Protecting your intellectual property in a contract. Derma Penn, LLC v. 4EverYoung Limited d/b/a Dermapenworld

In a case still unfolding in United States District Court for the District of Utah, there is a lesson to be learned for all who want to ensure protection of their intellectual property. In December 2013, the U.S. District Court for the District of Utah granted partial summary judgment in favor of the defendant 4EverYoung Limited d/b/a Dermapenworld ("4EverYoung") regarding plaintiff's defenses to specific performance. The court concluded that twelve affirmative defenses asserted by Derma Pen, LLC ("Derma Pen") against 4EverYoung's demand for specific performance were not sufficient to excuse its obligation under a sales distribution agreement to sell its trademark and domain name.

This case shows the importance of understanding the implications of including a first right of refusal or a contingent right to purchase intellectual property when an agreement is terminated. The lawsuit arose after Derma Pen decided to terminate its sales distribution agreement with 4EverYoung pursuant to Section 11 of the contract.

The court's undertook an analysis of the terms of agreement in light of 4EverYoung's motion for partial summary judgment. The district court determined there were two contingent rights pursuant to the agreement: first, Derma Pen was required to offer the trademark/domain name for sale to 4EverYoung upon termination of the contract pursuant to section 11 after establishing their value; and second, 4EverYoung had the right of first refusal if Derma Pen received an offer for purchase of the intellectual property from any third-party. The court found that termination of the contract pursuant to section 11 triggered the contingent rights, but that no third party ever offered to purchase the trademark or domain thereby not trigger the first right of refusal. However, the court determined that Derma Pen's obligation to establish the valuation of the trademark and domain name and to offer them for sale was triggered but that "Derma Pen has never offered the Trademark and the Domain Name to 4EverYoung."

Next, the court evaluated Derma Pen's twelve affirmative defenses in response to 4EverYoung's request for specific performance finding that none excused Derma Pen's obligation to offer its trademark and domain for sale. The court's decision severely affected Derma Pen's case and allowed 4EverYoung to request specific performance requiring Derma Pen's to establish a value and offer the trademark and domain name for purchase by 4EverYoung.

This case is a great example of ensuring full understanding of the rights and obligations contained in any contractual agreement before executing the contract. An intellectual property owner should clearly understand the implications of terminating any contractual agreement. An contingent obligation to sell your intellectual property may be acceptable during negotiations, but understanding your obligations under the contact is essential to protecting your rights, and your defenses. 

Stan Lee Media, Inc. v. The Walt Disney Company

The Tenth Circuit recently issued an opinion affirming the dismissal of a lawsuit between Stan Lee Media, Inc. and The Walt Disney Company. Stan Lee Media, Inc. was a Colorado Company originally formed by Stan Lee in 1998, but Stan Lee later returned to Marvel and has long since cut ties with the company.

Stan Lee Media’s claims copyright ownership rights in characters created while Mr. Lee was at Marvel. The claims are derived from an employment agreement between Stan Lee and Stan Lee Media, Inc. in 1998. Stan Lee Media claims that ownership rights in some of Marvel’s most recognizable characters, including Spider-Man, the X-Med, the Incredible Hulk, The Fantastic Four, Iron Man, Thor, Daredevil, and others, were transferred to Stan Lee Media in exchange for salary and other benefits.

This Tenth Circuit decision is the most recent stemming from numerous lawsuits initiated by Stan Lee Media around the country claiming copyright ownership in the Marvel characters. The Colorado trial court in this case dismissed Stan Lee Media’s single cause of action for copyright infringement against Disney on the basis that the complaint failed to state a claim. The Tenth Circuit affirmed the trial court’s decision based on collateral estopple, a legal rule which prevents re-litigation of issues that have been previously decided in other cases.

