Category Archives: superheroes

The Superior Spider-Man & The March Across the Valley of Death (Part 1)

 

(This fantastic guest post, the first of two parts, was written by Anthony Cova, who serves as the Corporate Counsel at Addgene, Inc., a nonprofit plasmid repository, where he handles the company’s legal and technology transfer matters.  The views expressed in these posts are solely those of the author and do not necessarily reflect the views of Addgene.)

 

Since regaining control of his body from Dr. Otto Octavius following the events of The Superior Spider-Man, Peter Parker has had his hands full reconciling with family, friends and co-workers, and restoring Spider-Man’s credibility with the public and other heroes. Yet, despite all the harm Octavius caused during his tenure as Peter Parker/Spider-Man, he still managed to obtain a Ph.D., found a company and restore Parker’s loved ones’ ability to walk.

Now, the cybernetics technology that freed Aunt May from her cane and Flash Thompson from his wheelchair is at risk. In a recent public address, Parker announced that Parker Industries would be putting its cybernetics line “on hold” to research and develop technologies focused on capturing, imprisoning and depowering super villains. Parker, who does not possess Octavius’s cybernetics knowledge, would rather shelve a proven technology than carry out another’s work. Given the benefits of Octavius’s cybernetics technology, can Parker simply halt its research and development (presumably indefinitely) out of pride and insecurity? Will the public be deprived of invaluable cybernetic prosthetics? Who can rescue the technology from the crumbled shelves of Parker Industries?[1]

In Part I, I will provide a brief overview of technology transfer—its history, objectives, and barriers. Part II will then describe the powers and objectives of Empire State University and the federal government and whether they are sufficient to rescue the cybernetics technology on the public’s behalf.

PART I. TECHNOLOGY TRANSFER

The Origin Story

In the sweltering summer months of 1787, a conclave of demigods[2] assembled behind bolted doors and shuttered windows at the Pennsylvania State House. Their task: to bandage a hobbling federal government. However, rather than patching the Articles of Confederation, the demigods chose to create an entirely new constitution. Unlike its penniless, toothless predecessor, the 1787 Constitution empowered the federal government to collect taxes “to provide for the common defence [sic] and general welfare;”[3] to grant inventors an exclusive right (a patent) to exclude others from using their inventions for limited periods of time “to promote the progress of science and the useful arts;”[4] and to make all laws “necessary and proper” to “carry[] into execution the foregoing powers.”[5] While these powers strengthened the federal government, they were intended to be exercised to “promote the general welfare.”[6]

Since the conclave’s end, the U.S. has grown into a global, economic power. Recognizing the benefits of “promoting the progress of science and the useful arts” and the need to remain competitive internationally, the federal government, through its various agencies (collectively, the “FED”), began funding university research. Similar to the FED, universities are “conducted for the common good.”[7] They are committed to the education of their students, the pursuit of unbiased research and the dissemination of knowledge to the public. Moreover, as institutes of higher learning, universities have historically served as centers of innovation. Indeed, many products today can be traced back to a university lab notebook or chalkboard.[8] When innovations are transferred from universities to commercial partners and, ultimately, the general public, this process is referred to as “technology transfer.” Unfortunately, despite FED objectives and university academic principles, technology transfer is not always successful.

 

The Bayh-Dole Act and the Rise of the Technology Transfer Offices

Prior to 1980, title to any patentable innovations developed through government-sponsored contracts or federally funded research (a federally funded invention or “FFI”) typically vested in the FED. This reflected the rationale that research funded by the public belonged to the public. Ironically, only a handful of FFIs ever reached the public. Neither the FED nor the university possessed the necessary resources to develop and commercialize FFIs for public use, and obtaining developmental help from the private sector was often a slow, circuitous process due to the number of funding federal agencies and/or their inconsistent intellectual property policies.[9] Exacerbating FFI unavailability was the fact that some FED agencies offered FFIs on a non-exclusive basis only, believing that non-exclusivity provided the public potentially with greater access. Unsurprisingly, this deterred many in the private sector from investing in and commercializing a FFI. If the public was ever to benefit from the fruits of its tax dollars, legislative and systematic changes were needed.

