MANGEMENT FINAL

Copyrights

"C" A copyright is "the exclusive legal right to reproduce, publish, and sell the fixed form of expression or an original creative idea." Copyrights apply to books, periodicals, musical compositions, plays, movies, ballets, architectural works, sound recordings, lecture (like mine!), works of art, and computer programs.

The take away:

"The trademark office is designed to protect things that have been used as brand names. So you can protect a word you've made up - Coke for a soda for instance - or even a word that you haven't made up that you've adopted for something arbitrary like Apple for computers. But you do so only if you can show that nobody is going to associate the word with anything related to what you sell until you start selling a product that uses that word."

The goals of tort law are:

(1) to compensate the innocent party and (2) to a lesser extent, deter similar conduct by the same defendant or others.

Fiduciary

(Fiduciary duty = one of absolute loyalty to the master or employer. Both corporate directors and officers owe a "fiduciary duty" to shareholders. Agents owe the same legal obligation to principals.

Partnerships

(no federal taxes - it's a "pass through"). Partnerships are distinct legal entities. In the absence of a written agreement, the Uniform Partnership Act fills in the gaps.

To maintain the status of a "trade secret" a business should:

* Restrict access to the information (lock it away in a secure place, such as a bank vault). * Limit the number of people who know the information. * Have the people who know the trade secret agree in writing not to disclose the information (sign non-disclosure agreements). * Have anyone that comes in contact with the trade secret, directly or indirectly, sign non-disclosure agreements. * Mark any written material pertaining to the trade secret as proprietary. Trade secrets remain valid only as long as no one else has discovered the information independently; the information has not been made public (by employees or published literature) nor discovered by working backward from the original product/process or publicly observing the product/process. If the trade secret is revealed in violation of a non-disclosure agreement, you can sue for damages. However, once the secret is revealed, it is hard to get the trade-secret status resumed. Trade secrets are protected under many state laws, Federal statutes and some international laws.

Liability.

. Personal liability can be problematic depending upon (1) present and (2) future assets (if you have nothing now, you have nothing to lose; however, if you have a lot now, you potentially have a lot to lose if you are personally liable). Also consider what type of business you're in, and the particular types of possible liability you might have if things were to go wrong, e.g. opening a hair salon carries different risks than a restaurant, or a law office.

The franchise business model has multiple variations =

1) Product Distributorships (GM, Ford) Franchisee has the right to sell in a specified geographic area. These territorial rights are very important to the franchisee. Why? Distributorships will fight back at any attempt to change the business model: TESLA (2) Business Format / Chain-style businesses (McDonalds) that must be set up an run based upon rules established by the franchisor. (3) Trademark or Trade Name Licensing / Manufacturing or processing arrangements (Coca-Cola) Current issues: Minimum Wages - Is a franchise a "big company" or a "small business"? Seattle.... There is also an open question as to whether employees of franchises are part of a small business or a large business. In Seattle this is a significant issue:

Things that cannot be patented include:

1) the laws of nature; (2) natural phenomenon; (3) and abstract ideas.

To enjoin (sue the other party, asking the judge to order the other party to stop doing something) a competitor from continuing to use trades secrets, a plaintiff must prove that:

1. A trade secret actually exists; and 2. The defendant acquired it through unlawful means; and 3. The defendant used it without the plaintiff's permission

A CORPORATION IS:

1. An "artificial person"; the law recognizes it as a "person". Mitt Romney knows this... 2. It is owned by its stockholders (one share of stock = 1 vote). 3. It has rights and responsibilities. 4. It substitutes itself for its shareholders when "doing business". 5. It is liable for its actions, but (significantly) shareholders are not personally liable, except insofar as the value of their equity decreases in response to corporate malfeasance. KEY FACTOR: OWNERS HAVE NO PERSONAL LIABILITY, except in limited circumstances where "the corporate veil" is pierced, because of fraud, illegal acts, or circumventing the law. Fraud, in which a corporation is created with highly paid insiders, is a re-occurring problem. 6. Board of directors, elected by shareholders, is responsible for corporate policy. 7. Board of directors hires officers, who run day-to-day operations. 8. Fundamental duty is to make money for stockholder/owners.

THE DUTY OF CARE.

1. Every person must operate as a "reasonable person", and use ordinary care in how we interact with others. Statutory Duty of Care. In some cases, an affirmative "duty of care" is provided for by law, and this duty of care provide for a different and usually higher standard of care. Example: Stockbrokers' - "Suitable investments" standard.

Interests in real property may take a variety of forms:

1. I own my house (legal term = "fee simple"). 2. I can rent my house to you (legal term = "conditional estate", or "lease") 3. When my grandmother died, she gave my mother a "life-estate" (use of her house, for my mother's life) but when my mother dies, the house goes to my siblings and I. Thus, my mother has a "life interest" in the home, and I have a "future interest". What if my mother lets the roof go, damaging the value of the house? Who is responsible for upkeep? Usually the entity with a "remainder interest" can force the entity with the life interest not to "waste" the resources by failing to keep it up. 4. If somebody wants to run a power cable under my property, I might sell them an "easement", which is the permanent (or for a set duration of time) right to do this. 5. The government has the right to take your property, via "eminent domain" but has to give you fair compensation for it: 6. Restrictive Covenants. Rules saying residents must be 55... OK (why would you do this?) But rules saying "Nobody except Caucasians" are contrary to public policy, e.g., laws saying no discrimination in public accommodations. 7. But what about the Augusta National Golf Course, home of The Masters? Is there a difference when a private club is involved? 8. What happens when multiple people own, or lease, property (some of you have, or will, sign leases with friends, boyfriends/girlfriends.... Things don't always work out...sometimes we break up... then what?

Elements of Fraud:

1. Knowing, False statement 2. Which is intended to deceive the other party; 3. about a material fact (a fact that matters) 4. Which induces reliance 5. And causes damage 6. That are causally related to the misstatement 7. there are damages. 8. There is privity (a relationship that created legal obligation) between the parties.

DEFENSES TO PRODUCT LIABILITY LAWSUITS

1. Product Misuse If a product is misused, or used in an improper or unforeseen manner, or not maintained properly, the plaintiff may lose. 2. Assumption of risk (consent). The tobacco litigation... 3. Sophisticated Users (experience v. inexperienced users of product) 4. Federal Preemption. The idea here is that if a product is regulated by the government, and the government has to approve the item (for instance, drugs must be approved by the FDA) and the government does approve the item - but the item is later shown to be unsafe, does the government's imprimatur of safety (that it meets government regulations) absolve the company from liability in manufacturing an unsafe product? The Supreme Court has been skeptical: http://www.npr.org/templates/story/story.php?storyId=101465350 But note that the area is very complex, and if there is a specific federal law requiring companies to make a specific warning, and the companies follow it, there cannot be a claim of an improper failure to warn. 5. Statute of Repose Time limit on products (no airbags in old cars) This limits the time period for which a tort can be brought by looking back to when the product was purchased by the consumer. 6. State of the Art Defense Manufacturer may show that, at the time it produced the product, the product was reasonable given the available scientific evidence.

