Tolling agreements are a common feature of the energy industry. Through these agreements, a buyer will supply fuel to an electric generator and, in return, the generator will provide power back to the buyer, according to an article posted on the website of Hogan Lovells.

But a court recent ruled that such a tolling agreement, when entered into between companies that intended to merge, violated the Hart-Scott-Rodino Antitrust Improvements Act of 1976, leading to the imposition of significant financial penalties against the buyer.

“Parties that have or may have an interest in acquiring the other party to the agreement must be careful to avoid assuming beneficial ownership of the target before complying with the HSR Act’s reporting requirements if HSR notification would be required,” the article says. “Failure to do so may result in the tolling agreement being construed as evidence of gun-jumping and the acquiring person being subject to significant penalties of up to $40,654 per day for noncompliance.”

Read the article.

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Dylan O. Adams, a senior patent attorney and author of “Patents Demystified: An Insider’s Guide to Protecting Ideas and Inventions,” presents an on-demand webinar on patent protection.

The complimentary 53-minute video is available at BrightTalk.com.

Adams has experience with U.S. and foreign patents in a wide variety of technology fields, including software, computer hardware and biotechnology.

This webinar explores which patent protection strategy best fits a company’s business goals, both short and long-term. It also covers best practices on how to work with patent attorneys to craft the strategy that fits current and future budget constraints, and how to leverage patent assets and derive the most value from them.

Watch the on-demand video.

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Management’s standard response when an employee says they’re leaving the company is to walk that worker out the door immediately. But James Pooley writes on Orrick, Herrington & Sutcliffe LLP‘s website that the standard approach could put confidential information at risk.

“When you first learn of a departure, you are engaged in triage with two parallel priorities: find out what’s going on, and lock down the evidence,” he advises. “In most circumstances that may give you time for an initial meeting to get some details and perhaps try to turn the situation around. But you also have to be ready immediately to take actions that guarantee you get control over your data.”

Pooley provides a detailed exit interview checklist that covers possession of data and any restrictive agreements that will govern the departing employee’s behavior in his new job.

Read the article.

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In a pun-laden opinion, the Eleventh Circuit Court of Appeals affirmed a district court’s ruling that the Kardashian sisters Kim, Kourtney and Khloe could not rely on the doctrine of equitable estoppel to compel plaintiff Kroma Makeup EU, LLC to arbitrate its claims, reports TheTMCA.com.

Those claims involved allegations of trademark infringement and tortious interference with contract.

As the court put it, “there is a wrinkle in this case:  the arbitration clause which the non-party to the agreement is seeking to enforce is explicitly limited to disputes between the parties.”

TheTMCA.com reports:

The Eleventh Circuit first clarified that although federal law generally governs arbitration agreements, the “issue of whether a non-signatory to an agreement can use an arbitration clause in that agreement to force a signatory to arbitrate a dispute between them is controlled by state law,” and that the parties “agree that Florida law controls on that issue.”

Read the article.

A federal judge blocked the $54 billion merger between health insurance giants Anthem and Cigna, saying the deal would increase prices and reduce competition, according to a report by The Washington Post.

Carolyn Y. Johnson reports that this ruling is the second recent court decision to uphold the Justice Department’s opposition to deals that would have consolidated the five largest insurers in the United States into three companies.

“The evidence has also shown that the merger is likely to result in higher prices, and that it will have other anticompetitive effects: it will eliminate the two firms’ vigorous competition against each other for national accounts, reduce the number of national carriers available to respond to solicitations in the future, and diminish the prospects for innovation in the market,” U.S. District Judge Amy Berman Jackson wrote in a 12-page order.

In the merger agreement, Anthem had agreed to pay Cigna a $1.85 billion termination fee if the deal is blocked because of regulatory interference.

Read the Washington Post article.

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It’s important for parties entering into any significant economic transaction to have written contracts. This is especially true for construction projects which are, by their nature, complicated, writes Jason T. Strickland for Ward and Smith, P.A.

A contract on a construction project sets forth the parties’ obligations to each other and determines how risks will be shared or divided on the project.

Strickland explains the value of having a written construction contract, rather than simply an oral agreement. Then he discusses risk shifting, parties to a construction contract, key elements of a construction contract, consistency, flow down and tiers, and industry forms.

Read the article.

