HAN LLP Attorneys at Law

08/18/2022

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06/24/2022

Most of us are familiar with the concept of a breach of , and the recovery of damages when it happens. But what if the parties lack an enforceable contract in the first place? Are damages recoverable?

The short answer is yes. In most jurisdictions, a plaintiff's right to recover damages when there is no enforceable contract is rooted in three primarily common law "quasi-contract" claims: Promissory Estoppel, Quantum Meruit, and Unjust Enrichment.

At a very high level, recovery may be available under quasi-contract claims when no enforceable contract existed; the defendant was enriched by the benefits conferred by the plaintiff; and the defendant's retention of those benefits would not be fair to the plaintiff in good conscience.

The best practice will always be to have a legally enforceable contract. But if you don't have a contract, you may want to consider doing the following: show you did what you were told; show the other side had received the benefit of what you did, and point out that letting the other side retains the benefit is unfair and unjust to you.

06/23/2022

The creation of digital assets is coming under tighter scrutiny by famous brands when digital artists use the famous mark to create artworks and sell them on NFT marketplaces.

The recent dispute between the maker of Birkin bags and a LA digital artist who created " " may provide valuable insight into this murky area.

On May 5, 2022, U.S. District Court Judge Jed S. Rakoff of the Southern District of New York denied a motion to dismiss trademark infringement claims brought by the international fashion brand Hermès against an artist name Mason Rothschild – a digital artist who created a collection of digital im...

06/03/2022

For this week’s , we are going to talk about an application for preliminary injunctive relief in .

As an overview, under Rule 65 of the Federal Rules of Civil Procedures, there are two forms of preliminary injunctive relief available for the litigants: Preliminary Injunctions and Temporary Restraining Orders (TRO). Either injunctive relief will be granted by the court in a form of a court order if the litigant meets the requisite legal standard for the application. (discussed below)

A preliminary injunction orders the other party to the lawsuit (usually the defendant) to do or stop doing something until final judgment.

A TRO has similar effects, and it is used to preserve the status quo until the court decides whether to issue a preliminary injunction.

Under Rule 65, a TRO has a shorter duration, which typically expires 14 days after the order is entered, subject to further extensions by court order or by stipulation of the parties. Under limited circumstances, a TRO may be granted “ex parte” (i.e., meaning by one party requesting it without putting the other party on notice). Depending on the circumstances of the case, an ex parte TRO might be necessary to stop the harm from continuing to occur while the legal proceeding is ongoing.

While the legal standard for seeking preliminary injunctive relief varies depending on the federal circuits, the court typically will require the party seeking injunctive relief to show the following:

• The existence of irreparable harm to the plaintiff without preliminary injunctive relief.
• The plaintiff is likely to succeed on the underlying merits of the case.
• The harm to the plaintiff if the injunctive relief is not granted outweighs the harm to the defendant if it is granted.
• The granting of the relief is in the public interest.

When applying for a TRO, the standard tends to be higher than applying for a preliminary injunction. In addition to the above factors, the court will need to see whether the plaintiff can show that immediate and irreparable harm will occur before the adverse party can be heard in the preliminary injunction hearing.

The decision to pursue preliminary injunctive relief should be supported by a thorough investigation and analysis of the issues and facts of the case as the burden to satisfy the legal standard is high, and the relief might not be available if money damages would make the plaintiff whole. But if injunctive relief is ordered, it could potentially tip the dynamic of the case in favor of the party that received the relief as the granting of the relief might signal to the adverse party the strength of the plaintiff’s case.

(NOTICE: The post is distributed for discussion purposes only and not a substitution of legal advice from licensed counsel)

06/01/2022

When issue stocks to investors, the question of whether the offering is selling "to the public" under the New York Blue Sky laws is particularly important. If the offering would be considered “to the public,” it might trigger registration requirements under the New York Blue Sky laws.

Read more here: https://hanllplaw.com/public-offering-newyork-blue-sky-securities/

05/27/2022

The Second Amendment of the U.S. Constitution reads: “A well regulated Militia, being necessary to the security of a free state, the right of the people to keep and bear Arms, shall not be infringed."

If the Second Amendment has any practical meaning for the lives of our modern Americans is that it guarantees its citizens the individual freedom to bear arms for their own self-protection.

Self-protection. What an irony.

