Legal Updates

IS CHANGE FINALLY BRUIN’ OR IS IT A TROJAN HORSE? NCAA TAKES ACTION ON NAME, IMAGE AND LIKENESS RIGHTS

In a process that began with lawsuits led by current and former players, including former UCLA forward Ed O’Bannon, the National Collegiate Athletic Association (NCAA) announced on April 29 its recommendations for approving a framework which allows college athletes to earn money from the use of their names, images and/or likenesses from third parties.
This recent round of NCAA activity comes in response to the flurry of states seeking to pass their own versions of California’s Fair Pay to Play Act, which was signed into law in September 2019. For more information on the Fair Pay to Play Act, see our previous alert.
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Llinks Client Alert – Anti-Corruption (April 2020)

Llinks would like to share our views on the most recent hot topics and legal updates on the Anti-Corruption with “ Llinks Client Alert – Anti-Corruption (April 2020)”

If you have any questions or do not wish to receive this kind of publication sent by Llinks, please do not hesitate to contact us.

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Staggering Amount of Spoliation Leads to Quick Conclusion of Trade Secrets Lawsuit

A recent decision issued by the U.S. District Court for the Northern District of California, San Jose Division, presents a stark example of what can result when a defendant accused of trade secret misappropriation is careless in preserving electronically stored information (“ESI”) relevant to the lawsuit.

Silicon Valley-based autonomous car startup WeRide Corp. and WeRide Inc. (collectively, “WeRide”) sued rival self-driving car company AllRide.AI Inc. (“AllRide”), along with two of its former executives and AllRide’s related companies, asserting claims for misappropriation under the federal Defendant Trade Secrets Act and the California Uniform Trade Secrets Code, along with numerous other claims.  WeRide secured a preliminary injunction from the Court, directing AllRide not to use or disclose WeRide’s confidential information and trade secrets, and specifically directing defendants not to destroy evidence.

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A Recipe for Patent Protection: Are food products patentable?

In the past several years, the food and beverage space has seen an explosion of innovation—alternative meat products, plant-based dairy and protein alternatives, CBD- and collagen-infused everything, and functional foods and beverages and containing everything from pre/pro/post-biotics to nootropic and adaptogenic herbs, just to name a few. And many of these innovations have led to wildly successful products with household brand recognition (think: Impossible Foods and Vital Proteins).

While many of these brands may be protected by robust trademark portfolios, what role have patents played in defining their territory in the market? Patent protection can add significant value to an emerging brand by keeping competitors at bay, serving as an asset or collateral to secure financing, or as leverage to license across different industries or markets. Yet, the vast majority of conventional foods occupying the shelves of your local grocery store are likely not covered by a utility patent.  Which begs the question, are food products patentable?

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SEC SETTLES WITH STEVEN SEAGAL FOR FAILURE TO DISCLOSE PAYMENTS FOR PROMOTING CRYPTOCURRENCY

Hollywood actor and producer Steven Seagal settled allegations brought by the U.S. Securities and Exchange Commission (SEC) that he failed to disclose the compensation he received for promoting investments in an initial coin offering (ICO) conducted by Bitcoiin2Gen (B2G).
Notably, this is not the first time the SEC has brought an action regarding false and misleading celebrity cryptocurrency endorsements.
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THE WARNINGS WERE REAL: FTC FINES TEAMI, AND SENDS LETTERS TO INFLUENCERS ABOUT INADEQUATE DISCLOSURES

Teami, LLC (Teami) agreed to settle Federal Trade Commission (FTC) charges that the company made false and unsubstantiated health claims regarding its tea and skincare products and hired influencers who failed to adequately disclose that they were being paid to endorse its products on social media.
Notably, the FTC also warned ten celebrity influencers (including Jordin Sparks and Cardi B) about their obligation to disclose their material connections when paid to endorse products on social media.
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Experimenting on electronic employment document flow

On May 5, 2020, a law1 comes into force that establishes the procedure for experimenting on the use of employment in electronic form without their duplicating on paper documents by certain employers and employees. More detailed rules for experimenting will be set out in the regulations on conducting the experiment, which must be approved by the Russian Ministry of Labor.

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Face or Fingerprint? The DEA Revisits Biometric Identifiers for e-Prescribing Controlled Substances

On April 21, 2020, the Drug Enforcement Administration (DEA) published a Request for Information (“RFI”) that reopened the comment period for an interim final rule that was published March 31, 2010 (75 FR 16236) (the “2010 IFR” or the “IFR”). The IFR is being revisited in response to the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) mandate for the DEA to update the requirements for the biometric component of multifactor authentication with respect to electronic prescriptions of controlled substances. Prior to the 2010 IFR, the only way that controlled substances could be prescribed was in writing, on paper with a wet signature. The IFR was the first time that an electronic alternative was made available for prescribing controlled substances and the DEA leveraged the technologies that were available at the time to ensure that electronic prescribing applications could not be misused to divert controlled substances.

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U.S. Supreme Court – Willfulness Is Not a Prerequisite for a Profit Award for Trademark Infringement

In its unanimous April 23, 2020 opinion in Romag Fasteners v. Fossil, Inc., the Supreme Court made clear once and for all that a successful trademark plaintiff is not required to establish that the defendant’s infringement was willful to be entitled to an award of the infringer’s profits. In other words, profits may be disgorged for less than willful infringement of a trademark.

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Supreme Court: The ACA & Risk Corridor Obligations

The U.S. Supreme Court decision today in Maine Community Health Options v. United States, is a major decision affecting healthcare and resolving a significant Obamacare dispute. The Affordable Care Act famously established online exchanges where insurers could sell their healthcare plans. It included the now-expired “Risk Corridors” program aimed to limit the plans’ profits and losses during the exchanges’ first three years (2014-16). The Act contained a formula for computing a plan’s gains or losses at the end of each year, providing that eligible profitable plans “shall pay” the Secretary of the Department of Health and Human Services (HHS), while the Secretary “shall pay” eligible unprofitable plans. But the Act did not appropriate funds that the Secretary could dispense or cap the amounts that the Secretary would pay to unprofitable plans. Nor was there any budget neutrality stated in the Act. The program was something less than a great success and, after three years, in which unprofitable plans outnumbered those that were profitable, the net deficit was more than $12 billion. But the Centers for Medicare and Medicaid Services (CMS) couldn’t make any payments to unprofitable plans because, each year, its budget appropriation included a rider preventing CMS from using the funds for Risk Corridors payments. Four unprofitable plans brought suit against the government under the Tucker Act, alleging that the ACA obligated the government to pay the full amount of their negative deficit. With Justice Sotomayor writing for seven other Justices (Alito, J. dissented, and Thomas, J. and Gorsuch, J. did not join one section of the majority opinion), the Court agreed with the plans and reversed the Federal Circuit’s holding that while the ACA initially created an initial obligation, the subsequent riders vitiated it.

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