The lawsuit alleges that all seven of the municipalities issued invitations to bid on road construction projects that required specifications only one business could deliver. Those specifications required bidding companies to use a particular brand of asphalt sealer, called Grip Tight, as well as a specific grade of gravel to be used in a process called "high performance chip seal."
]]> The problem was that the defendant company is the exclusive distributor of Grip Tight, at least in the northeastern United States. Not only that, the lawsuit claims, but the defendant purchased the entire supply of gravel from the only quarry that produces the grade of gravel the municipalities required. Therefore, no other companies were eligible to bid on the projects. Finally, the municipalities required that bidding companies own and use a 22-foot gravel spreader, which eliminated much of the competition.The attorney representing the two New Jersey companies explained that many times, municipalities will allow bidding companies to use substitute materials. But that wasn't the case for these bid invitations, he said. The municipalities accepted no substitutes for the brand of pavement sealer they specified. In fact, according to the lawsuit, a road department employee for one township, which isn't named in the lawsuit, admitted that the defendant gave the paving specifications to the township.
In addition to the company accused of rigging the bidding process, the lawsuit names three townships. The lawsuit's claims include illegal restraint of trade, anti-competitive conduct, discrimination, interference with economic opportunity and violation of Pennsylvania's competitive bidding law.
Unfortunately, bid-rigging is an all-too-common practice, in New Jersey and across the country. Rather than allowing companies to compete fairly, bid rigging creates unfair monopolies and prevents businesses from being allowed to expand and thrive. If you suspect your company is the target of a bid-rigging scheme, it may be time to contact an attorney who focuses on commercial litigation to ensure you aren't shut out of further business opportunities.
Source: The Morning Call, "N.J. firms allege Emmaus company sought monopoly on paving jobs," Peter Hall, May 3, 2012
]]>Last week saw the release of another sequel in "The Godfather" series, just the latest chapter of a battle over intellectual property. Back in February Paramount filed a lawsuit in federal court in Manhattan against Anthony Puzo, the late author's son and the executor of his estate, in an effort to stop the book -- titled "The Family Corleone" -- from being published because the studio says it wasn't authorized. Paramount claims it purchased the copyright to the classic mobster series in 1969 and authorized just one sequel, "The Godfather Returns," to be published by Random House in 2004, five years after Mario Puzo died.
]]> But another sequel, "The Godfather's Revenge," was published in 2006 without the studio's permission, the lawsuit claims. Paramount says it's trying to protect not only its copyright and trademark interests, but the integrity of "The Godfather" legacy.Anthony Puzo countersued in March, arguing that the contract between his father and Paramount didn't include book publishing rights. His lawsuit also contends that Paramount disregarded contractual promises it made to the late author and breached a 1969 contract. To put an end to the matter, Puzo and his attorney are seeking an end to the studio's rights, along with damages that could exceed $10 million -- a steep figure, but one that beats waking up next to a horse's head.
Until the matter is settled, proceeds from the new sequel, "The Family Corleone," will be put in escrow. The Puzo estate and Paramount are hoping to resolve their battle through a mediator who will, with any luck, give both parties an offer they can't refuse.
Source: Bloomberg, "'The Godfather,' Anti-Piracy: Intellectual Property (Update 1)," Ellen Rosen, May 14, 2012
]]>New Jersey ranks near the bottom among states with the most chain restaurants, defined as restaurants with at least 10 locations. The state boasts more than 20,300 restaurants and fewer than 25 percent are chains.
]]> High costs appear to stifle chain expansion. Building a chain restaurant in New Jersey can be an expensive, uncertain venture. Construction costs, rent and taxes come have high price tags. Getting a license to serve alcohol in a restaurant can be up to a $1 million expense, depending on where a restaurant is located.Chains must compete with New Jersey's famous independent and family-owned restaurants. Many local restaurant owners have snapped up prime locations with the advantage of well-established customer familiarity and loyalty.
