In celebration of the Raven’s excellent 2009 season, and to commemorate the law that years ago caused the Colts to leave town in the middle of the night, today we discuss American Needle v NFL, argued at the Supreme Court several weeks ago. Case cite: http://caselaw.lp.findlaw.com/data2/circs/7th/074006p.pdf
The “law” here is antitrust. American Needle held a long standing contract with the NFL to produce headwear bearing NFL and NFL team logos. In 2000, the NFL decided to open bidding to make the headwear licensing exclusive, and Reebok won that bid, and thus American Needle was prohibited from making headgear bearing NFL logos. American Needle sued the NFL and Reebok, arguing that the NFL teams, which are independent corporations, conspired together in restraint of trade.
As one might suspect, American Needle lost at the District Court and in its initial appeal. In both courts, the courts held that while the NFL teams are independent, their joint action in exclusively licensing their trademarks was not “concerted action” of independent firms, but rather, permissible action of a “single” functional entity.
Unlike Major League baseball, which has statutory immunity from antitrust laws, the NFL has no such immunity. As a result, the NFL is subject to liability for violating the antitrust laws. While antitrust law is complex because the economic relationships between enterprises in commerce are complex, as a very general matter, antitrust law prohibits two competitors (and in some cases two non competitors) from engaging in a “contract, combination or conspiracy” in restraint of trade. This is known as a “Section 1” case, referring to Section 1 of the Sherman Act, because it requires that two independent parties engage in the conduct. The argument made unsuccessfully by American Needle is that by granting an exclusive license to Reebok (or anyone), each team can control retail pricing of headgear bearing its logos in a manner that they could not have controlled if there were multiple licensed manufacturers of headgear, or if each team had to license the logos separately. In addition, the argument is that Reebok conspired with the NFL because with no other competitors for authentic licensed headgear, it too can increase prices.
The moral of the story here is that when engaging in exclusive licensing of any intellectual property, antitrust law must be considered. In the vast majority of cases, Section 1 of Sherman Act the will not be implicated because a single entity will be engaging in the conduct (Section 2 would apply . . . but that is a discussion for another day). However, when two independent parties jointly and exclusively license their trademarks . . . the rule in these cases, and whatever holding the Supreme Court finally makes in this case, should be considered.
For more information on this or other antitrust law issues, please contact Mike Oliver at oliver@bowie-jensen.com.
Thursday, February 18, 2010
Tuesday, February 16, 2010
Adverse Weather and the Delivery of Goods and Materials
As the snow slowing begins to melt away and businesses begin to dig out from the back to back snow storms of 2010, supplies and materials are once again beginning to be delivered to job sites and warehouses. In additional to various other problems associated with the snow, contractors must also consider issues arising out of delivery of goods and materials. Depending on the contract language, the responsibility for the delivery of goods or materials will be with the buyer or seller. So the first thing to determine is whether your contract covers the terms of delivery of goods and materials. Additionally, Maryland law provides coverage for such issues if your contract is silent on the issue of responsibility for deliveries.
In either case, buyers must provide facilities reasonably suited to the receipt of the goods or materials. Essentially, the buyer has to make sure that the seller of the goods and materials can drop off the shipment to the predetermined destination. This usually is not an issue, but when jobsites, parking lots, and warehouses (which usually receive these goods) are covered with snow and snow piles, problems will arise. In short, by making sure the drop off location for deliveries are clear of snow and ice, contractors will deal with the task at hand – completing their job. If you have any additional questions, please contact Michael W. Siri at 410-583-2400 or via email at siri@bowie-jensen.com.
In either case, buyers must provide facilities reasonably suited to the receipt of the goods or materials. Essentially, the buyer has to make sure that the seller of the goods and materials can drop off the shipment to the predetermined destination. This usually is not an issue, but when jobsites, parking lots, and warehouses (which usually receive these goods) are covered with snow and snow piles, problems will arise. In short, by making sure the drop off location for deliveries are clear of snow and ice, contractors will deal with the task at hand – completing their job. If you have any additional questions, please contact Michael W. Siri at 410-583-2400 or via email at siri@bowie-jensen.com.
Monday, February 15, 2010
A Slippery Proposition: a Business or Land Owner’s Liability for a Visitor’s Slip and Fall on Snow or Ice.