The types of marks protected by Federal trademark law include:

1. Product Trademark. The symbol for BMW, or Mercedes' circle with three points within it. 2. Service Marks. Any mark used in association with a service rather than a product). 3. Collective Mark. Identifies the product as part of a larger group. (Made in the USA; or a symbol denoting made by a union. 4. Certification marks. "UL Tested" "Good Housekeeping" Occasionally, phrases can be trademarked, too. What do the following phrases have in common? * "This sick beat" "Nice to meet you where you been." "Party like its 1989" "'Cus we never go out of style" "Speak now." (part of tayor swift songs)

THE ELEMENTS OF A LAWSUIT BASED UPON NEGLIGENCE

1. That the Defendant owed a duty of care (ordinary care) to the person injured (plaintiff); Courts apply the "reasonable person" standard. 2. That the Defendant breached the duty of care through his or her unreasonable conduct, e.g., an act or omission. 3. That the Defendant's breach of duty of care was both the ACTUAL AND PROXIMATE CAUSE of the victim's injury, e.g, there is a causal connection between the improper conduct and the harm resulting to the injured party; 4. That the injury justifies an award of damages (in other words, the victim has demonstrated some real economic loss, or damage, that might include pain and suffering), and that there is no social policy that should result in the defendant not being liable. NOTE: "intent" to harm is not required for a tort based upon negligence.

To obtain a copyright, and successfully sue anyone who infringes on it, the applicant must meet three criteria:

1. The idea must be fixed - e.g., set out in a tangible medium or expression; 2. It must be original; 3. It must be creative; 4. It must carry the appropriate notice, e.g. 5. And be registered (with the Register of Copyright"). Ordinarily, this procedure protects the holder for his/her life + 70 years before the item falls into the public domain (everyone can use it for free). (For works done for you, by an employee, it's 95 years after publication).

The major rights shareholders have include

1. The right to receive dividends, if declared (illegal dividends occur when distributions are made while the company is insolvent; when and why might this happen?) 2. The right to vote (directly, or via PROXY) on: Members of the Board of directors; Major mergers and acquisitions; Charter and byelaw changes Proposals by stockholders 3. To receive annual reports, and an annual meeting. 4. To bring shareholder lawsuits against the company officers or members of the Board, OR to bring a suit against a third party - this is referred to as a "shareholders' derivative suit" (damages go to the corporation, which is owned by the shareholders, not the individual plaintiffs). Often useful if the Board or Management won't sue, in part because they are the ones who created the problem which (in the eyes of some shareholders, cost the shareholders money.) 5. To sell their shares of stock to others 6. Dodd-Frank: Say on Pay (non binding, periodic vote). 7. Shareholders also are OWED a fiduciary obligation from BOTH the Board of Directors, as well as the management of corporation. 8. Duties of Majority Shareholders / Rights of Minority Shareholders Where a single (or few) shareholders control the company, they owe a fiduciary obligation to minority shareholders. A breach of this duty may lead to "oppressive conduct". Consider how a small, closely held corporation could get into trouble here. 9. Limited ability to force the company to hold a vote/resolution on topics. Wal-Mart shareholders fail to force company to send ballot initiative to shareholders re WM policy on selling assault weapons in stores.

TORTS BY NEGLIGENCE

1. Violation of a statute (NEGLIGENCE PER SE) / criminal or civil / is proof of negligence. Often, the government will place affirmative requirements on the producers of products (flame-retardant materials on mattresses, and pajamas, for instance), the failure to comply with such requirements = negligence per se. Example: Car accidents, tickets, and a judicial finding of liability. Only question is damages. 2. What happens when there's no statute...

CORPORATION CHARTERS

A corporation is a legal entity created and recognized by the state. It usually has perpetual existence. While a company may be created in any state, when the INCORPORATORS file ARTICLES OF INCORPORATION with the State (Amazon - Todd Tarbert was incorporated here), the choice is usually Delaware because of its highly evolved law on corporations, and the fact that Delaware law is business-friendly. The Charter specifies the rights and responsibilities of stockholders, directors, and officers. The Charter also provides detailed provisions on annual meetings, the method of choosing directors, and the authority of directors to issue stock.

Nonprofit corporation

A nonprofit corporation is any legal entity which has been incorporated under the law of its jurisdiction for purposes other than making profits for its owners or shareholders. Depending on the laws of the jurisdiction, a nonprofit corporation may seek official recognition as such, and may be taxed differently from for-profit corporations, and treated differently in other ways.

(Business Law Question: Which is better, a patent or trade-secret?)

A patent-holder, because it controls the product (e.g., it essentially has a monopoly on the product) may not illegally tie it to another product. Example: Microsoft owns the patent to Windows, the world's best selling computer operating system. As we will see later, Microsoft got in trouble (violating anti-trust laws) when it tied (required original equipment manufacturers purchasing Windows to ALSO take its internet browser) the two products together. The end-result was that people were forced to take a browser that may not have been the best, or first choice of the OEM or consumer. NOTE; COMPARE WITH COPYRIGHT BELOW A patent-holder may license the product to others. Consider Toyota's Hybrid technology. LAWSUITS ARE QUITE COMMON CONCERNING WHO OWNS THE PATENT FOR SOMETHING.

tort

A private wrong (other than breach of a contract), by either intentional or unintentional conduct, committed by one person, corporation, business entity, or association (the tortfeasor) that injures another person, business entity, corporation, or association or their property, for which the law allows the legal remedy of monetary damages. Torts, alone, do NOT lead to jail.

ex of tort by intentional conduct: Invasion of privacy (four separate torts)

A. Appropriation: Using a person's likeness without permission (usually in a business context). Let's say you wanted to start a lecture note service, taking notes in Steve Sefcek's accounting class, and you did so without getting his permission AND you included a photo of Steve on cover, with him making a big thumbs-up sign. The inference is that he endorses it, but that's not true. You've improperly appropriated his likeness for commercial purposes. This happens a lot with celebrities (and using look-alike imposters) B. Intrusion into solitude Example: Washington State's one-party wiretap statute. Compare with Linda Tripp, of Monica Lewinsky fame. Ralph Nader and GM C. False light. Publishing something with significant misinformation. D. Public disclosure of private facts; In almost all cases the privacy interest is statutory, e.g., there is a law that provides for a civil (and possibly criminal) cause of action for the disclosure of private information. Example: Disclosing "arrest data" in Washington State. Example: Suicide of college student who was secretly filmed by roommates, in a same-sex encounter, which was posted on YouTube

ex of tort by intentional conduct: INTENTIONAL TORTS AGAINST PROPERTY

A. Trespass to Realty / Trespass to real property. Using another's land without permission. B. Trespass to personality (using or interfering with another person's property for a short period of time). C. Conversion (More commonly thought of as Theft). Includes the theft of tangible and intangible property, e.g., taking your classmate's laptop or Ipad, AND the re-recoding of music, and distribution of it to friends. February 28, 2006 RIAA Announces New Round Of Music Theft Lawsuits WASHINGTON, DC - Continuing its ongoing efforts to protect the recording industry's ability to invest in new music and further the success of legal online services, the Recording Industry Association of America (RIAA), on behalf of its member companies, today announced a new round of copyright infringement lawsuits against 750 individuals. The "John Doe" lawsuits filed today cite individuals for illegally distributing copyrighted music on the Internet via unauthorized peer-to-peer services such as LimeWire and Kazaa. In addition to the new "John Doe" litigations, the major music companies filed lawsuits earlier this month against 210 named defendants in Arizona, California, Georgia, Illinois, Michigan, New Jersey, New York, Pennsylvania, Texas, Virginia, Washington, and Wisconsin.

