LEGAL AND REGULATORY ENVIRONMENT OF BUSINESS
LEGAL STUDIES 2700
OUTLINE OF NOTES
ELIZABETH J. MUSTARD

Administration ------------------------------------------------- Thurs. 8 January

1.  Syllabus

2.  Personal Introduction
    A. Education
    B. Practice
     C. Family: children, dog
     D. Background/Interests

3.  Classroom Dynamics
    A. I will ask questions during my lecture and you can volunteer answers.  No socratic method.
    B. Students' Substantive Questions. Never hesitate to ask substantive questions about the material - either in class or during office hours. At the beginning of each class I will try to ask whether anyone has questions about the material from previous lectures or from the reading.
    C. Students' Administrative Questions. To allow me to help people most effectively with the substantive issues, if you have administrative questions, please go to 1) Syllabus; 2) Web site; 3) Classmates; 4) Me.
    D. Review Course Homepage.

 4.  How to do well
    A. Come to class
    B. Do reading as it is being covered in class
    C. Use a legal framework eg. elements, rules, exceptions, charts
    D. Use my class outline on website
    E. Talk to me before, rather than after exams
    F. Repetition--this is needed to excel in anything - weekly review and outline

5. Class website

6. Going to Law School
 
---------------------------------------------------------------- Tues. 13 January 

1. Law and Property as the Foundation of Business     

A.  Theories for economic strength of countries
    1. Measures of economic strength
        http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)
        http://www.nationmaster.com/graph/eco_gro_nat_inc_percap-gross-national-income-per-capita
        http://www.mrdowling.com/800gdppercapita.html
    2. Other theories
    3. Free market economy in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of the seller and buyer.
        a. Index of economic freedom http://www.heritage.org/Index/countries.cfm
        c. Examples
    4. Certainty of law and legal system

B. Law
    1. Define
    2. Formal
    3. Enforcement
    4. Example

 C. Rule of Law
    1. Define
     2. Examples
          a. Burger Meister Meister Burger
        b. Zimbabwe
 
D. Property
     1.   Define
          a. Legal right to exclude
          b. Legal right to control, use or transfer things
    2. Bundle of rights
 ---------------------------------------------------------------- Thurs. 15 January
    3. Public, Private, Common
    4. Enforcement
    5. Property based legal system incentives
         a. who gets to use what when
         b. invest
    6. Central concept of US legal system
    7. Pierson v. Post (Supreme Court of NY 1805)
   
E. Classification of Law
   1. Common law and civil law
   2. Public and private laws
   3. Civil and Criminal
   4. Substantive and procedural

---------------------------------------------------------------- Tues. 20 January
F. Sources of Law
    1. Constitution
    2.  Legislation
          a. Federal 15 USC 1 et seq
          b. State O.C.G.A. 11-1-101
    3. Case Law
          a. Opinions
          b.  Precedent and Stare decisis
          c.  Citations
                 i. Federal  Reports - F.Supp., F.3d, U.S.
                 ii. State http://lawschool.westlaw.com/federalcourt/NationalReporterPage.asp
    4. Heirarchy and source
    5. Classification scenarios

G. Legal Sanctions

H. Corporate Governance
       1. Principal Agent problem - motivating a party to act on behalf of another.
       2. Defining - guaranteeing accountability of certain individuals of corporation. acceptance by management of the rights of shareholders as the true owners of corporation and their own role as trustee on behalf of the shareholders

I. Problems
     1. Darden
     2. Samples - chapter 1
---------------------------------------------------------------- Thurs. 22 January
2. Ethics
    1.  A Culture of Honesty
       a. Organizational Code of Ethics for UGA Students
       b. Key Sections
       c. Scenarios
       d. Whistleblower

    2. Ethics and Society
        a. fragmentation in society http://charactercounts.org/programs/reportcard/index.html
        b. government

    3. Defining Ethics
       a. Systematic statement of right and wrong together witih a philosophical system that both justifies and necessitates rules of conduct
       b.  Business Ethics
             i. Personal v. Business
             ii. Differences
             iii. Stakeholders
 ---------------------------------------------------------------- Tues. 27 January   
        c. Law and Ethics
       d. Profitability and Ethics
              i. Milton Friedman: There is one and only one responsibility of business: to use its resources and engage in activities designed to increase profits so long as it stays within the rules of the game.
     
     4. Profitable - Legal - Ethical Diagram
             i. Examples

    5. Sources of Values for Business Ethics
       a. Legal regulation
       b. Codes of Ethics
       c. Organizational Codes of Ethics
       d. Individual Values

    6. Achieving an Ethical Business Corporation
       a. management
       b. communication
       c. responsiveness to crisis
      d. consider stakeholders

    7. Cost benefit analysis (add link)

    8. Ethics Scenarios
---------------------------------------------------------------- Thurs. 29 January
    9. Samples - chapter 1 and 2
  
3. Court Systems
A.Court Personnel
    1. Judge
       a. Trial
       b. Appellate - Justice
    2. Jury
       a. Role
       b. Number
       c. Petit v. Grand
       d. Constitutional Issues
    3. Lawyer GA Rules Professional Conduct
       a. Officer of the Court
       b. Counselor
       c. Advocate
       d. Public Servant

