Understand Your Rights. Solve Your Legal Problems
ALD and NED, both public owned companies active in the management of the gas distribution service in 20 municipalities in the province of Milan, selected AP Reti Gas as the industrial partner for the joint participation to the coming tenders for the award of the service in ATEM Milan 2 and Milan 3.
10 bidders participated in the tender and AP Reti Gas presented the most advantageous offer.
ALD was assisted by Studio Legale Valaguzza with a team lead by Sara Valaguzza, founder of the Law Firm and expert of strategic procurement, supported by Lucia Martegani and Eugenio Pizzaghi.
NED was assisted by Todarello & Partners.
Federica Stevanin, general counsel of the Ascopiave group, oversaw the legal aspects of the winning offer for AP Reti Gas. BonelliErede acted as legal adviser to AP Reti Gas.
An Interview With Sara Valaguzza, Founder of Studio Legale Valaguzza
What are clients’ main concerns when entering a bid proposal like this one?
The actual legal framework does not relieve when a public owned company begins a path to select the best industrial partner; the main concerns arise around the regulatory vacuum.
The public contracts’ regulation does not cover the case. Indeed, if the public owned company can customise a strategy to develop a flexible and informal tender, the regulatory vacuum could become an extraordinary opportunity both for the economic operators and the public sector.
For the public bodies and their consultants, the first problem to tackle is conceiving and realising an “anti-fragile” procedure, strongly anchored to general principles of the administrative law, such as transparency, impartiality and most importantly, effectiveness.
There are many areas of risk and potential issues. Every decision must be carefully weighed.
In partnership scenarios, the effectiveness is achieved if the potential partners compete to combine their business with those of the public entity.
I believe that the Italian Public Contract Code is not a good example in respect to shaping a smart procedure to attract businesses.
The procedures defined by the Public Contract Code are based on the idea that the contractual relationship should be a juxtaposition. Instead, the aim of a partnership is to create an alliance.
Nevertheless, breaking away from the familiar regulation and choosing new paths requires courage and resolution. Our client had both the courage and resolution to build a new path; the results obtained show that we are on the right track.
Lawyers can set up a great opportunity, supporting public clients in their process of cutting loose from the regulation related to tenders and concessions, even providing tailor made solutions and reasoning about new procedures. In this way lawyers contribute to the creation of public value.
How do you assist them to ensure the decisions the client makes is the best one?
Our first task is understanding the reasons and perspectives of the client; this is essential to start a dialogue on the strategy to achieve the clients’ objectives.
The mutual trust between the client and his lawyers along with an honest debate allow to shape the most suitable procedure. We believe that all legal advice must serve the purpose of the client.
While shaping new rules and procedures for a public client, a solid experience, extremely qualified knowledge and awareness of the market is essential for lawyers.
There are many areas of risk and potential issues. Every decision must be carefully weighed.
When your client asks you to be a pioneer you must decide: are you able to think out of the box? What boxes ought to be ticked for companies to accept such tenders?
The clarity of rules, fairness, flexibility and reliability are the key factors for a tender to succeed.
Did you experience any challenges when working on this deal?
The most critical challenge was finding the correct balance between constraints and goals; we had to work hard to define rules able to set a compromise. Clear goals were written down in the tender documents and constraints have been kept to a minimum.
It was not easy to combine the general principles of public law with a market friendly approach. Indeed, this has been our major challenge as lawyers.
As Law Firm engaged in several ambits of strategic consultancy, including infrastructure and environment fields we work every day to create best practices for public clients to work faster and simpler.
How did you overcome them?
The issues concerning the mentioned balance between the constraints and goals have been solved exploiting the public law principle of maximum transparency and equality, without neglecting the market’s sensitivities. The partnership’s terms and conditions have been discussed with each competitor and the public client attended the dialogue with the specific reference also to the industrial aspects. Opening to debates and dialogues were essential factors to obtain the important result gained by ALV and NED.
A well-organised and complete data room allowed competitors to manage their due diligence on legal, economic and financial aspects before submitting their tenders.
Now the public-private partnership is ready to start, and the three companies can jointly participate in the ATEM procedures, focusing on their business: gas distribution.
How does this deal reflect the importance of public owned companies working on tenders?
Ten economic operators competed. This result demonstrates that public owned companies are an interesting target for the businesses and that public private partnerships represent an interesting instrument to be developed by the public sector.
The procedure we shaped could become a model for several cases of partnership.
Nevertheless, the marriage with the market is feasible only if the public sector can create efficient and flexible tenders.
The partnership is an opportunity to enhancing public value but cannot disregard a balance between public and private approaches.
Public clients can create a positive environment for partnerships, only if they take care of structuring relationships with the private sector based on mutual trust and respect.
Competitors could add real value to public services, with less bureaucracy and a more goal-oriented set of rules.
In this regard, it is fundamental to explore atypical procedures, as in the case of the partnership between ALD, NED and AP Reti Gas.
In what ways is fire investigation more than just gathering witness statements?
A forensic fire investigator is normally appointed to determine what happened, why and in what sequence. We usually work for insurance companies, often acting through intermediaries such as loss adjusters and solicitors, although we also undertake work for corporate clients and public bodies.
Fire investigators interpret fire damage patterns to identify the seat of a fire. However, the destructive nature of fire can obliterate useful evidence and create misleading patterns. On large commercial fires, we are often presented with a scene of near total devastation, with few discernible patterns of damage. Therefore, investigations based solely on the interpretation of damage patterns are rare.
Electrical evidence, including the activation of circuit protection devices or electric arc mapping, can be used to narrow down the location of the seat of a fire, and in some cases to identify the precise cause. Additional sources of information, such as intruder and fire alarm logs, CCTV recordings and automated production records can also be of use. However, sometimes interrogation of such devices, if they have been damaged by the fire, requires specialist equipment, resulting in delays. In such cases, early access to information from witnesses is invaluable.