DEFENSES TO NEGLIGENCE

ASSUMPTION OF RISK. If you voluntarily put yourself in a dangerous situation, and are injured, you can't sue to recover damages. Example: Sports: A boxer who is injured. A fan is hit by a Barry Bonds, steroid-fueled home run. Up until the summer of 2014, I used the following example to illustrate the point that:

Respondeat superior

Applies to employees, but not to independent and sub-contractors. May apply to franchisors that exercise too much control. legal doctrine that is at the heart of the idea that the boss/employer/principal may be responsible for the torts of the employee, independent contractor, or agent

DAMAGES:

COMPENSATORY DAMAGES are also called ACTUAL DAMAGES because they consist of money damages awarded to the plaintiff for real (actual) loss or injury. They may be broken down to special and general damages

Strict Liability Torts:

Certain torts where the fact of injury means that somebody has done something wrong (Ex. Surgeon leaving a medical instrument inside the belly of a patient during surgery - yea, it's happened.) (Ex. The producer of a product will be held strictly liable for harm sustained by a purchaser's use of the product as long as the purchaser used the product as intended.

Close corporation

Close corporations have some advantages over publicly traded corporations. A small, close corporation can often make company-changing decisions much more rapidly than a publicly traded company. A publicly traded company is also at the mercy of the market, having capital flow in and out based not only on what the company is doing but the market and even what the competitors are doing.

COMPARATIVE AND CONTRIBUTORY NEGLIGENCE

Contributory negligence rules often made/make it impossible for plaintiff's to recover anything if they were even minimally at fault. Still, some states continue to operate under this regime. Comparative Negligence is the rule in most states. If can be broken down further, into "pure comparative negligence" (damages split by % each party is found to be at fault) and "modified comparative negligence", where the rules is the defendant be MORE negligent than the plaintiff, or the plaintiff recovers nothing. Example: Walking home from Finns at 2:10 a.m.... and cross the Ave in a place where there is no crosswalk...and...

COUNTERFEIT GOODS

Counterfeit goods, bearing fake trademarks, enter the US economy with great frequency. Some estimates are that 7% of the goods imported into the US are counterfeit. It is a Federal crime to traffic intentionally in counterfeit goods or services. The act also provides for the goods to be forfeited. Fake Gucci bags, NFL jerseys and Rolex watches....who has been to Italy? Or China? As we know, the US Constitution is the highest law, and all federal and state laws have to comply with it --- they have to be constitutional.

ex of tort by intentional conduct: Intentional Infliction of mental / emotional Distress.

Creditors harassing you to pay bills. This also violates Federal law.

TORTS BY INTENTIONAL CONDUCT

Deliberate, intentional conduct by one person, that injures another person, is an intentional tort. The defendant's action must be intentional, and voluntary (motive does not matter). Defendants must also be shown to have known, or should have known, about the consequences. This differs from either negligence or strict liability torts.

Corporations enjoy many of the same rights that people have, including:

Equal Protection of the laws; Access to courts; Due process of law; Freedom against unreasonable searches (but no freedom "to remain silent"... yet). Freedom of speech, including political speech, which includes making campaign contributions. What about "Religious Freedom"? We've already spent time on this complex issue. As we will see, the Title VII of the Civil Rights Act of 1964 forbids employers from using religious tests in hiring, e.g., if you see a "help wanted" sign on the Ave., and turn your application in, the owner cannot say "I don't hire Muslims," or "I don't hire Christians". That's illegal.

INTENTIONAL INTERFERENCE WITH A CONTRACTUAL RELATIONSHIP.

Example: Luring an employee from a competitor, if the employee has an employment contract. Think NBA/NFL, or lesser companies. Note: Same concept applies to prospective advantage, e.g. interfering with another business in an unreasonable way. Example: Book posits idea of stationing your sales force outside a competitors' front door.... Example: Your sales force works on commissions paid at time contract is signed. Your top sales agent brings in a big client, ready to sign. You fire the agent 5 minutes before the signing - so that the agent doesn't get the commission, you do.

Limited Partnership

General partner makes decisions, and is liable; limited partners = no decision making and management of the business, and no personal liability. Must be in writing. Why? To put third parties on notice that certain partners are not personally liable and cannot bind the partnership.

Dispute over trademarks

If a dispute arises, the courts will apply a multi-part, non-dispositive test (meaning no single part of the test is likely to control the outcome) that considers a variety of factors, the most important of which (and which spans several sub-topics) is the potential for the consumer to confuse the two groups: 1. Strength of the senior users mark. (How much is the design associated with a particular producer? The more generic, the less protection. Trademarks getting the highest level of protection are those that are In making this assessment, courts will first evaluate where the term fits: A. Arbitrary and Fanciful, e.g., invented words like Xerox, or Kodak These have no connection to the product, but have taken on a connection in public's mind: English Leather B. Suggestive - Dairy Queen (implies great ice cream!) / is more difficult to obtain complete protection that Arbitrary/Fanciful. The public has grown to associate this term with the product. C. Descriptive. Not favored by courts; plaintiff must show that the term has acquired customer recognition to obtain protection. D. Generic. Not protected. Any company can use "Kleenex" to describe their products. 2. Degree of similarity between the two marks (the key is whether or not the similarity will cause confusion among the public). 3. Proximity of Products (are they in the same market? Compete for the same customers?) 4. Bridging the gap. Is there evidence the senior user intends, or might later, enter into the same business? 5. Evidence of actual confusion. 6. Junior users good faith and goodwill (has the junior user acted properly?) 7. Quality of junior users product (the lower the quality, the greater the potential damage to the senior user, is the minds of the public that purchase form the junior user.) 8. Sophistication of consumers (are they smart enough to tell the difference?). A couple of examples of litigation in this area: ESPN X GAMES VS. QUICKSILVER STYLIZED "X" Dispute was settled by agreement of the parties. What about these? What are we looking at here? Converse All Stars Fila Bobs

A. INTERVENING AND SUPERSEDING CAUSES MAY AFFECT THE DEFENDANT'S LIABILTY

If an independent force happens AFTER the Defendant's negligent conduct begins, and an injury results that could not have been foreseen, the original wrongdoer is not liable for the entire result. EX. I'm driving drunk and hit you, while you're riding a bike, causing minor injuries. A man stops, offering medical aid, but his negligent treatment causes much worse injury. This is an intervening cause. Good Samaritans must use reasonable care under the circumstances. They are generally shielded by state laws...from being sued if they injure somebody while acting as a reasonable person would act.

