By: Richard Borden, Gwenn Barney and Emma Bechara
On June 28, 2018, California passed a new privacy law that is one of the most stringent consumer protection privacy laws in the nation. The California Consumer Privacy Act of 2018 (Act) introduces onerous new requirements and limitations on any businesses that collect and sell personal information of California residents. (more…)
By: Lori Smith
In the recent case of Glidepath Limited v. Beumer Corporation, the Delaware Court of Chancery considered the case of whether a court could apply equitable principles to reform the dates in a purchase contract for measurement of an earn-out period. The court held that reformation was not appropriate because the sellers were unable to establish by clear and convincing evidence that because of either fraud or mutual mistake, the contract did not reflect the actual intention of the parties.
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By: Marc Casarino and Lori Smith
The State of Delaware has long been an attractive home for businesses. A stable political system, accomplished judiciary and tested business laws combine for a business-friendly environment. Intending to build on this reputation, Governor John Carney signed the Angel Investor Job Creation and Innovation Act on May 24, 2018. The act offers tax credits to investors in a technology start-up company that locates its headquarters and the majority of its employees in Delaware, with the goal being to spur economic development in the technology sector. Although well-intended, the act’s barriers to participation and limited benefits are likely to throttle its effectiveness. (more…)
By: Alexandria Kane
The Economic Growth Regulatory Relief and Consumer Protection Act, which was signed into law by President Trump on May 24, 2018, directs the US Securities and Exchange Commission (SEC) to amend a significant provision of Rule 701. Rule 701 is the federal exemption from registration that most US private companies rely on when granting or selling equity based compensation to their employees, consultants and advisors. Rule 701(e) requires certain heightened disclosure requirements, including financial statements of the issuer prepared in accordance with generally accepted accounting principles (GAAP), risk factors and a summary of material terms of the plan, when the aggregate sale price or amount of securities sold or granted during any consecutive 12 month period exceed $5 million. These items must be provided in a reasonable time before the date of any sale or grant. This $5 million threshold had not been revised since 1999 and, since such date, companies have been staying private longer and growing to significantly higher valuations. (more…)
By: Josh Galante
On May 14, 2018, the United States Supreme Court issued an opinion with nationwide ramifications that could create a potentially massive new industry. In Murphy v. National Collegiate Athletic Association, the Court found that the Professional and Amateur Sports Protection Act (PASPA), a 1992 federal law that purports to make it unlawful for states “to sponsor, operate, advertise, promote, license, or authorize . . . a lottery, sweepstakes, or other betting, gambling, or wagering scheme based . . . on” competitive sporting events, violates the “anticommandeering” rule created by the US Constitution’s Tenth Amendment. PASPA contained “grandfather” provisions that allowed certain historical sports betting programs in a limited number of states, including Nevada, which had been in place before PASPA, to continue. The Court held that, because PASPA dictates what state legislatures may and may not do, rather than make sports betting itself a federal crime by regulating private actors, the law impermissibly infringed on state’s rights under the Constitution’s dual sovereignty system. (more…)
By: Melissa Nott Davis
On May 3, 2018, Nike sued Puma alleging infringement of seven utility patents related to its Flyknit, Air, and cleat assembly technologies1. In its complaint, Nike asserts that it has been “investing heavily in research, design and development” and that Puma has “forgone innovation and is instead using Nike’s technologies without permission.” While Nike has not shied away from asserting its patents against competitor products, this case is unusual in that Nike has asserted utility, not design patents. This is the first time Nike has asserted these utility patents, despite having been engaged in prior litigation regarding its Flyknit technology. (more…)
By: Ryan Udell and Melissa Pang
Pennsylvania Secretary of Health Dr. Rachel Levine approved a recommendation from the state medical marijuana advisory board to allow the sale of whole-plant cannabis (dry leaf and flower) for medical purposes in Pennsylvania at an April 16, 2018 Harrisburg news conference. Previously, Pennsylvania permitted only the sale of oils, extracts, pills, and tinctures. Dry leaf, which requires no processing and is easier and cheaper to produce, will be available in dispensaries later this summer, according to Dr. Levine. This new development should reduce the cost of treatment and increase access to patients who have been facing shortages since dispensaries opened in February. Pennsylvania law still forbids patients from smoking or consuming marijuana in edible form and prohibits dispensaries from selling pipes, bongs, and rolling papers, permitting the sale of dry leaf medical marijuana only for vaporization through vaporizers and other devices. (more…)
By: George Morrison
On April 12, 2018, the United States Department of Labor (DOL) issued its first substantive opinion letters since the Bush Administration. Not only do opinion letters clarify the agency’s application of the law, the letters also can sometimes provide a complete defense to claims if an employer acts in conformity with and reliance on a letter. (more…)
By: Lori Smith and Jamie Wang
The Corporate Council of the Corporation Law Section of the Delaware State Bar Association recently released its proposed amendments to the Delaware General Corporation Law (DGCL) for 2018. Noticeably, the proposed amendments would amend Section 262(b) of the DGCL to eliminate an inconsistency in the availability of appraisal rights in stock-for-stock public mergers structured as two-step transactions under DGCL Section 251(h) and those structured as long form mergers. The proposed amendments intend to confirm and extend the availability of ratification of defective corporate acts in certain circumstances and streamline the use of such a potentially powerful tool for companies to address innocent mistakes. (more…)
By: Ryan Udell and Gwenn Barney
For the second time in a year, President Donald Trump has taken the historically extraordinary measure of issuing an executive order to block a foreign company’s takeover of a US technology company based on national security concerns. This time, it was to thwart Broadcom’s proposed takeover of US-based chipmaker Qualcomm. (more…)