Archives for July 2018

We have heard the story countless times: an unknown artists sells her work for pennies on the dollar only to see it’s value escalate to astronomical heights, as auction houses and gallerists catch the windfall. The California Resales Royalties Act (“CRRA”), and a class-action by a coalition of artists, intended to end this timeless tale once and for all, but the Ninth Circuit Court of Appeals found that it was almost entirely preempted by the federal Copyright Act.

In an 8-3 decision, the Ninth Circuit neutered a provision of the 1976 state law that required California art purchasers to pay a five percent royalty to the artist if the sale occurred in California or if the owner was a California resident who sold the work out of state. While the state law remains in effect with respect to works resold from January 1, 1977 to January 1, 1978, artists of works sold before or after those dates cannot recoup past royalties or collect royalties on sales in the future.

Read more about the decision here.

To learn how Castaybert PLLC can assist with art law matters, click here.

Recent international arbitration surveys list New York as the most favored arbitration site in the United States for commercial disputes. Studies conducted by University of Leicester (England) Law School and Queen Mary University in London found that the respective survey populations favored New York as an arbitration over any other U.S. city. The Leicester survey found that 66 percent of those surveyed preferred New York as a U.S. arbitration venue. Miami, preferred by 15 percent of those surveyed, placed second. Meanwhile, the Queen Mary’s survey focusing on European and other non-U.S. commercial arbitration participants found New York to be the leading U.S. site, with no other U.S. city finding it’s way into the conversation for best commercial arbitration venues.

Read more about these studies here.

To learn more about how Castaybert PLLC can assist with domestic and international arbitration matters, click here.

July 6, 2018 – André Castaybert, principal attorney at CASTAYBERT PLLC, has received a 2018 Martindale Hubbell peer review AV rating of “Preeminent” in ethical standards and legal ability for the past five years.

Can a plaintiff recover trade secrets damages from a defendant for the costs the defendant avoided by misappropriating plaintiff’s trade secrets?

Apparently not, according to the New York Court of Appeals. In E.J. Brooks Co. v. Cambridge Security Seals, 2018 WL 2048724 (N.Y. May 3, 2018), the New York Court of Appeals announced that a plaintiff seeking compensatory damages for unfair competition may only recover what the plaintiff would have earned if not for the defendant’s wrongs—not the amount that defendant saved, received, or earned through its wrongful actions. Id. at *4. The Court also held that plaintiff’s asserting unjust enrichment claims are not permitted to recover compensatory damages from defendants for their avoided costs.

The majority’s decision invoked a vehement dissent in which Judge Rowan Wilson, joined by Judges Rivera and Fahey, expressed concerns about the majority’s “unnecessarily narrow interpretation of damages,” its conflation of damages at law and in equity, and its incoherence with existing New York Unfair Competition Law.

E.J. Brooks significantly limits the scope of compensatory damages recoverable by plaintiffs in trade secret and unfair competition actions in New York. Rather than permitting plaintiffs to recover for competitive advantages conferred on defendants found guilty of engaging in unfair competition, the Court capped plaintiff’s damages at the amount of actual loses incurred. As noted by the dissent, this has the potential to incentivize economic espionage and discourage innovation, making the decision highly questionable as a matter of policy.

For a more detailed analysis of the case, see Muhammad U. Faridi and A. Robert Quirk’s New York Law Journal Article, “Unfair Competition, Trade Secrets Damages Limited to Plaintiff’s Losses Under NY Law,” published June 25, 2018.

To read the full E.J. Brooks opinion visit the New York Court of Appeals’ website here.

To learn about how Castaybert PLLC can assist with trade secret matters, please click here.