South Carolina Intellectual Property Litigation

South Carolina Intellectual Property Litigation

Ordinary Care, Reasonable Care and The Fiduciary Duty – The First in a Series of “Spectra” Posts

Posted in Confidential Information, ERISA, Fiduciary Duty, General, Jury Issues / Trial, Non-Disclosure Agreements, Policy

We like to put things in order, right? It helps us understand the concepts and the analytical process further identifies distinguishing characteristics. In the legal world, however, complex concepts are more appropriately placed on a spectrum, rather than a list. provides a non-physics definition of “spectrum” as follows: “a broad range of varied but related ideas or objects, the individual features of which tend to overlap so as to form a continuous series or sequence, e.g., the spectrum of political beliefs.”

Key words: range, related and overlap. Today, we look at the following three related legal duties, each of which overlap, but are also unique and distinct:

1. Ordinary Care, e.g., as owed by a bank to its depositors and customers in the handling of their checking transactions (likely a result of privity of contract and statute);

2. Reasonable Care, most commonly found in auto accident cases (arises the moment you turn the key and engage a pedal), medical malpractice, and other so-called “negligence” cases;

3. The Fiduciary Duty, e.g., as owed by a Trustee to a beneficiary, a lawyer in a lawyer-client relationship, or a by a 401(k) plan fiduciary to the participating employees (limited generally to special relationships, but also created by statute, as in case of ERISA and 401(k) plans).

To begin to illustrate how these three duties are related and can overlap, we introduce a fourth: The duty of confidentiality  is generally included within The Fiduciary Duty. This duty can also arise in conjunction with all three duties identified above by: (a) special relationship; (b) contract, for example as a non-disclosure agreement (NDA); (c) court order; or (d) statute, as in duty to protect personal information such as social security numbers, etc., to the extent that hackers do not already have all that.

How Do These Three Legal Duties Differ?

Ordinary Care is characterized by what is customary in any given context. In other words, are you doing what others like you in your field are also presently doing? For example, just because average speed on a Detroit-to-Novi freeway is 96 mph, making such conduct “customary,” that speed is still likely a violation of applicable law. As such, the person driving 96 mph causing an accident violates her duty of Reasonable Care. Recall from the link above, Reasonable Care is defined as, “the level of care that someone of ordinary prudence would have exercised under the same circumstances.” Note that establishing evidence of the Ordinary Care standard will likely require “expert” testimony. For example (back to banking), what if the expert witness testifies that Bank of America is doing something to protect your accounts that Wells Fargo is not doing? Would Chase or JP Morgan then be held to the Ordinary Care standard set by BoA, or could that be an issue for the jury?

So how do we determine what is prudent (Reasonable Care) vs. what is customary (Ordinary Care)?

Assume a “hypothetical utopian” community has 100% of its citizens acting with the utmost level of care, liability under a Reasonable Care standard is still evaluated by what would a reasonable person have done, not as compared to the hyper-vigilant utopians. In contrast, if a “hypothetical” community of reckless people is used to establish Ordinary Care, then the level of care owed under an Ordinary Care could be far less than that of Reasonable Care.

So how does The Fiduciary Duty differ from Reasonable Care and Ordinary Care?

The Fiduciary Duty, arguably, subsumes the Duty of Reasonable care and adds to it the Duty of Loyalty. One held to a Fiduciary Duty standard is required to act with respect to the affairs of the client-beneficiary in the same manner he or she would act with respect to their own affairs. Avoidance of conflicts of interests is implicit in The Fiduciary Duty.

So does this mean that the person owing The Fiduciary Duty, if a reckless person in their own right, then only owes the client the same recklessness for which they would apply to their own affairs? Certainly not. In fact, one of the primary differences between a Reasonable Care Duty and The Fiduciary Duty is that The Fiduciary Duty is owed to a specified individual or group of people, whereas, the duty of Reasonable Care is generally owed to all persons in any particular context, e.g., all persons driving or riding on the road in which you drive your vehicle.

Can the conduct of the client or beneficiary of the duty owed negate or reduce the duty owed?

