Back Talk Requested, 08.17.08

Posted by Cliff Tuttle

This past week PLBT received a comment on the Ebay post (“Too Good to be Enforceable”) by Shalini at AVVO. She said she was glad to hear that their Q&A’s could be entertaining. In addition, PLBT received an attaboy from a reader on “Should Philadelphia’s Mortgage Foreclosure Program be Adopted in Pittsburgh?”

However, another reader commented that he didn’t understand the message in “Ten Good Reasons to Prepare a Deed.” I responded with an explanation which I hope cleared up the reader’s confusion.

This is an interactive blog and I will publish any responsible comment. If necessary, I will respond directly in the Comments Section. If you like, you can reply to my response. I’ll try to answer questions promptly. If I can’t, I’ll try to look up the answer or ask someone who knows.

There is no reason why we cannot have a dialogue about a post in the Comments. And if someone else wants to join in our two-way discussion, fine.

If there are any legal topics you want to read about that have not been covered by PLBT, send me a comment under this or any other “Back Talk Requested” post.

CLT

Category: Uncategorized

Attorney Thomas Joseph on the Quanta patent decision by the US Supreme Court

Posted by Cliff Tuttle

The most significant decision of the United States Supreme Court in the term ending this June may have been Quanta Computer, Inc. v. LG Electronics, Inc., cited below in the guest blog article by patent attorney Thomas Joseph. If you’ve been meaning to find out about this important case, here it is in a nutshell. Tom is an attorney with the Pittsburgh area law firm of Price & Adams, which concentrates its practice on intellectual property law. Tom can be reached at 412-882-7170.

CLT
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The US Supreme Court recently addressed the 150 year old exhaustion doctrine by holding that the doctrine applies to products that embody method claims. See Quanta Computer, Inc. v. LG Electronics, Inc., 128 S. Ct. 2109, 170 L. Ed. 2d 996 (June 9, 2008).

The two most common formats for patent claims are method claims and apparatus claims. Apparatus claims include a series of interconnected mechanical, chemical, or electrical elements. Method claims include a series of steps for performing a process. Many patents include both apparatus and method claims.

The exhaustion doctrine provides that the initial authorized sale of a patented item terminates all patent rights in that item. In other words, a person who purchases a patented product without restrictions generally has the right to use that product without restriction by the patentee. The exhaustion doctrine does not apply: (1) when the sale is not authorized; (2) when the sale is conditioned upon a lawful restriction; or (3) when the “sale” is actually a license with restrictions.

Prior to the Quanta decision, it was settled law that the exhaustion doctrine applied to apparatus claims. The gravamen of the dispute in Quanta centered around whether the exhaustion doctrine applied to method claims in principle. Once the Court determined that the exhaustion doctrine applied to method claims, the Court had to decide whether the exhaustion doctrine applied to the specific technology at issue.

Ultimately, the Court decided that the computer technology at issue embodied method claims. Accordingly, the Court held that the patentee was barred from asserting its patent rights against the ultimate purchaser by the exhaustion doctrine.

The decision is significant for two reasons. First, method claims are very common in patents that cover computer, software and Internet-related technology due to the fact that the steps within the claims can include broad, functional language that is particularly suitable for that technology. In fact, the Quanta patentee asserted three patents relating to computer technology. Second, the decision follows a recent trend in which the Court has limited the rights of patent holders. See KSR2 International Co. v. Teleflex, Inc., 127 S. Ct. 1727, 167 L.Ed. 2d 705 (2007) (The Court applied a more flexible and expansive test for obviousness in assessing the validity of patents); Microsoft Corp. v. AT&T Corp., 127 S. Ct. 1746, 167 L.Ed. 2d 737 (2007) (The Court limited the scope of extraterritorial enforcement of patents under 35 U.S.C. §271(f)); MedImmune, Inc. v. Genetech, Inc., 549 U.S. 118, 127 S.Ct. 764, 166 L. Ed. 2d 604 (2007) (The Court held that a licensee was not required to break or terminate its license agreement before filing a declaratory judgment action for patent invalidity); eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 126 S. Ct. 1837, 164 L. Ed. 2d 641 (2006) (The Court held that patentees who obtained a judgment of infringement against an accused infringer were no longer entitled to an automatic permanent injunction).

