Five Stories That Matter in Michigan This Week – April 7, 2023

  1. Michigan Legislature Passes Amendment to Elliott-Larsen Civil Rights Act to Protect LGBTQ Rights

The Michigan Legislature recently passed an amendment to the state’s Elliot-Larsen Civil Rights Act (ELCRA) that explicitly includes protections against discrimination on the basis of sexual orientation, gender identity, or expression.

Why it Matters: Michigan entities covered by the ELCRA should ensure that their policies and practices protect against discrimination based on these amended protected categories.

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  1. 2023 April Business Education Series

During the April Business Education Series, Emmie Musser, senior portfolio marketing manager, ​TechSmith, will share what we learned and best practices to positively impact employee satisfaction, job attitude, productivity, and innovation.

Why it Matters: Not all meetings can or should be replaced, but identifying which ones can and how to replace them will offer your organization greater flexibility and productivity and more dedicated “think” time. Hosted at the Lansing Regional Chamber on Tuesday, April 11. Full details and to register.

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  1. Prominent Cannabis Brand Regains Control of Multiple Cannabis Stores Following Court Order

A recent court order has placed control of several cannabis stores back under Skymint’s leadership. In 2021, Skymint acquired competitor 3Fifteen Cannabis and its cannabis stores located across the state. Following reports of Skymint Brands being placed under receivership, 3Fifteen Cannabis challenged the company’s leadership and took back control of several of the stores that were acquired. However, a judge ruled that 3Fifteen Cannabis violated the receivership’s order and must relinquish control back to Skymint.

Why it Matters: The fact that Skymint’s assets were put into receivership is noteworthy, as state court receivership has become an alternative to bankruptcy for distressed cannabis companies. Because cannabis is still illegal at the federal level, companies can’t access federal bankruptcy to reorganize or liquidate.

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  1. How Copyrights Protect Your Business

Copyright is the exclusive legal protection that covers an original work of authorship. Copyrights vest upon creation of the work, which means placing the work onto a tangible medium (e.g., applying paint to a canvas or words to a screenplay).

Why it Matters: As noted above, copyrights vest upon creation of the work, even if it isn’t published. Similar to trademark law, it can be difficult to enforce your copyright if the work is not registered with the U.S. Copyright Office. Learn more.

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  1. Name, Image, Likeness Law for Student-Athletes in Michigan

The new law, which took effect December 31, 2022, set standards for how student-athletes can earn compensation for the use of their name, image, and likeness (“NIL”) in Michigan. The NCAA also has its own NIL policy, which took effect on July 1, 2021.

Why it Matters: It’s important that Michigan student-athletes, covered higher education institutions, and businesses ensure that NIL deals comply not only with NCAA rules and regulations, but also with the new standards that will apply in the State of Michigan. Learn more on the subject from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Business & Tax | Ed Castellani
Cannabis Law | Sean Gallagher
Intellectual Property | Jared Roberts
Higher Education | Ryan Kauffman

Five Stories That Matter in Michigan This Week – March 31, 2023

  1. Recent NLRB Decision Makes Unlawful the Proffer of a Severance Agreement with Standard “Confidentiality” and “Non-Disparagement” Provisions

The National Labor Relations Board overruled two prior decisions and held that an employer violates the National Labor Relations Act “when it proffers a severance agreement with provisions that would restrict employees’ exercise of their NLRA rights,” including agreements containing reasonably standard confidentiality-of-agreement and non-disparagement provisions.

Why it Matters: The typical “remedy” for a violation of this nature, and the remedy awarded in McLaren, is to “cease and desist” from proffering unlawful language in future severance agreements and post a notice of the immediate violation in prominent places in the employer’s facility.  Now that the new “rule” is announced, however, future remedies could include (a) rescission of the offending agreements; (b) notification of other employees who signed unlawful agreements (subject to the statutory 6-month limitations period) and other remedial orders. Learn more on the topic.

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  1. 2023 April Business Education Series

During the April Business Education Series, Emmie Musser, senior portfolio marketing manager, ​TechSmith, will share what we learned and best practices to positively impact employee satisfaction, job attitude, productivity, and innovation.

Why it Matters: Not all meetings can or should be replaced, but identifying which ones can and how to replace them will offer your organization greater flexibility and productivity and more dedicated “think” time. Hosted at the Lansing Regional Chamber on Tuesday, April 11. Full details and to register.

