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jospu!q iCue~d '~oj~~esueal ssau!snq iCepiCla~a ere u~

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-uoa!aua le8a~ aqq jo 8urpuelslapun ailq3ajja uv

The Legal Ev~vironmerst - --%-ah -0 u---vA- ---- - ---"* ---a*-<-<-

I.r;aud theft (11161 IlibeB can also ~ I L e T P F ~

t o tort InPng;~t~on 111 the htlc,llles% CBIL ~ronment

I f a pl;alnuff ~liilrlrnc, ~ h a e a detendant faslcd to In\ c up t o a ctsntl actual proan xkc. the plarntrti rnay ch;inactc:rnrc the 131 ohcn prornlL,e as hat ~ n g hecr-s Inten- haon;tlly tdc~eptrke and tllereforc fraeadaa- lent TPrlls chcir;actcrnrcitam \~$~ould make Ilne broken pra~rnase a tort as atrcll as a 131 eaclm of conta act h gslalnt~ff 1% ho ~ l ; i ~ r i r ~ t , thiit his trade secrete, ha\e hecnn nllsappropraatcd talks ahout them ;tc,

laaa Irng lreenn stolera. just aa, hc noelld P B ;I iuurqlary hael t;rhen place. I ,she$ aaad \Ian- tier sur84 are 5eldo1n \ B ~ L C ~ ~ \ B U B ~ h e r c the j~%;ulaatnfi alsd cicfend;anlt are Isulnllcsc re- \ d s , but unflalr csmrncnt\ ahcsut ih C018a-

petrtor can amount lo ;in urlfarr lrractrcc uracicn IracPc ~egu1;rtlon li;r\as as we11 iis s1elam;rtrtan under 808 t law

3" 'Trade Regulation Law. Aralltau\t ;and trade rt-yularlon 1;x-n~~ rr-a the LTrsiitcd 5r;ites, thc F,UPCB- peas rlli=corae,rrxrc ('c~mmur~nty anti r-alanj other jllr~sdactronr create luolk cnal Irahrlnr! anoP calnarm;il pcn;iltae% for restraalnf of trade nao- ratrpols~atacrr1 alltl otlrcr amproper conlpelrtlive prachnces 'Thew lam ",arc summar~zcd In Stan- i&ikl"kk$ 01 Rla~ ~lle\8. ( 014d11(f

("nil 1I;~hllitg u~ lder the trade regul;itic~xp la"\ of tlac I rnaltcd Statct, can result in an am ~ard ot tre- hlr. dr~i~rages. 'Ihiq r.aae:ins tla;at the party harmed 19, :lrmtncc~n~pctitlve activit) can recover thrcc. %Inle\ ths amount of the eccsnomic: losses r a n 0lvk.d.

4, Patent, Trademark and Copyright Hi,aw, A lsroad kiew t h : rights and re\ptr~lini&iAities in- a vlva;c% in rrn ekerj cia! busrnes5 trarnaction should ;alc,o recc~fznl~e tbc ilnportance of civil lr- at-sill~! under patent. trademark and caspyright l;aw B;or 11jl-B Pieild n-azarketrng ~-scr.;onncl, the c h ~ c i I Y I B I I ; ~ ~ ~ of t1~t.x legal concerns relate5 to rhta r a h t and wrong way9 ldii h;~ndls" coalfldentrzal ix~form;ation., which will be dlscu~ccd at :a later point Ira this brc~a~klcr.

I%roce$uaii Steps in Civil I,itigati&ion la Summons and (:a~mplaint, A cieiil c u e hegnnc,

with delnvery t a f ;o OIIPPIIFIOP?~ ;1nd ( ~ O P I I ~ I ~ L ~ I P I ~ LO

the delesmdarlt t ~ z ~ Ireh;tlf ot the p1;tlnutf.

The complaxr~t tcllc the p l ; t~n~r f t~s sede of shr \tory. If nay I e c ~ t e \%laat ;ire c;al%cd ((;gbd/ ~ ~ C T L ~ I Y Y T

;is \1$c1l at, aswrtrtrnmc, of tact; at may ask for elann- ape\ that ;arc greatly out crl gun1port1on etr ran-rlp aaa1 urnes ;~ctuaPly wffcred I hekc te;itun e< O B the corrlpl;n~alt should he kept nn focu\ I P ~ L ~ ~ U S L , d6:- \ , I I P W ~ ~ the flct~o~as ;laad exaggcr atloras t8-a;er ram], he nn\ol\etl neb4 rcporta, about a cat11 w e l telrndli to

regreat the clalnrac, amdc In the ct~rnnl~ln~nt 216 st the%/ had aln eady keena est;abl~slacd ac, the trwth

