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Court Watch
Ninth Circuit Reforms CA Covenant Not to Compete; CA Supreme Court Will Consider 'Narrow Restraint' Exception
Section 16600 of the California Business and Professions Code provides that '[e]very contract by which anyone is restrained from engaging in a lawful profession, trade, or business of any kind is to that extent void.' There is little dispute that this provision nullifies post-term covenants not to compete in franchise agreements except in very limited circumstances, such as the statutory exceptions for a covenant in an agreement for the sale of a business or in connection with the dissolution of a partnership or a limited liability company. See, e.g., Scott v. Snelling and Snelling, Inc., 732 F.Supp. 1034 (DC Cal. 1990).
Over the years, at least two judicially created exceptions to '16600 have been formulated: A covenant not to compete will be enforced to the extent necessary to prevent unfair competition and protect trade secrets, see, e.g., ReadyLink Healthcare v. Cotton, 126 Cal.App.4th 1006 (2005); and a covenant will be enforced if it only amounts to partial or narrow restraint on the covenantor's exercise of its profession, see, e.g., General Commercial Packaging v. TPS Package, 114 F.3d 888 (9th Cir. 1997). The few California state intermediate appellate court opinions that discussed an exception to '16600 based on the limited scope of the covenant involved based their decisions on narrow factual situations. See, e.g., Dayton Time Lock Service, Inc. v. Silent Watchman Corp., 52 Cal.App.3d 1 (1975) (exclusive dealing contract in franchise agreement); Broughton v. Socony Mobil Oil Co., 231 Cal.App.2d 188 (1964) (challenge to term in deed to property prohibiting use of property for sale of petroleum products).
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Stranger to the Deed Rule
In 1987, a unanimous Court of Appeals reaffirmed the vitality of the "stranger to the deed" rule, which holds that if a grantor executes a deed to a grantee purporting to create an easement in a third party, the easement is invalid. Daniello v. Wagner, decided by the Second Department on November 29th, makes it clear that not all grantors (or their lawyers) have received the Court of Appeals' message, suggesting that the rule needs re-examination.