Bankrupting Trademarks

The explosive growth of technology in the last two decades has vastly expanded intellectual property jurisprudence and elevated intellectual property to a heightened status in the marketplace. Indeed, a company\u27s intellectual property assets may now be its most valuable corporate assets. Moreover, the property value of some trademarks is significantly greater than that of the trademark owner\u27s physical assets. The term “intellectual property” is commonly understood to include patents, trade secrets, copyrights, and trademarks. Yet a paradigm has been constructed and enforced over the last fifteen years wherein only patents, trade secrets, and copyrights are included. The paradigm specifically excludes trademarks from some of the protections afforded to the other three types of intellectual property. Under the paradigm, the licensees of patents, trade secrets, and copyrights are allowed to retain the right to use the licenses after the licensor has petitioned for bankruptcy and decided to sever the license agreements. On the other hand, a bankrupt licensor\u27s severing of a trademark license agreement extinguishes the licensee\u27s license rights. This Intellectual Property Bankruptcy Paradigm (“the Paradigm”) is embodied in the Intellectual Property Licenses in Bankruptcy Act. The Paradigm calls into question the normative values given to patents, trade secrets, and copyrights, on one end of the spectrum, and trademarks, on the other end. The fast changing role of trademarks in Internet global communication and commerce calls into question the exclusion of trademarks from the Paradigm. Further, the modern and less restrictive quality control practices and the integration of trademarks into the bundle of licensed rights in the marketplace undermine the foundation of the Paradigm. This Article contends that the Paradigm\u27s exclusion of trademarks is the result of a legislative reaction that occurred without a proper inquiry into trademark\u27s status as intellectual property, and that the exclusion threatens to bankrupt the goodwill of trademarks. This Article argues that trademark\u27s rapidly evolving role in the Internet economy and in integrated intellectual property licensing calls for an end to the exclusion of trademarks from the Paradigm. Part I examines the phenomenal rise of trademarks through licensing and the global Internet medium. This Part analyzes how the liberalization of the quality control requirement in licensing arrangements has fostered the expanded role of trademarks in the marketplace. Part II identifies the Intellectual Property Bankruptcy Paradigm in which patents, copyrights, and trade secrets--but not trademarks--are protected. This Part discusses the enactment of the Intellectual Property Licenses in Bankruptcy Act (“IPLBA”), and argues that Congress passed the Act in reaction to a court decision. Congress claimed that the creation of the IPLBA was necessary to maintain U.S. leadership in technology development. This rationale, however, does not justify the exclusion of trademarks from the Paradigm that protects only patent, copyright, and trade secret licenses. This Part explores the rationale and its limitations by examining, comparing, and contrasting patents, copyrights, trade secrets, and trademarks. Part III analyzes how notable cases have perpetuated the Paradigm. This Part identifies the consequences of the Paradigm on trademark licenses by examining two cases in which courts have applied the law and extinguished licensees\u27 rights to use licensed trademarks. Canons of statutory construction force courts to perpetuate the Paradigm, and do not permit courts to consider the high cost borne only by licensees of trademarks. Part IV questions whether the Paradigm\u27s exclusion of trademarks is rational in light of both the increased importance of Internet domain names as trademarks and the integration of trademark licenses as parts of the bundle of licensed rights. This Part focuses on the threat of bankrupting the goodwill of trademarks and its potential threat to the nascent e-commerce economy. This Part examines the consequences that ensue when the licenses of trademarked domain names and the licenses of trademarks in integrated licensing schemes are terminated and subsequently used by the bankrupt licensor or its authorized third party in association with different web pages, mix-matched, or materially different goods. Part V recommends the end of the exclusion of trademarks from the Paradigm. In light of the changing role of trademarks and the integration of trademarks in intellectual property licensing schemes, an amendment to the existing law is appropriate. When Congress enacted the IPLBA, quality control was the rationale for the exclusion of trademarks from the protection provided under the IPLBA. Such concern, however, does not justify the exclusion of trademarks. This Part also proposes and evaluates ways in which the exclusion of trademarks should cease. The Article concludes that the changing role of trademarks, the integration of trademarks into intellectual property licensing, and the apparent lack of benefits to the bankruptcy estate, unsecured creditors, and consumers, necessitate a shift in the Intellectual Property Bankruptcy Paradigm

EF Cultural Travel v. Explorica: The Protection of Confidential Commercial Information in the American and Canadian Contexts

