Ledger Vol. 2 – No. 1

Fasten Your Seatbelts, It’s Going to Be a Bumpy Night: The Implications of Recent Delaware Case Law on the Film Industry

By Jason Tyler* A pdf version of this article may be downloaded here. I. Introduction Applying general corporate law principles to Hollywood is challenging because the film industry is unique.  This article attempts to offer some preliminary analysis of two recent Delaware [FN1] Court of Chancery cases dealing with contests for corporate control in light of Hollywood’s unique qualities.  Recently, the Court of Chancery in eBay v. Newmark doubted the ability of firms to cite a threat to corporate culture as legitimate grounds for implementing a takeover defense.[FN2] Just over a year ago, the Court in Amylin expressed doubt about a firm’s ability to impede changes of control by embedding financial penalties, for lack of a better word, in otherwise ordinary business transactions.[FN3] In both cases, the final analysis proceeded naturally from a central tenet of Delaware’s corporate law jurisprudence: ultimate authority to elect corporate directors rests in the hands of the shareholders as the principals of their agent-directors. More →

How to Protect Against a Licensing Partner’s Bankruptcy: Patent Licenses and the Bankruptcy Code

By Jordan Markham* A pdf version of this article may be downloaded here. I.  Introduction In uncertain times, or when dealing with uncertain partners, planning for the possibility of bankruptcy ex ante can provide a very real benefit to a party contemplating a patent licensing agreement.  Since the financial crisis of 2008, many contractual partners who formerly looked rock solid have experienced major cash-flow problems.  In addition, it has always been the case that in some fields of technology, such as biotech, a significant number of businesses are expected to fail.  Thus, it is important to think through at the outset how a license might be treated by a bankruptcy court, and where possible, to structure the agreement accordingly.  How to best do this will depend primarily on whether a party is the patentee or the licensee, and on the extent to which rights are transferred (i.e. whether the transaction results in a sale or merely a license agreement).  As we shall see, in the context of a bankruptcy proceeding, the patentee is generally better served by a greater, and a licensee by a lesser, transfer of rights. More →

Student Speech in Online Social Networking Sites: Where to Draw the Line

By Michael J. Kasdan* A pdf version of this article may be downloaded here. Introduction The move toward online communication has the potential to throw off the historically careful balance that has been struck regarding First Amendment issues in the realm of “student speech.”  In a seminal trilogy of cases, the Supreme Court balanced the free speech rights of students with school districts’ ability – and even responsibility – to regulate student speech that disrupts the learning environment.  Before the proliferation of instant messaging, SMS texts, and social networking sites, the Court allowed schools to regulate on-campus speech in limited circumstances (i.e., when the speech disrupts the learning environment) but did not extend the school’s authority to regulate speech that occurs off-campus (i.e., speech subject to traditional First Amendment protection).  Electronic communication blurs the boundary between on- and off-campus speech.  While a student may post a Facebook message from the seeming privacy of his or her own home, that message is widely accessible and could have a potentially disruptive effect on campus. More →

Regulating the Film Industry in China: A New Approach

By Brian R. Byrne* A pdf version of this article may be downloaded here. I.  Introduction For U.S. filmmakers, the People’s Republic of China represents a prodigious market opportunity.[FN1] As the Chinese middle-class expands,[FN2] enjoying an increase in disposable income,[FN3] the thirst for quality entertainment intensifies.[FN4] Cinema construction rampages across the mainland in an effort to satisfy demand for theatrical releases.[FN5] Yet despite this consumer demand,[FN6] supply methodology remains a perplexing phenomenon. True exploitation of the market is simply chimerical due to an obstinate web of import quotas, censorship, and government intervention, all founded upon a guise of cultural protectionism.[FN7] However, notwithstanding the obstacles to legitimate distribution, the channels of illegitimate distribution remain relatively unencumbered. Piracy is rampant throughout China[FN8] and high quality copies of pirated films are widely available, often before the film in question has even been released through lawful channels. Moreover, in contrast to lawful distribution, pirates are subject to neither an import quota nor the rigorous censorship regime that would otherwise apply.[FN9] Thus, China appears to offer a distinct advantage to illegitimate market players. More →