Once the seat of the fire has been identified, it is often necessary to conduct further laboratory-based examinations and tests on items found there to establish why the fire occurred and whether the cause is attributable to the actions or omissions of an identifiable party. The extent of a laboratory examination will depend significantly on the balance of cost versus benefit; guiding our client in that respect is an integral part of the service provided by Hawkins.
People who start fires deliberately are often under the misapprehension that the fire will cover their tracks.
How do witness statements help?
Witness evidence is interesting, in that its reliability is ultimately a matter for a Court to consider, but without early access to contemporaneous witness accounts, it can be difficult to determine the cause of a fire. Witness information can guide an investigation, but ultimately my opinion needs to be based on scientific interpretation of the physical evidence. Part of that work involves reconciling witness accounts with that evidence.
Normally, during the initial stages of an investigation, I either interview witnesses directly, or sit in on interviews conducted by others. My preference is to be present, because there is more to taking statements than simply obtaining the answers to a list of predetermined questions. Typically, the witness will have just experienced a traumatic event and is perhaps concerned for the future of their business or employment. It is therefore necessary to approach them with compassion and care, whilst remaining objective and endeavouring to obtain the information needed for my investigation. Witnesses are generally helpful, but the frailties of human memory, coupled with the desire to help, sometimes leads to inaccuracies in the information provided. Such inaccuracies can sometimes be mistaken for deliberate attempts to mislead, but it is always necessary to be alert for indications of intentions to mislead; often those who intend to mislead do so under the misapprehension that the fire will have destroyed evidence of their intentions or activities.
What are common reasons for fires?
Some causes of fire are common, irrespective of the type of property or the nature of the activities carried out within them. Almost 50% of domestic fires in the UK in 2020 were attributed to cooking appliances. In a commercial setting, cooking fires often spread rapidly beyond the kitchen due to grease and fat deposits within extraction ductwork that has not been cleaned appropriately.
Electrical faults and appliance fires account for many fires investigated by Hawkins. Power surges and overloading of circuits are often referred to in the media, but in correctly configured installations they are rare. By far the most common cause of fires of electrical origin relates to resistive heating at poorly made connections. Fires can also originate within white goods; many recent high-profile incidents have been attributed to various brands of white goods, some of which have been subject to product safety recalls. Indeed, I was evacuated from an office block last year when smoke began issuing from a domestic dishwasher in a staff canteen. Somewhat aptly, at the time, I was delivering familiarisation training to solicitors on the topic of fires in white goods!
Witnesses are generally helpful, but the frailties of human memory, coupled with the desire to help, sometimes leads to inaccuracies in the information provided.
Another electrical cause that is becoming more frequent is the failure of lithium-ion batteries that have either been damaged, over-charged or over-discharged. Charge management is extremely important with such batteries. Even the mismatching of chargers can result in the energetic failure of a battery pack, often with devastating consequences. Similarly, disposing of such batteries poses a significant risk to the recycling industry; lithium reacts violently with water, the primary means of firefighting on such sites.
Other common causes of fires include self-heating, particularly of vegetable oil contaminated items recently dried in tumble driers, hot works, and poorly discarded smokers’ materials, although discarded cigarettes are considerably less likely to result in fires than Hollywood would have you believe!
The potential for fires to be started deliberately is ever-present; for example, by disgruntled employees, unscrupulous competitors or vandals. The potential also exists for business owners to attempt to “cash in” their insurance policy by starting a fire. However, people who start fires deliberately are often under the misapprehension that the fire will cover their tracks.
How can these be avoided?
The easiest and most effective way to avoid fires in a commercial setting is by following industry best practice and manufacturers’ instructions.
In terms of reducing the risks of electrical fires, I recommend ensuring that: the fixed wiring in the premises complies with the relevant Wiring Regulations, the installation is inspected by suitably qualified professionals at the recommended intervals, and electrical work is only carried out by competent contractors.
When it comes to industry-specific risks, many insurers offer guidance on how to comply with the conditions of their policies. It is advisable for businesses to work with their insurers to ensure compliance with the relevant guidance. Doing so not only reduces the risk of a fire, but it will also help to ensure that cover is in place in the event of a loss. For example, in the hospitality industry, insurance policies typically have conditions pertaining to the cleaning of kitchen extraction systems; in the laundry industry, policies typically require items to be separated and allowed to cool between drying and packaging.
Regulatory authorities, such as the HSE in the UK, offer guidance on how to reduce the risks of fire in the workplace, both generally and for specific industries. However, often the best source of guidance on industry specific risks is a relevant trade organisation.
When selecting external contractors to undertake work that bears a risk of fire, obtain copies of their fire related risk assessments and method statements, and ensure that the safeguards detailed in the documents are implemented.
In what ways can your forensic investigation change a case?
A well-respected loss adjuster once said to me at the scene of an incident, “John, if it is going to come out in the end, it might as well come out at the beginning.” I had just informed him that the evidence was pointing towards possible negligence by his principal’s insured. His point was that this information enabled him, and his client, to make informed decisions on liability at a very early stage and to manage the case accordingly. Of course, I did not divulge the relevant information to the other parties; client confidentiality is paramount.
Honesty, integrity and impartiality are fundamental to how Hawkins works. Our role is not to win cases for our clients, but rather to provide them with a scientifically robust interpretation of pertinent technical issues. This enables them to make appropriately informed decisions on how best to proceed. We achieve this by ensuring a rapid attendance on site, coupled with rigorous scientific analysis, followed by a rapid initial appraisal of the incident. Thereafter, we support our client by providing guidance on the technical merits of proceeding with more detailed investigations and undertaking those investigations where appropriate, including providing expert evidence in Court when necessary. Cases often hinge on the strength and reliability of the expert evidence.