This week life will begin to return to normal for business owners who have felt a real hit because of the blizzards. If you are a business owner who expects visitors, including customers and clients, or a landlord or commercial property owner whose property will receive visitors, you should know the extent of your obligations lie to clear snow and ice from a visitor’s path (including the parking lot).
Maryland law offers some guidance on an owner’s snow and ice removal obligations, although the line between liability and no liability is sometimes as clear as a salt covered windshield.
Maryland courts have adopted a 3-part “test” for analyzing whether a business or commercial landowner is liable to its business “invitees” – which what courts call customers, clients, and others who may walk onto your commercial property. The following three factors, if met, will subject the business or landowner liable for a business invitee’s slip and fall injury:
1. The owner knows (or by the exercise of reasonable care could discovery) the slippery condition that caused the fall;
2. The owner should expect that invitees will not discovery the danger, or will fail to protect themselves against it; and
3. The owner fails to take measures to eliminate the unsafe condition or does not warn its invitees that the unsafe condition exists.
Of course, it is very unlikely that factor #2 could be met the week or two after the history-making blizzards hit the area, but that may not be true for very long. Maryland’s courts, like many state courts, often take into consideration the length of time that had passed between the date that snow has fallen and the date of the invitee’s accident. For example, in one case the Court held that a storeowner was not liable for a slip and fall the morning after a snowfall that had ended at noon the day before. In another case, however, a supermarket was found liable for a slip and fall on ice and snow that existed five days after a snowfall. The court’s ultimate determination is whether the owner removed the snow and ice within a “reasonable” amount of time after the storm.
Even if snow is removed promptly, ice from melting piles can cause slippery conditions for days or weeks after. When it comes to ice from melted snow, courts usually determine liability by considering whether the business or commercial landowner had knowledge (or should have had knowledge) that ice would form in certain spots but failed to take reasonable measures eliminate it or provide adequate warning to invitees.
For example, a shopping center owner in Towson was found liable several days after a snowstorm because of ice that had formed from a melting snow pile. The owner had plowed the snow into a corner of the parking lot but the only location for the water from the melt to drain was across the lot, near the store entrances. The owner was found liable for a customer’s slip and fall on ice that formed from the melted runoff because the owner knew or should have known about the hazard and had not salted or taken any other measures to eliminate the ice during the time that the stores remained open in the evening. In another case, an owner piled snow on either side of a sidewalk knowing that the water from melting would collect on (and would flow over) the sidewalk. The owner did not take any precautions (salting, etc.) and was found liable for an injury resulting from ice on the sidewalk.
The common thread among most cases that resulted in a finding of owner liability is that the injury to the invitee occurred several days after a snowfall, and on a hazard that the invitee did not know about. When the potential risk is clear to the invitee, however, and the invitee makes the decision to assume the risk anyway, the owner is usually not liable. For example, an invitee that decides to park and walk across a parking lot that is covered in snow assumes the risk of injury, as does an invitee who decides to step over a snow-packed curb rather than walk along a salted path.
The bottom line for business and commercial landowners, however, is to avoid waiting too long to shovel and salt clear paths for all of those who visit your business or property, and if you know (or should know) that ice will form in certain spots because of the melting snow, do not ignore it. Take steps to identify and salt potential slick spots that may not be readily apparent to a visitor, particularly during hours when visitors are invited onto the property.
Here are a few related points regarding liability for snow and ice related injury:
- Clearing public property: For the most part, owners have no duty to shovel or salt a public sidewalk or street, and they may choose to do so without assuming liability for falls (unless the owner’s shoveling or salting creates a more dangerous condition than what originally existed).
- Insurance: provided that your commercial general liability coverage is in place, owners should have coverage for lawsuits arising from slip and fall injuries. This would be a good time, however, to make sure that there is ample coverage and that the policy has not lapsed for some reason. There are Maryland laws that require an insurer to give notice before a policy is canceled.
- Home or landowners who permit others to use their property for recreational use (e.g., sledding) without charge: there is a Maryland law that insulates these property owners for liability for injury. The “Maryland Recreational Use Statute” provides that when a landowner permits others to use his or her property for unsupervised recreational activities without charge, the landowner is not liable for any injury to those users, unless the landowner “willfully or maliciously” fails to warn against a known dangerous condition.
