It is common place for there to be disputes between Franchisees and Franchisors. Often times, the dispute involves continued use of trademark licenses without paying royalties, claims of fraud involving financial information, and breach of contract or the franchise agreement. However, there is some measure of protection from the unhappy or disappointed with their purchase of a franchise or a franchise store. The franchisee often claims that the financial ;projections of the past performances of the franchise stores or operators.
There is often disagreement about what financial information was provided by the Franchisor and how much of it is mere puffery, opinion or an accurate reflection of the historical performance of different franchise stores. However, in a recent Ruling the Illinois Appellate Court for the First District provided a finding that allowed Ace Hardware to defeat the claims asserted by Avon Hardware. Avon Hardware asserted that Ace Hardware was liable for providing fraudulent or misleading sales and financial information to Avon Hardware.
Ace Hardware was found to have provided a variety of opinions and financial information to Avon Hardware, but was found to be not liable to Avon Hardware. The primary reason for the First District Court’s dismissal of the common law or statutory fraud was the inability to overcome the language in the parties’ Franchise Agreement cautioning about the financial and sales data and the opinions contained therein. The First District Court dismissal of the fraud claims were based on the Franchisees failure to plead and prove materiality and reasonable reliance on the Financial Sales and Data.
Thus, it is crucial for Franchisees to make sure that they verify sales projections and ensure that the Franchisor is required to provide audited financial and sales data. This will help curtail the risk of being provided unnecessarily inflated financial information and sales data. Moreover, it will help ensure that you do not have Buyer’s remorse. Of course, if you have any concerns or questions, then please contact us at http://www.vrplaw.com
The America Invents Act or the AIA changed our patent filing system from a First to Invent to a First to File system. However, it also introduced derivation proceedings into the United States Patent and Trademark Office (USPTO) or Patent Office process. This may still allow many First to Invent Applicants to establish superior patent rights by demostrating that that First to File Applicant derived his, her or its invention from the Second Applicant.
This concept is similar and analogous to a copyright holder’s right to derivative works. However, it is unclear what the scope of these patent derivation proceedings will be. In addition, will an applicant be able to create a presumption of derivation by showing reasonable access to his or her invention and substantial similarity? How will this impact the policy of permitting improvement patents that are not anticipated and nonobvious?
Can all improvements to a patented invention be challenged in derivation proceedings? What impact will this have on granting pioneering inventions greater protection? Will Courts still allow a broader or greater scope of protection in interpreting the claims of a pioneering patent? Will the Patent Office also in effect give broader or greater rights to a pioneering inventor in derivation proceedings?
We will just have to wait and see how the Patent Office and Courts interpret the changes brought about by the AIA. If you have any concerns or questions, then please contact us at http://www.vrplaw.com
Negotiating commercial agreements requires a certain combination of preparation, skill, art, anticipation, guess work and sometimes just dumb luck to ensure that you are able to come to terms that are satisfactory to both sides. If you push too hard and you ask for too much, then you are likely to meet stiff resistance and encounter more obstacles to working out a deal or reaching an agreement. Preparation is key in this respect, know the industry, know what is standard, know what you do not know, know the other side’s hot buttons and concerns, know your bottom line and know your risk tolerance, and lastly be creative–not everything has to be the same as it was before.
There are many ways to negotiate around and draft around concerns that both parties have. Foster an atmosphere of frank and open discussion about the issues that both sides are trying to manage. Understand when the other side is making a reasonable request. Make sure you are not being unreasonable, but do not be afraid to ask for what you want. A good negotiator and a contract draft can usually find a way to appease both sides. However, if the parties are not willing to discussing business points and openly air their concerns, then it is hard to identify the business driver for the negotiations. In this case, it is really hard for both sides to come to terms and agreement, because neither, sides are discussing the real obstacle to the deal.
While it is true that sometimes you may be able to get what you want, because the other party is lacking in sophistication, the reality is that anyone can play hide the ball or withhold information. It doesn’t take a genius to recognize when the other side is not being forthcoming or is being less than candid with you. Thus, it inherently leads to a scenario where the other side reacts and conducts him, her or itself in the same manner. Often times, the sophisticated party doesn’t realize that they have fell for the oldest trick in the book. No matter what concerns or risks you are trying to manage the more frank and candid you are the more likely that you are to bridge the gap and come to an agreement.