'I kc cc~rnpl;ilnt also eclentafic"\ tlar par trrs cla~rnt-,d hv the pliaeratxlf to he respc>nnsrhle lor the loas tR~;it h:i* occurred It ;in erraplojee of a corngxiny Bike HP 14 raanaetl :ic, :a clefendant along avntia the ccrnmp;any nh 1s often becaua,e the ~~l;arratrff wants to frlgkatcra the crnplojr~c or 17c- 11e\es that rmanrlng the erraplo\~cc ac, a partj wi l l make ~t easrer to aabtra~x-a te\tlnlcsnlp anti alcrcu- mentara~ e\ ndenc e tor trial ot the caw

111 the deienelanrt falls to respond M . P ~ ~ I I H P thk3 tnane \el by law, the court laas the pcPwer to pate ehc plairnt~ff substaaataa$l) all of the rcBlef he lras asked for. without ;I trial on the merlitt, o f the caw. in ~ k a t 1s called ;t d e f a i ~ i t ~ ~ t i ~ q r n ~ i " 1 1 If t1P recc1ba:a a surnnlcjns and complaint, the IiP peop14: famlllar M rth the underlying dn4pute must therefore communxcatc arad cc~arpcrate vevntla the ctrnr1p;aaa) '4 legal eptabf i t \ yuicklj a v o s - slble so ahat a "Ernncly defena,e to the %urt can be <~rga~aaaed.

3, IBretrial Blisca~very, In the United States.. thc procetlurral stagc ilia c.11 r l Iltlgatlon m hrch tiakes the naoa,t time and cbfort 1s the I-srcPces\ called jrrelnai dkncoverv. The okiectne of dr$co~ el g is to gi\c cach a,ide In the ca4e an c~~.~ptanternait) to learn about all of the u 1tnesse5 and et iderrce available to the other side before thr case goes to tnal.

.(saag yms jo iilaLao3al IOJ apyo-~d .411~3g1sa"t Y~M

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sao8 neyl ~s~ead aqr s! ,<~!~~~oylazo jonlnrj pa2lhfiul [EJ~U~D

Agency

Liability of Principal While the agent is standing in the shoes of the principal. his actions as well as his promises may create liability for the principal. For example, if the agent is negligent or engages in fraud or theft in the course of his duties for the principal, the principal is liable to the parties hurt by the agent's conduct. In this context, it is said that the acts of the agent are irnpured to the principal.

I < n o ~ ledge as well as conduct can be lmputed to the principal. Suppose a customer is havlng nrob- lems with the performance of an H P product, calls IIP to complain and talks to a sales manager In an- other product d~sclpline rather than to support personnel for the product. If the customer later c la~ms that HP fa led to respond to the call. the know ledge ot the manager 1s ~mputed to H P even though the manager may not even have under- 5tooci eker! thing the customer had to say G~vlng ~ntormatlon to someone at H P may be legally equivalent to i v l n g information to everjone a1 I IP

Agents other than Employees A corporation may act through agents other than its employees. For example, it can hire an indepen- dent firm to provide service for its customers. If it continues to receive payments under its service contracts and tells its customers that the firm is performing service on its behalf. the firm would perform as an agent.

The fact that other corporations may be agents of IIP is important in the context of I1P's relation- ships with third party sellers of H P products. such as dealers, distributors and original equipment

manufacturers (OEMs). Since the scope of an agent's authority to act on behalf of a principal can depend upon appearances, the purchaser's per- ception of the third party seller's authority to speak or act on behalf of HP can determine IIP's liability for the third party's promises and performance.

Suppose a college bookstore carries five or six dif- ferent lines of calculators and personal computers, including those manufactured by HP. If the HP logo is part of a display in the store, a purchaser is not likely to think that the store is a branch office of HP, and H P does not become liable for the store's promises regarding the performance of the H P products, much less for the store's promises regarding the non-HP products that the store also carries.

Change the facts, and assume the store uses the I-IP logo and no other sign or logo of any kind on its door, its business cards and its business station- ery. If a reasonably intelligent person coulct con- clude that the store is a branch office of HP on the basis of the way the H P logo is used, the purchaser might successfully argue that H P is responsible for all of the store's commitments and all of the store's unbranded products.

Where 11P has chosen to do business through deal- ers, distributors and OEMs, HIP is careful to define the separate roles c3f H P and the third party and to avoid creating false impressions. Since the liability of H P will depend on appearances, HP must help the purchaser understand that H P and the third party. although they complement one another, are independent entities, and that the third party is re- sponsible for its own commitments and products.