For more information regarding this story or related topics, please contact Josh Glikin by email at glikin@bowie-jensen.com or by phone at 443-921-4233.
Maryland law offers some guidance on an owner’s snow and ice removal obligations, although the line between liability and no liability is sometimes as clear as a salt covered windshield.
Maryland courts have adopted a 3-part “test” for analyzing whether a business or commercial landowner is liable to its business “invitees” – which what courts call customers, clients, and others who may walk onto your commercial property. The following three factors, if met, will subject the business or landowner liable for a business invitee’s slip and fall injury:
1. The owner knows (or by the exercise of reasonable care could discovery) the slippery condition that caused the fall;
2. The owner should expect that invitees will not discovery the danger, or will fail to protect themselves against it; and
3. The owner fails to take measures to eliminate the unsafe condition or does not warn its invitees that the unsafe condition exists.
Of course, it is very unlikely that factor #2 could be met the week or two after the history-making blizzards hit the area, but that may not be true for very long. Maryland’s courts, like many state courts, often take into consideration the length of time that had passed between the date that snow has fallen and the date of the invitee’s accident. For example, in one case the Court held that a storeowner was not liable for a slip and fall the morning after a snowfall that had ended at noon the day before. In another case, however, a supermarket was found liable for a slip and fall on ice and snow that existed five days after a snowfall. The court’s ultimate determination is whether the owner removed the snow and ice within a “reasonable” amount of time after the storm.
Even if snow is removed promptly, ice from melting piles can cause slippery conditions for days or weeks after. When it comes to ice from melted snow, courts usually determine liability by considering whether the business or commercial landowner had knowledge (or should have had knowledge) that ice would form in certain spots but failed to take reasonable measures eliminate it or provide adequate warning to invitees.
For example, a shopping center owner in Towson was found liable several days after a snowstorm because of ice that had formed from a melting snow pile. The owner had plowed the snow into a corner of the parking lot but the only location for the water from the melt to drain was across the lot, near the store entrances. The owner was found liable for a customer’s slip and fall on ice that formed from the melted runoff because the owner knew or should have known about the hazard and had not salted or taken any other measures to eliminate the ice during the time that the stores remained open in the evening. In another case, an owner piled snow on either side of a sidewalk knowing that the water from melting would collect on (and would flow over) the sidewalk. The owner did not take any precautions (salting, etc.) and was found liable for an injury resulting from ice on the sidewalk.
The common thread among most cases that resulted in a finding of owner liability is that the injury to the invitee occurred several days after a snowfall, and on a hazard that the invitee did not know about. When the potential risk is clear to the invitee, however, and the invitee makes the decision to assume the risk anyway, the owner is usually not liable. For example, an invitee that decides to park and walk across a parking lot that is covered in snow assumes the risk of injury, as does an invitee who decides to step over a snow-packed curb rather than walk along a salted path.
The bottom line for business and commercial landowners, however, is to avoid waiting too long to shovel and salt clear paths for all of those who visit your business or property, and if you know (or should know) that ice will form in certain spots because of the melting snow, do not ignore it. Take steps to identify and salt potential slick spots that may not be readily apparent to a visitor, particularly during hours when visitors are invited onto the property.
Here are a few related points regarding liability for snow and ice related injury:
- Clearing public property: For the most part, owners have no duty to shovel or salt a public sidewalk or street, and they may choose to do so without assuming liability for falls (unless the owner’s shoveling or salting creates a more dangerous condition than what originally existed).
- Insurance: provided that your commercial general liability coverage is in place, owners should have coverage for lawsuits arising from slip and fall injuries. This would be a good time, however, to make sure that there is ample coverage and that the policy has not lapsed for some reason. There are Maryland laws that require an insurer to give notice before a policy is canceled.
- Home or landowners who permit others to use their property for recreational use (e.g., sledding) without charge: there is a Maryland law that insulates these property owners for liability for injury. The “Maryland Recreational Use Statute” provides that when a landowner permits others to use his or her property for unsupervised recreational activities without charge, the landowner is not liable for any injury to those users, unless the landowner “willfully or maliciously” fails to warn against a known dangerous condition.