Chain restaurants also have expenses independent restaurants do not. The chain stores are often franchised, which requires the operator to pay royalties from sales to a franchisor before pocketing any profit. A franchisee might be locked into a deal to upgrade the restaurant on a regular basis, adding to the costs of operation and taking a bite out of success.
Before a chain enters the New Jersey market, it has to be able to meet and exceed the expenses of opening there, and factors like high business taxes and higher minimum wage requirements could be revenue breakers.
The customer base exists for other chain restaurants in the state, but some chain owners are inching toward a decision. The manager of a five-state diner chain is anxious to offer franchises for 30 diners in New Jersey. He says he will open when he knows those diners have a good chance to succeed.
Source: Asbury Park Press, "Chain restaurants battle to get a place at the table in NJ," David P. Willis, May 1, 2012
]]>Google purchased Motorola last year, along with its patents. Late last month an administrative law judge for the U.S. International Trade Commission ruled that Microsoft's Xbox infringes four of those patents. Shortly thereafter, a judge in Germany also ruled that the Xbox and some versions of Windows infringed the same patents, and ordered the products removed from sale in the country.
]]> But the Xbox ban won't be implemented before the outcome of a lawsuit to be heard today. Microsoft argues in its breach of contract suit that Motorola failed to offer fair licensing terms on patents for inventions that are essential to industry standards for Wi-Fi and video technology, and that royalties for those patents would add up to about $4 billion a year, a figure that Motorola disputes. The hearing will also determine whether Microsoft lost the right to complain, since it failed to make a counter offer to Motorola's request of a 2.25 percentage in royalties on the retail price of Microsoft products.If the judge in today's hearing sides with Microsoft, the ban on Xbox sales in Germany won't be carried out. A ruling in Microsoft's favor could also solve a trade dispute over whether the Asia-made gaming system should be banned in the U.S.
Standard-essential patents disclose and claim inventions that are required to practice an industry standard, and they're essential to many gaming systems, smartphones and other top-selling technology. Both Microsoft and Apple, which is embroiled in its own battle with Motorola, have promised not to seek bans on the use of standard-essential patents as long as licensing agreements are made with patent users. But they want other companies, including Motorola, to do the same.
While Microsoft, Apple and Google may have the money to argue endlessly over infringements of standard-essential patents, many industry analysts point out that smaller companies aren't able to afford some of these patent royalties, which in effect stifles their competition. As one research firm analyst puts it, "A patent is no longer something to promote innovation, but simply a weapon to be used in a court of law."
Source: Thomson Reuters News & Insight, "Up Monday: Crucial hearing in Microsoft v. Motorola RAND case," Alison Frankel, May 4, 2012
]]>Five chapters of the United Way announced this week that they'll merge with two chapters in Pennsylvania with the goal of boosting fundraising. The merger is set to become official July 1. The president of one of those chapters said the agencies have worked together informally for years, but in the last year and a half the chapter heads have been talking more seriously about joining forces in an official capacity.
]]> Not surprisingly, one of the motivators for the merger is the economy. The past several years have been tough on most nonprofit organizations, particularly those that are charity-based. But agency leaders are also confident that they can serve more people and make a bigger impact by working together. A bigger "footprint," the aforementioned president says, could bring in more grant revenue for its preschools and similar programs. Given that the agencies rely on heavily workplace giving through partial paycheck donations, he said that merging would allow the combined chapters to focus on other forms of fundraising.The United Way merger is actually part of a trend within the organization. Last year five chapters in northern New Jersey merged for the same reasons as the current merger. Already other businesses and influential community members have taken notice. Even major universities are tapping the agency, asking to collaborate on projects.
The extra attention could be due to the perceived growth of the nonprofit. Even though the nonprofit hasn't expanded overall and local staff, programs and boards of directors will still exist, the formation of a larger agency seems to be generating a positive response inside and out. And that's definitely a signal of future success.