Comprehensive due diligence review of any target company is imperative when determining whether to buy another company, writes Kimi Murakami for Piliero Mazza.

“Layer on the fact that the target company has government contracts then several unique issues must also be critically evaluated when performing due diligence. Failure to do so could result in a significant loss in value of the target – and its contracts – after the acquisition has closed. What follows is a list of certain key issues that should be analyzed when engaging in due diligence review of a government contractor,” she explains in an article in the firm’s PM Legal Minute blog.

The article covers subjects such as set-aside contracts, pending proposals, security clearance, import/export issues, oci issues, subcontracts, non-us buyer, and novation.

Read the article.

A federal jury awarded the former general counsel of BioRad Laboratories $8 million in back pay and damages — which will increase to $11 million — for whistleblower retaliation involving potential bribery in China, according to a Courthouse News article.

Sanford “Sandy” Wadler won $2.96 million for economic losses and $5 million in punitive damages. Because the Dodd-Frank Act allows double back pay damages for whistleblower retaliation, the back pay award will increase to $5.92 million, bringing the total to nearly $11 million, explains reporter Nicholas Iovino.

Wadler sued Hercules, California-based BioRad Laboratories and its CEO Norman Schwartz in May 2015. He alleged he was fired in June 2013 for reporting potential bribery in China, a violation of the Foreign Corrupt Practices Act.

David A. Nenni and Jessica L. Sussman of Jackson Lewis also wrote about the verdict in the firm’s Corporate Compliance and White Collar Advisor blog:

This case implicates a number of key issues confronting companies and their in-house legal teams, including:  (1) protections and scope of the attorney-client privilege; (2) what constitutes protected activity from an in-house attorney or compliance officer; (3) the importance of consistent and timely performance critiques; and (4) preparing adverse employment decisions to be scrutinized by a judge, jury, or arbitrator.  The case also highlights the existing split among federal courts regarding what constitutes a “whistleblower” under the DFA.

Read the Courthouse News article.

Read the Jackson Lewis blog item.

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A Washington lawyer at a prominent firm was arrested in a disguise while trying to sell a copy of a secret lawsuit involving a company that was under investigation by the U.S. Justice Department, Bloomberg Law is reporting.

Jeffrey Wertkin immediately lost his job with Akin Gump Strauss Hauer & Feld LLP after he was picked up Jan. 31 in the lobby of a hotel in Cupertino, California. The FBI said he believed he was about to collect $310,000 for selling the lawsuit.

Wertkin believed he would hand a copy of a complaint to an employee of the company, which was accused in the complaint by a whistle-blower of falsely billing the government, report Bloomberg’s Jef Feeley, David Voreacos and Joel Rosenblatt.

That employee turned out to be an FBI agent, according to arrest documents unsealed on Feb. 6.

Read the Bloomberg article.

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A family business’ significant commercial relationships are usually reflected in written agreements, writes Michael P. Connolly in Murtha Cullina LLP’s Family Business Perspectives blog. But who is authorized to sign those agreements and to bind the company to the terms?

“Typically, a company’s management will have actual authority to sign agreements,” Connolly explains. “However, the company may give the impression to third parties that other employees (for example, purchasing agents, account managers and IT personnel) that those employees have ‘apparent’ authority to sign contracts relating to their areas of responsibility and thus bind the company to agreements. It is therefore important for family business owners and management to clearly instruct their employees and agents – and to communicate to third parties – as to whether those employees or agents are authorized to sign contracts and other important documents on the company’s behalf.”

Connolly describes a recent court decision that highlights the confusion and potential for liability that can arise when an employee signs a document on a company’s behalf without express authority to do so.

Read the article.

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With international and domestic supply chain contracts, there is little or no room for error. according to an article posted by a team of lawyers at Foley & Lardner LLP.

“While some supply chain contracts incorporate negotiated provisions in the form of a letter agreement or long-term agreement, many supply chain contracts rely on standard purchase order terms and conditions. This can result in contracts of considerable value and corresponding high risk receiving  little attention from in-house or outside counsel,” they write.

They offer advice on how to manage supply chain contract risk, supply chain contracting in light of regulatory changes, and international contracting.

Read the article.

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Attorney Barbara Dunn O’Neal and Lance Ewing, executive vice president Global Risk Management & Client Services at Cotton Holdings Inc., recently discussed some of the basics of contract drafting when they spoke at a meeting of professional meeting planners.

