Mayhall Fondren Blaize

Baton Rouge Business & Commercial Law Blog

Recent business litigation has Apple and Qualcomm in hot dispute

The world of high-tech mobile devices involves putting a lot of proprietary information together to make a working unit suitable for mass marketing. This inevitably means that breach of contract and intellectual property disputes will arise during the course of a product's public life. In Louisiana, such disputes often appear in the dockets of the business litigation courts.

On perhaps the highest scale that such disputes arise, two well-known companies have jockeyed back and forth over these kinds of issues for several years. Apple Computer and chipmaker Qualcomm have been in and out of the courts arguing about their contractual  obligations to each other and the alleged breaches of proprietary obligations committed by each other. Apple began the recent volley of disputes back in January when it complained that Qualcomm was demanding unfair royalties.

Business litigation: Consumer class-action suits to be limited

Bankers and credit card lenders have long been protected from certain kinds of consumer class actions, both in Louisiana and nationwide. Generally, the courts have in the past enforced provisions in the consumer's contract with the lender that call for arbitration to resolve disputes and which prohibit the filing of class action lawsuits against the institution. In recent years, however, many consumers have challenged the right of banks and other institutions to control their remedies in the business litigation arena.

The main challenge to these clauses is the assertion that they are unconscionable. Consumers have claimed that they have no bargaining power to change the provisions and therefore the agreement is not an "arm's length" transaction that contains the mutual assent of both contracting parties. Usually, the arbitration provisions and class-action prohibitions are inserted in mass preprinted forms that are sent out with credit card approvals.

Business and commercial law firms guide mergers/acquisition

When a business in Louisiana contemplates a merger or acquisition it may be one of the most important actions that it has faced. In the context of the business and commercial law landscape, the transaction may have a great impact on its industry and the consuming public. That is why the choices, procedures and options selected by the company must be done under the guidance of experienced mergers and acquisitions attorneys from the beginning of the process through to the end.

The economic benefits to a participant in a merger or acquisition can be substantial, with a large influx of capital and a final entity that is bigger, stronger and more versatile than ever before. Often the acquisition of a smaller company or a division of a larger company is accomplished with the goal of expanding into the product line made and marketed by the smaller company or division. A great deal of planning and strategy must go into such a decision so that all future developments are familiar in advance.

Industry spokespersons question oil and gas law litigation

Representatives of the gas and oil industry in Louisiana are actively complaining that the state has become a haven for litigation due to its image of welcoming such lawsuits against oil and gas companies. The critics of the state's litigation system say that oil and gas law cases have clogged the state's courts and flattened the growth of the industry locally. They pin the blame on the governor, who they say is actively promoting and even soliciting such litigation.

The spokesperson for the Louisiana Oil and Gas Association has stated that part of the problem is set by the tone adopted by state leaders. He says that where the governor cannot solicit the parishes to cooperate, he makes it clear that he is going to do it himself. That industry spokesperson, Jordan Gleason, also asserted that the growth of oil and gas activity in Louisiana is stagnant when compared to the activity in other states around the country.

Business litigation financing is a growing investment industry

A surprisingly vibrant industry in Louisiana and nationwide involves the activity of investing in commercial litigation lawsuits. Although it has been generally considered unethical for outside investors to have an ongoing financial stake in the profits and losses of law firms, that principle has given way to an exception that allows for the outside funding of highly costly business litigation suits. Because the suits are expected to obtain substantial monetary recoveries, it arguably makes sense to allow for outside interests to invest through companies that specialize in such transactions.

That is especially true because the phenomenal cost of experts, studies, tests, data analyses, reporting, investigative fees and the like in complex cases make it difficult for law firms and clients to foot the total bill for funding the suit. The funding resources often come from hedge funds, private investors, credit funds and other financial investment entities. Whereas in the past these efforts focused on one case at a time, it is now possible to invest in a portfolio of cases chosen by the investment firm.