John Holland
Principal Associate
Hawkins
Address: New London House, 6 London St, London EC3R 7LP
Tel: +44 (0)20 7481 4897
Email: enquires@hawkins.biz
Hawkins recently celebrated its 40th anniversary, having grown to become the UK’s leading provider of forensic investigation services in the private sector. Hawkins has eight offices throughout the UK, and offices in Dubai, Hong Kong and Singapore. Hawkins investigates a wide range of incidents including fires, explosions, road traffic accidents, personal injuries, power generation, acoustics, marine, contamination and all major engineering disciplines.
John Holland, a Chartered Mechanical Engineer, joined Hawkins in 2007. In 2016 he became the Regional Manager for Scotland and Ireland. John specialises in the investigation of fires, engineering failures and personal injuries. He has investigated over 750 incidents, including many major and complex ones involving serious injuries and fatalities. He has prepared reports for insurers, private clients, and the Crown, in both civil and criminal matters. He has also given expert evidence in court on numerous occasions.
At the same time as wireless communication standards have gained economic importance, litigations pertaining to standard-essential patents fill courtrooms across the globe. Lots of examples can be found around the world. Ericsson and Samsung are in dispute over standard-essential patents, so are Nokia and Daimler, Panoptis and Apple, and many others.
The sums that international technology corporations are prepared to invest to defend their position are significant. In the initial dispute between Apple and Samsung alone over $1 billion was at stake. This is reason enough to take a closer look at what type of valuation approaches courts have come to accept in international landmark decisions.
An in-depth assessment of key disputes suggests that courts have commonly accepted both the top-down and the comparable licences approaches to value standard-essential patents. It is also worth noting that the debate on the valuation of standard-essential patents is rather recent. Over a decade ago hardly any court devoted time to the valuation of standard-essential patents. Equally interesting is the fact that U.S. Courts have shown thought leadership on the topic, with much of the rest of the world following suit only after key issues were framed in U.S. judgments. For example, The Top Down Approach was applied in Huawei v Samsung (China, 2018), Unwired Planet v Huawei (UK, 2017), TCL v Ericsson (USA, 2017) [1], Samsung v Apple (Japan, 2014), In Re Innovatio IP Ventures (USA, 2013). The Comparable Licences Approach was used in Microsoft v Motorola (USA, 2013), SK Hynic v Rambus (USA, 2013), TCL v Ericsson (USA, 2017) and Unwired Planet v Huawei (UK, 2017).
To further understand the value of a given set of standard-essential patents, the counting of patents has also been recognised.
The Top-Down Approach
The top-down approach aims to offer an aggregate rate for a given standard. The method requires two steps. First, one needs to identify an estimate for the entire standard, then one needs to split this estimate among the various patents that read on the standard. This analysis allows us to understand the value of the standard and the relationship of a set of standard-essential patents in relation to the whole. Courts have accepted different ways to handle this analysis. Commonly, public statements made by major standard-essential patent owners have been used to come to grips with the value of the standard as a whole. For example, in TCL v. Ericsson, as well as in Samsung v. Apple and in Huawei v. Samsung, the total aggregate rate for the standard was identified with the support of public statements made by major standard-essential patent owners.
In Unwired Planet v. Huawei, again, the Court referred back to the findings of the Japanese Courts in Samsung v. Apple and used these as an additional cross-check for the royalty rate it identified for setting a FRAND[2] rate.
To further understand the value of a given set of standard-essential patents, the counting of patents has also been recognised. The Unwired Planet v. Huawei Court, for example, found that the counting of patents is a common market practice and hence used this approach to come to grips with the top-down approach.
Yet another approach to assess the value under the top-down approach was applied in the In Re Innovatio IP Ventures case. There the Court based the licensing rate on the average profit of the Wi-Fi chip. Singling out the average profit served the same purpose as setting a total aggregate royalty burden. The maximum amount available for paying royalties would stay unaffected regardless of the number of entities holding and asserting SEPs.
To complicate things further, however, it is also possible to start with identifying comparable licences and then establish the top-down approach on that basis. This was done in Unwired Planet v. Huawei. The Court started off with the identification of comparable licensing rates and then went on to run a sensitivity check with the support of the top-down approach. This allowed the Court to check the risks associated with a potential cumulative royalty stack, even if it were just hypothetical.
In comparison to the top-down approach, the underlying reasoning of the comparable licences approach is very easy to understand.
The Comparable Licences Approach
The comparable licences approach offers different insights on what the value of standard-essential patents could be. Rather than seeking to determine the value of the standard as a whole, the comparable licences approach can help to understand the value of a given set of standard-essential patents with reference to what others have done in the market, or with reference to what the holder of a set of standard-essential patents has been able to get from other market participants.
In comparison to the top-down approach, the underlying reasoning of the comparable licences approach is very easy to understand. It seeks to determine value with reference to ‘others’. While this does not require much more explanation, the art is to figure out if the comparison to ‘others’ is actually justified. Here, both substantial legal considerations and econometric assessments come into play. Just because a licensing deal was a transaction that actually happened, that does not make it a FRAND offer.
The Takeaway
Courts have accepted the valuation of standard-essential patents and made it core to their determination of licensing rates and conditions many times. That standard-essential patents can be valued is hence not the question. Rather, it is important to decide which valuation approach to adopt in a given case. Apart from obviously having to assess the specific facts of the case, the availability of data can also play a role.
In that regard, there may be scope for regulatory reform. Licensing transactions, in general, suffer from a lack of transparency. The licensing of standard-essential patents is no exception to that. Shedding further light on licensing markets would help substantially to facilitate the task of valuing standard-essential patents. This would help with price discovery and support the goals that FRAND stands for: namely to make the licensing of standard-essential patents fair, reasonable and non-discriminatory.
