Understanding Corporate Law & Its Importance

Understanding Corporate Law & Its Importance


Understanding Corporate Law & Its Importance


The world of business is a complex one, with intricate rules and regulations governing every move. For companies to navigate this landscape successfully, a firm grasp of corporate law is crucial. But what exactly is it, and how does it differ from business law? This article delves into the heart of corporate law, unpacking its key aspects and highlighting its vital role in the corporate world.


What is Corporate Law?


At its core, corporate law governs the formation, operation, and dissolution of corporations. Corporate law encompasses a vast array of legal issues, including:


  • Formation: Establishing a corporation, choosing a structure (e.g., LLC, C-Corp),drafting bylaws, and complying with registration requirements.
  • Governance: Setting up internal structures, defining the roles and responsibilities of directors and officers, ensuring compliance with fiduciary duties, and conducting shareholder meetings.
  • Financing: Raising capital through various means (e.g., issuing stocks, bonds),complying with securities regulations, and managing investor relations.
  • Mergers and Acquisitions: Facilitating the legal aspects of combining or acquiring other businesses, ensuring compliance with antitrust laws and shareholder rights.
  • Taxation: Structuring the corporation for optimal tax efficiency and navigating complex tax regulations.
  • Compliance: Adhering to labor laws, environmental regulations, and other legal requirements applicable to the corporation.1


Is Corporate Law Different from Business Law?


While closely related, corporate law is a specialized subset of business law Business law encompasses the legal aspects of all businesses, regardless of their structure, size, or industry. Corporate law, on the other hand, focuses specifically on the legal issues unique to corporations, a distinct legal entity with its own rights and responsibilities.2


Types of Corporate Law:


The diverse nature of corporations necessitates various areas of specialization within corporate law. Some key types include:


  • Mergers & Acquisitions (M&A) Law: Deals with the legal aspects of combining or acquiring other businesses, ensuring compliance with regulations and protecting shareholder interests.
  • Securities Law: Governs the issuance and trading of stocks, bonds, and other securities, ensuring investor protection and market integrity.
  • Governance & Compliance Law: Advises corporations on setting up effective internal structures, complying with regulations, and managing risk.
  • Tax Law: Helps corporations minimize their tax burden by structuring themselves efficiently and navigating complex tax codes.
  • Intellectual Property Law: Protects valuable intangible assets like trademarks, patents, and copyrights, ensuring their ownership and exploitation rights.3


Why is Corporate Law Important?


For corporations of all sizes, navigating the legal landscape without proper guidance can be treacherous. Corporate law plays a crucial role in:


  • Protecting the corporation: By ensuring compliance with legal requirements and mitigating risks, corporate law safeguards the corporation from lawsuits, penalties, and reputational damage.
  • Facilitating growth: From raising capital to acquiring new businesses, corporate law provides the legal framework for strategic expansion and growth.
  • Ensuring fairness and transparency: Corporate law establishes clear rules and procedures for governance, protecting the rights of shareholders, directors, and other stakeholders.
  • Promoting economic activity: By creating a predictable and stable legal environment for corporations, corporate law fosters a thriving business ecosystem.4


Corporate law is not just about legalese; it’s the lifeblood of a successful business. Understanding its scope and importance is essential for any business owner, investor, or individual involved in the corporate world. As your company navigates the intricate legal landscape, seeking the guidance of a qualified corporate lawyer can be the difference between smooth sailing and choppy waters. If you require counsel please do not hesitate to contact the Law Firm of Dayrel Sewell, PLLC.



1 What Is Corporate Law? www.theforage.com/blog/careers/what-is-corporate-law (last visited 2/23/24).


2 What Is The Difference Between Corporate And Business Law?, https://www.lobbplewe.com/what-the-difference-between-corporate-business-law/#:~:text=Business%20law%20is%20much%20more,shareholders%2C%20including%20laws%20surrounding%20stocks (last visited 2/23/24).


3 Types of Corporate Law www.fridmanlawfirm.com/corporate-law/types/ (last visited 2/23/24).


4 What Is Corporate Law and Why Is It Important? https://legamart.com/articles/corporate-law/#purpose-of-corporate-law (last visited 2/23/24).


Intellectual Property Litigation: Strategies for Resolving Disputes and Protecting Rights

Intellectual Property Litigation: Strategies for Resolving Disputes and Protecting Rights

Intellectual Property Litigation: Strategies for Resolving Disputes and Protecting Rights

Intellectual Property (IP) litigation has become increasingly complex in the modern era, as technological advancements continue to blur the lines between creativity, innovation, and ownership. This article explores key strategies for resolving disputes and protecting rights in IP litigation, with a focus on recent case law that has shaped the legal landscape. From patent and trademark infringement to copyright disputes, understanding effective litigation strategies is crucial for both rights holders and accused infringers.

Intellectual Property encompasses a range of rights, including patents, trademarks, copyrights, and trade secrets. Disputes often arise when parties assert their rights or defend against allegations of infringement. The dynamic nature of technology and creativity requires a nuanced approach to litigation.

Before initiating litigation, parties should explore alternative dispute resolution methods, such as negotiation, mediation, or arbitration. These methods can be cost-effective and lead to quicker resolutions. Patent infringement cases rarely go to bench or jury trial and are settlement before going to trial at the claim construction stage.i Additionally, conducting a thorough pre-litigation investigation is crucial, involving the identification of key evidence, estimated legal costs, potential witnesses, and the assessment of the strength of the case.

I. Recent Case Law Trends

A. Notable Cases in Patent Litigation and Strategy Implications

a. Alice Corp. v. CLS Bank Int’l, 573 U.S. 208 (2014): The Supreme Court’s decision clarified the patent eligibility of software and business method claims, impacting the approach to patent litigation in these areas. The court used the two-step framework from Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289 (2012) to determine patent eligibility of a computer-implemented schedule for mitigating settlement risk. The court determined that the generic computer implementation did not provide an “inventive concept” to transform the abstract idea into a patent-eligible application under 35 U.S.C. § 101. The invention must be something that could lead to a patent.ii

Careful Claim Drafting: Post-Alice, patent holders must draft claims with an emphasis on technical details and inventive concepts to overcome eligibility challenges and to avoid ceasing at abstract ideas of a concept.

b. TC Heartland LLC v. Kraft Foods Group Brands LLC, 137 S. Ct. 1219 (2017): This case reshaped venue rules for patent infringement lawsuits, limiting the jurisdictions where cases can be filed. The court held that a domestic corporation “resides” only in its state of incorporation for purposes of the patent venue statute.iii

Strategic Venue Selection: On both the plaintiff and defendant’s side, TC Heartland has led to a strategic consideration of the most favorable venue for patent litigation, impacting case outcomes. Fact-intensive inquiry may ensue depending on whether parties select their venue based on where “the defendant had committed acts of infringement and has a regular and established place of business” or the state of incorporation.iv

B. Notable Cases in Trademark Litigation and Strategy Implications

a. Matal v. Tam, 137 S. Ct. 1744 (2017): The Supreme Court’s decision in this case held that the Lanham Act’s prohibition on disparaging trademarksv violated the First Amendment and amounts to viewpoint discrimination. The First Amendment does not allow the government to prohibit the expression of an idea simply because it is offensive. The court also refused to accept the contention that trademarks are government speech, impacting the criteria for registering trademarks.vi

Careful Selection of Marks: The Matal decision underscores the importance of choosing distinctive and non-disparaging marks.

b. Patent and Trademark Office v. Booking.com B. V., 140 S. Ct. 2298 (2020): The Supreme Court ruled that adding “.com” to a generic term can result in a protectable trademark.

Expanding Protection: Booking.com highlights the potential for obtaining trademark protection for domain names that include generic terms. However, in order to be capable of trademark protection, the use of the term as a brand name has to be distinctive enough that the consumer has to perceive the term as a source identifier.vii

C. Notable Cases in Copyright Litigation and Strategy Implications

a. Google LLC v. Oracle Am., Inc., 141 S. Ct. 1183 (2021): The Supreme Court’s decision clarified the fair useviii doctrine in the context of software code, impacting the boundaries of copyright protection. The court ruled that Defendant Google’s copying of a portion of Plaintiff Oracle’s Java SE computer program was fair use because Google’s use of the Java API was transformative, allowing the creation of new products and expanding use of Android-based smartphones, and had little market effect on Oracle.

Fair Use Considerations: Oracle provides guidance on the fair use analysis, emphasizing transformative use and the nature of the copyrighted work, especially in the area of software interface use and development.ix

b. Fourth Estate Pub. Benefit Corp. v. Wall-Street.com, 139 S. Ct. 881 (2019): This case clarified the registration requirement for filing copyright infringement lawsuits.x Registration has been made when the Copyright Office has registered a copyright after examining a properly filed application. The Register’s action triggers a copyright owner’s entitlement to sue not upon submission of an application for registration.xi

Timely Registration: Fourth Estate underscores the importance of promptly registering copyrights for litigation purposes because it affects the copyright owner’s leverage in threats to initiate immediate legal action for copyright infringements.xii Without a properly and timely copyright registration, the copyright owner may be unable to seek a preliminary injunction. Furthermore, it will be further costly for small copyright owners if they need to use the expensive expedited process for copyright registration.xiii

II. Key Litigation Strategies

A. Early Case Assessment

Conducting a detailed early case assessment allows parties to evaluate the merits of their claims or defenses, helping in the formulation of effective legal strategies. It also allows to measure potential costs, what tasks could be complete in-house, and how long the litigation make take.xiv Considering the cost and expense of IP litigation, early case assessment also allows counsel and the client to consider out-of-court solutions such as mediation, negotiation, and/or settlement.

B. Effective Use of Experts

Engaging qualified experts is crucial in IP litigation to provide technical or industry-specific insights that can influence the court’s understanding of complex issues. The expert can simplify technical jargon and translate intricate scientific or technical processes for easier digestion by the court.xv In the earlier part of the case, the expert’s advice can also assist counsel with whether there is a valid intellectual property claim.xvi They can also help with negotiations and settlement considerations and give objective expert advice on finding a fair ground between the parties.xvii

C. Enforcement of IP Rights Abroad

Globalization has increased the need for enforcing IP rights internationally, necessitating a strategic approach to cross-border litigation and coordination with foreign counsel. In case of infringement, the availability of litigation tools depends on the jurisdiction and the intentionality of the infringement.xviii The enforcement process may involve cease and desist letters and/or various judicial proceedings to preserve evidence of the alleged IP infringement, seek injunction and eventually damages.xix Because of the difficulty of enforcing IP rights globally, international bodies such as the World Trade Organization have established international agreements such as the Trade-related Aspects of Intellectual Property Rights (TRIPS) agreement to provide judicial measures to protect IP rights around the world.xx

D. Post-Grant Proceedings

Utilizing post-grant proceedings for patents, such as Inter Partes Review (IPR), Post-Grant Reviews (PGRs), and Ex Parte Reexaminations can be an effective strategy to challenge the validity of asserted IP rights before the relevant administrative bodies. In choosing which post-grant proceeding to use, it is important to consider factors such as “the nature of the dispute, the availability of prior art, and desired level of involvement from the owner or challenger.”xxi

IP litigation requires a multifaceted approach that considers legal, technical, and strategic aspects. Recent case law developments highlight the evolving nature of intellectual property disputes, necessitating a dynamic and well-informed strategy for both rights holders and accused infringers. Understanding the impact of recent decisions and integrating effective litigation strategies can significantly influence the outcome of IP disputes and safeguard the interests of the parties involved.

iJames C. Yoon, IP Litigation in United States,Wilson Sonsini Goodrich & Rosati (Aug. 4, 2016),https://law.stanford.edu/wp-content/uploads/2016/07/Revised-Stanford-August-4-2016-Class-Presentation.pdf.

ii Julia Powles, Alice v. CLS Bank: United States Supreme Court Establishes General Patentability Test, WIPO Magazine (Aug. 2014),https://www.wipo.int/wipo_magazine/en/2014/04/article_0004.html.

iii28 U.S.C. § 1400(b).

ivId.; see also “TC Heartland:” The End of an Era in Patent Litigation, Dorsey & Whiney LLP (May 25, 2017), https://www.dorsey.com/newsresources/publications/client-alerts/2017/05/tc-heartland.

v 15 U.S.C. § 1052.

