"Hideous Company Sends Boing-Boing Pre-Emptive Nastygram"

by Lee Gesmer on August 7, 2006

One of the risks of sending a legal demand letter to someone in the Internet age is that they will post it on the web and ridicule you. That’s what happened when the Baker & McKenzie law firm sent the very popular web site Boing Boing a letter warning it not to broadcast the World Cup competition, and containing the ominous threat that it would have its “agents actively monitor your website and others to identify unlawful activity.” Boing Boing published the letter here. (The letter is an image, so you may have to print it to read it).

Is a preemptive strike like this legally effective? Almost certainly it is not, except as a warning to the web site owner itself not to publish video or audio from the Cup. However, no sane, established web site owner would do so even without such a warning, since the site owner would risk significant damages (and particularly “statutory” damages – aka punitive damages) of up to $150,000 per infringement ). The far greater likelihood is that a third party will publish the audio or video (on a video site such as YouTube.com, for example, where videos of the Cup continue to be rampant), and that it was publications of this nature that Baker & McKenzie was targeting.

However, the owners of the World Cup broadcast rights must give notice after the fact under the strict procedures described in the DMCA (at least in the U.S., where Boing Boing is based). A preemptive, “before the fact” letter gives the copyright owner no greater rights than if it had not sent it at all. The owner of the Cup broadcast rights would still have to go through the “after the fact” notice and “take down” procedures mandated by the DMCA.

Back to my original point, when you send these demand letters (which by their nature often are extreme examples of “lawyer-speak”), you do risk public ridicule on the Web, and people will often try very hard to effect this. One of my all-time favorite examples of this is “The Rocket Formerly Known as Black,” which is quite funny, and seems to have taken on a life of its own.

100 Million Videos, Daily

by Lee Gesmer on August 4, 2006

An interesting article in Business Week on the copyright issues raised by YouTube’s tremendous success.

When YouTube Inc. was sued on July 14 for copyright infringement, the shock wasn’t that the video-sharing service was being yanked into court. Questions had been swirling for months about whether the upstart, which now dishes up 100 million daily videos, was crossing copyright boundaries by letting its members upload videos with little oversight. continue . .

YouTube has a strong answer to this complaint based on the Digital Millennium Copyright Act (pdf file), which allows publishers like YouTube to avoid copyright liability for infringements posted by third parties, so long as an infringement is taken down after notice to the publisher.

Covenant Not-to-Compete Not Enforceable Against English-Challenged Russian Immigrant

by Lee Gesmer on August 4, 2006

It’s a bad day when your client wants you to enforce a noncompete agreement against a $10/hour Russian immigrant with “a very limited command of English,” who sends most of her earnings back to her son and elderly parents in Russia, and who, after a year of at-will employment and with no further payment of consideration, was told that unless she signed the noncompete agreement she’d be fired the next day.

Nevertheless, that’s what the plaintiff’s lawyer faced in Zabota Community Center, Inc. v. Frolova.

Not surprisingly, Judge Allan van Gestel of the Suffolk County Business Litigation Session threw the book at the plaintiff in this case, denying the motion for every reason conceivable.

You can read the case here (pdf file).

Long-Awaited Rambus FTC Decision

by Lee Gesmer on August 2, 2006

Here is a link to the FTC decision, which is adverse to Rambus. More to come ….

[Link]

Update: Andy Updegrove discusses the background of this case and the implications of the decision on Consortiuminfo.com:

In what can only be called a stunning development in a high profile standards case, the U.S. Federal Trade Commission (FTC) unanimously reversed the earlier decision of one of its own Administrative Law Judges and ruled that semiconductor technology company Rambus, Inc. had “unlawfully monopolized the markets for four computer memory technologies that have been incorporated into industry standards for dynamic random access memory,” or DRAM. The FTC will deliberate further before announcing the penalties to be levied against Rambus.

continue . . .

Antitrust and the "Single Entity" Doctrine

by Lee Gesmer on July 24, 2006

It is axiomatic that an entity cannot “conspire” with itself. For example, the Supreme Court has held that a parent corporation and its subsidiary are not capable of an illegal conspiracy under the Sherman Antitrust Act.

Of course, as is true with most legal principles, what looks simple at 30,000 feet altitude becomes more complicated the closer one gets to the ground, and the courts have struggled with the definition of a “single entity” in a variety of contexts.

Dean Williamson of the DOJ Antitrust Division has written an interesting and in-depth paper analyzing the law and economics of this issue. The paper, titled Organization, Control and the Single Entity Defense in Antitrust, is published here.

Supernova 2006: Connecting in Complex World

by Lee Gesmer on July 21, 2006

I usually find the Knowledge@Wharton reports and articles interesting. Here is a series of articles summarizing some of the topics discussed at their annual Supernova Conference, which was held in San Francisco in late June.

The topics include:

What’s the Future of Desktop Software — and How Will It Affect Your Privacy?

Kevin Lynch on Adobe‘s Plans for a New Generation of Software

The Rise of the ‘Videonet’

Tantek

The "Anonymous Lawyer" Industry

by Lee Gesmer on July 21, 2006

First the blog, then the web site, and finally the book. Jeremy Blachman has quite an operation!

Law firms, and especially large law firms, are very strange places. Combine driven, intelligent (mostly), eccentric people, big egos, big money, competition for partnership among associates and for share of income among partners, clients pressures, competition between firms, greed, …. I could go on. Having worked at three of these institutions (the-firm-formally-known-as Hale and Dorr, the-firm-formally-known-as-Howrey & Simon,and the firm still known as Choate, Hall & Stewart), I am not totally unfamiliar with them. Now, Jeremy Blachman, long-time author of the Anonymous Lawyer blog (which is very mordant and a bit humorous if taken in small bites), has written a soon-to-be released book, The Anonymous Lawyer.