Source: NJBiz.com, "South Jersey United Ways to merge with Pa. chapters," Jared Kaltwasser, April 30, 2012
]]>The FTC announced last week that it was hiring the former U.S. Department of Justice prosecutor, who at 49 years old has never lost a case. Currently an attorney for a New York-based law firm of more than 700 lawyers, she's been charged with leading a team of prosecutors chosen by the FTC to determine whether Google violated antitrust regulations.
]]> At the heart of the issue is whether Google abused its position in the search engine market to promote its own products over its rivals in search results. Included in the investigation is Google's social search feature, which pulls content from Google+ into search results and makes contacts and pages from the social networking service more readily searchable -- another form of bias in Google's search results, the FTC has suggested. The search engine is also suspected of increasing advertising rates for competitors.The current investigation against Google isn't the first. The European Commission began conducting its own investigation before the FTC's began, and is expected to decide in the next few weeks whether to pursue legal action.
Right now, the FTC insists that the new attorney hire doesn't mean it will file a lawsuit against Google. But insiders say the move sends a very strong signal. An attorney hired to lead the antitrust case against Microsoft Corp. in 1994 says the FTC tends not to bring in outside counsel unless it's very serious about moving forward with litigation. And the attorney the agency has chosen appears to be fired up and ready.
"Technology is transforming our society," she told the New York Times. "In society, it impacts privacy, competition, our interactions with other people -- just about everything. Working on the investigation will be a great challenge."
Source: Bloomberg, "Weiss, Greenberg, Latham, Linklaters: Business of Law," Elizabeth Amon, April 27, 2012
]]>According to the study, companies that rely on copyrights, trademarks and patents to protect their ideas supply some 40 million jobs, or roughly 28 percent of the national workforce. Those that immediately come to mind are movie and recording studios, but also consider the property of pharmaceutical companies, medical laboratories and research hubs, not to mention the entrepreneurs and artists working from garages and basement studios across the U.S.
]]> The first-of-its-kind study, released earlier this month by the U.S. Department of Commerce, points out that nearly 35 percent of the U.S. gross domestic product comes from 75 industries that are heavy on intellectual property and collectively employ about 27 million people. These industries also support roughly 13 million other jobs in related industries.The report's release comes at a time when awareness of intellectual property and piracy of content is at an all-time high. Most New Jersey residents are aware that it takes little more than Internet access and a touch of savvy to illegally download content without paying for it. But as countless people pirate this content, many more are affected by it. As U.S. Chamber of Commerce President Thomas Donohue says, "Innovation can't create jobs without strong IP protection." Digital piracy has caused job losses across the board, particularly in the media and arts industries. In fact, New Jersey is considered one of the most IP-intensive states, along with California, Minnesota, Wisconsin and a handful of other East Coast states.
This is one reason the U.S. government hasn't abandoned its fight against international digital piracy. Legislation such as the Stop Online Piracy Act may not have succeeded yet, but with so much of the American workforce at stake, lawmakers will be pressed to keep trying.
Source: Reuters, "U.S. says intellectual property supports 40 million jobs," Doug Palmer, April 11, 2012
]]>Many New Jersey professionals have found ways to make a sideline business work. In November 2010 an anesthesiologist in Hoboken with more than 25 years of experience in medicine decided to open a hair salon. He met a stylist who wanted to open her own business, and he decided to invest in it. Although that partnership fell through, it put the doctor on the path to starting his own salon. After working with designers and hiring stylists, he opened the business and it found success. It was one of five finalists for a Salon Design of the Year award in 2011.
]]> "The beauty industry has enabled me to add something totally outside the box to my life experience," says the doctor, who is the first to admit that he relies on two senior stylists for day-to-day management of the salon. In doing so he's practicing an important element of running a side business: He's not just keeping his day job; he's keeping it separate from his new venture.Keeping your work lives separate ensures continued success in your primary occupation. Although the second business is bound to produce distractions, they shouldn't leak into your day job because they could negatively affect your work -- something the anesthesiologist can't take a chance on. Keeping your businesses truly separate may mean you have to schedule meetings for the sideline in the off-hours, but it's better than having these meetings interrupt your work.
