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The Law & Mediation Offices of Elizabeth Yang is a Los Angeles and Orange County based full service legal firm that specializes in intellectual property law (patent, trademark, copyright, licensing, prosecution and litigation), business law (entity formation, contract drafting, civil litigation), and family law (divorce, child custody, child support, alimony, paternity, asset division, pre-nuptials, post-nuptials, and mediation). 


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NEW TTAB DECISIONS REMIND OWNERS TO USE THEIR TRADEMARK ON THEIR WEBSITE CORRECTLY

December 13, 2012

The Trademark Trial and Appeal Board (TTAB) recently issued a decision that reminds all trademark owners it is crucial to properly use trademarks on their own websites to reinforce trademark importance. This decision emphasizes the importance of educating the individuals in an organization as to proper trademark use and reviewing all promotional materials to guarantee consistent use.


The decision of Wet Dog Media, Inc. v. Rodale, Inc. is rather expected: basically the Board found the applied-for trademark “WOMEN’S RUNNING” is too descriptive of the subject services to serve as a trademark. What is remarkable, however, is Applicant’s own website was the critical evidence cited in defeating its claim of trademark rights and in ruling that “WOMEN’S RUNNING” was not used in a trademark manner.


Particularly, the Board commented that Applicant’s use of “WOMEN’S RUNNING” on its website was descriptive, and not used as a trademark, because the words are “used alongside, in the same font, as other website ‘categories’” of information. At first, the Examining Attorney allowed Applicant’s claim of acquired distinctiveness in the descriptive mark but, after opposition by a competitor, Applicant’s own website came under inspection and was used as the source to defeat its claim of trademark rights.


The Board studied Applicant’s website and found WOMEN’S RUNNING was used in the same fashion and font as other descriptive headers such as “NUTRITION/WEIGHT LOSS”, “SITE MAP”, and “BEGINNERS”. The decision serves as an important lesson because, in obtaining trademark protection, all promotional materials should support a claim of trademark rights. Simply put, it is important to use a trademark in a conspicuous, distinctive manner, in a different stylization, font, and/or color than other wording on the website, to ensure viewers see the mark as indicating the source of your goods/services being promoted. It is also effective to use the ™ or ® in the vicinity to the mark, when appropriate.


If your trademark is appropriately displayed on your website, and in other marketing materials, it can help strengthen your rights in the mark and cultivate the image that is paramount to the value of your trademark. Ultimately, Rodale might not have been able to obtain a trademark registration for “WOMEN’S RUNNING”, it should not have been the Registrant’s own website that defeated its validity of trademark rights.

NEW GUIDELINES UNDER THE FIRST-TO-FILE SYSTEM

March 8, 2013

The implementation of the first-to-file system established by the America Invents Act (AIA) will take effect on March 16, 2013. On February 14, 2013, the United States Patent and Trademark Office published a series of guidelines to govern first-to-file patent procedures*. The implications resulting from these provisions will include restrictions to invention patentability. Listed below are some of the changes instated by the first-to-file system with regard to patent applications.


1) Priority of invention will be given to the first person to disclose the claimed invention (the patent application is due within a year from disclosure) or to file a patent application with the U.S. Patent and Trademark Office.


2) There will be increased restrictions to exceptions of disclosures made before the effective filing date. If the disclosures are made within a year of the claimed invention’s filing date, then only disclosures of the same inventive subject matter will be considered. Disclosures that are merely similar or linked to the inventive subject matter may not qualify for patentability.


3) All claimed inventions, both domestic and international, that are published, sold, patented, or publicized in a similar manner before the effective filing date will not qualify for patentability. This broadens the criteria for defining prior art and thus the threshold for patentability will be raised.


4) Obviousness will be established before the filing date under the first-to-file system. Previously under the first-to-invent system, obviousness was generally determined by the date of invention.


5) Once a patent application is bound to the provisions of the first-to-file system, the application and any subsequent matters (i.e.: continuation-in-part application or a non provisional application based on a provisional application) will always be subject to the provisions**.


Note: The information provided herein is for informational purposes only. All filing strategies in light of the new first-inventor-to-file provisions should be reviewed with counsel prior to implementation.


*The new first-to-file provisions apply to patent applications that have an effective filing date after March 15, 2013. An effective filing date under the AIA is defined as (1) the actual filing date of the patent or the application for the patent containing a claim to the invention; or (2) the filing date of the earlist application for which the patent or application is entitled, as to such invention, to a right of priority or the benefit of an earlier filing date under 35 U.S.C. § 119, 120, 121, or 365. 35 U.S.C. 100(i).


**AIA § 3(n)(1)-(2).

FAMOUS SHOW HOST ADAM CAROLLA FACES BACK-TO-BACK LAWSUIT FOR PODCAST NETWORK

March 30, 2013

Famous comedian, television host, radio personality and actor, Adam Carolla, now faces two lawsuits for his iTunes podcast network, ACE Broadcasting Network. The production company creates top-charting podcasts including Ace on the House, the Adam & Dr. Drew Show, and the Adam Carolla Show.


On January 17 2013, Carolla’s former business partners and friends, Donny Misraje, Kathee Schneider-Misraje and Sandy Ganz, filed a lawsuit against Carolla for eleven claims in total, including: breach of partnership agreement, breach of fiduciary duty, breach of employment contract, violation of labor code, and violation of the business and professions code. Carolla’s former business partners argue that Carolla broke their partnership agreement and failed to pay them for the work they invested and compensation before they were let go from the company in 2011.


The former employees of Carolla contend that their relationship ended after they sought to enforce their rights to equal decision making for the company. In the same week, Carolla faces another lawsuit, only this time for patent infringement. Personal Audio, LLC, a patent licensing company, has filed suit against three podcast networks for patent infringement related to podcasting. This lawsuit comes in the wake of a successful jury verdict won by Personal Audio against Apple in Texas for infringing the patent playlist technology. The verdict for Personal Audio resulted in an $8 million judgment plus $4 million in interest. Personal Audio now seeks to go after the heavy-hitters of the podcast world including ACE Broadcasting Network, HowStuffWorks.com and TogiEntertainment.


Personal Audio claims to own the rights to the technology that enables podcasting back in 1996. The company describes Patent 8,112,504 as a “system for disseminating media content representing episodes in a serialized sequence.” The company states it was originally invented in an effort to develop a personal, portable audio system that would offer a customizable listening experience.


Although Personal Audio may have a valid claim, an obstacle the company must overcome is the fact that the patent was not issued until 2012 yet podcast technology has been available since 2001. The company assures that it has a “precursor to podcasting,” filed in in 1996, which led to this patent. If Personal Audio succeeds in its claim for patent infringement, this lawsuit could have a profound impact on the availability of podcasts and other media content to the public through iTunes and similar outlets.

