Filed under: Business Law
As businesses try to attract viewers to their websites, social media pages and online ad campaigns, online contests have become more prevalent. The opportunity to win a prize can provide consumers with an incentive to visit an advertising page, view a video, reply to a survey or take other action. Businesses who offer contests must be aware of the applicable state laws that regulate sweepstakes, contests and lotteries. In the online world, which knows no state boundaries, this means that businesses may need to consider many different state laws — register with state authorities as needed — because the online world knows no state boundaries.
However, the various state laws do exhibit some common themes. In general, a sweepstakes or contest includes the elements of a prize, and randomness or chance. If the contest also requires consideration, then it may be considered an illegal lottery in many states. Consideration is not limited to payment, but can also include a requirement that the user perform certain tasks (such as a purchase a product, or even visit a website multiple times).
In order to comply with the laws of various states and avoid registration requirements, advertisers who implement online contests should keep multiple rules in mind: (more…)
Filed under: Business Law
A new California law imposes a variety of supply-chain disclosure obligations on large retailers and manufacturers who do business in California. As summarized in a recent article by my partner Jane Luxton:
[P]oised to go into effect January 1, 2012, [the new law] will impose disclosure obligations on all retailers and manufacturers that do business in California and have global gross receipts of $100 million per year. The California Transparency in Supply Chains Act of 2010 will require businesses to disclose on their Web sites their efforts to eliminate the use of slave labor and human trafficking from their supply chains.
To view Jane’s full article and a detailed summary of the new law, click here.
As more businesses store and share data via third-party “cloud computing services”, privacy risks and Federal Trade Commission enforcement actions have also increased. Many companies’ standard vendor services contracts are woefully inadequate to address these risks. When contracting for cloud computing services, the contract should specifically describe data handling practices, security breach notification procedures, and data return requirements when the contract ends.
My colleagues Sharon Klein and Tabitha Sullivan recently wrote an article that includes tips and traps to consider when negotiating or drafting a cloud computing services contract. As they note in the article:
The scope of the cloud computing services will impact the respective responsibilities of the vendor and the customer. This contractual clarity is especially important given that most cloud computing vendors believe security of data is the customer’s responsibility, not theirs. . . . The [customer's] contracting department should work closely with the IT department to identify the company’s specific requirements and incorporate appropriate provisions to ensure the company’s needs are met.
To view the full article on the Pepper Hamilton website, click here.
In recent years geological studies, economic drivers and government policy have spurred significant investment in hydraulic fracturing activities. New studies showing that the Marcellus shale formation alone can supply 25% of the country’s natural gas needs within 10 years have prompted many state governments, research institutions and private companies to make large investments in shale gas exploration and recovery.
The spotlight on shale drilling may lead private equity and venture capital investors, research institutions, and entrepreneurs to ask: is all of the Marcellus shale activity spurring investment in new technologies?
One way to assess this is to consider the number of patents and patent applications surrounding the Marcellus shale boom. The focus on Marcellus shale gas recovery technologies began in 2008. Thus, although the United States Patent and Trademark Office (USPTO) keeps patents and patent applications confidential for the first 18 months after they are filed, the earliest Marcellus shale-related patent applications began to publish in mid-2009.
Surprisingly, a review of USPTO and World Intellectual Property Office (WIPO) records reveals (more…)
My Pepper Hamilton partner Ray Miller was recently interviewed by WMNY Money Talk 1360 AM of Pittsburgh, PA about the link between intellectual property protection and corporate management strategies. The interview originally aired on Friday, August 5, 2011.
The interview stems from a survey that Ray and our colleague David Smith conducted on behalf of Pepper at the 2011 Bio International Convention. Pepper surveyed CEOs, business development executives and scientists attending BIO’s Biotechnology Entrepreneurship Boot Camp, as well as those attending a dinner event that Pepper hosted. According to survey respondents, technology is just the beginning. Those surveyed felt a life sciences company would have trouble succeeding without both a strong management team and strong intellectual property protection.
I thought that IP Spotlight readers would have an interest in listening to the interview. To listen, link to the Pepper Hamilton website via this link.
