Individual Assignment #3
Fact Scenario: Quik Results, Inc.(QRI), a Michigan corporation, makes and sells Power Up!, a super energy boosting, carbonated beverage. Power Up! is made in Michigan, but shipped to stores all across the Midwest and East Coast. Power Up! is made by QRI, and delivered on QRI. trucks, by QRI employees. QRI has in-house accounting and marketing staff.
Assignment: Use the scenario above and properly cited research from your textbook and elsewhere to support your conclusions and give detailed, thorough answers to the ANY 5 of the following questions. Expectations are answers should be approximately 1-2 pages per question, for a total of approximately 5-10 total pages. Please use 12 point Times New Roman font and normal margins.
1. Orin, a citizen of Ohio, sees an ad for Power Up! in EXTREME!!! magazine and buys it in Ohio at a local store. Within 2 hours of drinking Power Up! Orin suffers internal injuries. Alleging that the injuries are caused by Power Up! Orin files a suit against QRI in an Ohio state court. QRI asks the court to dismiss the suit on the ground that it does not have personal jurisdiction over QRI. What is the court most likely to rule and why?
2. Steve, a driver for QRI, leaves the truck’s motor running in neutral and carelessly forgets to set the parking brake while he makes a delivery. The truck rolls and crashes into a nearby gas station pump, igniting a fire that spreads quickly to a construction site a block away. A burned wall collapses onto a crane, which falls on, and injures, a bystander, Helen. What must Helen show to recover damages from Steve? What are QRI’s potential liabilities?
3. QRI’s in-house marketing department decides to use in print ads for Power Up! direct quotes from a study that shows the ingredients in Power Up! are safe and effective. The study was done by Deep Topics, Inc. a private, for profit research/think tank organization. QRI does not obtain the permission of Deep Topics to use the study in its advertisements. Deep Topics files a suit against QRI, alleging infringement of the plaintiffs’ intellectual property rights. Which type of intellectual property is involved in this situation? What is QRI’s likely defense? How is a court most likely to rule? Explain.
4. Louisa, worried about her cousin Garth’s dangerous obesity and seeming addiction to Power Up! promises to pay Garth, $10,000 if Garth stops drinking Power Up! and loses 100 pounds within the next two years. Garth agrees, performs his part of the bargain, and asks for the money. Louisa refuses to pay, saying that she forgot about the deal, but that even if she did make such a pledge, there was no valid consideration for it. Garth files a suit against Louisa. In whose favor is the court likely to rule, and why?
5. QRI, hires Cole to its in-house marketing team to develop and implement an e-commerce strategy for marketing Power Up!. Cole signs a contract that includes a clause prohibiting him from competing with QRI during and after the employment. After creating the strategy, but before the strategy is implemented, Cole resigns from QRI’s employ and opens a business to compete with QRI. In QRI’s suit against Cole, to determine whether Cole may compete with QRI, what are the most important factors the court should consider? What will be the result of the suit?
6. QRI includes on the label of Power Up! a warning that states that QRI is not liable for any injury or death caused by Power Up!. Three drinkers of Power Up! become violently ill and 2 die soon after drinking Power Up! The cause of injury and death is found to be due to QRI’s negligence in making Power Up!. All three of those injured bought their Power Up! at different locations of the 8/12 convenience store chain. Under what cause of action or theory could QRI be sued? Could 8/12 be sued? Under what theory? Based on the warning on the label of Power Up!, can QRI avoid liability?
7. Quicksilver Delivery Service contracts to deliver Power Up! in California for $5,000, payable in advance. QRI pays the money, but Quicksilver fails to perform. Can QRI rescind the contract? Can QRI also obtain restitution? What does it mean to “rescind” a contract? How is a contract rescinded? What is restitution? How is restitution accomplished? Explain.
8. QRI is concerned about preventing competitors from imitating the distinctive Power Up! logo and thereby misleading customers. How can QRI protect the logo? What would QRI do if someone imitated or straight copied the Power Up! logo
9. Can QRI prevent its employees from revealing its customer lists, pricing policies, and other confidential information, if the employees resign to work for a competitor or to enter the same business themselves? How?
The court is likely to rule that it has personal jurisdiction over QRI. Personal jurisdiction refers to a court’s authority to hear and determine a case involving a particular defendant. In this case, QRI is subject to personal jurisdiction in Ohio because it has sufficient contacts with the state through its sales and distribution of Power Up! in Ohio. QRI’s deliberate distribution of the product in Ohio, along with its advertising and marketing efforts, establish a minimum level of contacts necessary for the court to exercise personal jurisdiction over QRI. Additionally, QRI’s use of the national magazine EXTREME!!!, which has circulation in Ohio, to advertise its product further supports personal jurisdiction. Therefore, the court is likely to deny QRI’s motion to dismiss the suit for lack of personal jurisdiction.
Helen must show that Steve was negligent in leaving the truck running without properly setting the parking brake, and that this negligence caused the accident that resulted in her injuries. She must also show that she suffered actual damages as a result of the accident. QRI’s potential liabilities depend on whether Steve was acting within the scope of his employment when the accident occurred. If Steve was acting within the scope of his employment, QRI may be vicariously liable for his negligence under the doctrine of respondeat superior. However, if Steve’s actions were outside the scope of his employment, QRI may not be liable for his negligence.
The type of intellectual property involved in this situation is copyright infringement. QRI’s use of Deep Topics’ study in its advertisements without obtaining permission amounts to an unauthorized use of copyrighted material. QRI’s likely defense would be fair use, which permits the limited use of copyrighted material for purposes such as commentary, criticism, news reporting, teaching, scholarship, or research. However, QRI’s use of the study in its advertisements is for commercial purposes and may not be considered fair use. A court is likely to rule that QRI has infringed on Deep Topics’ copyright and may order QRI to pay damages.
In this case, Garth and Louisa entered into a unilateral contract in which Garth was promised $10,000 in exchange for his performance of losing 100 pounds and stopping his consumption of Power Up!. Garth has performed his part of the bargain, and Louisa is obligated to pay him the $10,000. Louisa’s argument that there was no valid consideration is not valid because Garth provided performance as consideration. The court is likely to rule in favor of Garth and order Louisa to pay him the $10,000.
In determining whether Cole may compete with QRI, the court should consider the reasonableness of the non-compete clause in the contract, the extent of QRI’s legitimate business interests in enforcing the clause, and the harm that would result to Cole if the clause were enforced. The court may also consider whether Cole has disclosed confidential information or engaged in unfair competition. If the court finds that the non-compete clause is reasonable and necessary to protect QRI’s legitimate business interests, it may enforce the clause and prohibit Cole from competing with QRI. If the court finds that the clause is overly restrictive or that QRI has not shown a legitimate business interest in enforcing it, the court may not enforce the clause and allow Cole to compete with QRI.
QRI could be sued under a products liability theory for manufacturing a defective product. The warning on the label may not absolve QRI of liability if the defect was a result of QRI’s negligence. The injured consumers may sue QRI for their injuries and the families of the deceased may sue for wrongful death. The convenience store chain, 8/12, may also be sued under a theory of strict liability for selling a defective product
