Exam 3 Flashcards
criminal overview
protecting whom, sources of law, who brings the case, standard of proof
protecting whom
wrongs against society
sources of law
authority in federal and state codes (criminal sections or sometimes referred to as penal codes)
who brings the case?
government is the party prosecuting
standard of proof
beyond a reasonable doubt
white-collar crime
any illegal offense that occurs in a business or professional setting - committed to harm the business, personal gains, or even business gain
civil law: focused on types of penalties
damages or equitable relief
criminal: focused on types of penalties
fines, prison sentences, probation, community service, etc.
felonies
indictment: grand jury, fine or imprisonment >= 1 year
misdemeanor
information: government charge, fine or jail <= 1 year
intent: willful or knowingly
ignorantia juris non excusal: ignorance of the law is no excuse, a lot of laws to know about
pleas in criminal cases
guilty, not guilt, solo contendere (“no contest)
nolo contendere (“no content)
not defending and not admitting guilt, only on certain types of crimes, criminal conviction may be basis for civil damages suit
trends in white collar crime I
increase in prosecution of white collar criminals and legislative efforts to protect the public from fraud, sarbanes-oxley act
trends in white collar crime II
investigation of illegal activities by top management, plea bargaining with mid-level employees in exchange for testimony against top-level employees
trends in white collar crime III
prosecutors capitalize on high-profile prosecutions
4th amendment
protects individuals and corporations from unreasonable searches and seizures by the government, usually (but not always) require the police to obtain a search warrant
expectation of privacy
warrantless inspection of: commercial premises is reasonable in certain circumstances and higher likelihood a search of a private residence is unconstitutional
grand jury: fifth amendment to the US Constitution
before a trial for a capital, or otherwise infamous crime, there must be presentment of an indictment by a grand jury
grand jury: comprised of 16 to 23 citizens: unanimity is not required
determine whether probable cause (reasonable basis) a crime has occurred - still have presumption of innocence: presuming that an indicted person is innocent until found guilty by a petit (trial jury), serve as an investigative body, functioning depends upon the secrecy of the proceedings
5th amendment protects the accused from being compelled to testify against self; does not protect
against being required to produce physical evidence, a person who is required to produce business records, companies: sole proprietorship business who are protected as impossible to distinguish between individual and the business
individuals cannot be tried twice by the same governmental entity for the same crime
double jeopardy, does not prevent two prosecutions - federal and state, on civil side you can think of doctrine of res judicator: prohibits subsequent civil actions involving the same parties, claims and causes of action
6th Amendment provides multiple protections that offer the right to
speedy and public trial, trial by jury, be informed of the charge against oneself, confront the accuser, subpoena witnesses in one’s favor, have the assistance of an attorney
8th amendment
prohibits government from imposing excessive bail, excessive fines, and cruel and unusual punishment
examples of white collar crimes: larceny
robbery, burglary, embezzlement
fraud
creates criminal liability, fines and/or imprisonment are exerted on individuals who knowingly and willfully defraud another, many specific types of fraud for which there are federal and state criminal codes
scheme to defraud
plan designed to take from a person the tangible right of honest services
theft by deception
taking another’s property under false pretenses (words or conduct that create a false impression
conspiracy
agreement or a partnership for criminal purposes (two or more people) - each member becomes the agent or partner of every other member - and an offense occurs when one makes a conspiracy agreement and commits an overt act
overt act
any event knowingly committed by a conspirator to accomplish some object of conspiracy
embezzlement
stealing in the workplace
cyber crime
person who intentionally accesses a computer without authorization or exceeds authorized access to obtain classified, restricted, or protected data, is subject to criminal prosecution: identity theft, phishing, denial of service, ransomware
electronic theft
hackers steal money, trade secrets, personnel records, and customer lists
aggressive goals without goalposts
tied to job incentives although perhaps not always directly financially rewarding in short term
poorly designed overall job incentives
bonuses, stock grants/options, etc. - short term behaviors generally rewarded
moral hazard
risk taking and different behavior knowing others bear the downside
management nonchalance towards ethics
business decisions that are unethical unto themselves or turn a blind eye to others in organization or those that work for the company
unethical behavior perceived as harmless
belief that white collar crime is “victimless” because of its non-violent nature
disregard for the law and belief everyone misbehaves
people disagree with the law or everyone is doing it mentality
hubris due to success
feeling of invincibility
motivated blindness
not stopping bad behavior because not in self-interest to do so
pilfering public or private entities
a lot of money that is tempting
group behavior
less personal responsibility
roles of scarcity
need for resources outstrips supply of those resources
state controlled/communism
government controls all resources and directs how they are divided up between citizens
property- based/capitalism (private/free markets)
enact laws that enable citizens to acquire, possess, use, and transfer scarce resources
states generally have a mix
not purely one or the other
private property establishes necessary conditions for capital formation
loan for a business and can convert rights in one resource (house) into rights in different resource (cash) for purpose of starting a business
loan for a business
put up house as collarteral
real property
land, interests in land, buildings (surface, air, subsurface, fixtures)
personal property
movable resources (tangible and intangible)
acquiring property
exchange, possession, confusion, accession, and gift
exchange
most common - buying things, providing services - contracts
un-ownded
includes abandoned, rule of first possession
lost
own it except the rightful owner can come back for it (may need to provide to police, take reasonable measures to locate owner, etc.)
