As Tommy Callahan asks his customers in the high-brow ‘90s movie, Tommy Boy, “why would somebody put a guarantee on a box?” What does it mean and why it is useful? This post provides a high-level primer on commercial and consumer warranties on products.
The rapid adoption of Industry 4.0 technologies leaves manufacturers with a choice: accelerate with the market or be left behind. According to a 2019 Global Market Insights, Inc. report, the market for artificial intelligence in manufacturing will grow to $16 billion by 2025. Factors driving the adoption of Industry 4.0, the general name given to the deployment of cyber-physical systems, Internet-of-Things technologies and cognitive computing in the manufacturing environment, include:
- Reducing the cost of operations
- Enhancing operational efficiency
- Aligning operations with customer requirements
- Analyzing processes in real-time
- Scaling operations without intensive capital cost
On February 20, 2019, the United States Supreme Court heard oral arguments in the case Mission Products, Inc. v. Tempnology, LLC. The case has important implications for manufacturers and other parties to trademark licenses when a trademark licensor files, or threatens to file, bankruptcy. Lower courts including the First Circuit found that, in the event of a trademark licensor bankruptcy filing, the licensor may reject the trademark license, prevent the licensee from further use of the license, and leave the licensee with the sole remedy of filing a claim in the bankruptcy case. Other courts have disagreed with the effect of a trademark license rejection in bankruptcy, finding that a trademark licensee may retain certain rights following a licensor rejection. When the Supreme Court rules, the Tempnology case is slated to be a landmark decision both on the general issue of what rejection truly means in bankruptcy and on the specific issue of whether a trademark licensee’s rights can essentially be destroyed in a licensor bankruptcy case.
According to Black’s Law Dictionary (10th ed. 2014), indemnity is a “duty to make good any loss, damage, or liability incurred by another.” At its core, an indemnification is a promise to reimburse a person for a loss incurred by that person. Often, the obligation to indemnify is limited to third party claims. Further, there is typically a “defend” component to the indemnity that requires the indemnifying party to take over the defense of the claim on behalf of the indemnified party.
Among the most common disputes in the manufacturing industry are disputes over price changes. Most often, such disputes involve a supplier seeking higher prices from its customer. However, there also are instances in which a buyer seeks price reductions from its suppliers. These disputes can arise for many reasons, such as increases for raw materials or other costs, programs extending beyond original expectations, or simply through miscalculations in the initial quote. Whatever the cause, such disputes have existed for as long as the manufacturing supply chain itself. While many of these disputes are resolved amicably through commercial discussions, they have the potential to destroy long-standing relationships and cause significant disruption to the supply chain.