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Contracts

Battle sf the Farms The lernlc, 'and co~ad~t~a)ns that applj In an everkda! transiitrlon are tjpncali~ the ones set torth nn the itantiasti papel work tor the tran\sctlc>n. If P's tern14 ane iel forth rn ,I purchase agreement form, :r q~aota t~on i-orm or an ;ickno~lletigrnent for rn The c+u\tonrnel may hdke rts own term\ ac, part of ~ t s pur- chaie order form 'Flat. po\\lbrlity that IlP'r term4 F X I C ~ ) E I C P ~ mnaich up precisely with the customer'\ term5 remits rra I! hat 14 cctlied the hnrrle 0 j dzr form \

Tile In% rrad~tionally requ~recl a preclse meerlng o j tlre mrnds (that 15, coranplete agrcernent) between the ieHler and the bujer beiore any tenm of a con- tract nit\ enlorceable. In the kJnlled States, this tradit~crrial requirement har been weakened In :a contract tor the sale of good\, court5 may enfcjrce m:any ot Part] 14'5 terms even though Part) B nekrer explicitie agreed to them a\ long as Part) M hat1 a-iotlce of them annd lalied to okiect One can ha\ e notice ot terms even though one docs not read or understand them. particularly ~f the rale is a iotnmcrcnal transiicticin rather than a consumer trtlmsactlon.

%'he Ierrrls set fortla in HI"s standard forms have buen drafted with care as precise definitions of IfYs com~nitnlents regarding products and sup- port. The risk in using rhe customer's Corm is that :he custo~ncr's ternis will redefine IIP's co~nmit- lnerlts scz as to create obligations thar HIP cannot reason;tbiy meet. If every sales and support trans- ~acoicin uses HI3 forms to the fullest possible extent, E-%Id will have made comn~itments it can live up to, and customcx satisfaction will be enhanced in the l a ~ ~ n f : run.

Promises and Warranties Most of u"i11imakc of a .cccirrar?& a\ a promlsc by a rrranut;acturer to repair a product if it fail\ u lthin the f l r4b 90 da j \ or one year after 11 I \ sold. In fact, Ihlr con-inlitmerlt hy the manufacturer IS no more than a 4pecllic example of promlse\ regarding products IJnder the 13%. a vi.arranty 1s a n j prcpmlse regardnn~g a product thar rnfluence\ the customer'\ deca\roir to buy the procluct. Allriosl an! promrse 1s

3 narrarht> t o the customer ~t the customer reites 011 E l

I\io magic words are needed to create a warranty. The seller need ntrt say, "I guarantee that this product will last fcvr five years" or "'our firm con?- rnitrnent is that this product will iast for five

- 9 - years. I'he seller need only say, "This product will 3 9 ~ last for fi\.c years. ~f the p~irchaser reasonably

understands the statement as creating 21 commit- ment on the seller's part.

A manufacturer's sales forrals usually contain a riis- c1airnc.r o lesprrss u~larrli~tties. Such a cla~ise states. in effect, thar the 90-day or one-year service conz- rnltn~ent made try the nzanufact~arer is the onky comrnitnrnei-nr regarding the product to which the naanufacturer is willing to be held.

Assuming that a tr;ans:iction takes place on the hasis of the manufacturer's forms rather than the custc~mer's forms, will this disclaimer of express warranties effectively prevent the customer from holding the manufacturer to its other commitments'! 7 . Y he answer is often "Yes." but occ;1siotaa1ly "NO." Courts are sympathetic to buj.ers who rely on statements made by seiicrs with sopkistic;ited tech- nical kr~owledge and significant bargaining power. When courts are sympathetic to r he buyer. they arc likely t o find that neither party to the contract in- tended the disclainaer to exclude a particularly valuable anti explicit promise on which the buyer obviousiy reiiecf.

lo re over. if a promise ranacte in ccinr-nectior-i with a sale amounts t o misrepreser-ntation 01- fr;~ucI, the buyer can rely on tort law rather than contract law in enforcing its rights, and in that way defeat the seller's efforts to protect itself tllrotlgh language in the contract.

When these pxraciples are combinec-t M l th the pn In- clples of agency I ~ M J . thc clear implicat~on is that the standard ~ a r r ~ i n t ~ e s In a ma~mutacturer'\ torrns can often be cxpandeci 01 o k e ~ rldcien b~ fleld nza1- ketlrag personnel

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Contracts

Deciding not to do business with a prospect is ob- viouslt. a Base resort for difficult situations rather than an everyday part of field marketing strategy. I l o ~ e \ . ~ c r , the ).to .stile decisio?~ is availakle as an op- tion when a n effort t ~ ? set reasonable expectations hias failed.