viMatal v Tam: Supreme Court Holds Disparaging Trademark Ban Violates First Amendment,Scarinci Hollenback, LLC (June 27, 2017),https://constitutionallawreporter.com/2017/06/27/matal-v-tam-2017/.

viiBass, Berry & Sims PLC, Impact of Supreme Court Trademark Decision in Booking.com Case,JD Supra (July 13, 2020), https://www.jdsupra.com/legalnews/impact-of-supreme-court-trademark-91400/.

viii17 U.S.C. § 107.

ixJeffrey Robert Kaufman, What Google v. Oracle Means for Open Source, Opensource.com (May 5, 2021), https://opensource.com/article/21/5/google-v-oracle.

x17 U.S.C. § 411(a).

xiFourth Estate Pub. Benefit Corp. v. Wall-Street.com,LLC, 139 S. Ct. 881 (2019).

xii Sylvia Zhang, A Guide to Fourth Estate v. Wall-Street.com, Harvard Law School (May 28, 2019), https://hls.harvard.edu/clinic-stories/legal-policy-work/a-guide-to-fourth-estate-v-wall-street-com/.


xivPowles,supranote ii.

xvImportance of Expert Witness Testimonies in Intellectual Property Litigation, LITILI Group (Sept. 12, 2023), https://litiligroup.com/expert-witness-testimonies-in-intellectual-property-litigation/.



xviiiSettling Disputes and Enforcing IP RightsWorld Intellectual Property Organization,https://www.wipo.int/sme/en/settle-ip-disputes.html#(last accessed on Feb. 21, 2024).


xxEnforcement of intellectual property rights Enforcement of intellectual property rights, World Trade Organization,https://www.wto.org/english/tratop_e/trips_e/ipenforcement_e.htm(last access on Feb. 21, 2024).

xxiHoward Suh, USPTO Post-Grant Proceedings: An Overview, Fox Rothschild LLP (June 23, 2023),https://www.foxrothschild.com/publications/uspto-post-grant-proceedings-an-overview

Protect Your Work with Copyright

Protect Your Work with Copyright


Protect Your Work with Copyright


In the world of creative expression, originality deserves protection. That’s where copyright comes in. This legal instrument safeguards your creations, granting you exclusive control over their use and distribution. Copyright covers a vast spectrum of creative endeavors, including literary works, music, artwork, plays, and films.1 The moment you breathe life into your work, copyright protection automatically kicks in, typically lasting for your lifetime plus 70 years.2


Unveiling the Copyright Mystery


Think of copyright as a shield defending the unique way you express an idea. Copyrights empower their owners to decide how their work is reproduced, distributed, displayed, performed, or even transformed into derivative works.3 Copyright protection is yours from the moment of creation, without any formal registration process.4 However, registering your work with the U.S. Copyright Office unlocks several advantages:


  • A Public Seal of Ownership: Your copyright claim gets etched in a public record, serving as undeniable proof of your authorship.
  • Federal Court Access: If someone infringes on your copyright, registering allows you to pursue legal action in federal court and is considered prima facie evidence in a court of law of the validity of the copyright if made before or within five years of publication.
  • Enhanced Damages: Winning a copyright infringement lawsuit with a registered work might entitle you to statutory damages and attorney’s fees.5


Securing Your Creative Realm


There are two primary paths to securing copyright protection:

1. Publish with a Copyright Notice: This includes the copyright symbol ©, the publication year, and your name as the copyright holder.


2. U.S. Copyright Office Registration: To register with the U.S. Copyright Office, you must complete an application, submit the nonrefundable filing fee, and provide a non-returnable deposit (a copy or copies of the works being registered).6


Areas Beyond Copyright’s Reach


Copyright doesn’t extend to facts, mere ideas, systems, methods of operation, titles, slogans, or short phrases.7 Additionally, it doesn’t cover unoriginal works like blank forms, government documents, or those already in the public domain.8


The Enduring Legacy of Creativity


Generally, copyrighted work created after January 1, 1978, is protected for the author’s lifetime plus 70 years.9 For anonymous, pseudonymous or works made for hire, protection lasts for 120 years after creation or 95 years after publication, whichever comes first. 10


Unlocking the Benefits of Copyright


Copyright empowers you to hold the reins on how your work is used. You can sell, license, or even give away your copyright rights.11 Moreover, you have the legal grounds to take action against anyone who infringes upon your copyright.12


Safeguarding Your Creative Investment


If you suspect someone of infringing on your copyright, you can send them a cease-and-desist letter. If they persist, you have the option to file a lawsuit against the infringing party.




If you suspect someone of infringing on your copyright, you can send them a cease-and-desist letter. If they persist, you have the option to file a lawsuit against the infringing party.


  • Document your work: Keep drafts, sketches, emails, and anything else that chronicles your creative journey.
  • Display the copyright notice: Include it on all published works.
  • Consider registration: Registering with the U.S. Copyright Office strengthens your claim.
  • Seek legal counsel: Consult an attorney for tailored advice on copyright law.


Disclaimer: This blog post is for informational purposes only and does not constitute legal advice. Please consult with an attorney for specific legal guidance on copyright law.



1Copyright.gov: Copyright in General,https://www.copyright.gov/help/faq/faq-general.html#:~:text=Copyright%2C%20a%20form%20of%20intellectual,%2C%20computer%20software%2C%20and%20architecture (last visited February 6, 2024).


2 Copyright.gov: How Long Does Copyright Protection Last?,https://www.copyright.gov/help/faq/faq-duration.html#:~:text=As%20a%20general%20rule%2C%20for,plus%20an%20additional%2070%20years (last visited February 6, 2024).


3Congressional Research Service: Copyright Law: An Introduction and Issues for Congress, https://crsreports.congress.gov/product/pdf/IF/IF12339#:~:text=Exclusive%20Rights%20of%20Copyright%20Owners,%2C%20sequel%2C%20or%20dramatization (last visited February 6, 2024).


4Copyright in General,https://www.copyright.gov/help/faq/faq-general.html#:~:text=Copyright%2C%20a%20form%20of%20intellectual,%2C%20computer%20software%2C%20and%20architecture (last visited February 6, 2024).


5 Id.








9: How Long Does Copyright Protection Last?, https://www.copyright.gov/help/faq/faq-duration.html#:~:text=As%20a%20general%20rule%2C%20for,plus%20an%20additional%2070%20years (last visited February 6, 2024).




11Copyright Law: An Introduction and Issues for Congress, https://crsreports.congress.gov/product/pdf/IF/IF12339#:~:text=Exclusive%20Rights%20of%20Copyright%20Owners,%2C%20sequel%2C%20or%20dramatization (last visited February 6, 2024).


12 Id.


Understanding Litigation Hold Notices: A Crucial Element in Legal Proceedings

What is Litigation Hold Notice

Understanding Litigation Hold Notices: A Crucial Element in Legal Proceedings

Litigation holds play a pivotal role in the legal landscape, especially when legal disputes are imminent or ongoing. A litigation hold notice, also known as a legal hold or preservation order, is a formal communication that instructs organizations and/or custodians of certain documents to preserve all relevant documents and information related to a potential or existing legal case. This proactive measure is essential to ensure the integrity of evidence and prevent the destruction or alteration of crucial information that may be pertinent to the litigation.

What is a Litigation Hold Notice?

A Litigation Hold Notice or Litigation Hold Notice is a written directive issued by legal counsel to custodians of certain documents, informing them of their obligation to preserve all potentially relevant evidence in anticipation of future litigation.i A litigation hold notice is also called “preservation letters” or “stop destruction requests.”ii This can include a wide range of materials, such as documents, emails, electronically stored information (ESI), and other records that may be relevant to the legal matter at hand such as voicemail, videos, calendars, photographs, text messages, etc.iii Litigation Hold Notices are often sent before parties issue a written demand for the production of relevant information.iv The goal of a litigation hold is to prevent the spoliation of evidence, which refers to the intentional or negligent destruction, alteration, or concealment of evidence. This formal legal process began with a series of New York federal court cases related to the court’s concern for preservation of documents and prevention of destruction of key evidence related to litigation during discovery.v

Key Components of a Litigation Hold Notice:

1. Identification of Relevant Information:

The litigation hold notice typically outlines the scope of the information to be preserved. Legal teams work closely with their clients to identify and specify the types of documents and data that are crucial to the case. In the notice, it is best to be simple and clear, so it obviates any confusion or need for revision.vi Legal teams also examine whether the relevant information they seek is within the possession, custody, or control of the other side. The relevant documents and/or information may be found in email servers, smartphones, cloud storage, meeting software, collaboration software, network drives, social media accounts, any personal devices used to conduct business, usb drives, file cabinets, etc.vii

2. Communication to Key Personnel:

The litigation hold notice is generally distributed to key personnel within the organization who are responsible for implementing and overseeing the litigation hold. This often includes IT professionals, records management personnel, and relevant department heads. After giving notice, it is also important to have an internal system set up to remind record custodians about the timeline and expiration of the litigation hold, and to keep track of custodians who are leaving the company by resignation or termination. viii

3. Clear Instructions and Timelines:

A well-crafted litigation hold notice provides clear and concise instructions on how to comply with the preservation order. It may also include specific timelines and deadlines for compliance, ensuring that the organization and/or custodian of certain documents act promptly to preserve the relevant information. If the preserving party does not timely issue a litigation hold notice to its employees the court may find it to be an indication of a grossly negligent mental state and forms a rebuttable presumption that the destroyed evidence was relevant.ix Generally, the evidence should not be destroyed until the conclusion of the litigation.

4. Documentation and Reporting:

Organizations and/or custodian of certain documents are usually required to document their efforts in complying with the litigation hold. Meticulous recording and tracking of preservation of evidence under litigation hold also prevents potential sanctions.x The preserving party must be able to show that reasonable and good faith action was taken to preserve the information relevant to the litigation.xi This can involve creating reports detailing the steps taken to preserve information, as well as any challenges encountered during the process.

Importance of Litigation Holds:

1. Preservation of Evidence:

The primary purpose of a litigation hold notice is to preserve potentially relevant evidence. This is crucial for ensuring a fair and just legal process, as it allows both parties to access the same information during litigation.

2. Compliance with Legal Obligations:

Failure to comply with a litigation hold notice can have serious legal consequences, including sanctions. Courts take a dim view of spoliation of evidence, and non-compliance may result in adverse inferences or monetary penalties. A party failing to comply may face sanctions by the court if the party demanding the litigation hold can show that the evidence has not been maintained, and that i) the spoliating party had an obligation to preserve the evidence; ii) the evidence was destroyed with a culpable state of mind; iii) and the lost evidence was relevant to the requesting party’s claim or defense.xii

3. Risk Mitigation:

By implementing a litigation hold promptly and thoroughly, organizations and/or custodian of certain documents can mitigate the risk of facing legal consequences due to the loss or alteration of critical evidence.

In the complex world of legal proceedings, litigation hold notices serve as a crucial tool to ensure the fair and transparent administration of justice. Organizations and/or custodian of certain documents must understand the importance of promptly and diligently complying with these notices to preserve evidence, meet legal obligations, and ultimately contribute to a just resolution of legal disputes. As the legal landscape continues to evolve, staying informed about the significance of litigation holds is essential for organizations and/or custodian of certain documents navigating potential legal challenges.

iStephanie F. Stacy, Litigation Holds: Ten Tips in Ten Minutes, United States District Court District of Nebraska (July 2010),https://www.ned.uscourts.gov/internetDocs/cle/2010-07/LitigationHoldTopTen.pdf.

ii Id.

iiiSterling Miller, Litigation holds: What in-house counsel needs to know, Thomson Reuters (Sept. 19, 2022), https://legal.thomsonreuters.com/en/insights/articles/litigation-holds-what-in-house-counsel-need-to-know.

ivTracee Davis, Constance M. Boland & Adam I. Cohen, Best Practices in E-Discovery in New York State and Federal Courts, E-Discovery Committee of the Commercial and Federal Litigation Section of the New York State Bar Association (Apr. 5, 2013), https://nysba.org/app/uploads/2020/02/Ediscovery_Final5.2013.pdf.

v Zubulake v. UBS Warburgh LLC, 220 F.R.D. 212 (S.D.N.Y. 2003).

viDavis, Boland & Cohen, supra note iv.

viiMiller, supra note iii.


ixVoom HD Holdings LLC v. Echostar Satellite LLC, 93 A.D.3d 33 (1st Dept. 2012).

xMiller, supra note iii.

xiFed. R. Civ. P. 37(e).

xii See Richard Reice, The Tyranny of the Litigation Hold, New York State Bar Association, 21 NYLitigator, no. 1, 2016, at 19; see also Ortega v. City of New York, 9 N.Y.3d 69, 76, 845 N.Y.S.2d 773, 776 (2007).

