We now hear from Pritha Jha who is an expert in ensuring that M&A transactions run as smoothly as possible. Here she discusses how parties can ensure their deal is completed in the least stressful way, and what the investment scope is currently looking like in India.

When negotiating contracts, how many people are ‘too many people’? What would you claim as the ideal team for negotiation?

It is not about how many people, but more to do with how many different types of personalities are involved. As long as the negotiating table is evenly balanced with people who are aggressive negotiators, people who are passive observers, and of course those who have years of experience in deal making, negotiations are fruitful and move along smoothly. Generally, a negotiating team should consist of no more than four people on either side: a mix of individuals from the target and the acquirer that know the business, and lawyers that know their documents and the sector in which investment is being made. There can never really be a perfect team, you need to draw resources depending on the crux of what is being negotiated.

When has testing boundaries worked in your favour during negotiation? What would you say are key characteristics to maintain in order to achieve the ideal outcome for your clients?

There are numerous times when a party on the other side has staged a “walk out” in the middle of negotiations. That can be troublesome. But honestly, in most cases this is more of a positioning and negotiating tactic. Take a step back, give both sides a week to cool off and they will be back on the table to find the middle ground that works for both. Rarely have I ever seen a deal fall through due to legal negotiations. There is always room to negotiate. You need to figure out what will work for you and the other side. The only way to cut through the lengthy negotiations is to offer solutions and think out of the box instead of harping on about what has already been stated and is not agreeable.

What difficulties do you face when advising multi-national companies? How do you ensure your knowledge on each related jurisdiction enables your clients to make the best decision?

The expectations of multinational companies are very high. They expect the turn out time to be short and require a high degree of expertise.

When advising multinational companies across jurisdictions, one has to be at least generally familiar with the legal framework of the relevant offshore jurisdictions involved in the transaction, though one is not expected to be an expert. It is not easy to keep oneself updated of the laws of multiple jurisdictions. You keep yourself briefly updated on the significant developments in such jurisdictions through interaction with law firms of these jurisdictions.

What are common mishaps that acquirers often make when trying to bring in innovative change to the sellers’ share – especially in a case of part ownership?

Part ownerships can be tricky. It is very important for the acquiring party to understand the kind of corporate culture that the target follows. Strategic acquirers tend to believe that once the acquisition is made, they can bully entrepreneurs and everyone within the organisation to adopt new policies of the acquirer overnight. Change is difficult to deal with for most people, and imposing it can lead to needless hostility. Sometimes, changes can be imposed without the attempt to have any prior discussions with the management team. In my experience, it is very important to have people with great soft skills on the ground post acquisition to make the acquisition successful. Managing the expectations of people, moulding people within your own scheme of things, making them work with you rather than against you, at the same time making it look like a collaborative effort is an art few people can master. The actual success of an acquisition can depend greatly on this.

How have you seen the M&A sphere change over the years - have there been any significant changes that took you by surprise?

The M&A sphere has changed over the years and recently has been very active. As the gestation period for setting up a new business could be long and cumbersome in India, growth through M&A is considered to be a speedier alternative. Further, due to changes in law such as: amendments to the takeover code, company law, competition law and foreign investment regulation, there has been an increase in the M&A activity. Since the last few years, even private equity funds have been engaged in M&A, which earlier saw mainly strategic buyer participation.

In the next year, what investments are you looking out for in India?

M&A in media and advertising is growing at a very quick pace. Having advised on most of the acquisitions within this space in India over the last few years, I expect this sector to be active over the next couple of years as well.

On the PE side, we have been very active in the healthcare, pharmaceutical, financial services and insurance space over the last few years. Given the recent foreign investment liberalisations in these sectors, we expect a significant growth in transactions in this space as well.

Pritha Jha

Associate Partner

DSK Legal

www.dsklegal.com

Pritha Jha is an associate Partner at DSK Legal, who specialises in private equity and strategic acquisitions of media and advertising companies. After graduating in law in 2007, her years of experience has enabled her to work up the legal ladder. Her motto is: “Achieving deal closure is a matter of knowing what is of importance to a client and negotiating in a manner that addresses concerns of all parties in the best way possible. A good deal is where you get a win-win for all sides, where the bigger picture can be achieved. Think out of the box!”

DSK Legal was set up in 2001 and has since established an excellent reputation for its integrity and value based proactive, pragmatic and innovative legal advice and its ability to help clients effectively traverse the complicated legal and regulatory regime in India. With offices in Delhi, Mumbai and Pune, DSK Legal has grown rapidly on the strength of its expertise to a multi-disciplinary team with over 100 lawyers, including 13 partners. We are modern and inclusive in our outlook, and have a solution oriented approach.

We now hear from Mary DeVuono Englund, a Senior Deputy in the Civil Division of the King County Prosecuting Attorneys’ Office, who represents the Department of Natural Resources Wastewater Treatment Division on their capital programme issues. We also hear from David Goodnight, a litigation partner at Stoel Rives, LLP.

“When a construction contract dispute occurs that is likely to result in a large case, I engage outside counsel such as Stoel Rives LLP to work with the County,” explains Mary.

“One such case, King County v. Vinci Construction Grands Projects et al. was litigated to a $155 million jury verdict in favour of King County. The net judgment and attorneys’ fee award have now been upheld by the Washington Supreme Court.”

Both Mary and David use their expertise to discuss key areas in construction, including the fees covering litigation, assessing contractual risks and avoiding disputes in relation to project delays.

What are the typical contractual issues that clients need assistance with?

Mary: In the public works contracting arena, clients most often need assistance with contractor requests for additional money, which are referred to as requests for change order in King County’s contract. The other frequent issue is project delay.

What do you think could be done to ensure disputes are avoided regarding delays in the project schedule?

David: In the contract under administration relationships, it is helpful to build into the claims process a bias toward open dialogue, to avoid confusion and obfuscation.

Mary: As in-house counsel, working closely with the client, you have the opportunity to guide the project manager in using contract provisions to reserve the owner’s rights while encouraging project delay recovery. Although project delay cannot usually be fully recouped, the owner and the contractor have a mutual interest in minimising further project delay.

This approach was successful on the King County Ballard Siphon Replacement. The project involved a new 7-foot-diameter sewer pipe tunnelled under the Lake Washington Ship Canal. The new pipe is more than 120 feet under the surface and will carry Combined Sewer Overflows during storms. For several reasons, the tunnelling progress under the canal was much slower than planned and seriously impacted the project’s critical path.

By the time it is acknowledged that a major delay is occurring, the owner and the contractor probably have strong opinions about the cause of the delay: a differing site condition, defective specifications, a lack of specialised expertise, or bad management. The owner and the prime contractor may continue to disagree about the cause of the delay and those issues will be addressed under the contract provisions, but they need to change their focus from who is at fault to recovery from the delay.