In 1980, Congress passed the Bayh-Dole Act (“BD”) in order “to promote [FFI] commercialization and public availability” and “to protect the public against [FFI] nonuse or unreasonable use.”[10] By granting universities the right to retain title to FFIs, BD allowed universities to facilitate technology transfer transactions on behalf of the FED and to streamline the licensing process. Revenue from these licenses also provided universities additional funds to be reinvested into further research. Since its passage, BD has created thousands of jobs, generated billions of dollars and significantly increased the number of FFIs reaching the public. Nonetheless, the right to retain title is not absolute. BD requires universities to timely file patent applications, to prefer certain licensees and, most importantly, to promote a FFI’s utilization, commercialization and public availability. Universities that fail to comply with these and other obligations risk losing title to FFIs and even future research funds.[11]

With so much at stake, U.S. universities have established special administrative offices, generally referred to as technology transfer offices (“TTOs”), to manage regulatory compliance and advance university policies. TTO operations can typically be divided into three purposes: (1) generate revenue for the university to supplement federal grants; (2) support the university’s research community (e.g., facilitating industrial partnerships, assisting spinout companies, responding to student and faculty intellectual property queries, etc.); and (3) comply with external laws and regulations. While some TTOs may focus their operations on one purpose over another, most TTOs fulfill, to varying degrees, all three. More importantly, as stalwarts of their universities, TTOs are charged with defending and advancing their universities’ core academic principles. TTOs must be vigilant of any hazards that could interfere with a university’s ability to develop and disseminate innovations and knowledge to the public. For example, contract provisions that restrict publication or intellectual discourse amongst faculty are often immediately struck from any collaboration agreement. Licenses that restrict universities’ rights to use an invention for research purposes are often renegotiated, and any agreements that narrow or remove access to research tools are best avoided. Given these academic principles and the BD obligations described above, TTOs have a duty to promote public availability of FFIs and to ensure that the public will ultimately benefit from federally funded university research.

 

The Valley of Death

Across the commercial plain, nestled between academia and the consuming public, lies the Valley of Death (the “Valley”). Despite the best efforts of countless TTOs, the Valley has claimed many worthwhile innovations. Some FFIs perish along the way for lack of funding—having failed to attract investors or to maintain sufficient cash flows. Others—having been deemed commercially invaluable—may be immediately abandoned at the Valley’s edge. Although lack of funding and investment support are endemic to the Valley, those wishing to guide FFIs through the financial brambles have many tools at their disposal. Universities and local business groups often offer low cost spaces or business incubators for small businesses. Financial programs like the Small Business Innovation Research Program provide federal funds to support the research and commercial development of small business innovations. Even federal laws, such as the Orphan Drug Act, can incentivize commercial investment and development of less marketable technologies. While these and other tools may not always be sufficient to blaze a path through the Valley, TTOs can help FFI licensees appropriately equip themselves for the attempt.

More troubling within the Valley are the surreptitious barbs of patent trolls or the alluring facades of devious competitors. Patent trolls often use broadly written, and sometimes ambiguous, patents to poke at a company’s portfolio in hopes of spearing forced royalties and/or settlement payments. Although many companies may succeed in routing these attacks, they may find they have suffered significant financial lacerations to continue beyond the Valley. Devious competitors, looking to maintain or promote their own technologies, might approach a TTO with alluring exclusive license terms, only to later bury the competing technology within the Valley. While President Obama and various legislators have taken great strides to cull the patent troll population and professional technology transfer organizations have developed best practices to prevent the burying or intentional shelving of exclusively licensed technologies,[12] many innovations continue to languish in the Valley.