B. Structure of Courts: ( Federal and State)
      1. Subject Matter Jurisdiction
         a. General Jurisdiction
          b. Limited Jurisdiction
          c. Justiciable
---------------------------------------------------------------- Tues. February 3
       2. State Courts
             a. Georgia Court System. GA Courts, GA Court of Appeals, GA Supreme Court
             b. Law and Equity
                i. Example
    3. Federal Courts
          a. Creation and Structure
          b. Circuit and District Courts
          c. Jurisdiction (See Art III)
             i. Cases in which US is party and Controversies among states
             ii. Federal Question - arising out of US constitution or out of other federal statutes or other federal law
             iii. Diversity of Citizenship -  P and D different states and amount in controversy >$75,000
       d. US Supreme Court-  Justices
             i. Discretionary Review
             ii. Petition for Writ of Certiorari
             iii. Cert granted
                a. Substantial federal question
                b. Circuit Split
             iv. State Court

 C. Judicial Review - power of court to invalidate actions by the President or Congress
    a. Marbury v. Madison
--------------------------------------------------------------- Thurs. February 5
   b. Judicial Restraint
    c. Judicial Activism
    d. Kelo Case
--------------------------------------------------------------- Tues. February 10

D. Sample Problems


4. Litigation and ADR

A.  Litigation basics
  1. Parties 
   2. Standing
   3. Personal Jurisdiction
   4. Venue
   5. Class Action   

B. Pretrial Procedures
    1. Pleadings
       a. Complaint
       b. Answer
       c. Summons Sample
    2. Discovery
         a. Required Initial Disclosures
          b. Disclosure of experts
          c. Interrogatories
          d. request for production of documents
          e. physical exam
          f. deposition
          g. request for admissions
    3.Motions
        a. Motion to dismiss
        b. Motion for Judgment on the Pleadings
        c. Motion for Summary Judgment
    4. Frivolous Cases

C. Trial
    1. Process p. 115
    2. Jury Selection
          a. Purpose
          b. Questions
          c. Challenges
                i. Cause
                ii. Peremptory - CANNOT BE DISCRIMINATORY
          d. Jury Instructions Samples
   
    3. Plaintiff Rests   
    4. Burden of Proof
         a. Beyond a reasonable doubt (high) criminal
         b. Clear and convincing evidence (medium; seldom used)
         c. Preponderance of evidence (low) most civil
     5. Deciding the Case
--------------------------------------------------------------- Thurs. February 12
D. Posttrial issues
    1. Appeals
    2. Enforcement of Judgments and Decrees
    3. Res Judicata        

--------------------------------------------------------------- Thurs. February 19
E. Alternative Dispute Resolution (chart)
   

5. Constitutional Law (Skip for now)
February 19,  24 and 26 (Contracts)
1. Reading
    Please read chapter 7
    Please skip case 7.2 (Venture Media)
2. Read U.S. Constitution. Art. I, Section 10 - Contracts Clause

6. Contract Law

A. Introduction
    1. Function of Contract Law
        a. One purpose of contract law is to promote cooperation by converting situations with noncooperative solutions to situations with cooperative solutions.
    2. Sources of Contract Law
        a. Common Law
        b. UCC
            i. Definition of Goods -  tangible, movable, personal property
       c. Framework

-------------------------------------------------------------- Tues. Feb. 24 
  
    3. K terminology
         a. Executed, Executory
          b. Offeror/Promisor - Offeree/Promisee
    4. Contract Classification
       a. Bilateral - Unilateral
       b. Express - Implied in Fact
       c. Implied in Law/quasi contract
    5. Definition of K

 B. Requirements of A K
    1. Agreement
       a. Offer
             i. Objective Theory of K
   -------------------------------------------------------------- Thur. Feb. 26    

        b. Acceptance before revocation
    2. Consideration
       a. bargained for
       b. legal value
       c. courts not inquire into amount
 -------------------------------------------------------------- Tues. March 3

    3. No formation defenses
         
C. Statute of Frauds
     1. Definition
    2. Sufficiency of Writing
    3. Contracts/promises covered
    4. Special cases
          a. Land
          b. Surety
          c. Sale of goods $500 or more UCC 2-201
             i. memorandum
             ii. customized goods
             iii. admissions to quantity admitted
             iv. partial performance
             v. merchants confirm in writing
    5. Exceptions
       a. Writing p 206
       b. partial performance or partial payment - land p. 207
       c. admission in court - pleading, testimony, or otherwise

 D. INTERPRETATION OF CONTRACTS
     1. Plain Meaning Rule
          a. trade usage, course of performance, prior dealing
          b. Parole Evidence Rule. Generally, parties ot a contract will a complete and final written contract cannot introduce oral evidence in court that changes the intended meaning of the written terms
             i. exception. oral evidence admissible to explain terms
             ii. Always permissible when formation defense is relevant - eg. fraud
    2. Hierarchy.
          a. Hand
          b. Typed
          c. Preprinted
    3. Ambiguous or vague terms interpretted agains the party who drafts contract.
 

