Thomson Reuters Practice Point, a new tool that integrates the legal resources attorneys need to advise, negotiate and structure business dealings, is hosting a series of free 30-minute webinars providing an overview of current in-house legal trends.

June 15: Practice Point Exclusive Sneak Peek: Labor and Employment, 1:30 p.m. CT, featuring Kate Bally, Co-Director of Practical Law’s Labor and Employment service.

June 16: Practice Point Exclusive Sneak Peek: Capital Markets & Corporate Governance, 1:30 p.m. CT, featuring Chris Roehrig, Senior Legal Editor of Practical Law’s Capital Markets & Corporate Governance service.

June 22: Practice Point Exclusive Sneak Peek: Intellectual Property & Technology, 1:30 p.m. CT, featuring Rita Berardino, Senior Legal Editor of Practical Law’s Intellectual Property & Technology service.

June 23: Practice Point Exclusive Sneak Peek: Commercial Transactions, 1:30 p.m. CT, Featuring Laszlo Serester, Senior Legal Editor of Practical Law’s Commercial Transactions service.

Register for the webinars.

When negotiating and drafting a contract on behalf of a business, one of the most important considerations is whether it will create personal liability for the individual signing on behalf of the business, as illustrated by a recent decision from Florida’s Third District Court of Appeal, Frieri v. Capital Investment Services, Inc., writes Adam B. Edgecombe of Jimerson & Cobb, P.A.

“Frieri involved an investor who contributed $6 million to a business trust that he formed with the president of a small corporation, with each of them owning 50% of the trust,” Edgecombe explains. “In exchange for the investor’s contribution, the president of the corporation was to transfer 78% of the corporate stock to the trust. However, after the investor paid over his $6 million contribution, the president of the corporation never transferred the stock.”

The investor sued both the president of the corporation and the corporation, alleging that the defendants had breached the stock-purchase agreement. The trial court agreed, entering a final verdict in the amount of $7,369,222.00 against the corporation and the president individually. On appeal, the president and the corporation argued there was no basis for his personal liability.

“The Third District disagreed with the president’s position, finding that, when two businesses contract, the entirety of the document must be analyzed to determine whether the parties intend to bind the businesses alone or whether the obligation extends to the signing agents in their individual capacities,” Edgecombe writes.

Read the article.

Platinum Equity and Stone Canyon Industries, LLC announced it has signed a definitive agreement for Platinum Equity to sell BWAY Corp. to Stone Canyon Industries LLC for $2.4 billion.

BWAY is a North American manufacturer of rigid metal and plastic containers used to package industrial, bulk food and retail goods. The sale is subject to regulatory approval and customary closing conditions, and is expected to close in August 2016.

Latham & Watkins LLP represented Platinum Equity in the transaction with a corporate deal led by Washington, D.C. partner David Brown and associates Daniel Kecman, Mariclaire Petty and Alexander Sevald. Advice was also provided on tax matters by New York partner Lisa Watts and associate Matthew Dewitz; on intellectual property matters by Washington, D.C. counsel Kieran Dickinson and Los Angeles associate Aryeh Richmond; on employee benefits matters by Washington, D.C. partner David Della Rocca and associates Matthew Conway and Nikhil Kumar; on environmental matters by Washington, D.C. partner James Barrett; on real estate matters by Chicago partner David Shapiro and associate Patrick Maloney; on government contracts matters by Washington, D.C. counsel Kyle Jefcoat; on export controls and sanctions matters by Washington, D.C. partner William McGlone and on debt financing matters by Washington, D.C. partners Scott Forchheimer, Patrick Shannon and Shagufa Hossain.

Platinum Equity acquired BWAY in 2012. In January 2013 BWAY acquired Ropak, a complementary producer of rigid plastic containers.

“BWAY’s success is a testament to strong collaboration with Ken Roessler and his management team and the value of truly integrating M&A with operations at every level of the investment,” said Platinum Equity Partner Louis Samson.  “The company is well positioned for continued success going forward.”

Samson said that BWAY’s EBITDA grew approximately 45% from 2012 to 2016 thanks to a combination of operational improvements and growth through acquisition.

“We have had a great partnership with Platinum Equity and we are proud of everything our teams have accomplished together,” said BWAY CEO Ken Roessler. “Today we have a fundamentally sound business with great momentum, and we are poised for continued growth and long-term profitability as we transition to Stone Canyon’s ownership.”