In the present case, Parker has simply decided that Parker Industries will no longer pursue the cybernetics technology. The decision to shelve the technology—thereby abandoning it in the Valley—stems from Parker’s hurt pride rather than for lack of funding. Unlike Aunt May and Flash Thompson who benefitted directly by Octavius’s hand, the public may have to wait years before the cybernetics technology finds its way out of the Valley, just because Parker is ashamed that he lacks the necessary cybernetics skills and knowledge. For some members of the public, access to such life-changing technologies may come too late.

 

To be Continued . . .

Next time, in Part II of this series, we will consider whether the powers and obligations of Empire State University, the university where Octavius earned Parker’s Ph.D., and/or the FED, are sufficient to rescue the technology from Parker Industries on behalf of a needy and ready public.

 

[1] This article was originally written shortly after the Ghost had destroyed Parker Industries.

[2] Letter from Thomas Jefferson to John Adams (Aug. 30, 1787), in Hilary, Prologue: Pieces of History, The National Archives, Dec. 5, 2012 (referring to the Framers of the Constitution as an “assembly of demigods”).

[3] U.S. Const. art. I, § 8, cl. 1.

[4] U.S. Const. art. I, § 8, cl. 8.

[5] U.S. Const. art. I, § 8, cl. 18.

[6] U.S. Const. pmbl.

[7] American Association of University Professors, 1940 Statement of Principles on Academic Freedom and Tenure 14 (1940).

[8] For example, Gatorade was developed at the University of Florida; the algorithms for Google were developed at Stanford University; and the components that produce high-definition television were developed at MIT.

[9] There were 26 different federal agency policies regarding the use of federally funded research at the time of the Bayh-Dole Act’s consideration. U.S. Gen. Accounting Office, GAO-09-742, Information on the Government’s Right to Assert Ownership Control Over Federally Funded Inventions 4 (2009).

[10] 35 U.S.C. § 200.

[11] For example, in Campbell Plastics, the Federal Circuit determined that a federal defense contractor had forfeited its right to retain title under BD for failure to comply with BD’s invention disclosure requirements. Campbell Plastics Engineering & Manufacturing, Inc. v. Brownlee, 389 F.3d 1243 (Fed. Cir., Nov. 10, 2004).

[12] See David Kravets, History Will Remember Obama as the Great Slayer of Patent Trolls, Wired (Mar. 20, 2014) (discussing the various implementations to combat patent trolls including five executive orders issued by President Obama and patent reform legislation introduced in Congress); and AUTM, In the Public Interest: Nine Points to Consider in Licensing University Technology (AUTM, Mar. 6, 2007).

Super Heroines in the Pub

This Monday, September 28th, I will be giving a talk on Batman villains and the insanity defense as part of a Super Heroines, Etc. event here in St. Louis.  Super Heroines, Etc. (aka SHE) is a St. Louis-based 501c3 nonprofit focused on empowering women through educational events, classes, and workshops.  I’m looking forward to it and hope to see many of you there!

Law and the Multiverse Retcon #10

Time for another installment of the Law and the Multiverse Retcons series, in which I discuss changes in the law (or corrections in my analysis) that affect older posts.  Alert readers will notice that there was no Retcon #9.  This is because there are actually two Retcon #6s, and I have decided to retcon the Retcon numbering system as though I had not lost the ability to count to 10 at some point between kindergarten and last year.

This Retcon addresses some of my shortcomings on a recent episode of the Geek’s Guide to the Galaxy podcast, specifically my discussion of Man of Steel and Superman’s possible civil and criminal liability for the destruction of Metropolis.  I saw the movie when it was released and had forgotten several key plot points that affect the legal analysis.  Thanks to Damon for pointing out these issues!  Some spoilers for Man of Steel follow.