SUPREME COURT TO DECIDE ON PATENTABILITY OF HUMAN GENES IN THE MYRIAD GENETICS LAWSUIT

April 16, 2013

Should researchers and scientists be able to claim human DNA as their intellectual property? That is the question the U.S. Supreme Court must now decide after hearing oral arguments yesterday. Robert Barnes of the Washington Post reported that the Justices expressed trepidation as they listened to the parties’ explanations of patent law and the complexities of biochemistry.


The overriding hesitation by the Supreme Court may be due to the fact that this decision has the potential to shape the future of medical and genetic research as well as the potential to have profound impact on pharmaceuticals and genetically modified crops.


A coalition of researchers, genetic counselors, cancer survivors, breast cancer support groups, and scientific associations filed suit in 2009 against Myriad Genetics, a Utah biotechnology company, challenging the company’s patent of genes BRCA1 and BRCA2. Myriad discovered and isolated the two genes, BRCA 1 and BRCA 2, which are highly associated with hereditary breast and ovarian cancer. Myriad patented its discovery and the company now has a 20-year monopoly over the use, research, diagnostics and treatment of the genes.


The general rule for registering for a patent with the USPTO is that the discovery or idea cannot be a product of nature or a law of nature. No matter how difficult or costly the discovery, a product of nature is immune to patents. However, the USPTO has granted patents on at least 4,000 human genes to companies, universities and researchers who have discovered and decoded them.


Despite the large number of patents for human genes, much of the medical profession do not favor patents on DNA. The group of researchers and scientists who filed the lawsuit claim that Myriad’s patents claim rights to genes, which are a product of nature and therefore are not patentable. Opponents also contend that patents, such as Myriad’s patents for BRCA1 and BRCA2, improperly put constraints on medical research and diagnostic testing. They see patents for genes as an attempt to monopolize and block future exploration in the field of genetics and personalized medicine.


Myriad, on the other hand, supports the patents in arguing that the company has isolated these specific genes and thus they are a product of human ingenuity, not nature. Myriad’s lawyer, Gregory Castanias, claims without “the incentives offered by a strong and stable intellectual property system,” companies like Myriad may not receive the capital and support necessary to evelop new treatments and introduce them to the medical field. One possible resolution to the debate is to look to see how other countries handle the issue. Most countries grant patents on genes but with specific exceptions to them, allowing researchers and diagnostic developers to use the genes freely.


Although this seems like a basic and logical solution, the process would be arduous for the Supreme Court, as they would have to enlist the help of Congress to change the current Patent Laws. The Supreme Court’s decision will also determine the effect of patenting human DNA and generics has on scientific research and its patients. Even the Justices verbalized the heavy burden of the decision on Monday. In questioning whether the Court had to immediately decide on this issue, Justice Samuel A. Alito Jr. appropriately framed the question, “Why should we jump in … and decide the broadest question possible?”

ICANN’S NEW GENERIC TOP-LEVEL DOMAIN (GTLD) PROGRAM WILL AFFECT ONLINE INTELLECTUAL PROPERTY PROTECTION

May 15, 2013

The Internet Corporation for Assigned Names and Numbers (ICANN) announced last June their decision to expand internet domain space through the new generic Top-Level Domain (new gTLD) program. The program will allow for potential domain owners to create their own top level internet domain name which constitutes the “.com” part of a web address. While domain names typically consist of Latin characters, ICANN will also allow for non-Latin characters such as Arabic, Spanish, Chinese, and other approved languages.


The new gTLD program seeks to increase consumer motility and stabilize internet usage by stimulating competition among registry service providers. To this date, the application process has garnered almost 2000 application submissions. Business organizations such as Google have already applied for multiple domain names such as .google, .youtube, and .lol.


Despite the high number of applications, the intellectual property community has raised several points of concern over ICANN’s new proposal. The initial cost of application for a new Web suffix is $185,000 in addition to $25,000 per year for a decade to maintain rights to that domain. The financial criteria for domain ownership will by itself significantly slim down the pool of potential gTLD applicants.

Furthermore, trademark holders are concerned that new domain names may directly infringe on their intellectual property rights and create unwanted advertisements or associations to their products. Trademark holders argue that the new gTLD program will force those who want to protect their intellectual property to buy up expensive domain names, a precaution that is financially taxing and practically unfeasible for everyone.


However, ICANN has offered an alternative solution to this. The establishment of the Trademark Clearinghouse (TMCH), effective March 26, 2013, will provide trademark protection for any trademark holder, individual, or company who registers with the system. The TMCH was built into the new gTLD program to centralize and monitor all registered trademarks so no violations would occur. The TMCH will act to prevent trademark violations from occurring in a systemized and coordinated way, but it will also come with a cost. Each trademark registration with Clearinghouse will cost anywhere from $95 to $150 a year.


ICANN is a nonprofit private organization based in Los Angeles that was formed to oversee and manage internet related responsibilities coordinated originally by US Government entities. ICANN’s areas of management include Domain Name System (DNS), Internet Protocol (IP) addresses, space allocation, protocol identifier assignment, generic (gTLD) and country code (ccTLD) Top-Level Domain name system management, and root server system management functions.

SUPREME COURT DENIES PATENT FOR HUMAN GENES

June 17, 2013

In a unanimous ruling on June 13, 2013, the U.S. Supreme Court held that human genes are not patentable…or at least not natural human genes. Although all nine Justices said that naturally occurring isolated biological material is not patentable, their ruling was still a compromise by allowing for the possibility of a patent on the synthetic version of the gene material.


In 2009, a coalition of researchers, genetic counselors, cancer survivors, breast cancer support groups and scientific associations filed suit against Myriad Genetics, a Utah biotechnology company, challenging the company’s patent of genes BRCA1 and BRCA2. Myriad discovered and isolated the two genes, BRCA 1 and BRCA 2, which are highly associated with hereditary breast and ovarian cancer.


Myriad patented its discovery, allowing the company a monopoly over the use, research, diagnostics and treatment of the genes. Myriad was also the only company that could perform tests for potential abnormalities. In April 2013, the Supreme Court began the trial on whether researchers and scientists are able to claim human DNA as their intellectual property.


Specifically, the issue focused on whether “products of nature” can be treated the same as “human-made” inventions in order for the individuals and companies who have isolated the specific genes to have the exclusive intellectual property rights to these genes.

The Supreme Court found that Myriad did not create or invent anything for purposes of patent law. “Myriad did not create or alter any of the genetic information encoded in the BRCA1 and BRCA2 genes,” Justice Clarence Thomas said in writing for the Court. “[Myriad] found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention,” Justice Thomas further clarified.


In the ruling, the Supreme Court also supported the Obama administration position that although DNA is not patentable by itself, Complementary DNA, or “cDNA” can be. Complementary DNA is artificially synthesized from the genetic template and engineered to produce gene clones. Justice Thomas claimed, “cDNA does not present the same obstacles to patentability as naturally occurring, isolated DNA segments.”