Roya Ghafele
Director
OxFirst Ltd
The Oxford Science Park
Address: John Eccles House, Science Park, Robert Robinson Ave, Littlemore, Oxford OX4 4GP, UK
Email: info@oxfirst.com
Roya Ghafele is the Director of law and economics consultancy OxFirst and a visiting professor in IP Law with Brunel University London. Previously she worked as an economist for the World Intellectual Property Organization, the OECD and McKinsey. She also held lectureships in law and economics, respectively, with Oxford and Edinburgh University.
OxFirst specialises in IP valuation and associating IP with economic worth. The IP valuations OxFirst undertook have been instrumental in assessing the value of patent infringements, the economic impact of a technology investment or the determination of an adequate licensing rate for IP.
Since 2011 OxFirst has helped Fortune 100 companies, alongside Law Firms, Private Equity Firms and Public Institutions around the world unleash the value of intellectual property and foster competition strategy.
[1] I understand that TCL vs Ericsson was vacated. However, it was not vacated on the grounds of its ()FRAND royalty rate determination. Hence, I consider this case nonetheless to offer insights as to how to approach a FRAND royalty rate.
[2] Fair, reasonable, and non-discriminatory (FRAND) terms
Brian also discusses the legal criteria for asset forfeiture and the powers of the Australian Federal Police to confiscate property believed to be connected to a criminal act.
Having your assets confiscated due to criminal allegations can have deleterious effects; how should clients prepare themselves for investigations and cases in order to lessen the potential negative effects?
Obtain legal advice prior to engaging in conduct that can potentially result in your assets being seized. Not everyone in the Australian community is aware of how strong criminal asset confiscation laws are. For example, if a drug dealer used the garage of his family home to store drugs, arguably that home then becomes tainted and the allegation can be made that the home has been used as an instrument of crime.
The home can then potentially be confiscated by the Authorities (Australian Federal Police, New South Wales Crime Commission etc).
This can obviously then affect other family members who occupy the house or have contributed to the financial upkeep of the property.
Obtain legal advice prior to engaging in conduct that can potentially result in your assets being seized.
Criminal asset confiscation laws are quite robust in Australia. What impact can it have on someone who is alleged to have received the proceeds of crime?
It can be devastating on an individual who is alleged to have been involved in obtaining a benefit from crime in Australia. It can start with a restraining order effectively freezing all your current and future assets, leaving you essentially impecunious. Your home, your car, your bank account can all be frozen, leaving you with very little to pay your bills and survive.
There are a number of applications that can be made to the Court including a revocation from restraining order, exclusion from a restraining order, exclusion from forfeiture, a compensation order, and an allowance order amongst others.
Some jurisdictions, such as New South Wales, have certain provisions for your legal expenses for your criminal asset confiscation matter and potentially a concurrent criminal charge to be paid for out of your restrained funds.
Criminal asset legislation also has compulsory examination powers to order the examination of a range of people that may have information relating to the proceeds of crime litigation. These examination powers usually remove a number of common legal safeguards such as the right to privilege against self-incrimination and legal professional privilege. This means that you may be required to answer questions that incriminate yourself or you may be required to answer questions of confidential conversations that you have had with your legal advisor.
The main criteria in determining whether an asset can be forfeited is whether the asset was used as an instrument of crime and whether the realised funds are the result of the proceeds of crime.
What factors do the Courts take into account during proceeds of crime matters?
Depending on the nature of the allegation and the nature of your application, but generally the Courts will look at your involvement in any alleged criminal activities and assets that were used as an instrument in that criminal enterprise, as well as whether you received any proceeds of criminal activities. The Courts will also look at whether your asset base is commensurate with your legitimate sources of income.
Because a criminal finding of guilt is not required to forfeit alleged criminal assets in Australia, what is the main criteria in determining whether an asset can be forfeited when no criminal conviction is present?
The main criteria in determining whether an asset can be forfeited is whether the asset was used as an instrument of crime and whether the realised funds are the result of the proceeds of crime. If an entity is subject to a pecuniary penalty order or a similar type of order in the various States and Territories in Australia, legitimately acquired assets can be used by the authorities to satisfy the debt attached to the order.
It's worth noting that proceeds of crime litigation in Australia is generally regarded as civil in nature, meaning that the relevant threshold standard is the lower test of the balance of probabilities rather than the higher criminal standard of beyond reasonable doubt.
Proceeds of crime legislation is also unique as it often reverses the onus on the defendant to prove that the property in question is not derived from nefarious activities, rather than the plaintiff having to prove that it was from nefarious activities.
Has criminal asset confiscation in Australia been on the rise? What are the trends in proceeds of crime asset confiscation in Australia?
The dollar amount of confiscated assets is dependent upon the resources of the Australian Federal Police and the State and Territory equivalent law enforcement bodies such as the New South Wales Crime Commission. It also depends on the size of operations as large operations can go through the Court over a number of years before being eventually confiscated.
Recent trends in Australian Criminal Asset Confiscation include utilising legitimate international money transfers to facilitate international money laundering also known as ‘cuckoo smurfing’, childcare subsidy fraud and the restraint of bitcoin used to facilitate money laundering.
What powers do the AFP (Australian Federal Police) have when it comes to enforcing asset confiscation?
Initially if an entity is suspected of or charged with an offence, the AFP can obtain an ex-parte court order restraining the entity’s assets on an in personam basis. Similarly but separately, the AFP can obtain an ex-parte court order restraining the property on the basis that the property is the proceeds of an offence or the instrument of an offence on an in rem basis. Once the property is restrained, the onus then shifts onto the opposing or other interested party to substantiate that the property is not derived from the proceeds of crime or is not an instrument of crime and is not under the effective control of an individual suspected of deriving a benefit from criminal activities.