That said, if you do decide to break off and devote all your time to the new business, you may be able to court the one you're leaving as a new client. If your contract allows it, it can be a great way to form partnerships with colleagues with whom you already have mutual respect and trust.
Of course, starting a sideline business isn't easy, and mistakes are almost inevitable. This is where a business law professional can help by advising you on your business plan, financing and other details so can you avoid as many distracting pitfalls as possible.
Source: American Medical News, "N.J. anesthesiologist makes hairpin turn and opens beauty salon," Victoria Stagg Elliot, April 23, 2012
]]>Sometimes, unfortunately, the source turns out to be untrustworthy. A New Jersey collector is claiming just that in his breach of contract and fraud lawsuit against an auction house and its president. The plaintiff says the defendants knew that some items they bought from a supplier were either unauthentic or questionable, but allowed the collector to buy them anyway.
]]> The supplier is a former hip-hop artist who turned to sports memorabilia collecting when his music career went south in the early 1990s. He has supplied items to several auctions, such as an 1853 New York Knickerbocker Trophy Ball that the plaintiff purchased in 2003 from another auction house, which folded in the midst of an FBI investigation. The plaintiff claims that the auction house president named in his lawsuit, who was previously an executive with the now-defunct company, knew there were questions about the basketball's authenticity and should not have sold the item.An FBI agent told the plaintiff that the executive and other auction house employees had reason to believe the ball wasn't authentic, despite the executive's numerous assurances to the contrary. The plaintiff finally had the ball tested along with another one he'd bought from the company; both were found to be fraudulent.
Ironically, the hip-hop artist-turned-collector runs a website dedicated to exposing fraud in the memorabilia industry. Yet he's the target of fraud accusations by the FBI, as well as a number of lawsuits. One of these lawsuits was the reason the auction house executive didn't disclose his concerns about the items the plaintiff purchased, the lawsuit says.
The auction house named in the lawsuit has attempted to get the case dismissed, saying it had disclaimed any warranties and that the statute of limitations had run out, but a judge denied the motion. This came as good news to the plaintiff, an attorney who owns a sports memorabilia collection that is said to be one of the best in the world. As an experienced collector, he knows better than most that if you pay top dollar for an item, it had better be everything the seller says it is.
Source: New York Daily News, "New Jersey federal judge allows lawsuit over authenticity of memorabilia supplied by Peter Nash, who was Pete Nice of rap group 3rd Bass," Michael O'Keeffe, April 15, 2012
]]>According to Christopher Dodd, chairman of the Motion Picture Association of America and a former U.S. senator for Connecticut, SOPA is now dead and gone. Although the MPAA built significant backing for both bills, Dodd said in a recent interview that SOPA, at least, "went further than it probably should have."
]]> The bills and ensuing protests addressed issues that most Internet users hadn't given much thought to until then. Whether you were for or against them, both bills raised public awareness of intellectual property, censorship and information access on the Web. Dodd said in his interview that although SOPA may be dead, these issues are alive and well, and that leaders from the U.S. government to the private technology sectors believe that something still must be done to address intellectual property on the Internet.Does that mean a compromise is on the horizon? Possibly, but it's hard to say when the issue will come to a head again. With elections taking center stage this year, it won't be the Legislature's focus. But the next session could bring another attempt at combating online piracy without threatening free speech and innovation and imposing too many other restrictions.
Source: Bloomberg, "SOPA, Dolce & Gabbana, Becton: Intellectual Property," Victoria Slind-Flor, April 13, 2012
]]>One of the biggest concerns of a workforce soon to be absorbed by a new company is integration. How many employees will be laid off, and from which of the two merging companies? In a recent memo to parent company AMR Corp.'s chief executive officer, American Airlines' vice president for flight expressed his concerns about U.S. Airways' ability to combine the two airlines' workforces, saying he didn't believe the merger would result in a better opportunity for pilots than what they already have under American.