STRICT LIABILITY TORTS

In some circumstances, as a matter of public policy, certain people and businesses MUST compensate persons who are injured by their products, services or activities. The victim need not prove an intentional tort, or even a tort based upon negligence. Animals: Wild animals = strict liability. Domestic animals only if known to be vicious (one free bite rule). Recent News Stories: Attempts to ban breeds; hold owners criminally liable.

Federal Trademark Dilution Act

In1995 the Federal Trademark Dilution Act strengthened Federal protections, to include the concept of "dilution"* (think of "dilution" as putting a mixer in your hard alcohol; it dilutes the alcohol) when another business does something that dilutes (lessons) the value of a similar trademark. The Act (1) created a Federal cause-of-action for violation of the statute, (2) regardless of whether the products competed with each other and (3) eliminated the requirement that "confusion" be demonstrated. (4) But (the Supreme Court has held) there still must be some evidence that the infringing mark lessons the value of the famous mark, e.g. "dilution" (5) injunctive relief is allowed. To be protected by a trademark, the trademark must be registered with the State or Federal government (US Patent Office) by submitting a drawing. Only distinctive trademarks will be registered.

INTELLECTUAL PROPERTY

Intellectual property refers to things created by people. The law is designed to protect those who create new and useful things, so that they can profit from their creations. This incentivizes people to create new things (and is, by extension, good for them and the larger economy). Because people can rely upon the government protecting their creations, they are spurred on to create new things. Intellectual property is any property that results from intellectual, creative processes - that is, the product of one's mind. Intellectual property is protected in a variety of ways, depending upon the nature of the property. If you unlawfully use, or take advantage of another person's intellectual property, you are said to have infringed on that person's rights.

General Partnership

Joint control; share profits; can agree to almost any terms. Partnership does not pay federal income taxes - it's a "pass through". But personal liability extends to the debts of the partnership, including torts committed during the partnership. Can be formed orally, or implied by conduct (be careful - because in the absence of agreement things are 50/50). It's safer to do it in writing. Difficulty when there is not a management partnership agreement setting out roles and responsibilities; without one, control is equal. Partners owe a fiduciary duty to the partnership

Real Property

Land + everything permanently attached to it, e.g. permanent fixtures (vs. trade fixtures). Thus, if you lease space for your business and make improvements by installing new walls, when the lease expires these improvements revert to the owner. However, removable shelves would stay with you. Airspace Mineral rights + Even the right to the rain that falls from the skies (in Colorado). Tidal lands (especially important in areas like Puget Sound / affected by Indian treaty rights).

MULTIPLE VICTIMS = CLASS ACTIONS

Large groups of injured persons, who are similarly situated, can obtain redress in a single lawsuit, rather than filing hundreds or even thousands of separate suits. Wal-Mart (2011) The rule announced by the Supreme Court requires that the class members share the same legal theory. Wal-Mart case involved many women claiming Wal-Mart had a policy of not advancing women. Court said that was too broad, and that each women had unique facts. The tobacco lawsuits. Many small problems (long distance companies that round up). A few large problems (Georgia-Pacific siding). For next class: What are your thoughts on the woman who won 2.8 millions dollars from McDonalds after spilling coffee on herself, and getting burned?

ex of tort by intentional conduct: Defamation

Libel (written), slander (spoken) and the related idea of DISPARAGEMENT In the business world, this often comes up when references are too honest in expressing the opinions about former (poor) employees. This is the reason why many businesses do not allow information beyond the "fact of" employment to be provided to potential new employers. LIBEL = Plaintiff bears the burden of proving by a preponderance of the evidence: 1. That the libel was communicated to a third person (or, the press is the defendant, it must be "published") 2. That the plaintiff was identified (this is an element, even though the text only implies as much) 3. That the words were defamatory***, e.g. it causes harm to the plaintiff 4. That the defamatory statement was false (this is sometimes considered a "defense" to the tort. ***Defamation per se Some statements are presumed defamatory, and the plaintiff need not prove that they were injured. Allegations of criminal conduct, or criminal business dealings would fit this test. Note that when the party being sued is the PRESS, the First Amendment is triggered as an additional, Constitutional protection given to the defendant, and requires that the plaintiff prove elements not necessary when a non-press party is the defendant. PROVING "FAULT" a. Public Figures - or those who Hold Office Publication must be knowingly false or published with reckless disregard as to whether it was true or false (ACTUAL MALICE TEST) Note that the fact finder (jury) makes the decision about whether or not a person is or is not a public figure. Public figures may be "limited", or general. b. Non-public figures the publication was negligent The related tort of DISPARAGMENT occurs within the economic or business setting, usually when companies are competing against each other for market share, and often when they are engaged in comparison "testing". Think: Coke v. Pepsi. More recently, the battle between Progresso and Campbells soups over which was healthier and had a lower overall sodium content. The elements of this intentional tort include: 1. Knowingly false statement of material fact about the business (typically the statement relates to quality, honestly, or reputation of the business; 2. Publication 3. Resulting HARM to the business; 4. And actual economic loss that results from 1-3 above.

S Corp

Limited number of shareholders (less than 100). Must be a natural (real) person, and US citizen or legal resident. Tax Plus: Pass through. No individual liaibility

PRODUCT AND SERVICE LIABILITY LAW

Mattel and lead paint / quality control issue NPR OLD DAYS.... Privity protected manufacturers... with unfair results. The rule of "caveat emptor" further aided manufacturers.. and was endorsed by the Courts. (it means let the buyer beware) SIDE NOTE: Does "caveat emptor" continue to be a rule we live with today? Who has been parasailing? Where? MODERN RULES... Protect consumers. Privity is no longer required: "The manufacturer of a product is liable in the production and sale of a product for negligence, if the product may reasonably be expected to inflict harm on the user if the product is defective." McPherson.

CORPORATIONS

Most business (by dollar volume) in America is conducted by (for profit) corporations. The institutions most often referenced by the word "corporation" are publicly traded corporations, the shares of which are traded on a public stock exchange (for example, the New York Stock Exchange or Nasdaq in the United States) where shares of stock of corporations are bought and sold by and to the general public. Public corporations - in part because of a history of fraudulent activities - are regulated by the government to insure that their accounting is proper, and properly reported to the SHAREHOLDERS that own the corporation. Many of you will end up working for firms that exist because publicly held corporations exist. However, the majority (in terms of numbers) of corporations are described as being to be close corporations, meaning that the number of shareholders is small (usually less than 50) and the shares of these corporations are not traded on a market (and meaning that these corporations do not have the onerous reporting requirements that you learn about in accounting). Many such corporations are owned and managed by a small group of businesspeople or companies, although the size of such a corporation can be as vast as the largest public corporations. FACEBOOK was an example of a close corporation, until it "went public" two years ago. So was Alibaba.

