North America

The RSS Business Law Practice Group: Still Active Despite COVID-19

By Annie Claude Beauchemin and Herbert Z. Pinchuk, from our Business Law Practice Group

May 5, 2020 — The RSS Business Law Practice Group is here to help. Although we are rigorously respecting governmental guidelines in order to protect public health, we remain fully connected to the business world and remain ready to assist you through this difficult period.

As certain restrictions on businesses ease, we are here to guide and counsel you as you cope with current challenges or prepare to resume your business activities and operations.

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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.
Click here to read the full Alert   >>
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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.
Click here to read the full Alert   >>
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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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Chambers USA 2020 Ranks Connolly Gallagher Three Delaware Practices

Connolly Gallagher LLP appears in three Delaware practice categories in the 2020 edition of Chambers USA: America’s Leading Lawyers for Business released today. The prestigious Chambers guide has consistently ranked Connolly Gallagher for Delaware Chancery, Intellectual Property and Labor & Employment services.  Chambers sources including firm clients and market commentators praise Connolly Gallagher  as:

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Law Firm ILN-telligence Podcast: Episode 2: Michael Slan | Fogler Rubinoff LLP

Michael Slan is the managing partner of Fogler Rubinoff LLP in Toronto, Canada, and a member of the International Lawyers Network. In this episode, Lindsay has a candid conversation with Michael about the importance of communication in this time of pandemic, why deep cuts may not be the best cuts, and what leadership looks like in the face of market downturns and global lockdowns.  Listen here.

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