-------------------------------------------------------------- Thurs. March 5

 4. Norfolk Southern Railway Company v. Kirby Pty Ltd
          a. Bill of Lading document issued by a carrier to a shipper acknowledging that specific goods have been received on boad as cargo for conveyance to a named place for delivery to the consignee who is usually identified. http://www.unzco.com/basicguide/figure3.html
          b. Himalaya Clause. Contractual provision expressed to be for the benefit of a third party who is not a party to the K.
          c. Parties.
                i. Plaintiff, Kirby
                ii. Defendant, Norfolk Southern
          d. Procedural History
             i. TC in favor of Norfolk Southern
             ii. 11th Circuit reversed
             iii. US Supreme Court - granted cert. reversed and remanded
          e. Facts ICC Freight forwarding company agreed to ship 10 containers from Australia through Savannah GA and on to Huntsville AL. Shipping K signed b/w ICC and Kirby for shipping and limiting liability of all involved in shipping; ICC contracted with Hamburg Sud a shipping company to handle the shipping; 2nd K signed between ICC and Hamburg Sud for shipping and limiting liability. Containers arrived in GA without damage. Hamburg contracted with Norfolk Southern to ship containes to Huntsville. Containers damaged to extent of $1.5 million. Kirby sued Norfolk Southern
          f. Issue
             i. Does the liability limit contained in the contract between a freight forwarding company and the cargo owner apply to a sub-subcontractor when the language of the contract extends to "all agents, and independent carriers involved"
             ii. Does the liability limit contained in the K between a freight fowarding company and the carrier limit the cargo owner's recovery against the carrier's subcontractor?
          g. Holding
             i. Yes. By the plain language of the contract, a sub-subcontractor is an intended beneficiary of the K
             ii. Yes. When an intermediary contracts with a carrier to transport goods, the cargo owner's recovery against the carrier is limited by the liability limitations to which the intermediary and carrier agree. Intermediary acts as an agent for the cargo owner in limiting liaiblity.
          h. Repondent's argument - disast for the international shipping industry
             i. limited agency rules track industry practice
             ii. higher rates with different rules
             iii. cargo owner's have other options eg. seek recovery against freight fowarding company
          i. additional question. what is the basis for subject matter jurisdiction in this case?
E. ASSIGNMENT OF K
     1. Some Definitions
    2. Example
    3. General Rule
    4. Notice of Assignment
    5. Rights that can't be assigned


 F. PERFORMANCE OF K
  1. Ask
       a. Has a present duty to perform arisen?
       b. Has the duty been discharged?
       c. If a present duty has arisen and it has not been discharged, nonperformance will be a breach.
    2. Material Breach
    3. Minor Breach
    4. Breach of K remedies
         a. Damages
         b. Specific Performance
          c. Mitigation
  
G. DISCHARGE OF K. p. 217 sidebar 7.12

 D. U.S. CONSTITUTION - CONTRACT CLAUSE
    1. Purpose
    2. Test for validity of legislation
       a. Does the legislation substantially impair a party's rights under an existing K? If yes,
       b. Does it serve an important and legitimate public interest?
       c. Is it a reasonable and narrowly tailored means of promoting that interest?
 
-------------------------------------------------------------- Tues. March 17
 
7. Tort Law
Assignment for March 17, 19 and 24
1. Reading
    Please read chapter 8
    Please skip case 8.3 (Iannelli)
    Please skip p. 248 (bottom) - p. 253
    Please add p. 333-334 on Respondeat Superior
A. Introduction
    1. Definition and purpose- French word meaning "wrong"
    2. Tort Liability
          a. Intentional (arise from intentional acts)
          b. Negligent (arise from certain unintentional acts of carelessness)
          c. Strict Liability
    3. Differs from criminal law
    4. Differs from contract law
 
B. Intentional Tort
    1. Elements
       a. Act of D
       b. Intent
            i. desire to bring about certain result
            ii. knew with substantial certain that specific consequences would result
             iii. No evil or harmful motive is required
       c. Causation  - interference with person or business in a way not permitted by law
   
    2. Some intentional torts
       a. Assault
          i. An act by D creating a reasonable apprehension in P
          ii. of immediate harm or offensive contact to P's person
          iii. intent
          iv. causation
        b. Battery
          i. harmful or offensive contact
          ii. to plaintiff's person
          iii. intent
          iv. causation
       c. Intentional Infliction of emotional distress
          i. act of D amounts to extreme and outrageous behavior
          ii. intent on part of D to cause P to suffer sever emotional distress or recklessness as to the effect of D's conduct
          iii. causation
          iv. damages - severe emotional distress
          v. Van Stan v. Fancy Colours & Company
       d. Invasion of Privacy
          i. appropriation of name or likeness
          ii. intrusion on P's phyical solitude
          iii. public disclosure of highly objectionable, private information about the P.
       e. False Imprisonment
          i. An act or omission on the part of D that confines or restrains P
          ii. to a bounded area
          iii. Causation
          iv. Example
       f. trespass
          i. Physical invasion of P's real property
          ii. Intent
          iii. Causation
       g. conversion
          i. Act by D interfering with P's right of possession in a chattel serious enough in nature and consequence to warrant that the D pay full value of the chattel
          ii. Intent
          iii. Causation
       h. defamation
          i. defamatory language on the part of D
          ii. of or concerning the P
          iii. Publication by D to a third person
          iv. damage to the reputation of P
          v. Public figure
             1. falsity of the defamatory statement
             2. fault on the part of D - malice
          i. Libel v. Slander
     
-------------------------------------------------------------- Thur. March 19
 
     i. fraud - Wells Fargo Bank v. Ariozona Laborers,Teamsters and Cement Masons
          i. misrepresentation - Lies lies lies
          ii. failure to disclose
          iii. concealment
          iv. Fraud can be
             1.
             2.
             3.
             4.
       j. Common Law Business Tort
          1. injurious falsehood
             a. Stinger Systems v. Taser http://www.reuters.com/article/pressRelease/idUS166171+24-apr-2008+PRN20080424
          2. interference with contractual relationships
 
C. Negligence
    1. Elements
       i. duty on the part of D to conform to a specific standard of conduct for the protection of P against an unreasonable risk of injury
       ii. breach of duty -unreasonable behavior
       iii. causation - causation in fact and proximate cause
       iv. damages
    2. Defenses
       i. contributor negligence
       ii. comparative negligence
       iii. assumption of risk
-------------------------------------------------------------- Tues. March 24   
D. Strict Liability
   