Often times, concerns surround legal ease or boiler plate that is outdated and unenforceable. In fact, sometimes the more you overreach the less protection the law and contract interpretation principles will award you. Many times, I have advised clients to just not worry about something that is unenforceable, but being a litigator it makes it easier for me to know what will work and withstand scrutiny by a Court. It is often better to just leave overreaching language in a contract, because you know it will give you grounds to invalidate the contract. However, there is a bit of art involved in this, because the language has to be interpreted by a court in the manner that you would like it to render it unenforceable.
I always suggest that if somebody is playing hardball take on hardball posture and allow them to feel like they have the upper hand and are getting some very tough language to protect their interests, but then pick certain issues that truly are risks that need to be managed and you can discuss frankly. In fact, you may get more than you should in certain areas, because the other party believe it has gotten everything it wants in areas that are truly not a concern for you. However, this requires careful preparation and a nuanced understanding of the law, the industry, and the clients risk tolerance.
If you have any concerns or questions about negotiating a commercial agreement, acquisition, divestiture, sale of your business or the purchase of your business, then please do not hesitate to contact us at http://www.chicagoacquisitionsattorneycom
So, you have been sued for copyright infringement, because you downloaded content from a website, blog, google scholar, or another source for your creative Work Product. Whether, you are talking about written articles, e-books, blog posts, videos, photographs, website architecture and content (Collectively “Works”), many of the issues from a copyright infringement perspective are the same. Many individuals make the mistake of thinking that because something is published on the internet that it is part of the Public Domain, and can be used by anyone. Quite simply, this is incorrect. Just because a Work is available or publicly accessible does not mean that it is not subject to a valid Copyright. You must still review it to determine if, the Work is copyrighted and if, you are using it in violation of the owner or author’s Copyrights.
First, you should look for a Copyright notice. Second, you should check the U.S. Copyright Office’s records. Third, you should determine how much of the Copyrighted Work you are actually using in creating your own Work. If the amount that you have appropriated is covered by the Copyright Registration, then you may very well still be liable for Copyright Infringement. If the material is covered by a Copyright you should review your own Work to see if, it is substantially similar to the original Work covered by the Copyright Registration. If your Work is substantially similar or uses the heart of the original Work, then you should check to see if, your Work qualifies for a defense or exception from infringement.
To determine if, your Work qualifies for an exception or defenses from infringement you need to compare your Work to the Original Work and see if, there is an applicable Fair Use, Parody, Innocent Infringer, or DMCA Safe Harbor defense. If not, then you may be liable for Copyright Infringement, which can be substantial and ongoing source of liability. Damages in a Copyright Infringement case can include statutory fees, attorneys’ fees, lost profits and/or reasonable royalties for the life of the Copyright or the author’s life plus seventy years. So, before you go to a website and copy a Work and expose yourself to a Copyright Infringement, Inducing Infringement, Contributory Infringement, Vicarious Infringement, or a Digital Millennium Copyright Infringement claim, consider investigating whether the Work is Copyrighted.
If you have any concerns or questions about enforcing your copyrights or defending against copyright infringement claims, then please feel free to contact our Copyright Attorneys or see our website at: http://www.vrplawgroup.com
Litigating patent infringement claims on behalf of Plaintiffs and Defendants requires a unique set of skills, and only some litigators understand what it takes. You have to understand the client’s technology, the background of the industry, how to read and interpret patent claims, how to read and understand prosecution history, litigation strategy, discovery and evidentiary rules, ability to use experts and patent monetization strategies.
In addition, often times, you are dealing with a variety of other attorneys, inventors, professionals and personalities. However, to be effective as a Lead Counsel, you must be able to understand the details and how they fit into your overall strategy for establishing infringement, non-infringement, invalidity, anticipation, obviousness, lack of enablement, undue experimentation, walker process counterclaims, antitrust counterclaims, indirect, contributory and/or vicarious patent infringement.