How ChatGPT and other generative AI may affect the legal industry




A Brief Introduction to ChatGPT


“ChatGPT, or similar language models, has the potential to significantly impact the legal industry in various ways”, says ChatGPT when prompted, “how is ChatGPT going to affect the legal industry”. ChatGPT is a machine learning based technology created by OpenAI, an American artificial intelligence (“AI”) research lab aiming to make AI globally user-friendly and accessible.1 Since OpenAI’s launching of ChatGPT in November 2022, ChatGPT has become one of the most accessible and user-friendly AI models available to the public. Reaching 100 million users in just over two months, ChatGPT may be the fastest-growing consumer app in internet history, and there is no doubt about its influence on various fields such as finance, government, technology, etc.2


The legal industry has access to ChatGPT and other generative AIs at their disposal as well. Seeing a potential for success in the legal field, OpenAI released its latest version of ChatGPT called GPT-4 in March 2023. GPT-4 currently powers CoCounsel, the very first AI legal assistant program now widely used by the legal industry.3 GPT-4 can perform tasks typically handled by lawyers, such as reviewing documents, preparing for a deposition, conducting legal research, and summarizing documents.4 As AI advances at an unprecedented speed, its potential impact on the legal profession, especially for lawyers and paralegals, can be evaluated.


ChatGPT’s impact on the Legal Profession


a. What ChatGPT can do


Put simply, generative AI like ChatGPT collects a colossal amount of information and data, breaks it down into small units, analyzes these small units, and puts them together.5 Taking advantage of the generative AI’s ability to access and quickly access vast amounts of information, ChatGPT-4 can perform advanced tasks such as drafting documents, legal research, predictive analysis, contract review analysis, and due diligence.6 In fact, a LexisNexis survey from March 2022 revealed that over half of the New York lawyers who participated in the survey expressed that they had already used generative AI at work or were planning on doing so.7 Currently, the services in the legal profession most likely impacted by AI are those that involve routine and repetitive tasks which are mostly handled by junior associates, leading to cost savings for law firms as AIs can perform those tasks faster.8 A study done in March 2023, by researchers at Princeton University, University of Pennsylvania, and New York University, predicted that the industry most vulnerable to the new AI was legal services. 9 Another research by Goldman Sachs also predicted that 44 percent of legal work could be automated.10


The rise of generative AI could also affect the demand for legal services due to its affordability and accessibility. The LexisNexis survey revealed that of around 2,000 consumers in the legal market, around 15% of them stated that they had already tried generative AI for legal advice or assistance.11 As generative AIs become more and more advanced, the number of people turning to AIs for relatively simple legal services are likely to increase and attorneys will see a decrease in the number of potential clients for certain types of legal work.


b. What ChatGPT cannot do


Despite its enthusiastic reception and hype, ChatGPT as of now still remains more as a prospect, according to its inceptor; co-founder and CEO of OpenAI Sam Altman tweeted in December 2022 that ChatGPT is “incredibly limited but good enough at some things to create a misleading impression of greatness.”12


A perfect example of his comment comes from a lawyer who used ChatGPT to draft a brief. Most recently in May 2023, a New York lawyer used ChatGPT to draft a brief opposing a motion to dismiss filed against an in-flight personal injury case filed in the Southern District Court of New York.13 When the lawyer asked ChatGPT to search for relevant cases to include in his opposition, ChatGPT cited more than half a dozen cases involving flight injuries.14 The brief contained pinpoint citations from cases such as Martinez v. Delta Air Lines, Zicherman v. Korean Air Lines, and Varghese v. China Southern Airlines.15 However, it turned out that ChatGPT had invented those cases and the lawyer who did not think that ChatGPT could “make up” cases used them without confirming the validity of the cases. The lawyer was eventually penalized to pay $ 5,000 for sanctions under Federal Rule of Civil Procudure Rule 11 for submitting pleadings that contain arguments that have no evidentiary support.16


In addition to the aforementioned problem of ChatGPT “making up” facts, ChatGPT is also not up-to-date. ChatGPT does not update its database automatically and/or regularly. 17 The current version has only been tested with information up to 2021.18 Therefore, ChatGPT is not aware of and/or does not have any information after 2021, which means its collection of case law, statutes, local ordinances, legislature, news, etc. is outdated and may sometimes even be irrelevant. For example, ChatGPT does not have in its database most recent U.S. Supreme Court cases such as Dobbs v. Jackson Women’s Health Organization that overturned Roe v. Wade in June 2022 and Students for Fair Admissions, Inc. v. President and Fellows of Harvard College that struck down affirmative action in June 2023. Furthermore, because ChatGPT operates by processing potentially inaccurate information, it also produces inaccurate information, with OpenAI claiming a factual accuracy rate between 70-80%.19 In such a fast paced world where facts have become ever more important, outdatedness and inaccuracy can result in significant negative impact on users in various ways. This in turn means that it is still a little early for people to fully rely on the information and/or work product produced by generative AI assistance.


Legal Implications that Comes with the Increased Use of AI in the Legal Field


a. Privacy


Another concern with generative AI tools like ChatGPT is privacy. According to the OpenAI’s product and service privacy policy, “data ingested into the public ChatGPT model becomes part of the data repository and is not kept private,” and therefore the data could be breached and private information could be leaked.20 Hence there is a potential violation of a duty of confidentiality in using public generative AI, and many firms either ban or only allow limited use of generative AI in fear of privacy violation.21 Similarly, private users should keep in mind that the data they put in the public AI could be exposed.




b. Copyright


As explained previously, generative AI such as ChatGPT creates text based on a vast amount of data that is already out, and a huge part of which is copyrighted. Courts’ ruling on whether ChatGPT’s use of such work constitutes an act of copying works that are protected by copyright is not clear because there has not been a case raising the issue. However, it is an implication that users, especially lawyers, need to keep in mind. On the other hand, whether work created by the generative AI can be copyrighted is another interesting question; there is not an abundance of cases regarding the issue. However, the U.S. Copyright Office in its formal guidance said that works created by AI may be copyrightable, provided that the work involves sufficient human authorship. 22




Artificial intelligence has more heavily been integrated in people’s everyday lives than they may have realized. From customer service, education, content creation, and businesses, more people are turning to tax-filing softwares such as Turbotax to file their tax returns and more and more websites are using AI chat-systems to direct and help customers. The advancement and development of AI are likely not ending anytime soon. In February 2023, Google launched Bard, its experimental artificial intelligence23 and Meta also introduced its own artificial intelligence, LLaMA (Large Language Model Meta AI).24 The tech industry’s seemingly infinite possibilities fuel competition and investments, and nobody can predict how fast and far it can take us. According to UBS, the AI services market is expected to grow to $90 billion by 2025.25 However, amidst the possibilities, the example of the New York lawyer who used ChatGPT to draft a brief with nonexistent cases reminds us that artificial intelligence is at its core “artificial.”


After a brief pause, ChatGPT added when asked “how is ChatGPT going to affect the legal industry”: “However, it’s important to note that while ChatGPT can be a useful tool, it should not be seen as a substitute for human legal expertise. Legal professionals will still play a crucial role in interpreting and applying the law, exercising judgment, and providing tailored advice to clients. Additionally, ethical considerations surrounding the use of AI in the legal industry, such as privacy, data security, and bias, need to be addressed to ensure responsible and fair deployment.”


1OpenAI,https://openai.com/ (last visited July 18, 2023).


2 Sawdah Bhaimiya, ChatGPT May Be the Fastest-Growing Consumer App in Internet History, Reaching 100 Million Users in Just Over 2 Months, UBS Report Says, Business Insider (Feb. 2, 2023), https://www.businessinsider.com/chatgpt-may-be-fastest-growing-app-in-history-ubs-study-2023-2.


3Casetext https://casetext.com/ (last visited July 18, 2023).




5 Kevin Roose, How Does ChatGPT Really Work?, N.Y.Times (Mar. 28, 2023),https://www.nytimes.com/2023/03/28/technology/ai-chatbots-chatgpt-bing-bard-llm.html


6The Potential Impact of Generative AI on Law Firms, FairfaxAssociates.com (May 10, 2023), https://fairfaxassociates.com/insights/the-potential-impact-of-generative-ai-on-law-firms/


7Generative AI Captures Iagination of Lawyers, Law Students, Consumers Alike, LexisNexis.com (Mar. 20, 2023), https://www.lexisnexis.com/community/pressroom/b/news/posts/generative-ai-captures-imagination-of-lawyers-law-students-consumers-alike




9Jan Hatzius, Joseph Briggs, Devesh Kodnani & Giovanni Pierdomenico, The Potentially Large Effects of Artificial Intelligence on Economic Growth, Goldman Sachs (Mar. 26, 2023), https://www.gspublishing.com/content/research/en/reports/2023/03/27/d64e052b-0f6e-45d7-967b-d7be35fabd16.html


10Ed Felton, Manav Raj & Robert Seamans, How will Language Modelers like ChatGPT Affect Occupations and Industries?, Social Science Research Network (Mar. 6, 2023), https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4375268.




12 Sam Altman (@sama), Twitter (Dec. 10, 2022 7:11 PM), https://twitter.com/sama/status/1601731295792414720?lang=en.


13Benjamin Weiser & Nate Schweber, The ChatGPT Lawyer Explains Himself, N.Y.Times (June 8. 2023), https://www.nytimes.com/2023/06/08/nyregion/lawyer-chatgpt-sanctions.html




15 Benjamin Weiser, Here’s What Happens When Your Lawyer Uses ChatGPT, N.Y.Times (May 27, 2023),https://www.nytimes.com/2023/05/27/nyregion/avianca-airline-lawsuit-chatgpt.html.


16 Mata v. Avianca, Inc., No. 54 Civ. 1461 (S.D.N.Y. June 22, 2023), available at https://storage.courtlistener.com/recap/gov.uscourts.nysd.575368/gov.uscourts.nysd.575368.54.0_3.pdf; see also Debra Cassens Weiss, Lawyers Who ‘Doubled Down’ and Defended ChatGPT’s Fake Cases Must Pay $5K, Judge Says, ABA Journal (June 26, 2023), https://www.abajournal.com/web/article/lawyers-who-doubled-down-and-defended-chatgpts-fake-cases-must-pay-5k-judge-says.


17 OpenAI, What is ChatGPT?, https://help.openai.com/en/articles/6783457-what-is-chatgpt (last visited July 18, 2023).




19OpenAI, GPT-4, https://openai.com/research/gpt-4 (last visited July 18, 2023).


20Skye Witley, ChatGPT Tempts Big Law Despite AI Accuracy, Privacy Worries (2), Bloomberg Law (June 1, 2023), https://news.bloomberglaw.com/privacy-and-data-security/chatgpt-tempts-big-law-despite-ai-accuracy-data-privacy-worries.


21 Stephanie Pacheco, ANALYSIS: AI Has Entered the Chat- Is the Legal Industry Ready?, Bloomberg Law (May 10, 2023),https://news.bloomberglaw.com/bloomberg-law-analysis/analysis-ai-has-entered-the-chat-is-the-legal-industry-ready.


22Copyright Registration Guidance: Works Containing Material Generated by Artificial Intelligence, 88 Fed. Reg. 16, 190 (Mar. 16, 2023) (to be codified at 37 C.F.R. § 202); see also Blake Brittain, AI-created Images Lose U.S. Copyrights in Test for New Technology, Reuters (Feb. 22, 2023), https://www.reuters.com/legal/ai-created-images-lose-us-copyrights-test-new-technology-2023-02-22/.


23 Sundar Pichai, An Important Next Step on Our AI Journey, Google (Feb. 6, 2023), https://blog.google/technology/ai/bard-google-ai-search-updates/.


24 Introducing LLaMA: A foundational, 65-billion-parameter large language model, MetaAI (Feb. 24, 2023),https://ai.facebook.com/blog/large-language-model-llama-meta-ai/.