E. Damages

F. Other considerations
    1. Vicarious Liability (p. 333-334 of Text)
       a. doctrine of respondent superior. employer will be responsible for tortious acts of employee committed within scope of employment.
       b. Frolic and Detour.
       c. GR intentional torts not within scope of employment unless force is authorized in the employment or friction is generated by employment or employee is furthering business of employer
     2. Independent Contractor. Principal not liable for the tortious acts of agent if agent is an independent contractor
         a. inherentlydangerous activities
         b. nondelegable duty
  
 G. Cases Palsgraff v. Long Island Railroad Co.
   

Criminal law Assignment
Please read  Chapter 9
Add relevant parts of Amendment 4, 5 and 6 of U.S. Constitution


8.  Criminal Law
 A. Overview
    1. Definition and Purpose
    2. Sources of Criminal Law
    3. Essential Elements
       a. Act
       b. Intent
          i. MCP Intent designations
          ii. Georgia Murder Statute
       c. Concurrence
       d. Act caused result (where result
-------------------------------------------------------------- Thurs. March 26  
  
B. Constitutional Dimensions
    1. 4th amendment: Illegal search and seizure
    2. 5th amenment. Protection against self-incrimination
    3. 5th amendment. double jeopardy
       a. Hudson v. US
          Facts. OCC issued Notice of Assessment of Civil Money Penalties against and Notice of Intention to Prohibit further Participation of Chairman, controlling shareholder, president adn board of director member of 2 banks. Civil resolved by Stipulation and Consent Order in which Petitioners agrered to pay certain assessments and agreed to debarment. Subsequently indicated on 22 counts. Criminal violations alleged arose from the same transaction and facts of the administrative action. Petitioner moved to dismiss indictmnet on grounds of double jeopardy.
          Issue. Does the DJ clause prohibit civil and criminal punishment for the same activities?
          Holding. No the DJ clause does not prohibit punishment for  both civil and criminal violations based on the same activities. Whether a law is civil or crirminal is a matter of statutory construction. The court examined 7 factors that would lead them to believe a civil law was applied like a criminal law. Under the facts of this case, the civil law was civil in nature.
    4. 6th amendment. rights in a criminal case
-------------------------------------------------------------- Tues. March 31  
C. Crimes
    1. Fraud
       a. Federal p. 270
       b. State criminal codes
       c. Specific areas. Mail and wirre, securities, health care, use of counterfeiting devices, bankruptcy
       d. Ponzi Scheme http://www.youtube.com/watch?v=zRTPKcJGwe4
         f. Schmuck case. 
          i. Facts. Schmuck used care distributor purchased used cars rolled back their odometers and then sold autos to Wisconsin retail dealers for prices artificially inflated because of the low mileage readings. Car dealers resold the cars to customers who paid inflated prices reflecting the fraud. By mail, dealer submitted title paperworkr to Wisconsin DOT to transfer title and obtain tags for purchaser.
          ii. Schmuck claimed these mailing did not further the fraud
          iii. Holding. To be part of te execution of the fraud, the use of the mails need not be essential element of the scheme. Sufficient for mailing to be incident to essential part of the scheme or step in the plot. The resals and Schmuck's relationship with the retail dealers naturally depended on the successful passage of title among the various parties.   
    g. Defenses to fraud
          i. good faith
          ii. statute of limitations

   2. Conspiracy
       a. Agreement between 2 or more persons to accomplish an unlawful plan
       b. Intent to enter into the agreement
       c. Intent by at least 2 persons to achieve the object of the agreement
       d. One committed an overt act in furtherance of the crime
       e. Hughes Case.
          i. Hughes Aircraft Co., Inc. contracts with government. LaRue, supervisor ensuring accuracy for the testing under these gov. contracts, falsified tests for the gov. contracts. LaRue's subordinates informed LaRue's supervisors, supervisors did nothing about it and said he was not to be questioned by his subordinates. Hughes and LaRue charged with conspiracy to defrarud
           ii. Hughes arguments 1. Hughes should be aquitted because LaRue was acquitted by the same jury. Court. Conviction of one co-conspirator is valid even when all the other coconspirators are acquitted.
          iii. Hughes argument 2. Hughes should be acquitted because LaRue's evidence was identical to its. Court. Hughes assumption that the facts against both Ds were identical is erroneous.
          iv. Hughes argument 3. Statutory argument based on 18 USC 371 "two or morre persons" Hughes can't conspire with itself. Court. Creative argument but corporations may be liable for conspirarcies entered into by its agents and employees.
          v. Hughes argument 4. Hughes argues that under 18 USC 1001 the underlying offense to conspiracy requires 2 actors based on the corporate reporting structure. Under Wharton Rule no conspiracy can be found. Court. Corporation can be liable under 1001 for false statements to government by just one of its employees - Wharton Rule does not apply.
    3. Obstruction of Justice
       a. Act
       b. Intent to obstruct the legislative or judicial process
       c. Martha Stewart http://money.cnn.com/2006/01/06/news/newsmakers/martha/index.htm
    4. False statement to a bank
          a. Knowingly or willfully
          b. make a false statement or overvaluing property or security
          c. To a federally insured financial institution or agency
          d. US v. Wells US 1997 (court held no materiality requirement. no one would make an immaterial false statement to a bank)
    5. False statement to a federal agency. 18 USC 1001. http://www4.law.cornell.edu/uscode/18/1001.html