Futures H P field marketing people encounte~- two distinct problems regarding f'lirtrrcs: whether HP can sell them and whether BHP carr disclose them. In this ccxmtext. a future is an unreleascd product which has not received approval for inclusion on the I IP C'ory~orate Price I ,kt.

1 . Selling Futures. may not be sold. HP Corporate Ma1 ketrng Policj prohib~ts qrrodlflg ( that I \ , ofterlng for sale) a n j product not ap- proved tor the Corporate Price l,r\t. Should a customel requesr the right to purchase an unre- \cased product. the most that can be done r \ to sell a current product wlth time rlght to suhstl- tute any new plcsduct that might be reicased.

Disclosing Futures. butenre\ car1 be and often arc cir rt lo,c.d, kul such d~rclosure 1s a r i \ k prc~po\ltton The unrelca5ed produce n-nay neker become :available, ~f ~t does, 11 rnaj not Ewve the projected features at the projected price L+ ~ t h ciellkerq at the projected time As '1 result, d1scus5lon of futures m a j create ~ ~ n p o \ - clhle commitments to1 F-IP

Disclosure of futures can also uneterrnine HP's patent position in countries where publican- llcsutacemcnt of a product still to be patented makes it difficult or impossible to obtain the parent.

3. Procedure. I f it is deterrnirled that the berlefits of disclosing a future outweigh the kgaE risks, the disclosure milst be made witla caution. 'The decision to cBiscuss the future 111ust be made in Divisiorl Marketing by someone wit11 thc au- thority to irnplen~en-at the product plans under discussion. Any disclosilre made by the field must be consistent with factory irstei~tiorrs.

The customer to whom the cilscHosure is made should receive a letter from B IP, emphasizing that kdP's plans are subject to change and that 131' can make no commitrner~ts 21s to perfor- mance, price or availabiiity of a product uniil the procluct is released.

Careful Communication As this booklet has already noted, we necessarily think in terms of rni~lir~zizir~g rather than plirnit~~lf- irzg our exposure to civil liability for prob1erns like breach of contract. 'I'hcrc will always be a risk that claims will be made against u s , since a customer may have a had experience involving Ii f P products or HP support for reasons that are not HP's fault, and aray customer who feels dissatisfied is free to file a civil suit.

-1 he best mean5 of nllnimlrlng the rlsk ot Eiab~llt! for breach of contract 1s careful communlcatltrn HP 5hould explain to the cu5tcsrner what H P prod- uctr and IIP support can and cannot be expected to do I-IP should also explain the custonler'\ need to make a comm~trrlent of ekfort to ~ o r k \%lt11 IHP successtully Finaliy. ail thc member5 ot the IIP team should csmrnunlcate fu11) wrth each other so that promises to the customer wlil bc tulfilled 11 all t h ~ s communication hd4 taken place, the cus- tomer 1s not likely to be a plalnt~tt in a breach ot coartr act actron

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Confidential Information

Confidentiality and Pretrial Discovery 6)ilr ~ n g pc t r~ ;1 I cil\ccice~j 1 1 ~ ~ 1 c1\ I [ s1111. IIP cdnnot ret u\c t o n e\ eal exlseirag document\ on the grouncls th;ir the! ucrc pr ep'ired tor the conrp;an?'s prlbate use or \%ere r~liirketi "C'or-t~panq ('ont~dentlal" on "Eirr Irmrernal k'\e oral^ " I1P can \omctime\ le\i%t :i ilcmarid t o produce clocumnent\ on the groui~d\ that the! cont,iln tr'ldc secrets ffone\er , courts trcquerrtlq handle thi \ 'irgw-nent b j rcclcalrlrlg that the. docurr-icrats be OM n only to the !;in \er",ior thc o p p o s ~ ~ g part!, who must then retraln~ tronr clr\clos~ng then1 content\ t t r markctlng or Iabora- tor! people ~ h o m ~ g h t profit trclrra seesrag the tech- nlca! lntor mation.

The single srgnltic;ti.~t euceptiou-m t o the rule rcy uir- ing prodilcltoil of t 'b I C ~ C ~ I C C in the course of dis- colcr! relate\ to ciocunrerrts prepi~rcd h? 131' attor-

1 1 ~ 5 4 o r b people ~acsrkrny ulth t i P alto1 n q s . I n lln-iiaeci clrcunmst:inces, ihe\e docurners~\ rajah hii\ e prl\ ~ leged \tatals a \ nfror'rre\ -c-lirlzt c oint,r~irllc'uilot~\

or a t f o r rrel' t i ~ o r k ~ I C ) ( / L ~ I t

IfiP ha\ no rea\on t o tear th'it ~ t 4 Ieg;il interc\t\ ~ b i t i

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