On the Ballard Siphon project, the owner’s project design was revised to move a structure out of the tunnel shaft and the contractor re-sequenced its baseline schedule so that work could be performed concurrently with tunnelling. By re-sequencing activities in collaboration with the owner’s re-design, the contractor ‘found time’ which mitigated the cumulative project delay and extra cost. Cost liability is then resolved under contract claims provisions.

What strategies do you implement when assessing contractual risks for your clients?

Mary: Engaging an expert construction claims analyst is a useful strategy, especially in conjunction with a strong audit clause in the construction contract. You can deploy your expert to perform an audit of the contractor’s project cost records, which allows you to inform your client about how much money the contractor has either made or lost on the job and assess the real value of the cost requests the contractor is making. Likewise, an expert schedule analyst can determine when and why the delays on the project actually occurred as opposed to the claims rationale the contractor may be presenting. With this information I am much better prepared to assess the client’s risks of any action under the contract, such as a denial of a request for change order.

David: If litigation occurs, we ask our lawyers to place an economic value on the claims. This is what we refer to as a Litigation Risk Analysis, which calculates the value of a claim by multiplying the claim amount (e.g., $25 million) times the likelihood of success (e.g., 60-80%) to provide a risk adjusted value of a claim (here, a range of $15 - $20 million). This is helpful to our executives in assessing settlement offers and in making reasonable demands.

How do you go about considering the costs of litigation?

Mary: We request that our lawyers provide us with budgets, which we update at least quarterly against actual spend.

If a contractor defaults or breaches a contract, does an owner like King County have contractual or statutory remedies?

David: Yes, an owner may sue for breach of contract or even “default” if a contractor fails to perform as promised. Default termination is appropriate if the breach is material and the contractor fails to cure. King County’s contract provides a process for a corrective action plan. If the contractor fails to provide such a plan, an owner can then hold the contractor in default and terminate the contract.

Is it possible in your experience to recover the costs and fees associated with litigation?

David: Yes, for instance, costs and attorneys’ fees may be awarded when a surety or insurer is a defendant. In Washington, a recent Supreme Court decision holds that while there are many differences between an insurer and a surety, an award of attorneys’ fees is proper when the surety, or insurer, wrongfully denies coverage. In other words, if the insurer or surety forces the insured or beneficiary of the bond to initiate litigation to enforce its rights, then all costs, fees and expenses can be recovered against the surety or insurer. In a recent case, King County recovered $14.6 million against a surety defendant following a contractor’s breach, when the surety refused to fulfil its obligations under a surety bond to step in and cure the contractor’s breach. The Washington Supreme Court held that a full award of all costs and fees, including expert expenses, was justified where the surety compelled King County to assume the burden of legal action to obtain the benefit of the performance bond. King County v. Vinci Construction Grands Projets, 188 Wash.2d 618 (2017).

Can such costs and fees be sought even where there is a separate statutory remedy?

David: Yes, in the King County case, the Court held that the statutory remedy for fees and costs provided in Washington law, RCW 4.84.250, is not the exclusive remedy available to the County.

Do you have any practice tips for public or private parties seeking to enforce their contractual rights?

David: Of course, several. First, if you are forced to litigate disputes, request a risk analysis that provides your executives with the economic value of the case. They can then make any adjustments up or down based on their tolerance for risk. Second, if there is either insurance or a performance or payment bond that applies to the contract, keep track of all costs and expenses incurred in enforcing your client’s rights. Finally, if you are forced to sue either an insurer or a surety to compel them to fulfil their obligations, carefully evaluate the potential recovery of all costs and attorneys’ fees.

As a thought leader, how are you helping to develop and implement construction legislation?

Mary: Much of what I do in addressing legislative proposals is preventative, because the contractors’ and subcontractors’ industry groups are very active in pushing for legislative remedies to principles established by case law in Washington State. King County construction contracts contain standard general terms and conditions, which require contractors to submit claim notices and documentation within specified timeframes. King County, like all owners, needs clear and enforceable rules that provide reasonable certainty in order to manage public projects effectively and efficiently. The Washington courts have supported this principle in cases such as Mike M. Johnson Inc. v. Spokane County, 2003 WL 22410697, which has triggered repeated legislative efforts by contractor groups interested in eliminating claim documentation requirements. Public owners need to be aware of legislative efforts that may disrupt reasonable contract requirements that provide for the orderly administration of construction contracts.

Mary DeVuono Englund | King County Prosecuting Attorney’s Office| Civil Division
500 4th Avenue, 9th Fl Seattle, Washington 98104 | (206) 477-9521

David R. Goodnight
Partner
www.stoel.com
P – (001) 206 386 7586

Mary DeVuono Englund is a Senior Deputy in the Civil Division of the King County Prosecuting Attorney’s Office. Her practice involves representing County clients with large infrastructure capital programs. She advises County agencies on construction law and related insurance coverage issues, and represents King County in alternative dispute resolution forums and litigation. Prior to joining the Prosecutor’s Office, her private sector practice involved representing contractors and subcontractors on government and private projects. Ms. DeVuono Englund is admitted to United States Court of Federal Claims and has served on the Construction Law Council of the Washington State Bar Association.

David Goodnight is in his 31st year of law practice and thoroughly enjoys it. He is a trusted adviser to public and private clients in major disputes. His work includes commercial, intellectual property, land use, partnership, construction, and tax and telecommunications litigation. David has tried cases to juries and judges in various state and federal courts throughout the U.S. Before joining Stoel Rives, David was a law clerk for the Tenth Circuit of the United States Court of Appeals (1988‑1989) and in the United States District Court for the Northern District of Indiana (1986‑1988).

For some, taking over the globe does not necessarily mean world domination. Instead, it means marking their business on every corner of the world; take McDonalds, for example, you will struggle to visit a part of the world that has not at least one of the franchise’s restaurants pitched up. But what are the legal requirements and how do we go about it? We speak with Tim Pickwell, who has been in the franchising industry for over 30 years, and touches on the obstacles franchisers may face.

Can you list three important things business people should consider or be aware about before they decide to franchise their business or concept?

To successfully franchise a concept or brand, an owner must first understand why their own business is successful and why it can be replicated, then must be committed to having their franchisees succeed, and finally, must leave their original business behind and focus on the growth of the franchise system. So, in essence: understand your own business, commit to your franchisees and transition from being a small business owner, to a franchising executive.

What legal obstacles do businesses often face when expanding as a franchise in the United States?

Franchising is regulated at the national level by the Federal Trade Commission which mandates the use of a detailed Franchise Disclosure Document. FDD’s can range from 150 to 400 pages, and it is expensive to compile the information and prepare the initial FDD.  Then there are 14 key states which require that you actually register and revise the FDD and submit it for annual review. Having an FDD which accurately discloses the business opportunity, while satisfying Federal law and State Examiners is critical.  Except for high-level executives in publicly traded companies, few business people are used to the type of disclosure and scrutiny required in franchising.