MeetingsNet.com reported on their presentation, including a discussion of some of the basic terms used in contracts.

The speakers also discussed the importance of updating contracts and insurance related to meetings.

And they wrapped up with “the drone horror story.”

Read the article.

China employee non-compete agreements and provisions are an often-litigated area, writes Grace Yang in China Law Blog.

“Many employers (wrongly) assume that they cannot prevail in such a dispute because employees usually win,” she explains. “This belief is not only wrong, but also risky. It is wrong because Chinese courts do not automatically side with the employee; those rare employers that have done things the right way actually usually win. It is also risky because employers with this attitude and approach tend to do an even poorer job of making sure they have a well-crafted contract, complying with the law and preserving good evidence, which are keys to employer success in any employee dispute.”

She describes a case involving China employee non-competes and offers some key lessons to be learned.

Read the article.

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Uber CEO Travis Kalanick responded to an onslaught of criticism to his joining President Trump’s economic advisory council by resigning from the council on Thursday, reports The New York Times.

The criticism came both from people outside the company and from Uber employees, explains reporter Mike Issac.

First, the company took heat from the public after the company appeared to be profiting from business generated during New York protests of Trump’s immigration order. Then Kalanick had to face direct criticism from his employees, who wondered why he was willing to advise the president.

“Outside of the internal pressure, Uber faced other fallout from Mr. Kalanick’s stance. More than 200,000 customers had deleted their accounts,” Issac writes.

Read the Times article.

Hogan Lovells announced that Andrew Keller, a senior government official and former Deputy Assistant Secretary of State for Counter-threat Finance and Sanctions (TFS) in the State Department’s Bureau of Economic and Business Affairs (EB), will join the firm’s International Trade and Investment practice as a partner in its Washington, D.C. office.

As Deputy Assistant Secretary at the U.S. Department of State, Keller led the Department’s efforts on economic sanctions and counter-threat finance matters. Keller held this position at a critical time for the United States government. He played a key leadership role in developing and implementing the sanctions relief aspects of the nuclear agreement with Iran known as the Joint Comprehensive Plan of Action (JCPOA); coordinating with counterparts in Europe and Asia on Russia sanctions; and developing and implementing the easing of sanctions against Cuba, the firm said in a release.

The release continues:

With lead responsibility for outreach to the private sector, one of Andrew Keller’s primary functions at the State Department was to explain U.S. sanctions policies and regulations to industry in the United States and abroad, and to coordinate with European, Asian, and other counterparts on sanctions and counter-threat finance policy and implementation. Keller served as a primary liaison between the State Department and the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury, and the Bureau of Industry and Security (BIS) of the United States Department of Commerce, on economic sanctions and related export controls. In that capacity, he was responsible for the State Department’s foreign policy review of OFAC and BIS license applications.

At Hogan Lovells, Keller will concentrate his practice on sanctions, counter-threat finance, national security and export control regulatory, policy, legislative and enforcement matters.
“We are delighted that Andrew is joining our practice,” said Beth Peters, Co-Director of the firm’s International Trade and Investment Group. “He has had an unparalleled vantage point for viewing and influencing how sanctions regulations and policy are developed, interpreted, and implemented both in the U.S. and in foreign countries, and he will bring that unique perspective to strengthen the value of the counsel we provide to our clients on a global scale.”

“As the Trump administration’s position becomes clearer on a number of key sanctions programs, our clients must be ready for change and a potentially more aggressive approach to enforcement,” added Alice Valder Curran, Global head of the firm’s Government Regulatory practice. “Andrew’s background in sanctions and enforcement matters will be extremely valuable to our clients worldwide as they look for guidance and prepare for anticipated regulatory volatility and increased compliance risk, especially with respect to Iran, Russia, and Cuba.”

Before serving as Deputy Assistant Secretary, Keller served in senior positions at the State Department and on Capitol Hill. He twice served in the State Department’s Office of the Legal Adviser: as a Deputy Legal Adviser from 2013 to 2015 and as an Attorney-Adviser from 2002 to 2009. In that capacity, his work included leading priority initiatives on behalf of the Secretary of State, handling counterterrorism, law enforcement, intelligence, and other matters, and leading U.S. delegations in treaty negotiations.