The decades of gun violence in this nation have plagued our churches, grocery stores, public transit, schools, and communities. It has imprisoned our minds in fear of incomprehensible death as we go through our daily life. It has senselessly taken the lives of our children, fathers, mothers, grandmothers, grandfathers, neighbors, friends, and loved ones with no end in sight.

Lawmakers, do you understand your inaction, blaming games, and purported legislative compromises and political rhetoric over gun control have numbed millions of Americans from the rightful sense of individual and public safety in the community we live, work, and raise our children, and most tragically, continuously caused the lives of the innocents.

Your term in office will end one day. But those who lost their loved ones to gun violence will continue to carry the soul-gutting burden of their immense losses through generations.

For those who point to social and mental health issues as the driver of the recent proliferation of gun violence, I don’t believe that any sensible Americans would disagree with you that the mass shooters’ state of mental health is one of the many contributing factors in the deaths of innocent mass and challenging to anticipate. But the fact that an 18-year-old can get his hands on two U.S. military-style assault rifles with hundreds of rounds of ammunition within a week of his 18th birthday and still, the same teen cannot even get a can of beer in the local liquor store without facing jail time in some States is just plain wrong.

Democrat and Republican elected officials, WE NEED ACTION. IMMEDIATE, MEANINGFUL, AND STRONGER GUN CONTROL REFORM. YESTERDAY AND NOW!

05/20/2022

Why DAO may be seen as a general partnership?

You might have heard of the term “Decentralized Autonomous Organizations,” or DAOs. To put it simply, a DAO essentially is a blockchain-based members-governing structure built by codes and rules maintained on blockchain and is controlled by all participants involved in it without a centralized leadership. Members of DAO would get tokens that provide them with certain voting power for creating rules to achieve certain goals of the DAO, such as pooling money to invest in certain assets.

Earlier this month, a group of DAO investors filed a class action against bZx DAO and its co-founders over bZx DAO’s loss of nearly $55 million worth of assets by a hack as a result of the co-founders’ negligence. The investors are seeking to hold the co-founders of bZx DAO personally liable for the loss because bZx DAO, as the complaint asserted, “lacks any legal formalities” and thus lacks liability protection for its founders.

Without a legal formality, the complaint argued that bZx DAO is essentially a general partnership, with the co-founders being the general partners who could be held personally liable for the entire loss of the assets in bZx DAO due to theft.

Under California Uniform Partnership Act, “the association of two or more persons to carry on as coowners a business for profit forms a partnership, whether or not the persons intend to form a partnership.” This means that forming a partnership can be as easy as a handshake or without one as long as you have two or more persons working together in a business for profits.

People going into business tend to form a legal entity such as a limited liability company or a corporation to protect themselves from being held personally liable for the debts and liabilities of the business. However, DAO’s lack of legal formality at its inception of its organization exposes its participants (e.g., tokenholders) to unlimited personal liability if the founders do not take the steps to form a legal entity for the DAO.

In response to the public’s increased use and adoption of DAO as a preferred governing structure for cryptocurrency investments, the State of Wyoming in 2021 became the first US state to enact a DAO limited liability company statue officially recognizing DAOs as a formal legal entity in the state.

The case is at its early pleading stage and the defendants have not submitted an Answer to the Complaint responding to the allegations that bZx DAO is a general partnership. It might be very difficult for the defendants to argue that bZx DAO is not a general partnership given just how easy a partnership may be formed under the well-settled partnership law.

The case is Sarcuni et al. v. bZx DAO et al (22-cv-0618) filed in the US District Court Southern District of California.

05/18/2022

Drop-shipping might be a profitable way to carry out your business transaction. But it comes with its own challenges and risks. The good news is that you can easily avoid them by risk-proofing your drop-ship contracts.

Learn more here: https://hanllplaw.com/risk-proof-dropshipment/

05/16/2022

05/13/2022

What is trademark dilution?

Generally speaking, under federal trademark law, trademark dilution may occur when an unauthorized use of a similar mark has caused dilution of a famous mark by “blurring” or “tarnishment.”

Dilution by “blurring” occurs when one uses a similar mark in the marketplace that by association reduces the uniqueness of a famous mark and impairs its distinctiveness.

Dilution by “tarnishment” occurs when the use of a similar mark in the marketplace by association harms the famous mark's reputation.

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In a recent lawsuit filed by Nike against StockX, the issue of whether StockX’s unauthorized use of Nike’s famous marks in its newly minted Vault NFTs becomes the center of the attention.