What financial obstacles do new franchisers often face?

Successful deployment of capital is critical. I have seen well-capitalised start-up franchisers blow through $500,000 in two or three years, and undercapitalised franchisers run out of cash before they get off the runway. My most successful clients grow organically at first, work out some kinks on costs and site selection, use consulting talent judiciously on an as needed basis, and then bring on staff and ramp up their marketing and growth only when their training and systems can support it.

What area of law poses the most challenges for franchising?

Franchising in the medical area is especially challenging because of healthcare privacy laws on the one hand, which make it difficult for a franchisee to share data or information with a franchiser, and state law restrictions on professionals, such as doctors or dentist forming partnership with non-professionals, along with restrictions on sharing fees - such as royalties - with non-professionals.

You spent the first 12 years of your career in-house handling international expansion for CENTURY 21 and then JACK IN THE BOX restaurants. What challenges came your way when you supervised international franchising for JACK IN THE BOX?

Well, with CENTURY 21, the challenges were legal. With JACK IN THE BOX, the challenges were operational. The quick service restaurant (QSR) segment in the United States is highly evolved, with suppliers who manufacture food products to detailed tolerances, in order to cook perfectly with the right equipment in good time. At JACK IN THE BOX in the US we had the cost of a slice of tomato figured out to four decimal points and the tomatoes were so consistent they looked like they came out of a factory. Overseas, especially in Southeast Asia in the mid-1990’s, the supply chain could not support our franchisees. In some instances, they were not yet purchasing in enough volume to get the interest of the large manufacturers. One supplier told a franchisee, “It would cost me more to shut down our line and change to your molds and recipes than you are paying me.” When McDonald’s expands internationally, it takes its entire supply chain with it, they build local farms and factories, and everyone loses money for several years until they reach critical mass. JACK IN THE BOX did not have the capital or time to replicate that model.

How do international franchise regulations differ from the United States?

Well, when I started, they differed by being non-existent. We worried about basic contract law and enforceability of key provisions overseas. But, our franchise regulations seem to have infected many parts of the world. Many Canadian provinces now have a pre-sale disclosure requirement, as does Australia, Mexico and a number of other countries. If anything, the international arena is becoming more similar to the US, with fewer differences, although you still need to proceed with a case-by-case, country-by-country analysis.

How have you seen franchising change over your 30-year legal career?

The biggest change is sales. It used to be face-to-face, door-knocking salesmen, or, large trade shows. Advertising for franchise sales was in a newspaper. Now we see the internet, and the rise of “portals” being dedicated to lead generation and franchise sales. Now, those are being eclipsed at a rapid rate by SEO, Facebook and other more targeted means.

What changes would you like to see in franchise laws?

Franchise laws have not caught up to the internet. Unregistered franchisers are not typically targeting a state which may require registration in advance. Now, it’s a citizen of that registration state searching on the internet for a business and initiating contact with the franchiser. After an exchange of e-mails and a phone call, that franchiser may have inadvertently violated the state’s pre-offer registration requirement. I’d like to see that change. Franchisers should be able to explore a market, assess interest, and then decide to register without penalty.

Tim Pickwell
Certified Specialist
Franchise & Distribution Law
State Bar of California Board of Legal Specialization
Pickwell Law Group
Hacienda Del Mar
12625 High Bluff Drive, Suite 108 B
San Diego, CA 92130
P: (858) 793-1094 / F: (858) 793-1096
tpickwell@pickwelllaw.com
www.pickwelllaw.com

Mr. Pickwell’s unique in-house background enables him to provide practical, business-oriented solutions to franchisers and franchisees. His expertise includes intellectual property licensing and trademark matters, international franchising, retail lease drafting and negotiations, franchise registration and compliance, litigation advice, and general corporate and business matters. Clientele include established franchisers, large restaurant companies, multi-unit franchisee organisations, as well as single-site retailers, and start-up franchisers. Mr. Pickwell is a member of the California Bar, and a Certified Specialist in Franchise and Distribution Law. He is admitted to the Federal District Courts for the Northern, Central and Southern Districts of California.

Pickwell Law represents restaurant, franchise and retail companies.

• We work with start-up franchisors, and draft and register franchise agreements and Franchise Disclosure Documents.

• We advise franchiser clients on all aspects of franchising (sales, advertising, co-ops, terminations, renewals).

• We draft and review purchasing and distribution agreements.

• The firm serves as de facto General Counsel to companies with revenues from $2 million to $200 million.

From a trial lawyer’s standpoint, a practice in professional liability is always intellectually challenging. Speaking with a Partner at Robie & Matthai, Kyle Kveton says: “I rarely, if ever, try the same type of case twice.  Representing lawyers in vastly different fields presents an unparalleled opportunity to learn from my clients and to acquire a level of insight into areas of practice I otherwise would not engage in.  Most lawyers never have this type of opportunity.”

With over 30 years’ experience, Kyle speaks on his expertise and reveals how businesses can avoid unnecessary litigation and considerations that must be made when considering a  malicious prosecution action.

Can you offer three “nuggets” of advice for businesses (and lawyers) to consider in order to avoid unnecessary litigation?

(1) One thing I have found in the course of litigating transactional malpractice cases over the years is that while many transactional lawyers are skilled in document drafting, they have never litigated a breach of contract case, or consulted with someone who has litigated a breach of contract case.  In my experience, litigation can often be avoided by having transaction documents drafted by someone with a joint transaction/litigation background, or by ensuring that transaction counsel consults with litigation counsel during the drafting process.  Litigators can be valuable in catching hidden land mines in deal documents.

(2)  Keep in mind that even the best intended of deals can go awry and even the best of business partners can find themselves at odds.  Deal documents (and retainer agreements) should be written with the recognition that disputes may occur, and should, to the extent possible, include provisions controlling what happens if the parties to the deal “break up.”  In other words, consider whether your transaction documents need to have some features of a classic prenuptial agreement.

(3)  If and when disputes arise, start working with your business partner (or your client) toward resolution, not toward “posturing” for litigation.  I am always amazed at how many seemingly insurmountable differences can be overcome when both sides recognise that informal resolution is infinitely cheaper than litigation.  Consider including a provision in transaction documents requiring the parties to meaningfully engage in informal dispute resolution (even mediation) as a prerequisite to filing suit.

Can you explain alternative considerations you and your clients must make when regarding malicious prosecution actions?

I rarely, if ever, recommend that clients I have successfully defended sue for malicious prosecution.  There are several reasons for this: first, in many states, anti-SLAPP statutes exist, which allow a malicious prosecution defendant to seek early dismissal of the case.  Many statutes provide that if the defendant is successful in obtaining early dismissal, an award of attorney’s fees against the malicious prosecution plaintiff automatically follows.  Second, under many anti-SLAPP statutes, an order denying an anti-SLAPP motion is immediately appealable, which means that even if the malicious prosecution plaintiff defeats the anti-SLAPP motion, the litigation can get bogged down for two or more years while sitting in the appellate courts.  Third, while revenge is sweet, litigation carries an opportunity cost.  Every hour a business (or a lawyer) is engaged in litigation is an hour the business (or lawyer) is not doing what it should be doing in the first place.