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Uncle Ben at the Supreme Court

Thanks to Joe, Josh, and others for pointing out Justice Kagan’s quotation in yesterday’s decision in Kimble v. Marvel:

What we can decide, we can undecide. But stare decisis teaches that we should exercise that authority sparingly. Cf. S. Lee and S. Ditko, Amazing Fantasy No. 15: “Spider-Man,” p. 13 (1962) (“[I]n this world, with great power there must also come—great responsibility”). Finding many reasons for staying the stare decisis course and no “special justification” for departing from it, we decline Kimble’s invitation to overrule Brulotte.

I happen to disagree with the majority’s decision; Brulotte v. Thys was wrongly decided*, and the Court wasted a rare opportunity to correct a mistake.  So on the one hand the citation and other references to Spider-Man were fun, but on the other hand it felt a little too cute by half for a decision that will ultimately result in Marvel (now part of the second largest media company in the world) avoiding royalty payments to an individual inventor whose idea Marvel (apparently) pretty blatantly ripped off.  The tone of the opinion is incongruous with its consequences.

It may seem a little overly dramatic in a case that is ultimately about money, but I am reminded of Robert Cover’s Violence and the Word:

Legal interpretation takes place in a field of pain and death. This is true in several senses. Legal interpretive acts signal and occasion the imposition of violence upon others: A judge articulates her understanding of a text, and as a result, somebody loses his freedom, his property, his children, even his life. Interpretations in law also constitute justifications for violence which has already occurred or which is about to occur. When interpreters have finished their work, they frequently leave behind victims whose lives have been torn apart by these organized, social practices of violence. Neither legal interpretation nor the violence it occasions may be properly understood apart from one another.

This is not to say that all judicial writing should be humorless.  I have enjoyed reading any number of funny, often acerbic opinions, but those opinions were usually written in response to parties that were themselves behaving badly or foolishly, and so deserved to be treated lightly or even mockingly.  In this case, however, the Court has sided with a multi-billion dollar corporation over an individual inventor and did so on fairly technical grounds.  The majority interpreted the law of stare decisis, and as a result Stephen Kimble lost his property (i.e. the contractual right to royalties from sales of the patented toy).  This does not seem like an appropriate occasion for such levity.

Stepping back off my soap box, I promise the next post will return to discussing the legal implications of comic book hijinks.

* A full discussion of why this is the case is beyond the scope of this blog, but if you’re interested, see the dissent in Kimble and Judge Posner’s opinion in Scheiber v. Dolby Labs.

Age of Ultron, Part I

(This post contains spoilers for Avengers: Age of Ultron.  You have been warned.)

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Is Thor an illegal immigrant?

Superman’s immigration status has been considered here before, and recently I received a link (thanks, Rick!) to this great piece: Is The Avengers’ Thor an Illegal Alien?, written by Jake Lipman, an immigration attorney with Lipman & Wolf, LLP.  Check it out!

Nova’s Complex Legal History

Although the Guardians of the Galaxy movie did not feature a specific character identifiable as the superhero Nova (e.g. Richard Rider), it did feature the Nova Corps, and there have been indications that Nova may make an appearance in a sequel.  It turns out that the character of Nova has an interesting legal history, one that attorney Britton Payne has written a great post about on his copyright blog, Copyright On.  Check it out!

Guardians of the Galaxy and She-Hulk

Guardians of the Galaxy was a really terrific movie, and I highly recommend it.  As with many of the more cosmic Marvel storylines there isn’t much more for me to say about it than that.

I’ve continued to follow She-Hulk with similar results.  The last couple of issues have been good (albeit a little bit wheel-spinning in terms of the larger story arc), but there haven’t been any big legal issues that leapt off the page at me.  Still, it’s a good book.  The writer, Charles Soule, has indicated that “There’s a bunch happening in issues 8-10 I think [Law and the Multiverse will] have a field day with”, so I’m looking forward to that in a couple of months.

So, back to the backlog of questions from readers.  Look for more (and more substantial) posts in the coming weeks.

X-Men: Days of Future Past and Thoughts on Due Process

This guest post was written by Joe Suhre, of Suhre & Associates, LLC, a firm with offices in Chicago, Illinois, Dayton, Ohio, and Columbus, Ohio. Joe previously wrote guest posts on Defending Loki and Captain America: The Winter Soldier.