25UBS Editorial Team, Let’s Chat about ChatGPT, UBS (Feb. 23, 2023),https://www.ubs.com/global/en/wealth-management/our-approach/marketnews/article.1585717.html.


The Copyright Implications of AI-Generated Art

Today we are witnessing the rapid advancement of artificial intelligence (AI) technologies which are capable of generating human-like images, audio, and text.1 While many people are excited by these AI technologies, these advancements have also rung the warning bell for many individuals in creative industries who believe that AI technologies are exploiting their work and harming their profession as a whole. This is especially a concern for the art industry


Recently, AI technologies which generate images have become increasingly sophisticated. These AI technologies are programmed to learn how to generate images from scraping publicly accessible data – in this case images – from the internet.2 Consequently, artists are becoming concerned about how their artwork online is being exploited by large companies to train their AI to create new works, often for a profit.


Last year, artists around the world took to the internet and reposted images of a red prohibition circle over the letters “AI” in protest of image-generating AI. The first person to post this image appears to be an artist named Alexander Nanichtkov who stated in a tweet that “AI creates the ‘art’ you see on the backs of artists being exploited . . . AI ‘art’ is currently scraping the web for art and uses it in datasets. No artist gave consent to have their art used. We were not compensated.” 3 In the face of these concerns, many legal professionals are currently considering the extent to which intellectual property rights – particularly copyrights – serve to protect the work of artists.


AI Generated


A variation of the symbol posted in protest of AI generated art.4


Under the Copyright Act, copyright protection is only granted to “original works of authorship.” 5While there is no law or provision of the United States Constitution which defines who may be considered an “author,” the UnitedStates Copyright Office (USCO) tends to only recognize copyrights for works “created by a human being.” 6 Courts actually have a history of denying copyright protection to non-human authors. For instance, in Naruto v. Slater the Ninth Circuit Court of Appeals held that Naruto, a crested macaque, did not have legal standing to claim copyright infringement under the Copyright Act for pictures that Naruto took 7 himself. And for those wondering, Naruto’s claims were filed by the People for the Ethical Treatment of Animals (PETA).8


Beyond the context of copyright protection for animals, courts have also considered cases regarding copyright protection for AI systems.This past April, the Supreme Court declined to hear an appeal from a computer scientist named Stephen Thaler, who filed a suit to claim a copyright on behalf of hisAI system, known as Device for Autonomous Bootstrapping of Unified Sentience (DABUS).9 Although Thaler argued that DABUS created the works autonomously, the Court upheld the decision of the lower courts and the USCO, and declined his appeal “on the grounds that the AI couldn’t be considered the legal creator of those works.” While these decisions may seem promising to human artists since they deny copyright protection to non-human authors, the issue of AI generating images is far from settled.


The U.S. Patent and Trademark Office acknowledges when these AI technologies scrape data from the internet to generate images, this process “will almost by definition involve the reproduction of entire works or substantial portions thereof,”10 and as a result, copyright infringement seems quite plausible. In fact, a recent decision by the USCO has ruled that AI generated works – whether that is art, writing, or music – will not be granted copyright protection. 11 This decision arose from a copyright application for a comic called Zarya of the Dawn, which used original writing alongside art generated by Midjourney, an AI program.12 In their letter to Zarya creator Kristina Kashtanova, the USCO explained how “the office will not register works produced by a machine or mere mechanical intervention from a human author” and how the crucial question is “whether the ‘work’ is basically one of human authorship, with the computer . . .merely being an assisting instrument, or whether the traditional elements of authorship in the work . . . were actually conceived and executed not by man but by a machine.” 13




The cover page and second page of Zarya of the Dawn14


On the other hand, OpenAI, a company that uses AI generating tools, has argued that the works created by AI tools should be protected since they qualify as fair use since the process of scraping data from the internet is done to “create a useful generative AI system and the copies aren’t made available to the public.” 15 To provide another recent example, this past February Getty Images sued Stability AI alleging that it “copied at least 12 copyrighted images from Getty Images’websites” to train their Stable Diffusion AI program.16 While Stability AI responded with a fair use defense, Getty argues that this defense is inapplicable since Stability AI’s AIprogram undermines the market for Getty’s copyrighted material. At the same time, Stability AI is also facing a class action lawsuit from several artists alleging copyright infringement due to the use of their images to train their AI programs.


AI image-generating tools have also caused controversies since they can scrape data to mimic a particular artist’s style.This past January, DeviantArt – an online art website – was sued for copyright infringement after they began offering a new service in which users could pay a monthly subscription to access an AI art generator.17 This AI art generator was trained on the artwork of artists who uploaded their art to DeviantArt for free,and users could enter a text prompt to generate images.18 Furthermore, users of this AI tool could even input a specific artist’s name in order to create an image which replicated that exact artist’s style.19 The claim argues that this constitutes copying and consequently breaches copyright. 20 While this may seem like a clearcase of copyright infringement, not everyone in the legal community agrees. For example, Andres Guadamuz, a legal school at the University of Sussex, believes that these AI tools are simply learning patterns from the original works, brushstrokes, and styles which are not covered by copyright law.21


To add another layer of complexity to this matter, the USCO has stated that an AI-generated work could be copyrightable if an individual can prove that “they themselves put a meaningful amount of creative effort into the final content.” 22 In other words, while a company that uses an AI system, which scrapes images from the internet to produce new content, may be found to have committed copyright infringement, if that company can prove they added ameaningful amount of creative effort to the final product, then the company could actually argue that they have a valid copyright in the new work.23 This would overcome the previous problem that individuals have faced when they tried to make an AI system a copyright holder.


This does not mean however, that minimal contributions made to an AI-generated work would automatically qualify for copyright protection. The Director of the USCO Shira Perlmutter stated “If a work’s traditional elements of authorship were produced by a machine, the work lacks human authorship and theOffice will not register it.”24 For example, if an AI system produced a work solely based on a human prompt then the “’traditional elements of authorship’ are determined and executed by the technology – not the human user.”25 On the other hand, if an AI-system produced a work of art based on a human prompt,and then that finished work was then edited further using Photoshop, the USCO has stated that a copyright is more likely to be granted.26


This new stance on the copyrightability of AI-generated works brings with it a wide array of new problems. For example,there is no definitive standard or test which could be used to determine whether a company or individual has made a meaningful enough contribution to an AI-generated work which would qualify it for copyright protection. As previously mentioned, the Director of the USCO Shira Perlmutter stated that if a meaningful human contribution is made to an AI-generated image, through Photoshop for example, then the AI-generated work could qualify for copyright protection.However, there would need to be further clarification or case law on how much Photoshop editing would be required to qualify as a meaningful contribution to the work. Companies could quickly make contributions to an AI-generated work on Photoshop and as a result they could defeat copyright infringement claims.This would be especially harmful to artists whose original works are used without their consent to train these AI systems which then create new works fora profit. Additionally, these new works created by AI systems could be sold at a far cheaper price since producing them is drastically quicker than the cost of human artists creating original works. This could lead to severe economic harms to human artists and could have even greater implications for theart industry as a whole.


Despite the bleakness of this situation, there may be a light at the end of the tunnel which could prevent generative-AI from gettingout of hand and inflicting severe harm on human creators. One popular method which has been discussed to control the rapid growth of generative-AI is theimplementation of some sort of licensing system.27 This type of licensing system would require companies using generative-AI to pay copyright holders a fee forusing their works in training their AI systems. This licensing system could offset some of the harm caused by generative-AI since human artists could refuse to license their original works, or they could at least be compensated for allowing their work to be used to train an AI system. Unfortunately, this licensing systemmay not address the greater problem of unfair competition between generative-AI and human artists since companies could produce new works at a far quicker and cheaper rate than human artists creating original works.


Due to the recent advancement of AI technologies and their benefits, it is likely that generative-AI systems will continue to be used for the foreseeable future. Furthermore, since these AI technologies are very new, our laws and courts are not fully prepared to handle the quickevolution of these new technologies. As a result, the consequences and effects of generative-AI systems must be continually considered since they can pose substantial harm to human artists.


1 Eric Revell, AI complicates copyright law, YAHOO! FINANCE (May 19, 2023), https://finance.yahoo.com/news/ai-complicates-copyright-law-131932670.html.




3 Butlerian Jihad, ARTISTS MASS PROTEST AGAINST AI STEALING THEIR WORK BY SHARING ANTI-AI LOGO, THE_BYTE (Dec. 16, 2022),. https://futurism.com/the-byte/artists-protest-ai


4Verity Babbs, Digital Artists Are Pushing Back Against AI, HYPERALLERGIC (Mar. 6, 2023), https://hyperallergic.com/806026/digital-artists-are-pushing-back-against-ai/.


5 17 U.S.C. § 102


6Revell, supra note 1.


7Naruto v. Slater, 888 F.3d 418, 426 (9th Cir. 2018).


8Revell, supra note 1.






11 Sam Sachs, US Copyright Office Rules AI-generated artwork, content not legally protected, WFLA (Feb. 23, 2023, 2:30 PM),https://www.wfla.com/news/national/us-copyright-office-rules-ai-generated-artwork-content-not-legally-protected/.






14Richard Lawler, The US Copyright Office says you can’t copyright Midjourney AI-generated images, THE VERGE (Feb. 22, 2023, 9:06 PM),https://www.theverge.com/2023/2/22/23611278/midjourney-ai-copyright-office-kristina-kashtanova.






17 Darian Woods & Adrian Ma, AI-generated images breach copyright law, artists say, NPR (Feb. 7, 2023), https://www.npr.org/2023/02/07/1155185861/ai-generated-images-breach-copyright-law-artists-say.










22Katyanna Quach, AI-generated art can be copyrighted, say US officials – with a catch, THE REGISTER (Mar. 16, 2023), https://www.theregister.com/2023/03/16/ai_art_copyright_usco/.










27Kai Nicol-Schwarz & Tim Smith, Why Harry Potter is the copyright timebomb under generative AI models, SIFTED (May 18, 2023), https://sifted.eu/articles/generative-ai-copyright.


Attorney-Client Privilege: Protections and Pitfalls

Attorney Client Privilege: Protection and Pitfalls


Inadvertent disclosure of privileged documents is an issue that periodically arises for lawyers and clients. Recently, Infowar host and founder, Alex Jones’ attorneys had to deal with an inadvertent disclosure to the opposing parties of cellphone records protected by attorney-client privilege during the Sandy Hook massacre defamation case proceeding against him.1 Understanding how to deal with inadvertent disclosure and what remedies are available is an important aspect of legal practice because attorneys can find themselves (or their client) suffering from an inadvertent disclosure of protected information or, conversely, being presented with inadvertently disclosed documents.


Privilege? What is that? Do I Have It?

In order to understand the legal parameters of returning attorney-client privileged material, it needs to be understood by what is meant when referring to “attorney-client privilege”, “inadvertent disclosure of privileged material,” and “protective orders ordering return of inadvertently disclosed information.” Remember, the client is the holder of the privilege.



In today’s legal proceedings, New York courts almost exclusively rely upon the common law in their application of “attorney-client privilege.”1 This is evidenced in the case, People v Belge, where the Onondaga County Court ordered the defendant to produce corporate records as per a subpoena duces tecum, but the appellant refused and claimed that these records were protected by attorney-client privilege. The Onondaga County Supreme Court held the defendant in contempt and sentenced to the Onondaga County Correctional Facility at Jamesville after defendant rejected the Court’s order of providing the records in camera.3Upon the defendant’s subsequent appeal, the Appellate Court stated that the appellant-defendant was not referring to Fifth Amendment privilege, but rather to the privilege of confidentiality in an attorney-client relationship.4The Court ruled that for information to be protected under “attorney-client privilege”, there must be an attorney-client relationship and “the information must have been given with the expectation of confidentiality and for the purpose of obtaining legal…advice.”5The Court affirmed the Court’s ruling that the appellant was contemptuous, but vacated the sentencing and remanded the case back to the Onondaga County Court to allow the appellant to make a disclosure of the records under oath.6


Attorney | Top New York Attorneys

Can I Lose My Privilege? What If I Send Accidentally Reveal Something?