As an expert with years in professional liability, what are the most common cases you were instructed on, and how complex can liability investigations become in these cases?

Over the years, my firm and I have been fortunate enough to handle an extraordinary variety of malpractice cases.  We have defended claims involving family law, tax, commercial transactions, intellectual property, estate planning, bankruptcy and debtor-creditor relationships and criminal law, to name a few.  Right now, we are involved in several “high stakes” malpractice lawsuits, where our lawyer/firm defendants represented their former clients for years before being sued.  The liability investigations in cases like these can be extremely complex.  They involve a long history of representation, often involving many different types of advice, and the documentary evidence is likely to be extensive.  One of the hardest things to do in cases like these is to distill years of representation and mountains of facts into a coherent narrative for a jury to understand when the case goes to trial.  In fact, the more complex the case, the more necessary it is for trial counsel to develop concise and coherent themes that allow a jury or judge to easily understand what can be seemingly overwhelming evidence at trial.  Clarity persuades.

How often do you see liability cases resolved swiftly, or can they be very complex?

There is no easy answer to this question.  Every case is different.  I believe my clients should be defended zealously, particularly since legal malpractice claims strike at the very heart of a lawyer’s biggest asset:  his or her reputation.  Nonetheless, I believe that the best service I can provide to a client at times is to give him or her the bad news that his or her case is one of liability, and that it should be resolved sooner rather than later.  Our firm believes in providing an early and careful analysis of a professional liability case so that we can be in a position at the outset to give a client a fair understanding of what lies ahead.  And, early evaluation allows us to be focused and efficient as we proceed through discovery and trial.

What common challenges do professional liability lawyers face within this field and how do you navigate them?

One of the biggest challenges I face on a regular basis is helping my clients, and sometimes judges, overcome the perception that “everyone hates lawyers.”  I cannot count the number of times that judges or mediators have told me that juries do not like lawyers.  It has been my experience in decades of trying malpractice cases that jurors respect hard working lawyers who try to do their best for a client, even if the representation wasn’t “perfect.”  Jurors can accept that lawyers are human, and they understand that that having a license to practice law does not guarantee perfect results.  Where a lawyer has acted reasonably, ethically, and diligently, juries are readily capable of returning verdicts in favour of lawyers.  My job is to help them get there.

In what past cases would you say your liability expertise has been a game changer for your client, and to what do you attribute the success?

Over the years, our firm has developed a reputation for jumping into cases at the last minute.  Often, a fresh look can add a new perspective on strategies and tactics.  In a case a few years ago, I was asked to associate in on the eve of trial.  The case involved claims of negligence against an insurance broker for failing to obtain appropriate coverage for an international client.  I was able to help devise a strategy which encouraged the plaintiff to file an amended complaint.  As I anticipated, the newly-amended complaint raised a statute of limitations issue that had not been readily apparent in the earlier pleading.  We promptly filed a demurrer asserting that the complaint was time-barred, and the trial court agreed.  The trial court’s dismissal was eventually affirmed on appeal.  It was gratifying to add value to the existing defence.

Kyle Kveton
Partner
kkveton@romalaw.com
(213) 706-8000

I am a partner in Robie & Matthai, A Professional Corporation.  The firm just celebrated its 30th Anniversary, and I have been practicing with my partner, Edith R. Matthai, for over 30 years.  The firm is a trial and appellate firm.  I do both trial and appellate work (and have acted as outside general counsel for some privately held companies).  I hold the rank of Associate with the American Board of Trial Advocates and I am a Senior Fellow of the Litigation Counsel of America. 

I am a member of the Los Angeles County Bar Association, the American Bar Association (Business Law Section), the Association of Business Trial Lawyers, and the Association of Southern California Defense Counsel.  I have been a faculty member for the National Institute for Trial Advocacy continuously since 2005, and have taught both deposition and trial skills programs for that organization. 

I have tried over 30 matters to decision, including over 20 jury trials, and have been counsel of record on approximately 50 published and unpublished opinions issued by the California Court of Appeal and the California Supreme Court.  I am admitted to practice in the courts of the State of California, all federal District Courts within California and the Ninth Circuit Court of Appeals. 

China has slowly creeped up and overtaken substantially in the IP world; with Japan being the previous leader in innovation and IP patenting, we decided to get in touch with legal expert Katsumori Iseki, who discusses how the Chinese patent growth is affecting Japan and its business.

How would you describe the current growth in patent applications and the overall atmosphere in the IP sphere?

The worldwide growth of the number of patent applications and the growing awareness toward intellectual property rights (IPRs) should be appreciated. However,  such awareness has to contribute to the business’ success and it is much more difficult to succeed in business than to obtain patent rights. Although IPRs are just a tool for achieving success, businesses can benefit substantially from using the IPRs strategically. Therefore, the current global tendency towards IPRs is desirable, but establishing IPRs systems which will hinder business growth should be avoided. Especially more so in the recent so-called ‘Fourth Industry Revolution’ age, where there is an increasing demand for new IPRs systems to protect unprecedented new technologies.

The worldwide growth in the number of patent applications is mainly due to the rapid growth of applications in China. It is based on the rising of awareness for IPRs by Chinese companies and also based on the IPRs’ policies implemented by the Chinese government. In fact, the number of Japanese patent applications from China has largely grown recently and we have actually witnessed such a growth in our firm as well. Besides, we have found that some Chinese companies tried to build strong and hybrid IPRs portfolios by using design patents. More importantly, the number of lawsuits related with IPRs and trials for IPRs invalidations is also rapidly increasing in China. It means that Chinese companies drastically, but firmly, have accumulated experiences in enforcement, defence and lawsuits in a short period of time, which normally takes more years to companies in other jurisdictions, particularly in Japan. Basically, Japanese companies have high awareness towards IPRs and high practical capabilities - such as interpreting the scopes of IPRs - and, in most cases, they have settled problems relating to IPRs with other Japanese companies before going to court. Therefore, those Japanese companies who have less experience with lawsuits and its practice would surely be exposed to the threat by Chinese companies with rich practical IPRs experiences from now on.

Many large Japanese companies have gathered experience in acquisition and enforcement of IPRs, especially in the US and Europe, and they are also largely experiencing the filing and prosecution of processing applications in China. Furthermore, they are recently turning their eyes to ASEAN regions in terms of protection and enforcement of IPRs, but some far-seeing companies seem to be getting prepared for lawsuits and trials for invalidation in China in cooperation with local Japanese and Chinese patent attorneys. These companies believe that China will become the important venue for IP disputes in the near future in terms of forum shopping. As a matter of fact, our firm is seeing an increase in the number of consultation cases for those preparations and issues for our Japanese clients. These issues would be more and more important not only for Japanese companies but also for other oversea companies in the US, Europe, Korea and so on.

