8 notable GCs in the news

General counsel sound off on loan seizing, gun control rights, Internet tracking and more

Alfred Pollard

 Stopping Seizures

“There is a rational basis to conclude that the use of eminent domain by localities to restructure loans for borrowers that are ‘underwater’ on their mortgages presents a clear threat to the safe and sound operations of Fannie Mae, Freddie Mac and the Federal Home Loan Banks as provided in federal law.”

--Alfred M. Pollard, general counsel of the Federal Housing Finance Agency (FHFA)

 

Some cities, such as Richmond, Calif., have begun seizing mortgages from investors and writing down the loan balances to help borrowers at the risk of foreclosure. Although this plan has some backers, the FHFA is not one of them. Last week, the agency, which regulates Fannie Mae and Freddie Mac, is considering telling the two companies to stop doing business in communities where this occurs.

Fannie Mae and Freddie Mac have recently joined a lawsuit to stop Richmond from seizing loans. Other cities, such as North Las Vegas, Nev., and Irvington, N.J., are still examining the eminent domain plan. Chicago is among the cities that scrapped the idea after studying it last year.

Jim Kirkland 

Navigation Networks

“The responsibility for Harbinger’s losses rests squarely with Harbinger.”

--Jim Kirkland, general counsel of Trimble Navigation

 

GPS companies are in Phillip Falcone’s crosshairs. His hedge fund, Harbinger Capital, sued Deere & Company, Garmin International and Trimble Navigation last week, along with two GPS industry lobby groups. Harbinger owns LightSquared, a now-bankrupt wireless broadband company. In the lawsuit, Harbinger claims the defendants prevented LightSquared from operating a crucial 4G network.

The GPS companies don’t see the disagreement the same way. According to them, LightSquared’s network transmitters would interfere with other GPS equipment using the same band of spectrum. LightSquared had planned to build a broadband network to compete with AT&T and Verizon, but in February 2012, the Federal Communications Commission rejected a license it needed to get the network up and running.

 Jeff Reh

 Political Preferences

“We’ve excluded states that have not shown consistent, strong support for Second Amendment rights.”

--Jeff Reh, general counsel of Beretta U.S.A.

 

It’s not much of a secret that some sections of the U.S. are more gun-friendly than others. Recognizing this discrepancy, governors and other politicians from gun-friendly states have begun offering tax breaks and cash grants to persuade gun makers to move. While gun makers’ headquarters were once all over the map, more and more are beginning to be concentrated in one place.

Gunmaker Beretta U.S.A. is one of those on the move. The company is looking to build a new factory, and as Reh explains, only gun-friendly states will be considered. Beretta has determined seven finalists—among them South Carolina, Texas and Virginia—from these states. Other states, such as West Virginia and Louisiana, were cut due to state politicians supporting gun control bills.

 Renee Lawson

 Patent Problems

“Zynga filed a lawsuit to stop blatant infringement of its valuable ‘With Friends’ brand. Zynga is compelled to file suit to prevent further consumer confusion and protect its intellectual property rights against infringement.”

--Renee Lawson, deputy general counsel of Zynga

 

As we covered here at InsideCounsel, Zynga was none too happy about a start-up phone application company calling itself “Bang with Friends.” Zynga, whose game catalog included the titles “Words with Friends,” “Chess with Friends” and “Scramble with Friends” claimed the new company was in violation of Zynga’s intellectual property rights due to the similarity.

However, Zynga may not get its wish. Experts told the BBC that “with” and “friends” are very common words that the company may not be able to keep to itself. Bang with Friends said, "As a technology company, we take intellectual property seriously, and will evaluate the case in detail once we receive a copy.”

Horatio Gutierrez

 Fee Fracas

“Quality starts by staffing and resourcing the patent office.”

--Horacio Gutierrez, deputy general counsel of Microsoft Corp.

 

Technology patent fights are all the rage these days, especially with Samsung and Apple locked in a duel to the death. That’s why technology companies were crying foul a few weeks ago when Congress held back $148 million in higher patent fees received from companies such as Google Inc. and 3M Co. rather than using those funds to address a work backlog. Several top-patent holding companies agreed to higher fees if the government would use the funds constructively, and now, they’re crying foul.

The struggles within the U.S. patent system have resulted in many major technology companies beefing up their patent law departments. Microsoft has been at the forefront of this movement, an unsurprising development considering the company ranks in the top 10 recipients of U.S. patents each year. According to Gutierrez, Microsoft pays “tens of millions more each year," that, with the government's decision, have resulted in “a tax increase that is not going to result in the improvement of patent quality.”

Mike Yang

 Privacy Protections

“While consensus around the technical specs remains elusive, people are making a choice when they turn on Do Not Track. We’re going to respect that choice.”

--Mike Yang, general counsel of Pinterest

 

Web privacy has become a hot-button issue, and social networking site Pinterest is the latest to make its thoughts on the matter known. Using a “Do Not Track” feature, Pinterest users are now eligible to avoid cookies that collect personal information as well as third-party cookies, including those used for advertising. Pinterest said on its company blog: “We’re excited to offer everyone a more personal experience, but we also understand if you’re not interested. We respect Do Not Track as an option for people who want to turn off this collection of browsing activity from other sites.”

Privacy companies are praising the move. Kurt Opsahl, a senior staff lawyer with the non-profit Electronic Frontier Foundation, told The New York Times, “It’s good to see some prominent companies come forward and adopt these standards. By doing so they are saying ‘We’re going to respect people’s privacy preferences.’”

Stanton Dodge

 TV Tussle

“[This] is a victory for American consumers, and we are proud to have stood by their side in this important fight over the fundamental rights of consumer choice and control.”

--Stanton Dodge, general counsel of Dish Network Corp.

 

Tired of commercials? Dish Network Corp. has been banking on that. Its AutoHop ad-skipping feature delighted Dish customers but enraged broadcasting companies to the point where some decided to take Dish to court. In late July, Dish won the first battle, as a California federal appeals court upheld a lower court’s decision denying a preliminary injunction and allowing the service to continue.

Last year, Fox Broadcasting Co., Comcast Corp.’s NBC, and CBS Corp. sued Dish in California, claiming the ad-skipping feature would reduce the companies’ revenue from advertisers. Fox also filed a preliminary injunction against Dish which was denied. Dish in turn sued the broadcast networks in New York seeking a declaration that its service would not infringe upon copyrights.

Steve Scheinthal

 Stakeholder Suit

“The court recognized that there isn’t wrongdoing in every instance where a public company is acquired.”

--Steve Scheinthal, general counsel of Landry’s, Inc.

 

When Landry’s Inc. and restaurateur Tilman Fertitta purchased Morton’s Restaurant Group Inc. for $116.6 million, Morton’s stakeholders cried foul. Shareholders claimed Morton’s directors should have gotten more for the sale than $6.90 per share, claiming a rushed process that always favored Fertitta above all other bidders. In late July, Delaware Chancery Court Judge Leo Strine sided with Morton’s and threw out the investor suits challenging the deal.

In his decision, Judge Strine said investors could not challenge the sale because “every major decision leading up to the transaction was approved by a board of independent and disinterested directors.” The judge concluded that Morton’s properly shopped around for the best price, taking nine months to complete the process. He also said the finances were not clouded by a conflict of interest, as the shareholders had claimed.

Contributing Author

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Zach Warren

Zach Warren is Assistant Editor of InsideCounsel magazine, where he oversees online content submissions and administers InsideCounsel's enewsletters. Zach specializes in new media and multimedia...

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