A recent decision in Perry Bartsch Jr., Constr. Co. v. Dept. of the Int., CBCA 4865, 5071 (December 8, 2016) helps contractors understand the scope and contours of a release of claims in a contract, reports Covington & Burling LLP in an article published in the firm’s Inside Government Contracts blog.

Chase Johnson and Justin Ganderson write that the case offers  important guidance about how to draft a release in an effective and narrow way, and the types of factors that the CBCA will consider when interpreting a release. Bartsch discusses the issue of whether an apparent global release of claims, contained in just one of many contract modifications, can extinguish all potential claims against the government.

The authors describe the case in detail and conclude with three points that contractors can consider to help ensure they are entering into a release that reflects their intention.

Read the article.

Johnson & Johnson won a ruling cutting almost in half a $1.04 billion jury award to patients who accused the company of hiding defects in its Pinnacle artificial hips that had to be surgically removed, reports Insurance Journal.

The jury’s finding that officials of J&J and its DePuy unit failed to properly warn doctors and patients about the artificial hips’ flaws is intact. But U.S. District Judge Ed Kinkeade in Dallas found the panel’s punitive-damage awards to six patients were excessive and should be reduced, according to court filings.

“J&J still faces almost 9,000 lawsuits accusing the company of illegally marketing the flawed metal-on-metal hips. J&J stopped selling the devices in 2013 after the U.S. Food and Drug Administration toughened artificial-hip regulations,” according to reporter Jef Feeley.

Read the Insurance Journal article.

The Hill is reporting that President-elect Donald Trump will not settle a lawsuit against celebrity chef Geoffrey Zakarian, a lawyer for the Trump Organization told a judge Tuesday.

Trump’s breach of contract alleges the celebrity chef backed out of plans to open a new restaurant in Trump International Hotel in Washington, D.C.

Zakarian’s withdrawal from the deal followed Trump’s claims that Mexican immigrants included criminals and rapists, reports Max Greenwood

Lawyers for the Trump Organization and for Zakarian’s company told the judge that the two parties had reached an impasse.

Read The Hill article.

Dentons has published the latest edition of its “Government Contracts Legislative and Regulatory Update,” a summary of the relevant changes that took place during November.

Highlights of the report include:

• Compromise version of the National Defense Authorization Act for FY 2017 nears completion
• FAR Council issues a final rule requiring representation of contractor greenhouse gas emission disclosures
• BIS issues a final rule to remove arms embargoes against certain countries
• DoD proposes a rule that would increase contractors’ evaluated bid prices by including allowable IR&D expenses

See the complete report.

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South Korea’s antitrust regulator fined Qualcomm Inc $854 million for what it called unfair business practices in patent licensing and modem chip sales, a decision the U.S. chipmaker said it will challenge in court, reports Reuters.

The Korea Fair Trade Commission ruled that Qualcomm abused its dominant market position and forced handset makers to pay royalties for an unnecessarily broad set of patents as part of sales of its modem chips, according to the report by Se Young Lee and Stephen Nellis.

The commission also claimed Qualcomm restricted competition by refusing or limiting licensing of its standard essential patents related to modem chips to rival chipmakers. Those action negatively affected the rivals’ sales and left their products vulnerable to lawsuits, according to the complaint.

Read the Reuters article.

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Nexsen Pruet attorneys Peter Santos, Christy Myatt, and David Garrett led a recent presentation on cross-border contracts to members of the Association of Corporate Counsel Research Triangle Area.

According to a post on JDSupra, the team explored how more than 10,000 North Carolina businesses export more than $31 billion worth of merchandise every year and support more than 164,000 jobs.

Some of the general topics included: common law and civil law countries are different; cultrual differences can lead to legal differences; and comparing U.S. contracts to other nations.

Read the presentation.

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In an article posted on Commercial Property Executive’s website, Elizabeth Levin of Manatt, Phelps & Phillips explores the implications of contracts and lease agreements pertaining to co-working and short term rental arrangements.

The central tenet of such agreements has not been tested in courts, Levin explains.

“Though the proprietors of co-working spaces and the owners of short-term rental properties have tried to make clear that these are not traditional landlord-tenant arrangements, that premise has not been truly tested, and the question of how a court would treat such an arrangement looms large over those drafting the contracts that govern these arrangements,” she writes.