Katsumori Iseki

Founder

www.cpjapan.com

Katsumori ISEKI is a Japanese patent attorney practicing within the IP field for more than 17 years. His experience includes working at a US law firm; meanwhile, he has been appointed as an adviser of management support for Organisation for Small & Medium Enterprises and Regional Innovation, JAPAN. He is currently a board member of FICPI JAPAN. He obtained his LL.M. (Master of Law) from UC Berkeley, Law School.

Katsumori ISEKI is a founder of CPJAPAN IP Attorneys, a Japanese IP law firm established in 2011. CP JAPAN IP Attorneys’ activities range from ordinary practices obtaining IPRs of patents, designs and trademarks to consultations regarding not only domestic but also cross-border IP disputes, management and so on for SMEs and start-ups. Since we have a native Chinese patent attorney, a Taiwanese patent attorney and Korean IP practitioners, our IP services to those countries in relation to Japan are extensive, effective and efficient. In addition, we have experienced Ph.D. practitioners in the field of life science. Thus, our patent attorneys, in cooperation with those practitioners, can provide our clients with insightful and extensive practices. Our international team, including not only above native staffs but also practitioners with international experiences in North America and Europe, can overcome promptly and efficiently the complicated cross-border IP issues faced by our clients. More than half of our clients are international, mainly from China, Korea, Germany, France, and US. The remainder of our client base comprises domestic companies, primarily SMEs.

By Eva-Maria Strobel, Partner at Baker McKenzie

The trademark landscape is evolving rapidly, with both brand owners and trademark professionals trying to keep up. The changes are mostly driven by the steep rise in trademark applications — there was a 13.7% increase in trademark filing activity in 2015, according to WIPO — and shrinking budgets as all involved are tasked with doing more with the same or fewer resources.

These issues present challenges to those responsible for ensuring that potential future marks are fully cleared prior to application and current marks are properly watched after registration. While considering lower cost alternatives certainly can be attractive, as discussed below, there is a great deal of risk if you cut corners. A trademark professional should always properly clear a mark prior to registration and protect marks after application.

Increasingly trademark lawyers and professionals are seeking new ways to deliver value to our clients — whether that is combining and making better use of the tools available for search and clearance, or reinforcing the importance of expert analysis and advice in the process.

Trademark professionals and brands alike need to be consistent in the way they approach search and make use of the same practices they have used in the past to avoid risk, while considering challenges they face and the way that the trademark landscape is evolving.

The importance of Search, Clearance and Watch

Increasingly what we are seeing as trademark lawyers is that due to budgetary constraints, clients are relying on Google, EUIPO or USPTO when searching and clearing a trademark. There are inherent dangers here in that these online resources do not cover all areas of search, lack the reporting capabilities of paid-for tools, and do not include the analysis and expert advice offered by trademark professionals.

Practically speaking, brands simply cannot afford to clear every single mark. One of the examples of this that I have encountered centres on a well-known consumer goods manufacturer that relies on a large in-house team of IP lawyers for search and clearance. With a wide range of products, the marketing department began moving away from more technical names in order to make them more appealing to customers. Due to the number of products the company produced, it was not practical or cost-effective to clear each mark. These marks were seen as temporary and were never meant to be developed as stand-alone brand names. However, with so many moving parts in the trademark management process, the marketing department continued to use some of these names and use them more prominently than initially envisioned.

The danger here is that once these uncleared marks are used more visibly in promotional campaigns, packaging and on websites, or even on the goods themselves, there is an increased likelihood that a competitor who owns a prior mark will become aware of such use, leading to disruptive disputes, costly settlements or – in the worst case - retracting products from the market.

While brands cannot clear all marks, in the above example hundreds of names for individual products, they need to work with trademark professionals to find a balance between using the mark and the risk involved. These companies need to make use of fundamental clearance procedures and have an understanding around what is actually possible in the longer term to mitigate the legal risk if these marks are still necessary. Whether that is using customised search to look for specific terms (such as slogans) or descriptive terms; or broadening the scope of what is cleared.

This also applies to marks on watch — what we see is that many clients only watch their primary marks or those in certain regions, ignoring the global picture or lesser, seasonal marks.

While there are challenges when it comes to budget, the importance of searching, clearing and watching properly, making use of both the right technology and professional expertise is clear in the numerous examples of companies that have gotten it wrong and paid the price.

When Trademarking Goes Wrong

Consider the case of Chernae Noonan versus Benefit Cosmetics LLC in Australia.  Benefit Cosmetics, a subsidiary of Louis Vuitton Moet Hennessy, had been using the trademark “Brow Bar” in the US since 2003. In 2008, the company applied to register the mark in Australia. Australian business owner Chernae Noonan, who had registered “The Brow Bar” in 2005 for her chain of beauty salons, opposed the registration on the grounds that it was likely to cause confusion with her established brand. The Australian Trade Marks Office upheld Noonan’s opposition, denying the registration. Further, Benefit Cosmetics was forced to pay costs.

In another example going back a few years, perfume maker Guerlain SA of France opposed an application by Italian cruise line Costa Crociere for the trademark “Samsara” in class 44 for “Spas, Turkish baths, sauna services, health spa services, all provided on board cruise ships” on the basis of its prior Community Trademark “Samsara” in class 3 for the products “Soaps, perfumery, essential oils, cosmetics, hair lotions, dentifrices.” The then named Office for Harmonisation in the Internal Market (OHIM) — now the EUIPO — upheld the opposition. The applicant appealed to the General Court of the European Union. The General Court upheld the OHIM decision, citing the similarity of the marks and the likelihood of confusion given the similarity of services in class 44 and products in class 3. Did Costa Crociere fully clear the mark SAMSARA, or did they limit clearance to Class 44 services only, disregarding the risk that there may be similarity between such services and Class 3 goods and eventually likelihood of confusion?

What these cases demonstrate is that before establishing a new brand, or entering new markets with existing brands, it is wise to perform a full availability search in the targeted jurisdiction(s) covering the right Classes to identify potential conflicts early – and when we are talking about the targeted jurisdictions, the recommendation is not to focus on the key markets only but to at least conduct an identity search with a broad geographic coverage (keeping in mind that there may, for instance, be a recently filed registration or pending application in a not-targeted jurisdiction, and the right holder may decide to expand its geographical scope of protection within the 6-months priority deadline into the targeted jurisdictions). Failing to do this can lead to costly legal proceedings, inability to use your brand in key markets, and negative publicity that could damage your brand image.

