Locating the Law
Contents
This paper takes the form of a client memorandum to two sister companies in crisis and examines how legal argumentation is shaped by the actors' goals, power relations and time horizons. Four interlinked scenarios – an ownership dispute over a core patent, the question of whether the company's IP portfolio can serve as credit security, an impending avoidance claim arising from a related-party transaction and a damages claim following a wrongly issued injunction subject to a fine – are treated not as isolated problems, but as communicating vessels in which an argument that strengthens the client in one context may at the same time undermine him in another.
The analysis moves across the entire register of business law. Under property law, it tests the difference between a retention of title clause and a contractual right of termination on the transfer of intellectual property rights in bankruptcy. The credit security question forces an examination of the integrated and hard-to-realise value of the IP portfolio, including an application of the UsedSoft criteria to the borderline between licence and sale. The avoidance question maps the bankruptcy administrator's broad toolbox and the brutal burden of proof under the gift rule in related-party transactions. The damages question untangles who owns the claim after an abandonment and the company law trap set by creditor protection. Throughout, both the substantive strength and the litigation risks that justify settlement over litigation are set out.
The contribution of the text lies in its reflexive conclusion. By showing how the same legal facts – the defects in the IP portfolio – are used as a sword against the bank, a shield against the bankruptcy administrator and a dead weight in the damages calculation, a valuation paradox is laid bare: in one context it is in the client's interest for the asset to appear worthless, in the next for it to appear invaluable, and both arguments are legally tenable. The business lawyer's task thereby emerges as something other than the judge's search for an objectively correct answer – it is not about establishing what the law is, but about identifying what can be asserted, and doing so with an honestly presented risk picture. The work thus positions the honest presentation of risk, including the arguments that tell against the client, not as a sign of weak advice but of strong advice.