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  1. Michigan Right-to-Work Law Repealed

On March 24, 2023, Governor Whitmer signed into law a bill that repeals the state’s right to work law. The Michigan Senate approved a bill on March 14 to repeal the state’s right-to-work law that currently allows employees in unionized jobs to opt out of membership and paying dues. The Michigan House previously passed its own version of the bill.

Why it Matters: It’s time to review current collective bargaining agreements with labor law counsel to prepare for a post-right-to-work environment in Michigan. Employers should also be thinking about their approach to upcoming collective bargaining agreement negotiations in light of these developments.

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  1. How Copyrights Protect Your Business

Copyright is the exclusive legal protection that covers an original work of authorship. Copyrights vest upon creation of the work, which means placing the work onto a tangible medium (e.g., applying paint to a canvas or words to a screenplay).

Why it Matters: As noted above, copyrights vest upon creation of the work, even if it isn’t published. Similar to trademark law, it can be difficult to enforce your copyright if the work is not registered with the U.S. Copyright Office. Learn more.

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  1. $10 Million Microbusiness Loan Program Launched for Michigan Women, Entrepreneurs of Color

Michigan Women Forward recently announced the launch of a $10 million loan program for women and entrepreneurs of color. The Michigan Economic Opportunity Fund program offers funds to small business owners who may not qualify for more traditional loans.

Why it Matters: Small business startup and expansion is key to Michigan’s economic vitality. This program will help women entrepreneurs who identify as socially and economically disadvantaged due to a lack of access to capital and credit.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Business & Tax | Ed Castellani
Intellectual Property | Jared Roberts

Five Stories that Matter in Michigan This Week – March 24, 2023

  1. $10 Million Microbusiness Loan Program Launched for Michigan Women, Entrepreneurs of Color

Michigan Women Forward recently announced the launch of a $10 million loan program for women and entrepreneurs of color. The Michigan Economic Opportunity Fund program offers funds to small business owners who may not qualify for more traditional loans.

Why it Matters: Small business startup and expansion is key to Michigan’s economic vitality. This program will help women entrepreneurs who identify as socially and economically disadvantaged due to a lack of access to capital and credit.

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  1. Recent NLRB Decision Makes Unlawful the Proffer of a Severance Agreement With Standard “Confidentiality” and “Non-Disparagement” Provisions

In McLaren Macomb, 372 NLRB No. 58 (2023), the National Labor Relations Board overruled two prior decisions and held that an employer violates the National Labor Relations Act “when it proffers a severance agreement with provisions that would restrict employees’ exercise of their NLRA rights,” including agreements containing reasonably standard confidentiality-of-agreement and non-disparagement provisions.

Why it Matters: The typical “remedy” for a violation of this nature, and the remedy awarded in McLaren, is to “cease and desist” from proffering unlawful language in future severance agreements and post a notice of the immediate violation in prominent places in the employer’s facility.  Now that the new “rule” is announced, however, future remedies could include (a) rescission of the offending agreements; (b) notification of other employees who signed unlawful agreements (subject to the statutory 6-month limitations period) and other remedial orders. Contact your Fraser Trebilcock attorney.

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  1. Michigan Right-to-Work Law Likely to be Repealed Soon

The Michigan Senate approved a bill on March 14 to repeal the state’s right-to-work law that currently allows employees in unionized jobs to opt out of membership and paying dues. The Michigan House previously passed its own version of the bill. Governor Whitmer has indicated she will sign the final bill into law once it reaches her desk.

Why it Matters: It’s time to review current collective bargaining agreements with labor law counsel to prepare for a post-right-to-work environment in Michigan. Employers should also be thinking about their approach to upcoming collective bargaining agreement negotiations in light of these developments.

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  1. Michigan Cannabis Sales Hit $216 Million in February

Michigan cannabis sales surpassed $200 million in February, per recent data published by the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $206,378,444.08, which medical sales came in at $10,010,601.91.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market over-saturation that the industry is contending with.

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  1. How Trademarks Protect Your Business

Trademarks operate to distinguish your business, build consumer goodwill and solidify your reputation as a source for the goods or services. In most cases, a trademark is a distinctive word, phrase, logo or design that is associated with or applied to a category of goods or services.

