Gramm-Leach-Bliley Act Compliance: Model Privacy Notice Form

Posted on November 25, 2009 by Ken Rathburn

Under the Gramm-Leach-Bliley Act (“GLB”), financial institutions are required to disclose their information-sharing practices to their customers and also to notify them of their right to opt out of certain practices. As amended by the Financial Services Regulatory Relief Act of 2006, GLB also requires that certain regulatory agencies develop a model privacy notice form. This form will assist consumers in comparing the different information and privacy practices of financial institutions by providing an inclusive form that is consistent across all institutions.

On November 17, 2009, the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Federal Trade Commission, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Office of Thrift Supervision, and the Securities and Exchange Commission jointly issued a final model privacy notice form under GLB. The final model privacy notice form comes in two versions: (1) a version containing opt-out language in a section titled “To limit our sharing,” and (2) a version without opt-out language.

 

By using the appropriate final model privacy notice form, financial institutions can comply with the GLB notice and disclosure requirements. Under the final rule promulgated by the regulatory agencies, use of the model form functions as a “safe harbor” such that any financial institution correctly using the appropriate model form will satisfy the notice and disclosure requirements.

 

While the model form provides a safe harbor, financial institutions can continue to use their own notice form so long as it complies with the final rule. If a financial institution elects to use the model form, that institution must determine whether or not their information-sharing practices necessitate the use of the opt-out model form. Accordingly, financial institutions should seek the advice of privacy personnel and legal counsel to determine if switching to the model form is the right decision for their business and, if so, which version applies.

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Mergers: Intellectual Property Considerations

Posted on November 17, 2009 by Sheena Little

The Sixth Circuit Court of Appeals recently addressed the effect of mergers and internal corporate restructuring on intellectual property licenses in a decision that has implications in drafting and interpreting license agreements as well as in advising entities who are considering whether to restructure or merge a corporate entity. 

In Cincom Systems, Inc. v. Novelis Corp., 6th Cir. No. 07-4142, 2009 WL 3048436 (6th Cir., Sept. 25, 2009), the Court considered whether an internal corporate merger resulted in an improper transfer of a copyright license. It determined that an internal merger may result in a transfer and that the transfer is improper unless it is expressly authorized by the licensor.

Cincom Systems granted Alcan a software license, which was “non-transferable” without Cincom’s prior written approval. Alcan, a wholly-owned subsidiary of a Canadian corporation, later created a separate corporation, Alcan Texas, and the two subsidiaries merged. The surviving corporation, Alcan Texas, simultaneously merged into itself and its three subsidiaries. After several name changes, the corporation became Novelis. None of the entities ever sought or received Cincom’s approval to continue to use the software license. In the resulting copyright infringement action, the district court granted summary judgment to Cincom, finding that the merger with Alcan Texas was an improper transfer of the software license under the Sixth Circuit’s decision in PPG Industries, Inc. v. Guardian Industries, Corp., 597 F.2d 1090 (6th Cir. 1979) (the “PPG” decision). The court awarded Cincom $460,000 in damages for the infringement.

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