Next, having established what constitutes “attorney-client privilege”, we move to the inadvertent disclosure of privileged material and reclaiming that material via protective order. Previously, some courts held that inadvertent disclosure of privilege documentation served as an automatic waiver of said privilege because the client and attorney possess sufficient means to preserve the secrecy of a communication, and because disclosure makes achievement of the benefits of the privilege impossible.7 Thankfully, this jurisprudence has been augmented to a more forgiving common law rule, which states that inadvertently disclosed material is still protected under attorney-client privilege, subject to the satisfaction of several factors.8 For privileged information to remain protected under “attorney-client privilege” when inadvertently disclosed, it needs to be shown that: (1) it was the client’s intention to retain the confidentiality of the privileged material; (2) the client took reasonable steps to prevent disclosure; (3) the client promptly objected to the disclosure; and, (4) the party claiming the waiver would not be prejudiced if a protective order is issued for said privileged materials.9 Furthermore, the burden of proving that the privilege applies is on the party asserting the privilege.10Next, if during a proceeding, a court concludes that inadvertent disclosure was not a waiver of “attorney-client privilege”, then that finding serves as grounds for returning the privileged documentation back to the party moving for the protective order, but this demand of return has to be expressed in the motion for the protective order.11 Comment 4(2) of Rule 4.4 of the ABA Model Rules of Professional Conduct states the following regarding the return of inadvertent documentation: “Whether the lawyer is required to take additional steps, such as returning the document or electronically stored information, is a matter of law beyond the scope of these Rules, as is the question of whether the privileged status of a document or electronically stored information has been waived.”


In Manufacturers and Traders Trust Co. v. Servotronics, Inc., plaintiff, Manufacturers and Traders Trust Co., and Defendant, Servotronics Inc., executed two agreements, the Debt Modification Agreement and the Sinking Fund Agreement.12 The defendant discovered that six documents were inadvertently disclosed to the plaintiff.13 The defendant moved for a protective order for the documents to be returned and for an injunction preventing the plaintiff from utilizing the six documents.14 Special Term denied the defendant’s motion.15The Appellate Court unanimously reversed and granted the protective order, thus returning the six documents.16 The Court first ruled that the six documents were protected by “attorney-client privilege” because Defendant satisfied the rule constructed in People v. Belge.17 The Court then ruled that the inadvertent disclosure of the six documents did not serve as a waiver of “attorney-client privilege.”18 Utilizing the four factors mentioned above, the Court reasoned that it was not the defendant’s intention to disclose the documents, as evidenced by the vice-president of the defendant bank stating that they did not intend to disclose.19 To satisfy the second factor, the Court stated that the defendant took reasonable steps to prevent disclosure, as evidenced by the screening of all the material by the defendant’s lawyers prior to handing over the materials to the plaintiff.20 For the third factor, the Court stated it was sufficient that, after learning about the inadvertent disclosure, the defendant only took two days to initiate proceedings for a protective order.21 For the fourth and final factor, the Court concluded that a protective order would not prejudice the plaintiff because the defendant quickly began proceedings and didn’t exacerbate the error by testimony.22


Regarding the last factor, which addresses prejudice towards the party claiming waiver of privilege, the party claiming waiver of attorney-client privilege is prejudiced when it relies on the contents of the inadvertently disclosed information and the information is relevant to the case in question.23 In the case, AFA Protective Systems, Inc. v. City of New York, after a series of failed settlement discussions between the parties from December 1994 and November 1998, plaintiff AFA informed defendant City of New York via letter that they have in their possession a memorandum, dated February 17, 1994, written by one of the former defendant’s attorneys.24 AFA stated their intention to file this memorandum with the Court in support of its summary judgment motion.25 City of New York soon thereafter objected to AFA’s intended use of the memorandum claiming that the content of the memorandum is protected by attorney-client privilege.26 Utilizing the four factors test established by Manufacturers and Traders Trust Co., the Appellate Court stated that the City of New York knew for four years that the memorandum was in AFA’s possession.27 There is no evidence to suggest that the City of New York, after learning of AFA’s possession of the memo, demanded its return nor is there evidence of the City figuring out whether the memo was inadvertently or unlawfully disclosed.28 Therefore, the Court held that granting a protective order would be prejudicial to AFA because the memo is relevant to this case and AFA relied on the contents of the memo in support of their summary judgment motion.29 The Court reversed the lower court’s decision and denied the City of New York’s motion for a protective order.30


Conversely, in federal court, when the inadvertently disclosed information is not vital to the arguments presented by the party claiming the waiver, then they wouldn’t be prejudiced if a protective order is issued. For instance, in Employers Ins. Co. of Wausau v. Skinner, in response to document requests, Plaintiff delivered 396 documents to Defendants Skinner.31 Amongst these documents was an email that the Plaintiff later claimed was inadvertently disclosed.32 Thus, Employers motioned for a protective order ordering Skinner to return or destroy the original and copies made of the email and to preclude Skinner from utilizing the email in any way.33 Upon evaluation of the prejudice factor, the Court stated that although the contents of the email related to the present action, the contents of the email are not vital to Skinner’s arguments.34 The Court reasoned that Skinner would still be capable of making their arguments even without the contents of the email.35


Similarly, in Long Island Lighting Co. v. Allianz Underwriters Ins. Co., the Appellate Court stated that a protective order prohibiting the use of plaintiff LILCO’s December 1993 Report, an internal report marked “Privileged and Confidential Attorney Work Product Attorney-Client Communication”, would not be prejudicial towards the defendants because the defendants’ motion for summary judgment was supported by over 200 documents, other than the December 1993 Report.36 The December 1993 Report was not vital enough to make granting a protective order prejudicial against the defendants.37


Attorney Client Privilege


In conclusion, the arguments and precedent alluded to above signifies that inadvertently disclosed information protected by attorney-client privilege is not always protected. Rather, in certain scenarios, the claim of attorney-client privilege will not be sufficient enough to warrant a protective order, especially when there are factors that may be prejudicial to the other party. Relevance of the information to the matter at hand, and the actions of both the client and their counsel, are key factors that the Court considers prior to making a determination on whether certain information should remain in confidence. Thus, it is increasingly important for attorneys to monitor, undergo multiple reviews, and establish internal systems that ensure protection of all attorney-client privileged information before any inadvertent disclosure occurs, as there is no assurance that such mistakes will be rescindable.


1See David L. Hudson Jr., Alex Jones case shows inadvertent disclosure of electronically stored information is a real risk, ABA Journal, Oct. 27, 2022, https://www.abajournal.com/web/article/alex-jones-case-shows-inadvertent-disclosure-of-electronically-stored-information-is-a-real-risk.


2See Spectrum Systems Intern. Corp. v. Chemical Bank, 78 N.Y.2d 371 (N.Y. 1991); People v. Belge, 59 A.D.2d 307 (4th Dep’t 1977); Forman v. Henkin, 93 N.E.3d 882, 887 (N.Y. 2018); BDO USA, LLP v. Franz, 208 A.D.3d 1088 (1st Dep’t 2022).


3People v. Belge, 399 59 A.D.2d 307, 308 (4th Dep’t 1977).


4See id.




6Id. at 309.


7Manufacturers and Traders Trust Co. v. Servotronics, Inc., 132 A.D.2d 392, 398 (4th Dep’t 1987); Enterprise Architectural Sales, Inc. v. Magnetic Builders Group LLC, 193 A.D.3d 411 (1st Dep’t 2021); Delta Financial Corp. v. Morrison, 819 N.Y.S.2d 425, 429 (Sup Ct, Nassau County 2006).


8Manufacturers and Traders Trust Co., 522 N.Y.S.2d at 395.


9Id. at 398, 399.


10Id. at 398.


11Campbell v. Aerospace Products Intern., 37 A.D.3d 1156, 1157 (4th Dep’t 2007).


12Manufacturers and Traders Trust Co., 522 N.Y.S.2d at 393.








16Id. at 399.


17Id. at 395.


18Id. at 393.


19Id. at 398.


20Id. at 399.




22Manufacturers and Traders Trust Co., 522 N.Y.S.2d at 399.


23AFA Protective Systems, Inc. v. City of New York, 13 A.D.3d 564, 565 (2d Dep’t 2004).








27Id. at 565.








31Employers Ins. Co, 2008 WL 4283346 at *1.




33Id. at *10.






36Long Island Lighting Co. v. Allianz Underwriters Ins. Co., 301 A.D.2d 23, 31 (1st Dep’t 2002).




Mechanical Doping: The Running War on Super Shoes

Ever since Pheidippides ran from Marathon to Athens, athletes of all levels have marveled at the pursuit of running a marathon.1 26.2 miles is an incredibly daunting task, and professionals to amateurs alike have learned to respect the distance – the race does not owe anyone anything. The allure of competitive racing is the act of accomplishing something that many others cannot, as well as breaking personal barriers and records. For years, feats in professional distance running saw few advances and many runners were reaching unbreakable plateaus using the same shoes they’ve been wearing for years (with very minor advances in shoe technology). However, in recent years, many big players in sportswear have begun to develop what are now being called “super shoes.”2 Basically, this category of running footwear is inclusive of any shoe that is meant to be fast and lightweight with enough cushion and bounce to propel your next step to the finish.3 However, it is the implementation of a few more specific attributes that has garnered attention from runners, coaches, and sports journalists worldwide – carbon plates and engineered mesh upper.4 The addition of this plate, along with lightweight yet stable uppers, allows for a greater energy return during a runner’s stride and was marketed to have increased running economy by roughly over 4%, hence Nike’s naming of their shoe to be the “Vaporfly 4%.”5


Runners in Nike's Vaporfly & Alphafly | Best Corporate Law Firm in New York City

Runners in Nike’s Vaporfly & Alphafly


Super shoes are highly controversial by their very nature, and many consider them to be a form of “mechanical doping.”6 Mechanical doping has been at the subject of controversy in other endurance sports like swimming and cycling, as products in production have been banned for the unfair advantages that they offer the athletes who use them.7 Further, many regulations have needed to be put into place to prevent and monitor this form of “doping” by sports and rules federations around the globe.8 The advantages these super shoes offer to runners are no exception, as they seem highly unfair to runners who compete without them and almost appear illegal. In fact, Nike’s original Vaporfly model was banned from competition initially.9 Professional marathon runner and motivational athlete Eliud Kipchoge broke the all-time world record for his sub 2-hour marathon time in one of Nike’s super shoes, the Alphafly Next%10, and many athletes and critics were quick to discredit his time and overlook his race as a result almost entirely obtained because of his shoes.11 The reasoning adopted by these critics, albeit flawed12, does have roots in a serious issue regarding those shoes. The main reason for this argument was because, at the time, Nike was the only player in the sport making sneakers at this caliber and with this level of new technology.13 Their running shoe technology was groundbreaking, and non-Nike sponsored athletes were surely paying the price.14 Athletes at all levels that were not sponsored by Nike could not seem to catch a break, as, until recently, athletes at the podium were all sporting Nike running shoes alongside their medals and accolades. But now, seemingly every competing sportswear company that produces high-level running shoes is releasing models that can compete with Nike’s. Nike is still considered the mecca of running shoe producers to many, yet various athletes are breaking records and out-running Nike athletes in non-Nike shoes.15 Now, Nike is fighting back to remain at the top of the super shoe food chain.16


Super shoes | Runners in Nike's Vaporfly & Alphafly | Best Corporate Law Firm in New York City

Eliud Kipchoge with Alphafly Next%’s


To very little surprise, the most popular competitor for Nike in this running shoe arms race is Adidas. The Checks vs. Stripes feud seems to date back nearly as far as Nike’s inception itself.17 You can imagine Adidas’ frustration when a company decades younger has soared to the top of nearly every sports market.18 But Adidas has been able to rival Nike’s Vaporfly and Alphafly models with the introduction of the Adidas Adios Pro line.19 These Adidas shoes are made using Primeknit technology, while Nike’s are made using patented Flyknit technology, and this is where the issue lies.20 Nike claims that Adidas has stolen their “game-changing” technology for various product designs, seeking injunctive relief as well as monetary damages.21 Before this complaint filed by Nike, Adidas lost in the U.S. Court of Appeals for the Federal Circuit to Nike after alleging that Nike violated two patents owned by Adidas.22 As part of their request for injunctive relief, Nike has further requested that the U.S International Trade Commission block all imports of various Adidas shoe models that allegedly infringe on Nike’s patented designs and technology.23 These patents that Nike seeks to protect are some of the most crucial aspects to the Vaporfly and Alphafly designs, as they allow the shoe to be extremely lightweight and comfortable, which in turn increases running performance in users.24 This technology is constantly being improved upon and changed, so it is uncertain whether these patent disputes are worth it for these companies in the long term, but for now they do not appear to be going away. Nike will attempt to protect their designs to stay on top, while Adidas will fight to remain as competitive as they can be as a late player to the game. While many other running brands, like Asics25, have developed a more unique model of super shoe, it is notable that Nike and Adidas are seemingly the only players that wish to compete not only with the entire market, but with each other in a separate battle to the finish.