The AFP can then apply after a certain period of time or after concurrent criminal convictions are secured to forfeit the property to the Crown. The value of forfeited assets is credited to a Crown account called the Confiscated Assets Account and, subject to the discretion of the Minister for Home Affairs, the funds are used for various crime prevention measures such as the installation of CCTV in urban areas.
Brian Walker
Barrister
Clarence Chambers
Address: Level 21, 133 Castlereagh Street, Sydney NSW 2000
Australia
Tel: (02) 8207 9949
www.walkercriminallawyers.com.au
Brian Walker is a Barrister based in Sydney, Australia. Prior to becoming a Barrister, he was a private criminal defence solicitor. He was also previously a Federal Prosecutor who represented the Commonwealth Director of Public Prosecutions in large scale drug importation and sexual offences as well as representing the Australian Federal Police in proceeds of crime litigation. He possesses a Bachelor of Accounting, a Graduate Diploma of Legal Practice, and a Juris Doctor in Law.
We speak to Christopher Young, Head of the Intellectual Property team at MinterEllisonRuddWatts, about the challenges his clients often face and why it is vital for IP rights to be sorted from the onset.
The film industry’s most valuable asset is Intellectual Property, which can be protected by copyrights, trademarks, patents, and the right of publicity for distribution deals. When and why does it go wrong?
As is often the case with IP, getting the IP basics right is critical, this is no more so than with film. If this is not achieved and appropriate rights are not secured it can flaw distribution and value worldwide. Fundamental considerations for IP are clear ownership and full rights to use relevant IP - these are key. Using a full range of appropriate contracts with all contributors to IP during the production phases, assessments and contracts to reduce the risk of claims and rights clearance assessments are all of significant importance. Our production work in New Zealand is usually coupled with the need to also ensure structures meet requirements for grants from the Film Commission which means contracts and structures must fit within the parameters of the New Zealand grant framework. So for us working with many international producers, this often requires changing the structure of typical contract suites used elsewhere. Other local law tensions arise with factors like goods and services tax and our local employment law, and health and safety law all impacting.
Of all the IP rights, copyright is the linchpin of the film-making enterprise. What protection should be sought after here?
The key factor is full ownership over all potential uses of copyright, and that it is not infringing 3rd party rights, structures and contractual regimes to achieve that; reducing the likelihood of claims from contributors and third parties are also critical. While “work for hire” copyright regimes are typical in the U.S., New Zealand has a different copyright regime and contracts need to be drafted to ensure that rights are obtained and owned under local law. Again this requires a different contractual approach to that typically used in the U.S.; in New Zealand, this extends to dealing with individual’s rights under New Zealand law including moral rights and performer’s rights. This then needs to be extended by contract to ensure rights are secured in an appropriate manner worldwide. The tension between U.S. copyright requirements and New Zealand law then needs to be handled in these contracts. Then targeted postproduction rights management and enforcement is critical.
Film and video related IP concerns are not limited to copyright infringement of the released film. It is important to consider IP from the very beginning. Why is this vital?
Clearance and ensuring ownership of relevant IP is probably the most important basic to get right through the production process as without that in place correctly, exploitation and distribution, which follows later in the process, as well as protection and enforcement of the IP rights, relies on these basics being in place correctly. Clearance of rights is critical including in the context of 3rd party conflicting rights and appropriate releases from contributors.
What design rights should creators think about?
Design rights in film are wide and cover all aspects from production, props, special effects, methods through to post production, distribution and other exploitation including character merchandising of key assets and personalities. So copyright and other aspects of the film are important including trademarks, registered designs and design patents, as well as copyright. Occasionally patents are involved too. Coordinating this worldwide or through key markets is one of the challenges. We need to think of every material involved including characters, props, post production and distribution. Confidentiality undertakings, IP ownership contracts and quitclaims from contributors are very important in the array of contracts used.
What difference can this make in the long run?
Getting these things right can make a significant difference long term as if particular ownership of the IP and 3rd party rights are not sorted correctly, it will impact funding arrangements and distribution in the future.
Christopher Young
Partner
T +64 9 353 9910
christopher.young@minterellison.co.nz
MinterEllisonRuddWatts
Chris Young heads the Intellectual Property team at MinterEllisonRuddWatts in New Zealand. He is a specialist intellectual property lawyer and well recognised commercial IP and brand strategist. His work spans a wide range of areas and includes a subspecialty in media, film and television production handling local legal work for a wide range of productions typically from US producers, ranging from long term TV series including Spartacus, Ash v Evil Dead and Power Rangers, through to films including the Avengers, Thor and Thor Ragnarok. Other key areas of Chris’ practice include IP commercialisation, branding, trademarks, licensing, marketing, sponsorship, commercial agreements, handling all the IP aspects of commercial/corporate transactions, IP aspects of TMT, privacy, IP audits. He also advises on IP and other regulatory aspects in the pharmaceutical / medical/ medical device industries and other regulatory work.
Chris has an extensive international practice both for New Zealand based export clients and also handling for international clients inbound work into New Zealand and Australia, with wide networks including through the IBA ( International Bar Association) and INTA (International Trademark Association where he has previously chaired the Asia Pacific Famous And Well Known Marks subcommittee, and he currently chairs the Bulletin subcommittee for Asia Pacific ).
We also take a look at the challenges investors may face, including how to market their cannabis-based product.
Can you share the advantages of investing in the cannabis industry during this time?
Investing in public stocks versus investing capital in a commercial enterprise involve distinct challenges. The factors to consider are dependant on the unique circumstances of each case. Moreover, it should be noted that the cannabis industry includes more than the production, sale, and consumption of marijuana. The cannabis market is rapidly evolving to include both the medical and recreational production and use of cannabis and cannabis-derived products (such as CBD), medical and other research and development, and cannabis’ industrial derivative, hemp.
