups Act (JOBS Act)

made it easier for startups and other small businesses to raise limited amounts of capital from members of the public using the internet (crowdfunding) and for emerging growth companies (with less than 1B in revenue per year) to make an initial public offering without having to comply with SOX and securities acts.

Disadvantages of trade secrets

maintaining a protection program can be expensive, trade secret protection provides no protection against reverse engineering or independent discovery.

1934 Act - Section 10b

makes it unlawful for any person to use a fraudulent, manipulative or deceptive device in connection with the purchase or sale of a security

Duty of Loyalty

mandates that fiduciaries act in good faith and in what they believe to be the best interest of the corporation, subordinating their personal interests to the welfare of the corporation.

NOT copyrightable

names, phrases, government publications, information or facts.

Scienter

no liability for innocent M &O's they must be made with scienter (intent to deceive, manipulate or defraud.

Generic Marks

no protection for generic terms like software - for terms that describe products made only by one company, the problem of genericity, or the use of the product name as the generic name is huge. they lose their trademark. aka kleenex

Contributory Patent Infringement

occurs when one party knowingly sells an item with one use that will result in the infringement of anothers patent.

Class Voting

occurs when the charter or law requires one class of stock, usually preffered, to approve a given proposal voting separately from the holders of the other classes of stock

Tarnishment

occurs when the famous mark is used in connection with a category of goods of inferior quality, resulting in damage to the positive image associated with the products bearing the famous mark.

Blurring of a trademark

occurs when the nonfamous mark reduces the strong association between the owner of the famous mark and its products.

what is a material fact

one that a reasonable investor would most likely have considered important in deciding whether to buy or sell. what a hypothetical investor would have considered important. ex. earnings, distributions, assets, even if revenues is overstateed and so is COGS, this is still material

Temporary Insiders

outside attorneys, accountants etc. people who ar not directly employed by the issuer but who have confidential information because they perform services for them. thus, they have a fiduciary duty to keep the nonpublic information confidential

Loss Causation

plaintiff must prove that the M, O or other deceptive conduct caused him to suffer economic losses

Elements of Liability

plaintiff must show: 1. the statement contained a false or misleading statement of material fact 2. omitted to state a material fact required to be stated or one that was necessary so that the statements were not misleading.

Liability of Secondary Actors for 10b violations

private plaintiffs and the SEC often sue other parties such as accountants, lawyers or banks for section 10b violations under a variety of theories. Primary Liability (accounting firm for bad audit report) its just given Controlling Person Liability Aiding and Abetting Scheme Liability

Aiding and Abetting

private plaintiffs cannot bring these suits. To hold a person liable for this the government must show: 1. the existence of a violation of 10b or 10b-5 by the primary party 2. the defendant's knowledge of that violation 3. substantial assistance of the violation by the defendant

Suits to bring against inside traders

private suits - plaintiff must be an actual purchaser or seller of securities and loss was caused by actions of the defendant. all tippers and direct and remote tippees are liable SEC enforcement actions - liable for damages and disgorgement of profits and may be subject to other penalites and injunctions. Criminal prosecutions - SEC has no criminal enforcement power

Regulation FD (Fair Disclosure)

prohibits the practice of selective disclosure, whereby issuers of publicly traded securities disclose material nonpublic information to certain people before making full disclosure of the same information to the general public.

Design Patents

protects any novel, original and ornamental design for an article. protects again copying the appearance or shape of an article.

Section 11 of the 1933 Act

provides a remedy for a person who purchases a security pursuant to a misleading registration statement. Who can sue? any person who has purchased a registered security but this right is subject to a tracing requirement in which the purchaser must prove that the security was one of those sold pursuant to the misleading registration statement

Fair Use Doctrine

provides that a person may infringe upon the copyright rights without liability if the person uses the material while engaging in activities such as literary criticism, social comment, education etc.

Hostile Environment Harassment

quid pro quo harassment will not hold as an argument if there was never actual adverse action, aka the threats weren't carried out.

Arbitrary Mark

real words whose ordinary meanings has nothing to do with the trademarked product, APPLE

Duty of Care

requires fiduciaries to make informed and reasonable decisions and to exercise reasonable supervision of the business.

Straight Voting

shareholder casts one vote for each share the shareholder owns for each nominee.

Plurality Voting

shareholders get two votes either "for" or "withhold policy" a director could be elected as long as he got a plurality of the votes cast for any nominee.

Corporate Opportunity Doctrine

specialized rule for situations where an officer or director considers taking a business opportunity that rightfully belongs to the corporation.

Descriptive Marks

specify certain characteristics of the goods, like size or color, uses, the intended customers or the effect of using the goods. these are initially un-protectable but can become protectable if they acquire secondary meaning. ex. geographic and personal names are non distinctive until proven otherwise...north pole bananas.