The Most Important Movie of the Year?

Recently, US-authorized drone strikes killed several American citizens accused of being a threat to the country based on their terrorist affiliations and unapologetic rhetoric opposing US policy.

Oh, wait . . . that was the beginning of X-Men: Days of Future Past.

You probably already know that this article will have multiple spoilers, so if you haven’t yet seen the latest iteration of Marvel’s X-Men, you should go see it soon. Then come back and tell me in the comments whether you believe in my assessment of this film or not.

What’s the Big Deal?

If you have seen Days of Future Past already, did you see what I saw? I will admit it is somewhat hidden, but only because we are trained to ignore it, since it just gets in the way.

I am talking about due process—due process, as in the opposite of capricious verdicts and judgments based on prejudice, fear, and political expediency; as in that little right we inherited from our Founding Fathers, who had experienced the lack of due process first hand and decided the Constitution wasn’t complete until we included it in the Bill of Rights.

You might disagree with me when I say the framers of the Constitution had the events of X-Men: Days of Future Past in mind when they insisted that due process be inviolate, so let’s review the instances in the movie and then see if we face the same issues today.

First Class 

Everything really started at the end of X-Men: First Class when, in a mercurial moment, mutants went from heroes to goats on the beach in Cuba, incurring the wrath of the instantly allied US and Soviet fleets. The Soviets would obviously have no problem firing on a small contingent of Americans, but why did the generals calling the shots in Washington order the execution of US citizens without due process? And why were the American Sailors, so soon after World War II, willing to “just follow orders,” especially after hearing Agent MacTaggert screaming over the com that the situation was contained?

I guess their justification for such an attack was fear; fear based on ignorance and concern for safety. Which, by the way, is the same tactic currently exercised by law enforcement across the country. In fact, according to the Bureau of Justice Statistics, police kill 400 – 500 innocent people each year out of fear for their own safety, significantly more than the 33 officers killed by firearms each year in the line of duty.

A 2012 example of irrational fear in Cleveland, not unlike the attack levied against the mutants on the beach, involved a man and woman whose car backfired. The retaliation by police to the possible gunfire from the car resulted in a force of 60 police cars pursuing the now frightened couple and ended with 115 officers firing 140 bullets into the car in less than 30 seconds. The unarmed couple was pronounced dead on the scene.

Kennedy Assassination

Speaking of no due process, although the details were sketchy on how the US government accused Magneto of complicity in the JFK assassination, it is clear that government suspicion that Magneto manipulated the “magic bullet” was justification for his incarceration.

Of course, in 1963 Erik Lehnsherr’s incarceration was illegal, but now after several rounds in congress and many court challenges, the President on December 26, 2013 signed into law that the government can arrest anyone on suspicion only and detain them indefinitely without trial. Welcome to Magneto’s world.

Not that I subscribe to the rhetoric of Magneto, but you have to admit that being thrown in solitary without due process, tends to sap any loyalty one might have for King and country; whether you are a German Jew or a US Citizen of the wrong color, species, or ideology.

Vigilante Justice

One element of vigilante justice that makes it not only illegal but immoral as well is that the vigilante, lynch mob, or angry villagers with torches and pitch forks don’t feel bound by due process. Their aim is to dispense justice, quickly—right or wrong. What drives the vigilante is fear that justice won’t happen without them taking over.

Vigilante justice in Detroit occurred in April of this year when a man hit a 10-year old boy with his truck. The driver stopped to help but was immediately beaten into a coma in retaliation even though surveillance cameras would later show the boy ran in front of the oncoming truck leaving no time to stop. Concern for due process would have allowed the mob to see that the man was not at fault after a thorough investigation.