Why it Matters: If you are in the business of providing goods or services, then it is strongly recommended that you consult with an intellectual property lawyer to get the best protection in a timely manner. Learn more.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Cannabis Law | Sean Gallagher
Intellectual Property | Jared Roberts

Five Stories that Matter in Michigan This Week – March 17, 2023

  1. Business Education Series – Teaching Leadership

Hosted at the Lansing Regional Chamber on Wednesday, March 22 at 10:00 to 11:30 a.m., the March Business Education Series will have Brain Town, founder and CEO of Michigan Creative, who will discuss how to inspire your staff to be the leaders they all have inside of them.

Why it Matters: Brian will also show you how to write core values that can guide your business and help form an unstoppable team. Attendees will learn how to write and use core values, leadership tips, and ways to inspire greatness. Business owners and leaders are encouraged to attend! Learn more.

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  1. How Patents Protect Your Business

A patent is a legal monopoly for protecting a utilitarian device, system, machine, composition or process. A patent owner has the right to prevent others from making, using, selling or importing a protected invention for a limited time.

Why it Matters: The U.S. is a “first-to-file” system, so it is imperative that an inventor keep the details of their invention confidential until a patent application has been filed. Also, timing is of the essence to prevent a competitor from winning the race to the Patent Office. Learn more.

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  1. Noteworthy Michigan Cannabis Brand Put into Receivership

Skymint Brands, a high-profile Michigan consumer cannabis brand, was placed into receivership on March 7. According to a lawsuit filed by Tropics, LP against Skymint’s parent company, Green Peak Industries, Inc., Tropics is owed more than $127 million in loans that are in default.

Why it Matters: While Michigan has experienced strong sales of recreational marijuana as a whole, prices per ounce have fallen significantly, making it difficult for many dispensaries to generate profits. The fact that Skymint’s assets were put into receivership is also noteworthy, as state court receivership has become an alternative to bankruptcy for distressed cannabis companies. Because cannabis is still illegal at the federal level, companies can’t access federal bankruptcy to reorganize or liquidate.

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  1. CRA Publishes February 2023 Data, Average Price Hovers Near All-Time Low

The Cannabis Regulatory Agency recently published its latest monthly data, showing that the average price for an ounce of cannabis is $86.00, an increase from the all-time low of $80.16 in January of this year.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices. Contact our cannabis law attorneys if you have any questions.

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  1. Ten Reasons You May Want to Consider a Family Cottage Succession Plan

The goal of cottage succession planning is to set up legal ground rules that provide the best chance to keep a cottage in the family for future generations.

Why it Matters: Here are a few reasons why you and/or your family may want to consider a family cottage succession plan. Prevents a joint owner from forcing the sale of the cottage through an action for partition, prevents transfer of an interest in the cottage outside the family, protects owners from creditor claims, and establishes a framework for making decisions affecting the cottage. See the complete list from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Intellectual Property | Jared Roberts
Cannabis Law | Sean Gallagher
Cottage Law | Mark Kellogg

Five Stories that Matter in Michigan This Week – March 10, 2023

  1. US Supreme Court Makes Clear that Highly Compensated Employees can be Eligible for Overtime Pay

In Helix Energy Solutions Group v. Helix, the U.S. Supreme Court ruled that highly compensated employees—in this case the employee at issue earned more than $200,000 per year—can be eligible for overtime pay if they are paid on a daily basis as opposed to a salary basis.

Why it Matters: Many employers mistakenly assume that highly compensated employees are not eligible for overtime pay. However, under the Fair Labor Standards Act, employees are exempt from overtime if they earn at least $107,432 per year on a salary basis (and perform executive, administrative, professional or outside sales work. Because the penalties for noncompliance can be steep, employers should consult with legal counsel to help ensure that their workers are classified and paid in accordance with state and federal guidelines.

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  1. How Copyrights Protect Your Business

Copyright is the exclusive legal protection that covers an original work of authorship. Copyrights vest upon creation of the work, which means placing the work onto a tangible medium (e.g., applying paint to a canvas or words to a screenplay).

Why it Matters: As noted above, copyrights vest upon creation of the work, even if it isn’t published. Similar to trademark law, it can be difficult to enforce your copyright if the work is not registered with the U.S. Copyright Office. Learn more.