The Value of Expertise

There is more to the trademark management process than search and clearance. In the same way, there is more to the process than just the tools or technologies that are used.  As mentioned before, the expertise and advice that trademark professionals, such as lawyers, can offer, brings immeasurable benefit to the client. This is particularly true when it comes to reviewing search and watch results. While the results generated are important to the process, so too is the analysis and interpretation by trademark professionals — be wary of solutions that remove the review stage because it exposes clients to risk and doesn’t provide the full picture. Of course, as a trademark lawyer I rely on having the right tools on hand, and the right vendor to supply those. The support and service from these vendors, that match the hours I tend to work, is invaluable.

In my experience, clients do have budgetary issues and other challenges. But more and more they are turning to us for commercial and practical considerations alongside legal advice, all things we are able to deliver because of our depth of expertise in this area and the data we have access to.

Yes, there may be competing marks, but the value of our advice comes in the form where we can analyse what the likelihood of litigation may be; is the mark being used? How is the mark being used? Is it used often or randomly, or not for years? Does the mark’s owner aggressively enforce its trademark rights? And it is here that we can advise if the risks are manageable or too high to be considered.

There are many strategies that can be used when considering a conflict, but these are not always used if legal counsel is bypassed or brands make use of low-cost services.

The number of trademark applications is rising exponentially, making the landscape that much more difficult to manage. The fact is that due to these numbers, finding a unique mark is near impossible. However, with the right tools, analysis and expertise delivered by trademark professionals, IP lawyers and in-house counsel, conflicts can be managed and the entire trademark management process can be done more effectively and efficiently.

Eva-Maria Strobel is a partner in Baker McKenzie's European Intellectual Property Practice Group. Managing IP and WTR 1000 rank Eva-Maria Strobel as one of the leading trademark lawyers in Switzerland. Eva-Maria is admitted to the bars in Switzerland and Germany, and worked in the Firm’s Frankfurt office prior to relocating to Zurich.

Paul Davidoff starts this insightful interview by stating: “Where there are trusts involved, in particular offshore trusts or any other foreign elements, there is no substitute for good, clear and comprehensive advice. However, choosing an adviser is a very personal decision, but whatever ‘softer’ qualities you are looking for, making sure the adviser is a member of STEP is an excellent start”. Here he reveals more about his journey into specialising in the private client field and what clients should consider when delving into onshore or offshore trusts.

When working with lawyers from other jurisdictions, what are their common misconceptions about the UK’s legal system and regulations?

When advising clients who have non-UK connections, some foreign lawyers expect that, under English/Welsh law, a person must leave a specified portion of their estate to certain relatives. To say we do not have such rules in England is not quite right, as, amongst other things, there are statutory provisions allowing certain people making a claim against an estate if not adequately provided for - importantly, these are not exactly the same as the foreign ‘forced heirship’ concepts.

Also, where our foreign clients buy real property (eg a house) in the UK, foreign advisers frequently believe that a Will from the client’s home country will be sufficient to deal with the UK property and that no other advice is needed. It is rare that a foreign Will is the most appropriate way to deal with a property in the UK and, at the very least, an English lawyer should be instructed to advise on this and also on the raft of important potential UK tax liabilities which affect UK property owners.

Can you share three important points all people should note when regarding offshore, as opposed to onshore, trusts?

(a) The UK tax treatment of offshore trusts (trusts resident outside the UK) is almost entirely different to that of onshore trusts (trusts resident in the UK). The complexity of the offshore regime cannot be overstated. Misunderstanding about the tax rules, their apparent unfairness as between beneficiaries and unexpected tax charges on UK-resident beneficiaries can lead to bad feeling between the trustees and the settlor or beneficiaries.

(b) Wherever a trust is resident, the trust assets do not belong to the beneficiaries nor to the settlor. This needs to be made absolutely clear at the outset and the settlor and the beneficiaries need to understand that they cannot direct trustees to use the trust’s assets how they (the settlor/beneficiaries) want, unless there is an express power in the trust instrument to that effect. Courts take a very dim view of trustees who merely follow the direction of the settlor or a beneficiary, without giving the matter proper deliberation.

(c) Many offshore trusts will need professional trustees and the administration will be carried out by a trust administration company (and not free of charge by the trustees personally). Offshore trustees are likely to need tax (and possibly legal) advice from more than one jurisdiction in order to make appropriate decisions. Consequently, the costs involved with offshore trusts tend to be much higher than for onshore trusts. It is vital to consider: what is the purpose of this trust and do the likely costs and complexity involved negate the benefits of having the trust?

Can you share the transition and motivation behind originally specialising in Classics and Arabic to the legal industry? Do you see this qualification inspiring you in a unique way when dealing with legal cases?

Until after the end of university, I had never considered becoming a lawyer. After a spell in IT, I was called up for jury service and sat on one jury for four days. Just over a year later, I had given up IT and had started the law conversion course. In the end, I was most intrigued by the ‘private client’ field (Wills, trusts, probate, tax, etc) as this is something which affects everyone and gave me the opportunity to find ways to help individuals and families sort out their personal affairs and navigate the complexities of the tax that affects them.

Many say that classicists make good lawyers (and computer programmers!). Latin and Greek are very logical languages. Arabic is said to be one of the hardest languages to master. Law involves a lot about interpreting language and conveying meaning concisely and accurately – something for which my linguistic background was perfect training. Experience of other cultures is a great advantage in any walk of life – the wider one’s experience, the easier it becomes to understand other people.

Paul Davidoff

Partner and Head of Private Client

+44 (0)207 400 7770.

pdavidoff@moonbeever.com

Moon Beever, Bedford House, 21a John Street, London WC1N 2BF

Paul Davidoff a Partner and Head of Moon Beever’s Private Client team.  He is a prize-winning member of STEP (the Society of Trust and Estate Practitioners) and has been recognised in Chambers & Partners, the Legal 500, Super Lawyer, LMG Euromoney’s ‘Expert Guides’ and the Citywealth ‘Leaders List’.  He has extensive experience in all aspects of Private Client work, advising both UK and international clients on Wills and succession planning, all aspects of onshore and offshore trusts and personal UK tax planning. He acts for UK and non-UK domiciled individuals, executors and other fiduciaries. The US, the EU and the Far East are just some of the regions where he has had recent engagements.

 Moon Beever is a long-established firm in central London which has a long history expertise on private client and property matters, acting for many literary and aristocratic characters as befits its location in the heart of London’s literary quarter. Its private client and property teams now have a proven track record of advising non-UK individuals or those with non-UK interests.  Since the mid 1980’s the firm’s position in the commercial arena has been subject of expansion and development, in particular the insolvency and debt recovery spaces, resulting in an enviable reputation within the profession.  The firm also advises clients on all company and commercial matters, general litigation, family law and employment law.