mislaid
owner of premises and owner can come back for it (state dependent as well)
neglected land
adverse possession
open & notorious
not secretive
continous
uninterrupted for a fixed period of time
exclusive
sole occupant of land
actual
physical presence on land
non-permisive
without owner’s permission
confusion
fungible goods mixed together
accession
adding something new
if accidentally acquired
then acquirer gets it but must compensate original owner
if stolen
the original owner gets modified property
gift
intent and transfer means you can’t take it back
escheatment
must turn over the funds to the state
types of ownership for real property
fee simple, life estate, leasehold estate, concurrent ownership
“To Michelle forever”
fee simple absolute to Michelle
“To Michelle so long as the land is used for…”
fee simple defeasible to Michelle
“To Michael for life”
present interest (life estate to Michelle), Future Interest (reversion interest to Kathy)
“To Michelle for life, then to Jim”
Present Interest (life estate) to Michelle, Future Interest (remainder interest) to Jim
lost property example
crooks accidentally put it in there or somehow dropped it in there!
mislaid property
crooks intentionally set it there, and we now own the “property upon which it was found”
once abandoned,
property goes back to nature like wild animals
fee simple absolute
own it outright without restrictions
fee simple defeasible
own it with condiitons
life estate
present and future interests
To Michelle, as tenant for 12 months
leasehold estate to Michelle
To Jason and Julie
tenancy in common
To Jason and Julie as joint tenants with right of survivorship
joint tenancy
easement
the right to use the land of another in a certain way
easement by prescription
ownership vs right to use, similar to adverse possession, openly, wrongfully, period of time (frequently 15-20 years)
natural easement
one of necessity, configuration of land makes it “necessary” to give right to use
bailment
arises when you entrust someone with property to be returned in the future, owner (bailor) entrusts their property to someone else (bailee)
reasonable care
for the mutual benefit of both parties
slight duty of care
for the sole benefit of the bailor
high standard of care
for the sole benefit of the bailee
Types of Intellectual Property
trademark, copyright, patent, trade secret
trade secrets
knowledge or info - kept secret (reasonable measures taken), economic value
conduct a trade secret audit
to identify confidential knowledge-based resources, records and data classification reviews are quite common
preserve secrecy examples
lock up written material, secure computer-stored knowledge with firewalls and encryption, regulate visitors, properly mark documents, NDA and non-compete
trade secretes - how long does the protection last
economic value and reasonable measure to keep secret
misappropriation
occurs when one improperly acquires, discloses, or trade secret
what if accidental (defenses)
independent creation and reverse engineering
civil enforcement of trade secrets
trade secret owners can get an injunction and owners can obtain damages from people who misappropriate trade secrets
criminal enforcement of trade secrets state laws
Economic Espionage Act (EEA), considers stealing trade secrets a crime and punishment
injunction
order by a judge either to do something or to refrain from doing something
individuals
fines and up to 10 years’ imprisonment
organizations
up to $5 million in fines
provisions
makes one liable for standard trade secret misappropriation and addresses misappropriation to benefit a foreign government
patent law
new invention, legal monopoly
utility patent
new non-obvious, useful processes, machines compositions of matter or improvements thereof, term: 20 years from filing date
design patent
new, original and ornamental design for an article of manufacture; term 16 years from issue date
plant patent
new variety of plant that can be reproduced asexually, term: 20 years from filing date
obtaining a patent
- File application 2. Filing fee 3. Explain invention 4. Show difference from prior art 5. Describe patentable aspects 6. Evaluation by the patent examinier
patent
exclusive right to invention
patentable subject matter
validity of a patent often tested by scrutinizing its subject matter as well as whether it meets the other requirement and certain categories of subject matter cannot be patented
cannot be patented
mere ideas, laws of nature, natural phenomena, mathematical formulas, general business concepts versus “methods” or processes” is tricky
characteristics of patents
novelty, nonobviousness, utility
novelty
something new and different from the prior art and cannot have been published, sold, or put in public use by inventor >1 year before
nonobviousness
ability of an invention to producing surprising or unexpected results
utility
must to do something useful, things that don’t work don’t count
patent rights
exploiting a patent; may want to license your invention to others (or may need to get licenses from others)
“exploiting” a patent
right is to exclude other from making, using, selling, importing and depending on circumstances may be able to make it yourself
trade symbols