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  1. Department of Labor Issues Guidance to Employers on Telework

On February 9, 2023, the U.S. Department of Labor (DOL) issued a Field Assistance Bulletin (Bulletin) addressing several questions related to compliance with the Fair Labor Standards Act (FLSA) and Family and Medical Leave Act (FMLA) when a business employs teleworkers.

Why it Matters: The Bulletin provides that the protections under the FLSA apply equally to employees who telework as to employees working at an office, factory, construction site, retail outlet, or any other worksite location. Learn more.

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  1. Business Education Series – Teaching Leadership

Hosted at the Lansing Regional Chamber, the March Business Education Series will have Brain Town, founder and CEO of Michigan Creative, who will discuss how to inspire your staff to be the leaders they all have inside of them.

Why it Matters: Brian will also show you how to write core values that can guide your business and help form an unstoppable team. Attendees will learn how to write and use core values, leadership tips, and ways to inspire greatness. Business owners and leaders are encouraged to attend! Learn more.

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  1. The Ins and Outs of Cottage Succession Planning in Michigan (Part Two)

A cottage plan is an agreement that describes how a cottage will be shared, managed and passed on to future generations of family members. Cottage plans typically cover a range of issues that can impede the succession of a cottage if left unaddressed.

Why it Matters: There are significant advantages to having a cottage plan that utilizes an LLC or trust structure. There is no single option that is best for all families, so it’s important to consult with an experienced cottage law attorney to determine what option is right for you. Learn more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | Aaron Davis

Intellectual Property | Jared Roberts

Cottage Law | Mark Kellogg

Five Stories that Matter in Michigan This Week – March 3, 2023

  1. DOL Issues Telework Guidance to Employers

On February 9, 2023, the U.S. Department of Labor (DOL) issued a Field Assistance Bulletin (Bulletin) addressing several questions related to compliance with the Fair Labor Standards Act (FLSA) and Family and Medical Leave Act (FMLA) when a business employs teleworkers.

Why it Matters: The Bulletin provides that the protections under the FLSA apply equally to employees who telework as to employees working at an office, factory, construction site, retail outlet, or any other worksite location. Learn more.

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  1. How Trademarks Protect Your Business

Trademarks operate to distinguish your business, build consumer goodwill and solidify your reputation as a source for the goods or services. In most cases, a trademark is a distinctive word, phrase, logo or design that is associated with or applied to a category of goods or services.

Why it Matters: If you are in the business of providing goods or services, then it is strongly recommended that you consult with an intellectual property lawyer to get the best protection in a timely manner. Learn more.

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  1. $35 Million in Grants Available for Small Nonprofits

The State of Michigan, Department of Labor and Economic Opportunity (LEO) and Michigan Nonprofit Association (MNA) have teamed up to help Michigan charities whose operations were impacted by the COVID-19 pandemic.

Why it Matters: Under this initiative, called the MI Nonprofit Relief Fund, grants in amounts between $5,000 and $25,000 will be awarded to selected entities with annual revenues total under $1 million. In addition, eligible entities must be based in Michigan and recognized by the IRS under Section 501(c)(3). Learn more.

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  1. Michigan Cannabis Sales Over $200 Million in January

Marijuana sales surpassed $200 million in January, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $196,008,634, while medical sales came in at $11,295,443.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market over-saturation that the industry is contending with.

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  1. The Ins and Outs of Cottage Succession Planning in Michigan (Part One)

When purchasing a cottage, it’s often the intent of the owner to pass the cottage on to future generations to enjoy. Unfortunately, that vision may not become a reality due to challenges such as high property taxes, differing objectives among heirs and resulting family disputes that result in the cottage being sold upon the owner’s death.

Why it Matters: Common issues that prevent the passing of a cottage to future generations in Michigan can be addressed through careful cottage succession planning. Learn more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | Aaron Davis
Intellectual Property | Jared Roberts
Business & Tax | Robert Burgee
Cannabis Law | Sean Gallagher
Cottage Law | Mark Kellogg

LegalZoom vs. a Lawyer for Protecting Intellectual Property

LegalZoom vs a Lawyer for Protecting Intellectual PropertyYou have already taken a step in the right direction by knowing that you need to protect your invention, brand or other original works with a patent, trademark, or copyright, respectively. But, what are the most cost effective, efficient and proactive steps to take when the time comes to protect your intellectual property? Over the last decade or so, a variety of online legal services have popped up, promoting themselves as easy-to-use and inexpensive when compared to a typical intellectual property attorney.