But in another universe, maybe the boy was a mutant, and his fellow mutants felt that there would be no justice unless they acted on their own. Thus was the mindset of Mystique as she set about finding and executing Trask. It all seemed clear what she had to do since nobody else was willing to stop Trask from continuing with his plans against mutants. Due process wasn’t on her mind, and as it usually does, her vigilante justice backfired.

Due Process and Personhood

Without getting into a history lesson on civil rights in America, one doctrine that kept slaves and minority races under the boot of the majority was the belief that they didn’t fully qualify as human. The majority claimed belief in rule of law, due process, and justice, yet denied an equal share of this philosophy to those deemed as “less human.” This belief also fueled the Holocaust in Germany, where enslavement and execution of “untermenschen” or “subhumans” was ok, to the tune of eleven million dead.

Trask was quick to play on this flaw in humanity when he was able to convince the powers that were, that mutants, by virtue of their differences also didn’t deserve consideration as humans and should be targeted as enemies. His deep seated prejudice was made plain when, suspecting a Vietnamese general to be a mutant, he said to others in the room driven to panic, “Don’t shoot it.”

Denying Due Process 

I dare say, in a classroom most students would see the injustice and immorality of denying human rights to any individual based on race. Maybe racist attitudes are fading away in our culture. Let’s hope so. But my discussion has not been about the obvious ethnic lessons of X-Men: Days of Future Past. I have been talking about due process and why we should be aware of its importance.

To whom are we willing to deny due process today? Do you think we should afford all people the right of presumed innocence? Or are some crimes so heinous that it is hard to restrain us from rushing to judgment and bypassing due process? Unfortunately, I have seen instances where many people feel that for some crimes due process isn’t important and should be suspended. Let me toss around a few words. Let’s see what your emotional response is to arresting:

  • Drunk drivers;
  • Terrorists;
  • Child molesters;
  • Rapists;
  • Drug dealers
A police officer arrests and handcuffs a man.

You have the right to . . . oh never mind, just get in the car @$&hole.

The question is, are we willing to trust our system of justice when it comes to these types of crimes? Or do we treat these individuals as “mutants . . .” to be feared and condemned as guilty before they are even tried? In the case of a drunk driving arrest, you are presumed guilty. Your license is suspended and you are given a notice of suspension. Police officers in these cases are judge, jury, and executioner. It is a very efficient system.

However, putting justice in the hands of the people can be slow. It was a risky move by the founding fathers. Many feel that people show too much mercy and not enough justice. They fight for mandatory sentences, new laws, and regulations that take authority away from the judge and jury. They allow exceptions to every right we have in an attempt to control our “unruly” system.

I like what Charles Xavier said to Raven at the end of X-Men, “I have been trying to control you since the day we met and look where that’s got us . . . I have faith in you Raven.” Perhaps we should have faith in each other as well.

Due process isn’t perfect, but it is fair. It is foundational to our freedom. In light of the alternative, it is a pretty big deal. Is it significant enough to suggest that X-Men: Days of Future Past is the most important movie of the year?

Ask me again in ten years.

A Comic Book-Inspired Law School Final Exam

Lawrence M. Friedman is a partner at Barnes, Richardson & Colburn, LLP and an adjunct professor at the John Marshall Law School’s Center for International Law.  He is also the author of the Customs Law Blog.  He sent me this final exam, which he recently gave in his Trade Remedies class.  According to Prof. Friedman, “I stressed to my students that the names and locations were not particularly relevant. Nevertheless, I have no doubt they are wondering what I was thinking. It is a bit of a scavenger hunt for random DC universe references, from the well-known to the obscure.”  Thank you to Prof. Friedman, and I hope you all enjoy reading it as much as I did!

IBT 705 International Trade Remedies Law

Spring 2014

Final Exam: The Dark Knight Edition

Instructions:

  1. To complete this exam, you may rely on your class notes, textbook, and a calculator. No other resources can be consulted.
  2. Read the facts below and respond accordingly. Credit will be earned by properly identifying legal issues, stating the relevant rules, applying the facts to the rules, and logically stating your advice to the client.

