A LITIGATOR’S ADVICE ON LITIGATION AVOIDANCE

Alan N. GreenspanAlan N. GreenspanJackson Walker LLPJackson Walker LLPagreenspan@jw.comagreenspan@jw.com

© 2004 by Alan N. Greenspan.All rights reserved

Not me . . . or my dad

OVERVIEW

Good contracts make good neighborsGood contracts make good neighbors Be smart about intellectual propertyBe smart about intellectual property Inform yourself about informationInform yourself about information What to do when your worst nightmare What to do when your worst nightmare

becomes realitybecomes reality

Good Contracts

Define in writing what you are getting Define in writing what you are getting and givingand giving

A good contract is worthless if ignoredA good contract is worthless if ignored The one with the best paper trail winsThe one with the best paper trail wins There’s really no such thing as There’s really no such thing as

“boilerplate”“boilerplate”

Choice of Law/Venue/Forum

Choose law for Choose law for allall disputes disputes Choose venue and courtChoose venue and court Choice may not be enough - Create Choice may not be enough - Create

connections to the venueconnections to the venue Waive all venue challengesWaive all venue challenges

Choice of LawThis contract, the entire relationship of This contract, the entire relationship of the parties hereto, and any litigation the parties hereto, and any litigation between the parties (whether grounded between the parties (whether grounded in contract, tort, statute, law or equity) in contract, tort, statute, law or equity) shall be governed by, construed in shall be governed by, construed in accordance with, and interpreted accordance with, and interpreted pursuant to the laws of the State of pursuant to the laws of the State of Texas, without giving effect to its choice Texas, without giving effect to its choice of laws principles.of laws principles.

Avoiding Fraud

Merger and integration clauseMerger and integration clause Negate inducement and relianceNegate inducement and reliance

Negate Inducement and Reliance

Buyer warrants and represents that no promise or inducement has been offered except as set forth herein. This Agreement is executed by Buyer without its reliance upon any oral, written, express or implied representations, statements, promises, warranties or other inducement of any nature or sort made by any person or party hereto other than as is expressly set forth herein.

Dispute Resolution

Choose your methodChoose your method Create exceptions for emergenciesCreate exceptions for emergencies Create limitations if possibleCreate limitations if possible

Dispute ResolutionAny controversy or claim arising out of Any controversy or claim arising out of or relating to this contract, or the breach or relating to this contract, or the breach thereof, and any dispute between the thereof, and any dispute between the parties hereto, shall be settled by parties hereto, shall be settled by arbitration administered by the arbitration administered by the American Arbitration Association under American Arbitration Association under its Commercial Arbitration Rules, and its Commercial Arbitration Rules, and judgment on the award may be entered judgment on the award may be entered in any court having jurisdiction thereof.in any court having jurisdiction thereof.

Disclaimers

Disclaim UCC warrantiesDisclaim UCC warranties Disclaim or limit liability and damagesDisclaim or limit liability and damages Disclaim UCITA warrantiesDisclaim UCITA warranties All disclaimers need to be conspicuousAll disclaimers need to be conspicuous

UCC DisclaimersSeller expressly disclaims all warranties of any kind, Seller expressly disclaims all warranties of any kind, whether express or implied, including without limitation, whether express or implied, including without limitation, any implied warranties of fitness for a particular purpose, any implied warranties of fitness for a particular purpose, of merchantability, or of noninfringement. Buyer disclaims of merchantability, or of noninfringement. Buyer disclaims any right to the recovery of special damages, any right to the recovery of special damages, consequential damages (including without limitation, lost consequential damages (including without limitation, lost profits), statutory damages, punitive damages, or profits), statutory damages, punitive damages, or exemplary damages, regardless of the theory or grounds exemplary damages, regardless of the theory or grounds for recovery therefor and notwithstanding Seller’s for recovery therefor and notwithstanding Seller’s knowledge thereof. Any damages recoverable by Buyer knowledge thereof. Any damages recoverable by Buyer are limited to the amount paid by Buyer to Seller in the are limited to the amount paid by Buyer to Seller in the calendar year preceding the date the cause of action calendar year preceding the date the cause of action accrued.accrued.

UCITA DisclaimersWarranties of noninterference with information, noninfringement, accuracy of informational content, and merchantability of computer programs are expressly excluded. Competing claims may exist and Licensor grants only such rights as it actually possesses. Except for the express warranties stated in this contract, if any, the applications are provided with all faults, and the entire risk as to satisfactory quality, performance, accuracy, and effort is with Licensee.

Stopping Class Actions

YOU FURTHER AGREE NOT TO JOIN IN ANY LAWSUIT WITH ANOTHER PERSON OR SERVE AS A CLASS REPRESENTATIVE OF ANY CLASS ACTION LAWSUIT AGAINST PARTY A.

Intellectual Property

Trademarks – protect “good will”Trademarks – protect “good will” Copyrights – protect expression of an Copyrights – protect expression of an

ideaidea Trade secrets – protect Trade secrets – protect secretsecret ways of ways of

doing business and related informationdoing business and related information Patents – protect novel inventionsPatents – protect novel inventions

Trademarks

AvailabilityAvailability RegistrabilityRegistrability Priority of usage and registrationPriority of usage and registration The use of ™ and ®The use of ™ and ®

Copyrights

Employer automatically owns what Employer automatically owns what employees createemployees create

Employer Employer does not owndoes not own what what independent contractor createsindependent contractor creates

Registration is not necessary but Registration is not necessary but recommendedrecommended

When to use ©When to use ©

Trade Secrets

Confidentiality agreements and Confidentiality agreements and ownership assignments generally are ownership assignments generally are enforceable in Texasenforceable in Texas

Noncompete agreements generally are Noncompete agreements generally are not enforceable in Texas (but might be if not enforceable in Texas (but might be if carefully drafted)carefully drafted)

Patents

Hey, I’ve only got 15 minutesHey, I’ve only got 15 minutes And the guy in the front row fell asleep 5 And the guy in the front row fell asleep 5

minutes agominutes ago

Information Control

Every website should have terms and Every website should have terms and conditions of use – with all the disclaimersconditions of use – with all the disclaimers

Every website should have a privacy policy Every website should have a privacy policy that is followedthat is followed

If you collect personal information you need If you collect personal information you need state of the art security technologystate of the art security technology

Every company should have document Every company should have document retention policy for electronic dataretention policy for electronic data

Your worst nightmare

If there is any basis to believe you have If there is any basis to believe you have insurance coverage, notify your insurance coverage, notify your insurance carrier right awayinsurance carrier right away

Get a lawyer involved earlyGet a lawyer involved early It’s too late to implement a document It’s too late to implement a document

retention/destruction policyretention/destruction policy