Many times, people have a difficult time dealing with experts, other attorneys or individuals that may believe that they know the technology, patent monetization strategy, prosecution history, or industry better than you do. You have to be willing to accept input where needed, but be willing to stand your ground where needed to make sure that you are able to develop a cohesive litigation strategy that helps your clients win.
It is a challenging process that requires you to learn new technology quickly, use inventors, prosecution attorneys and experts’ input where needed, but at the same time push back to ensure that the overall strategy is not disrupted by focusing on irrelevant subject matter. Patent litigation is a fun, but business driven necessity in our modern economy, and having the right patent litigation attorney represent you can be the difference between a winning and losing patent infringement suit.
Patents can be for several different inventions including, but not limited to machines, apparatus, and compositions of matter, computer software, designs, and much more. An invention can be patented, if, several conditions are met. Under 5 U.S.C. 101. Patentable Inventions are “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. The conditions of novelty and non-obvious subject matter are discussed in 35 U.S.C. 102-103.
Your invention must be novel. This means that you are the first to create the invention. Under 35 U.S.C. 102-103 novelty and other hurdles to acquiring patents are described in more detail The claimed invention must not have been patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention. The invention must not have been known or used by the public in the United States. A person is not entitled to obtain a patent for something derived from or invented by another person.
The invention must have non-obvious subject matter. 35 U.S.C. 103 describes what non-obvious subject matter is. If the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner, in which, the invention was made. In determining whether, an invention is obvious, the Supreme Court set forth the following considerations: (1) the scope and content of the prior art; (2) the level of ordinary skill in the art; and (3) the number of differences between the prior art and the claimed invention. Graham v. John Deere Company of Kansas City, 383 U.S. 1(1966).
Of course there are exceptions to every rule. There are more guidelines to take into account, as well. However, as long as you are the first inventor of the invention you can patent it. Should you choose to patent your invention or are considering patenting your invention a Patent Attorney should be your first step.
Many employers, plaintiffs, and their attorneys will be interested in a recent Ruling in the Crittenden v. Cook County Commission on Human Rights Ruling relating to punitive damages. A former employee sued for discrimination and sexual harassment under the Cook County Human Rights Ordinance and the Illinois Human Rights Act.
The Cook County Human Rights Commission (CCHRC) ruled in favor of the former employee and awarded lost wages, compensatory damages, punitive damages, costs, and attorneys’ fees. However, the Employer appealed the award of punitive damages. The Employer asserted that the Cook County Human Rights Ordinance (CCHRO) and the Illinois Human Rights Act (IHRA) do not explicitly authorize the CCHRC to award punitive damages.
Although it has long been understood that Title VII allows punitive damages, but with caps or limits based on the number of employees; there is no such analogous provision under the CCHRO or the IHRA. Thus, the Plaintiff or employee had to make a common law based claim for punitive damages. However, the CCHRC does not have such common law powers. The CCHRC’s administrative authority does not include the inherent common law powers of circuit or district court judges.
Consequently, the Employer was able to have the award of punitive damages stricken. If you have any concerns or questions, then please contact a Chicago business, corporate, or employment law attorney.
To find out more go to: Crittenden Opinion
In a recent, Seventh Circuit Case, the Eastland Music Group v. Lionsgate Entertainment, Summit Entertainment and Mandate Pictures, the Plaintiff’s alleged the use of the terms “50/50″ violated their registered and common law trademark rights to the use of the PHIFTY-50 mark for songs, rap music, movies and entertainment. However, there was no actual indication or allegations that the use of the terms “50/50″ was actually causing confusion as to the source of the origin for the movie. The Seventh Circuit stated the PHIFTY-50 mark is not the same in appearance as the “50/50″ mark. Although the marks sound the same, the Court, performed a cursory examination of the similarities of the marks and stopped with the lack of similarity in the appearance of the mark. The Court, found that the PHIFTY-50 mark is too weak and a descriptive mark, so that “50/50” mark could be used in a descriptive sense to describe that the main character had a “50/50” percent chance of surviving a surgery involving spinal cyst that had degenerated into cancer of the spine.