 -------------------------------------------------------------- Thurs. April 2
 6. Larceny
          a. A taking
          b. and carrying away
          c. of personal property
          d. of another
          e. without consent
          f. with intent to permanently deprive that person of her interest in property
           g. distinguish burglary, robbery and embezzlement      
    7. racketeer influenced and corrupt organization act (RICO)
          a. http://www.law.cornell.edu/uscode/18/usc_sec_18_00001962----000-.html
    8. Cyber Crime
    9. endangering workers http://www.npr.org/templates/story/story.php?storyId=101207707
    10. aiding and abetting
 
D. Other considerations
    1. sentencing guidelines
    2. trends

Intellectual property
Please read chapter 10. (skip middle of page 317-top of page 324)
Please read US Constitution Art I., Sect 8

9. Intellectual Property
  
"To promote the Progress of Science and useful Arts,
by securing for limited Times to Authors and Inventors
the exclusive Right to their respective Writings and Discoveries."
US Constitution, Article I, Section 8.
A. Introduction
    1. Definition
       a. Patent. A government grant that gives an inventor the exclusive right to or to exclude others from making, using, offering for sale, or selling the inventin in the United States or importing the invention into the United States.
       b. Trademark. word, name, symbol or device which is used in trade with goods to indicate the source of goods and to distinguish them from the goods of others.
       c. Copyright. form of property protection provided by the U.S. government to the authors of "original works of authorship," including literarry, dramatic, musical, artistic and other intellectual works.
    2. Purpose see Art I, Section 8.
      
B. Patents
    In the mid 19th century Henry L. Ellsworth, United States Commissioner of Patents, commented on the proposed construction of a new buildling for the U.S. Patent Office. He thought that a new building should not be too large or expensive because, “the advancement of the arts from year to year taxes our credulity and seems to presage the arrival of that period when further improvements must end.”
    In 1899, Charles H. Duell, commissioner of the U.S. Office of Patents, pronounced, "Everything that can be invented has been invented."
  
    1. Legal Monopoly  - exclusive right created by federal statute 
    2. Obtaining a patent
    3. Grant of patent. Gives a presumption of valid property right not a final determination.
       a. The _______ decides the validity of a patent.
    4. Subject matter of a patent. 35 USC 101 (practically everything made by man and the prrocess forr making it)
       a. Process
       b. Machines
       c. Composition of Matter
       d. Improvements to the foregoing
       e. Nonfunctional designs of a manufactured article
       f. Certain plants
       g. Distinguish between utility, design and plant patent
       h. JEM AG Supply Inc. v. Pioneer Hi-bred International Inc US 2001
          i. The basis for subject matter jurisdiction is ___________________.
          ii. Using statutory construction and precedent, establishes that the subject matter of paents is very broad
          iii. Plant Variety Protection Act and Plant Protection Act. are not exlusive means of establishing patent right in plants. 17 USC 101 is broader and is an additional means of patenting a plant
    5. Other requirements of patent
       a. Nonobviousness. that a patentable invention must not have been obvious to a "person having ordinary skill in the art" in view of the appropriate prior art.
       b. Novelty - not the same as prior products or process - must be new
       c. Usefulness (does not apply to design and plant patents) subject matter has a useful purpose.
  
-------------------------------------------------------------- Tues. April   14
    
    d. Smuckers uncrustables.
    6. Patent Duration
       a. Utility patent 20 years from time of filing application
       b. Plant 20 years from time of filing application
       c. Design 14 years from time of filing application
    7. Current issues
     8. Infringement

C. Trademarks

    Definition: The term trademark includes any work, name, symbol, or device, or any combination thereof –
    1) used by a person, or
    2) which a person has a bona fide intention to use in commerce
and applies to register on the principal register established by this Sct, to identify and distinguish his or her good, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown.
    Lanham Act , 15 U.S.C. Section 1127.

    1. Types of Marks
       a. Trademark
       b. Service Mark
       c. Certification mark
       d. Collective Mark
       e. Trade dress
    2. Trademark registration
     3. Destinctiveness
        a. Arbitrary
        b. Fanciful
        c. Suggestive
        d. Nondestinct - secondary meaning
     5. Generic mak
    6. Duration
    7. Enforcement
    8. Infringement
      Test--likelihood of consumer confusion
        a. The similarity in the overall impression created by the two marks (look, phonetic similarities, underlying meanings)
        b. The similarities of the goods and services involved (including an examination of the marketing channels for the goods)
        c. The strength of the plaintiff's mark
        d. Any evidence of actual consumer confusion.
        e. The intent of the defendant in adopting its mark.
        f. The physical proximity of the goods in the retail marketplace.
        g. The degree of care likely to be exercised by the consumer.
        h. The likelihood of expansion of the product lines.
    9. Trademark Dilution
       a. unauthorized use when the use is on noncompeting goods or is unlikely to cause confusion
       b. Mark must be famous
       c. blurring - power of the mark is weakened through identification with dissimilar goods eg. Kodak bicycles - no confusion but dilutes distinctive quality of the mark
       d. tarnishment - mark is cast in an unlattering light - inferior or unseemly products eg. Toysrus v. Adultsrus
       e. Mosely v. V. Secret Catalogue inc
          facts
          i. Victor and Cathy Mosely owned Victor's Secret selling intimate lingerie
          ii. VS owns VS trademark demanded that Victor's Secret change their name
          iv. Victor's Secret changes name to Victor's Little Secret
          v. Victoria's Secret sues Mosely for infringement and dilution
          procedural history
          i. TC no infringement. dilution of VS trademark occurred
          ii. C/A affirmed
          iii. Supreme Court Granted Cert and reversed
          Reasoning
          i. based on statutory construction "causes dilution" requires proof of actual dilution not likelihood of dilution
          ii. This case has been overturned by the recent 2006 Amendment to the Dilution Act which requires now only a likelihood of dilution see http://www.law.cornell.edu/uscode/15/1125.html#c