Category: Uncategorized

Ebay Offer: Too Good to be Legally Enforceable

Posted by Cliff Tuttle

AVVO, the lawyer rating website, runs a Q&A feature called AVVO Answers and Advice. Readers ask questions and lawyers who have claimed their AVVO pages answer them. Some questions are more-widely read than others and AVVO recently posted a few that were the most popular. Here’s one about a woman who tried to sell her house on ebay with a twist. Ebay, of course, threw her off the site — but not before she had achieved her goal of getting a great deal of attention.

There are several answers. Don’t quit before you read the last one. Click here.

Category: Uncategorized

Attorney Gerry Elman on copyrighted Photos

Posted by Cliff Tuttle

I came across an outstanding answer to a question on Avvo (the website that rates lawyers) that is worth sharing. Gerry Elman is an intellectual property lawyer from the Eastern end of the Commonwealth. That means patents, trademarks, copyrights, technology and the internet. If you read some of the linked material, you will find that he has been involved with some very intriguing (and challenging) matters.

If you didn’t know, photographs can have copyright protection. The royalties paid for photographs in magazine stories often exceed the fee paid to the author. As Gerry Elman relates, even sketching a figure from a photograph, when done for commercial purposes, may require the artist to obtain the legal right to do so.

Gerry has provided links to extensive references, for those who may want or need to go into great depth. However, he asked me to warn you that the links were somehow shuffled when AVVO posted his answer and the first four links actually refer to links 3 – 6 as originally posted. The fifth link is actually link 7. The sixth link is link 1 and the seventh link is link 2. Got that?

If you need to straighten out the links or ask any more profound questions, you can call Gerry at 610-892-9942.

Now for the AVVO Answer: Click here.

CLT

Category: Uncategorized

Back Talk Requested

Posted by Cliff Tuttle

I have received off-line feedback that some readers are unaware that they can comment on posts on this blog and/or do not know how to do it. The process is very simple. At the end of each blog post (after everything, even the tags) you will see the word “comments”. If you are going to be the first to comment, it will say “no comments.” Click on the word “comments.” Then fill in your name (first name will do if you wish to be anonymous) and email address. If you wish, you can list your web site or blog address as well.

If you ask a legal question, I’ll reply. If you ask a question for which I don’t know the answer, I’ll find somebody who does.

If you wish to ask a question on an area of the law that has not been posted or if you want to suggest a topic to be covered, make a comment on this or any subsequent post labeled “Back Talk Requested”.

CLT

Category: Uncategorized

Obscenity Prosecution Tells a Sad Story

Posted by Cliff Tuttle

The Wall Street Journal Law Blog commented on a Western Pennsylvania Federal Prosecution this past week. From the Pittsburgh Post Gazette account linked to the blog, Karen Fletcher of Donora in Washington County, didn’t sound much like a predatory internet child pornographer. She sounded like a writer. She wrote stories on a for-members-only internet website called “Red Rose Stories” involving brutal sexual crimes against children. Fletcher said she originally wrote them as self-therapy for memories of an abused childhood.

Fletcher plead guilty and received five years probation, with the first six months to be served under house arrest. In her plea agreement, Fletcher admitted that the specified writings in “The Red Rose” were obscene under the test adopted by the United States Supreme Court:

“The defendant, Karen Fletcher, agrees that each of the six
stories (which underlie Counts One through Six of the Indictment),
when each is considered as a separate work, satisfies the following
test for obscenity enunciated in Miller v. United States, 413 U.S.
15, 24 (1973) :
1. An average person, applying contemporary community
standards, would find that the material taken as a whole
appeals to the prurient interest;
2. An average person, applying contemporary community
standards, would find that the material depicts or
describes sexual conduct in a patently offensive way; and
3. A reasonable person would find, taking the material as a
whole, that it lacks serious literary, artistic,
political or scientific value.
The defendant, Karen Fletcher, also acknowledges that the six
charged stories are not the only material, posted to the red-rosestories
web site, which meets the test for obscenity.”

