Scott Technology Attorneys

On January 12, 2012, the D.C. Court of Appeals held that the Software & Information Industry Association (SIIA) would not be required to disclose the name of one of its confidential informants in a civil case for defamation. Solers, Inc. had filed its lawsuit against a John Doe defendant for defamation after it resolved a software-audit investigation initiated by the SIIA. The SIIA had alleged, based on information that it previously had received from the anonymous defendant, that Solers was using a number of copies of SIIA-member software products in excess of the number of licenses it had purchased for that software. Solers had attempted to force the SIIA to disclose the name of its informant in order to proceed with the defamation action.

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In Brasher’s Idaho Auto Auction vs. Software & Information Industry Association, Adobe Systems, Corel, McAfee, Symantec, Idaho Auto Auction, ADP, and Robert William Gillespie filed in U.S. District court for the District of Idaho (Case #1:11-cv-00310-REB), the plaintiff, a target of an SIIA audit, is asking the court to determine who is legally responsible for the unlicensed software found on its computers during the audit.

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Many IT-solution providers develop and sell hardware, software or support services (or some combination of all three) intended to reduce costs associated with deploying someone else’s enterprise-level software products in the licensee’s network environment.  For business owners, the high cost of deploying some industry-standard, server-based software deployments can lead to near-desperation in efforts to remain competitive while keeping associated costs from breaking the bank. In many cases, third-party solutions designed to achieve those ends can seem too good to be true. However, in those cases, a prudent business owner will start with the assumption that they are, in fact, too good to be true, and he or she will conduct a thorough level of due diligence before (1) obligating the company to contractual obligations with a provider that can’t deliver on its promises and, possibly, (2) exposing the company to legal liability.

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On January 7, 2008, the United States Magistrate Judge Barbara Major issued a sanctions order against Qualcomm and certain in-house and outside counsel for discovery misconduct.  Specifically, the Court ordered that Qualcomm pay $8.5 million in opposing counsel’s fees for withholding critical documents during discovery, and Qualcomm’s attorneys further were referred to the California State Bar for an appropriate investigation.

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Many businesses learn the hard way that even implied use of a famous person’s name or likeness without that person’s permission can be a costly mistake. Jewel Food Stores and Dominick’s Finer Foods, two grocery chains operating stores in the Chicago area, recently were named as defendants in lawsuits filed by basketball great Michael Jordan for publishing ads indirectly referencing Jordan’s 2009 induction into the Basketball Hall of Fame. The ads did not include Jordan’s picture or his name, but he nevertheless alleged in his complaint that the ads suggested an endorsement of the chains’ respective brands. Similarly, Chuck Yeager, the renowned former test pilot who was the first person to fly faster than the speed of sound, recently sued Virgin America for publishing an ad stating: “not unlike Buzz Aldrin or Chuck Yeager, you have the opportunity to be a part of a monumental moment in air travel.” In each case, the claimants have requested injunctive relief and damages.

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 A team that formed to pursue a $20 million prize from Google is learning the hard way that all businesses – even small ones whose members believe their interests are aligned at the outset – neglect at their peril the necessity of addressing legal formation, operating agreements and property management at the earliest possible opportunity.

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