“BWAY’s success is a testament to strong collaboration with Ken Roessler and his management team and the value of truly integrating M&A with operations at every level of the investment. The company is well positioned for continued success going forward,” said Platinum Equity Partner Louis Samson.

Jim Fordyce, co-CEO of Stone Canyon Industries, said his firm is excited about BWAY’s potential and looks forward to working with Roessler and the management team.

“BWAY is a world class company with a great leadership team, dedicated employees and a very bright future,” said Fordyce.  “We look forward to working with Ken to help BWAY continue delivering on its strategic and operational plan as the company takes the next step in its evolution.”

Goldman, Sachs & Co. is serving as financial advisor to Platinum Equity and Latham and Watkins is serving as Platinum Equity’s legal counsel. BMO Capital Markets is serving as financial advisor to Stone Canyon Industries and Gibson, Dunn & Crutcher is serving as its legal counsel.

Wal-Mart Stores Inc. would have to spend an additional $4.95 billion if it were to raise the minimum wage for its hourly employees in the United States to $15 per hour from the current $10 per hour, according to an estimate by the UC Berkeley Center for Labor Research, Reuters is reporting.

Study found that 1.1 million of the big retailer’s 1.5 million employees are paid hourly wages. An estimated 979,000 employees would get an increase if Wal-Mart went to $15 per hour.

Labor groups have been demanding a $15 minimum wage for the company’s workers, and the “Fight for Fifteen” movement has been a topic of discussion during the U.S. presidential campaign, reports Nandita Bose.

Read the article.

A federal judge has shot down a motion by Oracle to overturn a jury verdict that found Google’s use of Java application program interfaces (APIs) in Android was “fair use.” The verdict also rejected Oracle’s claim that the mobile system infringed its copyrights.

Ars Technica reports that U.S. District Judge William Alsup’s stinging rebuke rejected Oracle’s arguments on every front.

“The final jury charge culminated an exhaustive and iterative process of proposals by the judge followed by critiques by counsel,” Alsup wrote.

Read the article.

Practical Law will present a free 75-minute webinar in which Matthew A. Karlyn, partner with Foley & Lardner LLP and co-author of “A Guide to IT Contracting: Checklists, Tools and Techniques,” to discuss practice tips on data privacy and security provisions of SaaS and other cloud service agreements, including a discussion of recent trends and issues.

The webinar will be Wednesday, June 15, at 1 p.m. EDT.

Data privacy and security are key issues for businesses who seek to upload their information onto the cloud, the company says on its website. Customers need assurance that the software as a service (SaaS) or other cloud service provider will maintain effective policies and practices to safeguard the confidentiality and security of their information.

In seeking this assurance, it is not enough for the customer to conduct due diligence of the provider’s practices because those practices, like the laws and regulations that govern them, can be a fast-moving target. Only by the skillful drafting of the customer’s cloud service agreement can counsel aim to ensure that the customer’s confidential, trade secret, and personal information stay well protected and that both the service provider and customer remain compliant with data privacy and security laws.

A key case is the pending replacement of the EU-US safe harbor framework with stringent requirements of a new, EU-US Privacy Shield for the handling of personal data. It is crucial to businesses that their cloud service agreements include terms broad enough to anticipate such legal developments, technological advances, and changes in standards and practices.

In this program, attendees will:

• Learn how to avoid common errors in data security, privacy, and disaster recovery provisions and provide for proper data protection both during and after the term of the cloud agreement.
• Explore effective remedies for breaches of data privacy and security.
• Consider the requirements of the EU-US Privacy Shield and its anticipated impact on cloud service customers and providers and the terms of their cloud service agreements.

A short Q&A session will follow.

Presenters:

• Matt Karlyn, Co-Chair Technology Industry Team, Foley & Lardner
• Paul Connuck, Senior Legal Editor, Intellectual Property & Technology

CLE credit is available for: Arizona, California, Colorado, Georgia, Hawaii, Illinois, Indiana, Mississippi, Missouri, New Hampshire, New Jersey, New York, North Carolina, Oklahoma, Pennsylvania, Vermont, Washington. CLE credit is being sought for: Louisiana, Minnesota, Oregon, Tennessee, Texas, Virginia CLE can be self-applied for in: Florida.

Register for the webinar.

While subscription services (sometimes referred to as auto-renewal programs) can be lucrative, companies should be mindful of the applicable laws to avoid the costs of fighting off the type of lawsuits that led to Sirius XM Radio settling an auto-renewal case for $3.8 million and Angie’s List settling a similar suit for $2.8 million, warn Andrew Klungness and Aaron Ginsburg on Bryan Cave’s Retail Law blog.