Clinical Psychology, Expert Witness, Culpability, Crimina Prosecution, Negligence, Personal Injury, Unfitness to Plead

Bernard Kat is a Health and Clinical Psychologist and a Cognitive Behavioural Psychotherapist and has spoken with us this month about his perception of the legal industry, in relation to claimants and defendants clinical negligence and personal injury relating to psychological health. He states: “I devote some time to providing psychological therapies for individuals and couples, however, the majority of my work is concerned with providing expert witness reports for various Courts. From time to time I provide reports in personal injury and clinical negligence cases, and occasionally in Family Court and employment tribunal cases, but most of my reports are commissioned on behalf of a defendant in a criminal prosecution.”

In this interview, he expands on the cases he sees, the moot points he faces in his line of work and the difficulties a clinical psychologist may face when instructed to Court.

My reports are required “to help the Court to achieve the overriding objective by giving independent assistance by way of objective, unbiased opinion on matters within my expertise”. The focus is on the defendant or offender, whatever doubts there may be about the quality of the prosecution case or the abilities or motives of the complainant or prosecution witnesses. My instructions are usually initiated by the defendant’s barrister or solicitor-advocate, but sometimes by the trial judge. Reports may be pre-trial or pre-sentence; each requires care concerning the language used. Pre-trial reports refer to people who have been charged with one or more offences but may or may not be guilty and may have no previous convictions; the report is likely to be read by magistrates or a jury. A pre-sentence report may contribute to a plea in mitigation and will be read by the judge alongside the Probation Service pre-sentence report. Reports are funded by the Legal Aid Authority which has to agree an estimate in advance. The fee for psychologists’ reports was reduced to £93.60 per hour in December 2013 and remains at that level.

Many pre-trial reports are concerned with factors which may affect the individual’s culpability. In other words, could the defendant have chosen to behave differently, or was their capacity to manage their behaviour limited or impaired in significant way?

For example, a person with a learning disability may have little understanding of appropriate behaviour in particular circumstances or of the consequences of their behaviour. A person with a pre-existing head injury or a history of abuse and trauma may have impaired capacity to control their emotional or impulsive behaviour. I have found that young men in their early 20s who received special education but, owing to the closure of follow-up and supportive services and the constraints of the benefits system, find themselves with nothing to do, no prospects and little or no income, are a particularly vulnerable group. “The Devil makes work for idle hands”; they easily become involved in crime owing to drink, or drugs or other people abusing their ignorance and naivety.

In some cases there may be a question about whether such the defendant is fit to plead and stand trial, or will need the help of an intermediary in order to ensure a fair trial. The 2016 Law Commission report on Unfitness to Plead recognised the value of a clinical psychologist’s assessment in such cases.

Another example of doubts about culpability is people who have been arrested on suspicion of a driving offence but were unable to provide a specimen of breath, urine or blood owing to various phobia: did they ‘refuse to provide’ or were they unable to do so?

The recent increase in historical sex abuse cases has raised complex questions about the psychology of memory. Many alleged sexual offences come down to one person’s word against another’s. In these cases are autobiographical memories for events which, if they occurred, did so 30 or even 40 years ago, reliable? Can alleged victims have ‘false memories’? Some defendants are of an advanced age: is their memory functioning intact, or might they be suffering from early dementia? And what about a defendant who was not honest with themselves at the time about what they were doing at the time of the alleged offence; can they give an honest account now?

If a defendant pleads guilty, the Probation Service will be asked to provide a pre-sentence report (PSR). The initial police investigation is likely to have focused primarily on whether an offence had been committed, by whom and whether they were prepared to admit their guilt. The PSR is intended to give the sentencing court some information about why the offender committed their offence(s), whether they feel any remorse, their background, family and work circumstances and their risk of reoffending. Probation reports use actuarial methods to predict risk of reoffending i.e. they look at the offender as one example of a category of offenders. A clinical psychologists’ report can add important additional information about that particular individual by integrating information about their upbringing, life events, beliefs and aspirations and about any psychological disorders and problems affecting them. It can help to make sense of the defendant’s behaviour by putting it into the context of their personal development and social circumstances. Their GP medical record is often a vital source of information, contributing to an accurate chronology, as a source of information that the offender may have misunderstood or forgotten, and as corroboration or correction of the offender’s own account of their past.

Instructions in cases involving sexual or violent offences often include a request for assessment of dangerousness or risk of committing further similar offences. These are amongst the most difficult assessments to undertake and research suggests that such characteristics are not readily predictable. A clinical psychologists’ assessment does not look at the person in isolation, abstracted from their social environment; it will usually see their behaviour as the product of an interaction between their personal characteristics and the demands of the situation in which they found themselves. Unfortunately, the time and information available to make an assessment, and the therapeutic services which might minimise the offender’s risk and ensure public safety in the future, are often limited or even unavailable.

Our criminal justice system attributes criminal responsibility to individuals. As a psychologist, I have seen that our system struggles to cope with defendants whose alleged offence(s) were one side of an interaction with, or were determined by another stronger or more controlling person. Examples include people who were deceived into offending, or were responding to provocation, or were unusually suggestible, or who had been coerced by inescapable pressures, or whose capacity to live with physical, emotional or sexual abuse had been exceeded. Whether criminal responsibility should be attributed to such people at all, or should be reduced because of the fear, pain, confusion or frank incomprehension of the world as seen through their eyes is a question for other people; clinical psychologists can assist by addressing the complexity of such situations.

Finally, I will mention just three of the challenges which face a clinical psychologist offering expert witness services in criminal cases. “For expert opinion to be admissible it must be able to provide the court with information which is likely to be outside a judge’s or a jury's knowledge and experience, but it must also be evidence which gives the court the help it needs in forming its conclusions.”, (CPS Guidance on Expert Evidence 2014). There are those in the criminal justice system who believe that there is no significant difference between the science of psychology and ‘common sense’, and therefore clinical psychologists offer very little that a jury cannot work out for itself. One challenge is to acknowledge and respond to those beliefs. Another challenge is entirely practical; the quality of the settings in which remand prisoners have to be assessed on ‘official visits’ can make the task very difficult. Asking people to discuss their traumatic pasts, their real fears and their shameful behaviour in those settings is not conducive to a good service to the Courts. The third is a personal emotional reaction; I have sometimes been surprised, even shocked by the consequences of the incentives to plead guilty and by the length of prison sentences given for what (in my naivety) had seemed to me to be relatively minor or accidental offences. I might understand better if such sentences led to adequate therapy, rehabilitation and resettlement, but apparently they do not.

Bernard Kat BA MSc CPsychol FBPsS
Director. Health and Clinical Psychologist
Email: b.kat@psynapse.co.uk
Text: 0 788 799 8375
Daytime phone: 0191 230 6461

Bernard Kat is a Health and Clinical Psychologist and a Cognitive Behavioural Psychotherapist. He is a Fellow of the British Psychological Society and qualified as a clinical psychologist in 1974 and worked in the National Health Service until 2002. Since then, he has worked for his own company, Psynapse (Psychological Services) Ltd. He is based in the North East of England.