This compromised ruling does not come as a shock to the public since the Justices ave previously expressed their hesitancy to allow for patents on human genes and the profound impact it would have on pharmaceuticals and genetically modified crops. However, one surprise in the ruling was that all but one Justice signed off on the ruling.

Instead, Justice Anton Scalia wrote a separate opinion agreeing with all parts of the opinion except Part I-A, the paragraph that describes what genes are, what they do and how they’re created. Scalia wrote, “I am unable to affirm those details on my own knowledge or even my own belief.”


Regardless of Scalia’s understanding or belief of genes, this ruling has already had a major impact on the medical community. Immediately after the ruling, at least three companies and two university labs said that they would now begin offering genetic testing in the field of breast cancer. Along with companies having the ability to offer genetic testing, the costs of these tests are also expected to fall for patients.

Dr. Harry Ostrer, a professor at Albert Einstein College of Medicine and director of genetic and genomic testing at Montefiore Medical Center in New York said, “I’m thrilled. We can offer BRCA 1 and 2 testing to low-income women without concerns about how it will be paid for.” Furthermore, scientists will be able to research the BRCA genes without fear of being sued.


Even Myriad found solace in the ruling. Peter D. Meldrum, president and chief executive officer of Myriad, said the company believed the court “appropriately upheld our claims on cDNA.” He also stated that the ruling “underscored the patent eligibility of our method claims, ensuring strong intellectual property protection for our BRACAnalysis test moving forward.”

ASIAN-AMERICAN BAND FIGHTS TO TRADEMARK NAME ‘THE SLANTS’

October 20, 2013

An Asian-American rock band, “The Slants,” is preparing to take their fight to patent their name to the federal circuit court, after already having been denied for the past four years on the grounds that the group name is ostensibly a disparaging racial slur.

The Slants argue that the term itself has various different connotations aside from race, and to deny them this trademark is to violate their First Amendment rights.


Click here to read more about the battle between this Asian-American rock band and the United States Patent and Trademark Office: http://www.npr.org/sections/codeswitch/2013/10/20/236235813/asian-american-band-fights-to-trademark-name-the-slants 

APPLE HEADS TO TRIAL WITH INVENTOR OVER SMARTPHONE PATENT

November 12, 2013

Seventy-year-old Richard L. Ditzik, owner of NetAirus Technologies LLC, takes Apple Inc. to trial over a patent that covers a popular smartphone feature, the cellular network. Apple Inc. argues that since Ditzik’s original patent was changed to include technology that Ditzik did not discover until after filing the application, the patent is not valid.


Click here to read more about the world’s most valuable technology company, and its patent dispute over iPhone’s features: https://www.bloomberg.com/news/articles/2013-11-12/apple-heads-to-trial-with-inventor-over-smartphone-patent

GOOGLE’S BOOK-SCANNING IS FAIR USE, JUDGE RULES IN LANDMARK COPYRIGHT CASE

November 14, 2013

Federal Judge Denny Chin declares that Google Books, which digitizes complete copies of books without an author’s permission, is absolutely legal, thereby putting an end to this 8-year-old legal battle. Chin declares that Google not only meets the four legal factors for fair use defense to copyright infringement, but also benefits society by making more books accessible.


Click here to read more about the Google Books legal battle, as well as what opponents of the decision are saying: https://www.wired.com/2013/11/google-2/ 

THE IMPACT OF TRADEMARK BULLYING

December 10, 2013

Trademark law protects a trademark owner’s exclusive right to use a trademark when use of a mark by another party would be likely to cause consumer confusion as to the source or origin of goods. To establish a violation of the Lanham Act for either a registered mark, the plaintiff must demonstrate that: (1) He has a valid and legally protectable mark; (2) He owns the mark; and (3) The defendant’s use of the mark to identify goods or services causes a likelihood of confusion.


As a trademark opposition attorney, I have first-hand knowledge of trademark bullying tactics that are designed to outspend and harass small business trademark applicants into abandoning their trademark application.


The practice also spills into federal court actions for trademark infringement, cybersquatting, and other related matters. This litigation tactic is becoming increasingly popular and has long-lasting, harmful effects.


As part of the Trademark Technical and Conforming Amendment Act of 2010, Congress instructed the United States Patent and Trademark Office (USPTO) to take the unusual step to address this issue by sending out a trademark bullying survey to trademark attorneys, small business owners, and interested parties to determine whether they had been the victims of trademark bullying. The survey invited respondents to share their experiences with trademark litigation tactics, “especially those that may involve an attempt to enforce trademark rights beyond a reasonable interpretation of the scope of the rights granted to trademark owners.”


Solicited examples of trademark litigation bullying tactics included: abuses of trademark, cease and desist letters, domain name cease and desist letters, trademark opposition proceedings, trademark cancellation proceedings, and other trademark-related matters that have adversely impacted the respondents, their clients, and/or businesses.


The resulting Report to Congress, Trademark Litigation Tactics and Federal Government Services to Protect Trademark and Prevent Counterfeiting, highlighted some important responses. Approximately 60% of respondents viewed trademark bullying as a substantial problem. A majority of respondents stated that Congress has a responsibility to discourage or prevent aggressive trademark litigation tactics. Many respondents also encouraged the Trademark Trial and Appeal Board (TTAB) to amend its rules to create and enforce tough sanctions against such behavior in trademark opposition proceedings.


A petition for cancellation of a U.S. trademark registration is available to any party who believes that an already existing federal trademark registration should not be allowed to remain an active registration due to a variety of grounds. However, trademark bullies who initiate proceedings against parties should be aware that their tactics have caught the attention of Congress and the USPTO. Soon, trademark bullies may find that their aggressive litigation strategies don’t pack as much punch to trademark attorneys, small business owners, and interested parties.

HOW SMALL BUSINESSES CAN FIGHT OFF KNOCK-OFFS WITH INTELLECTUAL PROPERTY RIGHTS

February 5, 2014

The International Organization for Standardization (ISO) released a report earlier this year detailing the continual rise in counterfeiting, which has become a big business that can be detrimental to small businesses and consumers.


Counterfeiting reaches a diverse array of industries including, but not limited to, food, drinks, currency, apparel, pharmaceuticals, electronics, automobile parts, cigarettes, toys, toiletries, and building materials. Counterfeiters work by copying a design and sell a cheaper version of the product, or simply put another brand’s logo or name onto their goods.


Not only is nearly every area of industry adversely affected by counterfeiting, but the illegal trade is projected to cost legitimate companies worldwide $500-700 billion every year.


The International Chamber of Commerce (ICC) predicts that by 2015, counterfeit goods will be valued over $1.7 trillion internationally, which is more than 2% of the world’s economic output now. These numbers indicate the exorbitant threat counterfeiting poses to the shelf life of a company, let alone a small business. Low turnover, stolen intellectual property, expensive lawsuits and increased prices are just a few examples of the impact knock-offs have on businesses.