However, the (legal) cannabis industry is a budding market. Wall Street estimates vary significantly, which stands to reason since there is relatively limited historical data to extrapolate projections, but a consensus is that the U.S. will account for a third to half of all marijuana sales in a $40+ billion (USD) market by 2030.
There is always a risk of being “too early” to market. In the cannabis space, many companies have discovered the disparate treatment of the industry among states and the federal government was a bridge too far. However, with the legal landscape becoming more favourable, it makes sense to be the “first to market”. On the whole, cannabis stock prices are expected to rise with more favourable legislation, and states which have seen cannabis laws pass are likely only to hand out a finite number of licences. With respect to the latter, there is a considerable amount of investment in time, money, and local outreach which must be accomplished to better your chances to secure a licence.
What should investors be cautious about?
The key concern is that the recreational cannabis industry is prohibited by the federal government. The general consensus is that this is likely to change. However, there really is no guarantee that it will, and any change at the federal level is likely to be incremental and gradual.
The major federal law prohibiting personal possession and sale of cannabis is the Comprehensive Drug Abuse Prevention and Control Act of 1970. While small quantities carry relatively minor penalties (for first offences), charges related to large quantity trafficking can place an individual behind bars for decades and levy millions of dollars in fines. Where banking and other institutions engage in transactions involving cannabis or proceeds from the sales are concerned, the Bank Secrecy Act, Money Laundering Statute, and Unlicensed Money Transmitter Statute are the three primary federal criminal laws that can be triggered. Violations of these laws can result in fines up to $500,000 and jail time.
Since cannabis is not legal at the federal level, banks generally refuse to provide basic banking services to cannabis businesses. This forces industry players to deal in cash, and lots of it. The raising of capital is done by issuing stock (which dilutes existing shareholders), private equity, venture capital, and, in limited cases, credit unions.
Federal law also shapes the cannabis industry as a whole. Federal prohibition restricts interstate transport. As a result, investors have to set up redundant operations in multiple states.
Are there any further regulations that pose challenges for investment in this sector?
The Bankruptcy Code is a federal law that, among other things, provides a mechanism for distressed companies to reorganise their debt and emerge as a healthier, more profitable entity. The Bankruptcy Code includes significant protections to those entities which elect to take advantage of an opportunity for a fresh start, including a broad stay against virtually all creditors, located in any state, from continued attempts to recover property of the bankrupt debtor – even through the state or federal judicial system. However, in order to qualify for such protections, the bankrupt debtor’s business must be “legal” in the eyes of the federal government.
In April of 2017, the Director of the Executive Office for United States Trustees, which oversees the federal government’s interest in bankruptcy cases, made clear that it was the policy of the United States Trustee Program that United States Trustees move to dismiss all cases involving cannabis assets on grounds that such assets may not be administered under the Bankruptcy Code. The directive included those cases filed by debtors directly engaged in the cannabis industry, as well as those cases involving cannabis assets (for example, landlords who received rent where the proceeds derived from cannabis sales). The result has been the dismissal of most bankruptcy cases even when the debtors are arguably only indirectly involved in the cannabis industry.
For those wanting to turn investment into company formation, what unique issues do they face when it comes to insurance? How can they get around this?
Carriers face similar risks as other financial institutions which are subject to criminal prosecution for their involvement with cannabis-related businesses. Most insurers are owned by banking institutions.
The cannabis insurance industry has come a long way. Companies can obtain coverage. However, you must read the policy carefully to determine policy limits and confirm whether certain coverage is carved out. There are options for certain types of property and casualty lines, including general commercial and product liability. There are carriers that offer D&O policies for public and private companies.
Since many cannabis-related businesses primarily operate with paper currency, and house a large amount of product that can be stolen and sold on the black market, crime is a significant part of their risk exposure. Those looking to invest in or create a cannabis company can provide insurers with certain due diligence, including details of the security programs employed by a business to prevent crime. The measures taken must be commensurate with the operation. Businesses with robust risk management programs will have better coverage options.
The line between CBD and Marijuana is sometimes confusing – how can this create issues during marketing and advertising, especially when using a social media platform where those reached are from different states, where cannabis remains illegal?
Like interstate transportation, marketing is federally regulated. With the passage of the Farm Bill in 2018, Congress legalised the cultivation of hemp and hemp products. Under the Farm Bill, hemp is defined as cannabis but with no more than 0.3% of THC (the chemical responsible for mind-altering effects). Cannabinoids (or CBD) are a set of chemical compounds found in the cannabis plant. Under the federal Farm Bill, CBD product derived from hemp is legal. However, it is possible to derive CBD from cannabis with more than the 0.3% of the THC limit, which is illegal.
With its legalisation, federal agencies, like the FDA and FTC, must treat CBD (from hemp) the same as any other regulated product. Most large social media channels prohibit the advertisement of CBD (from hemp or cannabis) and cannabis. Recently, Facebook started loosening its restrictions on hemp-based CBD ads, but there are plenty of rules to follow if you don’t want them to pull yours down.
Any advertiser should carefully consider and gain a full understanding of how far and wide any platform might reach, especially if it has the potential of reaching across state lines, or into a state in which cannabis or cannabis-derived CBD is illegal.
When a company is formed in this sector, what HR challenges are presented? How is testing and cannabis use managed?
Company HR concerns will be dependant, in part, on the state in which the company is located. In New York’s recently passed legislation, employers have no legal obligation to permit use of recreational cannabis in their workplace. In addition, while off-site usage is protected, the law includes provisions allowing employers to take action against employees who are impaired at work where their performance is lessened or the employee’s conduct interferes with the ability to provide a safe and healthy workplace. Employers likewise have no obligation to violate local, state or federal laws or allow conduct that jeopardises their receipt of federal funding.
In New Jersey, employers have broader discretion and are authorised to take action where an employee is found to be impaired and presents a positive test. No other harm or risk is required.