Torts based upon Negligence

Most torts occur when one person acts in a negligent manner, i.e., a careless manner, inadvertently causing an injury to another person. A person is negligent is he or she breaches a duty of care that results in harm to another person.

THE INJURY REQUIREMENT:

No injury = no tort = no recovery (remember Paula Jones....) To recover damages, the person injured must have suffered some loss, harm, or invasion of a protected interest. Why? Purpose of tort law is to compensate people for their injuries. If there is no injury, then there is no tort. Also, there must not be a social policy (public policy) that says that the plaintiff is not entitled to damages. Example: workers compensation programs, discussed below, which provides for a comprehensive scheme to compensate injured workers, and in return they may not sue the employer if they are injured on the job.

Franchise.

Nomenclature: Franchisee / Franchisor; each is dependent upon the other. WHY? This is contractual, but also the subject of both federal and state laws. The owner of a trademark or trade name authorizes the use to another. The relationship is symbiotic - Why? Consider things from the perspective of the franchisor and franchisee... including quality control and the ability of the franchisor to dictate terms to the franchisee (and if the control is too much, liability may flow). There is also a fair amount of government regulation (Federal and State) in this area, in part to protect franchisees who may (1) invest a lot of money; and (2) once invested, have a significant capital investment that could be destroyed if the franshisor ends the relationship.

ex of tort by intentional conduct: Assault (and, by extension, the entire gamut of intentional crimes).

Note that "assault" is both a crime, as well as a tort, and the offending party can face both a civil lawsuit, as well as criminal prosecution. Assault = apprehension or fear; battery = actual harmful or offensive contact. In Washington State the two concepts are merged and the law speaks only of "assault". The burden of proof is different depending upon civil/criminal. Recall the only the government can start a criminal case, and only criminal cases can lead to a loss of liberty

GENERAL DAMAGES

Other than out-of-pocket expenses. These include PAIN AND SUFFERING, MENTAL DISTRESS, LOSS OF CONSORTIUM (not available unless married).

SPECIAL DAMAGES

Out of pocket damages that can be specified: Lost wages, medical bills, lost income, cost of repairing a car. Cost of future lost wages (w/discount rate).

PATENTS

Patents protect (1) novel + (2) useful + (3) non-obvious products, processes, inventions, machines, or asexually reproducing plants. Thus, the galaxy of patentable products is wide, and includes artistic methods, certain works of art, the structure of storylines, provided they are novel and not obvious. Additionally, genetically modified plants (including pest-resistant ones) and cloned animals are patentable. Computer programs are also patentable (since the early 1980s.) The first to file for a patent ordinarily get the patent, which is good for 20 years from the date of application. The process of obtaining a patent is expensive and time consuming, but once you have it, it will receive significant legal protection. The downside of patents is that once filed, the whole world knows your design, and in 20 years everyone can copy your work. Generic Drugs take this route. Generic drugs are usually sold for significantly lower prices than their branded equivalents. One reason for the relatively low price of generic medicines is that competition increases among producers when drugs no longer are protected by patents. Business processes may be patented. For instance, Priceline patented its process whereby consumers "bid" or "name their own price" for hotel rooms and airline tickets.

LIABILITY WAIVERS

People can waive rights... to a limit. You can't waive rights that are established via public policy. Example: Rental agreements and landlord negligence. A sound waiver should include the following: 1. Disclaimer in a prominent place; 2. Standard print size;

Professional Corporations (PC)

Previously, groups of doctors formed partnership; modern trend is Professional Corporation. Liability is limited to investment, so each MD is not personally liable for the errors of OTHER physicians, though does continue to have liability for his/her own negligence.

PRODUCT LIABILITY TORTS

Product liability law is a sub-set of torts; it is not a separate area of the law. As a result, everything we've learned about the subject of torts applies to "product liability" law. Product liability law embraces traditional principles of tort law, like "negligence," e.g., a manufacture must use reasonable care in: 1. Designing 2. Manufacturing 3. Inspecting for defects 4. Alerting buyers if defects are discovered after sale 5. Presenting or advertising the product 6. Warning of dangers But this area of the law also introduces new and unique principles, such as "breach of warranty" and "strict product liability" law. Negligence - and the test (outlined above) apply.

publicly traded company

Publicly traded companies also have advantages over their closely held counterparts. Publicly traded companies often have more working capital - in part because there are Federal and State laws designed to protect investors. Equity financing (issuing more stock) Debt financing (issuing bonds) Publicly traded companies though suffer from this exact advantage. A closely held corporation can often voluntarily take a hit to profit with little to no repercussions (as long as it is not a sustained loss). A publicly traded company though often comes under extreme scrutiny if profit and growth are not evident to stock holders, thus stock holders may sell, further damaging the company. Often this blow is enough to make a small public company fail.

THE CORPORATE VEIL

Recall that one of the major advantages of forming a corporation is that it allows the investors to only risk their investment, and generally shield their personal assets from creditors... this advantage is occasionally exploited by unscrupulous investors. When this happens, creditors seek to "pierce the corporate veil" and get to the assets of the shareholders. TEST: 1. Shareholder must completely control/dominate the business in terms of policy and business practices; this is sometimes referred to as the "unity of interest and ownership" rule; 2. This control was used to perpetrate a fraud or other serious wrong / the "wrongful conduct" test 3. The control and act (#2, above) was the proximate cause of the injury Court will sometimes consider whether a corporation is undercapitalized and ignoring regulatory rules - simply to "save money" but not have funds available if a disaster should strike. Example: Todco corp leases (does not own) an indoor pool from TodcoParentsCorp (Tod's parents' corporation) Tod is the only shareholder of Todco, which has no actual assets. Bellevue requires lifeguards (which Tod does not have) and insurance (which Tod does not have) - thus saving money and allowing Tod to profit. A drowning occurs. Todco is undercapitized. Example: story from text - shell game where roofer sold assets to the next corp he formed.

Benefit Corporation

Recall that traditional, for profit companies have an imperative: make money for shareholders. Benefit Corporations may write into their charter goals in additional to maximizing profits, e.g., consider the environment, etc.

Typically, executive pay consists of a combination of:

Salary. The base salary is set, usually by contact. How is the CEO's salary determined? The Board of Directors often turns to consulting firms to do this. 2. Annual bonuses Based upon the company's annual performance, typically measured by year end profits, increase in market shares, new products brought to market, etc. 3. Long term bonuses These are contingent on the long-term success of the company. How should these be measured? Over what period of time? How do decisions now, on R&D for future products, play into this? Is this good or bad? 4. Restricted Stock Start-ups, to attract well-qualified managers, use these "special" stock grants that are given to executives. These stocks do not vest, or mature, until a set time passes, and the recipient can only sell a set number of shares at a time. The idea is to motivate the manager to do a good job, thus increasing the value of his/her stock. 5. Stock options These are approved by the Board, and designed to keep employees and managers loyal, because they can vest over a period of time. They work by giving employees, today, the right to purchase stock at today's price, any time on or after a certain date.