One of the most common and highly promoted online entities is LegalZoom. It purports that the party seeking protection, typically the owner of the intellectual property, may easily download the necessary paperwork based upon the menu items or checklist items selected within its website. LegalZoom advertises a base starting price of $99 that increases with nearly each selection you make on the website. Your documents are not reviewed by an attorney and you are responsible for completing and filing the items on your own.

With that low of an entry price point, it can be very tempting to “do it yourself” (DIY) instead of hiring a professional intellectual property attorney. As you may suspect – BUYER BEWARE! Costs can and often do increase wildly during the filing process – and there’s no one to help you guarantee that you’re filing the right forms, filling them out correctly, or even meeting the basic requirements of the U.S. Patent and Trademark Office or U.S. Copyright Office. Accordingly, we’ve put together three key things to consider before moving forward with a DIY approach to intellectual property protection.

Researching Trademark and Patent Needs

It can take hours to fully research which materials you need based upon the property you are trying to protect. This type of process is not typical for people outside of the legal profession, and although some websites will provide you with the documents they feel you need, the system is not foolproof. One key consideration when comparing LegalZoom vs. a lawyer is that an intellectual property attorney will know exactly what steps need to be completed for your specific situation, no matter how simple or complex.

It is important to note that the “complexities” do not lie solely in filling out the paperwork or checking the correct boxes on the LegalZoom website. Trademarks, for example, should broadly and accurately cover the goods and services that a company currently makes or plans to make within the next five years. Too often, trademark applications are prepared with a narrow or inaccurate scope regarding the goods and services of the company. This may result in less than intended coverage, which in turn may require that additional trademark applications be filed. Or worse, it may leave the door open for a competitor to usurp your mark for goods and services that should have been covered in your trademark application.

As for patent applications, it may seem like straightforward process to write up a description of your invention, add a few images to support your description, and file it using LegalZoom. However, the chance of a DIY patent application making it through the examination phase at the U.S. Patent and Trademark Office is virtually zero. On the off chance that the examination process is navigated successfully, the odds of that DIY patent actually becoming a valuable, enforceable asset are even closer to zero. Patents are documents that live for 20 years, they must be addressed to a variety of audiences, they must be written for a person of ordinary skill in the art, which is legalese that a DIY software program cannot explain, they must flow from general to specific, they should not contain absolute terms or non-working examples that could invalidate the patent, and they must include well drafted patent claims.

Patent claims are the heart and soul of a patent application. They provide the legal boundaries that define your invention, which means, if properly drafted, they provide a protected space that keeps competitors from designing around your invention.

Filing the Correct Paperwork

After you have found the documents you think you need to file, you now need to complete the proper paperwork. Each document needs to be completed correctly, and will be closely scrutinized upon receipt by the U.S. Patent and Trademark Office or US. Copyright Office. If there is ANY discrepancy, your request will be denied – often without any opportunity to remedy the alleged defects. If you are still so inclined, you will then need to repeat the process, including obtaining and completing the proper paperwork and paying more fees. An experienced intellectual property lawyer will guide you through the entire process, handle all the necessary paperwork and communication with the respective Office, and help you obtain strong and broad coverage for your intellectual property.

Potential Intellectual Property Liability in the Future

Assuming that you overcome the odds to have your patent or trademark application filed, examined and approved, the work is still not finished. A competitor may move to cancel your trademark or invalidate your patent, among many other tactics. At that time, having the correct items and a legal professional who knows your business is more critical than ever. In these stressful circumstances, it is much more beneficial to have an IP attorney who understands your business and product fully and one who can assist you from the beginning to avoid many potential pitfalls down the road. When considering a DIY entity such as LegalZoom, you should be extremely careful not to be taken in by the attractive entry costs because, in the end, you always get what you pay for. Your IP attorney will be able to counsel you about and through the process all while ensuring you are set up to succeed.

Although it may seem like a substantial cost savings in the beginning, your business and its intellectual property assets are too important to rely on the lowest bidder. If you’re considering LegalZoom vs. a lawyer, contact our attorneys now and we will provide you with an initial consultation to help you understand the importance of strong IP assets and how we can help your business be successful from its early beginnings to many years of successful growth.


business-legal-checklist

Business Legal Compliance Checklist

A critical overview of laws and regulations governing businesses of all sizes.