Moreover, the Court considered the fact that Wikipedia defined “50/50” as essentially, a fifty to fifty probability of some event occurs or eventuality actually happening. The Court went on to state that there were many third party users that used the terms “50/50” in a descriptive sense and there may be prior users of the mark. However, the Court did not perform an actual “prior user” or “failure to police” analysis. The prevalent of the use of the mark by third parties indicated that the mark was entitled to weaker protection. The Seventh Circuit ignored Second Circuit Case Law considering the constitutional concerns involving the Freedom of Speech, under the First Amendment, in analyzing infringement of descriptive marks. Instead, the Seventh Circuit found that Constitutional issues should not be the first issues to consider in a case. Thus, if a case or final judgment can be entered without considering of a constitutional issue at the pleadings stage, then the constitutional should not be considered as moot.
In this particular case, it appeared that although the Plaintiff alleged prior trademark rights, it would have been a junior user with respect to the other third party users. Moreover, the Supreme Court, precedent indicated that the use of a mark in the title of the intellectual property work can only, infringe the original author’s trademark rights, if, it indicates that the latter author is the origin for the work. This seems to crossover slightly, into the right of attribution in the original author’s copyrights. However, since the Right of Attribution must always be complied with and the title of the original copyrighted work must be cited and referenced; it is hard to imagine how there can be a potential likelihood of confusion? The mark must be placed far away from the actual reference or citation to the original author to engender some likelihood of confusion that may or may not be alleviated based on how close the citation is to the mark or the point of sale or purchase.
Moreover, the Seventh Circuit, seemed to focus on the cost and expense of trademark litigation in holding in light, of the small likelihood of actual confusion the Plaintiff’s had not asserted a trademark infringement claim and dismissed the case on a 12 (b) (6) motion to dismiss. It appeared that the Seventh Circuit seemed to be moving towards a Tomboy and/or Irbal or plausibility analysis for trademark infringement claims. We will see if, this trend continues and if, defense attorneys have a new tool in their arsenal to combat marginal trademark infringement claims.
If you have any concerns or questions on how to prosecute or defend a trademark infringement matter, then please feel free to contact us at http://www.vrplawgroup.com
One of the most practical ways that a business owner can grow his or her business and make it more attractive to investors is by creating an operations and/or process manual. This provides a method of creating knowledge transfer between the owner, employees, and anyone else that may be working for you. It is also a ready source of trade secrets and training materials for new employees. If you can write down what you know, then you have to spend less time revising it to improve on your processes, training replacement employees, identify potential areas of further research and development to develop additional products or services.
After you have taken the time to create an operations plan you can use it to tweak your business plan and corporate strategy. For example, are there processes that are prone to increase risk of liability, if so, then you can think about creating a subsidiary or another company to use to shield the less risky aspects of your business. Maybe, a general commercial liability or products liability insurance policy will effectively help you manage the risk of liability. The operations manual can be used to train new employees and protect against the risk of losing your employees to your competitors. Maybe, you are growing at a rate that exposes you to federal and state employment statutes, and it makes sense in investing in a good employment manual and human resource training program.
Moreover, once you have written down your operations manual not only can you identify areas of innovation, but also potential areas for developing your intellectual property portfolio. The Operations Manual can be the start of an IP development strategy to help create barriers to entry and increase the value of your business. You can develop not only trade secrets, but patents, trademarks, trade dress, and copyrights. In addition, you can identify customers that are generating a large portion of your revenues and try to cater to their need for your products or services. You can identify the traits of these customers that will allow you to find other similar customers to whom you can pitch your product or services.
These customers may also be good sources for strategic alliances and partnerships or some form long term supply or services agreements. Once, you identify who they are you can also develop product or service bundles and/or add on products or services. However, if you have not created a method of tracking who your customers are, then you cannot scale your business. If you have any concerns or questions about your business or corporate planning, then feel free to contact us.
Many trademark owners thinks that their job is done once, they have registered their trademarks. However, trademark law rewards individuals that decrease the costs for consumers to find and identify products and services that they are looking to acquire. In order to facilitate this policy and designation of a source of the quality and nature of the origin of the goods or services, the Lanham Act, the USPTO and Trademark Law protects the owners’ goodwill and marks. But, the failure to properly monitor the mark and ensure that the marks are still able to serve these purposes may lead to a forfeiture or abandonment of the mark.