Yes. For example, in banking law, frequently referred to as the UCC, the bank owes a duty of Ordinary Care unless the customer has failed, ironically, to exercise Reasonable Care by inspecting returned checks for forgeries, or for forgeries by the “same wrongdoer.” Similarly, in a common law negligence case where the duty of Reasonable Care is owed, if the plaintiff is negligent or “comparatively negligent,” then he or she may also lose the benefit of the legal duty owed as the cause of the injury is attributed to their own actions.

The Fiduciary Duty necessarily implies that the party owing this duty must act in the best interests of the beneficiary (loyalty), and no such legal concept like comparative fault can be used to mitigate or eliminate The Fiduciary Duty owed. This is true of lawyers and their clients, of a Trustee for children who have lost their parents and have trust funds to care for them left behind, and also recently covered when a party takes on the “fiduciary” responsibility to ensure that a company’s 401(k) plan is managed in a way that is in the best interests of the employees and not to provide for unnecessary fees or unnecessarily excessive management charges over and above what would have been customarily available.

What to do if you think you have a claim for breach of a legal duty owed?

If you or someone you know has a claim or thinks you might have a claim for breach of Fiduciary Duty, contact me to discuss it and learn what options may be available to you. While past results are no guaranty of future performance, our firm has the experience and ability to handle these types of cases and take them to trial, if necessary.
[Future “spectra” series posts will include: (1) standard of review for appellate matters including / ranging from any evidence, to abuse of discretion, to de novo review; and (2) trademarks including from fanciful, to arbitrary, to suggestive, to descriptive, to generic.]

Fish Tank Trade Secrets

Posted in Confidential Information, Jury Issues / Trial, Non-Disclosure Agreements, Policy, Trade Secrets

Sammy, Nuk or Tiger

I.  Background Fish Tank Facts:

In September of 2012, our family had plans to host several families at our house to watch the Clemson v. Florida State football game being played in Tallahassee. My wife loves people and entertaining. To create a fun, festive, and pleasant environment for the game, she and the children, while running errands that Saturday, decided to purchase a small fishbowl. Included in this “small” fishbowl were three Orandas. An Oranda, as shown above, is a bright “orange” and white fish from the goldfish family, pretty hearty but they do require a decent amount of space, oxygen, etc. (more than provided in a 2.5 gallon fishbowl). Continue Reading

Blurred Lines v. Got To Give It Up: 7 Things you need to know about the Pharrell / Marvin Gaye copyright lawsuit

Posted in Copyright, Fair Use, General, Jury Issues / Trial

On March 10, 2015, a jury in Los Angeles returned a $7.3 million verdict in favor of the estate of Marvin Gaye against pop icon, Pharrell Williams (The Voice, Happy), and Robin Thicke for copyright infringement.  The case involved the famous 1977 hit song by Marvin Gaye and made famous, at least in part, on the classic Saturday AM TV show Soul Train. Intellectual property lawyers and pundits have quite a bit to say about the verdict, its future validity, and implications for innovation in the music industry.  Below are 7 things to consider about this case: Continue Reading

Are Employee Non-Competes Good Policy? Many ways to Skin a Cat, Trade Secrets, Non-Solicitations, Confidential Information / NDA

Posted in Confidential Information, Injunctions, Jury Issues / Trial, Non-Disclosure Agreements, Policy, Trade Secrets

At least two states, Michigan this year and Massachusetts in 2014, have proposed legislation to curtail / eliminate the rights of parties (i.e., employers) with respect to non-compete agreements. The Michigan proposal would make “void” any non-compete agreements not related to the sale of a business.  California has banned these agreements for years and agreements in restraint of trade have been banned going back to 1414 in Dyer’s case, so presumably any constitutional challenges to such a ban have been vetted and failed, or else it has just been chalked up to being … California. But the California ban is not exclusive to employees residing in California, as parties and their lawyers often seek the application of Conflicts of Laws to have the law of one state applied in another state. In addressing the potential constitutional issue, courts have held that the employee’s right to be freely employed trumps the right to contract.

