Check your cell phone agreement, insurance policy, or almost any other agreement you enter into, there will be an arbitration clause. Whereby, whether you know it or not, but after you have signed the contract, you have agreed to forgo your rights through the litigation process so that you will submit to an arbitration procedure. The clause will probably look something like this…
“ In the event a dispute shall arise between the parties to this [contract, lease, etc.], it is hereby agreed that the dispute shall be referred to [one of the following choices: (1)designate a specific USA&M office or alternate service by agreement of the parties; (2) provide a method of selecting the arbitrator and situs of the hearing, such as "from the county wherein the manufacturing plant is located"; or for multi-jurisdictional disputes (3) insert "a USA&M office to be designated by USA&M National Headquarters"] for arbitration in accordance with the applicable United States Arbitration and Mediation Rules of Arbitration. The arbitrator’s decision shall be final and legally binding and judgment may be entered thereon.
Each party shall be responsible for its share of the arbitration fees in accordance with the applicable Rules of Arbitration. In the event a party fails to proceed with arbitration, unsuccessfully challenges the arbitrator’s award, or fails to comply with the arbitrator’s award, the other party is entitled to costs of suit, including a reasonable attorney’s fee for having to compel arbitration or defend or enforce the award. ”
Arbitration is a process whereby parties, to a contract, consent to an agreed set of dispute resolution terms which will govern the process of settling a dispute should a dispute arise. The concept of arbitration cannot be summated in this short discussion, however the topics of: 1) arbitration as a contract, 2) seperability, 3) arbitral regimes, and 4) enforceability, will be discussed.
The first thing one needs to understand is that arbitration is a contract, so all the binding protections afforded to a contract are now enforceable to make sure you comply with the arbitral method. The, albeit vague, definition of a contract is an enforceable promise to perform the terms of the agreement. The power of arbitration falls into the fact that the party contracted to the terms of this dispute settlement process.
For example, Justin bought a new phone that came with a two-year contract. One of the clauses in the contract was an arbitration clause. Should any dispute arise, Justin will have to submit to arbitration for the resolution.
My second topic is separability. The definition of separability, is that an arbitration clause is deemed to be separate and apart from the substantive contract. The purpose of this clause is to render the arbitration clause enforceable since it is usually the terms of the contract that are at issue.
For example, Justin bought a new cell phone that came with a two-year contract. A year into the term of the contract, the cell phone company begins charging him a new service fee, the system access fee. He would like to challenge this under the terms of the contract that he signed. Little did he know, that within the contract there was also an arbitration clause. Even though the terms of the contract are at issue, he still has to submit to arbitration.
There are several different arbitral regimes around the world that have a set of procedures to govern the arbitration process. The definition of an arbitral regime is a system of rules that guide and set the arbitration process. There are several arbitral regimes worldwide, such as the AAA, SIAC (Singapore), etc. In the United States there is the American Arbitration Association. The AAA is a regime acting like many other arbitral regimes, is the authority, if contracted to the authority, for a dispute being resolved through arbitration.
For example, in Justin’s contract with his cellular carrier, the cellular carrier has included into the arbitration clause that should a dispute arise, the AAA shall procedurally regulate it. The AAA will appoint the arbitrator, and will set the procedure and timeline that should be adhered to.
My fourth topic is enforceability. The definition of enforceability, in the context of arbitration, is that a party to a dispute will be forced to pay the arbitral award granted by the arbitrator with very little judicial review. The rational is that the party consented to the arbitral clause held within the contract, and the decision from the arbitrator was a contractual term that, generally, cannot be avoided by the court.
For example, when Justin goes to arbitration against his cell phone carrier, and he gets an award from the arbitrator saying that the cell phone company was not allowed to charge this new systems access fee, he will then take his award to a court so that they can enforce it. The court will enforce the arbitral award, generally, without even looking at the dispute against the cell phone carrier.
Arbitration is a vast and complex area to practice. It holds the potential to effective, efficient and cheaper dispute resolution processes. Personally I am very much interested in international arbitration so it offers many expedient solutions to real business problems that arise on a daily basis.
 Please note that this sample was taken from the United States Arbitration and Mediation website and may be found at: http://www.usam.com/services/arb_clause.shtml
What is a Trademark?
The American definition of a trademark is “a word, name, symbol or device which is used in trade with goods to indicate the source of the goods and to distinguish them from the goods of others”. This means that as you are walking down the street and you see the golden arches you know that establishment is a McDonald’s and you know what to expect should you decide to go in. The golden arches are McDonald’s famous trademark, recognized worldwide.
Geographical indications are defined as “indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographic origin”. 
Why are trademarks important?
When you walk into an Armani or Hugo Boss retail store there is an expectation of quality in the material and to be up to date if not ahead of current fashion. Brand holders work hard and expend a lot on creating their trademark and maintaining them. Trademarks are an important function in the corporate and consumer realm. Branding allows the end consumer to save on searching time and creates an expectation of quality.