Read the article.

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Kilpatrick Townsend & Stockton LLP has published a summary of key takeaways from a recent presentation on technology contract drafting and negotiating to the Charlotte Chapter of the Association of Corporate Counsel.

Josh Ganz, a Kilpatrick Townsend partner, and Michelle Tyde, counsel, made the presentation.

They discussed some of the basics, such as the scope of solution and services being provided, the level of performance quality to which the customer intends to hold the vendor, the level of risk the customer intends to shift to the vendor, and the price the customer will par for the solution or services.

Read the article.

General Counsel News and Zapproved have posted a complimentary on-demand webinar titled “Trends in Corporate E-Discovery Data Processing: Benchmark Survey Insights Revealed.”

An expert panel will explore the trends, and discuss the results of the 2017 benchmark survey.

The event provides insights and analysis on:

• In-sourcing vs. outsourcing e-discovery projects
• Satisfaction of process with an eye on factors such as time, cost and ease
• Technology trends affecting how in-house legal teams’ work evolves in 2017 and beyond

Corena Bahr

Speakers were Brad Harris, VP of Products, Zapproved, Inc.; Jack Thompson, Sr. Manager – eDiscovery & Legal Operations, Sanofi US; and Brad Ellis, Corporate VP of Legal Services, Physician Acquisitions, Asst General Counsel – Scripps Health.

The moderator was Corena Bahr, Webinar Consultant & Producer, YourWebinarGuru.

Brad Harris

Brad Harris has more than 30 years of experience in the high technology and enterprise software sectors, including assisting Fortune 1000 companies enhance their e-discovery preparedness through technology and process improvement. He is a frequent author and speaker on data preservation and e-discovery issues, including articles in National Law Journal, Corporate Counsel, Metropolitan Corporate Counsel and Information Management and presentations at leading industry events such as LegalTech New York. Prior to joining Zapproved, he led the development of electronic discovery readiness consulting efforts for Fios, Inc. from 2004 to 2009. He has held senior management positions at prominent public and privately held companies, including Hewlett-Packard, Tektronix and Merant.

Jack Thompson

Jack Thompson is a corporate eDiscovery and Legal Operations professional, specializing in the advancement of efficiency of legal technical operations and information governance.  From 2001 through 2014, He was legal operations manager at Purdue Pharma LP in Stamford, CT providing services and solutions to Purdue’s legal technology operations as well as leading the company’s legal analytics programs.  In 2014, Thompson relocated to Atlanta, GA to work as the legal technology manager for the UPS Corporate Legal Department, followed by working as an IT Business Services Manager for The Coca Cola Company’s global legal department providing technical expertise and process workflow implementations.  Heis currently working as the eDiscovery Manager and Legal Operations Lead for Sanofi US, located in Bridgewater, NJ.

Brad Ellis

Brad Ellis received both his Juris Doctorate and a Master of Law in Taxation from the University of San Diego School of Law. He has 25 years experience in healthcare law, and has worked at Scripps Health for the last 18 years. Prior to joining Scripps Health he was in private practice with a focus in healthcare and the banking industries. In addition to his legal duties, he is responsible for physician acquisition in a business role, and is also responsible for system-wide cyber-security for the Scripps Health system.

See the on-demand webinar.

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Bloomberg BNA will present a complimentary event to discuss the widespread corporate apathy towards antitrust risks — and why the business community needs a collective wake-up call.

The event will be at the Bloomberg LP offices at 731 Lexington Ave. in New York on Thursday, Jan. 19, 2017, 8-10 a.m.

Robins Kaplan LLP is an underwriter of the event, will carries up to 1.5 CLE credits.

“Companies rely on their sales personnel to drive business growth and generate new revenue, while the in-house compliance team must prevent, detect, and report actions that could draw scrutiny from antitrust enforcement agencies,” Bloomberg says on its website. “But what if those employees don’t even know what types of conduct is problematic under the antitrust laws?”

Bloomberg BNA and Robins Kaplan LLP conducted a survey of corporate sales and compliance professionals, and the results show a widespread lack of awareness of antitrust guidelines. Among the alarming findings: 25% of respondents are engaged in pricing activities that could rise to the level of illegality.