From 2009-2013, he served as Deputy Chief Counsel and then Chief Counsel to the U.S. Senate Committee on Foreign Relations (SFRC). During that time, he provided strategic, policy and legal guidance to then-Chairman Senator John Kerry, other Senators, and the committee staff on the range of foreign policy, international trade and national security-related matters pending in the SFRC and the Senate.

“Hogan Lovells’ global client base and wide range of practices will provide the ideal platform for me,” said Keller. “I look forward to bringing my government agency experience, and expanding the firm’s international trade, sanctions regulatory, legislative and enforcement capabilities.”

Keller served as a law clerk to the Honorable Royal Furgeson, U.S. District Court for the Western District of Texas. He received a J.D., with honors, from the University of Texas School of Law and a B.A. from Swarthmore College.

The Internal Revenue Service’s Large Business and International division is taking a new approach to tax compliance, with a series of 13 campaigns aimed at cracking down on tax evasion, reports Accounting Today.

Reporter Michael Cohn writes that the IRS division is moving toward issue-based examinations and a compliance campaign process in which it decides which compliance issues present enough of a risk that they require a response.

Those responses, known as “treatment streams,” could include examinations and letters to achieve the IRS’s tax compliance objectives, leveraging IRS expertise in various compliance issues, Cohn explains.

Some of the areas considered will be tax credits for advanced energy projects, people who withdraw from or are denied entry to the Offshore Voluntary Disclosure Program, TV broadcasters and channels who claim film production tax credits for distributing shows produced by third parties, and micro captive insurance.

Read the Accounting Today article.

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A report on the website of Low,  Ball & Lynch discusses a case in which the California Court of Appeal addresses whether attorneys’ fees can be awarded when a plaintiff alleges both tort and contract causes of action and dismisses the entire complaint before trial.

In the case, Neeshat S. Khan v. Michael Shim, “The Court of Appeal concluded that when a plaintiff voluntarily dismisses an action involving both contract and tort claims, Civil Code § 1717(b)(2) does not preclude a defendant from recovering attorneys’ fees if the fee provision is broad enough to cover the tort claims.”

The article concludes that parties need to pay particular attention when drafting fee provisions when contract and tort claims may be brought together. “For cases with a fee provision, a liability analysis regarding the impact of attorneys’ fees should be assessed when determining whether to voluntarily dismiss a case,” in says.

Read the article.

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A survey report released by Baker McKenzie reveals it is critical to understand what parts of the cloud contract are negotiable and what is not, particularly in newer portions of the marketplace that have greater variance in solutions and contracting terms, the firm reports on it website.

“The survey report, now in its third year, highlights the top objectives, hesitations, and criteria that buyer respondents factored into their cloud procurement determinations,” the firm says. “These factors are almost identical to the responses from cloud providers, potentially indicating further convergence in the marketplace.”

“Our survey results indicate that there may be convergence in the more established parts of the cloud marketplace, such as Software-as-a-Service, but less so in others, such as Infrastructure-as-a-Service and integration with machine-to-machine/Internet of Things solutions,” said Peter R. George, a Partner in Baker McKenzie’s TMT Group.

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At least three apparel chains — Wet Seal, Eastern Mountain Sports and Bob’s Stores — are running short of cash and on the verge of filing for bankruptcy protection, according to a New York Post report.

The report by Lisa Fickenscher and Josh Kosman also says outdoor retailer Gander Mountain — some of whose vendors stopped talking orders — have hired financial adviser Lazard.

A regulatory filing indicated Wet Seal — owned by Versa Capital, a private equity firm — reported a poor holiday made it impossible to obtain new financing.

“Over the last several weeks, Versa tried unsuccessfully to sell both EMS and Bob’s, sources said,” according to the Post‘s report.

Read the Post‘s article.

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Black Duck Software will present its annual review of open source legal issues in a webinar, discussing the most significant legal developments related to open source software in 2016.

The complimentary event will be Wednesday, Feb. 1, at 11:30 a.m. Eastern time. Anyone unable to participate in the live webinar may register anytime to receive the recording for viewing when convenient.

Presenters will be Karen Copenhaver, Partner at Choate Hall & Stewart and Counsel for the Linux Foundation, and Mark Radcliffe, Partner at DLA Piper and General Counsel for the Open Source Initiative.

Some of the topics on the agenda are:

• Current litigation
• An open source security update
• Companies open sourcing their own code
• FCC banning open source in routers

Register for the webinar.

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