Medenica Law Joins Industry Expert Series at Rutgers Business School

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On October 14, 2017, Olivera Medenica will discuss how to register, monitor and license trademarks as well as how to define and protect trade secrets at the Industry Expert Series at Rutgers Business School.

The class is a part of the Master of Science in Business of Fashion curriculum, and is designed to develop students’ practical knowledge about the fashion business by meeting industry professionals.

FBA/FABA Paris Fashion Law and Innovation Conference

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Thank you to everyone who attended the sold out FBA/FABA Fashion Law and Innovation Conference.  Special thanks to Céline Bondard (Cabinet Bondard), Noémie Balmat (www.futur404.com), Sofia Bernardin (www.RESEE.com), Hugo Garcia-Cotte (www.cypheme.com), Maria Vathis (Bryan Cave), Marie Eger (Maus Frères), Paola Gelato (Jacobacci Law), Laurence Baylocq (IMG Paris) and Caroline-Sarah Ellenberg (Réunion des Musées Nationaux).  Thank you as well to our host Lafayette Plug and Play (www.lafayetteplugandplay.com), our media crew from Creative Valley (www.creative-valley.fr), and our caterer Otium Cold Press (www.otiumcoldpress.com).  Looking forward to next year -  if you are in Paris for Fashion Week next September, please join us!  

Olivera Medenica Elected as FBA Second Circuit Vice President

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Olivera Medenica was recently elected as the Federal Bar Association's Vice President for the Second Circuit.  She will serve a two year term that expires on September 30, 2019.  The Federal Bar Association (FBA) is dedicated to promoting the welfare, interests, education, and professional development of attorneys involved in federal law. With more than 18,500 members—including 1,500 federal judges—its members run the gamut of federal practice, from small to large firms, corporations and federal agencies. The FBA serves as the catalyst for communication between the bar and the bench, as well as the private and public sectors.  More information here.  

The Impact of Varsity Brands for Design Protection in the Fashion Industry

On Wednesday, July 19, Olivera Medenica will be moderating a panel as part of Hot Topics in IP Law presented by the New York Intellectual Property Law Association at the Princeton Club.  Speaking on the panel The Impact of Varsity Brands for Design Protection in the Fashion Industry are Viviana Mura (Intellectual Property Law Counsel, Luxottica Group) and Lisa W. Rosaya (Baker and McKenzie LLP).  Hot Topics in IP Law takes place from 12-5pm.  The Princeton Club is located at 15 West 43rd Street, New York, NY.  For more information on this event and tickets please visit www.nyipla.org.

Intellectual Property Protection for the Fashion Industry

On March 21, 2017 Medenica Law held an in-house CLE entitled Intellectual Property in the Fashion Industry.  Included below is the PowerPoint deck circulated to attendees.  Topics covered include copyright, trademark and patent law (design patents).   The lecture was geared towards non-IP practitioners and included an overview of key cases.  You can access the slides here.

Cross-Border Litigation: Chasing Foreign Law and Facts

"United Nations" by Thomas Galvez under CC by 2.0 some changes made

"United Nations" by Thomas Galvez under CC by 2.0 some changes made

Please join us on May 16, 2017 at 8:00 am at the New York City Bar for a breakfast program entitled Cross-Border Litigation: Chasing Foreign Law and Facts.  Program panelists will discuss tips and strategies for conducting party and non-party international discovery in New York State courts.  Topics of discussion will include: the Hague Convention, depositions through electronic means, live electronic witness examination, and the use of translators and foreign law experts.  To register click here.  

CROSS - BORDER LITIGATION: CHASING FOREIGN LAW AND FACTS
New York City Bar - 42 West 44th
Tuesday May 16, 2017 - 8:00 - 9:15 am
$5 Student Members; $15 Members; $30 Non-Members

MODERATOR: Olivera Medenica, Medenica Law PLLC
PANELISTS: Florian Bruno, Bruno Law LLC; Raymond J. Dowd, Dunnington Bartholow and Miller LLP; Anne Li, Crowell & Moring; Jay G. Safer, Wollmuth Maher & Deutsch LLP.

SPONSORING ASSOCIATION COMMITTEE: State Courts of Superior Jurisdiction Committee, Adrienne B. Koch, Chair.

Is a Letter of Intent Binding?

"Proud lock" by Holly Victoria Norval is licensed under  CC BY 2.0 no changes made.

"Proud lock" by Holly Victoria Norval is licensed under  CC BY 2.0 no changes made.

Letters of intent can serve an important business and legal purpose.  In the business context, it helps to solidify a deal if the parties are able to flesh out its salient terms.  From a legal perspective, the benefits can cut both ways.  Letters of intent, because of their brevity, have resulted in a tremendous amount of litigation.  The terms of the deal are usually laid out in a rudimentary fashion, often overlooking important ramifications that the parties ignored in the haste of getting something in writing.  If a party deems the letter favorable to it, it will seek to enforce; if unfavorable, it will claim the letter is non-binding.

