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Pacific Sunwear v. Oleas Enterprises (Cal. Ct. App. - Oct. 9, 2008)

By Shaun Martin

The things I don't know about the UCC could fill a book. A book roughly the size of, say, the UCC.

I know a decent amount about intellectual property (though much less than my wife), but did not realize until this morning that the UCC -- including California's version of it -- has a fairly strong default value that the seller warrants that the products are delivered free of any infringement claims.

And, in this opinion, Justice Irion makes this default warranty even more significant, holding that it extends even to unsuccessful claims of infringement -- indeed, even ones disposed on summary judgment. As long as there's a "nonfrivolous claim of infringement that has any significant and adverse effect on the buyer's ability to make use of the purchased goods" (e.g., will result in significant costs to defend a lawsuit), you're in trouble.

So beware.

Full post as published by California Appellate Report on October 09, 2008 (boomark / email).