Because small businesses typically lack the same pool of resources that larger companies have to battle counterfeiting, their success is open to more damage, especially in the long run. What small businesses can do is to invest in and utilize their intellectual property rights. A recent article in Forbes listed “not getting a patent, copyright or trademark” as one of the top ten legal mistakes small businesses make. However, small businesses that obtain the types intellectual property pertinent to their product take a significant step in protecting and expanding their profitability.


Small businesses can also maintain the security afforded by intellectual property rights by keeping an eye out for counterfeits and reporting infringements. For example, business owners can browse for knock-offs in online marketplaces and auctions, and report counterfeits directly to them or to law enforcement authorities. STOPfakes.gov is a federal website that provides a wide range of intellectual property tools and information. Intellectual property owners can record their marks and copyrights using an online tool by the U.S. Customs and Border Protection in order to help the agency prevent infringements from crossing into U.S. borders. The help of a quality legal team can serve in protecting, and should the occasion arise, enforcing valuable patents, trademarks, and copyrights.

PATENT LITIGATION PITFALLS

May 31, 2014

For years, patent holders have utilized the strategy of suing on patent infringement claims as a means of profitability. However, recent trends in court rulings and proceedings have demonstrated that in the fast-growing technology sector, patent litigation may not be worth the time, effort and costs.


One such case involves technology conglomerates Apple Inc. and Samsung Electronics Co. In 2011, Apple filed a patent infringement claim against Samsung, alleging that a range of Samsung’s products including the Nexus S, Epic 4G, Galaxy S 4G, and the Samsung Galaxy Tab had infringed on seven of Apple’s design and utility patents.


Overturning Rulings

Since then, both companies have been embroiled in litigation in locations ranging from California to South Korean Courts, which has demanded vast amounts of resources from both sides. Finally after eight months, a verdict was reached. On August 24, 2012, a jury trial awarded Apple $1.05 billion in damages. The jury found that Samsung was guilty of violating six of seven Apple patents including the iPhone’s “Bounce-Back Effect” (US Patent No. 7,469,381) and “Tap to Zoom” (US Patent No. 7,864,163) features. However, Apple’s legal victory was short-lived. Since the ruling, Apple has been plagued with technical and legal setbacks. Judge Lucy H. Koh overturned the jury verdict by reducing damages and ordering a retrial. The United States Patent and Trademark Office (USPTO) has even gone as far to invalidate some of Apple’s patents.


So the question remains, is patent litigation worth the cost? It seems that the Apple v. Samsung case reveals that patent holders should be wary of the pitfalls in pursuing litigation. Even if the patent holder receives a ruling in its favor, the ruling is still subject to being altered or overturned on appeal. Hence, while the patent holder may have won one leg of the legal battle, the opposition still has opportunity to make the victory short-lived. In the case of Samsung v. Apple, while Apple won the jury verdict back in 2012, Judge Lucy H. Koh overturned the judgment by November 2013 and reduced damages awarded to Apple by $450.5 million. Judge Koh further ordered a retrial to recalculate further damages, drawing out the already lengthy trial to an uncertain deadline.


Moderate Damages Award

In addition, patent litigation may even result in a reverse effect. Patent holders who overvalue their patents and sue for a significant amount might end up empty handed by the end of the court process. When Google’s Motorola Mobility unit sued Microsoft, it alleged that Microsoft had infringed on its patents and demanded $4 billion in royalties for violating Motorola’s intellectual property relating to wireless communication and video compression. However, Motorola was severely disappointed when the results of the litigation backfired. U.S. District Court Judge James Robart ruled that Microsoft should pay Motorola only $1.8 million a year in patent royalties, a small fraction of what Motorola demanded originally.


This example is a classic case of patent holders overvaluing their patents and deciding to pursue lengthy and costly patent litigation in belief of receiving high monetary award. But Motorola’s case against Microsoft serves as an example that patent litigation may no longer be a profitable strategy. This case set precedence on the guidelines to patent valuation and it appears the Courts are quashing patent holders’ dreams of high profitability by only awarding a moderate amount.


The Effect of Technological Advances

Another difficulty in patent litigation is that patent holders cannot foresee certain external factors that can affect the outcome of the case. Recently, the USPTO in a final action notification invalidated one of Apple’s patents that Apple had sued Samsung for violating. The USPTO invalidated Apple’s “over-scroll bounce” patent in 2013 and previously, invalidated Apple’s “pinch-to-zoom feature.” This ebb and flow of external developments are bound to the verdict of the Apple v. Samsung trial. The case might be opened again after a final verdict or additional retrials might be resigned, once again drawing out the legal process.


Additionally, the courts are struggling to have patent litigation keep pace with the rapid growth of technology. Even if a patent holder wins a legal victory, the impact of that verdict may be diluted or rendered obsolete by the time trial ends. In the case of Apple v. Samsung, by the time a verdict was reached and Apple had filed for an injunction against the specific set of Samsung products found to violate its products, Samsung had already launched a new generation of products, replacing the ones that were allegedly infringing. As a result, litigation simply does not present a timely solution to patent infringement of certain technology.


In conclusion, the case of Apple v. Samsung demonstrates that patent litigation is not necessarily a profitable route any longer. Simply possessing patent rights to an invention is not a definitive defense in litigation. In addition, participating in lengthy and costly litigation drains the resources of technology companies and reduces that amount of time that could be better spent on cultivating new innovations than defending past developments. As such, patent holders should be wary of the pitfalls of litigation and stay realistic on the outcomes of the court process.

FAILING TO ENFORCE YOUR TRADEMARK COULD BE COSTLY

August 21, 2014

Trademark owners should diligently protect their trademarks from infringement and other misuse (e.g., blurring, tarnishment, unfair competition, passing off, false advertising and cybersquatting) that may harm the owner’s goodwill and business reputation.


A trademark owner is not required to uncover all uses that might conflict, or immediately commence a lawsuit against every infringer.  However, a complete failure to enforce will lead to a weakening of an owner’s marks, loss of distinctiveness over time and a potential forfeiture of certain available remedies. At minimum, owners should establish an appropriate level of proactive monitoring of USPTO registration applications, the Internet and other uses in commence.


Companies with famous trademarks and/or large budgets should consider engaging a professional watch service to conduct such search and monitoring activities. Alternatively, companies with more limited budgets should simply ask their employees, contractors, customers, licensees and counterparties to look out for and report any potential infringements that may come to their attention. Either way, when potential infringements are identified, trademark owners should investigate and evaluate relevant factors, such as the third party’s ownership, priority of use, type of use and likelihood of confusion.


If a response is warranted, owners should consider and pursue the most desired outcome, including monetary damages, injunctive relief, a trademark license agreement, coexistence agreement or settlement agreement. Federal lawsuits and cancellation or opposition proceedings with the USPTO’s Trademark Trial and Appeals Board can be costly in terms of time, money and resources, so legal enforcement priorities should be established from the onset based on similarity of the marks, similarity of the goods, quantities of infringing products, dollar values and other appropriate considerations.


