September 2006

Litigation. In Pease v. Tyco Electronics Corp., decided on September 7, 2006, Massachusetts Federal District Court Judge Ponsor dismissed wrongful termination claims by a former employee of Tyco, based on evidence that the employee had lied to Tyco regarding his education (an MBA), and then modified and destroyed files on his computer to cover up his actions during the litigation. Among other things, this case shows how effective forensic examination of a computer can be in litigation, as well as the fact that federal judges simply won’t tolerate this kind of conduct.

Of course, the case also shows that when an employee brings a suit like this he had better make sure that he has no skeletons in the closet.… Read the full article

The "Work for Hire" Trap

by Lee Gesmer on September 15, 2006

Copyright. Sometimes it just seems like the law is full of traps. Miss a filing deadline, fail to make the proper objection or motion in court, leave the many forms of “magic language” out of an agreement – any of these, and countless more, can result in disaster.

Our firm has recently seen two clients pay over $500,000 to buy their way out of what I call the “work for hire” trap. Both clients are software companies. In the first case, the client hired an independent contractor to develop its product, and failed to get a written assignment of ownership from him. After leaving under adversarial circumstances, the contractor claimed that he, not the company, owned the product. The second case involved similar facts, but the independent contractor/programmer worked for a small agency, and after several years the agency asserted ownership of the programmer’s work. Again, no written assignment, and again, a multi-hundred thousand dollar settlement to avoid litigation and get what the company should have owned outright.… Read the full article

Do We Have a Deal, or Not?

by Lee Gesmer on September 11, 2006

Litigation.

“Of course, this letter is not intended to create, nor do you or we presently have any binding legal obligation whatever in any way . . ..”

In 1991 those words played a major role in the Massachusetts Appeal Court’s reversal of a $32 million trial judgment against Federal-Mogul Corp. in the case (infamous to Massachusetts business lawyers of the time) of Schwanbeck v. Federal-Mogul. The plaintiff in that case claimed he had a deal to buy a division of Federal-Mogul, and FM had breached that agreement. While the trial court agreed (resulting in the $32 million judgment), the Appeals Court reversed, in part on the language quoted above.

That case was an object lesson to attorneys in our firm involved in M&A transactions that it was essential to include “no legal obligation” language in every transaction, unless and until our client was prepared to be legally bound. An article that I wrote in 1991 discussing this case in more detail is linked here.… Read the full article

Geeks on the Beach

by Lee Gesmer on September 6, 2006

Geeks on the Beach

Ok, my family is a little geeky, I admit it.  We watch documentaries together more than we watch family friendly movies.  What do I discuss with my beautiful wife and exceptional 12 year old daughter as we walk along the beaches of Cape Cod?  They both love astronomy, and every year I remind my lovely daughter that there are more stars in the Universe than grains of sand on all the beaches of Earth. However, I’ve always had a nagging doubt about this – is it true? It seems just, well, inconceivable.

This year, upon returning to civilization (and a computer) I googled “are there more stars in the Universe than grains of sand on all the beaches of earth?” It turns out that scientists think about this stuff too. The first hit is an authoritative appearing article from North American Skies which reads –

In my astronomy classes I have often used the claim that there are “more stars in the heavens than all the grains of sand on all the beaches on Earth.” The claim is certainly not original with me, but I had always accepted it without question.

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