-------------------------------------------------------------- Thurs. April   16

E. Copyright
    1. Cateogries given broad interpretation
       a. literary works
       b. musical works
       c. dramatic works
       d. pantomimes and choreographed works
       e. pictorial, graphic and sculptural works
       f. motion picture and other audio visual works
       g. sound recordings
       h. architectural works
       i. not copyrightable. titles, names, short phrases, slogans, familiar symbols, ideas, procedures, methods, systems, processes, concepts, works consisting of informatin that is common property and containing no original authorship
    2. Monopoly on reproduction, display, distribution and performance of protected work
       i. derivate work. work based on preexisting work. eg motion picture based on a book
    3. Optaining copyright protection
       a. no publication or registartion or other action with copyright office is required to secure copyright
       b. Copyright secured when work is created and fixed in a copy for the first time
    4. Copyright registration. file the following with the copyright office
       a. Completed application form
       b. non-refundable filing fee
       c. nonreturnable deposit of the copy or copies of the work being registered
    5. Criteria
       a. original works of authorship
       b. fixed in a tangible form of expression
       c. show some creativity
    6. Duration.
       a. automatic federal protection from the moment work is created
       b. works created after 1977 - authors lifetime plus 70 years
    7. Infringement.
       a. Actual harm or statutor damages imposed in court's discretion
       b. Costs and atty fees can also be imposed
       c. Criminal penalties for willful violation - fines and imprisonment
    8. Fair use defense
       a. Copyright for criticism, comment, news reporting, teaching (multiple copies for classroom use), scholarship or research
       b. factors listed on p. 314 of texts
       c. Betamax case. Fair use for copying TV programs by VCR for private use.
       d. Cambell v. Acuff Rose Music Inc
          Facts
             i. 2 Live Crew rap group recorded and sold parody of Roy Orbison's copyrighted song "Oh Pretty Woman"
             ii. 2 Live Crew sold over a quarter million copies
             iii. Acuff Rose Music Inc. copyright holder sued 2 Live Crew
          Procedural History
             i. TC Fair Use in favor of Campbell
             ii. C/A reversed in favor of Acuff
             iii. Supreme Court. granted cert. reversed and remanded
          Discussion
             i. Unconteseted infringement. Fair use defense raised
             ii. Purpose and character of use
                - is the new work tranformative
                - goal of copyright further creation of transformative work
            iii. Nature of copyrighted work
                - is the work close to the core of intended copyright protection
                - Orbison's work falls within this core
                - it doesn't help too much in a parody case - since parody usually made of expressive works.
            iv. Amount used in relation to whole copyrighted work
                - purloined substantial portion of original
                - lyrics - not excessive
                - music - repetition of bass riff
                - need some of the lyrics and some of the music to identify to it in parody
             v. Effect of use on market for or value of copyrighted work
                - harm to original work and to derivative works
                - was there a rap market
             vi. wrong to conclude that fails fair use because commercial

E. Trade Secret Law
          "'Trade Secret' means information, including a formula, pattern, compilation, program, device, method, technique or process that: 1) derives independent economic value, actual or potential from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; 2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." - (Uniform Trade Secrets Act)
    1. Law
       a. Uniform Trade Secret Act - some variation passed in 45 states
          i. Remedies. actual loss, unjust enrichment, injunction, in some cases atty fees and costs
       b. Economic Espionage Act - federal criminal law
          i. Remedies. No private cause of action, criminal penalties for interstate violations on page 298
    2. Requirements
       a. Secret
       b. Reasonable measures to maintain secrecy
       c. Economic Value
    3. Remedies
        a. Injunction
        b. Damages
  -------------------------------------------------------------- Tues. April   21     

Business organization.
Please read chapter Chapter 11.
Please skip case 11.2 Meyer v. Holley.