Low-level infringers may not be cost-effective to pursue. Nonetheless, trademark owners should continue to periodically monitor such infringers. They should also remain ready to vigorously enforce their rights if the infringement expands, causing increased or more imminent potential harm to the owner. That way, the owner can prevent the weakening of its mark and loss of remedies for the infringement.

DRIVING INNOVATION IN THE UNITED STATES

August 25, 2014

Innovation is critical to staying competitive in a global marketplace. It’s what keeps our economy moving—driving the growth of jobs with better wages and creating a higher standard of living for all. For most of the 20th century, the U.S. has been the worldwide leader in innovation.


In 2010, however, the U.S. slipped to 11th place, out of 133 countries, in the Global Innovation Index (GII), as reported by INSEAD. In 2011, there was a slight upswing to seventh place in innovation but the optimism was short-lived. In 2012, the U.S. fell to 10th place out of 141 countries.


Development of the Problem

Although the recession of 2008 hit the economy hard, it still doesn’t explain why wages have been stagnant for years, jobs have been drying up, and education—especially in science, technology, engineering, and mathematics (STEM)—has been in decline. In other words, there has been an obvious decline in U.S. innovation.


What has caused this decline? Some believe that the influx of foreign students on F-1 visas in the late 1990s into STEM graduate and Ph.D. programs suppressed wages in those industries, driving U.S. students into outside fields. U.S. education programs, in general, may have also played a role, emphasizing literacy in elementary education, for example, instead of math and the sciences. The increasing cost of university and graduate school attendance also plays a role. At the corporate level, an emphasis on profit at the expense of research and development is an additional factor contributing to the decline in innovation.


Getting Back on the Innovation Track

The U.S. Chamber of Commerce report identifies three critical steps to getting the U.S. back on the innovation track. First, federally funded research and development must team up with universities, institutions and the private sector. Second, our education system should prepare students with the necessary skills to pursue higher education in the STEM fields. Third, we need to develop adequate infrastructure to deliver new goods and services.


A U.S. Department of Commerce Report, The Competitiveness and Innovative Capacity of the United States (January 2012), estimates that a STEM workforce earns about 26% more than their counterparts in non-STEM occupations. They are also less likely to experience joblessness. In addition, STEM jobs over the past 10 years grew at three times the rate of non-STEM jobs.


To counterbalance the educational challenges of poor classroom preparation in STEM, the federal government is striving to make college and postgraduate education more affordable. Government initiatives also include expanding the size and quality of the STEM teacher ranks and mentoring students and workers to encourage continuation of their STEM education.


Just as important are the legal steps that haven been taken to address the decline of innovation in the U.S., such as the Leahy-Smith America Invents Act, signed into law by President Obama in late 2011. This law switched the U.S. rights to a patent from the previous “first-to-invent” system to a “first inventor-to-file” system for patent applications. In addition, the American Taxpayer Relief Act of 2012 extended the Research and Development Tax Credit, a tax credit widely believed to be a catalyst for innovation, from the end of 2011 through to 2013. Legislation has also been introduced to help startup companies, which generally cannot take advantage of a credit against tax liability (as it generally takes time before they turn a profit). The Startup Innovation Credit Act of 2013 seeks to provide startup companies with a credit to be applied toward employment taxes.


Transitional Period or the New Normal?

Innovation holds the key to long-term economic growth and creates many new industries, such as the wireless, software and information technology industries. These industries, in turn, employ more people earning above-average wages. The renewed emphasis on innovation may help the U.S. reemerge as a leader in innovation. Or it may be that, in a truly global economy, an increase in innovation in every country is the new normal. Either way, welcome to the 21st century.

TTAB CANCELS REDSKINS TRADEMARK

September 11, 2014

While the Washington “Redskins” name and logo remains a controversial topic of debate, a favorable judgment was entered for five Native Americans who filed a joint petition against the NFL franchise with the U.S. Patent and Trademark Office (USPTO) back in 2009. The petition called for the cancellation of six federal trademark registrations that included the term “Redskins,” alleging the team name was “disparaging” to Native Americans.


In a trademark cancellation proceeding held by the Trademark Trial and Appeal board (TTAB) on June 18, the board decided in Blackhorse v. Pro Football, Inc. (2014) that all six federal trademark registrations named in the initial petition must be cancelled on the grounds that the term was “disparaging of Native Americans, when used in relation to professional football services, at the times the various registrations involved in the cancellation proceeding were issued.”


The TTAB is an independent administrative tribunal within USPTO established to determine a party’s right to register or maintain a trademark with the federal government. While registering a trademark with the federal government is optional, doing so ensures additional protections and benefits under federal trademark statutes.

Representatives for the Washington Redskins, whose trademark was first registered in 1967, have since filed an appeal claiming that TTAB ignored federal case law and infringed upon the franchise’s freedom of expression.


Can a Trademark Be Cancelled?

According to federal trademark law, registration can be the subject of a cancellation proceeding at any time if an appropriate ground for cancellation is asserted. Most USPTO cancellation proceedings assert grounds for cancellation under Section 2 of the Lanham Act, 15 U.S.C. § 1052, which specifies a variety of types of terms or marks that Congress has determined to be ineligible for federal registration, including those that disparage an individual or group. A claim that a trademark was disparaging of an individual or group at the time of registration can be brought at any time, regardless of the age of the trademark’s registration.


This is not the first time TTAB has voted to cancel the NFL team’s trademarks. In 1992, a group of Native Americans led by Suzan Harjo filed Harjo et al v. Pro Football, Inc., outlining complaints identical to those listed in Blackhorse. TTAB first ruled in favor of their petition to cancel the trademarks in 1999, but the D.C. Court of Appeals later reversed the decision in 2003, stating there was insufficient evidence to prove “disparagement” and that the 25-year-period between the trademark registration in 1967 and Harjo’s 1992 challenge occurred too late – constituting an undue delay in asserting a right or claim as to prejudice the adverse party.


The Decision

Upon the reversal of TTAB’s first attempt to cancel the trademarks, the court found that a majority of the petitioners listed in Harjo were barred by laches, citing that the group’s 25-year delay between the trademark’s first registration in 1967 and the initial case filing in 1992 provided grounds for dismissal. Upon Harjo’s appeal, the U.S. Supreme Court denied certiorari for the case in 2009, affirming the district court’s 2003 decision and allowing the team’s federal trademark registrations to stand.


The trademark cancellation effort went on to continue in 2009 with Blackhorse v. Pro Football, Inc.—this time with younger petitioners who were not subject to laches. With TTAB’s recent decision to cancel the team’s trademarks for a second time, laches are no longer at issue – but whether or not the decision can withstand another appeal by Pro Football, Inc. will be decided in federal courts.