Download the Checklist

 

How Trademarks, Copyrights, and Patents Protect your Business

Trademark registration separate your business from your competition and make you unique.Your intellectual assets are some of the most powerful resources your business has. These assets separate your business from your competition and make you unique – as long as they are protected. Trademarks, copyrights, and patents are methods of protecting your intangibles while publicly providing notice to other businesses or individuals to avoid copying or infringing on your intellectual property rights. But when do you need these protections? How do you get them? And what are they for?

Trademarks

What is a trademark?

Trademarks are exclusive legal protections for names, logos, sounds, and even colors as applied to a category of goods or services. Federally registered trademarks may not be used by others without your permission. Trademark owners do have a legal obligation to police their marks and provide notice to anyone that may be inadvertently or willfully using the mark without permission. Trademarks can be renewed indefinitely as long as the owner can show proof that the mark has been continually used in commerce.

What is a trademark for?

Trademarks operate to distinguish your business, build consumer goodwill and solidify your reputation as a source for the goods or services. In most cases, a trademark is a distinctive word, phrase, logo or design that is associated with or applied to a category of goods or services. Trademarks should not be merely descriptive of the goods or services and generic terms are expressly banned from trademark protection (e.g., such as the term “Supermarket” as applied to a grocery store).

Trademarks must not be confusingly similar to another company’s mark otherwise the U.S. Trademark Office will reject the mark or the opposing owner may proactively move to cancel your mark. For example, the Nike name and Swoosh logo are federally registered trademarks. Trademarks may often be referred to as service marks when applied solely to services such as the NBC tri-tone sound or United Airline’s “Fly the Friendly Skies” slogan. If you are in the business of providing goods or services, then it is strongly recommended that you consult with an intellectual property lawyer to get the best protection in a timely manner.

How do I get a trademark?

For the most part, trademark rights vest upon usage of the mark in interstate commerce (e.g., across state lines). When you select a distinctive mark for your business, you are legally considered the owner of an unregistered trademark under common law trademark law (i.e., limited protections vis-à-vis a federally registered trademark). During this initial use and while your trademark application is being examined by the U.S. Trademark Office, you may use the ™ symbol to provide public notice that you are claiming ownership rights in the mark. The ™ symbol does not have any legal significance and is simply used as a public notification tool. Your ability to halt an infringing action, obtain an injunction or obtain money damages is limited when the mark is an unregistered trademark. Therefore, it is strongly recommended that you take the necessary steps to federally register your trademark with the U.S. Patent and Trademark Office. Once registered, you may use the ® symbol and be entitled to a full range of legal protections for your mark.

When should I get a trademark?

If you are consistently using a non-generic name, logo, or other symbol, you already have an unregistered trademark. This shows your customers that it is yours. To prevent another company from using the goodwill associated with your business – or, worse, tainting your business reputation with low-quality products – you should register your mark with the U.S. Patent and Trademark Office as soon as you have finalized the word, phrase, logo and/or design.

Copyright

What is copyright?

Copyright is the exclusive legal protection that covers an original work of authorship. Copyrights vest upon creation of the work, which means placing the work onto a tangible medium (e.g., applying paint to a canvas or words to a screenplay). Stated otherwise, a copyrighted work must be more than an idea – the idea of painting a scenic mountain is not protectable until one applies the paint to the canvas. A copyright owner holds to right to prevent others from copying, reproducing, displaying or making derivative works unless they expressly provide their permission for such use. A derivative work, for example, would be making a movie based on a book. Copyright protections are not indefinite; most protections last the length of the author’s life plus 70 years. For example, the author of the book Dracula died in 1912, so the copyright protection ended in 1982 and the work entered the public domain, which means it can be freely reproduced and distributed by anyone.

What is copyright for?

Original works are copyrightable materials. “Original” simply means that there must be some modicum of creativity that distinguishes the work from others. Books and e-books, magazine or newspaper articles, software, paintings, music, plays, some websites, and movies, among other things fall under purview of copyright protection. Historical and scientific facts, recipes, ideas, domain names, surnames, inventions, methods, and events are examples where copyright protection would not be appropriate; although some of these things may be protected under trademark or patent law.

How do I copyright my work?