In contrast, in Wisconsin, there is a pending bill that would change that state’s history of restricted enforcement of restrictive covenants. So why all the attention to noncompete agreements in the employment context? Will these bills pass or are they just one of the many events of posturing or pandering that can be expected in all legislative branches? To highlight that this is an issue that makes a difference, we refer you an older post by Jonathan Pollard where the lawyers fought over whether or not Florida (favorable to noncompetes) or Minnesota (noncompete likely unenforceable) law would apply.

Recently, bloggers, including Christopher McKinney and Eric Meyer, have addressed this subject. Apparently the state legislatures believe there is sufficient evidence of employers being heavy handed (i.e., Jimmy Johns) in he application of non-competes, Continue Reading

The Rule of Law – Does It Make a Difference?

Posted in Constitution, General

Recently, my friend and U.S. Congressman Trey Gowdy spoke about the Rule of Law, specifically with respect to the President’s recent Executive Order regarding Immigration.  With gridlock in D.C. being the norm, expect to hear a lot more about Executive powers.  For example, commentators are suggesting Roberts is looking at approving some aspects of Obamacare under Executive interpretation powers, therefore, leaving those aspects up for elimination under a new administration.  For 50-75 years, it has been expected that Executive interpretations of regulatory matters delegated by Congress would change when a different party occupies the White House.

In legal circles, this is the manifestation of what is known as Chevron deference, which gives the Executive branch power / discretion to interpret any ambiguities in a statute and enact regulations implementing their preferred interpretations (in theory eliminating the ambiguity). In effect, by this doctrine, the Executive branch gets the power to do what the Judicial branch normally does (i.e., interpret the law). Then, when parties come before the Judicial branch for resolution of their disputes related to the Executive interpretation in a regulation or in a policy statement or a guideline, the Judicial branch is obligated under Chevron to accept the Executive interpretation, as long as it is reasonable. As noted in the Roberts link above, the Judicial branch could then be obligated to accept two different interpretations resolving the same statutory ambiguity.
Continue Reading

What about the Statute of Frauds (?), said the “Uniform Electronic Transactions Act” (UETA)

Posted in Electronic Signatures, General, Injunctions, Jury Issues / Trial, Real Estate

Despite its enactment in 2004 in most all of the 50 states, the Uniform Electronic Transactions Act (“UETA”) has not received the amount of attention one might expect.  This is particularly true with respect to real estate transactions, for which it seems an overwhelming majority of real estate agents, brokers, realtors and others in the industry still think that “[t]he statute of frauds … requires some memorandum or note of the agreement relating to real estate to be in writing and signed by the party charged therewith or his agent.”  For example, even the first source for legal research in South Carolina, S.C. Jurisprudence, the chapter on the Statute of Frauds, makes no mention of the UETA, its statutory origin at S.C. Code § 26-6-10 et seq., or its potential significance to parties negotiating a contract via email.  In 2015, the vast majority of real estate transactions, whether residential or commercial, are handled by email.

According to the NCSL, 47 of the 50 states have enacted the UETA, with New York, Illinois and Washington being the exceptions, and even those states have enacted similar legislation.

Once again, despite the UETA being over 10 years old, and despite the fact that most UETA’s do not provide an exception to the applicability of the Act to “contracts for the sale of real property,” only a handful of cases can be found interpreting the UETA in conjunction with the well known SOF. Continue Reading

“Ready for Trial Your Honor” … the 12 month pledge

Posted in General, Jury Issues / Trial

This article by ACEDS on the recent sanctions levied against a major law firm in a patent trial which they won for their client raises numerous issues with the practice of law that need to change. The article refers to “structural woes,” of the legal system.  Anyone who practices law can attest to the length of time it usually takes to bring a case to trial, and the costs of litigating a high stakes or even a low stakes case.

If the case is in state court and requires a trial of more than one week, getting the trial scheduled around the lawyers and clients schedules will likely require a herculean effort by itself, and if it is set in a rural county with not so many terms of court and one that almost never has two judges trying cases, good luck to you. Federal court cases with their court-produced scheduling orders tend to keep cases on track, and the fact that those cases are assigned to one judge who usually has a whole month term, the length of the trial as long as it is not more than two weeks should not be cause for delay.