As an intro, StockX is an online resale platform famous for reselling brand-name sneakers, luxury bags, collectibles, etc. A large part of what makes StockX successful is its "proprietary, multi-step authentication process" for the products sold on its platform.

Earlier this year, Nike accused StockX's unauthorized use of Nike's trademarks in connection with StockX's marketing and sale of its Non-Fungible Tokens (NFTs). As claimed by StockX, each StockX's NFT (showing an image of a Nike sneaker) ties to a physical Nike's sneaker that "safely secured in its 'vault,'” and the owner of the Vault NFT may “redeem” the NFT in exchange for the physical shoes. In addition, customers can buy and trade these Vault NFTs through StockX’s website and App, usually for a significantly higher price than the price of the physical shoes.

Nike alleged that StockX’s “Nike-brand Vault NFTs” had diluted Nike’s famous marks and confused consumers into believing that Nike authorized StockX to sell StockX’s Nike-branded Vault NFTs when in fact it did not. Specifically, Nike alleged that StockX’s sold its “Nike-branded Vault NFTs” and the “inflated prices and [the] murky terms of purchase and ownership” had led the people to think that the “Vault NFTs are a scam,” harming Nike’s reputation and drawing negative associations with Nike’s brands.

StockX defended Nike’s trademark infringement and dilution claims by asserting, among other defenses, that its Vault NFTs are “much like a product page or advertisement on any other e-commerce site, Vault NFTs accurately depict and describe the underlying physical goods that the consumer is purchasing” and that “consumers are made aware they are purchasing physical goods that StockX has authenticated” and use the Vault NFTs to trade authenticated physical goods.

On May 10, Nike sought the court’s permission to file an amended complaint, adding additional allegations and claims, including allegations that StockX sold counterfeit Nike goods on its platform.

There is no doubt that Nike’s mark is “famous” and that Nike did not authorize the use of its famous mark in StockX’s Vault NFTs. What is at stake is whether Nike can show that StockX’s unauthorized use of Nike’s famous marks in the Vault NFTs has diluted Nike’s trademarks by tarnishment and damaged Nike’s famous marks’ reputations and goodwill in the consumer perceptions of Nike’s marks.

The case is currently moving through the judicial process - case number: NIKE INC. v. STOCKX LLC (No. 22-cv-00983-VEC

05/13/2022

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05/06/2022

In case you missed the news. Let's talk about Roe v. Wade.

The Fourteen Amendment of the United States Constitution says: that no State shall "deprive any person of life, liberty, or property, without due process of law[.]" The word "liberty" and the inherent right to privacy in the Due Process Clause of the Fourteen Amendment confer a constitutional right to abortion in the 1973 United States Supreme Court decision Roe v. Wade. Specifically, Roe expands the constitutional right of individual liberty and the right to privacy to encompass the right to abortion until the fetus reaches "viability," which is around 22 to 24 weeks of pregnancy.

In 1992, the Court revisited Roe's ruling in Planned Parenthood v. Casey 505 U.S. 833. It ruled that the state's regulations of abortion cannot impose an "undue burden" on a woman's right to obtain an abortion. Since Roe and Casey, States have enacted laws to regulate abortion, from allowing abortion at all stages of pregnancy to laws prohibiting abortion after fetal viability – the line drawn by Roe in balancing the State’s interest in protecting a potential human life and the individual liberty of women’s constitutional right to abortion before fetal viability.

On Monday, the leaked draft of the Supreme Court majority opinion addresses the constitutional challenge to a Mississippi law that bans abortion after 15 weeks of pregnancy – several weeks before the constitutional right to abortion ends.

As the draft opinion stated, it appears that the Supreme Court would overturn Roe, withdrawing a previously conferred constitutional right, and restoring the States’ right to regulate abortion in all stages of pregnancy.

The reasoning? The majority opinion thinks “Roe was wrong” since decided. As Justice Samuel Alito said in the draft majority opinion – “Constitutional analysis must begin with ‘the language of the instrument,’” and “[t[he Constitution makes no reference to abortion, and no such right is implicitly protected by any connotational provision,” and any constitutional right guaranteed by the Due Process Clause “must be ‘deeply rooted in this Nation’s history and tradition’ and ‘implicitly in the concept of ordered liberty.’”

While the draft opinion is not the Court's final decision on Roe, if Roe and Casey were overturned, the job to draw that line will be left to the State and the legislative process “by citizens trying to persuade one another and then voting.”

(All citations omitted)