10. Business Organization
    A. Agency
         1. Principal. authorizes the Agent to work under his control and on his behalf
          2. Agent. authorized to act on behalf of the principal with a third party
          3. Third Party. negotiates or acts with Agent to be bound with the principal
          4. Agent duties
             a. Loyalty. Duty of loyalty to act fo the principal's benefit, includes duty of confidentiality
             b. Notification. Duty to keep the principal fully informed
             c. Obedience. A duty to obey instructions
             d. Accounting. A duty to account to the principal for monies handled
             e. Avoid conflicts. Not accept any conflicting obligations inconsistent with duties owed to principal without disclosure and consent
          5. Principal's Duties
             a. Compensation. Duty to pay the agent for services rendered (this could be an implied-in-fact contract
             b. Reimbursement and indemnificiation. Duty to reimburse for payments made by the agent and obligations incurred by the agent
             c. Cooperation. Duty to cooperate and assist the agent in performing duties
             d. Safe working conditions. Duty to provide safe working premises, equipment  and conditions
          6. Tort liability. see doctrine of respondeat superior discussed in Tort section of outline
          7. Contactual liaiblity
             a. Actual authority. authority given in clear, direct and definite terms, orally or in writing.
                eg. Power of attorney, see also p. 335 of text
             b. Implied authority. to do what is reasonably necessary to carry out express authority and accomplish the objectives of the agency. Authority customarily associated with the position occupied by the agent.
                eg. given authority to manage business. customarily includes authority to hire, fire, buy merchandise and equipment, advertise products etc.
             c. apparent authority. principal's words or conduct would lead a reasonable person in the third party's position to believe the agent was authorized to act. eg. selling sunglasses, has no authority to collect payments but does. no objection on part of the business.
             d. When agent Authority is present, the principal will be bound by the acts of the agent
             e. Principal is not responsible for unauthorized acts - acts committed outside the sope of the Agent Authority
             f. consider disclosed and undisclosed agency. Agent will not have personal liability for disclosed agency. Agent will have personal liability for undisclosed agency
          8. Criminal liability
             a. misdeeds of individuals/agents cause the demise of organizations
             b. Penalties for businesses. fines, losing license
             c. Arthur Andersen v. US
             Facts.
                AA served as auditor for Enron. Fall 2001 Enron accounting scandal. October 2001 AA emphasized to employees that its document retention policy should be followed and specific instruction to the Enron Crisis Response Team at AA
                Team members started shredding Enron documents. October 30, SEC opened formal investigations, asking Enron for accounting documents. Shredding continued
                Nov. 8 SEC served Enron and AA with subpoenas for accounting records. November 9 shredding stopped
                AA indicted for obstruction of justice
             Procedural history
                TC. convicted after 10 days of deliberation
                C/A affirmed
                Supreme court. granted cert., reversed and remanded
             Reasoning.
                1. Careful in assessing reach of federal criminal statute
                   deference to Congress, fair warning of what law means, particularly where not inherently wrong (malum prohibitum)
                2. meaning of "knowingly corruptly"
                   knowingly. awareness, understanding, consciousness
                   corruptly. wrongful, immoral, depraved, evil
               3. Jury instruction failed to include culpability required by "knowingly corruptly"
                4. Important fact. AA had valid document retention policy in plac
    B. Business forms  Comparison Table
       1. Sole proprietor
             a.Owner does business without creating a separate business organization
             b. any type of business
             c. about 2/3 of businesses take this form
         2. Partnership. Agreement, express or implied, between two or more persons to carryon a business for profit.
             a Uniform Partnership Act passed in 49 states.
             b. to find partnership show
                sharing of profits and losses
                a joint ownership of the businesses
                Equal right to participate in the management of the business
          3. Corporation.Legal entity created and recognized by state law
             a. Shareholders - owners
             b. diretors - elected by SH, responsible for overall management and make all policy decisions
             c. officers - hired by the diretors, responsible for the day to day operations of the corporation
             d. Model business Corporation Act. majority of states are guided by this model
             e. domestic corp
             f. foreign corp.
             g. articles of incorporation
          4. Limited Partnership. A partnership consisting of at least 1 general partner and 1 or more limited partners
             a. GP. management responsiblity for the partnershi and has full responsibility for the partnership and its debts
             b. LP. contributes cash or other property and owns and interest in the partnership. Limited liability unless
           5.. LLC
                  a. Governed by state statutes which are not at all uniform
               b.. hybrid form that combines the limited liability of corporation and tax advantage of partnership
               c.. members - owenrs
               d. members form operating agreement provisions relating to management, division of profits, transfer of membership interests and other important issues.
                e. file articles of organization with SOS of state.
Securities law
Please read chapter 14 through middle of page 448.
Please skip case 14.3 United Staes v. O'Hagan

11. Securities Law
  A. Overview
       1. Purpose
          a. started as a measure to help US overcome the great depression
          b. designed to give investors accurate information about investments
          c. create and restore investor confidence
          d. discourage bad behavior
          e. regulate investments in whatever form they are made and by whatever name they are callled
       2. SEC
          a. created in 1934
          b. responsible for administering federal securities law
          c. 5 commissioners appointed by president for 5 year terms
          d. quasi legislative and quasi-judicial
          e. essential figure in addressing recent corporate scandals
       3. Security
          a. What is a security? see page 423 15 USC 77b
          b. Investment by an investor in an enterprise with profits to come solely from the efforts of the persons other than the investor
          c. just about any stake in ownership or debt of a company
          d. SEC v. Edwards US 2004
             i. Facts.
                Edwards through his corporation ETS offered public investment opportunities in payphones
                Investor paid $7,000 to own a payphone and offered $82/month under lease arrangement with Edwards company. Investor would receive $7,000 back at end of 5 year term
                ETS could not pay investors and filed for bankruptcy
                SEC brought action against ETS for civil damages from alleged violations of security law
          ii. procedural history
             TC in favor of SEC
             C/A 11th circuit reversed in favor of ETS
             Supreme Court. Granted Cert. Reversed and remanded
           iii. Issue. Whether a money making scheme is excluded from the term investment contract simply because the scheme offered a contractual entitlement to a fixed, rather than a variable return
          iv. Holding. Promise of a fixed return does not preclude a scheme from being an investment contract and thus a security subject to federal security law
          v. Reasoning. Investment contract is investment of money in a common enterprise with profits to come solely from the efforts of others. Howey case.
                Flexible definition
                does not distinguish between a fixed and variable return
                Encompasses countless and variable schemes devised by those who seek the use of the money of others on the promise of profits
   