Two cases identified by the Tenth Circuit Court precluded Stan Lee Media from re-litigating the issue of its alleged copyright ownership. The first was a decision from the Southern District of New York, Abadin v. Marvel Entm’t, Inc., No. 09 Civ. 0715(PAC), 2010 WL 1257519 (S.D.N.Y. Mar. 31, 2010, determined to bar re-litigation of certain claims and issues. On October 29, 2014, the Ninth Circuit issued an opinion and alternative basis for affirming dismissal of Stan Lee Media’s copyright ownership claims. See Stan Lee Media, v. Lee, Case No. 12-56733, at *1. The Tenth Circuit agreed with the Ninth Circuit’s conclusion that Stan Lee Media’s allegation of copyright ownership in the pre-1998 Marvel characters failed because it did not “allege ‘enough facts to state a claim to relief that is plausible on its face.” Stan Lee Media’s “failure to publicize, protect, or exploit its right to profit from the characters establishes that these claims are simply implausible.” It was on this basis that the 10th Circuit affirmed Disney’s motion to dismiss for failure to state a claim and dismissal of the claim.

The Ninth Circuit’s opinion was discussed by the Hollywood reporter which referenced the pending Tenth Circuit case above.

Post-Bar Taker Limbo. What do I call myself?

I'm back in the swing of things after sitting for July 2013 Bar Exam. In the weeks after the bar, one thing I've realized as a post-law school, post-bar taker is that describing your current status to people you meet is pretty challenging. The not-quite-a-lawyer but already-graduated-law-school is a mouth full to explain in casual conversation and most bar-takers are undoubtedly met with many comments along the lines of "you definitely passed." Law School Graduate, Post-3L, J.D., however you put it, I am in post-bar limbo with many across the nation as we are anxiously awaiting the results. Most law school graduates take the July bar exam in the state they'd like to practice after graduating in May, but the waiting period for bar exam results can range from one month to six months depending on the state and the number of takers.

Unsure of what to call themselves, many begin to list their occupation as an attorney. During the waiting period, recent law school grads and post-bar takers should tread lightly in how they describe themselves in order to not run afoul of the Professional Rules of Conduct. 

According to the ABA Model Rules of Professional Conduct Rule 7.1 prohibits false or misleading communication including material misrepresentations of fact or law. Attorney-hopefuls may violate this rule simply by updating their LinkedIn profile to indicate they are an attorney prior to receiving their bar results. 

In 2006, Above the Law discussed how Author, and Yale Law School Graduate, Elizabeth Wurtzel who stated in an interview with  BitterLawyer.com how much she enjoyed being a lawyer. The problem was that at the time, she hadn't yet passed the bar exam. Her statements were the topic of discussion regarding post-bar titles for law school graduates on Gawker.com. The ABA also published an article in 2009 discussing law school graduates who haven't yet passed the bar but are using the title attorney. Interestingly, the article point out that others who misuse titles include "lawyers who are on inactive status or licensed only in another state, and lawyers engaged in a business or profession other than the practice of law."

A simple word of caution to those who are in limbo waiting for bar exam results, be patient. I understand your are ready for your legal career to officially begin but be careful to not hold yourself out as an attorney until its official or you'll find yourself in front of an ethics committee even before your swearing in ceremony. For now, refer to yourself as a Post-Bar J.D. or something similar, and be patient, when the bar exam results come back you can shout it from the rooftops that you are an attorney. 

** UPDATE: I want to be clear that, unfortunately, even after receiving bar results you should not present yourself as an attorney until you have been officially sworn in at your licencing ceremony. It would still be a violation of the ethical rules until the official ceremony occurs. 

Your Online Life After Death

Take a second and think about all your online accounts. If you include email accounts, banks, dating sites, social networking, sky miles accounts, credit cards, memberships, rewards cards, etc, there are simply too many accounts to keep track of. Tech Radar reported that people have an average of twenty-six to forty online accounts. Now think about what would happen to those accounts if something happened to you.

This week Google unveiled its Inactive Account Manager, a new feature which allows its members to indicate what they would like to happen to their accounts after a period of inactivity. Users can set their online data to self-destruct or assign their data to trusted loved ones who will be contacted after the period of inactivity with access to the account. This new feature has been likened to an online will and its about time Google address this issue of what happens to our online lives after death.


