≡ Menu

This is making the rounds in the tech / IP bar: 

The United States District Court is not a wholly owned subsidiary of either TRT or Facebook Technologies. If the parties wanted to proceed in total privacy, they should have arbitrated this dispute. Instead, they brought this dispute to a public forum that belongs to the people of the United States, not TRT or Facebook. The United States people have every right to look over our shoulder and review the documents before the Court. The standard under Kamakana is not met for any document. 

Total Recall Technologies v. Luckey, No. C-15-02281, slip op. (N.D. Cal. Mar. 25, 2021) (Alsup, J., denying motion to seal) (emphasis added). (Hat tip: Prof. Eric Goldman.)

{ 0 comments }

This past week an appellate case out of Massachusetts was decided in which the employment agreement of a company, Covidien, required the employee, one Esch, to disclose and assign certain “Inventions” (a defined term) for one year after leaving Covidien. The jury found, and the appeals court affirmed:

  • that Esch, the former employee, had not breached his obligation to disclose and assign “Inventions” to Covidien — the appeals court held that the jury’s verdict implicitly meant that the jury had found that Esch’s new inventions were not “Inventions” as defined in his Covidien employment agreement; BUT
  • that Esch did breach his confidentiality obligation to Covidien by filing one of his patent applications, which apparently contained Covidien confidential information.

The jury awarded Covidien nearly $795,000 in damages against Esch, but the judge refused Covidien’s request to order Esch to assign his patent application(s) to Covidien.

Citation: Covidien LP v. Esch, No. 20-1515 (1st Cir. Apr. 8, 2021).

{ 0 comments }

Newbies: Anticipate the next step

I ran across some very useful advice for new lawyers — or really any new employee — at the ABA Journal Website; I’ll be citing the piece to my law students. Here’s an excerpt:

Doing good work means not only creating a strong work product but anticipating the next step.

  • If you are drafting a responsive pleading, you should be thinking about the discovery you will soon serve to support the claims or defenses.
  • If you are researching whether a particular contractual provision is permissible in a business contract, consider drafting your own clause.

Dustin M. Paul and Jennifer L. Eaton, 11 tips to survive your freshman year as an associate (ABAJournal.com Apr. 8, 2021) (emphasis and bullets added).

{ 0 comments }

A contractor agreed to gut and remodel a building for use as a neighborhood bar. It didn’t do so by the agreed completion date, causing the customer, a would-be bar owner, to miss the November-December holiday season. The court agreed with the bar owner that the contractor’s conduct had been “reckless” — causing the breach to fall within a carve-out from the contract’s exclusion of consequential damages. As a result, the court affirmed an award of the bar owner’s lost profits. [1]

[1] See Bakhshi v. Baarlaer, 2021 Ohio 13, No. 28767, slip op. ¶¶ 68-69, 84 (Ohio App. Jan. 8, 2021). Hat tip: Alexandra Parriman.

{ 0 comments }

In my contract-drafting courses at the University of Houston Law Center, we talk about an “H” diagram of how supply chains work in contract relationships, explained in section 19.3 of the course materials (still very much a work-in-progress):

h-diagram

Illustrating the roles of both “nature” and “interveners” in the Great Texas Blackout two weeks ago, the Texas attorney general’s office filed a lawsuit against electricity provider Griddy over the massive price spikes that many Griddy customers experienced during sub-freezing temperatures in most of the state. From the original petition in Harris County (Houston):

11. Griddy, unlike traditional electric retail providers, did not own power generation capability nor did it enter into long-term pricing contracts with power generators. Instead[:]

  • Griddy purchased electricity on the open, spot market.
  • Griddy charged customers a flat monthly rate, and then passed the price at which it purchased electricity directly on to the consumer.

During times of stability and low demand on the grid, Griddy was able to purchase electricity cheaply and pass those savings to consumers. But instability in the market can expose its customers to enormous risk, resulting in massive losses to consumers. Despite that very real risk, Griddy’s marketing persistently misled its customers about the nature and extent of this risk and the costs consumers could expect when utilizing Griddy’s services. * * *

17. One reason consumers have been surprised by the recent price spike to $9 per kWh is because Griddy’s advertising was misleading and failed to adequately disclose the risks of its pricing model to its customers.

The Griddy.com website offered: “For only $9.99 a month, get access to the wholesale price of electricity.” However, there is no officially indexed wholesale price of electricity in Texas. Instead, Griddy passed the price it pays on to the consumer along with its monthly $9.99 fee.

The Better Business Bureau issued a consumer alert in 2019 about Griddy’s advertising claims, writing that this usage of “wholesale” should not be used unless a business “actually owns and operates or directly and completely controls a wholesale or distribution facility which primarily sells products to retailers for resale,” which is not the case here. Their repeated representation of their prices as being the “wholesale” price was thus misleading.

18. Griddy’s representations emphasized potential savings and downplayed the effects of fluctuations in the electricity market. . . .

(Emphasis and extra paragraphing added, footnotes omitted.)

It’s of course far too early to know whether Griddy might actually be held liable. And some will no doubt assert that the lawsuit represents an attempt by the Texas attorney general to divert attention from his personal legal troubles.

But one thing is certain: Griddy will have to spend a lot of money — and management bandwidth — on defending against the lawsuit, including:

  • imposing litigation holds for emails and other documents;
  • searching for, screening, and producing documents;
  • preparing for and submitting to the depositions of many, many Griddy people; and
  • motion practice.
{ 0 comments }