個案總覽

Students are introduced to the basic framework for corporate governance. Begins by describing the complex role of the modern corporation, then proceeds by discussing the fiduciary duties to which a board of trustees is bound (duty of care, duty of loyalty, etc.), and concludes by proposing seven factors officers and directors should consider when overseeing the sale or purchase of a company. Recounts the precedential case Smith vs. Van Gorkom.

If you spring for optional pollution-control devices at your overseas plant, have you violated your duty to maximize shareholder value? Here's a framework that can help clarify this and other ethical dilemmas.

Involves a start-up, X-IT Products LLC, whose founders had designed an innovative, lightweight, and easy-to-use--yet strong--escape ladder. After X-IT had filed a patent application for the ladder in the United States, X-IT was approached by Kidde PLC, one of the largest vendors of fire protection products in the world. Negotiations to license X-IT's invention or to buy X-IT ensued. The parties entered into a confidentiality agreement, which gave Kidde's patent counsel access to X-IT's confidential patent application for the narrow purpose of reporting to Kidde whether the patent claims were weak or strong. After the X-IT founders saw Kidde representatives displaying a ladder at a major trade show that was almost identical to X-IT's ladder, X-IT's CEO had to decide what to do next. Although suing Kidde for violating the confidentiality agreement was an option, X-IT barely had sufficient cash to fill orders, not to mention pay attorney fees.

Silhouette, an Austrian eyeglass frame manufacturer, sued Hartlauer, an Austrian retail discounter, for reselling Silhouette frames within the European Union (EU) that Hartlauer had purchased outside the EU. Does the EU follow the principle of exhaustion of trademarks?

Metro, a German wholesaler, sued Cartier, a French luxury retailer, to require Cartier to honor Cartier's guarantee on its watches that Metro sold, even though Metro is not part of Cartier's selective distribution network. Is such a network incompatible with the European Union Treaty?

Jay Entrepreneur had to decide whether it was worth his time to plow through a 12-page term sheet for a Series A round of preferred stock prepared by HBS Investors, a well-established venture capital firm that did seed, early-round, and mezzanine financings. He could also send the sheet over to the solo practitioner he'd hired to incorporate the company he'd formed with his partner, Dr. Mark I. Tech, inventor of a revolutionary new drug-delivery device. Family and friends had already provided $10,000 for lab space and equipment, and Jay and Mark had maxxed out their credit cards to pay the $7,500 retainer patent counsel required. Time was short, however, because Jay had promised to get back to HBS Investors later that week with any comments or concerns. He also had to decide (with or without the advice of counsel) whether to accept the proposal terms.

Identifies many of the legal issues likely to arise in the course of starting and growing a company. Suggests strategies not only for ensuring compliance with the law but also for using the law and the legal system to increase predictability, maximize value, marshal resources, and manage risk. Explains why entrepreneurs and managers cannot just rely on lawyers to deal with the legal aspects of business and offers ways to manage legal risk and handle legal disputes. Also describes the relevance of a variety of laws to managers and entrepreneurs, including intellectual property, securities regulation, taxes, contracts, employment, business organization, product liability, environment, and alternative dispute resolution.

Outlines the tax and accounting treatment of restricted stock awards, nonqualified stock options, and incentive stock options, including the effect of making a Section 83(b) election for unvested stock.

Analyzes the 1991 decision of the U.S. Court of Appeals for the District of Columbia Circuit in the seminal New Economy antitrust case United States vs. Microsoft Corp., 253 F.3rd 34 (D.C. Cir. 2001), which arose out of Microsoft's efforts to promote Internet Explorer and to supplant Netscape's Navigator Internet Web browser as the leading browser. This case contains a detailed discussion of the application of the U.S. antitrust laws (Sections 1 and 2 of the Sherman Act, in particular) to technologically dynamic markets characterized by network effects. Issues addressed include: 1) the legality of exclusive dealing arrangements, 2) what constitutes illegal monopolization (including how courts define the relevant market and what constitutes anticompetitive conduct), 3) predatory pricing and the rules of impossibility, 4) the essential facilities doctrine, 5) the exercise of intellectual property rights (such as patents or copyrights) as a business justification, and 6) what constitutes an illegal attempt to monopolize. The U.S. Court of Appeals' decision is summarized, and extensive excerpts from the opinion appear as an exhibit.

Describes Priceline's patent of its "reverse auction" pricing mechanism, its discussions with Microsoft regarding Microsoft's license of the patent for its Expedia service, Microsoft's subsequent use of the technology without a license, and Priceline's decision whether to sue Microsoft for patent infringement.

Supplements the (A) case.

Describes the legal battles faced by Napster, the popular Web site for finding and downloading music files through the Internet. Traces the evolution of copyright law as it has been interpreted in recent cases on digital music. Focuses on the recent suit against Napster by the Recording Industry Association of America (RIAA), and involves the RIAA's arguments alleging that Napster constitutes illegal infringement and Napster's response that it does not.

Presents the final version of the agreements introduced in the (A) case.

Describes Richard Spellman's decision to leave his existing employer and join an Internet start-up as CEO. Focuses on the terms of a restricted stock agreement and employment agreement that must be negotiated. Includes first drafts of these two agreements.

Describes the sixth and final module of the Harvard Business School MBA second-year elective course Legal Aspects of Management. This module deals with the way firms should approach business risks in order to avoid legal liability and how firms can use contracts to allocate risk.

Examines several legal issues faced by Samantha Fine, the CEO of Next Step, a software concern that is focused on the World Wide Web and planning an initial public offering. Describes Fine's computer-related experience prior to founding Next Step and discusses the actions associated with transforming WebSaver from an unproven idea for a software product to one of the most successful Web-based software products. Provides a brief description of the origins of the Internet and the Web, the Web search engine market, and advertising on the Web. Although the subject of this case is a company whose primary product is an innovative program in a relatively new and rapidly changing medium, the legal lessons that can be learned from this case are applicable to a wide variety of entrepreneurial ventures. Legal issues include domestic and international protection of intellectual property, effect of assignments of intervention, non-compete clauses and non-disclosure agreements, equity rights of a founder who leaves, and tax and accounting consequences of a last-minute issuance of cheap stock.

Examines an Indian joint venture between a large U.S. telecommunications company and a small Indian software company, including a business and legal analysis of a joint-venture term sheet. Issues include extraterritorial application of U.S. antitrust and civil rights laws, protection for computer software afforded by Indian intellectual property and employment law, application of the U.S. Foreign Corrupt Practices Act, and circumstances under which a buyer of goods can stop payment on a letter of credit issued in favor of a seller that shipped nonconforming goods.