The event is designed for in-house counsel, compliance and business executives responsible for antitrust compliance.

Register for the event.

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Double-digit investment returns for little-known New York hedge fund Platinum Partners turned out to be too good to be true, according to federal prosecutors.

The New York Times reports that federal agents arrested Mark Nordlicht, a founder and the chief investment officer of Platinum, and six others on charges related to an alleged $1 billion fraud. It is one of the largest such fraud cases since Bernard L. Madoff’s investment firm unraveled in 2008.

“David Levy, the firm’s co-chief investment officer, was also among those arrested in the morning by agents in Texas, Manhattan and New Rochelle, a suburb of New York City,” writes reporter Alexandra Stevenson. “The men were charged with securities fraud and investment adviser fraud, according to an unsealed indictment filed in Federal District Court in Brooklyn. The Securities and Exchange Commission filed a parallel civil case.”

Read the NYT article.

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The San Diego Union-Tribune has been tracking the epic class action litigation against Donald Trump and his defunct Trump University, presenting an inside look at the legal maneuvers, the document leaks, the economic and emotional pain suffered by plaintiffs, and the eventual settlement with the future president of the United States.

Reporter Kristina Davis writes that the Trump University lawsuit landed at Zeldes Haeggquist & Eck, a small downtown San Diego law firm, the way so many cases do — with a phone call.

“The class-action lawsuit she filed against Donald Trump and his defunct Trump University became a centerpiece of the presidential campaign, featured in debates and on ‘Saturday Night Live.’ The end result: a $25 million settlement by the president-elect for thousands of former students 6½ years later,” writes Davis.

The attorneys’ big break came when some former Trump University employees leaked playbooks and scripts used by instructors.

Read the Union-Tribune article.

A new University of Iowa study demonstrates for the first time that financial shenanigans at companies decrease markedly in the years after truth tellers come forward with information about wrongdoing inside their operations, according to a report in The New York Times.

While government whistle-blower programs reward some individuals providing tips about corporate fraud, the costs for those people can be high, due to retaliation from their employers and their industry, writes Gretchen Morgenson. But companies subjected to whistle-blower investigations had less financial wrongdoing after being reported, the Iowa study found.

An analysis of the study found that the decrease lasted for at least two years, the period for which data had been collected for all the companies.

Read the NYT article.

The U.S. Supreme Court has agreed to consider putting sharp new limits on where patent-infringement lawsuits can be filed, accepting a case that may undercut patent owners’ ability to channel cases to favorable courts, reports Bloomberg.

The case involves an appeal by TC Heartland LLC, an Indiana-based maker of water flavorings that says a Kraft Heinz Co. unit shouldn’t be allowed to sue it in Delaware, reports Greg Stohr.

“A victory for Heartland would also bar most patent owners from pressing cases in the Eastern District of Texas, a patent-friendly jurisdiction where more than a third of all infringement suits are now filed,” Stohr explains. “Heartland’s appeal has support from a group of internet retailers and software companies, as well as the financial-services industry.”

Read the Bloomberg article.

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Reuters is reporting that a Washington judge has ordered Republican President-elect Donald Trump to give a deposition in a lawsuit against celebrity chef Jose Andres stemming from Trump’s disparaging remarks about Mexican immigrants.

Superior Court Judge Jennifer Di Toro on Wednesday directed Trump to testify in New York about Andres’ restaurant deal at Trump’s luxury Washington hotel. She set a time limit of seven hours on the event and ordered that it will take place during the first week of January.

“Trump is suing Andres for $10 million over breach of contract after Andres backed out of a plan to open a restaurant in the Trump International Hotel a few blocks from the White House,” writes Ian Simpson. Andres has said he canceled the project after Trump denounced Mexican immigrants in June 2015 as drug dealers and rapists.

Read the Reuters article.

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All parties involved with a construction contract need to explore which dispute resolution option is right for them and the project, and also ensure their contract terms are as clear as possible to avoid potential problems down the road, writes Kim Slowey in Construction Dive.

In her article, Slowey covers mediation, arbitration vs. litigation, and the importance of planning.