]]> But the memo may have been premature. AMR Corp.'s CEO has said recently that the company is open to a merger with U.S. Airways, but that it may be too large of an undertaking right now as it continues to undergo bankruptcy restructuring. Mergers have usually been good decisions for airlines, he said, but bankruptcy comes with its own complexities.These complexities also carry risks for employees. Cutting costs is a standard element of emerging from bankruptcy, and that often means layoffs. American's plan calls for about 13,000 job cuts; it's asked permission from the bankruptcy court to void current union contracts so it can make the cuts.
And here's where the possible combination of bankruptcy and a merger could get interesting. The American executive who wrote the memo to the CEO said American's pilots might actually welcome the merger if they can use it as bargaining leverage in union contract negotiations. The unions representing pilots, flight attendants, mechanics and baggage handlers have a seat on the unsecured creditors committee, which can hold discussions with suitors like U.S. Airways and has a say in major decisions that are made during the bankruptcy restructuring.
It will be interesting to see what happens to American in the coming year. Will it emerge from bankruptcy intact, or will it be broken up or acquired? And how soon? You can bet that business analysts will be watching closely -- and so will American Airlines employees.
Source: SFGate.com, "AMR Pilots Doubt US Airways Merger Chances, Executive Says," Mary Schlangenstein, April 11, 2012
]]>Olbermann's firing came just a year into his five-year, $50 million contract with the network formed by former Vice President Al Gore and Joel Hyatt. He allegedly clashed with his employers over issues ranging from technical problems to a disagreement to host certain hours of election coverage.
]]> Central to the breach of contract suit, though, is the claim that Olbermann missed a number of shows, which Current termed "unauthorized absences." The network says the host missed 19 out of 41 working days in January and February and that he asked for a vacation day one day before the Super Tuesday GOP primaries. When that request was declined, he was told that if he took it he would be in breach of contract. He took it off anyway, but was back on the air for the primaries. Not long after, however, Current announced it would be replacing Olbermann immediately with former New York Gov. Eliot Spitzer.Olbermann now says the network owes him up to $70 million in cash and equity compensation. Other complaints against Current include broadcasting his image in ads without permission, refusing to invest resources in the show and disclosing confidential terms of his contract.
The legal battle that's now brewing promises to be expensive, but that's to be expected with stakes as high as what Olbermann is demanding. Given his personality and career history, it's also likely to be highly volatile. Not all commercial litigation needs to be this way, though. With tough, experienced business law professionals on your side, a breach of contract lawsuit can be successful without the need to get your hands dirty.
Source: Contra Costa Times, "Keith Olbermann sues Al Gore's network," Tony Hicks, April 5, 2012
]]>The "Running of the Brides" is being offered as intellectual property that New Jersey-based parent company Syms Corporation is auctioning off as part of its bankruptcy filing. It will also auction off the domain names, customer data for almost 2 million shoppers and a perpetual royalty-free license for the Filene's Basement trademark, along with other brands the company owns.
]]> The "Running of the Brides" has been a tradition since 1947, when Filene's Basement first began offering deep discounts on designer wedding gowns in a one-day sale. Brides and their bridesmaids, friends, sisters and mothers would line up the night before outside the retail stores in hopes of scoring the perfect dresses, marked hundreds or even thousands of dollars below their original prices. Many groups of shoppers would wear matching colors along with whistles to communicate among the heavy crowds. When the doors opened, shoppers would run through the store, whipping as many dresses as they could off racks. From there, they would try on dresses in the aisles and trade those they didn't want with other shoppers. When a shopper found a dress she wanted, others would applaud.Filene's filed for bankruptcy in 2009 and was bought by Syms, which filed for bankruptcy a few months ago. Already some 20 parties have expressed interest in buying the rights to the sale and its name, meaning that the much-loved tradition could start up again in the coming year.