Legal Implications

If federal courts affirm TTAB’s decision, Pro Football, Inc. will lose all legal benefits conferred by federal registration of the trademarks. These benefits include:

- The legal presumptions of ownership and of a nationwide scope of rights in these trademarks

- The ability to use the federal registration ® symbol

- The ability to record the registrations with the U.S. Customs and Border Patrol Service so as to block the importation of infringing or counterfeit goods


The decision does not, however, require the team to change its name or stop using the trademarks at issue. Losing federal registration of a trademark does not necessarily mean the owner loses all legal rights to the mark, this is due to the fact that trademark rights in the U.S. come from use of the mark on or in conjunction with goods or services, not solely from the optional step of federal registration.


The TTAB is only concerned with determining the registration of a mark and not whether that mark can be used. The mark’s owner still may have rights to the mark based on use-based or “common law” rights that continue to exist even after federal registration is cancelled. Common Law rights involve rights governed by state law rather than federal statutes. Pending appeal, the team will continue to hold trademark protection until a final decision is reached.

MARVEL COMICS AND JACK KIRBY’S ESTATE REACH SETTLEMENT

September 29, 2014

Marvel Comics and Jack Kirby’s estate reached a settlement this past Friday after a long legal battle over claims to intellectual property rights regarding several popular superhero characters. Kirby, who was responsible for creating the likes of Spider-Man, Captain America, The Hulk and many others, passed away in 1994; however, the dispute began when Kirby’s family, represented by attorney Marc Toberoff, began sending termination notices to Marvel and its licensees including Sony, Fox and Universal.


The settlement comes just days before the Supreme Court was scheduled to discuss whether or not the case would be granted certiorari. As Kirby’s employer, Marvel was initially considered the statutory author of Kirby’s content under the 1976 Copyright Act.

At issue, however, was whether Kirby was eligible for copyright protection regarding the characters he created back in the 1950s and 1960s, before Copyright law was amended. The issue centered around what constituted an “employer” under the 1909 Copyright Act, making the case especially crucial in outlining the balance of power between creative contributors and the companies that manage and distribute their original work.


Click here to read more about the settlement reached in Kirby v. Marvel: http://www.hollywoodreporter.com/thr-esq/marvel-jack-kirby-estate-settlement-735921 

PROTECTING YOUR TRADEMARK INTERNATIONALLY

April 22, 2015

As your business continues to grow, it is important to evaluate whether or not your brand extends beyond the country in which you are located. Often times, trademark protection in the United States alone is not enough for companies that currently or are planning do business abroad.


Trademarks are national rights independent from country to country, and region to region. In deciding whether or not you should seek international trademark protection, consider the following questions:


1. Which countries do you currently sell, license, or franchise your products and/or services?

If you have customers in different countries around the world, it is important that you have protection in each country you conduct business in, including online sales. This is especially a concern when protecting your brand from counterfeit or ‘knockoff’ goods. If someone were to sell counterfeit products or services in a country where your consumers would recognize your brand, international trademark protection is crucial. Additionally, if someone in another country were to register a domain name that could confuse your customers into thinking that it is your brand, international trademark protection is essential in preventing imitators from impacting your brand identity.


2. Which countries are you likely to sell your products and/or services in the next 3 to 5 years?

As your business grows, you might consider expanding into other countries. If you advertise your products and/or services through the web, it is possible that entrepreneurs in that country may attempt to capitalize on your delay to protect your brand name internationally. For this reason, international protection in countries where you are likely to operate in in the future may be a wise option. If your brand gains notoriety in another country, knockoffs of your brand may be produced faster than your ability to obtain international trademark rights to defend it.


3. Which countries manufacture products similar to yours? Protect yourself there.

In some cases, counterfeit goods may begin at the original production source. Certain industrialized countries such as China, Taiwan and India now have the level of manufacturing prowess that enables non-ethical companies to cost effectively create knock-offs of your goods. If that is the case, you should seek federal protections of your trademark in order to prevent others from misappropriating your goodwill and business reputation.


If someone starts selling products or services with your brand (or a confusingly similar brand) in a country in which you currently operate in or are likely to operate in in the future, protecting your brand internationally may be a good idea.

PROTECTING YOUR TRADEMARK INTERNATIONALLY

April 22, 2015

As your business continues to grow, it is important to evaluate whether or not your brand extends beyond the country in which you are located. Often times, trademark protection in the United States alone is not enough for companies that currently or are planning do business abroad.


Trademarks are national rights independent from country to country, and region to region. In deciding whether or not you should seek international trademark protection, consider the following questions:


1. Which countries do you currently sell, license, or franchise your products and/or services?

If you have customers in different countries around the world, it is important that you have protection in each country you conduct business in, including online sales. This is especially a concern when protecting your brand from counterfeit or ‘knockoff’ goods. If someone were to sell counterfeit products or services in a country where your consumers would recognize your brand, international trademark protection is crucial. Additionally, if someone in another country were to register a domain name that could confuse your customers into thinking that it is your brand, international trademark protection is essential in preventing imitators from impacting your brand identity.


2. Which countries are you likely to sell your products and/or services in the next 3 to 5 years?

As your business grows, you might consider expanding into other countries. If you advertise your products and/or services through the web, it is possible that entrepreneurs in that country may attempt to capitalize on your delay to protect your brand name internationally. For this reason, international protection in countries where you are likely to operate in in the future may be a wise option. If your brand gains notoriety in another country, knockoffs of your brand may be produced faster than your ability to obtain international trademark rights to defend it.


3. Which countries manufacture products similar to yours? Protect yourself there.

In some cases, counterfeit goods may begin at the original production source. Certain industrialized countries such as China, Taiwan and India now have the level of manufacturing prowess that enables non-ethical companies to cost effectively create knock-offs of your goods. If that is the case, you should seek federal protections of your trademark in order to prevent others from misappropriating your goodwill and business reputation.


If someone starts selling products or services with your brand (or a confusingly similar brand) in a country in which you currently operate in or are likely to operate in in the future, protecting your brand internationally may be a good idea.

10 MISCONCEPTIONS ABOUT INTELLECTUAL PROPERTY LAW

April 29, 2015

How well do you understand intellectual property law? While many people may have a general idea of what patent, copyright and trademark rights protect, it is important to consider when and how they are actually used. Click on the statements below to find out the truth behind ten popular claims about intellectual property law:


Many people often confuse copyright and trademark law when it comes to original work. Copyright holders may enforce their copyright claims at their own discretion, and failing to do so does not weaken their copyright. Take, for example, fan fiction and fan art on the Internet. Work produced by fans does not weaken the copyright of the original author; however, if the author disapproves of a specific piece of fan work, the author can certainly choose to enforce their copyright. Enforcement of copyright is completely up to the person that holds it, and failing to do so does not have a negative impact on your right.


“Large companies are bullies for enforcing their trademarks against small businesses.”

