Legal Updates

The Days of Patent Plaintiff Forum Shopping May be Over

For the past 30 years, it has been established patent practice for a patent holder to bring suit in any district where infringing sales were made. This has led to the Eastern District of Texas being one of the preferred venues of choice for many patent plaintiffs. However, the days of such forum shopping may be over. In a recent unanimous decision, the U.S. Supreme Court significantly tightened the requirements for venue in patent infringement lawsuits.

The decision, TC Heartland LLC v. Kraft Foods Group Brands LLC, requires that patent holders now must file suit in districts where the defendant is incorporated or where they have a regular and established place of business, a far more restrictive standard than in any district where infringing sales were made. The decision, which was cheered by technology industry groups, spells trouble for patent trolls, who have long used the specter of suit in unfavorable jurisdictions to threaten defendants.

Read More

Read full article

Breach Of Contract Claims Allowed For Alleged Open Source License Violations

Recently, in Artifex Software v. Hancom, Inc., a California district court refused to dismiss breach of contract claims for alleged violations of the GNU General Public License (GPL) in connection with the use of open source software. The decision signals a growing acceptance of contract law as a viable option for addressing GPL breaches.

Open Source Licenses
An open source license is a type of license for software that imposes fewer use restrictions than a standard proprietary license. Among other things, it is designed to govern the use of the software released in its human readable or “source code” form. Access to source code, which is not usually contemplated in commercial licenses, allows users to see the underlying “blueprint” for the software. Open source licenses range from “permissive” licenses, such as the Massachusetts Institute of Technology (MIT) and Berkeley Software Distribution (BSD) licenses, that contain few restrictions on reuse, to “copyleft” licenses (such as the GPL) that typically require that rights to use the covered software are preserved when the software is shared.

Read More

Read full article

Talking Tax – Issue 78

Case law

Change in capacity held to be a change in beneficial ownership

On 12 May 2017 in Rakmy Pty Ltd v Commissioner of State Revenue [2017] VSC 237, the Victorian Supreme Court held that a change in beneficial ownership of dutiable property had occurred where there was a change in the capacity in which the taxpayer held the land.

The taxpayer had initially held land as trustee for a unit trust. The unit holders of the unit trust then passed a special resolution, vesting the land in a superannuation fund, of which the taxpayer was trustee. The main issue in the case was whether there was a ‘change in beneficial ownership of dutiable property’ within the meaning of sub-sections 7(1)(b)(vi) and 7(4) of the Duties Act 2000 (Vic) (Act), despite the land being held by the same legal entity.

Read full article

Private companies face public conundrum under new crowdfunding rules

A sticking point from the Federal Government’s Corporations Amendment (Crowd-sourced Funding) Act 2017 , was that there was no scope for private (proprietary limited) companies to access crowdfunding. Government sought to address this in the latest Federal budget, but there could be a catch.

The Crowdfunding bill passed in March, and becomes law this September. Feedback suggested few start-ups would consider crowdfunding under the model due to private companies being unable to raise money from the public and access the new regime, and the compliance burden of trading as a public company.

Read full article

Garden Leave Provisions in Employment Agreements

Peter A. Steinmeyer and Lauri F. Rasnick, Members of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s Chicago and New York offices, respectively, co-authored an article in Thomson Reuters Practical Law, titled “Garden Leave Provisions in Employment Agreements.”

Following is an excerpt (see below to download the full article in PDF format):

In recent years, traditional non-compete agreements have come under increasing judicial scrutiny, with courts focusing on issues such as the adequacy of consideration, the propriety of non-competes for lower level employees, and whether the restrictions of a noncompete are justified by a legitimate business interest or are merely a tool used to suppress competition.

Read full article

EB-5 Marketplace Measurement – China and Beyond

Arnstein & Lehr Attorney Ronald Fieldstone

Ronald R. Fieldstone

I just returned from a week in China. Along with speaking at the EB-5 Investors Magazine’s 2017 EB-5 & Investment Immigration Expo, I had the opportunity to visit with many migration agents, as well as other professionals in the EB-5 industry. My impressions of the marketplace, particularly China, are as follows:

Read full article

Revenue Sharing: Risks, Rewards, and Reality for Plan Fiduciaries

Practically all companies that sponsor a 401(k) plan hire a third party to administer and recordkeep their plan. These third party administrators, or “TPAs,” offer different kinds of service packages. The most commonly used is the “bundled service arrangement” under which a TPA provides a variety of plan-related services for one fee. Under most bundled service arrangements, this fee is paid partially or entirely through “revenue sharing,” which refers to payments made to the TPA by some of the mutual funds that are made available under the plan. Many plan sponsors prefer bundled service arrangements because they don’t have to negotiate a fee for each service the TPA provides and because fees are paid through revenue sharing (i.e., fees do not have to be paid by the plan sponsor or charged directly to participant accounts).

Read More

Read full article

Year-End Reviews Highlight Antitrust Enforcement in, And Guidance Relevant to, Health Care Industry; Aggressive Enforcement is Likely to Continue in 2017

The Federal Trade Commission (“FTC”) and the Antitrust Division of the Department of Justice (“Antitrust Division”) released their respective year-end reviews highlighted by aggressive enforcement in the health care industry. The FTC, in particular, indicated that 47% of its enforcement actions during calendar year 2016 took place in the health care industry (including pharmaceuticals and medical devices). Of note were successful challenges to hospital mergers in Pennsylvania (Penn State Hershey Medical Center and Pinnacle Health System), and Illinois (Advocate Health Care Network and North Shore University Health System). In both actions, the FTC was able to convince the court that the merger would likely substantially lessen competition for the provision of general acute-care hospital services in relevant areas in violation of section 7 of the Clayton Act. See FTC v. Penn State Hershey Med. Center, 838 F. 3d 327 (3d Cir. 2016); and FTC v. Advocate Health Care Network et al No. 1:15-cv-11473, 2017 U. S. Dist. LEXIS 37707 (N.D. Ill.Mar. 16, 2017)

Read full article

How compliance is the biggest issue for CFOs

As much as Chief Executive Officers (“CEOs”), Chief Financial Officers (“CFOs”) have been involved in corporate scandals reported around the world. There have been instances of connivance between CEOs and CFOs in fraudulent irregularities. Corporate scandals often involve material accounting manipulations, or what is commonly referred to as “cooking the books” which cannot otherwise be accomplished without the tacit nod of the CFO.

Read full article

ABA responds: Big reforms for small business lending are on their way

On 28 March 2017 the Australian Bankers’ Association (ABA) released its response to Mr Phil Khoury’s independent review of the Code of Banking Practice (Code) issued on 20 February 2017 (Khoury Report). The Code applies to personal and small business bank customers and sets out the banking industry’s key commitments and obligations to customers on standards of practice, disclosure and principles of conduct for their banking services. Our update on the Khoury Report is available here.

Read full article