SHAREHOLDERS / STOCKHOLDERS

Shareholders own the corporation but, ironically, have no role in the day-to-day management of the corporation. This "ownership" interest in the company is based upon a belief that the company will makes profits and, as a result, become more valuable (its share price will increase) and/or it will pay dividends (money representing the profits earned by the company) to stockholders. Some companies offer steady dividends (utilities), while others don't pay dividends at all, but expect to become more valuable over time (start-ups) as their stock price rises. Shareholder Rights By law, shareholders have certain rights Shareholders have a meeting once a year, where major decisions are made by taking a vote. One share = 1 vote. Management (the President of the company) will solicit proxies (your votes) to vote as management wants. A quorum must be present (50%), to pass a resolution.

STATUTORY LAW

Since 1946 the Federal Lanham Act, which allows for private enforcement, has protected businesses that hold trademarks from competing businesses with confusingly similar names; the act also provides for remedies. The Lanham act was limited to the unlawful USE of another's trademark on competing, or non-competing goods that could confuse the consumer. Trademarks should be registered. The first person who registers the trademark is protected. Trademarks are valid in perpetuity provided the owner continues to use and protect them.

THE BUSINESS JUDGMENT RULE

Suppose that either/both Directors and Management makes a disastrous decision, on behalf of the company, and significant losses are incurred. Can the shareholders successfully sue either/both the managers and directors for negligence? Honest mistakes, or poor guesses will not lead to liability. In other words, as long as there was a reasonable basis for the business decision at the time, they are in the clear. The decision must be made in good faith, and without any conflict of interest.

Anticybersquatting law

The Anticybersquatting law provides an additional level of protection for trademarked names, if those names are used by another party in a domain name on the web. This was the result of the Wild West period of the internet, when people rushed to acquire domain names of major companies.

THE BOARD OF DIRECTORS

The Board of Directors governs the corporation. After the original Board is appointed, usually by the incorporators, subsequent directors must be elected by a majority of the shareholders. The recent trend has been toward "outside" directors, e.g., directors who are not also management. The typical ratio is about 4 to 1. The board of directors acts by majority rule; individual members cannot do much. In 2004, the average Board had 11 members. Compensation is set forth in the corporate byelaws. Responsibilities: 1. The appointment, supervision, and removal of corporate officers, and setting their compensation. 2. Major financial decisions, like setting dividends, the issuance of new shares of stock, or stock buy-backs (what's that?) (any "illegal" dividends authorized by Directors may lead to personal liability for Directors) 3. Authorize major corporate policy decisions (who should we take over next?) or (should we agree to be bought out?) 4. Like management, Directors owe a fiduciary duty to stockholders. To do this effectively, Board members must be informed, and willing to exercise independent judgment. But Board Members often feel there is a conflict between the short-term desires of stockholders (higher share prices, based upon higher earnings), and long term spending on research and development.

MANAGEMENT : THE CEO

The Board of Directors has the responsibility of hiring the managers. This includes setting the salary of the CEO. But in practice, the CEO is often the Chairman of the Board (think Microsoft in the early days); furthermore, the same person may be the single largest stockholder (with the most votes). Obviously, the CEO of a corporation has ultimate responsibility for running the business - though the Board has the ultimate responsibility for making the major decisions. Managers (who are employees) are expected to exercise sound judgment, and provided that there is a "reasonable basis" for a business decision, they cannot be personally liable even if it turns out to be disastrous. Managers owe a fiduciary duty to the shareholders. Managers often work under contract. In recent years, one of the most troubling trends is the lack of correlation between pay and performance for top CEOs.

The Slants

The Slants fought the Federal government for years, and their case ended up before the US Supreme Court. The issue was this: Section 2(a) of the Lanham Act prohibits registration of marks or names that are "scandalous" or "immoral". The Trademark and Patent Office uses a two-part test to determine if the mark is disparaging: (1) what is the likely meaning of the mark or words; (2) if that meaning refers to an identifiable group, is the meaning disparaging to a substantial composite of that group? This is Portland band, the Slants, that wanted to trademark their name, but the Trademark office refused, citing the statute: The problem - according to the Patent office - is their name: The Slants. Ruled that their name couldn't be the slants

Coca-Cola vs. Koke (1920 - preceded the Lanham Act of 1946)

The US Supreme Court decides that.... Both trademarks and trade names (even nicknames, like "Coke" that are in everyday use) are protected by common law (e.g. judge-made law). The common law continues to protect trademarks.

Taxes.

The decision about how to form your business often has significant tax implications to both the firm, and its owners.

CAUSATION:

The defendant's conduct must be both the actual and proximate cause of the victim's injuries. A. Actual Cause Test: Would the injury have occurred "BUT FOR" the defendant's conduct. "Sin qua non" rule, latin for "most important element" B. Proximate Cause Test: Did the act actually cause the injury? Proximate cause = the true cause which, in a natural and continuous sequence, caused the injuries. Proximate cause will be found if there is the ability to see or know, in advance, that the harm or injury is a likely result of the acts or omissions. Social Policy - how far back to we go. To be the proximate cause, it must appear to just and fair, to hold the defendant liable the injury that resulted. C. Some States, like California, use an alternative test to the traditional proximate cause test: they use the "substantial factor test," e.g., would a reasonable person believe that the defendant's negligent conduct was the cause of the injury?"

PREMISES LIABILITY

The duty of care we owe, as landowners, renters, and merchants, is determined by how our guests are classified: Trespassers (uninvited, unwanted) - no spring guns - no duty to warn of dangerous natural conditions - if you know trespassers come, duty to warn of man-made risks Guests of home / apartment occupants. People who are present at your invitation, or with your permission are known as licensees. The home or apartment owner owes these people a DUTY OF REASONABLE CARE, e.g. such things as cleaning the snow off the steps to the front porch, if you're having people over. However, it doesn't include an obligation to check for dangerous hidden problems. Customers in Business Premises. The people are known as INVITEES. Owner owes these people a high degree of care: owners must inspect for any dangerous conditions, even if they are not obvious, and correct them or warn patrons. Safeway patrons slipping on water, etc.

STRICT LIABILITY TORTS - Focus on Restatement 3rd

The focus is on the product at issue, and the rule applies to product INJURY cases, where a person using a product is hurt. The (1) manufacturer AND (2) distributor AND (3) seller of a product may be held strictly liable if the product... TEST: 1. Is defective when, at the time of sale or distribution, it a. contains a manufacturing defect, e.g, it departs from its intended design b. is defective in design // A product is defective in design when the foreseeable risks of harm posted by the product could have been avoided by the adoption of a reasonable alternative design, AND the omission of the alternative design renders the product not reasonably safe. c. or is defective because of 1. inadequate instructions or // A product is defective when the foreseeable risks of harm could have been reduced or avoided by the provision of reasonable instructions or warnings, AND the omission of the instructions or warnings renders the product not reasonably safe. 2. warnings. // if the manufacturer knows of a danger caused by the products use that cannot be prevented entirely, but which users should be warned against, AND failures to warn about problems that become known after the product has been in use for some time. Mr Yuck !!!!The producer of a product will be held strictly liable for harm sustained by a purchaser's use of the product as long as the purchaser used the product as intended. !!!