Trademarks carries two different functions being the “source” and “quality”. The source function of a trademark carries more clout than just the geographical origin of the trademark. Consumers view a product to be genuine from the wholesaler, retailer or servicing company that they have been able to rely on in the past. The authorized distributor has in reality become the “sponsor” of the trademarked good.
Next time you’re shopping, try to take notice of what you pick up as a result of a brand or trademark.
 United States Patent and Trademark Office. 2010. http://www.uspto.gov/web/offices/pac/doc/general/whatis.htm
 This term comes from the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). The TRIPs Agreement essentially sets forth the standards to regulate international intellectual property protections and enforcement and sets forth-international minimum standards for the protection of geographical indications.
The idea of parallel imports is one of much controversy. Almost no other issue has permeated international business law as that of “grey goods” and “parallel imports”. Imagine, that a big clothing retailer aka Big Jeans sells its jeans in a developed market like the United States for $100 a unit, and sells its jeans in an undeveloped market for $30 a unit. What happens when entrepreneurial distributors decide to buy the jeans in the undeveloped market for the reduced rate, and then sell them in the developed market for a higher rate, but one lower than the price of Big Jeans, around $70? This problem may arise with almost any good that is sold worldwide.
This distributor is seen as utilizing unauthorized distribution channels, but not illegal channels, in parallel to the manufacturer. This practice plagues every single international industry. The reason for international problems is because of the lack of international consensus on the doctrine. The Americans have the first sale doctrine, the Europeans have the exhaustion principles, but Japan seems to have the opposite approach that forbids restrictions on resale laws.
Think about a game of poker. It’s pretty tough trying to account for; all the cards in a deck, the possible hands that each player may have and mannerisms of the dealer while abiding by the rules of the table.
Now imagine, that poker game represents doing business inside your own country. The one deck of cards represents economic and political variables impacting your business. The players represent your competition or potential business partners. The dealer represents the bank or financial intuitions that your money passes through. The rules of the table represent the law of the country that you’re bound by. Here, you have to worry about variables related only to your market, but at least you have one table, or one law, to worry about and you can hedge your risk pretty easily.
Now, add; several more decks, a few new players, which you have never seen before, many more dealers, and a few new tables. Think of this as doing business at the international level. Here, the decks represent many markets and political climates that you have to worry about adding their own economic and political variables. The players represent new and foreign competition or potential business partners. The dealers represent the numerous banks or financing institutions that you’re money has to pass through. The tables represent new laws you must abide by. Now go ahead and play.
Sounds risky, right? If you are anything like me, at this point, you’re either folding or hesitantly calling each round. There are just too many factors and variables to navigate.
The international business transaction industry of legal counsels is here to help businesses limit or mitigate their risk as much as possible. All cross border transactions require discussion between the legal counsels of each state that businesses are conducting business in.
For example, in English based legal systems such as Australia, Canada, United Kingdom and the United States, penalty clauses are void, but in states such as South Africa, banks and businesses are accustomed to seeing penalty clauses in finance agreements and commercial agreements which impose liquidated penalties in default scenarios. This is a tidbit I was able to pluck from my brain with ease, imagine how a legal counsel could help by proffering a little more effort.
Most of the legal risk mitigation techniques available in international contracts are similar, regardless of jurisdiction. Such as, choosing your business partner with care is one of the first steps and most crucial steps in protecting yourself. To do this, you must understand your business and the other’s business and how they both fit together. Finding how your business models fit may also lead to discovery of how you and your partner’s business do not fit, thus, exposing some possible areas to negotiate.
It is amazing how often in sale or purchase transactions, issues associated with allocation of risk and warranties are not fleshed out and negotiated. While transactions occur in such a numerous quantity each day, business owners may be weary of skeptical attorneys who wish to flesh these issues out, but the truth at the end of the day is, if you are that business owner who did not allow your counsel to negotiate these terms to your contract, you can be left holding the bag in the end.
The legal risk of international transactions can be substantially mitigated by lawyers who have the international political clout, understanding of international trade, understanding of conflict of laws, and perhaps most importantly, the savvy to construct a contract geared to the specific needs of the deal while being able to build in an amicable dispute resolution mechanism.
So for all of you who actually do like my analogy, you’re probably wondering how the lawyer fits into the game of poker? Normally, in a poker game, you do not ask the person what hand he has, nor would honestly he tell you.
Imagine a lawyer behind some of the poker players (the reality is that there will always be a business that believes it does not need a lawyer). Each lawyer is discussing ways through or around the rules imposed by the various tables (laws of each country), potentially selecting the optimal table to play on because of the rules that conform to the purpose of the deal. While they look at each card (economic and political variables) assessing the impact of that card on your hand as it relates to the hands of other players (the deal). Furthermore, the lawyers can vet the tables for the dealers (banks), because each dealer may deal differently or require a different tip amount.
Here the lawyers are able to talk freely among one another, thereby getting a feel for which players are cooperative (conducive for business relations), and which are not. Furthermore they will find the best table to play on and the dealer that requires the smallest tip. The result is that, with the lawyers who came to an agreement, you and your new business partners are able to work together and beat the other players who are still competing amongst themselves instead of collaborating.
