Commercial Law (Mgmt 348)

1. Commercial Law (Mgmt 348) Misappropriation and Business Judgment Rule Professor Charles H. Smith Spring 2011

2. Introduction to Misappropriation • Misappropriation protects the financial value of commercial exploitation of a person’s identity. • Also sometimes called right of publicity or use of name, picture or likeness for commercial purposes without permission. • Only a well-known person – entertainer, athlete, celebrity – can use this theory since ordinary person’s name, picture or likeness has no financial value and therefore no damages would result.

3. Misappropriation cont. • Case studies • Shaw Family Archives, Ltd. v. CMG Worldwide, Inc. (pages 1029-31) – Marilyn Monroe. • White v. Samsung Electronics America, Inc., 971 F.2d 1395 (9th Cir. 1992) – Vanna White (discussed on page 130). • “Tony Twist” case – hockey player (discussed on page 130). • “Guvanator Beer” matter – Arnold Schwarzenegger.

4. Business Judgment Rule • The business judgment rule acknowledges that an officer or director of a company can fail without being liable in damages to the company. • After all, some risk is incurred in all business matters. • Therefore, actions taken in subjective and objective good faith are protected by the business judgment rule.

5. Business Judgment Rule cont. • Case studies • In re The Walt Disney Company Derivative Litigation, 906 A.2d 27 (Del. 2006) – Michael Ovitz “golden parachute” matter. • Gaillard v. Natomas Company, 208 Cal.App.3d 1250 (1989) – “golden parachutes” for “inside directors” negotiated during corporate merger.