Unlike copyright holders, trademark holders must enforce their trademark or run the risk of losing it. A trademark is designed to uniquely distinguish the source of a product or service from others on the market. If multiple people are using the same symbol or phrase to market a similar product or service, it defeats the purpose of trademark rights. Thus, a trademark holder must enforce their trademark regardless of how big or small the competitor is in order to avoid confusion among consumers. Trademark holders can also choose to license out their trademark for other companies to use in certain cases.


“Selling fan art is illegal.”

This area can be complicated. A copyright holder of a particular story also owns both the copyright to the story as well as all of the characters in it. Furthermore, the nature of fan art as either commercial or non-profit is one of four factors that are considered in determining whether a work is fair use or infringing on an existing copyright, 17 U.S.C. § 107. The four factors are as follows:

1. The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

2. The nature of the copyrighted work;

3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

4. The effect of the use upon the potential market or value of the copyrighted work.

One important item to consider is the first factor, or “the purpose and character of the use,” in determining whether the use is transformative of the original. The more transformative your work, the less likely it is to be considered copyright infringement. Selling your work, however, increases this likelihood of infringement and a court would have to balance these factors in making the final judgment. The only situation in which you can absolutely sell your fan work is when it is a parody of the original work.


“If I am not selling or profiting from it, it will be considered fair use, right?”

While not selling your work might strengthen a fair use defense, it does not fully protect you from a copyright claim. Other factors will be considered in determining whether or not you have violated copyright. If you printed copies of a popular book and gave them away for free, doing so could certainly be found as infringement. Although it may help the defense in some cases, not selling something does not automatically make it fair use.


Posting your own story, film or artwork based on a copyrighted work for free on the Internet may also be judged for infringement on the above factors including the “amount and substantiality of the portion used.” The court will balance all factors in consideration to determine whether or not a work can be considered fair use. In patent law, however, it does not matter if you are selling your work or not – if you rebuild your own version of someone’s patented technology and give it away, it is undoubtedly infringement.


“You cannot trademark something you did not invent!”

It is important not to confuse the different areas of intellectual property law. Patent law is about protecting something you invented; copyright law is about protecting something you created and trademark law concerns the protection of your business’ ability to build a brand and to avoid consumer confusion. If a symbol or slogan is a key factor in distinguishing your brand or company, you can trademark it even if you did not specifically create it.


For example, the BBC owns trademark to blue telephone boxes as a symbol of their original television series, Doctor Who, despite the fact that the network did not originally create those telephone boxes. With the telephone boxes serving as a key symbol of the show, BBC legally obtained trademark of them.


“Someone is defaming me, can I issue a DMCA takedown?”

Some people think that you can use the DMCA to take down anything you dislike on the Internet – this is not true. The Digital Millennium Copyright Act (DMCA) only applies to copyright. If said defamation involves your own copyrighted content, you can issue a DMCA takedown notice; however, you cannot use the DMCA if you do not own copyright to the content in question.


If someone is spreading false rumors about you on the Internet without content that belongs to you, legal action must be pursued through other channels. Defamation is a tort and you can sue for it; however, the truth is a viable defense to a defamation claim.


“You cannot write a story that includes a trademarked concept.”

Marketing your work with a trademarked concept can certainly cause confusion regarding whether your work is associated with the brand of the trademark holders. For example, companies like Marvel and DC hold trademark of the term “superhero” despite amateur stories being written about superheroes all the time.In 2010, Marvel and DC sued Cup O Java Studios over the use of the term “superheroes” in their book “A World Without Superheroes.” Using the term “superhero” in the title of your work in addition to marketing your story as such may constitute a trademark violation. However, you can still write about superheroes and call them superheroes in your book, but consider refraining from using the term in your title.


“Story A has the same plot as Story B, therefore the author of Story A must be violating the copyright of Story B.”

Copyright law protects the expression of ideas, not the ideas themselves. Ideas are considered too valuable to be stuck under copyright law for decades upon decades so you can copy, or even steal, the basic concept of someone else’s story without violating copyright. You cannot create a work with the same exact storyline and characters, but variations of a basic plotline or concept are permitted.


In other words, you can write a story about an orphan boy attending a school for wizards and fighting evil, but if he looks like Harry Potter, sounds like Harry Potter and displays the likeness of Harry Potter, it could be considered infringement.Note that your work may still be considered plagiarism, which is often seen as an academic or moral violation. Just because your work might be permitted legally does not mean that you are free of other consequences.


“There is no point in registering a copyright or including a copyright notice on your work anymore.”

In earlier times, a copyright holder actually had to include a copyright notice on their work and register it in order for their work to be copyrighted. Today, copyright belongs to you as soon as you create a work regardless of notice or registration; however, notices and registration are still essential in actually using or enforcing your copyright.


For example, you will need to register your copyright in order to sue for infringement. While you can still request DMCA takedowns and send cease and desist letters without registering your copyright, you can only collect damages on registered copyrights. Furthermore, a copyright registration is key in proving that you are the actual owner of a copyright and notices deter copying while letting people know whom to contact in order to license your work.


“Posting my cover song on YouTube is definitely legal, people do it all the time!”

Many people are familiar with mechanical licenses, which are compulsory licenses that copyright holders grant for a “royalty fee” to those who cover their songs. However, a mechanical license applies to only audio recordings made for private use such as records, CDs, tapes and mp3 files. A mechanical license does not apply to music videos or those posted on the Internet.To post a video of your cover, you must obtain a synchronization license from the copyright holder. While a mechanical license is compulsory and granted by a copyright holder, synchronization licenses are not. YouTube has obtained synchronization licenses for some publishers, but you will need to check with the publisher of the song you want to cover, first.

DRAFTING LLC OPERATING AGREEMENTS

May 6, 2015

A limited liability company (LLC) operating agreement is similar to corporate bylaws in that both types of documents define the terms of how your business will function. The operating agreement sets forth the internal rules for governing a limited liability company, including the respective rights, obligations and duties of its members. When forming your business, an operating agreement should be carefully tailored to reflect the owner’s unique goals, business plan and culture of the company and its members. Below are four important questions to consider when drafting your company’s operating agreement:


1. Why do I need an operating agreement?

An operating agreement serves as an important means of defining the decision-making structure that will dictate how your company is run. Having an operating agreement in place for your LLC can act as a line of protection that guards the status of your limited personal liability for your business’ dealings while also preventing any misunderstandings between company owners.


If your company does not have an operating agreement, the guidelines governing the internal structure of your LLC defaults to your state’s version of the Limited Liability Company Act. The guidelines listed in each state’s version of the LLC Act may not be the best approach for your company, and tailoring an operating agreement specific to your company’s needs may be a better fit for your business.


2. Who will make daily business decisions?

Many states’ statutory provisions, as well as most operating agreements, provide that each member’s voting power be weighted proportionally to his or her percentage of ownership. While this framework may seem “fair,” each business has different needs. For example, while certain members of a company may have more to invest in the operation, others might have more industry knowledge or expertise within the business. In this situation, it might be best to allow individuals with more industry know-how to make daily business decisions or allow them greater voting power.