She quotes Margaret Greene, partner and leader of the construction planning practice group at Honigman Miller Schwartz and Cohn in Detroit, who counsels that perhaps the most important aspect of dispute resolution is to minimize the chance of conflict before disagreements rise to the level of “disputes” or “claims.”

Read the article.

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It is vital that a custom electronics integration or security company’s employees follow proper procedures to make sure the sales agreement is legally valid, but that may not be as straight-forward as it seems, writes Jason Knott for CEPro.

He quotes legal expert Ken Kirschenbaum of Kirschenbaum & Kirschenbaum when he writes that there is certain language related to signatures in an agreement that might appear to protect the company, but it actually can hurt.  For example, an agreement should not include a provision saying something like, “this contract is not valid unless signed by an officer of the Company.”

“Unfortunately courts do not always treat the [signature] omission as a two-way street,” Kirschenbaum tells Knott.

Read the article.

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Law firm partners have figured out how to increase profits per partner in the face of a declining demand. Firms, on the other hand, have an unsustainable model that remains largely intact even as clients are seeking options, writes Mark A. Cohen for Forbes.

He sees the explosive growth of in-house legal departments as possibly the biggest impact of the fiscal crisis.

“It’s easy to dismiss ‘insourcing’  legal work as labor arbitrage. But the more fundamental reason for in-house growth is law firms’ inability to deliver legal expertise and value — as well as to integrate technology and process in delivery. The value deficiency is linked to the traditional firm model and culture,” he writes.

He lists some of the reasons corporate legal departments now comprise about 45 percent of total legal spend.

Read the Forbes article.

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General Motors Co. said late Tuesday it has asked the U.S. Supreme Court to reverse a 2nd U.S. Circuit Court of Appeals decision that has opened GM to potentially billions of dollars in lawsuits related to pre-bankruptcy claims over defective ignition switches, reports The Detroit News.

Reporter Melissa Burden explains that GM was protected from some liabilities prior to its bankruptcy restructuring, but that protection did not extend to post-restructuring after 2009.

“A number of injury, wrongful death and economic loss lawsuits have been filed against GM over its faulty ignition switches and recall of nearly 2.6 million older vehicles in 2014,” she writes. “GM has admitted it knew of the defect for years but did not recall the cars for more than a decade and has paid fines to the National Highway Traffic Safety Administration and the Department of Justice.”

Read the Detroit News article.

By Robert J. Scott
Scott & Scott LLP

It has been said that software is the new oil. It fuels the information revolution. And in this metaphor, software audits are the meters that measure the flow—and extract maximum revenue for software makers. The auditors arrive on your company doorstep to “true up” your license and make sure you’re paying for all the software your employees are using. They probe and flag noncompliance.

Gartner Research Group has estimated that 68% of organizations will have their software assets audited in the next 12 months. This is up from 63% in 2013 and continues the upward trend of the recent past. In fact, every major software maker has embraced a strategy of revenue enhancement via software licensing audits, including IBM, Microsoft and Oracle.

Software audits are usually not a pleasant experience. The scripts that auditors use to discover illicit use of software (intentional or not) can themselves create problems in your IT infrastructure, consume valuable staff resources and money, and negatively impact your bottom line. Software publishers don’t typically telegraph their audits, which means an audit can trigger large unbudgeted payments for penalties and other hard and soft costs that impact financial performance. Following each unsuccessful audit, there’s a greater chance your company will be audited again and every audit is time-consuming, stressful and potentially damaging to your bottom line.

So what can be done?

First, companies can push back on software audits. Most businesses have more room to negotiate an audit than they realize. Second, you should have audit response policies in place to ensure that audits are dealt with in a systematic way rather than the typical “reactive mode.” Lastly, you should start thinking and treating your software licenses like fixed-assets that are carefully tracked and managed in your financial reports, which should lead to better outcomes.

More than six decades ago, business got on board the computer revolution. Now every company is racing into “digital transformation.” Technology is ubiquitous and software keeps it all running, across the globe. So it’s no wonder software audits have become so common-place for enterprises big and small. They are now a part of life, which means that now is the time for your business to put in place management practices to alleviate the stress and financial burden of software audits. Scott & Scott has defended over 500 software audits over the last ten years. If you are interested in benefiting from this experience, reach out to us and learn how we help client’s manage the risk of software audits.