Contract Drafting: It’s All in the Details

In 1881,  Dr. Joseph Lawrence invented Listerine and it remains the #1 best selling mouthwash.  Later that year, Dr. Lawrence sold the secret formulation to a pharmacist named Jordan Lambert.  The contract drafted in this exchange required Lambert to pay Dr. Lawrence a royalty  based on volumetric sales for as long as Listerine was sold.


For many years, Lambert and his successors continued to pay the royalty as promised, but in 1931 the secret formula was leaked to a medical journal and published.  Warner-Lambert continued to pay the royalties in spite of the disclosure but fifteen years later, those royalties totaled $1.5 million for the year. Warner-Lambert grew weary of paying fees on a formula that had lost its trade secret value and attempted to invalidate the agreement in 1959.

The court quickly ruled that the loss of the trade secret had no bearing on the royalties due. It held that the contract was clearly and concisely drafted and that payments were required to continue in perpetuity until  Listerine sales were discontinued. Consequently, the royalty payments continue 139 years later.

A share of these royalties came up for auction earlier this month. The winning bidder paid $561,000 for the share even though it generated only $32,000 in revenue last year.  With royalties rolling in for the foreseeable future it may still prove to be a good investment.  Even so, the story serves as a great example of lack of foresight in contracting drafting.


Engineer Posts Open-source DIY “Ventilator-ish” Device Instructions

With the recent increase in confirmed coronavirus cases many are concerned that ventilator supplies may run low.  One man has come up with a way to create a ventilator-like apparatus by modifying a standard CPAP machine.  This device is not FDA approved and does not appear to have been tested by any medical professionals; however, it’s encouraging that people are trying to come up with alternative solutions for potential ventilator shortages.  Please make/use this device at your own risk as I cannot comment on its safety or efficacy.

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China Applies for Patent to Treat Coronavirus

The Wuhan Institute of Virology has recently filed a patent application for the drug remdesivir to treat coronavirus.  The patent was filed jointly with the Military Medicine Institute of the People’s Liberation Army Academy of Military Science.     The Chinese believe that remdesivir and chloroquine (an anti-malarial drug) are effective at combating the virus.  Chloroquine is an eight year old drug and China is free to manufacture it but remdesivir has been patented by Gilead Sciences Inc.  Any production or use of this drug would require sublicensing or approval by Gilead.





EU Says Inventors Must Be Human

The European Union (EU) recently rejected two patents applications where the invention was created by artificial intelligence (AI).  These inventions were created by a “creativity machine” comprised of a system of multiple artificial neural networks. These networks generate new ideas, analyze their performance, and assess distinctions between existing inventions and the newly generated idea. The EU Patent office found both AI inventions to be new and industrially applicable; however, the patents were refused because the invention was not created by a human.

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Do the Scots own BURNS NIGHT?

The Scotch Whisky Association recently filed an opposition to the mark BURNS NIGHT filed by an Atlanta distiller of American malt whiskey.  The Association claims that BURNS NIGHT is “highly evocative of Scotland when used on a whisky product,” and is likely to cause a consumer to believe that the spirit being purchased is a Scotch as opposed to an American whiskey.

The mark would not seem to be a simple geographic indicator so can an annual celebration of the Scottish poet Robert Burns prevent registration of the mark?  It is an interesting question as Robbie Burns Night is acknowledged in many other parts of the world as well, particularly Canada and the US.



What Constitutes a Counterfeit?

Rolex has recently filed suit against laCalifornienne for allegedly dealing in fake watches. LaCalifornienne has been adding non-Rolex sanctioned dials, crystals, and other accessories to pre-owned Rolex® watches and reselling them as genuine Rolex® watches.  Rolex considers any watch that includes a non-Rolex part to be a counterfeit.

Rolex filed a similar case against a jeweler that was “enhancing” Rolex® watches with gemstones and other decorative adornments.  The Fifth Circuit sided with Rolex in that case.

In a similar case involving the modification of circuit breakers, the Ninth Circuit held “that “when an original mark is attached to a [reconditioned] product in such a way as to deceive the public [as to the source of the product], the product itself becomes a ‘counterfeit’ just as it would if an imitation of the trademark were attached.”



Actor Who Died 64 Years Ago To Star in Upcoming Film

Actor James Dean died in 1955 at the age of 24 but that has not stopped him from appearing in the new action film “Finding Jack.”   The film is set to feature Dean in a co-starring role, using computer images generated from old footage. While the producers and film makers appear to have legally acquired Dean’s personality rights, many feel the role does a disservice to Dean’s legacy.


Chinese National Working for Monsanto Indicted for Trade Secret Theft

A Monsanto employee was recently indicted for theft of trade secrets.  The Chinese national, Haitao Xiang, allegedly resigned from his position, purchased a one way ticket to China and was arrested at the airport with Monsanto trade secrets in his possession. Xiang received his PhD in agricultural engineering within the United States, following the same path as many others accused of similar crimes.


Can the Owner of a Building Control Reproductions of its Likeness?

Canadian Parliament is considering whether building owners can control the reproduction of a famous building’s likeness.  Author James Bow was set to release a new book featuring a cover-art collage which included an image of the CN Tower, a large radio antenna and tourist attraction located in Toronto.  A representative from CN Tower requested the removal of the artwork from the book claiming that it created a commercial link between the book and CN Tower.