October 1, 2010

Updates On Prior Postings (And Other Ramblings)

I’ve found a few minutes to make some notes updating prior posts here on the Alaska Law Blog.

(Hey, I’ve been distracted. Inspired by legal work I did for a couple of local entrepreneurs, I got to brainstorming ideas for possible new products for the unique Alaska market. Like one that consists of SAD lights with mudflap silhouettes stuck on them. Could be a seasonal big seller!)

H-P v. Hurd. I wrote about H-P’s bold lawsuit against its former CEO Mark Hurd just a few weeks ago. H-P apparently wasn’t all that serious about the case, seeing as how it was going to be a tough one to win anyway. H-P quickly settled with Hurd. Hurd has to give back some 350,000 H-P shares (worth maybe $14 million) that he received in his H-P severance package.

mudflap_librarian1227642487.jpgIt seems like kind of a strange result to me. H-P was supposedly worried about Hurd using its own confidential information in competing against it. One thing that might have blunted such action on Hurd’s part would be the knowledge that he owned a financially significant stake in the company. Giving back the stock just removes this governor on his conduct. Hurd can now use everything he knows about H-P against it, without being worried about impacting his own financial interests.

Arbitration. Quite a while back I posted a piece about how I dislike arbitration clauses in contracts. A recent example illustrates my point. In Lagstein v. Certain Underwriters at Lloyd's London, a doctor bought a $900,000 disability policy. When the insurer didn’t pay the disabled doctor, he pursued a recovery in arbitration as authorized under the policy. The arbitrators did not care for the Lloyd’s folks stiffing the doc. They awarded something like $6 million in favor of the doctor on his $900,000 policy.

The District Court judge said that he was “shocked” by the size of the award and he tried to chop it down. The Ninth Circuit held the District Court judge’s “shock” was irrelevant and re-instated the arbitrators’ award. The Nines said: “A district court may not vacate an arbitration award simply because of its size.” The Nines also noted that, even though some mistakes were made by the arbitrators in reading the disability policy, this wasn’t enough to warrant setting aside the award.

Now, I’m not saying that the Lloyd’s underwriters did not deserve a swift kick in the tuckus for refusing to honor their policy. I’m just pointing out that it is very, very hard to overturn an arbitration decision. Even in cases where the judge might think for good reason the arbitrators have gone too far, the court is going to feel compelled to uphold the result. So think twice (or thrice) before inserting an arbitration clause in any contract.

Toyota Motors v. Tabari. I wrote a piece about this opinion from Judge Kosinski, focusing on the treatment he gave Toyota’s lawyers, which was unusual to say the least. Some IP legal wonks have also chimed in on the decision, focusing more on the hardcore IP issues it presents. (IP = intellectual property) Their comments get into some nuances of the opinion. But I think the blog post of Santa Clara law prof Eric Goldman best summarizes the IP view of the decision:

This is a rich and multi-faceted opinion written in a confident and emphatic style…perhaps too emphatically, as the opinion swings around like a bull in a china shop, breezily overturning or sidestepping numerous 9th Circuit precedents on both domain names and nominative use.
His blog post is well worth reading to understand how the decision fits into the bigger scheme of things in IP law.

(Now, back to the Alaska product development. How about snow tires with retractable studs? I have no idea how to make it work -- electromagnets?? -- but this invention might keep the Seward and Glenn Highways from developing those alarming wheel ruts every winter.

What!? You think maybe I’ve got cold, snow and dark on the brain right now?)