If you hold a copyright you have:

The right to reproduce it Publish and distribute it Display it Perform it Prepare derivative works based upon it.

EXAMPLES OF SPECIFIC TORTS BASED UPON NEGLIGENCE. PROFESSIONAL LIABILITY / ALSO KNOWN AS "SERVICES LIABILITY" OR MALPRACTICE LIABILITY

The same general test for negligence is used, but the part of the test that establishes the "duty of care" is modified as follows: "The failure to use that degree of care, learning, and skill ordinarily possessed and applied by the average prudent member of the profession (and sometimes "in the same locality"). Why sometimes "in the same locality"? Accountants Test at issue is modified by statutory requirements defining standard of care. 1. How does the accounting business work? 2. What is a "conflict of interest"? And how might conflicts of interest lead to either negligent, reckless or intentional misconduct of accountants? 3. Should accountants be liable to third parties in such cases? Third party liability: In accounting cases, the big question is who the duty of owed to, because that will establish who is able to bring a lawsuit in the event of an error. (The legal doctrine at issue is called "standing".) The accountant's employer is always able to sue the accountant because of "privity" (the contractual relationship); this is known as the "ultramares doctrine". But what if you read a prospectus that relied upon negligent accounting, invested in the company (Enron...) and lost everything? Shouldn't you be able to sue the accountant too? Some states allow you to, because you are the "intended user" of the information prepared by the accounting firm. NOTE: this may or may not include a possible investor in the company. A minority of states find "standing" (allowing YOU to bring a lawsuit against an accounting firm for negligence) if it was reasonably foreseeable (general tort rule) that you would use the information. 4. Doctors: Policy Implications: Defensive Medicine: Doctors do more tests than are necessary. Certain OBGYNs w/not deliver "high risk" babies. Fear of being sued by trial attys. Who pays?

TRADEMARKS.

These are distinctive marks, words, designs, pictures, or arrangements used by the producer of a product to allow consumers to identify and link the product with the producer. The mark allows consumers to readily identify the origins of the product. Trademarks are often brand names, but an also be the titles of movies or comic books, and fictional characters like Spiderman. Even Ferrari's car design can be trademarked. For a business, a trademark is exceedingly important, because it allows consumers to "find" the product they are looking for. Businesses expend significant sums of money to promote their products via trademarks. This type of intellectual property has significant value, which we call Goodwill: it is the benefit and advantage a company has based upon its brand value and trust consumers have in it. Conversely, a company the users another company's trademark is getting a free ride. And they will likely be sued. Don't confuse Trademark with Trade Names. Trade Names are the names that companies use when doing business with the world.

DIGITAL MILLENNIUM COPYRIGHT ACT (1988)

This act gave significant new protections to the owners of copyrights in digital information, including both civil and criminal sanctions for anyone who circumvents encryption software or other anti-piracy protections. The act also forbids the manufacture, import, sale or distribution of devices or services for circumvention. The Act has caused students significant distress in copying friends' music: Examples: Napster's MP3 file sharing, via peer-to-peer networking, was determined to be illegal. Grokster suffered a similar fate (because it's software facilitated the transfer of MP3 music) at the hands of the US Supreme Court, and is now extinct. Limewire: Gone, too: On October 26, 2010, US federal court Judge Kimba Wood issued an injunction forcing LimeWire to prevent "the searching, downloading, uploading, file trading and/or file distribution functionality, and/or all functionality" of its software in Arista Records LLC v. Lime Group LLC.[ Bit-Torrent: A Federal judge has ordered it to pay $111 million in damages. The industry has also aggressively gone after individuals, including college students (here at the UW!).

Is it really true that "A man's home is his castle?"

This area has been the subject of a great deal of litigation. The chief argument is what happens when a well-meaning government regulation, like zoning, interferes with your property rights, making them less valuable? If somebody were to openly use your property for a long time, and you didn't complain about it, they would eventually get a legal, permanent right to continue doing this. Legal term = prescriptive easement (don't let this happen!). If things get really bad, your property can actually be taken by the other person via "adverse possession".

Res Ipsa Loquitur ("the thing speaks for itself") - Special Rule.

This doctrine permits the jury to find the defendant liable in a tort case provided that: 1. The event at issue doesn't usually happen without somebody being negligent; 2. Parties other than the defendants have been ruled out as being negligent; 3. The negligence at issue is within the scope of defendants' duty of care to the plaintiff. Under these circumstances, either the defendant is liable, or in the case of multiple defendants, they can argue among themselves who is liable. Example: An airplane crash.

Sole proprietorship

This exists whenever one person owns a business and there is no separate business entity (2/3 of all businesses in America are sole proprietorships). All profits go directly to the owner, and the owner directly pays taxes (advantage: no double taxation). Disadvantages: Unlimited personal liability risk; difficulty raising capital. Very easy to set up.

ex of tort by intentional conduct: False Imprisonment / Wrongful Arrest

This is unusually by physical force, but it's not required (coercion will suffice). Merchants stop shoplifters, provided they act reasonably (e.g, reasonable basis to stop; stop is for a reasonable time; and detention must be reasonable). But what if the merchant is wrong, or acts unreasonably? Lawsuits. Example: WASHINGTON Clothing retailer Eddie Bauer last week dropped its appeal of a $1 million award to three black teenagers who had charged the company with defamation, racism, and false imprisonment after an Eddie Bauer security guard detained them for suspected shoplifting in October 1995. The company settled with the youths for an undisclosed sum, according to the Reuters news agency. The teens, one of whom was forced to remove an Eddie Bauer shirt he had purchased previously until he could return with a receipt, originally sued the company for $85 million, saying the incident was racially motivated.

FAIR USE DOCTRINE

This provides that portions of a copyrighted work may be reproduced for purposes of "criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship and research. Courts, in deciding whether of not the boundaries have been crossed, will consider: 1. The purpose and character of the use (including whether there was a commercial, for-profit motive) 2. The nature of the copyrighted work; 3. The amount of the work that has been used (the larger the volume, the great the likelihood of infringement); 4. Whether the amount used has had an affect on the commercial value of the copyrighted work. This is one of the most famous images of President Obama, dating from the 2008 campaign. It is owned by the Smithsonian, in Washington D.C., where I ran into it. The problem was that the artist who painted it got an assist from an AP photographer. After nearly two years battling it out in court, the Associated Press and street artist Shepard Fairey agreed to settle their main copyright infringement lawsuit over rights in the "Obama Hope poster" and related merchandise. Neither side had to concede their point, though Fairey has promised that he will not use another AP photo in his work without first receiving a license from the news organization. The two sides will share the rights to make and sell the Obama Hope posters, which Fairey created during the presidential campaign by stenciling an AP photograph of the candidate.

