LEGAL
Updated IP licensing antitrust guidelines
The FTC and DOJ recently proposed the first update to the Antitrust Guidelines for the Licensing of Intellectual Property (Guidelines) since 1995. The Guidelines state the agencies’ antitrust enforcement policy for licensing agreements that involve patents, copyrights, trade secrets, and know-how.
The antitrust agencies’ efforts to update the Guidelines demonstrate their continued importance in the analysis of potential antitrust issues that arise in intellectual property (IP) licenses. The proposed update to the Guidelines should not change the antitrust agencies’ enforcement approach to IP licensing or expand the Guidelines’ scope to other topics. Instead, the proposed update modernizes the Guidelines to reflect several important legal developments since 1995. Among other things, the proposed update:
Because of the Guidelines’ usefulness in predicting whether the FTC and DOJ will view a licensing practice as anticompetitive, counsel should carefully review the Guidelines before entering into licensing agreements.
For more information on how the antitrust laws apply to IP, see Practice Note, Antitrust Risks in Standard-Setting Organizations.
Consumer contracts and class action lawsuits
Companies that sell goods or services to consumers in New Jersey, whether in person, online, or through a mobile platform, should be aware of the recent rise in class actions under the state’s Truth-in-Consumer Contract, Warranty and Notice Act (TCCWNA). Plaintiffs’ attorneys are increasingly using this law to sue major companies and challenge their online terms and conditions.
The TCCWNA applies to any seller, lessor, creditor, lender, or bailee that offers products or services to consumers or prospective consumers in New Jersey. It prohibits parties from including in a written consumer warranty, notice, or sign any term that:
A consumer contract can violate the TCCWNA and expose a company to liability even if the consumer has not suffered any actual damages. A TCCWNA violation arises simply from the contract’s terms. For example, a contract can violate the law if it has provisions that:
Companies that offer written contracts to consumers in New Jersey should carefully review those contracts and ensure that their terms do not violate the TCCWNA.
For more information on contracting with consumers online, see Standard Documents, Terms and Conditions for Online Sales by Manufacturers to Consumers and Terms and Conditions for Online Sales by Retailers to Consumers.
Class arbitration waivers in employment agreements
A recent Second Circuit decision reminds counsel that the enforceability of an employee’s class action waiver of claims against their employer depends on where the waiver is to be enforced.
In Patterson v. Raymours Furniture Co., Inc., the Second Circuit re-affirmed its earlier ruling in Sutherland v. Ernst & Young that class action waivers are enforceable despite employees’ collective action rights under the National Labor Relations Act (NLRA). The Second Circuit is aligned with the Fifth, Eighth, and Eleventh Circuits in holding that these waivers are enforceable. The Seventh and Ninth Circuits (in agreement with rulings from the National Labor Relations Board) have held the opposite, citing employees’ rights under Section 7 of the NLRA to engage in “concerted activities for the purpose of ... mutual aid or protection.” This circuit split is the basis of multiple petitions for certiorari to the U.S. Supreme Court.
Counsel at companies with employees located in the Seventh and Ninth Circuits should be aware that challenges to class action and collective arbitration waivers may succeed at least until the Supreme Court resolves the circuit split.
For updates on cases related to class arbitration and class action waivers in state and federal courts, see Practice Note, Class Arbitration Waivers in the US: Case Tracker.
This look at the major issues on the horizon for corporate counsel comes from Practical Law – an online legal know-how service. View all the looming issues now – compliments of Practical Law The Journal, which covers the latest transactional and compliance topics that impact your practice. To gain access to more related know-how resources, please visit www.us.practicallaw.com.
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