On May 2, 2019, the United States Patent and Trademark Office issued an examination guide in an effort to clarify the procedure for examining marks for cannabis and cannabis-derived goods and related services following the 2018 Farm Bill.
SCOTUS Landmark Trademark Licensing Decision: Mission Product Holdings, Inc. v. Tempnology, LLC, NKA Old Cold LLC No. 17-1657
Has "the most significant unresolved legal issue in trademark licensing" finally found some closure? Circuit courts have long been split over whether bankrupt trademark owners could revoke a license and on what the effect is, generally, of a rejection of an executory contract. On Monday May 20th, 2019 the U.S. Supreme Court ruled that defunct brand owners (as debtors in Chapter 11) cannot use bankruptcy law to unilaterally revoke (reject) a trademark license agreement. The court held that bankruptcy "rejection" of an executory contract trademark license (a contract that neither party has finished performing) under Section 365 was akin to a breach of contract outside of bankruptcy. Per Justice Kagan: "A rejection (of any executory contract) breaches a contract but does not rescind it." The licensee should not lose its right to use the debtor's trademark under license. [Kagan] "Such an act cannot rescind rights that the contract previously granted." Read here for the entire SCOTUS decision in Mission Product Holdings, Inc. vs. Tempnology, LLC.
Changes to VA Pension Rules Go Into Effect October 18, 2018
If you, your parent, your spouse, or other loved one served during an active period of War and may have need of the VA Aid & Attendance benefits in the future, the clock is running. Until now, veterans or their spouses who met medical qualifications could make transfers to lower their assets and allow them to qualify for such benefits. However, under the new regulations promulgated by the VA and just made final, the VA will be implementing, among other changes, a three year lookback period on transfers made of "covered assets" to an individual or a trust or an annuity if the inclusion of such assets would have caused the applicant's net worth to be over the limit permitted under the new regulations. The penalty period for such transfers can be long as long as five years.
Reminder of Annual QSEHRA Notice Requirement 2018
The law governing Qualified Small Employer Health Reimbursement Arrangements (QSEHRAs) requires that a written notice of the availability of the QSEHRA be provided to each eligible employee at least 90 days before the beginning of each year. While special rules for 2017 and 2018 allowed for later deadlines (since QSEHRAs were new and the rules were still being developed), no special deadline is available for a QSEHRA providing benefits in 2019. Therefore, an employer providing a QSEHRA for 2019 must provide the written notice no later than October 3, 2018.
Annual Filings Deadline for Breaches of PHI is March 1, 2018
March 1, 2018 is the deadline by which time Covered Entities who experienced a Breach of Unsecured Protected Health Information (PHI) during calendar year 2017 must notify the Secretary of the U.S. Department of Health & Human Services (HHS).
U.S. Attorney General Jeff Sessions Rescinds Marijuana Enforcement Guidance
In early January 2018, U.S. Attorney General Jeff Sessions rescinded the long-standing Obama-era guidance regarding the Department of Justice's (DOJ) treatment of the marijuana industry. In a series of memoranda dating back to 2009, Deputy Attorney Generals David W. Ogden and James M. Cole had established national guidance listing eight key areas of marijuana enforcement for federal prosecutors and law enforcement agencies. Federal law enforcement personnel were directed to focus their resources on persons and organizations that interfered with these priorities. Notably, the use of medical marijuana was not included in the list of enforcement priorities. The memoranda stated that federal marijuana enforcement should not focus on individuals whose actions are in "clear and unambiguous compliance" with existing state laws providing for the use of medical marijuana, and that pursuing prosecution of individuals with serious illnesses and their caretakers is "unlikely to be an efficient use of limited federal resources."
Superior Court Further Extends Reach of Negligent Misrepresentation Claims in Pennsylvania
Approximately two years ago, I commented on the Superior Court opinion in Gongloff Contracting, L.L.C. v. L. Robert Kimball & Assoc., No. 785 WDA 2014 (Pa. Super. 2015), which expanded the reach of Pennsylvania's negligent misrepresentation law from applying only to claims by contractors against design professionals to also encompassing claims by subcontractors against design professionals. Recently, the Superior Court has further expanded this cause of action beyond claims against only design professionals. In Fulton Bank, N.A. v. Sandquist, No. 2306 EDA 2016 (Pa. Super. 2017), the Superior Court has now recognized a cause of action for potential liability against accountants and their firms under a theory of negligent misrepresentation for providing professional information that is designed to be relied upon by a third party.
Is Evidence of a Plaintiff's Contributory Negligence Admissible in a Strict Product Liability Action? PA Federal Court Allows It, But only for Limited Purposes
Strict product liability generally focuses on the product itself, not the negligent conduct of the defendant, and as a result, defendants often are precluded from relying on certain negligence concepts in defending strict liability actions. A plaintiff's comparative fault or contributory negligence, for example, generally may not be used to excuse a product's defects or reduce a defendant's fault. A recent decision from the U.S. District Court for the Middle District of Pennsylvania makes clear, however, that evidence of a plaintiff's negligent conduct may be admissible in a strict product liability case under limited circumstances. Dodson v. Beijing Capital Tire Co., 2017 U.S. Dist. LEXIS 158484, at *8-13 (M.D. Pa. Sep. 27, 2017). Because such evidence can be powerful in defending these types of actions, it is important to understand when and why it may be admissible.
Are Non-Competes Enforceable in PA Independent Contractor Agreements?
Short Answer: Yes, but as with all non-compete provisions, proceed with caution and draft wisely.
Like many states, Pennsylvania has long viewed restrictive covenants such as covenants not to compete with disfavor. Despite its preference against them, non-compete agreements are still frequently used and upheld when narrowly drafted.
In Pennsylvania, in order to be enforceable, a restrictive covenant must satisfy three general requirements:
(1) the covenant must relate to either a contract for the sale of goodwill or other subject property or to a contract for employment;
(2) the covenant must be supported by adequate consideration; and
(3) the application of the covenant must be reasonably limited in both time and territory.
Piercing Pagoda, Inc. v. Hoffner, 351 A.2d 207, 210 (Pa. 1976).
Contractor Overhead and Profit May be Included in "Actual Cash Value" in Homeowner's Policies
In the recent case of Kurach v. Truck Ins. Exchange (C.P. Philadelphia 2017), a Pennsylvania Court held that under Pennsylvania law, insurance companies are required to include general contractor overhead and profits in actual cash value payments for losses where repairs would be reasonably likely to require a general contractor.
In this case, the homeowners sustained water damage to their homes. Both homeowners had purchased a higher cost insurance policy that provided that in the event of damage, they would receive "replacement cost", a higher amount than the lesser insurance product which only provides for "actual cash value". The policy provided a two step process whereby the homeowner would receive "actual cash value" upon getting an estimate for the repairs, and then upon completion of repairs would receive the difference between "actual cash value" and "replacement costs". The policy defined "actual cash value" as replacement cost less depreciation. The insurance carrier agreed that repairs would require the involvement of a general contractor. However, the homeowners never actually went to step two of the policy to complete the repairs, and therefore never sought "replacement cost". Rather they asserted that they were entitled to an "actual cash value" which included contractor overhead and profit, even though, by not completing the work, no such overhear or profit were ever incurred.