Just recently, I was told by insurance company adjuster that because the opposing party could also afford to take the case to trial, it  was very difficult to settle the case.  Obviously this person has become accustomed to having time on his side.  This comment also suggests reliance on the standard knee-jerk reaction Continue Reading

Motive – Help Yourself

Posted in General, Jury Issues / Trial, Trademarks

I hope everyone is having a wonderful June.  Extremely busy here.  School is out.  Our three teenage sons are all playing summer baseball on high school and college fields throughout the Southeast, swimming on the Rockbridge Swim Team, as well as working, lifting weights, going to Palmetto Boys State, The Naval Academy Summer Session, and trying to get all our fishing gear and boats ready for a week at Litchfield / Pawleys Island.  In the midst of all of this, I am working so hard and am presently motivated to get strong and stay stronger than my teenage boys who are closing the gap rapidly.  Ask them and they will say they have passed me already.  They just can’t “help themselves.”

I am now so old that I actually went to sleep before the end of all three #CWS games between Vandy and UVa.  Congrats btw to my child hood friend and now famous Mayor of Greenwood, @WelbornAdams on the Vandy Victory.  Check out his Twitter profile and make sure he removes the “long suffering Vanderbilt” claim there.  As a music lover, Welborn will hopefully appreciate that in analyzing motive, “we are programmed to receive” (The Eagles, Hotel California), and also the link below which you must read to find and listen to @OzzyOsbourne while still with @BlackSabbath.  Listen to those guitar strokes at the start of Hotel California and you will be motivated for something.

The IP Topic You will Not Be Hearing Too Much About Today:

My IP idea for a new blog post was to remind everyone that state trademark registrations, for example as provided for at S.C. Code Section 39-15-10 et seq.,  pack a strong punch for any registered trademark holder looking Continue Reading

Problem solving, anniversary, skills development, and Judical-Legislative power struggle

Posted in General

I knew it would be a challenge to post regularly on this blog as a solo practitioner, and the last few months have proven that.  While no posts have generated, countless ideas have run through my mind and I have decided today is the time to spit a few out.  This is largely because I think many U.S. citizens and most all lawyers would be interested in South Carolina’ latest legal news.  As shown in the Order re House Speaker Bobby Harrell – PDF – OCR (we try to add value here) , the South Carolina Circuit Court (a/k/a Common Pleas) told the S.C. Attorney General to “Move Over Rover” and let the House Ethics Committee take over!  So the question now becomes what will happen to the “fire” that is the investigation and who will get to “stand next to it.”  If the last sentence made no sense to you, please go back and see / listen to the Move Over Rover link.

Okay, so that was item 4 above and the titled topics to this post are out of order.  We find to maintain the reader’s attention, it is good to keep them guessing a little bit.  Back to the first topic.  As my friend and colleague Rob Rikard points out on his Twitter handle @rgrikard he is a “lawyer, father, problem solver.”   Continue Reading

Montgomery Ward, the “Sea King” Two-Stroke Motor, Mail Ordering in 1950’s, and What Could Have Been

Posted in Trademarks

Montgomery Ward® started in 1872 as a dry goods mail order business.  In 1981, the tradename “Montgomery Ward” was also associated with the following goods and services: “Retail Department Store and Mail Order Services,” claiming priority to a “First Use in Commerce: in 1872.  Montgomery Ward’s business model was apparently intended to take advantage of what was possibly the only available “impulse” buying from the home in the 1940’s and 50’s, excepting of course Sears®.  Did you know Sears sold homes?  Yes, in fact, I suspect the guts of my home built in 1946 was a mail order model.

On February 10, 1975, the Montgomery Ward name was also associated with seven trademark registrations for goods and services ranging from “ignition tuneup kits for internal combustion engines” to “loungewear, footwear, headwear, sleepwear, swimwear, [and] hosiery.”  Look out Sears!

According to USPTO filings for Montgomery Ward at Registration No. 1170705, Montgomery Ward, LLC filed for bankruptcy in in 2000.   Continue Reading