For more information regarding this story or related topics, please contact Josh Glikin by email at glikin@bowie-jensen.com or by phone at 443-921-4233.
Tips for Trademark Owner – Don’t Tweak Your Trademark.
You have a registered trademark. Some years have passed and you are now thinking about making some changes for advertising purposes. However, have you thought about how those tweaks may impact your rights in the trademark?
You build strength in your mark through use of the mark. If you make changes to your design that are material, you run the risk of losing all of the source-identifying value built up in the design. Further, you run the risk of losing rights in your registration. In particular, once you have registered a trademark with the U.S. Patent and Trademark Office (“PTO”), you should not make any material changes to your trademark because the PTO may determine that the registration no longer represents the actual use of the design and therefore deny continued registration of the mark. Thus, once you register your mark with the PTO, it is preferable to use it in the exact manner in which it is registered to avoid loss of the registration and to avoid loss of the source identifying value of the mark.
You build strength in your mark through use of the mark. If you make changes to your design that are material, you run the risk of losing all of the source-identifying value built up in the design. Further, you run the risk of losing rights in your registration. In particular, once you have registered a trademark with the U.S. Patent and Trademark Office (“PTO”), you should not make any material changes to your trademark because the PTO may determine that the registration no longer represents the actual use of the design and therefore deny continued registration of the mark. Thus, once you register your mark with the PTO, it is preferable to use it in the exact manner in which it is registered to avoid loss of the registration and to avoid loss of the source identifying value of the mark.
Federal Estate Tax Update
Congress failed to act before the expiration of the federal estate tax structure that had been in place since 2001. As discussed previously on this blog, that means there is no federal estate tax this year, compared with 2009 when the tax fell upon estates worth more than the then-exempt amount of $3.5 million. What has also changed this year following expiration of the old law is the so-called “step-up” in basis of estate assets for capital gains purposes. This can have serious consequences for high-value estates from this year onward.
Previously, the basis of an asset in a decedent’s estate would be established as of the date of death, regardless of how long the decedent may have owned it. Thus, for example, a beach condo purchased in 1980 for $200,000 and sold during someone’s life for $300,000 would be subject to capital gains tax on the $100,000 gain over the $200,000 basis. However, if that same condo were owned by the 1980 purchaser at the time of death, and valued in the estate at the time of death at $300,000, the basis would be $300,000. In any subsequent sale, the estate or the heirs would pay capital gains tax only on the excess of the stepped-up basis of $300,000, representing a significant saving on capital gains tax.
Starting this year, however, the step-up is limited. The basis may be increased no more than $1.3 million for the aggregate of the assets in an estate. Also, the IRS will allow up to a $3 million basis increase in property transferred at death to a surviving spouse. After this year, the $1.3 million and $3 million basis increases will be adjusted for inflation.
The estate does not go away entirely. The tax comes back in 2011 on estates worth more than $1 million, down from the $3.5 million exemption available in 2009.
For persons with substantial assets, the 2010 estate tax gap and the uncertainty about new legislation in the future should prompt a consultation with an estate planning lawyer to ensure maximum flexibility in these changing circumstances.
Monday, December 28, 2009
Wednesday, December 23, 2009
PRESIDENT OBAMA SIGNS RESTRICTION ON ARBITRATION CLAUSES FOR MILITARY CONTRACTORS INTO LAW
Most military contractors will no longer be able to enforce mandatory arbitration clauses in their employment contracts under a provision signed into law over the weekend. Specifically, no money can go to a defense contractor unless the contractor agrees not to enter into or enforce any employment contract "that requires, as a condition of employment, that the employee or independent contractor agree to resolve through arbitration any claim under title VII of the Civil Rights Act of 1964," or many tort claims. The restrictions will apply also to subcontractors starting in six months. Contracts and subcontracts under $1 million are exempt from the provision.
As a result of the new law, we recommend that all military contractors include a provision in their employment agreements whereby the parties agree to resolve all disputes related to the employment relationship by bench rather than jury trial. This means that the parties agree to have a judge, rather than a jury, make a decision with regard to any such dispute.
For more information on this topic, please contact Nicole Windsor at windsor@bowie-jensen.com.
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