Nevertheless, the arguments made by the prosecution, as reported in the WSJ Law Blog, sound like a case that might have once been made against the writings of D. H. Lawrence or James Joyce. Of course, we will probably never know whether Fletcher’s works had any literary merit. We can’t read them.

Had Fletcher been willing to face the possibility of a serious jail sentence, would she have prevailed, either at trial or on appeal, under the First Amendment? We will never know the answer to that question either. To read the Wall Street Journal Law Blog comment: Click here.

Category: Uncategorized

Settlement vs. Going to Trial: Do Litigants Make Poor Decisions?

Posted by Cliff Tuttle

A study to be published in the September issue of the Journal of Empirical Legal Studies concludes that, in the cases reviewed, “most of the plaintiffs who decided to pass up a settlement offer and went to trial ended up getting less money than if they had taken the offer,” according to an article published in the New York Times on August 7, 2008. To read the story, click here.

According to the study, Plaintiffs made the wrong decision in 61% of cases.

The study involved civil lawsuits in California and elsewhere in which a settlement was rejected in favor of going to trial. The authors of the study concluded that defendants made the wrong decision far less often. However, those decisions were more costly. Wrong decisions cost plaintiffs an average of $43,000. The average case where defendants passed up a settlement and lost resulted in a verdict of $1.1 million greater than the proposed settlement.

This study, involving cases occurring over 40 years, is claimed to be the largest of its kind. It is apparent from the article that a significant number of the cases involve personal injuries, with and without insurance coverage. However, the article did not contain enough detail to determine what kinds of cases were reviewed and the relative mix.

Wrong decisions by plaintiffs, according to this study, were more likely to be made in contingent fee cases. This, they stated, is consistent with psychological studies which confirm that people are more risk averse when the decision involves a gain than a loss. Faced with a sure gain of $200 against a 50-50 chance of gaining $500 or nothing, psych study participants have shown a clear preference for the sure thing. But when a sure loss of $200 is presented against the same chance of losing $500 or nothing, a similar group of participants will prefer taking the chance in hope of losing nothing.

This would indicate that, all things being equal, plaintiffs would prefer a particular settlement more than defendants. However, as eveyone knows, things are never equal.

CLT

Category: Uncategorized

Landlord and Tenant: Security Deposit Trap

Posted by Cliff Tuttle

So you’re eighteen at last and moving into your first apartment with a few friends. There’s rent and a security deposit to pay. You don’t have much money, but no problem. Everybody pays their share.

Then someday, you move on.

About a month ago, I answered a question involving this situation posted by someone from Philadelphia on a website operated by AVVO. AVVO is a multi-state lawyer rating service that has a place for consumers to ask questions and lawyers to provide answers. This particular Q&A has been read by 39 people and one of them left feedback that the answer was helpful. To find out how this story developed, click here.

Hey! Its tough being a grown up!

CLT

POSTSCRIPT: I discovered through Google that another AVVO Question I answered was carried on line by a publication called “Washington CEO.” The Question was about releasing a personal guarantee securing a loan to a business when the employee who gave the guarantee is leaving. In a way, it is a variation on the landlord-tenant Q&A. It is the first Q&A reprinted in the Washington CEO article. My answer is the second one, as another lawyer had also responded. To read the Washington CEO article on AVVO Answers, click here.

Category: Uncategorized

Attorney Jack Plowman on construction contracts and cost allowances

Posted by Cliff Tuttle

The following is a Guest Blog article by Jack W. Plowman, an eminent constuction litigator and fidelity and surety bond litigator. Here he addresses a practical issue arising under commonly-used American Institute of Architects construction contract forms and reaches a well-reasoned conclusion. Jack is currently Of Counsel at Bentz Law Firm, P.C., where he can be contacted at 412-563-4500.

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Is Labor an Extra in Respect to Cost Allowances?

by Jack W. Plowman*

It is common practice in residential construction to set cash allowances for certain items as to which the Owner may wish to exercise personal preferences. For example, some of the usual cash allowances are for kitchen cabinets, bathroom fixtures, or carpeting. If the cost of any of these allowances exceeds the cost allowance specified in the contract, then the Owner pays the additional sum or, if less, a credit is given to the Owner. But does the allowance include the labor necessary in installing the allowance items?
The easy answer is, “what does the contract say?” Unfortunately, the contract is often itself not clear. As an example, the American Institute of Architects Form A201, General Conditions (2007), provides:
3.8.1. “The Contractor shall include in the Contract Sum all allowances stated in the Contract Documents. Items covered by allowances shall be supplied for such amounts and by such persons or entities as the Owner may direct, but the Contractor shall not be required to employ persons or entities to whom the Contractor has reasonable objection.