Source: Business Week, "Filene's 'Running of the Brides' Marks to Be Sold at Auction," Victoria Slind-Flor, April 2, 2012
]]>MF Global Holding Ltd. CEO John Corzine, also a former governor of New Jersey, gave "direct instructions" to transfer the money to cover an overdraft with JPMorgan Chase & Co. shortly before the brokerage filed for bankruptcy Oct. 31, investigators said. After the firm collapsed, there was an estimated $1.6 billion gap between customer claims and available assets.
]]> To make a criminal case against him, the U.S. Department of Justice would have to prove he deliberately used customer funds to cover the shortfall. But for a civil lawsuit, investors would only have to show that customer funds were in fact used.An email from the treasurer of the brokerage specified that the $200 million transfer was "Per JC's direct instructions." The chief risk officer for JP Morgan, which is the firm's clearing bank and one of its custodian banks for segregated customer funds, called Corzine to make sure the funds being transferred didn't belong to customers. The bank was given verbal but not written assurance, according to an inside source. Who gave that assurance isn't yet clear. But a spokesman for Corzine said the CEO believed the company had hundreds of millions of dollars available to transfer and that he never gave any instruction to misuse customer funds.
Even if he didn't deliberately put customers' money at risk, he may be legally liable for his employees' actions. If he's found to have directed the transfer of customer funds, he could be tried for fraud. That intent could be shown through direct evidence, such as memos to staffers or their own testimony. If the government can show through circumstantial evidence that Corzine should have known there wasn't enough company money to avoid dipping into customer accounts, the government still could have a strong case against him. In fact, the circumstantial evidence would make a stronger case because it wouldn't rely on employee testimony, which could be tainted by bias, memory problems or hidden motivations by workers.
At a time when more and more financial companies are being taken to task for their irresponsibility, it will be interesting to see whether this CEO is held liable both by the government and his customers, who are still out an estimated $1.6 billion.
Source: Blooberg, "MF Global's Corzine May be Liable if Customer Risk Known," Linda Sandler and Phil Mattingly, March 25, 2012
]]>Nike accuses Reebok of illegally trying to capitalize on Tebow's March 21 trade to the New York Jets by selling jerseys and other apparel with the quarterback's name on it, essentially stealing Nike's intellectual property and taking away sales it would otherwise make after it becomes the official supplier April 1.
]]> Nike's lawsuit seeks to bar Reebok from selling the Tebow-themed merchandise, plus unspecified damages. It claims retailers have resisted placing orders with Nike because they have pending orders with Reebok and want to sell out that inventory before placing a new order with Nike."It is unlikely that a consumer who purchases an unauthorized Tebow-identified NFL jersey or t-shirt from Reebok this week will purchase an authorized Tebow jersey or t-shirt from Nike the following week," Nike's complaint says.
A U.S. district judge ordered Reebok to temporarily stop producing and selling Tebow clothing and to recall any New York Jets apparel with Tebow's name on it. The company has also been barred from taking more orders for those items. Reebok is allowed to distribute and sell Denver Broncos-related apparel with Tebow's name that was manufactured before March 1, the expiration date of the company's licensing agreement with the NFL.
After leading the Broncos to the NFL playoffs as quarterback of that team, Tebow, 24, was named the most popular professional athlete in the U.S. in an ESPN poll. His Broncos jersey was the second-highest selling of all NFL players last season. Sales of that jersey are expected to remain high, despite his trade to the Jets.
Nike paid a reported $1.1 billion to be the NFL's official provider for the next five years. The company also has an individual contract with Tebow to market clothing under his name.
Source: The Wall Street Journal, "Reebok Ordered to Halt Tebow Apparel," Chad Bray, March 29, 2012
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