Donald W. Clarke
Counsel
Basking Ridge
973.387.7804 (Direct)
Newark
973.533.0777 (Direct)
Donald W. Clarke is Counsel at Genova Burns LLC and a member of the firm’s Bankruptcy, Reorganization and Creditors Rights and Cannabis Law Groups. He has extensive experience with complex restructuring matters and a comprehensive understanding of federal, state, and local laws, including regulatory requirements, across all industries. This experience has enabled Mr Clarke to assist clients with their navigation of such regulatory schemes outside of bankruptcy, including in the space of cannabis law.
He explores the common risk factors and the process behind identifying if more could have been done by the prison institution to save inmates from committing suicide.
Suicide in jails and prisons is a significant public health issue in the United States and worldwide. It is the second leading cause of death in jails and third in prisons. A lawsuit follows 90% of suicides.
Inmate suicide attempts and suicides are the most common causes of litigation in jails and prisons. Lawsuits, often motivated by money, attempt to establish liability by stakeholders, including healthcare professionals and jail and prison officials. Clinical research has established the common risk factors, risk identification and risk assessment process.
A lawsuit follows 90% of suicides.
Two types of claims are common: 1) malpractice, mostly against healthcare providers, often litigated in state courts; and 2) §1983 civil rights violation claims which are litigated in federal courts. Sometimes, both types of claims can be made simultaneously.
In a malpractice claim, a medical or psychiatric expert's role is to establish a proximate relationship between any deviation from the standard of care and the resulting death or injury.
A correctional expert's role in a §1983 lawsuit is more complicated and fraught with problems and challenges. The typical allegation in a deliberate indifference complaint focuses on how the facility officials and/or health care providers intentionally disregarded an inmate’s serious medical need, violating his constitutional right, embedded in the 8th Amendment protection against cruel and unusual punishment. Suicide vulnerability and risk is deemed to be a serious medical need of an inmate. Usually, the §1983 based lawsuit includes claims of poor staffing and lack of staff training, causing and contributing to inmate suicide. Such claims have their origin in Monnell v. Department of Social Services, New York City[1]. There is no general agreement on what constitutes deliberate indifference.
The plaintiff must prove certain key elements to be successful on a §1983 claim. The court in the Palakovic case established that: 1) the individual had a particular vulnerability to suicide, meaning that there was a ‘strong likelihood’, rather than a mere possibility, that a suicide would be attempted; 2) the prison official knew or should have known of the individual’s particular vulnerability; and 3) the official acted with reckless or deliberate indifference, meaning something beyond mere negligence, to the individual’s particular vulnerability[2].
In Kempf v. Northumberland City Jail[3], relying on the expert report of Dr A. E. Daniel, the court determined that: “the (decedent) posed a significant suicide risk at the time he was booked and remained so throughout the confinement at (prison); and the placement of the (decedent) in a cell with known anchor points with bedsheets and clothing, knowing his obvious and substantial risk, amounted to deliberate indifference.”
The main challenge for the correctional expert is to establish that the decedent was particularly vulnerable to suicide.
Correctional experts generally include correctional psychiatrists, forensic psychiatrists, correctional physicians and nurses, correctional administrators, and jail and policy experts. They encounter several unique challenges in performing expert analysis and rendering professional opinions.
The main challenge for the correctional expert is to establish that the decedent was particularly vulnerable to suicide. The presence of specific risk factors, a key to making the decision, include a near-lethal suicide attempt/s during six months preceding the final event, active suicidal ideation with intent and plan during detention, active mental illness with psychotropic medication use, a mental state of hopelessness and narrowing of interests, anxiety and agitation and a psychosocial stressor acting as a precipitant of suicide. Some may be in a state of alcohol or opiate intoxication and withdrawal. These risk factors are likely to cause the inmate particularly vulnerable to suicide.
There is no standard methodology, special technique or formula to analyse the claims of civil rights violations involving suicide. An expert must perform an objective review and examination of screening documents, correctional records, mental health and medical records, applicable policies and procedures, administrative directives, state statutes, and testimonies to determine whether the facility health care professionals and correctional officials complied with standards of practice and procedures or committed acts of omission and commission, that can be interpreted as conscious, reckless disregard of the inmate’s suicide vulnerability. Then, the expert applies his hands-on experience, specialised knowledge and research in arriving at a logical and reasoned set of observations, findings and professional opinions. Since the subject of the lawsuit is deceased, no direct examination is feasible or required.
As per Federal Rules of Evidence 26, an expert is required to submit a report of the analysis and study. The expert renders the opinions with a reasonable degree of professional certainty or probability (more likely than not). The well-reasoned opinions establish the link between the officials’ knowledge of and subsequent lack of action to address the inmate’s suicide vulnerability. In civil rights violation cases, what an individual official (defendant) did or did not do must be identified in the report. Occasionally, a rebuttal report to address any disagreement with the opposing expert may be required.
In Farmer v. Brennan[4], Justice Souter positioned the required standard of proof between negligence on the one hand and acting with purpose or intent on the other, which basically amounts to "recklessness". In deliberate indifference lawsuits, the plaintiff is required to show that the defendants (prison officials or health care professionals) "knew" (had actual knowledge as opposed to should have known) the serious medical need and disregarded the "excessive risk to inmate's health or safety".
There is no standard methodology, special technique or formula to analyse the claims of civil rights violations involving suicide.
It is not uncommon that the defendants may move to strike the expert’s opinions[5], citing that the expert’s opinions are not relevant or reliable and that opinions invade the province of the jury by purporting to render conclusions of the law. Once such a challenge is made, the expert has the burden to prove by a preponderance of the evidence that the expert’s testimony is both relevant and reliable. Federal Rule of Evidence 702 indicates that an expert can testify if: 1) the expert’s scientific, technical, or other specialised knowledge will help the trier of fact to understand the evidence or to determine a fact in issue; 2) the testimony is based on sufficient facts or data; 3) the testimony is the product of reliable principles and methods, and 4) the expert has reliably applied the principles and methods to the facts of the case.
