Please respond to the following prompts using complete sentences and paragraphs. It’s ok if you number your responses as they are numbered in each prompt. You can use the internet, your textbook, and any supplemental readings you’ve been assigned in this class.
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Prompt # 1
Alan just graduated college with a BBA in Strategic Design and Management from Parsons. He wants to create his own sneaker brand, but he’s unsure of how to do that. (He didn’t take Prof. McGuire’s class). He has been making sneakers for 3 years from design to prototype.
His friend Gaby, also a skilled sneaker designer, is looking for work. He asks Gaby to help him build his next design and prototype. But he realizes he needs money to do that. So both of them ask their friends and family to invest in Alan’s company. Together, they raise $40K from friends and family. Gaby also introduces Alan to a venture capitalist who likes the idea of Alan’s company. Gaby creates pitch decks with Alan’s input and creates 3-D renderings of her sneaker designs as well as Alan’s past designs. The venture capitalist is interested in investing in this brand and drafts a term sheet that details how much equity the investor is seeking in the company. Alan agrees to the investor owning a 25% stake of the brand without consulting with Gaby.
Once the money is deposited into Alan’s account, he realizes he should probably have some legal protections in place. So he gives Gaby a non-disclosure agreement as well as a contract that does not stipulate whether or not Gaby is an employee or a contractor. He pays Gaby $15,000 to create a new sneaker design and prototype. He does not provide much input in the sneaker design process.
Gaby signs the agreements under the assumption that she is a partner in Alan’s company. She asks if Alan would like to register with the state as a general partnership entity. But she receives no response. Understanding that the investor will want to see the prototype soon, Gaby focuses on the sneaker and decides to circle back with Alan about the corporate entity formation issue later. After 6 months of work, Gaby grows increasingly frustrated that she has not received any clarification from Alan regarding entity formation. Finally, the prototype (last) is ready to be sent to the production manufacturer to be tested and to create samples. But Gaby does not deliver the design to Alan. When he inquires about the status of the design, Gaby tells him that she is taking the design to another more well known brand – APEX, a multi-billion dollar sneaker and athletic apparel conglomerate that recently hired her to lead their design team. APEX releases the shoe Gaby designed and Alan is very upset. Without the prototype, the investor grows increasingly skeptical about Alan’s ability to provide a return on the investor’s initial investment. Alan wonders what his options are at this point.
Based on what you’ve learned in this class thus far, please respond to the following. Please refer to the facts as much as possible to support your position. Do not simply respond “yes or no.” Write complete sentences/paragraphs and provide examples from this prompt and/or from our class in your response:
1. Is Gaby right to assume that a general partnership has been formed? Why or why not?
2. Who does the design Gaby created belong to, legally?
3. What, if anything, can Alan do to prevent APEX from selling this sneaker based on the design Gaby made?
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Prompt # 2
Alan recently graduated with a BBA in Strategic Design and Management from Parson’s. He received an offer to work as an executive assistant to the CEO at a well-known sneaker company, APEX, Inc. His first day on the job is quite hectic. The CEO is flustered because another well-known sneaker brand, NO BIRDS, has decided to create a sneaker design with midsole technology that looks and functions very similarly to technology APEX is currently developing. APEX’s technology is called “anti-gravity,” and it includes an electronic solar powered chip that allows the user to hover above ground. NO BIRD’s technology is called “above ground” and it has a similar function, except their technology allows the user to jump very high, not hover. Within the NO BIRD’s midsole, there is a battery operated chip that can recharge via USB to power jumps as high as 6 feet.
APEX has already created a last and ordered samples from their manufacturing hub in Dakar. The marketing department in APEX has been busy crafting a clever ad campaign for the shoe and it is scheduled to launch next month. So far, APEX has invested $10 million in design, manufacturing and advertising.
APEX’s CEO has also received a letter from the FTC which requests results of lab tests performed on the sneaker to ensure that the claims their marketing team approved are true. These claims state:
“This shoe will make you fly.”
“You will feel like a superhero!”
“This is the first sneaker that takes you from 0 to hero from the first wear.”
APEX’s CEO did not look at these claims closely before approving the marketing campaign. And there were no lab tests conducted.
APEX is also currently in financial debt after the most recent past sneaker was recalled due to a design defect, which caused quite the PR nightmare for the company. The anti-gravity sneaker is their attempt at redemption.
APEX’s CEO calls Alan into his office. He knows that Alan took Prof. McGuire’s Business Practices and Regulations Course, so he knows Alan is very knowledgeable about these types of issues. The CEO asks Alan for his advice on what APEX should do about their competitor’s technology.
In your answer, please respond to the following. Please use complete sentences/paragraphs :
1. What type of intellectual property (IP) is at issue here?
2. Does APEX have a viable claim of infringement against NO BIRDS? Why or why not?
3. Does APEX CEO have anything to worry about regarding the FTC letter? Why or why not?
4. Are lab tests necessary for the aforementioned marketing claims?
5. What is the legal basis (type of liability) for APEX’s most recent sneaker recall?
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Prompt #3
Ariel is a 16 year old Mermaid who lives under the sea. She needs legs so she can be a part of Prince Eric, her true love’s, world. So she verbally asks the neighborhood sea witch, Ursula, to help her acquire the legs. Ursula offers Ariel legs in exchange for Ariel’s voice. And Ursula promises to return Ariel’s voice to her if she can get a kiss from Prince Eric, Ariel’s true love, before the end of the third day. If Ariel does not receive a kiss from Prince Eric, Ariel will be under the perpetual employment of Ursula. This is not ideal for Ariel.
While Ariel is giving Ursula her voice, Ursula turns to her current employ-eels, Flotsam and Jetsam, and says, “we’ve got her boys.” Ursula uses her magic to create a draft agreement. Ariel signs the agreement. On the second day, Ursula uses her powers to grow her own legs to attempt to distract Prince Eric from noticing Ariel. Ariel grows suspicious of Ursula’s motives, but unable to speak, she’s not able to consult properly with an attorney for help.
In your answer, please respond to the following. Please use complete sentences/paragraphs :
What are the 4 (or 6) requirements of a valid contract?
1. What facts from the paragraphs above correspond to each contract requirement?
2. For instance, does Ursula present a valid offer to Ariel?
3. Why or why not? What about the other required elements of contract formation?
4. Walk me through your reasoning.
Is this a valid contract? Why or why not?