As noted above, copyrights vest upon creation of the work, even if it isn’t published. Similar to trademark law, it can be difficult to enforce your copyright if the work is not registered with the U.S. Copyright Office. In most cases, a copyright application entails a downloadable form, a fee, and a copy of the work submitted to the U.S. Copyright Office. The review process takes about four months to possibly one year. Registering your work with the U.S. Copyright Office is definitely a good idea and it is recommended that you have an intellectual property attorney at least do a cursory review of your copyright application prior to submission. If your work is plagiarized, improperly displayed or illicitly distributed then having a registered copyright will strengthen your position in the event you decide to take legal action and file an infringement lawsuit.

Patent

What is a patent?

A patent is a legal monopoly for protecting a utilitarian device, system, machine, composition or process. A patent owner has the right to prevent others from making, using, selling or importing a protected invention for a limited time. Utility patents have a term of 20 years and design patents have a term of 14 years from the date of filing.

What is a patent for?

Design patents protect the aesthetic or ornamental, non-functional aspects of a utilitarian object. Utility patents protect useful devices, systems, machines, processes, and compositions of matter that, upon examination by the U.S. Patent and Trademark Office, are verifiably shown to be new and non-obvious. Almost any product, from Tupperware to iPhones to Vicodin, can be (and often are) patented.

How do I get a patent?

The initial process for obtaining a patent is to prepare and file a patent application with the U.S. Patent and Trademark Office. It is important to realize that a patent is powerful asset that must be written with a variety of audiences in mind (e.g., inventor, investor, licensor, patent examiner, judge, jury, etc.) while meeting a plethora of complex and sometimes arcane rules of the U.S. Patent and Trademark Office. Once a patent application has been filed, a patent examiner will perform a patentability search and determine whether the patent application meets the various standards such as novelty and non-obviousness. The patent owner may publicly assert that the invention is “patent pending” as soon as the U.S. Patent and Trademark Office provides a filing receipt, which typically takes a few minutes if the patent application is filed electronically. The U.S. Patent and Trademark Office has a stated goal of examining a patent application and providing a final disposition within about 36 months, but it is not uncommon for the examination process to take longer. If the patent application successfully makes it through the examination process, the U.S. Patent and Trademark Office will grant an official patent number and the owner will then have a legally enforceable asset.

When should I file a patent?

The U.S. is a “first-to-file” system, so it is imperative that an inventor keep the details of their invention confidential until a patent application has been filed. Also, timing is of the essence to prevent a competitor from winning the race to the Patent Office. The basic requirement to prepare and file a patent application is that the inventor must be able to describe, in sufficient detail, how to make and use the invention to one of “ordinary skill in the art,” which typically means a person versed in the industry to which the invention pertains. For example, technical and industry terms may not need to be defined if such terms are commonly known among those skilled in the art. Further, a prototype of the invention is not necessary nor does the U.S. Patent and Trademark Office required an inventor to perform a patentability search before filing. As soon as you have the aforementioned information, you should contact a registered patent attorney or agent to begin the process. Remember, confidentiality and timely filing are two primary keys to obtaining patent protection for your invention. In view of the complexities of the patent process, retaining an intellectual property lawyer is a vital step to obtaining strong patent protection in an efficient and timely manner.

Whether you are seeking trademark, patent or copyright protection, make sure to document the process carefully, and seek legal advice. The wrong protection or a badly conducted filing can make you vulnerable to legal loopholes or unnecessary rejections from the U.S. Patent and Trademark Office. With the right intellectual property protections in place, your business will be able to thrive and grow while keeping your competition at arms length.


business-legal-checklist

Business Legal Compliance Checklist

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Intellectual Property Due Diligence in Anticipation of a Sale or Purchase of an Organization

Intellectual Property LawIs your business anticipating an upcoming merger or acquisition?  If so, you will be facing a number of upcoming due diligence responsibilities such as, but not limited to, financial stability, asset valuation, contractual obligations, employee benefits arrangements, ownership rights, licenses, and numerous other matters.  However, one incredibly important due diligence item that cannot be forgotten is that involving intellectual property (IP).

IP due diligence generally takes the form of an inventory or audit to assess the quantity and the quality of IP assets owned by, or licensed to, a company, business, or individual. The due diligence process should also include an assessment of how IP is captured, protected, and owned by the business and an analysis of relevant competitors.

Typically, the due diligence process is carried out by a prospective purchaser in relation to the IP assets of a target business.  However, IP due diligence can also be carried out by a company on its own IP assets in preparation for a transaction, such as a business sale or a major licensing deal.