Runners in Nike's Vaporfly & Alphafly | Best Corporate Law Firm in New York City

Nike Alphafly Next% vs. Adidas Adios Pro


It is difficult to deny the extent and breadth of Nike’s impact on sportswear and the running world.26 While their competitive edge remains prevalent, many new players in the game of elite super shoe production seem to be startling the industry leader. It will be very interesting to see how this case ultimately plays out, as it will set important precedents in running shoe technology advances as super shoes only seem to be getting better and better with each new model. Moreover, it will be just another landmark case in the ongoing battle between Nike and Adidas to see who truly reigns supreme as the top sportswear brand.27


As this case continues, and as progressively more people pick up competitive racing as a result of the Covid-19 pandemic28, it is likely for us to see many similar complaints and cases regarding running shoe technology begin to develop. And it makes sense – superpower companies will always try to protect technology and products that they believe to be proprietary and top-notch, and smaller corporations will always fight to remain competitive in a market dominated by only a fraction of the total players. As of July 2022, Adidas and Nike are both set to release brand new models of their super shoes, the Adizero Adios Pro 3 and the Alphafly Next% 3 respectively, before the Fall 2022 marathon season.29 This will indeed make for a very interesting sneaker battle come time for the results of the fall circuit, and possibly the king of super shoes will be crowned once and for all.


1See Dean Karnazes, The Real Pheidippides Story, Runner’s World (Dec. 6, 2016), https://www.runnersworld.com/runners-stories/a20836761/the-real-pheidippides-story/.


2Jonathon Taylor, Super shoes: Explaining athletics’ new technological arms race, The Conversation (Mar. 2, 2021, 7:47 AM), https://theconversation.com/super-shoes-explaining-athletics-new-technological-arms-race-156265.


3See Jonathon Taylor, Super shoes: Explaining athletics’ new technological arms race, The Conversation (Mar. 2, 2021, 7:47 AM), https://theconversation.com/super-shoes-explaining-athletics-new-technological-arms-race-156265; Bryce Dyer, Nike Vaporfly ban: why World Athletics had to act against the high-tech shoes, The Conversation (Feb. 6, 2020, 6:50 AM), https://theconversation.com/nike-vaporfly-ban-why-world-athletics-had-to-act-against-the-high-tech-shoes-131249.


4E.g. Jonathon Taylor, Super shoes: Explaining athletics’ new technological arms race, The Conversation (Mar. 2, 2021, 7:47 AM), https://theconversation.com/super-shoes-explaining-athletics-new-technological-arms-race-156265.




6E.g. THE CURIOUS CASE OF MECHANICAL DOPING, Sneaker Speculation (May 7, 2020), https://sneakerspeculation.com/2020/05/07/the-curious-case-of-mechanical-doping/.


7See id.


8See id.


9E.g. Stuart Greenwood, Kicking up a storm – a breakdown of Nike’s ground-breaking and controversial range of running shoes, AA Thornton (Feb. 2020), https://www.aathornton.com/nike-vaporfly/; Wall Street Journal, The Controversy Behind Nike’s Vaporfly Running Shoe, Explained | WSJ, YouTube (Jan. 23, 2020), https://www.youtube.com/watch?v=wVXrIaPuP7c.


10Luis Torres, How Eliud Kipchoge and the Nike AlphaFly Made History, Nice Kicks (Oct. 14, 2019), https://www.nicekicks.com/how-eliud-kipchoge-and-the-nike-alphafly-made-history/.


11See James Witts, Technological doping: The science of why Nike Alphaflys were banned from the Tokyo Olympics, Science Focus (Sept. 4, 2021, 4:00 PM), https://www.sciencefocus.com/the-human-body/nike-alphafly-banned-technological-doping/.


12See Brian Metzler, Banning Kipchoge’s Shoes Is the Dumbest Take in Running Right Now, Runner’s World (Oct. 21, 2019), https://www.runnersworld.com/gear/a29533576/ban-kipchoge-nike-shoes-vaporfly/.


13E.g. Running shoe tech: The Emperor’s clothes, and the issues for the integrity of running, The Science of Sport (Feb. 6, 2020), https://sportsscientists.com/2020/02/running-shoe-tech-the-emperors-clothes-and-the-issues-for-the-integrity-of-running/.


14THE CURIOUS CASE OF MECHANICAL DOPING, Sneaker Speculation (May 7, 2020), https://sneakerspeculation.com/2020/05/07/the-curious-case-of-mechanical-doping/.


15See Tony Owusu, Adidas Runs Into Nike FlyKnit Patent Lawsuit, TheStreet (Dec. 10, 2021, 9:18 AM), https://www.thestreet.com/investing/nike-sues-adidas-flyknit-patent.


16E.g. Rachel Bernardo, How Adidas Develops Adizero For World Record Performances, Believe In The Run (Apr. 21, 2022), https://www.believeintherun.com/adidas-adizero-roads-to-records/.


17NIKE VS ADIDAS: A CLASH OF GIANTS TO DOMINATE THE SNEAKER MARKET, AIO bot (Oct. 6, 2017), https://www.aiobot.com/nike-and-adidas-fight/.




19See Brandon Law, Comparison: Nike Alphafly Next% vs Adidas Adizero Adios Pro, Running Shoes Guru (last visited July 6, 2022), https://www.runningshoesguru.com/comparison/nike-alphafly-next-vs-adidas-adizero-adios-pro/.






22See Blake Britian, Nike asks U.S. agency to block Adidas shoe imports, citing patents, Reuters (Dec. 9, 2021, 12:16 PM), https://www.reuters.com/legal/transactional/nike-asks-us-agency-block-adidas-shoe-imports-citing-patents-2021-12-09/; Brendan Pierson, IN BRIEF: Nike prevails in shoe patent dispute with Adidas, Reuters (June 25, 2020, 6:57 PM), https://www.reuters.com/article/ip-nike/in-brief-nike-prevails-in-shoe-patent-dispute-with-adidas-idUSL1N2E22SN.




24Tony Owusu, Adidas Runs Into Nike FlyKnit Patent Lawsuit, TheStreet (Dec. 10, 2021, 9:18 AM), https://www.thestreet.com/investing/nike-sues-adidas-flyknit-patent.


25Cory Smith, ASICS Challenges Nike Super Shoe With ‘MetaSpeed Sky’: Review, Gear Junkie (Mar. 29, 2021), https://gearjunkie.com/footwear/asics-metaspeed-sky-running-shoe-review.


26E.g. id.


27See Nike vs Adidas Case Study: Who Is Winning? All You Need To Know, 440 Industries (Sept. 23, 2021), https://440industries.com/nike-vs-adidas-case-study-who-is-winning-all-you-need-to-know/.


28Wings for Life World Run, Running becoming increasingly popular, Red Bull (Jan 2, 2021), https://www.redbull.com/in-en/running-becoming-increasingly-popular.


29See Taylor Willson, NIKE VS ADIDAS: BATTLE OF THE “SUPER SHOE”, Highsnobiety (June 15, 2022), https://www.highsnobiety.com/p/nike-alphafly-next-2-adios-pro-3-super-shoe-info/.


NFT-based Trademark Infringements: Trends & Risk Mitigation Strategies

      1.   NFTs and Trademarks: General Overview

    Interest in blockchain technologies, cryptocurrencies, and particularly non-fungible tokens (NFTs) is steadily increasing. According to Eric Anziani, COO of Crypto.com, “NFTs really started initially with the digital art side. But it’s going to be a lot more powerful. It will be the tool that represents any digital type of assets in virtual worlds going forward. So the applications are tremendous1.”


    Basically, an NFT is a (i) cryptographic on the blockchain; (ii) representing an asset; (iii) that is unique and non-interchangeable. For instance, Finzer D. describes NFTs as: “unique, digital items with blockchain-managed ownership2.” Indeed, NFTs, powered by blockchain, have unique qualities which can be applied in different industries and businesses including fine arts, gaming, digital identity, certification, licensing, etc. In this respect, the sudden economic growth of the NFT market is understandable. Businesses also tend to use NFTs as marketing tools and as a creative way for building the brand’s image.


    In the meantime, the rise of the NFT market poses new legal challenges, including those in the realm of intellectual property and especially trademark law. Two main trends are worth highlighting. First, there is a significant increase of trademark filing activity around NFT brands. Second, the number of new NFT-related enforcement cases is constantly increasing, including a number of high-profile litigation cases.


      1.   Prosecution: How to Trademark your NFT and Avoid Infringing Third-Parties Trademarks

    With increased media coverage and popularity, U.S. NFT trademark applications skyrocketed during the past year.


    According to open sources, there was a 552% increase in NFT trademark applications with the U.S. patent agency between August 2021 and January 20223. In January alone, about 450 filings for NFT-related trademarks were received4. [Graphical representation of the data is below.]


    NFT Trademark Infringements: Trends and Risk Mitigation Strategies | Best Corporate Law Firm in New York City


    [Source: https://finbold.com/u-s-nft-trademarks-applications-skyrocketed-400x-in-2021-with-15-registrations-daily-in-2022/]


    Some of the latest examples of NFT-related trademark applications include:


    Monster Energy Company
    February 18, 2022
    IC 009 (e.g., virtual goods, software enabling users to experience virtual reality and augmented reality visualization, manipulation, and immersion…) IC 035 (e.g., retail store and online retail store services) IC 041 (entertainment services) IC 042 (providing on-line non-downloadable software; platform as a service (PaaS) and software as a service (SaaS))
    New York Stock Exchange (NYSE Group, Inc.)
    February 10, 2022
    IC 009 (e.g., virtual goods, software enabling users to experience virtual reality and augmented reality visualization, manipulation, and immersion) IC 035 (e.g., provision of an online marketplace) IC 036 (e.g., financial exchange of virtual currency in the field of digital currency) IC 042 (e.g., computer services, electronic storage of cryptocurrency)
    Brooklyn Nets, LLC
    January 19, 2022
    IC 025 (Clothing)
    NFT Starter
    NFT Starter Inc.
    January 28, 2022
    IC 009 (Downloadable image files containing artwork, video clips, writings, and multimedia authenticated by non-fungible tokens (NFTs))
    Columbia Craft, LLC.
    February 3, 2022
    IC 032 (Beer) IC 036 (Financial exchange of crypto assets; Financial services) IC 041 (Entertainment services)
    NFT Trademark Infringements: Trends and Risk Mitigation Strategies | Best Corporate Law Firm in New York City
    McDonald’s Corporation
    February 04, 2022
    IC 043 (operating a virtual restaurant)
    NFT Trademark Infringements: Trends and Risk Mitigation Strategies | Best Corporate Law Firm in New York City
    Victoria’s Secret Stores Brand Management, LLC
    February 14, 2022
    IC 009 (e.g., downloadable virtual goods) IC 035 (e.g., retail store services featuring virtual goods) IC 041 (entertainment services)
    Jan. 06, 2022
    IC 009 (Downloadable virtual goods) IC 035 (e.g., retail store and online retail store services) IC 041 (Providing an interactive website for virtual reality game services; Entertainment services)
    NFT Trademark Infringements: Trends and Risk Mitigation Strategies | Best Corporate Law Firm in New York City
    Nike, Inc.
    October 27, 2021
    IC 009 (downloadable virtual goods) IC 035 (retail store services featuring virtual goods) IC 041 (entertainment services)
    The Andy Warhol Foundation for the Visual Arts, Inc.
    March 25, 2021(Published on February 22, 2022)
    IC 009 (downloadable image and multimedia files containing artwork, text, audio, video, games relating to art, collectables, and Non-Fungible Tokens) IC 041 (providing on-line digital publications in the nature of blogs, articles, e-books, podcasts, and videos in the fields of art, artwork, and NFTs (non-fungible tokens) via the Internet (not downloadable)) IC 042 (e.g., providing temporary use of online non-downloadable simulation software for trading non-fungible tokens used with blockchain technology)


    Considering this increased focus on obtaining trademark protection for NFTs, it is essential to note that all general trademark registration requirements apply to NFT-related trademarks. In particular, trademarks are always registered for specific classes of goods and services (their intended use). In most cases, NFT-related trademarks are registered for the following classes:


        • International Class 009 (downloadable virtual goods)
        • International Class 035 (online retail store, business services)
        • International Class 036 (financial, banking services)
        • International Class 041 (entertainment services)


    Trademarkers must make a preliminary assessment of what classes and services to specify, form an accurate description of services/goods involved, and analyze descriptiveness and potential consumer confusion. According to the USPTO, registering a trademark usually takes about 12-18 months.