marks on what is produced to represent the origin of goods and services, recognizability or distinctiveness, protection against confusion
Marks Protected by the Lanham Act of 1946
trademark, service mark, certification mark, collective mark, and trade dress
fanciful marks
made up words (Exxon)
arbitrary marks
normal words but used in a different way (Apple for computers)
suggestive marks
hints at what it is (Netflix, Airbus)
descriptive marks
describes the good or service (Cold and Creamy) - can develop “secondary meaning”
generic terms
common name of a product or service (Clock)
trademark registration
use of the mark conveys some rights, extra rights (ex: national protection, extra damages) requires registration with PTO - must be used in interstate commerce, TM or SM prior to registration after, granted the right to use R, registered on the principal register if the mark is acceptable, must be renewed every 10 years
trademark infringement
remedies include civil damages and injunctions and orders to destroy infringing products; and manufacturing and trafficking counterfeit trademarked products is a criminal violation
1st Defenses
Mark is not distinctive; rather, it is descriptive or generic (may have become “generalized” and lost its protection)
2nd Defense
fair use
Fair Use
discussion, criticism, parody, comparison advertising (need to show study info), allowed to use Advil’s mark because it has similar ingredients, comparison), little chance of confusion
Federal Trademark Dilution Act 1995
prohibits the usage of a mark same as or similar to another famous trademark to dilute its significance, reputation, and goodwill
blurring: type of trademark dilution
when usage of a mark blurs distinctiveness of a famous mark
tarnishment
when usage of a mark creates negative impression about the famous company
dilution claim, tarnishment
Ben and Jerry’s sues porn company for using one of their ice cream names for the name of a film
copyrights
like other forms of IP, we are not interested in protecting ideas
requirements of copyrights
original works of authorship, fixed in tangible medium, creative expression requirement; protection attached as soon as the three elements are met
registration is not required; however it is required to sue for infringement
can and should immediately mark with words and/or C
who owns in a corporate setting
employees have to turn over what they did in employment; “work made for hire” language in outsourced deals, put this in contract
copyrights - the owner has to establish that defendant violated his or her exclusive rights of
reproduction, creation of derivative works, distribution, performance, display
how long does protection last - copyright
authors lifetime plus 70 years, 95 years from publication or 120 years from creation for a “work made for hire” or by a company
after expiration - copyright
the material goes into the “Public Domain”
First Sale Doctrine
copyright holder loses all rights over a particular physical (or digital) copy once sold
blurring hurts
distinctiveness
garnishment hurts
reputation
copyright act
specifies that fair use of copyrighted materials is not an infringement of the owner’s property
fair use includes
criticism, comment, parody, news reporting, teaching, scholarship, or research
factors considered by courts
purpose and character of the use, nature of work, amount and substantiality of the portion used, effect of the use upon the potential market
managerial control of decisions
how do we decide what to do if owners disagree
owner liability
who is liable for the firm’s debts
taxation
how is the income earned by the business taxed
your entity type may (and very likely will) change over time as your company matures
regularly evaluate your entity type with advisors
basic forms of business organizations
sole proprietorships, partnerships (general partnership), corporations (C-Corporation)
hybrid forms of business organizations
limited partnerships, S-corporations, limited liability companies, limited liability partnerships
double taxation
profits taxed at corporate level and then dividends taxed at individual level
Fiduciary Duty
obedience, loyalty
Lack of a fiduciary duty
doesn’t mean you can do whatever you want… remember fraud can be done by people with a fiduciary duty are not
components of fiduciary duty
act in good faith and in as a prudent person would, act in the best interest of the corporation
business judgement rule
directors and officers are expected to exercise due to care and use their best judgement
duty to make informed decisions
must be informed on corporate matters and conduct reasonable investigations, this requires meetings attendance, seek information, and date review
piercing the corporate veil
marginalization of the corporate entity by courts when finding out that the corporation is being misused
alter-ego theory
used to impose personal liability upon corporate officers, directors, and stockholders
components of alter-ego theory
blending of assets, not following formalities of the corporation (by laws, meetings, etc.), control concentrated in one person, fraudulent behavior
derivative suits
a minority shareholder brings an action against an officer or director on behalf of the company
