BLT: August 2020

 

Featured Articles

Business & Corporate

Oh, What a Relief Liu Is: Liu v. SEC and Relief Defendant Disgorgement

In Liu v. SEC, the United States Supreme Court confirmed the Securities and Exchange Commission’s (SEC) ability to seek disgorgement of ill-gotten gains as an equitable remedy in SEC enforcement actions in federal court.* However, the court limited the SEC’s ability to obtain such relief, holding that equitable principles require that a disgorgement award not exceed the wrongdoer’s net profits and be set aside to reimburse victims. This decision has clear implications for defendants charged with liability under the federal securities laws, who may now challenge any proposed disgorgement award that fails to deduct the defendant’s legitimate business expenses or does not set aside disgorged funds for fraud victims.

Business & Corporate

Whose Jurisdiction Is It Anyway? Gunn v. Minton and What It Means for Jurisdiction over Patent Licensing Disputes

Jurisdiction over patent licensing disputes is a tricky concept to navigate. The U.S. Code grants district courts original jurisdiction “of any civil action arising under any Act of Congress relating to patents, plant variety protection, copyrights and trademarks.”[1] However, cases involving patent license agreements implicate federal patent law issues and state contract interpretation issues. Thus, in such situations, the issue presented is determining the presence of “arising under” jurisdiction under 28 U.S.C. § 1338.

Business & Corporate

Why a Company Should Consider Using an Executive Committee of Its Board of Directors

The role of a public corporation’s in-house general counsel/chief legal officer has always been a difficult balancing act. The general counsel must be an expert advisor to the company’s CEO and board of directors. He or she must fulfill significant legal obligations to the company’s owners and creditors. An effective general counsel also must function as a knowledgeable business partner in senior management. The complex responsibilities of the position have been written about extensively in numerous professional publications and have been amplified by laws passed, regulations issued, and court cases over many years.

Business & Corporate

No Free Lunch: The Global Privacy Expectations of Video Teleconference Providers

While the availability of video-conferencing technology has proven to be a boon for many given the challenges of working remotely during the COVID-19 pandemic, the use of such technology is not without privacy and security risks. Unfortunately some users have fallen victim to so-called "zoom bombing" or "zoom raiding" incidents whereby their business meetings were hijacked by Internet trolls or hackers that inserted racist, anti-Semitic, sexist, and/or profane imagery on their screens and chat boxes or otherwise disrupted their audio feeds. Many video teleconferencing platform providers were seemingly caught unawares, scrambling to shore up their security settings by hastily releasing updates in order to patch critical vulnerabilities and convince users that they could continue online collaboration safely without fear of unwanted intruders.

Business & Corporate

Repeal or Amend Section 16(b) of the Securities Exchange Act of 1934, the “Short Swing” Disgorgement Provision

Congress should repeal or modify section 16(b) (Section 16(b)) of the Securities Exchange Act (Exchange Act) of 1934.[1] This provision requires certain corporate “insiders” to disgorge profits that they earn from “short swing” transactions in the stock of public companies. Section 16(b) defines a purchase and sale, or sale and purchase, within six months’ time as a short-swing transaction. Congress included the provision as part of the original Exchange Act in an effort to discourage insider trading.

Month-In-Brief