One of the ways, a trademark owner can lose or abandon his mark, is by engaging in naked licensing. If you have very lax or non-existent methods for ensuring that licensees that are using the mark are not required to meet your level of quality of the goods or services, then you may not be fulfilling the purposes of having your mark serve as an indicator of source, origin and/or quality. If you have oral or implied licenses that do not require payment of royalties, then you may have difficulty enforcing your trademarks in the future.
You may be unable to count on your licensees use to establish continue commercial use of the mark to sell a product or service and may have gaps in your claimed years of use. This may impact your priority rights, your rights to renew, your ability to make a mark incontestable, to sue counterfeiters and cyber squatters and maintain your low customer acquisition costs. Unfortunately, the old adage that if you do not own it you lose it is accurate with respect to trademark law. Moreover, trademarks that are not controlled by their owners and licensees that are not monitored for how they use your trademarks can become more of a liability than an asset.
If you have any concerns or questions about your trademark rights, protecting your barriers to entry and low acquisition costs for consumers, then please feel free to contact a trademark attorney at VRP Law Group.
Registering a trademark or service mark is the easiest method of establishing nationwide trademark rights. You can register a mark under section 1(a) based on use in commerce or register it under section 1 (b) an intent to use, as long as, you have a good faith intent to use it in commerce. However, even if your intent to use application is allowed, you still will not obtain a certificate of registration without demonstrating commercial use of the mark. Typically, this requires the trademark owner to file an Affidavit of Use. Although you may be able to claim priority based on the date of filing for the intent to use application; you will not be afforded any registered trademark or service mark rights, until you have demonstrated a commercial use.
Consequently, the key for any trademark or service mark holder is the need to demonstrate and establish a commercial use of the mark. However, sporadic and token uses of a mark are not sufficient to establish or demonstrate commercial use. Moreover, you have to demonstrate commercial use of the mark in connection with the goods or services that you are looking to register them in. It is true that trademark law allows for expansion of the geographic zone and into related products or services. However, unless you have a specimen demonstrating commercial use of the trademark or service mark in connection with the goods or services that you are attempting to register the mark in; the trademark examiner is unlikely to allow you to register the mark.
Therefore, having a good understanding of what is required to demonstrate commercial use and the specimen requirement are crucial to establishing federal and nationwide trademark or service mark rights. Otherwise, the goodwill and value of your brand is likely to be ripped off or usurped by copy cats or individuals that are second comers to a market you have developed.
There are a variety of rules and regulations to understand about Succession Planning and Corporate Risk Management. Generally, you want to work with a team of bankers, lawyers, accountants, insurance and investment advisors. For example, it may make sense for the Business to take out a life or disability insurance policy for key employees. This will help you use the funds to acquire an interim or turnaround employee to assist during the key employee’s absence.
It may make sense for you to create a trust and transfer your stock or equity interest to the trust and retain a life time interest in the business or income stream from the business. It may make sense to avoid signing a personal guarantee on a commercial loan to avoid ruining a corporate risk management strategy. It may make sense for you to cash out and sell your business four to five years before your planned retirement date to try to get a higher multiple on the sale price or EBITA with a lower tax liability.
You may be able to create an IRA or an ERISA covered plan that helps protect your assets from judgment creditors. You may be able to take advantage of the Homestead exemption for your state to avoid a lien or judgment that has been entered against you or your business. It may make sense for you to separate different businesses or assets in multiple corporations or LLCs to reduce the risks associated with a high risk or high liability business or venture. However, you really need a good advisor at the helm that can keep the overall strategy in mind to make sure that the plans and strategies created by different advisors are working together to protect you and your assets.
If you have any concerns or questions about succession planning and corporate risk management practices, then please feel free to contact us.
Whether or not you know if you need a Novation or an Assignment Agreement can be the difference between a good risk management strategy that works versus an ineffective risk mitigation strategy. Often times, clients will ask me to assign their contracts, intellectual property, licenses, permits, employment agreements, vendor agreements, customer agreements, but rarely will they ask me for a Novation Agreement.