Our online lives often continue on after death because of the issues of access. Imagine how daunting it is be for someone to track down all your online accounts and profiles without personal knowledge of where you have created them. Obviously, for accounts that are shared with your significant other, access is not an issue but friends and families face a huge problem for personal accounts, especially for peripheral membership. Loved ones are often left to manage or close accounts on their own without much direction of how many and where they are.

One woman resorted to seeking help from ABC News to get her late husbands profile removed from Facebook. Facebook refused to provide her access to the account and would only agree to "memorialize" the account; in effect leaving it up but making it private to friends only. Even after sending Facebook her husband's death, birth, and marriage certificates, and even a portion of his will to prove he had died, only after ABC's involvement was his profile actually deleted.

Facebook's policy hasn't changed with the procedures for members who have died still being fairly complicated. It still opts to memorialize profiles of its deceased members, it will not provide password information, but now with the proper documentation Facebook will delete an account.


States are beginning to slowly catch up; in February, Virginia's legislature joined five other states by passing a law that gave parents of deceased minors access to their social media accounts.

HOW TO MANAGE YOUR ONLINE PROFILE AFTER DEATH
Preparing for this if the best solution. Tell your loved ones whether you want your profiled deleted and create a creating an inventory of online accounts and passwords for loved ones to use to make accessing your accounts easy. There are many online services that provide a solution for this problem. While it may be easy to sign up, register or join as a member on many websites, the challenge comes when loved ones want to delete those accounts. Make it as easy as possible by treating your online life as part of the estate planning process. Take a look at this great site that explores more of these issues: http://www.digitalpassing.com/about/

Social Media Use by Attorneys and Law Firms

            The internet has fundamentally changed the way we interact on a daily basis. Though relatively new, social media has become a tool many businesses and individuals use in their professional lives. Platforms, like Facebook and Twitter, vary but all have a common purpose of facilitating interactions between users. The legal community has struggled with how to address the ethical concerns associated with the use of social media sometimes debating whether social media should be used within its profession at all.[1] 

            Utah’s Ethics Advisory Committee recently issued an unofficial advisory opinion to provide judges with guidance in their use of Social Media. The opinion provides some help to attorneys as well. Attorneys and judges should be cautious but they should not immediately shy away from using social media as part of their practice.While social media has been associated with a younger generation, it has expanded to include people of all ages and professions, including attorneys and judges[2]. 
           The nature of how one may “use” social media varies extensively. Many individuals in the legal community, lawyers and judges alike, are not members of any social media platform. Others may have an account or membership on multiple websites. For those who do have social media accounts, the level of individual participation on social media can vary vastly. Use on social media can range from those who have an account per se but are inactive users rarely visit the social media website; while active users may visit and participate regularly online.[3] “Active observers” may regularly visit their social media account but never actually engaging others on it; rather they use it as a tool to monitor or keep updated on the activity of others.[4] Moreover, a social media account may also serve different purposes for different individuals. Some users may limit their interactions to close family and friends as a way to keep in touch, while others use social media as a networking and business development tool to meet new people and potential clients.

There is nothing inherently inappropriate about social media use, but how you use it. Attorneys conduct is no more acceptable if it takes place online, it is just another form of technology. Social media use is not for everyone, but a basic understanding will allow you  to know why it is or is not useful for your practice. It’s important to identify your goals and understand the fundamental aspects social media; only after learning the tool, can it become useful.

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[1] Steven Seidenberg, Seduced, A.B.A. J., Feb 1, 2011, at 48 available at http://www.abajournal.com/magazine/article/seduced_for_lawyers_the_appeal_of_social_media_is_obvious_dangerous/.

[2] Seidenberg, supra note 1.

[3] See generally, Mary Madden, Older Adults and Social Media, Pew Internet & American Life Project (2010) available at http://pewinternet.org/Reports/2010/Older-Adults-and-Social-Media.aspx.