The shortest contracts often create the largest disputes. A recent article from Ron Morris of The American Entrepreneur very effectively illustrates what can go awry when two parties rush to sign an agreement. If the parties have not ensured that the critical terms are clearly defined, costly disagreements can result. In particular, payment terms – and the conditions that trigger a payment — must be clearly defined to avoid misunderstandings.
For example, in a license agreement the licensor may consider a payment obligation as triggered when the licensee’s customer agrees to purchase a licensed product. The licensee, however, will want to defer the payment obligation until it actually receives payment from its customer. Simple terms such as “sale”, “revenues”, or — as Ron notes in his article, “referral” — can be interpreted very differently depending on what side of the agreement you are on.
Often, contracting parties can avoid issues like this if, before signing, they each ask a third party who is experienced with contracts — a lawyer, a contracts administrator, or another experienced person — to carefully read the agreement and identify terms that can be subject to different interpretations. The time and expense put into carefully drafting a contract — even a relatively simple one — can avoid much more costly issues down the road.
For the full text of Ron Morris’ article, click here.
Filed under: Business Law
If you are in the Pittsburgh area and interested in international business issues, I will be a panelist at this week’s Entrepreneurial Thursday interview session, where the theme is “International Hour.”
Entrepreneurial Thursday is a weekly event that features live music, topical interviews focusing on what’s positive and innovative in the Pittsburgh region, and business networking opportunities. In this week’s panel discussion, we will talk about strategies for expanding your domestic business into global markets, legal issues to consider when contracting with international customers and suppliers, and tools to help bridge cultural and language barriers. In addition to me, the panelists will include Danette O’Connell of Triumph International Business Consulting and Charlene Nagy of Confluent Translations LLC.
The happy hour event is scheduled for 5:30 – 8:00 pm on Thursday, June 30 at Little E’s Jazz and Blues Club, 949 Liberty Ave., Second Floor (above Mahoney’s Restaurant), Pittsburgh, PA. For more information, visit www.entrepreneurialthursdays.com
The U.S. Supreme Court held that the Bayh-Dole Act does not override U.S. patent law’s maxim that an individual inventor will own a patent unless the inventor expressly assigned the patent to another entity.
In Board of Trustees of the Leland Stanford Junior University v. Roche Molecular Systems Inc., the Court reviewed a Federal Court decision in which a Stanford University researcher signed an agreement that obligated the researcher to assign his inventions to the University. However, the agreement did not by itself automatically assign inventions to the University. (For details (more…)
Physicians often contract with medical device manufacturers to provide services relating to new technologies. For example, the doctor may help the manufacturer develop a new device, or the doctor may help test an existing device. In the first situation, the physician may assign or license intellectual property to the manufacturer in exhange for payment. In the second, the physician simply performs consulting services in exchange for a service fee.
In either situation, both parties should ensure that the arrangement complies with applicable laws such as the federal Anti-Kickback Statute and the Stark Act. My colleague John Jones recently wrote an article on steps that physicans and manufacturers can take to reduce risk in these situations. As John writes:
The federal Anti-Kickback Statute proscribes . . . remuneration in exchange for a patient referral [in certain situations]. Violations of the Anti-Kickback Statute can result in significant criminal penalties, civil penalties of up to $50,000 for each violation, as well as imprisonment. The primary concern for physician relationships with medical device manufacturers under the Anti-Kickback Statute is whether the compensation paid to the physician constitutes disguised remuneration for referrals.
The article originally appeared in the February 25, 2011 issue of Physicians News Digest, and the full text is also available on the Pepper Hamilton website.
The U.S. Department of Health and Human Services Office of Civil Rights (OCR) recently announced its first-ever civil monetary penalty against a health system for alleged violations of the HIPAA privacy rule. The penalty of over $4.3 million, which was levied against Cignet Health, was followed by OCR’s announcement of a $1 million settlement resolving a HIPAA privacy complaint against certain entities affiliated with Mass General.
My colleague Rebekah Monson recently published an article describing the actions that resulted in penalties, as well as the penalty calculation methods. As Rebekah notes in the article:
While the Cignet case could be considered to be an isolated and extreme example, the type of HIPAA breach in the Mass General case is not unusual. The timing of the two announcements, significant penalties, and three-year [corrective action plan] (for Mass General) may signal OCR’s plans to use the HITECH-increased penalties as an enforcement tool.
The full text of the article is available here.