They discuss the the three main categories that various states use to regulate automatic renewal programs as they relate to contracts.

“Given the significant penalties and potential litigation costs associated with non-compliance, companies should work with experienced professionals to maximize compliance without adversely impacting the business,” the article says.

Read the article.

Anyone who has purchased a product online or downloaded software for a computer, tablet or mobile device has likely encountered “browsewrap” and “clickwrap” agreements, write Carolyn S. Toto and Kimberly Buffington on Pillsbury Winthrop Shaw Pittman‘s Social Media & Games Law Blog.

In the article, they write, “Such agreements are the bread and butter of companies that sell or license products or provide services via websites or web applications. Clickwrap agreements require a user to affirmatively click a button to affirm his or her assent to the agreement’s terms, whereas with a browsewrap agreement, the user’s assent to the agreement’s terms is inferred from the user’s use of the website. (Often, the terms of a browsewrap agreement are accessible from a hyperlink placed on one or more webpages of the company’s website.)”

The discuss a few recent cases that have addressed what exactly constitutes a valid, legally binding and enforceable contract.

Read the article.

A blog post on the Cooley M&A site discusses the “option to acquire” structure, which addresses both the needs of a target company to develop a product or business on the one hand and the desire by a buyer to identify growth opportunities on the other.

“In an option to acquire transaction, the buyer agrees to pay the target an option fee in exchange for the exclusive option to acquire the target for a fixed price during an option period subject to certain conditions and agreements that are set forth in a fully negotiated and executed acquisition agreement,” the post explains. “As part of the arrangement, the parties may also enter into a collaboration agreement covering certain development activities of the target during the option period, with the achievement of the developments functioning as milestones to the buyer’s ability to exercise its option to buy. The collaboration agreement is usually separate from the option and acquisition agreement. Sometimes, the specific terms of the option may also be set forth in a standalone option agreement that is separate from the acquisition agreement.”

While options to acquire are fairly common in the medical device and life sciences industries, the option also provides attractive opportunities for funds and companies in other industries as well, as a way to get an inside track on new technology, the firm writes.

Read the article.

A federal judge found a pattern of misconduct by Merck & Co., including lying under oath and other unethical practices, freeing Gilead Sciences Inc from paying any damages for infringing Merck’s patents with its lucrative treatments for hepatitis C, Sovaldi and Harvoni, according to a Reuters report.

The ruling follows a March 24 jury verdict that ordered Gilead to pay $200 million in damages, based on findings that Merck’s patents were valid.

In this week’s ruling, U.S. District Judge Beth Labson Freeman said Merck deceptively used confidential information from Pharmasset, Inc, a company Gilead bought in 2011.

“Freeman also said Merck cannot enforce the patents because Merck’s own lawyer gave inconsistent and untruthful testimony during the trial. ‘Merck’s acts are even more egregious because the main perpetrator of its misconduct was its attorney,’ she said,” reports Andrew Chung.

Read the article.

Contractual provisions for liquidated damages, indemnification, or other limitations on liability are a few of the most commonly used “damage control” tools, points out Theresa Y. Kananen for Arnall Golden Gregory LLP.

“In too many cases, however, drafting errors transform the very provisions intended to provide for clear-cut remedies, or clear-cut limitations on remedies, into sources of prolonged and expensive litigation,” she writes.

She lists and discusses three of the most common pitfalls to avoid when using one of these “damage control” provisions in a contract, including liquidated vs. actual damages, indemnity clauses and conspicuous limitations.

Read the article.

The National Association of Corporate Directors’ 2016 edition of Governance Challenges combines guidance from five strategic content partners of the NACD with broad M&A expertise. The report addresses the importance of early board engagement in strategy, the need for proactive dialogue with all key stakeholders, and the imperative to balance short-term and long-term goals throughout the M&A process.

A complimentary copy of the report is available for download.

Boards can use this new resource to:

• identify “drive and drag” factors that can advance or delay transaction results;
• monitor key aspects of the due-diligence process before approving the deal;
• understand the tax implications of a prospective transaction;
• consider exposure to risk from antitrust liability, cybersecurity challenges, and environmental liability; and
• select and retain talent and adjust compensation arrangements during the leadership change.

Download the report.

An article in King & Spalding’s Energy Newsletter discusses some of the issues that are typically addressed in a unitization and unit operating agreement (UUOA) that may require particular attention in the context of a cross-border unitization. Authors are Philip Weems and Nina Howell.