3.8.2. “Unless otherwise provided in the Contract Documents:

“….

2. “Contractor’s costs for…labor, installation costs, overhead, profit and other expenses contemplated for stated allowance amounts shall be included in the Contract Sum but not in the allowances.”

Thus, it would appear that under the A201, the labor incident to the installation of the cost allowance items, is included in the contract sum for the “work”. “Work” is defined in AIA A201 as follows:
The term “Work” means the construction and services required by the Contract Documents, whether completed or partially completed…and includes all other labor, materials, equipment, and services provided or to be provided by the Contractor to fulfill the Contractor’s obligations. The Work may constitute the whole or a part of the Project.

The Standard Form of Agreement between Owner and Contractor A101(2007) provides:

“The Contractor shall fully execute the Work described in the Contract Documents, except to the extent specifically indicated in the Contract Documents to be the responsibility of others.”

It is strange then that contractors often try to charge the Owner, as an extra, for the labor cost incurred in installing the cost allowance items. But each contract must be individually reviewed, to determine what is included, as all contracts are not as clear on this issue as they should be.
* Of counsel, Bentz Law Firm, P.C.; fellow, American College of Trial Lawyers; Pennsylvania Super Lawyer; member, American Bar Association Forum on the Construction Industry; member, American Bar Association Fidelity and Surety Committee; Member, National Bond Claims Association; Adjunct Professor, Emeritus, Duquesne University School of Law; Past President, Allegheny County Bar Association; Author, Pennsylvania Mechanics’ Liens (Professional Education Systems, 1989); Author, with K.W. Lee, Construction Contracting for Public Entities in Pennsylvania (Lorman Education Services, 2002). Author, Representing the Contractor, in Construction Contracts, from Concept to Concrete (Pennsylvania Bar Institute, 1988).

Permission is hereby granted for the reproduction and dissemination of this article, providing the source and identity of the author are set forth.

COMMENTS AND INQUIRIES POSTED TO THIS ARTICLE WILL BE DIRECTED TO JACK PLOWMAN.

CLT

Category: Uncategorized

Don’t be afraid to ask a lawyer because you are afraid of the price.

Posted by Cliff Tuttle

If you need legal assistance, especially in an emergency, don’t assume that you cannot afford it.

Most lawyers have performed services without charge from time to time, when they can and feel it is the proper thing to do. Others may accept reduced fees or liberal payment plans. Most are willing to talk to you about your problem without charging a fee.

Lawyers, even sole practitioners, have become increasingly specialized. The first thing you need to find out is whether the lawyer you are speaking to is knowledgeable in the area of the law involved in your problem. If not, he or she probably knows someone who is. You might even wish to begin the conversation by saying, “Do you know a lawyer whose work you would recommend who has a specialty in _______?”

There is no time as critical as when you have just been sued. The clock is running and if you postpone deciding what to do for too long, you may lose without firing a shot. While it is possible to open a default judgment under some circumstances, the odds are heavily against success at that point. Make the call. Don’t give up before you start. You may be pleasantly surprised.

CLT

Category: Uncategorized

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Welcome

CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

Pittsburgh Legal Back Talk

Legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus.

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Back Talk Requested, 08.17.08

Attorney Thomas Joseph on the Quanta patent decision by the US Supreme Court

Ebay Offer: Too Good to be Legally Enforceable

Attorney Gerry Elman on copyrighted Photos

Back Talk Requested

Obscenity Prosecution Tells a Sad Story

Settlement vs. Going to Trial: Do Litigants Make Poor Decisions?

Landlord and Tenant: Security Deposit Trap

Attorney Jack Plowman on construction contracts and cost allowances

Don’t be afraid to ask a lawyer because you are afraid of the price.

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