You are an associate in the International Trade Department of Grabemann, Loring and Ross in Ivy Town, USA. Jean Loring, one of the name partners, has called you into her office. She is meeting with a Mr. Alfred Pennyworth, who is there on behalf of your firm’s biggest client, Wayne Enterprises.  Ms. Loring and Mr. Pennyworth relayed the following facts to you.

From 2011 on, there have been only three companies in the United States that produce high quality bullet proof body armor. Those companies are Wayne Enterprises, Queen Consolidated, and Kord Industries. Wayne Enterprises produces approximately 60% of the body armor made in the United States. The remaining approximately 40% is divided evenly between Queen Consolidated and Kord Industries (each with 20%). Because of the nature of the product and federal government restrictions, there is a limited U.S. market for body armor.

The basic technology underlying the design and manufacturing of this body armor was invented by Lucius Fox, an employee of Wayne Enterprises. In 2008, Mr. Fox secured a patent covering the technology and its production. He assigned that patent to Wayne Enterprises, making Wayne Enterprises the owner of the patent. Wayne Enterprises has granted non-exclusive licenses to exploit the patent to both Queen Consolidated and Kord Industries. Wayne Enterprises also owns the U.S. trademark rights to “Ballistic Armor Technology” and “BAT” to describe the body armor. Both marks are registered with the U.S. Patent and Trademark Office and appear on the principal register of trademarks.

Somewhere in the central Asian republic of Nanda Parbat (a WTO member), a shadowy company called Demon’s Head Ltd. has been making inferior body armor and supplying it free of charge to the local criminal market. Mr. al Ghul, the president of Demon’s Head, has vowed to enter the U.S. body armor market with the express intention of pushing Wayne Enterprises, Queen Consolidated, and Kord Industries out of the market. That will allow Demon’s Head to sell BAT® body armor to members of the criminal underworld, making al Ghul the leader of a criminal army in the United States. To do that, al Ghul has enlisted the League of Corporate Assassins to launch his four-step plan.

  1. First, in 2011, al Ghul instructed his associate Antonio Diego to kidnap Mr. Fox in a successful effort to secure the information needed to produce BAT® body armor using the patented production methodology. Fox was later rescued unharmed by Wayne Enterprises Chief of Security Barbara Gordon.
  2. AlGhul then convinced RamaKushna, President ofNandaParbat, that additional exports to the United States would be good for the local economy. To help encourage economic activity, the President made three declarations having the force and effect of law as of January 1, 2012.
    1. All companies in Nanda Parbat that export goods are entitled to a credit against their overall corporate income tax liability equal to 1% of the value of the exported products.
    2. No bank in Nanda Parabat making loans to domestic producers of textiles and apparel may charge interest in excess of 3% per annum but the government will pay the bank to make up any difference between the 3% fixed rate and the prevailing market rate of 15% per annum.
    3. Every company in Nanda Parabat that employs more than 100 people will receive an annual grant to support on-site child care for workers’ children.
  3. Next, al Ghul instructed Anthony Ivo, Chief Scientist at Demon’s Head, to begin production of BAT-style body armor suits using Wayne Enterprise’s patented BAT® technology. This product proved to be far superior to his prior efforts, due to the stolen BAT® technology. As a result, in January 2012, Demon’s Head began selling body armor to the Nanda Parabat police and army for the dollar equivalent of $5000 per full suit (not including optional cape). At the same time, Demon’s Head continues giving away body armor suits to criminals in Nanda Parabat.
  4. Simultaneously, Demon’s Head began shipping body armor to the U.S., where it is imported by the Talia Distributors, a company set up and wholly owned by Demon’s Head. Mr. al Ghul is the president of both companies. Talia Distributors repackages, markets, and sells the body armor at wholesale to Cobblepot & Co., H. Dent Corp., and Sionis Systems Ltd. who sell to retail customers in the United States (both legal and criminal enterprises). Under a strict transfer pricing methodology, Talia Distributors pays Demon’s Head $2500 per full suit. The price to Cobblepot, Dent, and Sionis is set at $3000 per full suit. Talia Distributors keeps the $500 as a commission to cover its costs.