Suggestive Marks

suggests something about the product without directly describing it. after seeing the mark the customer can use imagination to determine the nature of the goods. tuna = chicken of the sea

Vicarious Copyright Liability

the defendant may face this for a direct infringer's actions if the defendant 1. has the right to control the infringer's actions, 2. receives a direct financial benefit from the infringement.

Fair Use - Trademarks

the defense of fair use is available when a trademark user truthfully uses a competitor's mark to identify the product for their own purposes. used in a descriptive sense.

Copyright

the legal right to prevent others from copying an original expression embodied in any original work of authorship fixed in a tangible medium. Protests the expression of the work NOT the ideas behind it.

Direct Patent Infringement

the making, use or sale of any patented invention within the US

The Equal Employment Opportunity Commission

the primary enforcer of civil rights legislation in the US (civil rights act of 1964 & title 7)

Incorporation

the process by which an organization is formed. the state under whose laws a corporation is formed is called the corporation's corporate domicile. the company can conduct business as a foreign corporation is other states.

Section 16b - Short Swing Trading

the purchase and sale by insiders of equity securities of a public company registered under the 1934 act within a 6 month period. this prevents insiders from profiting on information not available to the public for officers and directors - the rules apply if you either sold or purchased an equity during the time of tenure, doesn't have to be both. for 10% shareholders, they are liable only if they hold more than 10% at the time of purchase and the time of sale.

Disgorgement

the purpose of it is to make it unprofitable for the violator to break the law, it deprives violators of the profits and deters future misconduct - it doesn't compensate victims - prevents unjust enrichment. not punitive so it cannot exceed the amount obtained through the wrongdoing

Shelf Registration

the registration of a number of securities at one time for issuance later, very beneficial because you can use them as you see fit over longer periods of time according to market conditions and the company's needs

Firm Commitment Underwriting

the underwriters agree to purchase the entire offering, thus shifting the risk to themselves. this is attractive to issuers becuase they will know what kind of money they are going to get for it and when. basically underwriters buy at a discount and sell to investors at full price - need to be sure they have buyers, which is why they take on more risk. this sends a positive signal to the market bc it means they aren't that risky if they were willing to buy

Best - Efforts Underwriting

the underwriters do not agree to purchase the securities being offered, instead agree to find buyers at an agreed upon price. Mostly for IPOs and unseasoned companies. NO RISK For underwriter

Advantages of trade secrets

there is no application process and they are immediately protectable - just develop a trade secret protection program. - use a trade secret when its not really a product or a service - doesn't have to be unique, just anything that provides a competitive advantage

Alter Ego Theory

this theory applies when the owners of the corporation have so mingled their own affairs with those of the corporation that it doesn't exist as a distinct entity. Includes three considerations: Domination by controlling shareholders, commingling of assets & bypassing of formalities.

Waiting Period/ Quiet Period

time between the filing and when it becomes effective. the law limits what the issuer and underwriter can say or publish during this time. no sale of securities may occur, but you can solicit sales or give them the preliminary prospectus. i

Reliance

to establish liability, investors must show that they relied either directly or indirectly on the M &O when deciding to buy or sell securities.

Insider Trading

trading securities based on material nonpublic information in violation of a duty to the corporation or its shareholders or the source of the information. THe two goals of security laws are to protect the investing public and to maintain fair and efficient securities markets.

Disparate Impact

typically Title VII class actions brought against large employers challenging testing and other selection procedures, claiming they exclude women etc. this claim doesn't have to be intentional like disparate treatment does. The defense for this is business necessity.

Line of Business Test

use this to decide if an opportunity belongs to the corporation or not. if the opportunity is within the lines of business, they cannot take it for themselves. if an officer develops an idea on company time using company resources = breach of fiduciary duty.

Cumulative Voting

when each shareholder can cast all of his votes for on person or allocate them. total number of votes you get is number of directors to be elected * number of shares owned. gives minority shareholders the chance of electing at least one director.

shareholder derivative actions

when shareholders alleging corporate mismanagement leading to harm to the corporation as a whole must sue derivatively in the name of the corporation. its usually shareholders suing a third party (maybe a director) on behalf of the corporation

Direct Copyright Infringement

when the copyright owner alleges that a defendant violated at least one of the 5 rights of the holder (ability to reproduce, display and perform the work, prepare derivative works & distribute copies)

Scheme Liability

when third parties engage in fradulent business transaction designed to enable the issuer to mislead investors by artifically inflating its earnings

Trademarks

words or symbols (brand names) that identify the source of goods or services - are legally protected.

Primary Stages of an IPO

1. due diligence 2. file registration statement with the SEC 3. SEC review, waiting/quiet period, & roadshows 4. going effective - able to sell securities

Types of Copyright infringement

Direct, Contributory & Vicarious Copyright Liability

Majority voting

a director must get the majority of the shares voted to be elected.

Plant Patents

protect any distinct and new variety of plant that is asexually produced.

Federal Economic Espionage Act of 1996

the law imposes criminal liability on any person who intentionally or knowingly steals a trade secret or gets or purchases a wrongfully obtained trade secret.