Commercial information, once relegated to paper files stored in cabinets, is now more likely to be in digital form, allowing a myriad of people to access its contents. These electronic storehouses can subsequently be stored on the Internet, providing a handy but some- what risky means of archiving valuable information. The United States Court of Appeals (1st Circ.) judgment EF Cultural Travel v. Explorica1 is a clear indicator of the way in which the advent of the Internet has completely changed the constructive meaning of the traditional ‘‘office file’’. This paper attempts to provide an under- standing of the scope and potential impact on policy relating to confidential information and the use of Internet robots. In addition, this paper will provide an assessment of whether or not the same — or similar — facts of the Explorica decision could be successfully argued under all relevant and equivalent Canadian law relating to the protection of confidential commercial information

Holding Intellectual Property

The collapse of WorldCom, Inc., exposed a complex web of accounting irregularities. Within that web, recent filings by Dick Thornburgh, WorldCom\u27s Bankruptcy Court Examiner, reveal a different type of scheme that involves the holding of intellectual property. Further scrutinizing the scheme reveals that WorldCom and its tax advisors, KPMG Peat Marwick LLP (KPMG), devised a tax avoidance scheme through the creation of an intellectual property holding company (IP holding company). This type of scheme has been widely and quietly utilized in the last twenty years by many corporations with substantial intellectual property. Indeed, as state taxing authorities have become more aggressive in their auditing process, the spotlight is now on the IP holding company scheme. Due to numerous states\u27 slow recovery from the economic downturn and the shrinkage of state tax revenues in the last few years, more and more states have directed their attention to intercorporate transactions and income shifting schemes. In doing so, many states unearthed handsome amounts of royalty income generated by the licensing of intellectual property that had never been taxed. Utilizing this taxing power, states are eager to reach the royalty income accumulated by companies holding intellectual property, but in taxing such income, states may encounter a potential constitutional stumbling block. How does intellectual property become part of a tax avoidance scheme? What is an IP holding company? What are the tax and nontax reasons that facilitate the creation of this scheme? What are the constitutional challenges states may face in their efforts to tax royalty income? What are their alternatives? This Article will address these questions and argue that the IP holding company scheme is a complex tax avoidance program requiring states to devise an approach to taxation that reflects an understanding of intellectual property rights and of the interests of intellectual property rights holders. In and of itself, a scheme that results in tax avoidance is not illegal. There are considerable business reasons behind the creation of an IP holding company for a major corporation\u27s intellectual property assets. Part I discusses the transformation of intellectual property into valuable corporate assets. Part II identifies and analyzes the IP holding company scheme. Notable examples illustrate the widespread use of this scheme by major U.S. corporations. Part III focuses on the constitutional reach of state taxing power to royalty income received by out-of-state holding companies in light of the U.S. Supreme Court\u27s decision in Quill Corp. v. North Dakota. Part IV discusses how states attempted to evade constitutional requirements in their eagerness to tax the royalty income of out-of-state holding companies. This section analyzes the business situs approach to intellectual property rights as employed by states to justify their fulfillment of the constitutional requirements post-Quill. This section critiques the business situs approach by providing illustrative examples of how the approach reaches beyond constitutional limits. Part V advocates balancing the interests between states and holders of intellectual property. This section highlights some fundamental aspects of intellectual property rights that may assist states in their efforts to reach royalty income received by out-of-state holding companies that license intellectual property rights for use within states. This section also provides alternative approaches states may consider that pose less risk of constitutional challenges. This Article concludes that as long as intellectual property assets are valuable corporate assets and holders of intellectual property continue to seek ways to maximize their return on such assets, uncertainties regarding states\u27 power to tax an IP holding company\u27s income reflect a need for guidance from Congress and a need for uniformity of state tax treatments. Regardless of these uncertainties, the potential migration of intellectual property assets offshore poses yet another problem

Assessment of Sustainability of Bulgarian Farms

The New Institutional and Transaction Costs Economics framework is incorporated to transitional Bulgarian agriculture, and level of sustainability of dominating subsistent farming, production cooperatives, small-scare commercial farms, and large agro-firms assessed. New framework for assessing sustainability of farms and for governing of sustainable development is suggested taking into account: role of specific institutional environment, comparative efficiency of various market, private, public and hybrid governing modes, transaction costs and critical factors (frequency, uncertainty, asset specificity, and appropriability) of farm transactions. Analysis of sustainability of different types of Bulgarian farms is made, and further domination of subsistence farming, cooperatives, large agrofirms, and some part of small commercial farms projected.Agribusiness,

The BG News August 26, 2003

The BGSU campus student newspaper August 26, 2003. Volume 94 - Issue 3https://scholarworks.bgsu.edu/bg-news/8140/thumbnail.jp