      1.   Enforcement: Unauthorized Use of Trademarks in the NFT-based Projects

    Obtaining a trademark registration can be essential to prohibit third parties from unauthorized use of the trademarked designations in their NFT-based projects. However, since NFTs are so new, most brands have not established comprehensive trademark protections specifically for NFT-related goods and services.


    In the meantime, many NFT-based projects started to use famous trademarked brands without any consent from their owners. For example, a collection of 100 virtual versions of Hermès handbags appeared as NFTs created by Mason Rothschild at his metabirkin.com website. The name “METABIRKIN” was used for the project. This project inevitably implicated trademark rights and triggered a trademark lawsuit. On January 14, 2022, the rights holder of BIRKIN trademarks, Hermès, filed a trademark infringement and dilution lawsuit against Mason Rothschild.


    According to the complaint, Hermès alleges that Rothschild is trying to “get rich quick by appropriating the brand MetaBirkins for use in creating, marketing, selling, and facilitating the exchange of digital assets known as non-fungible tokens” and “make his fortune” by swapping out Hermès’ “real life” rights for “virtual rights5.” Hermès specifically asserts the following causes of action:


        1. Trademark Infringement (unauthorized use of the BIRKIN Mark resulted in Rothschild unfairly benefiting from Hermès’ advertising and promotion and profiting from Hermès’ reputation and the BIRKIN Mark).

        2. False Designations of Origin (falsely or misleadingly describe and/or represent the METABIRKINS NFTs as those of Hermès)

        3. Trademark Dilution (Rothschild intentionally and willfully utilized the BIRKIN Mark to trade on Hermès’ reputation and goodwill)

        4. Cybersquatting (registration and use of the Infringing Domain cause consumers to falsely believe that the METABIRKINS Website and the infringing METABIRKINS NFTs are affiliated with, endorsed or approved by Hermès)

        5. Injury to Business Reputation and Dilution (New York General Business Law)

        6. Common Law Trademark Infringement

        7. Misappropriation and Unfair Competitionunder New York Common Law


    In particular, according to Hermès, the “METABIRKINS brand simply rips off Hermès’ famous BIRKIN trademark by adding the generic prefix ‘meta’ to the famous trademark BIRKIN.” At the same time, Rothschild claimed, “I’m not creating or selling fake Birkin bags. I’ve made artworks that depict imaginary, fur-covered Birkin bags6.” Rothschild appealed to First Amendment rights and the prevalent “Rogers test” which helps to determine the balance between protecting artistic expression and avoiding potential confusion with a famous mark.


    Currently, multiple versions of the test exist, but a decision in this case could make applications more uniform and create a new standard for use of trademarks in expressive work. On such a possibility, Susan Scafidi, the director of Fordham University’s Fashion Law Institute, opined that “[this case] has the potential to provide guidance on how art and fashion will coexist in the digital world.”


    Another relevant high-profile case is Nike, Inc. v. StockX7. Nike filed a complaint against StockX, the operator of an online resale platform for various brands of sneakers, apparel, luxury handbags, electronics, and other collectible goods that purports to provide authentication services to its customers. According to Nike, “without Nike’s authorization or approval, StockX is “minting” NFTs that prominently use Nike’s trademarks, marketing those NFTs using Nike’s goodwill, and selling those NFTs at heavily inflated prices to unsuspecting consumers who believe or are likely to believe that those “investible digital assets” (as StockX calls them) are, in fact, authorized by Nike when they are not8.”


    Nike asserts the following causes of action:


        1. Trademark Infringement (StockX’s unauthorized use of Nike’s Asserted Marks constitutes trademark infringement of Nike’s federally registered trademarks, which has caused damage to Nike and the substantial business and goodwill embodied in Nike’s trademarks in violation of Section 32 of the Lanham Act)

        2. False Designations of Origin / Unfair Competition (StockX’s unauthorized use of Nike’s Asserted Marks and/or confusingly similar marks constitutes a false designation of origin that is likely to cause consumer confusion, mistake, or deception as to the origin, sponsorship, or approval of

        3. Trademark Dilution (Nike’s Asserted Marks have become distinctive and “famous”… StockX’s use of Nike’s Asserted Marks and/or confusingly similar marks has been intentional and willful)

        4. Injury to Business Reputation (New York General Business Law)

        5. Common Law Trademark Infringement and Unfair Competition (that StockX acted knowingly, willfully, wantonly, oppressively, fraudulently, maliciously, and in conscious disregard of Nike’s rights).


    The overlap between this lawsuit and the MetaBirkin case is apparent and StockX will likely also claim fair use and First Amendment protection.


    In this respect, these cases may be landmarks which will influence future cases involving allegations of trademark infringements by NFT-based projects.


      1.   Enforcement: NFTs and Cybersquatting

    As a related but separate issue, the recent increase in NFT-related domain name disputes has given rise to a new wave of arbitral litigation using the Uniform Domain-Name Dispute-Resolution Policy (UDRP). This is in no small part due to “cybersquatters” registering NFT-related domain names using well-known trademarks.


    For instance, an UDRP dispute arose involving the domain name “nftmorganstanley.com” unrelated to the actual Morgan Stanley financial services firm9. Upon the complaint of Morgan Stanley, the UDPR panel considered the registered domain name confusingly similar to the trademark owned by the firm.


    The UDRP panel found that the registrant of the nftmorganstanley.com domain name had no rights or legitimate interests in it and that the domain name was registered and used in bad faith. The panel in part determined that the use of competing pay-per-click links indicated bad faith. Due to this, the panel ordered the domain name transferred to Morgan Stanley.


    WhatsApp also faces unauthorized registration of several NFT-related domain names (nftwhatsapp.click, nftwhatsapp.com, nftwhatsapp.net, whatsappnft.click, whatsappnft.com and whatsappnft.net). Such domain names were registered on the name of Turkish individuals and organizations. WhatsApp filed the respective complaint with the WIPO Arbitration and Mediation Center. The Panel considered the complaint and stated the following: “The incorporation of a well-known trademark into a domain name by a registrant having no plausible explanation for doing so may be, in and of itself, an indication of bad faith10” The Panel ordered that the disputed domain names be transferred to the complainant.


    From these examples, the addition of the descriptive NFT acronym does not prevent a finding of confusing similarity and subsequent transfer of a domain name to the actual trademark holder. As in all cybersquatting cases, demonstration of a lack of the registrant’s rights or legitimate interests in the disputed domain names and evidence of bad faith registration can be informative in decision-making processes.


    Overall, the UDRP is a valuable instrument that can be used against “crypto-squatters” trying to capitalize on the registration of NFT-related domain names.


      1.   Conclusions and Further Implications

    The growth of the NFT market has spurred the increase of NFT-related trademark applications as well as new trademark infringements including those brought under UDPR litigation and fair use / first amendment protections.


    It seems reasonable to expect more high profile NFT-related trademark cases in the future. In addition to analyzing infringement and cybersquatting cases, we can expect NFT-related disputes in the Trademark Trial and Appeal Board (TTAB) as well as contracts arising from trademark licensing and assignment.


    In the meantime, both right-holders and owners of NFT-based projects can mitigate their legal risks associated with the possible trademark infringements in a variety of ways. In particular, right-holders and owners can:


        1. Register trademarks specifically for NFT-related goods and services

        2. Register domain names with the acronym “nft.”

        3. For trademark holders, monitor the use of trademarks in NFT-based projects and registration of relevant trademarks and domain names in the name of third parties. In case of potential violations, immediately take appropriate action (e.g., sending cease-and-desist letters)

        4. For NFT-based projects, make a risk assessment with regards to the used designations/logos used as part of their projects

        5. Carefully form and articulate enforcement/litigation strategy and respective argumentation.


1 NFTs: The metaverse economy. Financial Times (2022). Available at: URL: https://www.ft.com/partnercontent/crypto-com


2 Finzer D. (2021) The Non-Fungible Token Bible: Everything you need to know about NFTs. Available at: URL: https://blog.opensea.io/guides/non-fungible-tokens/


3 Sujha Sundararajan. U.S. NFT Trademark Filings Soared 400X Since 2021. Available at: https://www.fxempire.com/news/article/u-s-nft-trademark-filings-soared-400x-since-2021-902155


4 Justinas Baltrusaitis. U.S. NFT trademarks applications skyrocketed 400x in 2021 with 15 registrations daily in 2022. Available at: https://finbold.com/-s-nft-trademarks-applications-skyrocketed-400x-in-2021-with-15-registrations-daily-in-2022/


5 Hermes Complaint, 1. Available at: URL:



6Agence France-Presse, Hermès suing American artist over NFTs inspired by its Birkin bags. Jan 22, 2022. Available at: URL: https://www.theguardian.com/technology/2022/jan/22/hermes-suing-american-artist-over-nfts-of-its-birkin-bags#:~:text=French%20luxury%20group%20Herm%C3%A8s%20has,but%20ownership%20cannot%20be%20forged.


7Nike, Inc. v. StockX. Available at: URL: https://dockets.justia.com/docket/new-york/nysdce/1:2022cv00983/574411


8Nike Complaint, 2. Available at: https://heitnerlegal.com/wp-content/uploads/Nike-v-StockX.pdf

StockX’s Vault NFTs by creating the false and misleading impression StockX’s Vault NFTs are produced by, authorized by, or otherwise associated with Nike)


9 Morgan Stanley v. Joseph Masci. Available at: https://www.adrforum.com/domaindecisions/1940938.htm

10 WhatsApp, LLC v. Domain Admin, Isimtescil.net / Whoisprotection.biz / Mohammed Alkurdy, Evan Digital Technology Group. Available at: https://www.wipo.int/amc/en/domains/search/text.jsp?case=D2021-2329


TransUnion Case Law in Privacy-related Cases: Comment on the Article “Statutory Violations Not Enough to Give Rise to a Cause of Action for Class Actions says U.S. Supreme Court”

TransUnion Case Law in Privacy-related Cases | Best Corporate Law Firm in New York City


In the recent article “Statutory Violations Not Enough to Give Rise to a Cause of Action for Class Actions says U.S. Supreme Court“, we have analyzed the high-profile case TransUnion v. Ramirez and, specifically, the Supreme Court’s reasoning on the standard of proving tort damages in class actions.  The full article with a detailed analysis of the case is available via the link above.


In this comment, we would like to elaborate on the privacy implications of TransUnion v. Ramirez and, in particular, analyze the post-TransUnion case law of the Second Circuit from the perspective of privacy laws.


  • The Factual Analysis


To briefly summarize the facts of the case1: A credit reporting agency, TransUnion, was sued by Sergio Ramirez who was denied from buying a car because he was on a “terrorist list” according to the consumer report provided by TransUnion.


The issue is that TransUnion’s software aimed to facilitate the compilation of personal and financial information about individual consumers (OFAC Name Screen Alert) generated many false positives because many consumers shared names with those included in the OFAC list.


In this respect, Ramirez filed a class-action lawsuit alleging TransUnion’s alleging that it violated the Fair Credit Reporting Act (FCRA) by failing to follow reasonable procedures to ensure the accuracy of

the credit report information, disclose the inaccurate terrorist list match upon request, and include a notice of their rights under FCRA.