By properly performing the expert analysis based on technical, scientific and specialised knowledge of the subject matter, i.e., suicide vulnerability, a serious medical need, and applying the acceptable methodology to analyse the data and facts, expert testimony will assist the trier of fact.
Note: The article is based on the author’s Book (in reparation) titled “Suicide in Jails and Prisons.”
Contact Information:
www.prisonsuicideexpertwitness.com
Dr A. E. Daniel, M.D. specialises in the forensic application of his clinical expertise to issues involving civil, criminal, and correctional matters. Board Certified in Adult, Child and Forensic Psychiatry, Dr Daniel is Adjunct Professor of Psychiatry at the University of Missouri and a Distinguished Life Fellow of the American Psychiatric Association. He served as Associate Editor of Journal of the American Academy of Psychiatry and the Law.
Practising Forensic Psychiatry for over 30 years, Dr Daniel has evaluated close to 4,500 patients involved in civil, criminal, child custody and correctional matters and has testified more than 350 times on the forensic issues involved, in both state and federal courts.
[1] Monnell V. Department of Social Services of the City of New York, 436 US.658 (1978)
[2] Palakovic, 854 F.3d at 223-24, W.D. Pa. (2008)
[3] Estate of Kempf v. Washington City., No. CV.15-1125,2018 WL4354547
[4] Farmer v. Brennan, 511 U.S.825, 836, [1994}.
[5] Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993)
The European Parliament has backed the Brexit trade and security deal, a key step in ensuring that tariff- and quota-free trade between the UK and EU continues.
The Trade and Co-operation Agreement (TCA), which has been operating provisionally since January, was approved with 660 MEPs in favour and 5 against, with 32 abstentions. However, in an accompanying resolution the chamber described the 23 June 2016 Brexit referendum result as a “historic mistake”.
Lord Frost, the UK’s chief negotiator, said that the vote “brings certainty and allows us to focus on the future”.
Michel Barnier, Lord Frost’s opposite number in the Brexit negotiations, was less enthusiastic. "This is a divorce. It is a warning, Brexit. It's a failure of the European Union and we have to learn lessons from it," he told the European Parliament.
The deal does not address all the tensions that remain in the wake of Brexit. Northern Ireland trade remains covered under a separate protocol defining it as part of the EU’s single market, meaning that goods shipped to the country from the UK must undergo Eu checks.
While the TCA covers trade in goods between the UK and the Eu, it does not cover services – which make up the bulk of the UK economy. Other areas not covered by the TCA include foreign policy, financial services and student exchanges.
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The UK’s exit from the EU at the start of the year prompted a record loss in trade between the two blocs, with UK exports to the continent falling by 40.7% and imports falling by 28.8% in January. Though trade volumes have since increased, they remain below pre-Brexit levels.
Irwin Mitchell has become the latest firm to allow its staff to choose their own model of work post-pandemic.
The firm’s 3,000 staff have been told that, subject to their role and client work being completed effectively, they will be able to choose when and from where they work, whether that be from home, in the office or using a hybrid model. The firm will also pay staff a 3% bonus and repay funds it received through the government furlough scheme after a strong performance throughout 2020.
The announcement followed research among Irwin Mitchell’s clients and staff regarding the best approach to working in the future. The majority of respondents suggested that they would prefer a hybrid system that would support both working from home and other locations.
Irwin Mitchell has said that a more flexible model will fit with efforts to encourage travel only where necessary and reduce its reliance on paper.
“We've seen throughout the pandemic how much colleagues have embraced working from home and have appreciated being able to work flexibly around their lives,” said Susana Berlevy, chief people officer at Irwin Mitchell. “From listening to our colleagues we anticipate most people to take up hybrid working patterns with time split between offices and home.”
“It's crucial that we trust our colleagues to make the best choice for themselves, the other colleagues in their teams and their clients in how they decide to work in future.”
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Irwin Mitchell has 15 offices across the UK, which are due to be open at 50% capacity when lockdown measures are slated to end on 21 June.
The Sheffield-based firm has also reportedly been considering a stock market flotation on the London Stock Exchange.
The European Union said on Monday that it had launched legal action against British-Swedish pharmaceutical giant AstraZeneca over a shortfall of COVID-19 vaccine deliveries to the bloc.
"The Commission has started last Friday a legal action against the company AstraZeneca on the basis of breaches of the advanced purchase agreement," said EU spokesman Stefan De Keersmaecker. “Some terms of the contract have not been respected and the company has not been in a position to come up with a reliable strategy to ensure a timely delivery of doses.”
Keersmaecker added that the action was launched “on behalf of the 27 member states that are fully aligned in their support of this procedure".
AstraZeneca stated its intention to strongly defend itself from the legal action, which it dismissed as “without merit”.
"AstraZeneca has fully complied with the Advance Purchase Agreement with the European Commission and will strongly defend itself in court," the firm said in a statement.
AstraZeneca’s COVID-19 vaccine was intended to be the centre of the EU’s vaccination drive, but the company has now become embroiled in arguments with the European Commission over shortfalls of delivered doses. AstraZeneca has stated that it is due to have delivered roughly 50 million doses to Europe by the end of April, but the commission argues that this is far lower than the amount that should have been shipped.
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At the heart of the dispute is AstraZeneca CEO Pascal Soirot’s argument that the company is only bound to a “best reasonable efforts” clause in its contract with the EU. The commission has argued that the rest of the contract holds AstraZeenca to a greater legal responsibility and slammed its continued delivery of promised vaccine doses to the UK, where it is headquartered.
Diplomats have stated that any lawsuit against AstraZeneca would begin in a Belgian court in accordance with agreements laid out in the company’s contract with the commission.
