CK&E is attending Cosmoprof Asia in association with the California Trade Alliance (CTA). You can find John and Kim at the CTA’s California Pavilion, Hall 1E, Booth K4, adjacent to the USA Pavilion. John and Kim will be on hand at Cosmoprof to meet with and assist beauty industry participants. If you’re attending Cosmoprof Asia this year, please stop by and visit with them.
CK&E has represented companies in the beauty industry for more than 30 years. CK&E attorneys regularly attend trade shows servicing the beauty industry as a way to connect with clients and keep abreast of industry trends and developments.
If you are attending Cosmoprof Asia, please stop by the California Pavilion to meet John Conkle and Kim Sim, and let us know if you would like to attend the Happy Hour event to enjoy a delicious break from the usual trade show fare. The event hours are 3:30 – 5:30 pm, and the location is Hall 1E, Booth K4, the California Pavilion.
In Rennick v. O.P.T.I.O.N. Care, the Ninth Circuit Court of Appeal considered a party’s contention that a deal was struck when, after months of discussion and a 4-hour negotiating session, the parties “got up and circulated around the room and shook hands with each other on having made the deal.” The Rennick case observed that a jury could reasonably find that “the handshake was confirmation of a contract, or that it was an expression of friendship and the absence of ill will after a day of hard bargaining.” So, given the uncertainty of its meaning, should we stop shaking hands when discussing business? Of course not. Indeed, the Court noted that, “By custom, it is a rude insult to reject an outstretched hand in most circumstances, and to do so at the end of a long business meeting would likely prevent a future deal.”
The issue of the parties’ intent upon shaking hands is not a small one. In August 2014, Charles Wang, the owner of the New York Islanders was sued by a hedge fund manager who claimed that the parties had shaken hands on a deal to buy the NHA hockey team for $420 million, and that Wang had breached their agreement by demanding more money. The frustrated purchaser sued to either enforce an apparently unsigned 70-page agreement to conclude the sale of the team, or recover a $10 million break up fee that he claims was among the terms agreed upon with a handshake.
Courts struggle with this kind of issue, with or without handshakes. In contract disputes, courts try to enforce the parties’ expressed intentions. For example, where the parties clearly express that they do not intend to be bound until they sign a formal written contract, courts will try to honor that intention by finding that no contract exists unless a written agreement was fully signed. Indeed, negotiating parties usually can express almost any manner of requirement before an agreement becomes enforceable. Quentin Tarantino’s civil war era film Django Unchained featured a climactic scene in which the odious character Calvin Candie extorted Dr. King Schultz into signing an outrageous contract, and then insisted that the signed contract was meaningless unless Dr. Schultz also shook his hand. As a general point of law that was a doubtful proposition even in Mississippi in 1858, but if the parties had been careful to express that intention in their written agreement it probably would have been an enforceable prerequisite to the validity of the contract.
In reality, too often there is no such clear delineation. If the parties do not eliminate such possibilities by an express statement of their intentions, oral expressions or an exchange of emails or text messages might create an enforceable agreement. That is because, when the parties aren’t careful about expressing their intentions, courts are left to divine whether the parties intended an agreement with or without signatures on paper. Courts consider testimony about what was said and evidence of what was written and the activities that took place before, during and after the time of the purported agreement to draw conclusions about what the parties’ intentions really were. Often, the parties’ contemporaneous correspondence is the most important evidence of whether the parties intended to have a binding agreement immediately, or whether the parties intended only to express their good will or intention to negotiate further.
To avoid unnecessary disputes, a cautious businessperson should make a point to express clearly his or her intentions. The best approach is to plan ahead and be as clear as possible in a written expression as to when the deal is considered enforceable. The Conkle law firm counsels and represents businesses in negotiations to achieve those ends, or in disputes that can arise when the businesses handled negotiations themselves and come to Conkle, Kremer & Engel attorneys only after things did not turn out as intended.