It seems everyone is aware of the need to transfer title or right to receive the benefits of a contract or agreement to the proper individual or entity via an Assignment Agreement. So long as, there are no restrictions against assignments or change in control provisions or notice and approval requirements for assignments, it is fairly routine to prepare and execute an Assignment Agreement and record it with the proper agency. This will ensure that the Assignee is entitled to continue to own title to the asset or rights to receive the benefits of a contract, and ensure that the proper individual or party is paid or receives the benefits.
However, the Assignment Agreement, even if it includes an indemnification provision (including the costs and fees of defending) does not protect the Assignor from claims by third parties to the contract, asset, intellectual property, customer agreement, vendor agreement, employment agreement, license, permit or anything else that is included in the Assignment Agreement. The Assignor and his, her or its assets are still subject to claims from these third parties. Thus, many Assignors fail to realize that he, she or it may not be as protected as the risk management strategy would lead them to believe.
Often, the protection of a corporation, limited partnerships, LLCs, S-Corps, or similar entities is lost by the Assignor and the personal assets of the individual are subject to claims by third parties. The best method for ensuring that Assignors are not going to continue to be liable to third parties under contracts, licenses, permits, employment agreements, customer agreements, vendor agreements, or for intellectual property that has been assigned is to make sure that you Novate the prior Agreement.
A Novation Agreement requires that the prior agreement with the Assignor is extinguished, but the agreement and the obligations under the prior agreement will now be assumed by the Assignee. Thus, the Assignor has to have the other party agree to Novate their Agreement with the Assignor and transfer the obligations of that agreement to the Assignee. This will ensure that the obligations along with the benefits are being transferred to the Assignee.
If you have any concerns or questions relating to these matters, then please feel free to contact us.
The common law tort of interference with contractual relationships claim is often ignored in deciding how to respond to a business partner, employee or a competitors’ actions. However, interference with contractual relationship claims stem from the common law tort claims for intentional interference with business relationships. This is a good tool to use when there are no written agreements with employees, business partners, vendors, or customers,…
Another option is interference with prospective economic advantage, which is a great tool to use when you were expecting a business opportunity or profit that was thwarted by a competitor, business partner, employee, vendor or customer. Often times, these business or contractual relationships torts can be utilized in place of or to supplement a written agreement. These business torts are a great way to recover lost profits, sales, or compensatory damages that a business owner or company may have lost due to a dispute with employees, business partners, shareholders, vendors or customers.
In situations, where non-competition agreements are non-existent or found to be unenforceable, business owners may be able to recover the same types of damages by using the: a) interference with contractual relationship; b) intentional interference with business relationship; and c) intentional interference with a prospective economic advantage torts. If you have any concerns or questions relating to how to handle the disruption of your business or operations, then please feel free to contact us.
In a recent, Seventh Circuit Opinion, the Court found that Title VII’s requirement that a charge be filed with the EEOC within 300 days of an adverse employment action was an affirmative defense akin to a Statute of Limitations. Based on this Ruling, the Seventh Circuit stated that it was improper for a trial judge to conduct an evidentiary hearing to determine if, the Employee had complied with the 300 day time limit.
Where a Plaintiff or Employee makes a jury demand the question of affirmative defenses, such as, Statutes of Limitations must be decided by a Jury. A trial judge may not decide the matter, even if, the trial judge conducts an evidentiary hearing to see if, the Plaintiff or Employee had complied with the 300 day time limit.
The Seventh Circuit pronounced that the Exhaustion of Administrative Remedies requirement for Prisoner Litigation Cases was not the same as the 300 day time limit. The Prisoner Litigation Act requires that an arbitration tribunal first consider the matter and issue a ruling. On the other hand, Title VII’s 300 day limit to file an administrative charge does not require an Arbitration Panel to rule on the allegations in the Charge before filing suit. It merely acts a time limit or a statute of limitations that an Employer can raise in defense of claims of discrimination and retaliation.
The implications are that now more Plaintiffs or Employees will be able to survive motions to dismiss based on the 300 day time limit and potentially even motions for summary judgment. This Ruling makes it harder for Employers to defend claims that may be time barred.
See: Belogi v. Home Depot