[4] See e.g. Stephanie Francis Ward, Justice Breyer’s on Twitter & Facebook, But Don’t Count on Him Friending You, A.B.A. J. (Apr 14, 2011) available at http://www.abajournal.com/news/article/breyer_on_facebook_but_dont_count_on_him_friending_you/ (explaining that he has an account of Facebook and Twitter); James Vicini, U.S. Supreme Court Justice Breyer on Twitter, Reuters (April 14, 2011) available at http://blogs.reuters.com/talesfromthetrail/2011/04/14/u-s-supreme-court-justice-breyer-on-twitter/ (explaining that he has a twitter account but he does not actively engage with the public on it and uses it as an “active observer).

Arizona Law Graduates will leave Law School as Attorneys

Arizona Supreme Court issued its approval to amend a rule eventually allowing 3L's to take the February Bar Exam. The amendment to Rule 34 of the Supreme Court Rules were approved on an "experimental basis," until December 31, 2015. Arizona 3L's would be  required to file a petition in November prior to sitting for the exam.

The amended rule is part of a pilot program to take place in Arizona Law Schools. Graduating 3L's would  receive their diploma and bar results in the spring rather than having to take the exam two months after graduating. This would eliminate the additional wait until the fall that most graduates endure before finding out  whether they can practice law. The third year of law school is considered a waste by many. The first two years are considered the most valuable and the third year of law school is often referred to as the year they "bore you to death."

Arizona schools are not the first to try and fix the problem with the third year of law school. NYU recently announced that they are revamping their third year curriculum to address this issue. Stanford Law school lead the way with changes to its third year of law school designed to allow students to pursue joint-degrees.

AboveTheLaw.com weighed in on the debate regarding whether 3L students should be allowed to sit for the Bar. All three Arizona Law schools had supported the change arguing that students would have a head start entering the job market. The National Law Journal discusses that a financial benefit accompanies the cahnge by helping students enter the job market as they graduate rather than have a six month lag. In this economy, many employers no longer consider law students for employment until after they have received their bar exam results and know they will have a license to practice law. Prior to the economic downturn the legal field was thriving and jobs were easily obtained before students actually knew they had passed the test.

The pilot program has been given two years to evaluate the effectiveness of this change in Arizona while legal educators will continue to evaluate ways to help students get jobs as quickly as possible in this slow economy.

Yale Announces Ph.D. in Law

Yale Law announced earlier this week that is was going to launch a Ph.D. in Law. The announcement has picked up buzz in the legal community because this would be the first legal program in the United States to offer a doctorate program in Law. The program endeavors to appeal to students who seek to stay in academia often building careers as Law Professors.


This is a smart move for Yale. Believe it or not, there are many law students who don't want to be big law attorneys after earning their legal degrees. Moreover, law school has traditionally been used by some students as a stepping stone to other fields, attending law school with no intention of staying the legal field after graduating. There is a small group of law students, however, who enter law school with the specific goal of becoming a law professor.


Yale's program recognizes that it is difficult to transition from legal practice to teaching. The program will focus "in-depth scholarly training." I personally know one of these students whose goal is to become a law professor. He has expressed frustration in the lack of resources available to him at the law school level with most of the attention going to students who are planning on entering firm life upon receiving a J.D. 


Yale has developed a program to serve and unmet need. There is no question that with this program, Yale's great reputation and prestige will accompany its graduates as they enter the world of legal academia after completing this program. As the school itself recognizes, “Yale Law School’s Ph.D. in Law will offer a new, alternative route into a career in law teaching and legal scholarship,” said Dean Post. “Some students will no doubt seek advanced degrees in cognate disciplines, but for those who wish to concentrate on law, we expect that the Ph.D. in Law will provide an attractive option.” 


Only time will tell how many more programs will develop a doctoral degree, admittedly some will wait to see how Yale's new program is received.