“An oil or gas reservoir may straddle adjacent contract areas,” the authors explain. “Unitization is the process whereby the straddling reservoir is jointly developed by the interest owners in the adjacent contract groups.  Joint development of a straddling reservoir is usually more economical and efficient than separate developments by the adjacent contract groups.  A key principle of unitization is that the straddling reservoir is physically developed as though the boundary between the contract areas does not exist.”

They advise that in a cross-border unitization, additional scrutiny may be necessary due to the complexities and limitations that arise due the reservoir being subject to the jurisdiction of two governments.

Read the article.

Contract drafting is one of those subjects that just doesn’t get the attention it deserves, write Edward J. Hansen and Christopher C. Archer of Morgan Lewis, in the firm’s Sourcing@MorganLewis blog.

“Contracts for complex sourcing deals are problematically big and often written in a style that doesn’t speak to the people who should be reading them,” they write. “The language may be great if the reader is a judge, but there is a very small probability that a judge will ever see the contract. So, the challenge is to write a contract that can work for a judge but that primarily works for a business user.”

They offer some of their favorite tips for drafting a readable contract.

Read the article.

The outrage following last week’s revelation that Silicon Valley billionaire Peter Thiel had funded Hulk Hogan’s lawsuit against Gawker Media LLC wasn’t just about a rich guy throwing his money around; it was about a rich guy secretly throwing his money around, writes Joshua Brustein for Bloomberg Technology.

The information about Thiel’s financial involvement was kept from the jurors in the case.

“It turns out that the jurors wouldn’t have cared, anyway,” Brustein writes. “At least, that is what two of them said when asked about Thiel’s involvement. In a conflict involving an aggrieved professional wrestler and a snarky gossip website, a plot twist involving a shadowy technology billionaire didn’t seem that shocking.”

Read the article.

Takata Corp. has confirmed it has hired investment bank Lazard Ltd. to lead a financial restructuring in an effort to resolve costs stemming from its recall of tens of millions of faulty air bags linked to at least 13 deaths and more than 100 injuries worldwide, Reuters is reporting.

“Takata’s board of directors in February named an outside steering committee to develop a comprehensive restructuring plan to address the financial and operational issues related to its recall of the defective inflators,” swrites David Shepardson. “Takata’s outside committee said it retained Lazard as it is ‘expeditiously seeking new investment for Takata,’ the committee said in a statement.”

Takata posted a net loss of $120 million for the year ended in March and could potentially could face billions of dollars in costs related to the recall.

Read the article.

Google won a jury verdict that ends Oracle’s claim to a $9 billion slice of the search giant’s Android phone business, reports The Washington Post.

“Oracle contended that Google needed a license to use its Java programming language to develop Android, the operating system in 80 percent of the world’s mobile devices,” writes Joel Rosenblatt. “Jurors in a federal court in San Francisco rejected that argument Thursday and concluded that Google made fair use of the code under copyright law.”

Stakes were high for Google. A loss could have given more weight to software copyrights and to spur litigation to protect those added rights. “Oracle — which started the trial at an advantage with the judge explaining that it had already been established that Google had infringed Oracle’s copyrights — plans to appeal, although legal experts said overturning a jury verdict will be difficult,” according to the report.

Read the article.

Photo by Kārlis Dambrāns

Huawei Technologies sued Samsung Electronics on claims of infringement of smartphone patents, the Chinese firm’s first intellectual property challenge against the world’s top mobile maker, reports Reuters.

“Huawei has filed lawsuits in the United States and China seeking compensation for what it said was unlicensed use of fourth-generation (4G) cellular communications technology, operating systems and user interface software in Samsung phones,” according to the report.”

“The lawsuit marks a reversal of roles in China where firms have often been on the receiving end of patent infringement disputes. In smartphones, makers have grown rapidly in recent years but different intellectual property laws outside of China have slowed overseas expansion,” writes Yimou Lee and Anne Marie Roantree.

Read the article.

The Associated Press is reporting that Volkswagen and attorneys for vehicle owners affected by the company’s emissions cheating scandal are on target to meet a June deadline for a final settlement proposal, a federal judge said Tuesday.

A federal judge in San Francisco said the parties have made substantial progress in reaching a deal for that could affect more than 480,000 owners of polluting Volkswagens in the U.S.

“Many questions remain unanswered, including how much money owners can expect in a buyback and how much additional compensation beyond repairs and buybacks they’ll receive,” according to the report.

Read the article.