   B. Sarbanes Oxley Act
       1. General.
             a. Followed on the heals fo major accounting scandals
             b. Sought to revitalize SEC - increased SEC authority by increasing budget
       2. PCAOB
             a. created the Public Company Accounting Oversight Board
             b. Oversight of accounting firms that audit public companies. these firms must register with PCAOB
             c. http://www.pcaobus.org
        3. Key audit provisions.
          a. Audit is an independent assessment of the fairness by which a company's financial statements are presented by its management. It is performed by competent, independent and objective person(s) known as auditors or accountants, who then issue an auditor's report based on the results of the audit
           b. Shift - auditor maintain trust of public and corporate shareholders
           c. BOD of company creates auidt committee - independent from the control of the company. one member of committee has to be financial expert
           d. Auditor reports to this committee
           e. Audit partner rotates off every 5 years
           f. audit work papers retained for 7 years
           g. 18 USC 1519  http://www.law.cornell.edu/uscode/18/usc_sec_18_00001519----000-.html
           h. Auditors can no longer perform non-audit functions
        3. Financial Statements and Controls
            a. CEO and CFO cerfity the accuracy of the quarterly and annual financial statements filed with SEC and certify existence of internal controls
           b. No personal loans from company to executives.
         4. Security Fraud.
             a. Punishment strengthened for securities fraud
             b. Lengthened statute of limitations 2 years/5 years
             c. crime of conspiring to commit securities fraud
             d. improved protection for whistleblowers
    C. Securities Law of 1933 - going public
       1. General
          a. Disclosure law for initial sale of securities to the public - IPO
          b. Parties regulated
             i. issuer - one offering security
             ii. underwriter. participates in original distribution of securities by sale or guarantee of sale of securities eg. investment bankers
             iii. Controlling person. controls or controlled by issuer
             iv. Seller. contracts with purchaser or motivates sale (not generally atty assisting with sale just because involved in the process)
          c. Documents
             i. Registration statement. detailed disclosure of financial information about the issuer and the controlling individuals involved in the offering of security for sale to the public for the first time
             ii. Prospectus. legal document describing secuirites - sufficient facts so he can make investment decision
                   http://secwatch.com/s1?form_typeid+326&page=1
          d. Time periods
              i. prefiling period. Preliminary negotiations and agreement with underwriters: NO SELLING; NO OFFERS TO BUY OR SELL
              ii. Waiting period. Can solicit buyers and receive offers to buy: NO SELLING; CANNOT ACCEPT OFFERS
              iii. Post effective period. Sales are finalized.
       e. Liability based on initial offering
          i. Criminal. Willful violation of the act or fraud in any offer or sale of securities. Fine up to $10,000 or 5 years in prison or both
          ii. Civil Buyers of securities suing for refund of the investment
             Seciton 11, Section 12 and Section 17
       f. Defenses
          i. Materiality
          ii. Statute of Limitations
          iii. Due Diligence
    D. Security Exchange Act of 1934 - being public
       a. General
          i. regulates transfers of securities AFTER the initial offering
          ii. cannot sell on national exchange unless registration under 1934 act is effective
          iii. Subsequent periodic reporting of financial information and information impacting value of security
       b. Lititgation under 1934 Act. Section 10(b) and Rule 10b-5 p. 437 language of statute and rule
          i. Prohibits fraud or misrepresentation (or non-disclosure) in connection with purchase or sale of ANY security in interstate commerce
          ii. Covers ANY security whether or not registered under the Act
          iii. Possible Plaintiffs
                SEC
                Private Action for damages
          iv. Possible Defendants
             company that issues misleading information
             buyer or seller of security who misrepresents material information
             buyer or seller who fails to disclose material inside info when there is a duty to disclose
             tipper or tippee
          v. SEC v. Sandford US 2002
             Facts.
                1987 Wood and mentally disabled daughter opened investment account and placed $419,255 in account; Wood gave Sandford security broker discretion in managing fund; over 4 year period Zandford withdrew funds and transferred into his own account; Wood dies in 1991 and the account is empty; Zandford charged and convicted of 13 counts of wire fraud. prison sentence and restitution. Civil Complaint filed under Section 10(b) and Rule 10b-5
             PH. TC Summary Judgment in favor of SEC; C/A reversed and dismissed civil suit because conviction did not establish "in connection with" Supreme Court. granted cert. Reversed and remanded
             Reasoning. 1. Broad meaning given to "in connection with the purchase or sale of any security" 2. means that a broker who accepts payment for securities that he never intends to deliver or who sells customer securities with intent to misappropriate the proceeds violates 10(b) and  Rule 10b-5. 3. Zandford claims sales were lawful and the misappropriation is not in connection with the sale. 4. SAles and misappropriation not independent events. Fraud coincide with sale.
          vi. Actual damages and no punitives in the Section 10(b) litigation
    E. Insider trading
       a. Section 16B preventing the use of information that is available to an insider such as a officer, director and 10 percent shareholder that is not available to the general public
       b. Purpose. bad for market confidence to have these insiders buying and selling
       c. SEC cannot tell when nonpublic information is improperly used so it creates a presumption that any profit made within a 6 month period is illegal. Strict liability - no intent to deceive required
       d. Applies to
          i. Reporting corporation. listed on national exchange or at least ____ shareholders and $______ in assets
          ii. Type of D. Officer (executive officer, accounting officer, CFO, controller - look at function rather than title), director and 10% shareholder
          iii. Type of transaction. buying and selling stock within a single six-month period - short swing trading
          iv. What happens. All profits from short swing trading are recoverable by the corporation, the person who sold it to the insider or the person who purchased it from the insider.
       e. Note the reporting requirements on page 441
          v. Example see cases and readings pages.
    F. Tipper - Tippee SECTION 10(B) LIABLIITY
        a. Tipper (i) passes along material inside information in breach of duty and (ii) benefitted
         b. Tippee (i) trades on a tip and (ii) knew or should have known that the information was improperly passed
          c. Example see cases and reading pages.
12. Antitrust 
13. Employment and Labor Law
14. Discrimination in Employment Laws