Psynapse’s aims:

• to improve the psychological health, wellbeing and performance of clients (from individuals through to organisations and communities) by providing skilled services;

• to innovate, by developing applications of psychology and related disciplines in response to clients' needs and requirements, and

• to design, develop and support high quality services to make those innovations readily available.

Professor Alphonses Heraghty is a sports and recreation expert with more than twenty years of relevant, professional experience. He investigates, reports, and testifies in matters related to recreational programming; sports supervision and instruction; recreational facilities management; playground environments; coaching and ASTM Standards Compliance. His extensive background, in depth knowledge and exceptional communication skills make him an outstanding expert witness.

Alphonses currently serves as Academic Chair of Health & Physical Education at SUNY Suffolk in Brentwood, New York.  Prior to this role he was the Fitness & Aquatics Director and Head Lacrosse Coach at SUNY Suffolk.  He is a Certified Playground Safety Inspector credentialed by the National Recreation and Park Association and is also certified by the National Program for Playground Safety.  He currently serves on the Sports Equipment, Playing Surfaces, and Facilities committee with American Society for Testing and Materials International (ASTM). As the President of Total Sports Consulting Services, he ensures that his company, which specializes in risk management programs for various types of sports, recreation and fitness activities, offers the best advice and service for those undergoing litigation. Total Sports Consulting Services also specialise in the preparation of expert opinions for both plaintiff and defendants, in conjunction with recreation and sport personal injury cases.

As an expert witness, common cases that he is often instructed on are associated with playgrounds, trampoline parks, fitness facilities, sports and recreation activities. From his experience, the common policies and procedures that organisations fail to adhere to, or are unaware about are around the maintenance, supervision, staff training associated with such parks and recreational grounds and activities.

With his expertise, Alphonses can provide a wide range of services to the legal and insurance industries, including:

- Investigation, research and analysis

- Expert testimony at trial and depositions

- Expert reports

- Document review

- Site inspections

- On-site consulting during trial and deposition

- Trial preparation and strategy

Legal Support Services

·         Expert Opinion and Testimony

·         Comprehensive Review of Records, Depositions, Statements, and Incident Reports

·         Site Inspections

·         Expert reports

·         Photographic Presentation

Sports & Recreation

Total Sports Consulting Services can assist in investigating sports & recreation injuries/accidents to help determine how they occurred and whether or not they could have been prevented.

TSCS will investigate:

·         Emergency action plan

·         Supervision & Control of activity

·         Facility Condition is Safe

·         Maintenance of Equipment

·         Adherence to National Standards

Fitness Facilities Operations

·         User actions

·         Personal trainer actions

·         Equipment maintenance

·         Emergency preparedness

·         Facility cleanliness & sanitation

·         Staff training

·         Facility orientation for new users

·         Special class instruction

·         Premises security issues

Field and Equipment Safety

·         Equipment Standards & Expectations

·         Hazard Mitigation

·         Emergency Action Plan Design and Review

·         Equipment Calibration & Maintenance

·         Venue Surface, Lighting & Surroundings

·         Sports and athletic equipment evaluation

Playground Safety

Total Sports Consulting Services can assist in investigating playground injuries/accidents to help determine how they occurred and whether or not they could have been prevented.

Karsten Kranich's professional interest reflects the laws and regulations of life of his clients. His empathy helps him to understand the concerns of his clients through their individual system of values and enables him to protect them through his legal advice. Apart from tenancy and housing law, Mr Kranich also consults his clients in terms of inheritance law and transport law. We speak with him on the changes he has witnessed in Berlin and impacts inheritance has on real estate, which has thus impacted his clients.

How have you seen tenancy law change over the years since you began practising? How has this impacted your clients?

Until 2001, we did not have a homogeneous judge-made law in the field of tenancy law. The German Supreme Court could not decide in tenancy law issues. The highest court you could reach was the Higher Regional Court and this led to different court decisions. But nowadays the German Supreme Court is also responsible for tenancy law cases as the third and last resort. Over the last few years, the German Supreme Court worked tremendously hard and decided many tenancy law cases leading to a more homogeneous judge-made system. I would allege that due to this development the judge-made law now supports the landlord’s interest more than before. A certain social protection of the tenant is not a general criterion anymore, unlike before, where it was sometimes found between the lines of a verdict in earlier times.

What advice would you offer when tenancy contracts are not obeyed by your client’s residents? How often could this be due to missing out important information on the contract itself?

The statutory law, the judge-made law and the specific situation of the contract agreement have an influence when we discuss legal issues. Furthermore the law is always developing. Insofar no contract can rule out everything completely. Our duty as lawyers is to find the right answers. An example: in the past you could allow more than thirty years to unload the refurbishing of a flat onto the tenant with a strict deadline in the contract. Nowadays all these old contract provisions are invalid and the specific condition of the flat after some years is the decisive point.

What big impacts does inheritance have on real estate issues?

Indeed, my clients voice inheritance matters to me when there is an impact to real estate law. It has to be clarified, for instance, what rights or obligations the inheritor has when the tenant or the landlord died. Very often it is also necessary to represent an inheritor against the other joint heirs, when they could not find an agreement about the property; a public auction by court can be then a solution in those cases.

What developments have you noticed in Berlin, which have thus had an impact on real estate?

The rent and costs for real estate have increased tremendously in the last ten years in Berlin. This has led to several attempts by the legislation to establish a counterbalance. For instance, it is prohibited nowadays to rent out your flat as a holiday apartment. The aim is to save the flats for residents in the city. Furthermore, landlords must obey to the average cost of all rents in Berlin, depicted on a binding public rent schedule, as opposed to previously, where the landlord was free to negotiate rent fees. Also nowadays the realtor has to be paid by the landlord, which is different from before, where the landlord namely ordered the realtor to advertise the flat and the tenant had to pay the fee of the realtor. Due to the former judge-made law this was legal; until now, these measures have not been fully sufficient to stop the increasing rents and prices. Other ideas like restricting, by law, the costs for notary or realtor are vaguely discussed in political campaigns.

What changes are you expecting to see in the next year? How does this complement investment opportunities Berlin offers?

We expect that the rent and the price for real estate will further increase in the next years. Also, the possibility to raise the rent after installing a heat insulation will be a way for investors to enlarge their benefits by managing real estate. In this area, the legislation in Germany supports modernisation in several ways. Building law has been renewed by the legislator this year, especially the area of building and selling flats from one hand to the members of an apartment-owner-community, has been ruled in a complete new way. This will probably develop the law rapidly in the next years.

Karsten Kranich
Tel.: 030 / 288 79 057
Fax: 030 / 400 54 137
Mail: info@kanzlei-kranich.de
Internet: www.kanzlei-kranich.de

Lawyer Karsten Kranich has acquired years of experience in different law offices, specialising in real estate law. As an independent consulting lawyer, he devotes himself to tenancy law, inheritance and building law. The specific regulations within these fields can have immediate relevance for the legal relationship between real estate businesses and the living situation of individual persons.