In the manner of these things, the book is being promoted at an elaborate (and I do mean elaborate) web site which you can view by clicking here. In fact, I hope half as much work went into the book as went into the web site.

This is very funny stuff (the web site; I can’t comment on the book). Sadly, the picture it paints is one that many practitioners will find strikes uncomfortably close to home.

Things Just Ain't Like They Used To Be

by Lee Gesmer on July 20, 2006

When a popular blogger/law firm associate gets fired by her firm, in this case mega-firm Reed Smith, she doesn’t just go gentle into that good night, as so many thousands of associates have done before her. Or silently, for that matter. Denise Howell, author of the popular Bag and Baggage blog (and coiner of the term “blawg”), discusses her experiences, motherhood, and her opportunities here.

A New Twist on Forum Selection: The BLS

by Lee Gesmer on July 20, 2006

Business Litigation Session. The July 17, 2006 issue of Massachusetts Lawyers Weekly has an article suggesting that some attorneys are agreeing in contracts that claims arising from those contracts must be filed in the Suffolk County Business Litigation Session (BLS). The article reports that Judge Allan Van Gestel, the presiding judge of the session, recently made public comments that, assuming the conditions and requirements of the session are satisfied, such clauses are likely to be enforced.

This certainly adds a new option to the forum selection issue, and, given some of the difficulties and hazards of litigating outside of the BLS, should be seriously considered by lawyers negotiating business agreements that fall within the rules permitting cases to be heard in that venue. For more details on those requirements, see here and here.

Lawyers Gone Wild (rated PG 13)

by Lee Gesmer on July 12, 2006

I’ve debated with myself whether to post this video of Joe Jamail, the Texas lawyer who won a 10 billion dollar verdict in the infamous (in the 1980s) Penzoil v. Texaco case. Of course, my colleagues, trouble makers that they are, encouraged me to publish this.

Click here to see the video, which I’ve had trouble embedding from YouTube.

The background of this case, which was a cause celebre of major proportions at the time, is discussed here.

Old Joe got a whopping $1 billion contingent fee out of this case (which settled for $3 billion), resulting in much of the University of Texas Law School being beholden to him.

In any event, its a long way from the trenches of pre-trial discovery to the glory of a multi-billion dollar settlement. The miracles of the Internet now bring us a videotaped deposition by Mr. Jamail in this case. In most states, this deposition would result in court sanctions all around, but in Texas in the early ’80s, this kind of conduct seems to have been acceptable. Maybe it still is.

Up here in Boston, it would be pretty rare to see something like this.  We’re very polite and circumspect here.  I don’t know if that’s a good thing or a bad thing.  Probably good.

Jamail, whose back is to the camera (you can only see his left hand), is deposing an expert witness. The Texaco lawyers appear to be defending. Unfortunately, everyone is off camera except for the witness.

Lawyers: please don’t show this to your clients or expert witnesses when they ask you what a deposition is like.

"If America Wants to be the Massage Capital of the World, We're Well on Our Way"

by Lee Gesmer on June 27, 2006

What I’m Reading.

Queen Victoria’s Diamond Jubilee, held in London on June 22, 1897, was one of the grandest fetes the world has ever seen: 46,000 troops and 11 colonial prime ministers arrived from the four corners of the earth to pay homage to their sovereign. The event was as much a celebration of Victoria’s 60 years on the throne as it was of Britain’s superpower status. In 1897, Queen Victoria ruled over a quarter of the world’s population and a fifth of its territory, all connected by the latest marvel of British technology, the telegraph, and patrolled by the Royal Navy, which was larger than the next two navies put together. “The world took note,” says the historian Karl Meyer. The New York Times gushed: “We are a part … of the Greater Britain which seems so plainly destined to dominate this planet’.”

Click here to continue reading this Newsweek article, entitled “How Long Will America Lead the World?”

Trying to Enforce Your Noncompete? – Denied, Denied and Denied Again

by Lee Gesmer on June 21, 2006

Noncompete Agreements. Plaintiffs trying to obtain preliminary injunctions to enforce noncompete contracts in the Massachusetts states courts are off to a bad start this year.

In February Superior Court Judge Richard Connon refused to enforce a noncompete clause against a former employee for a reason we see all to often: the employee signed the noncompete with one company, and then worked for another (presumably related) company with which he had not signed a noncompete. Sorry, this may be only a technical detail, but it’s always enough prevent the noncompete from being enforced. The case is Merchant Business Solutions v. Arst.

In mid-March Judge Jonathan Brant refused to enforce a preliminary injunction when the plaintiff’s former employee went to work for a competitor with the former employer’s blessing. A year later the former employer changed its mind and filed suit, seeking a preliminary injunction. A year is far too long, the judge ruled – motion denied. The case is New England Speciality Lumber v. Jarvl.

Finally, in late March Judge Peter Agnes denied a request for a preliminary injunction that the plaintiff brought against a contractor (as opposed to an employee). Judge Agnes denied the injunction, holding that two years was too long in the context of the business in question and the agreement was too vague as to its geographic reach. The case is Payson’s Trucking v. Yeskevicz.

The lessons from these cases are, for the most part, obvious. Make sure the employee signs the noncompete with the company he works for. Don’t sit on your hands for a year before signing trying to enforce an agreement; and try to keep the duration and geography as narrow as possible. Although Massachusetts judge used to be willing to narrow these contracts as written to make then reasonable, there seems to be a trend away from this practice.

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