Territorial Franchise Agreement Prohibits Franchisor’s Online Sales. In a case believed to be of first impression nationwide, a panel of the American Arbitration Association in New York has ruled in favor of franchisees who argued that the value of the exclusive territories granted by their franchise agreements was being diluted by Franchisor’s competing online sales. Noting that Defendant promoted its website as "your full service online drugstore," offering special sales substantially undercutting the prices charged by its franchisees, arbitrators ruled in favor of franchisees, and granted a preliminary injunction against franchisor prohibiting its online sales in the designated territories. http://www.law.com/cgi-bin/nwlink.cgi?ACG=ZZZB30QM0DC
Domain Names I: Want the Domain [YourNameHere].law.firm? Although ICANN’s decision about the new top level domain names (tld’s) is months away, many domain registration companies are taking pre-registrations for tld’s like "anderson.consulting" (registered by Anderson Consulting in a flash), and more than 2000 ".web" names. Although these tld’s may never become domains, buyers are scooping them up, hoping to beat the rush. Want [YourNameHere].law.firm? Go get it, but buyer beware. http://www.wired.com/news/business/0,1367,38653,00.html
Domain Names II: Domain Name Not "Property," So Can’t Be Stolen. Adopting the argument of Network Solutions that a domain name is not "property" but rather a designation for a service, something like a phone number, a California District court Judge has ruled that a domain name cannot be stolen and converted. Defendant, a prison inmate, allegedly forged a letter to Network Solutions transferring ownership of sex.com from its original owner to himself, and has run the site from prison, netting millions of dollars. No opinion online, but see: http://www.wired.com/news/politics/0,1283,38398,00.html
"Business Use" Exclusion In Auto Policy Against Public Policy. The valet who delivers your car when you leave the restaurant/club/casino might fall under the "business use" exclusion of your insurance policy, but your coverage still applies. Since the enactment of mandatory automobile liability insurance, each insurance policy is required by law to cover any person driving an auto with the permission of the insured. Therefore, provisions in automobile policy excluding coverage for business use are against public policy. Summary judgment on favor of insurer on basis of "business exclusion" was overturned. a passenger was injured as they attempted to enter car being delivered by valet at defendant casino. The policy was required by law to cover any person driving the vehicle with the owner's permission, which included the valet. State Farm Automobile Insurance Co. vs. Fisher, 1-99-3396, (August 25, 2000) http://www.state.il.us/court/2000/1993396.htm
ERISA — Medical Insurance and COBRA. Employee who returned to work within 1 month of termination, and who was not told that she had to continue to make COBRA payments in order to avoid pre-existing condition limitation could not be denied medical insurance coverage by employer. In failing to explain interaction of COBRA and its medical insurance coverage, employer breached its fiduciary duty to employee. Bowerman vs. Wal-Mart Stores, Inc., No. 99-4130 (8/18/00). Appeal, S.D. Ind., Indianapolis. When posted, decision will be at http://www.kentlaw.edu/7circuit/2000/jul-sep/99-4130.html
Federal Trade Commission: FTC Approves Carmakers’ Auto Parts Website, but Delays Airline B2B Website Because of Competition Concerns. Covisint.com, the proposed B2B website of the big 3 automakers to sell replacement parts online has been given approval by the FTC as a benefit to consumers. http://www.washingtonpost.com/wp-dyn/articles/A51496-2000Sep11.html In the meantime, Orbitz.com, the proposed travel website sponsored by the major airlines, has been delayed until June, 2001 by the FTC because of concerns that it will adversely affect competition. http://www.usatoday.com/life/cyber/tech/cti502.htm
Use Caution in Terminating Employee With Unvested Stock Options. A former vice-president of Oracle, the software maker, won $2.6 million against Oracle as a result of her termination, almost $2 million of which was for unvested stock options. http://news.cnet.com/news/0-1003-200-2576435.html Meanwhile, Oracle is suing former company executive Pier Carlo Falotti, whom it fired 4 days before his $10 million in stock options was to vest, claiming he is not entitled to the value of the unvested stock options. http://news.cnet.com/news/0-1003-202-2464498.html
Intellectual Property: "Fair Use" Applies to Internet Spiders. In an unpublished opinion, the U.S. District Court for Central District of California has ruled that the "fair use" copyright doctrine applies to permit internet website "spiders" to make temporary copies of purely factual data on other sites, to extract and republish them. Denying a preliminary injunction, the Court ruled that making the copy was a necessary step to copy the factual information. However, although such "spidering" produced no copyright infringement, an action for trespass to chattels might result from such activity, if enough harm were caused. Tickets.com had copied the Events page of Ticketmaster’s website. Ticketmaster Corp. v. Tickets.com Inc., C.D. Calif., No. 99-7654 HLH (BQRx), 8/10/00, unpublished. http://ipcenter.bna.com/pic/document/1,1103,1_595,00.html
UCC: Proposed Revisions to Article 2 Fail to Move Forward. The National Conference of Commissioners on Uniform State Laws, failed to move forward the proposed revisions to Article 2 and 2A at its recent meeting. The problem is and remains a question of how to treat stand-alone software — as a good, or as a licensed piece of intellectual property. http://ipcenter.bna.com/pic/document/1,1103,1_590,00.html
UCITA: "Self-Help" Provisions Withdrawn for Consumers, but not Corporate Customers. But the same group backed off slightly from some of the more controversial portions of UCITA — The Uniform Computer Information Transactions Act — though it has already been passed by the states of Virginia and Maryland. The National Conference Commissioners agreed to end the so-called "self-help" provision" which allowed software vendors to remotely disable the software they sell to users. The commissioners agreed to remove the self-help provision for mass-market software sold via retail channels. But the provision remains in effect for other types of software such as customizable applications that are purchased by large businesses. http://www.infoworld.com/articles/hn/xml/00/08/09/000809hnucita.xml?0810tham