For all of you poker enthusiasts, keep in mind, I’m not much of a poker player, I just used this as an analogy for the complexities and risks involved in international business transactions.
There is no doubt that lately these technology giants like Apple, Google, Yahoo, and such have been marred by lawsuits, but if you are anything like me, you want to know what the “meat” of the law is that these giants are being sued on. After several arduous “Google” searches I finally found a copy of a complaint from Freeman v Apple, a lawsuit just filed against apple much like the allegations in Lalo v Apple.
There are a total of seven counts, being: 1) Computer and Abuse Act, 18 U.S.C. § 1030, 2) Consumer Legal Remedies Act Cal. Civ. Code § 1750, ET SEQ, 3) California’s Computer Crime Law Cal. Penal Code § 502, 4) Unfair Competition Law, Cal. Bus. Prof. Code § 17200, 5) Trespass to Personal Property, 6) Common Law Conversion, and 7) Unjust Enrichment/Restitution.
Count 1. The plaintiff’s are alleging that Apple and the named Defendants intentionally, knowingly and recklessly accessed and transmitted the Plaintiff’s UDID and location data the Defendants have accessed the Plaintiff’s computers in the course of interstate commerce without the authorization as required by 18 U.S.C. § (a)(2)(C).
Here, the Plaintiffs are seeking recovery for their loss, and injunctive relief to prevent future harm.
Count 2. Under the 2nd Count the plaintiff’s are alleging that Apple and the other named Defendants were engaged in and are still engaged in unfair and deceptive acts and practices in the course of transactions with the Plaintiffs. Further, that those transactions are intended to have resulted in the sales of services to consumers.
Here the Plaintiffs are seeking only injunctive relief, at least for now.
Count 3. Here the Plaintiffs are using the California Computer Crime Law, pursuant to California Penal Code § 502, which regulates “tampering, interference, damage, and unauthorized access to lawfully created computer data and computer systems.” The Plaintiffs are alleging that the Defendants violated this by knowingly accessing, copying, using, made use of, interfering, and/or altering, data belonging to Plaintiffs. Here, the Plaintiffs are seeking compensatory damages; the amount will be proven at trial.
Count 4. The Plaintiffs are using the California Business and Professions Code § 17200 to allege that the Defendants’ conduct is unfair, unlawful and fraudulent. Furthermore, pursuant to section 17500, which prohibits false advertising, the Plaintiffs are alleging that the Defendants statements were intended to induce consumers to enter into obligations relating to such services.
Count 5. The Plaintiff’s pursuant to idea of dominion and control are alleging that when the UDID and location data was obtained without the knowledge or consent, the Defendants improperly exercised dominion and control over the Plaintiff’s personal property aka their iPhones and iPads.
Count 6. The Plaintiff’s pursuant to the doctrine of common law conversion are alleging that the Defendans have taken the Plaintiffs property in the form of information about them that is private and personal.
Count 7. The Plaintiff’s pursuant to the doctrine of restitution and unjust enrichment are alleging that the Defendants have improperly and illegally profited from the obtainment and/or sale of the Plaintiffs’ personal, private data.
After everything has been said and done, in my personal opinion, this will most likely be settled even though it deserves to lose at trial. My conclusion is meaningless, but is it without merit?
Is our system too litigious? It may be an attorney’s dream come true or a mockery of our judicial system. It has come to my attention that when a lawsuit lands on the desk of an attorney, if s/he can’t find a solution to the client’s problem because there really may not be a problem, the attorney finds some technical error and tries to win the case. Some may call that impressive and some may call it underhanded. Either way, would we really call this fair? Isn’t our legal system created so we can help those that can’t help themselves? Fight for those that have been harmed and defend those that have been unjustly accused of causing harm? How can an attorney differentiate?
It all boils down to the “reasonable prudent person”. For example, a current case that displays my perplexed perspective is the case of Yaz and Yasmin oral contraceptive. It’s a birth control pill. The FDA has yet to pull the drug off the shelves. Key players are Bayer HealthCare Pharmaceuticals and several hundred contraceptive users. The contraceptive warns against many harmful side effects; however this suit in particular is focused on one specific side effect. Blood clotting. The issue is, the warnings for the contraceptive warned against forming blood clots, however it said nothing of contributing to a blood clotting condition a patient may already have had before the use of the drug.
In tort law, we look to the definition of warning defect, which is a failure to warn or an inadequate warning. However, for obvious dangers, most courts have found there is no duty to warn of obvious risks that are generally known because the warning will not reduce the risk and may diminish significance of warnings about non-obvious risks. This is determined by the reasonable prudent person.
In the case of Yaz and Yasmin oral contraceptive, wouldn’t the reasonable prudent person be weary of ingesting a drug that is known to cause blood clotting if that is a condition the reasonable prudent person already suffers from? Even if it doesn’t say contributing to blood clotting, especially if it can be life threatening? What is the intelligence level of the reasonable prudent person? Unfortunately, as advanced as our legal system is, we are still unable to define that, which brings me back to my original question– is our system too litigious?
Justin G. Persaud