Indeed, the question that most often arises is whether the letter of intent is binding, or not.  The short answer is that courts give great deference to the intent of the parties.  So if a document says it is not binding, New York courts will give great deference to the parties’ intent that it be not binding.  Where unclear, a court will examine the content of the document, as well as the parties’ behavior, to determine whether the letter is binding.

The factors that New York courts look at to determine whether a letter of intent (or term sheet, or memo of understanding etc.) is enforceable are: (1) the parties’ explicit statements to be or not to be bound; (2) partial performance by one party; (3) whether there is nothing left to negotiate; and (4) whether the subject matter is complex requiring a more lengthy contract.

In Dunhill Sec. Corp. v. Microthermal Applications, Inc., 308 F. Supp. 195 (1969), Plaintiff underwriter filed a claim against defendant corporation for breach of contract and quantum meruit based upon a letter of intent in connection with the corporation’s proposed issuance of stock.   The parties had executed a letter that set forth a preliminary understanding in regard to a proposed offering of common stock by the corporation.  The corporation subsequently sent a letter to the underwriter terminating any understanding after the corporation discovered that proceedings had been brought against the underwriter by the Securities and Exchange Commission. 

The court examined the letter and concluded that it stated that the parties did not intend any liabilities to emanate from the letter.  The court specifically examined a paragraph in the letter which stated in “the clearest possible terms that the parties did not intend any liabilities to emanate from the letter.”  This language in question is included here:

Since this instrument consists only of an expression of our mutual intent, it is expressly understood that no liability or obligation of any nature whatsoever is intended to be created as between any of the parties hereto. This letter is not intended to constitute a binding agreement to consummate the financing outlined herein, nor an agreement to enter into an Underwriting Agreement. The parties propose to proceed promptly and in good faith to conclude the arrangements with respect to the proposed public offering and any legal obligations between the parties shall be only those set forth in the executed Underwriting Agreement. In the event that the Underwriting Agreement is not executed and/or the purchase of the securities is not consummated, we shall not be obligated for any expenses of the Company or for any charges or claims whatsoever arising out of this letter of intent or the proposed financing or otherwise and, similarly, the Company shall not be, in any way, obligated to us.

The court further found that there was not likely to have been an intent to enter into a binding contract because the custom of the industry was not such that a letter of intent created a binding agreement.  The court ultimately granted summary judgment in favor of the corporation on the underwriter’s claims for breach of contract and quantum meruit.

But what if the letter has no “non-binding” type of language?  In those circumstances, it is necessary to examine the parties’ original intent when executing the document.  “A primary concern for courts in such disputes is to avoid trapping parties in surprise contractual obligations that they never intended.”  See Teachers Ins. Annuity Asso. v. Tribune Co., 670 F. Supp. 491 (1987).  In Teachers, the court identified two distinct types of preliminary contracts with binding force. 

One occurs when the parties have reached complete agreement on all terms that require negotiation.  The agreement is deemed merely “preliminary” because the parties state they will subsequently enter into a more formal agreement; but preliminary is not synonymous with non-binding.  Under such circumstances, the parties have reached a full agreement and the letter is enforceable.  See V’Soske v. Barwick, 404 F.2d 495, 499 (2d Cir.), cert denied, 394 U.S. 921, (1969) (“the mere fact that the parties contemplate memorializing their agreement in a formal document does not prevent their informal agreement from taking effect prior to that event. . . “).

The other occurs when the parties express mutual commitment to a contract on agreed major terms, with the recognition that there remains open terms to be negotiated.  The fact that there remains open terms, however, does not mean that there is no binding agreement.  Rather, there is a binding commitment on both ends to negotiate together in good faith in an effort to reach final agreement within the scope that has been settled in the preliminary agreement.  See Teachers, at 498.

When analyzing a letter of intent, the first and foremost factor to consider is therefore the plain language of the letter and whether the parties unequivocally considered the letter binding, or non-binding.  If non-binding language is absent, the factors cited in the Teachers court, and listed above, are of greater relevance.  If the letter is deemed binding, then the analysis must focus on whether the letter represents a fully negotiated agreement, or rather a preliminary agreement with a good faith obligation to negotiate the remaining terms.  The former requires execution, and the latter, further negotiation.

As is evident from the discussion above, the subject matter is ripe for litigation precisely because it is difficult to generalize about a letter of intent’s legal effect, without examining a whole host of factors extraneous to the letter itself. 

For any questions regarding the above, please feel free to contact Olivera Medenica at OMedenica@Medenicalaw.com.

Olivera Medenica to Chair Organizing Committee for Federal Bar Association's Fashion Law Program

Olivera Medenica is pleased to serve as Chair of the Organizing Committee for the Federal Bar Association's Annual Fashion Law Program, which will be held at the Parsons School of Fashion.  The program includes all-star panels featuring speakers from Estee Lauder, Google, Macy's and many others.  Please join us on February 10, 2017.  To register, click on the image below.