Below is a non-exhaustive list of the primary activities that should carried out during the IP due diligence process. As the process unfolds, it may be necessary to drill down into one or more of the assets, especially if the asset is related to a core technology of the business.

Document retention and proactive steps as viewed from the IP owner’s perspective:

  • Identify the key personnel and consultants who are in any way involved with the IP.
  • Create and maintain a list of all of the patents and patent applications in the U.S. and any foreign country or region.
  • Create and maintain a list of all of the trademarks and trademark applications in the U.S. and any foreign country or region.
  • Create and maintain a list of all domain names and registrations of the business.
  • Create and maintain a list of all copyright registrations and applications and includes a list of copyrightable material that has not yet been registered by the U.S. Copyright Office.
  • Create and maintain a list of all contracts and agreements relating to patents, trademarks, trade names, brand names, copyrights, inventions, processes, know-how, trade secrets, or other IP, including licenses, royalty agreements, confidentiality agreements, and other agreements or arrangements to which the business is a party relating to any IP of the business or of any other entity.
  • Using proprietary protections, create and maintain a list of all legal opinions and search reports.
  • Create and maintain a list of all software products and licenses produced by or acquired by the business, other than software used for word processing and other general office functions and administration. Obtain all public domain, open source, copyright or community source code materials used, or planned to be used.
  • Summarize all products and services sold or planned to be sold by the business. Such a summary should include the dates of first commercial sale for all products and services currently being sold as well as any future commercial launch dates.
  • Identify and list any security interests taken against any of the IP.
  • Identify any pending, threatened, or past challenges to the IP or right to use its IP and/or products and/or services.
  • Identify and list the main competitors in the US and elsewhere.

Typical review and analysis steps as viewed from the IP lawyer’s perspective:

  • Review any employment or other contracts for the key personnel and consultants to determine ownership, assignment obligations and fiduciary duties. Such a review may include employment and/or consulting agreements, including any agreements with prior employer(s), as applicable. Importantly, this review should also include agreements and communications between founders to ascertain any fiduciary obligations that may impact ownership of the IP.
  • For patents and patent applications, review and analyze the scope and strength thereof to include, but not limited to, ownership, licenses, and the prosecution history of each such patent and patent application.
  • Review the material trade secrets of the business vis-à-vis the patent portfolio.
  • For trademarks and trademark applications, review and analyze the commercial usage, mark strength, coverage and status, licenses, renewal documents, and the prosecution history of each such trademark or trademark application.
  • Compare domain names to trademark list to ensure continuity and proper association.
  • Perform at least a cursory review of all copyrights and copyright registrations of the business.
  • Review all contracts and agreements relating to patents, trademarks, trade names, brand names, copyrights, inventions, processes, know-how, trade secrets, or other IP, including licenses, royalty agreements, and other agreements or arrangements to which the business is a party relating to any IP of the business or of any other entity.
  • Review all legal opinions rendered on the IP of the business, such as, but not limited to, all patentability, freedom-to-operate, infringement, validity and registrability matters conducted or commissioned by the business or by another on behalf of the business.
  • Look at any software products produced by or acquired by the business, other than software used for word processing and other general office functions and administration. Obtain all public domain, open source, copyright or community source code materials used, or planned to be used, by the business.
  • Perform at least a cursory review of all software products and licenses.
  • Perform a comparative review of products and services sold or planning to be sold with the IP portfolio and ensure that IP protection adequately precedes commercial launch dates, trade shows, and advertisement campaigns.
  • Review any security interests taken against any of the IP.
  • Analyze the scope and relevance of any pending, threatened, or past challenges to the IP of or right to use its IP and/or products and/or services.
  • Perform a cursory review of the IP owned by the main competitors in the US and elsewhere for potential monetization opportunities and to better asses the valuation of the IP assets.

These issues provide a starting point for any business that is considering a merger or acquisition in the near future and beyond. If you have specific legal questions for your business with regard to the quantity and quality of your IP, we can help. Our attorneys are experienced in all aspects of intellectual property law and business law.

This blog serves solely as a general summary of complex intellectual property issues surrounding mergers and acquisitions.  It does not constitute legal guidance. Please contact us with any questions related to your company’s intellectual property or that involving a potential upcoming business sale or purchase.

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