Avoid business and commercial law problems in the startup phase

Louisiana is known for its posh culinary culture, which makes it a prime food business location. Many entrepreneurial opportunities do not need brick and mortar housing since online businesses can be launched from anyplace with internet connectivity. Launching a business (whether small, large, digital or in person) is definitely no small matter, and there are several things to keep in mind to increase the chances of success and to avoid business and commercial law problems.

Choosing a business that aligns with the goals, available resources and personality of a particular prospective business owner is a key factor toward success. A person can dream, but if he or she doesn't have what it takes to bring a specific dream to fruition things are bound to falter or perhaps never make it out of the starting gate at all. In short, it's not always enough to find a need and fill it, but to make sure that the person spearheading the idea is the one who actually can fill the need.

Business litigation riddles top officers, shareholders of Uber

Lawsuits involving the owners of large business entities comprise a distinct area of litigation in Louisiana and other states. Shareholders often join together to sue the corporate entity that they assert is not being run in a proper or legal manner. In some instances, this kind of business litigation can get quite personal, as when major shareholders sue the CEO personally for mismanaging the company and/or regarding any number of fraud or concealment claims.

That is the kind of dynamic that is currently playing out within the upper echelons of Uber, the privately held corporate entity that created history by joining the digital world to the private ride-hailing industry. Travis Kalanick founded Uber and served as its chief executive officer since its founding just eight years ago. Various internal conflicts led to Kalanick's ouster as CEO of the company in June.

Business litigation includes conflicts over trademark intrusions

Louisiana, like all other states, gets to host a variety of business litigation claims. The litigants may be companies of all sizes, from struggling startups to massive, established pillars of an industry. In one recent business litigation case in another state, the giant candy-maker, Mars Inc., is facing a drawn-out trademark dispute with a small chocolate maker consisting of one person.

Mars started by suing the small-batch chocolatier, Syovata Edari, in a federal court for violation of a Mars trademark for the name CocoaVia, which is used for its brand nutritional supplements. The court dismissed that case summarily for lack of jurisdiction due to the defendant having done no business in that state. Edari, knowing however that the dispute was just ratcheting up, brought her own lawsuit against Mars in another state, requesting a federal judge to declare that the small startup does not infringe on Mars' CocoaVia trademark for its brand nutritional supplements by using its name, CocoVaa.

Patent infringement is a source of business litigation cases

Patent infringement litigation is a continuing source of significant business litigation cases in Louisiana and nationwide. A jury award and a court's ruling in a case from another state is an example of how recoveries in patent infringement cases can be compelling for the winning party. A medical instrument company received a $248.7 million award from a federal judge who decided to triple the jury's award due to willful and egregious infringement by the defendant company in this business litigation case.

The plaintiff, Stryker Corp., makes medical instruments, and owns a patent for a motorized squirt gun and suction device that is used to rinse and vacuum surgical sites during surgery. A competitor, Zimmer Biomet, engaged in willful and egregious infringement, including the failure to turn over evidence during trial, according to the U.S. District Court judge who presided over the conflict. The judge tripled the jury's $70 million verdict due to his findings of egregious violations by Zimmer.

Business litigation asserts fiduciary breach in stock selections

The Employee Retirement Income Security Act (ERISA) is a complex federal law that governs employee retirement plans nationwide, including in Louisiana. Oil and energy companies have the same potential as companies in other industries to be drawn into ERISA lawsuits, which can cover a wide array of business litigation issues. For example, an employee of the Marathon Petroleum Co. recently filed a class action lawsuit against the employer for putting the stock of Marathon Oil Corp. in its workers' retirement plan.

The plaintiff claims that the stock choice was "reckless" under any common sense view of a wise investment strategy. The requirement that stock choices for retirement plans be prudently selected is a mandate of ERISA. The lawsuit claims that the stock substantially underperformed the market, and that tens of millions of losses to the retirement plan were suffered. It is alleged that while stocks tracked on the Standard and Poor's 500 Index increased by about 80 percent in the past six years, Marathon Oil Corp. stock fell by 40 percent.