With the increased consumer demand for natural and organic products, a growing number of companies in the beauty industry are drawing on biodiversity for its rich variety of native ingredients and as a way to differentiate their products. The use of exotic ingredients sourced from countries rich in biodiversity means that companies need to be aware of the Nagoya Protocol and the country-specific “Access and Benefit Sharing” laws and regulations that exist and are being enacted. The use of indigenous ingredients in hair care, skincare and cosmetics formulations – such as baobab oil extracted from the fruits of the baobab trees found across Africa or katafray bark extract from the katafray trees of Madagascar – may be a violation of the Nagoya Protocol if Access and Benefit Sharing requirements are not met.
The Nagoya Protocol is an international treaty focused on Access and Benefit-Sharing, which was adopted in 2010 by the United Nations’ Nagoya, Japan Convention on Biological Diversity. The Nagoya Protocol arose from the interest of national governments to conserve and promote sustainable use of their countries’ biodiversity and protect against commercial biopiracy. The purpose of the Nagoya Protocol is to support fair and equitable sharing of benefits arising from the utilization of genetic resources and associated traditional knowledge.
Generally, the Nagoya Protocol requires that access to a participating country’s genetic resources and associated traditional knowledge be subject to the “prior informed consent” of the party providing such resources. The Nagoya Protocol also requires the sharing of the benefits arising from the commercialization of genetic resources and associated traditional knowledge with the owners of biodiversity, including the local communities and the indigenous people, on “mutually agreed terms.”
The Nagoya Protocol itself establishes only international norms and a framework for Access and Benefit Sharing measures, and does not impose Access and Benefit Sharing laws itself. That is left to national legislation, and requires the contracting parties to implement their own Access and Benefit Sharing measures and to designate a competent national authority on ABS. Many countries, including Brazil, Chile, Colombia, Costa Rica and India, already have national enabling laws and regulations.
Personal care product companies in particular also should be aware that their marketing and advertising of the products as containing native ingredients or drawing on traditional knowledge could subject them to a claim of biopiracy by national governments, local communities, and even non-governmental organizations.
Although the United States is not a contracting party to the Convention on Biological Diversity or the Nagoya Protocol, companies in the United States whose products utilize genetic resources or traditional knowledge from a member state, or are sold in a member state, must comply with the access and benefit sharing requirements. It is imperative for companies to exercise due diligence to ensure that their raw material or ingredient suppliers have obtained prior informed consent for access to genetic resources or associated traditional knowledge used in their products, and mutually agreed terms for the sharing of benefits.
As a leader in providing legal services to the personal care products industry, CK&E can assist companies in instituting internal policies and procedures to help ensure compliance with the Nagoya Protocol. CK&E will continue to monitor and provide updates about developments in the Nagoya Protocol. The first meeting of the Conference of the Parties to the Nagoya Protocol will be held in October 2014 in Pyeongchang, South Korea, concurrently with the Conference of the Parties to the Convention on Biological Diversity.
Full text of the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization. The countries that have ratified or acceded to the Nagoya Protocol to date are:
IECSC Las Vegas is the country’s largest spa and wellness conference and expo, with more than 600 exhibitors, including manufacturers, distributors, spas and wellness centers, and thousands of professionals attending from the national and international spa and wellness market. In addition, this year’s IBS Las Vegas, a beauty show focused primarily on salon-only and professional-grade products, featured more than 350 exhibitors. Many of CK&E’s industry clients exhibited at both IECSC Las Vegas and IBS Las Vegas to widespread interest by show attendees. Both IECSC Las Vegas and IBS Las Vegas offer a unique opportunity for CK&E to meet and interact with clients as well as other professionals in the beauty industry, and stay on the inside track about the industry’s latest developments and trends. Kim was pleased to be able to catch up with BonBliss Beauty founders Elissa and Jay Choi.
CK&E’s next trade show attendance will be at Cosmoprof North America, one of the world’s top trade shows for the personal care products industry.