The class-action was filed on behalf of a class of 8,185 people all suffering from TransUnion’s matching practices.  However, only 1,853 of the class, including Ramirez, had their false reports containing OFAC alerts provided to the third-party companies.


privacy policy | Best Corporate Law Firm in New York City



  • Decision and Analysis: A Privacy Law Perspective


The Supreme Court held that members of the class-action lawsuit whose credit files were provided to third-party businesses suffered concrete harm from TransUnion’s actions.  However, those whose files were not transferred lacked standing to sue under Article III.  In our earlier article, we have discussed important procedural and policy issues and considerations related to this case.  In the meantime, this case also has significant privacy implications because the Supreme Court significantly shaped the enforcement landscape for many privacy laws.


Specifically, from the privacy perspective, the Supreme Court restricted private rights of action in privacy actions by introducing a “concrete harm” for Article III standing to seek damages.  According to the Supreme Court, “[c]entral to assessing concreteness is whether the asserted harm has a ‘close relationship’ to a harm traditionally recognized as providing a basis for a lawsuit in American courts.” TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 210 L. Ed. 2d 568, 2200 (2021).  In other words, a mere statutory violation does not give a plaintiff a cause of action against a defendant.


Taking into account the essence of many privacy violations and the notion of privacy harms2, determining what constitutes concrete harm exactly can be very challenging.  In particular, as mentioned in the dissenting opinion of Justice Thomas, “even setting aside everything already mentioned— the Constitution’s text, history, precedent, financial harm, libel, the risk of publication, and actual disclosure to a third party—one need only tap into common sense to know that receiving a letter identifying you as a potential drug trafficker or terrorist is harmful.”  TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 210 L. Ed. 2d 568, 2223 (2021).


In this respect, the Supreme Court’s decision is highly criticized by leading privacy scholars as “undermining the effectiveness of many privacy laws” and being “wrong and troubling on many levels.” Id.  According to Keats Citron & Daniel J. Solove, “the Court’s test for recognizing concrete injuries is severely flawed.  The Court’s application of its test is also marred by an inadequate understanding of privacy harms”. Id.


These conclusions are based on the detailed analysis of the notion of “privacy harm” in the broad sense (including “emotional distress harm” and “data quality harm”).  Indeed, it seems reasonable to argue that “a credit report with inaccurate information like denoting someone as a terrorist as in TransUnion poses a significant risk of economic and reputational harm” and “[i]t can be hard for individuals to find out about errors, and when they do, third parties will ignore requests to correct them without the real risk of litigation costs.”.  Id.


However, despite the risk of future harm was not recognized as sufficiently concrete to satisfy Article III standing, the Supreme Court recognized that “a person exposed to a risk of future harm may pursue forward-looking, injunctive relief to prevent the harm from occurring, at least so long as the risk of harm is sufficiently imminent and substantial.”. TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 210 L. Ed. 2d 568, 2210 (2021).  Specifically, the Supreme Court clarified that when it is impossible to prove a “concrete harm,” there is still an opportunity to enforce statutory rights through the injunctive relief.  In practice, this means that those whose credit reports contain inaccurate information could request TransUnion to amend this information, prohibit it from transferring with third parties, or undertake other measures aimed to prevent the harm from occurring.


Thus, from a privacy perspective, it provides guidance for courts and parties on how to assess intangible harms. In the meantime, the TransUnion case imposes significant limitations on the enforcement of privacy violations and, as mentioned in Thome v. Sayer L. Grp., P.C., “questions remain about how to implement TransUnion’s guidance.”.  Thome v. Sayer L. Grp., P.C., No. 20-CV-3058-CJW-KEM, 2021 WL 4690829, 7 (N.D. Iowa Oct. 7, 2021).


  • Post-TransUnion Case Law


Interestingly, since the decision was delivered on June 25, 2021, courts actively applied and analyzed the TransUnion decision.  As for February 2022, there are more than 300 decisions that, in their reasoning, referred to the TransUnion case4.


These cases include both those directly related to privacy violations, including privacy of communications as part of the debt collection litigation under FDCPA6 as well as a wide range of other class actions including antitrust, labor, First Amendment rights and specific state law statutes.


Despite the TransUnion decision only addressed federal court standing under Article III, courts tend to use TransUnion guidance in actions arising under state law.


For instance, it seems insightful to analyze the recent case considered in the Court of Appeals of the Second Circuit – Maddox v. Bank of New York Mellon Trust Company, N.A.  Maddox v. Bank of New York Mellon Trust Co., No. 19-1774 (2d Cir. 2021)10.  In this case, mortgagors (the “Maddoxes”) brought an action against the mortgagee, alleging that mortgagee’s failure to timely record mortgagors’ satisfaction of mortgage.  The district court stated that mortgagors had Article III standing to seek statutory damages from the Bank for its violation of New York’s mortgage-satisfaction-recording statutes (the “statutes”).


The District Court denied the Maddoxes’ motion for judgment on the pleadings.  Mortgagors filed an interlocutory appeal claiming to have Article III standing to seek statutory damages.  The appeal was certified.


However, on rehearing in light of the intervening authority of TransUnion LLC v. Ramirez, which was held after the TransUnion decision, the Court of Appeals of the Second Circuit held that mortgagors did not satisfy a test of “concrete harm”, and thus, they lacked Article III standing to pursue claims for statutory penalties in federal court.  As part of its analysis, the Court of Appeals of the Second Circuit noted the following:


“In sum, TransUnion established that in suits for damages plaintiffs cannot establish Article III standing by relying entirely on a statutory violation or risk of future harm: “No concrete harm; no standing.”


“Our original opinion observed that a statutory right is considered “substantive” if it protects against a harm that has a close relationship to a harm traditionally regarded as providing a basis for a lawsuit in American courts. The violation of a substantive right, the opinion explained, constitutes a concrete injury in fact sufficient to establish Article III standing without any additional showing. TransUnion clarified, however, that the type of harm that a statute protects against is of little (or no) import; what matters is “whether the alleged injury to the plaintiff has a ‘close relationship’ to a harm ‘traditionally’ recognized as providing a basis for a lawsuit in American courts.” 141 S. Ct. at 2204 (emphasis added) (quoting Spokeo, 578 U.S. at 341, 136 S.Ct. 1540).  In other words, plaintiffs must show that the statutory violation caused them a concrete harm, regardless of whether the statutory rights violated were substantive or procedural.”.  Id.


As for the privacy-related post-TransUnion cases, the illustrative example is the recent case Bohnak v. Marsh & McLennan Cos., Inc.  Bohnak v. Marsh & McLennan Cos., 2022 WL 158537 (S.D.N.Y. 2022).

In this case, plaintiffs (Bohnak and Smith) brought a nationwide class action complaint against defendants (specifically, companies Marsh & McLennan Companies, Inc. and Marsh & McLennan Agency, LLC) for alleged injuries arising from a data breach compromising plaintiffs’ personally-identifiable information in defendants’ possession. Plaintiffs bring state-law claims for: (1) negligence, (2) breach of implied contract, and, (3) breach of confidence.


In its analysis, the United States District Court (S.D. New York) made several references to the TransUnion case. In particular, the court noticed the following:


“Although TransUnion foreclosed Plaintiffs’ reliance on the mere future risk of harm, it did not foreclose Plaintiffs’ second theory. Plaintiffs may have Article III standing, so long as they plausibly allege that the exposure to identity theft itself “causes a separate concrete harm.”  Bohnak, 2022 WL at 5.  I hold that they do. Certain types of intangible harms have long been judicially cognizable, and are therefore, concrete.  These include reputational harm and privacy-related harms that form the basis for the common-law torts of defamation, public disclosure of private information (“PDPF”), and intrusion upon seclusion.”


“In light of the TransUnion Court’s admonition that common-law analogs need not provide “an exact duplicate,” as well as its explicit reference to PDPF as an example of traditionally judicially cognizable intangible harm, I find the fit sufficiently close.  Accordingly, I hold that Plaintiffs have alleged an intangible concrete injury, analogous to that associated with the common-law tort of public disclosure of private information, and therefore have Article III standing.”.  Bohnak, 2022 WL at 5.


Thus, the Court applied the TransUnion decision to determine the criteria for public disclosure of private information. Interestingly, despite the claim was overall dismissed for failure to state a claim11, the Complaint managed to satisfy the requirements of Article III, as prescribed by the TransUnion decision, and shed light on the application of the TransUnion “concrete harm” test in privacy-related cases considered in the Second Circuit.


TransUnion Case Law in Privacy-related Cases | Best Corporate Law Firm in New York City



  • Trends and Conclusions


Overall, TransUnion v. Ramirez is a landmark case that has debatable, but definitely strong influence on Article III standing regarding concrete harm, including enforcement in privacy-related cases. In particular, the TransUnion “concrete” harm test is adapted by courts of the Second Circuit.


In practice, this means that now plaintiffs, including those who are willing to enforce their privacy rights in the Second Circuit and, specifically, recover damages, should take into account the necessity to show the evidence of “concrete” harm as defined by the Supreme Court in TransUnion v. Ramirez.  Otherwise, plaintiffs may consider pursuing an alternative course of action (e.g., injunctive relief).


1 TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 210 L. Ed. 2d 568 (2021); Statutory Violations Not Enough to Give Rise to a Cause of Action for Class Actions says U.S. Supreme Court.


2 Citron, Danielle Keats and Solove, Daniel J., Privacy Harms (February 9, 2021). GWU Legal Studies Research Paper No. 2021-11, GWU Law School Public Law Research Paper No. 2021-11, Available at SSRN: https://ssrn.com/abstract=3782222 or http://dx.doi.org/10.2139/ssrn.3782222.


3 Solove, Daniel J. and Citron, Danielle Keats, Standing and Privacy Harms: A Critique of TransUnion v. Ramirez (July 28, 2021). 101 Boston University Law Review Online 62 (2021), Available at SSRN: https://ssrn.com/abstract=3895191.


4 Specifically, based on the Westlaw search, as for February 01, 2022, there are 312 cases where courts referred to TransUnion v. Ramirez.


5 See e.g., In re American Medical Collection Agency, Inc. Customer Data Security Breach Litigation, Slip Copy (D.N.J., 2021), Wadsworth v. Kross, Lieberman & Stone, Inc., 12 F.4th 665 (7th Cir. 2021), 12 F.4th 665, 668–69 (7th Cir. 2021); JOSE AVINA, Plaintiff, v. RADIUS GLOBAL SOLUTIONS, LLC, Defendant., No. 21 CV 295, 2021 WL 6752293 (N.D. Ill. Nov. 4, 2021); Bohnak v. Marsh & McLennan Cos., Inc., No. 21 CIV. 6096 (AKH), 2022 WL 158537 (S.D.N.Y. Jan. 17, 2022).


6 In re FDCPA Mailing Vendor Cases, No. CV 21-2312, 2021 WL 3160794, at *1 (E.D.N.Y. July 23, 2021), Lupia v. Medicredit, Inc., 8 F.4th 1184 (10th Cir. 2021), Kola v. Forster & Garbus LLP, No. 19-CV-10496 (CS), 2021 WL 4135153 (S.D.N.Y. Sept. 10, 2021); Sputz v. Alltran Fin., LP, No. 21-CV-4663 (CS), 2021 WL 5772033 (S.D.N.Y. Dec. 5, 2021).


7 See e.g., In re EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices and Antitrust Litigation, Slip Copy (D.Kan., 2021)


8 Ellsworth v. Schneider National Carriers, Inc., Slip Copy (C.D.Cal., 2021); Rosario v. Icon Burger Acquisition LLC, No. 21-CV-4313(JS)(ST), 2022 WL 198503 (E.D.N.Y. Jan. 21, 2022).


9 CARLOS VICTORINO & ADAM TAVITIAN, individually, & on behalf of other members of the general public similarly situated, Plaintiffs, v. FCA US LLC, a Delaware limited liability company, Defendant., No. 16CV1617-GPC(JLB), 2021 WL 4124245, at *4–5 (S.D. Cal. Sept. 9, 2021); Ass’n of Am. Physicians & Surgeons v. United States Food & Drug Admin., 13 F.4th 531 (6th Cir. 2021)


10 Maddox v. Bank of New York Mellon Tr. Co., N.A., 19 F.4th 58, 59 (2d Cir. 2021).


11 As mentioned by the Court, “it [the Complaint] ultimately falls short in establishing that Plaintiffs have suffered legally cognizable injury to support their substantive claims.”