MULTIPLE VICTIMS AND TORTFEASORS

Tortfeasors - There can be more than one tortfeasor/defendants (joint tortfeasors). They can be brought into the lawsuit by the plaintiff -victim or the defendant. Example: Plaintiff-victim can file a case against multiple defendants. Example: Plaintiff-victim files a case against one defendant, and then that defendant joins/sues other defendants, claiming they contributed to the problem

What type of things can you, and can you not trademark?

Trade Dress is a distinctive, nonfunctional feature, which distinguishes a merchant's, or manufacturer's goods or services from those of another. Another way of thinking of this is that trade dress is the overall appearance of a product. The Trade Dress of a product involves the "total image" and can include the color of the packaging, the configuration of goods, etc. There are two basic requirements that must be met for trade dress law protection. (1) The first is that the protectable features must be capable of functioning as a source indicator—identifying a particular product and its maker to consumers. In the United States, package design and building facades can be considered inherently distinctive. However, product design can never be inherently distinctive. Secondly, under the functionality doctrine, trade dress must also be nonfunctional in order to be protected. If the element is functional, protection should be sought under patent law. Such a broad and ambiguous definition makes Trade Dress very easy to manipulate. Seeking protection against Trade Dress infringements can be vital to the survival of a business.

TRADE SECRETS

Trade secrets are: A process, product, method of operation, or compilation of information used in business that is not known to the public and that may bestow a competitive advantage on the business. A trade secret could be a formula, computer program, process, method, device, technique, pricing information, customer lists or other non-public information. To qualify as a trade secret, or continue to be a trade secret, the information that allows you to make money must not be generally known. If the economic value of a piece of information relies on it being kept private, it could be a trade secret. The owner also must take steps to protect the information. Trade secrets are very different from patents, copyrights and trademarks. While patents and copyrights require you to disclose your information in the application process (information that eventually becomes public), trade secrets require you to actively keep the information secret. Trade-secret protection can potentially last longer than that of patents.

"Social Policy" Exceptions To Certain Torts:

WORKERS COMPENSATION - Injured workers receive (1) all medical for injuries suffered on the job; temporary disability; vocational training; legal assistance. These claims are handled by an administrative hearing. Injured employee can't sue for damages; workers compensation is the only remedy available to the employee. But because these programs are run by states, the pay outs vary widely: CHILDHOOD VACCINATIONS - Cannot directly sue vaccine manufacturers... WRONGFUL DEATH STATUTES Allow family members who are depend on the income of the deceased to sue for loss of companionship and lost future income. SURVIVOR STATUTE = allow the decedent's claim to flow to his estate, and the estate to sue, then distribute the money to the heirs. Example: If I died on the Alaska Airlines flight, leaving no children or dependants, my estate could still sue the airline for my "pain and suffering" and the award would go to my heirs (whoever I designate in my will). BARRIERS TO THE COLLECTION OF DAMAGES: Statute of limitations. Judgment Proof Creditors.

Market Share Liability / or Joint and Several Liability

What if multiple defendants manufacture a fungible (e.g., asbestos) product that is later shown to be dangerous, but it's impossible to demonstrate which manufacturer made the product that the plaintiff was exposed to? Does the inability to demonstrate who the true guilty party was preclude recovery? No. We look to the share of market that each major manufacture controlled at the time. Before this applies, a test is used: 1. All defendants must be tortfeasors. 2. The harmful products are identical. 3. Plaintiff, through no fault, cannot establish exact tortfeasor. 4. All manufacturers sold product in same geographic area at same time.

DIGITAL SAMPLING

What is it? Is it legit, or does it violate copyright laws? A: Anyone..... http://www.youtube.com/watch?v=P2buaOnQ6dc The most recent significant copyright case involving sampling held that even sampling three notes could constitute copyright infringement. The case centered on N.W.A.'s song "100 Miles and Runnin'" and Funkadelic's "Get Off Your Ass and Jam." Essentially, N.W.A. sampled a two-second-guitar chord from Funkadelic's tune, lowered the pitch and looped it five times in their song. This was all done without Funkadelic's permission and with no compensation paid to Bridgeport Music, which claims to own the rights to Funkadelic's music. The U.S. Court of Appeals for the Sixth Circuit reversed ruled that the sampling was in violation of copyright law. Bridgeport Music Inc. v. Dimension Films, 410 F.3d 792 (6th Cir. 2005).

Intentional Torts

Where one person intentionally injures another (occasionally, but not always, a crime).

FORESEEABILITY.

Without foreseeability, there is no duty of care, and thus no tort. We only owe a duty of care to those people / things that a reasonably prudent person would foresee as potentially injuring others through negligent acts or omissions. Social Policy: We don't hold people liable for unpredictable and unexpected consequences of their actions. Example: Should we blame President Eisenhower for global warming. B. DID THE DEFENDANT BREACH THE DUTY OF CARE? THIS PART OF THE TEST REQUIRES A "FACT" TO BE PROVEN BY A PREPONDERANCE OF THE EVIDENCE The failure to act as a reasonable person may result from ACTS / OMISSIONS / CARELESSNESS / RISKY ACTIVITY W/OUT CAUTION Test: Did the defendant either (1) do the act that was unreasonable, under the circumstances; or (2) not do an act which a reasonable person should have done under the circumstances.

To be eligible for any cooperation credit, corporations must provide to the the deparment all relevant facts about the individuals involved in corporate misconduct

in order for a company to receive any consideration for cooperation under the principles of federal prosecution of business organizations the company must completely disclose to the department all relevant facts about individual misconduct

THREE TYPES OF TORTS

intentional, negligence, strict liability

"Corporate governance"

is the term used to describe the overall control of a corporation. BYLAWS are the specific rules that regulate and govern the internal operations of corporations. Corporate governance is the overall control over activities of the corporation. On paper, the flow of power looks like this: Shareholders (those who own stock) Board of Directors Company Executives Many experts, however, believe that the power structure looks like this: Company Executives Board of Directors Shareholders Entities and groups beyond these three may be STAKEHOLDERS

common law

judge made law, protection is much less comprehensive than statutory protections

Property can be divided into two major types:

real property= things like land, buildings and tangible things intellectual property=things created by mental or creative processes

Limited Liability Company (LLC)

this is "company" not a "corporation" For 2+ person businesses. Taxed like partnership, e.g., no federal taxes unless partners prefer to be taxed as a corporation. Liability limited to investment. Must have an operating agreement, and be registered with the state, and business MUST lay LLC in its name so the public is on notice of its status. Every member has the ability to bind the company. "Members" have a "membership interest" (similar to stock, not identical). No restrictions on the number of members. Member Managed. All members participate. Majority members owe a fiduciary obligation to minority members. Manager-Managed. Managers appointed; owing a fiduciary obligation to members.