The influx of body armor from Nanda Parabat is taking a toll on the domestic industry. Felicity Smoak, who works for Queen Consolidated, prepared the following report showing declining sales of body armor suits in the U.S. At the same time, sales are increasing in Nanda Prabat. She also confirmed that Demon’s Head has no customers outside of Nanda Parabat and the U.S. However, Smoak identified significant potential markets for body armor suits throughout Europe; but, she does believes Demon’s Head is producing at capacity and lacks resources to serve additional markets.

United States
Wayne Queen Kord Demon Total US
2011 60,000 20,000 20,000 100,000
2012 57,000 19,000 19,000 5,000 100,000
2013 54,000 18,000 18,000 10,000 100,000
Nanda Parabat
Free Sales Total Nanda Parabat
2011 2,000 2,000
2012 2,500 2,000 4,500
2013 3,000 4,000 7,000

According to Pennyworth, to support its continuing massive investment in research and development, Wayne Enterprises wants to raise the price of BAT® body armor suits in the U.S. The U.S. price for a BAT® body armor suit from any of the three domestic producers is approximately $8,000 (not including optional cape). However, neither Queen nor Kord have moved prices upward to offset lost sales. To meet the competition, Wayne has been unable to increase prices and has, therefore, reduced R&D. To cut costs, Queen has fired Chief Marketing Office Roy Harper and will be consolidating its three sales and distribution centers into its main campus in Star City.

Kord has taken another approach. To cut costs and improve its overall profitability, Kord has decided to start production of BAT® body armor in the Balkan country of Markovia. As on January 1, 2014, Kord has shifted 50% of its production from the U.S. to Markovia. All of the Markovia-produced goods will be exported to the U.S. and imported by Kord.

Thus, the expected 2014 industry snapshot is as follows:

United States Sales
Wayne Queen Kord Demon Total US
2014 50,000 17,000 10,000
10,000
13,000 100,000
Origin USA USA Markovia/USA Nanda Parbat

The Kord and Demon’s Head imports will be competing for the same few legal customers in the U.S. while the imports from Demon will also supply the criminal market (about 10% of the total U.S. sales).

In January of 2013, Barbara Gordon of Wayne Enterprises’ reported that she has identified the unauthorized use of the BAT® trademark on inferior body armor being sold in the U.S. market. Her sources have provided shipping and commercial documents indicating that the unauthorized BAT® products are coming from Nanda Parabat.

Ms. Loring called you into the meeting with Mr. Pennyworth to help determine whether any U.S. trade remedy laws might help Wayne Enterprises offset the commercial competition from Demon’s Head. Mr. Pennyworth ominously suggested that fending off the threat from Demon’s Head and Mr. al Ghul has larger implications for the fate of the nation. He asked that you consider all options involving the trade laws. According to Pennyworth, the CEO of Wayne Enterprises is considering other options involving independent acts of self-help.

Ms. Loring has asked you to prepare a memo outlining any potential administrative or judicial actions you see as possible support for Wayne Enterprises. For each potential action, she wants you to explain in as much detail as time permits:

  • Whether Wayne Enterprises, alone or in conjunction with other companies, has standing to commence the action.
  • In what forum is the action commenced and how.
  • What proof will be necessary to secure a remedy?
  • What data will be considered and how will it be used?
  • What problems or opportunities do you see for Wayne Enterprises and the other companies?
  • For administrative action, what judicial review is available?
  • What is the standard of review applied by the relevant courts?
  • Will Wayne Enterprises be likely to prevail?

For no credit other than respect and bragging rights, provide the correct first and last names and popular aliases of the CEOs of Wayne Enterprises, Queen Consolidated, and Kord Industries and the first name of Mr. Pennyworth.