Additionally, it is especially important for businesses to outline procedural requirements should a business decision be tied or unresolved. Typically, when two people go into business with each other and form an LLC, both may be given equal decision-making power. If two individuals with equal voting power disagree, a “deadlock provision” can cover how a “tiebreaker” is reached.


For example, if the company prohibits the use of company money from being spent without unanimous approval between two owners, business activity may be halted if the owners cannot agree with each other. Preparing a deadlock provision in a business’ operating agreement can ensure that if or when it is needed, business relations can be kept in tact while also avoiding the cost of litigation.


3. What if a member wants to sell some or all of his or her interest?

If your business is doing well, members might look to sell some or all of their interest in the LCC at a profit. Nonspecific operating agreements usually allow members to transfer their interest in the LLC without restriction. This is good for a member who wants to sell, but it might leave remaining members with a new partner that they don’t care do deal with or have never met. There are several options a business owner can pursue to address this potential problem. One is to draft the operating agreement in such a way as to restrict the transfer of units unless the members holding a certain percentage of non-selling units approve, which may restrict a member from selling.


Another option is to include a standard right of refusal clause. Under a typical right of first refusal, a member who receives an offer by a third-party to buy their interest in the company is obligated to offer the same membership interests to the other members or to the company as a whole on the same, exact terms. This option allows members to prevent bringing an unknown person into the company, which can be important for companies offering highly specialized services. The company, however, may not have the finances to buy the selling member’s interest.


4. What happens when a member wants to leave?

Addressing the issue of members leaving the company should be specific to your business. One approach is to state in the operating agreement that no member can withdraw from the company without the unanimous consent of the other members. The only way that this strategy can be negated is through judicial dissolution of the entire company. This drastic outcome usually encourages members to negotiate. On the downside, however, the member who wishes to exit might choose to litigate in hopes of pressuring resistant members to approve his exit, which can be expensive and time-consuming.


Another option is to include a “put option” in your operating agreement. A put option allows a member to withdraw from the company and receive payment typically equivalent to the then-fair market value of the exiting member’s interest. This approach seems the most fair; however, it may not be prudent if the company is a service-based business because the reduction in human capital as a result of a member’s exit might impede on the LLC’s ability to increase cash flow to finance a buyout.


In contrast to the above options, an operating agreement may use a “go find a buyer” approach. This approach involves relaxing any transfer restrictions in the operating agreement, subject to the company’s (or another member’s) right of first refusal. If a member wants to leave, that member would have to find a third-party to buy them out; however, if that member does not find a buyer, the company (or another member) has the option of purchasing the selling member’s equity. This approach allows current members to decide if it is wise for the company to let the third-party buyer join the business, while also providing the exiting member with some value for their interest.


Terms to Include in LLC Operating Agreements:

Each LLC operating agreement will vary from company to company, but there are a few essential terms covered in a majority of operating agreements. These terms include:

- A breakdown of the ownership percentage of each member

The rights and responsibilities of each member

- A detailed plan showing how losses and profits will be distributed

- The voting rights of members

- A management plan for the business

- Rules for meetings and voting

- Buyout or buy-sell rules that govern a member’s sale of interest, or a member’s death or disability.


These are all significant factors to consider when drafting an operating agreement. The basic purpose of an operating agreement is to reflect the preferences of the owner(s) and company members on how the business should be run. It is therefore important for business partners to consider any potential pitfalls or conflicts regarding company management before the need arises.

SEVEN COMMON CLAUSES IN SHAREHOLDER AGREEMENTS FOR CALIFORNIA CORPORATIONS

June 16, 2015

Although there is no legal constraint limiting the topics in a shareholder agreement, many California shareholder agreements address the following seven clauses:


1. Registration Rights

Many California corporations have shareholder agreements stipulating the conditions in which the corporation must file a registration statement under the U.S. Securities Act for the benefit of the shareholders (or their constituencies). The registration statement governs the shareholders ability to hold a public sale of their shares; however, this section is not commonly included in family-owned corporations without investors.


The registration rights section of a shareholder agreement typically includes clauses addressing the registration process, how the shares offered for sale will be distributed among shareholders participating in the sale, how much power an underwriter has to reduce the number of shares belonging to those shareholders and the conditions that would trigger any indemnification for securities law liability.


Registration rights can be written as a “piggy-back” or “demand” registration right. A demand registration right allows shareholders to force the corporation to file a registration statement for their benefit. A piggy-back registration right allows the shareholders to register the sale of their own shares along with those the corporation offers when the corporation files a registration statement for its own purposes. Piggy-back rights are intended to come into effect when a shareholder wants to sell shares to a third party. The other shareholders can use the piggy-back right to block the sale until the third party also offers them the same price and conditions for their shares. This works mainly to safeguard minority shareholder interests.


2. Co-Sale/Tag-Along Rights

Co-sale/tag-along clauses allow shareholders to sell their shares along with a sale by another shareholder. A shareholder with a tag-along right is entitled to buy another shareholder’s shares on the same terms and conditions as all other shareholders. This often has the practical implication of making shares harder to sell to a third party. As a result it can be used to protect minority shareholders from not being considered in a deal or to help keep the business within the family by making a deal very difficult to close without near unanimous approval.


3. Rights of First Offer and First Refusal

Rights of first offer stops a shareholder from selling shares to a third party unless the shareholder first solicited offers from the other shareholders. The right of first refusal generally stipulates that the selling shareholder must inform the other shareholders of the terms of the proposed sale to the third party sale, wait for them turn down the right to purchase the shares in question, and only then can the selling shareholder sell to the third party.


4. Voting Agreements

California allows shareholders to contract on how they will vote their shares. Cal. Corp. Code § 706(a). Furthermore California also requires voting agreements to be clearly visible on their certificates or on transaction statements relating to the shares if certification is not available. Cal. Corp. Code § 418. As a result, share certificate legends indicating the existence of a shareholders’ agreement usually also clearly states whether there are any voting agreements. California shareholder agreements usually have clauses where the shareholders all agree to a certain board composition and contract that they will vote for that board composition.


Another type of voting agreement found in California shareholder agreements stipulates that when a certain number of shareholders vote for a merger or a sale of corporate assets, the remaining shareholders will vote for the merger or sale. This agreement is usually coupled with another agreement where shareholders agree to sell their shares if a certain number of shareholders have agreed to sell (known as a drag-along clause).


5. Share Transfer Regulations

Shareholders usually will agree not to transfer their shares unless they go through filing a registration statement under federal and state securities laws or unless it is a transaction in which registration requirements do not apply.


6. Protective Provisions

These provisions are written to safeguard the interests of certain shareholders from dilution of ownership interest of the benefits of their rights and preferences. Protective provisions usually address the issuing of other classes of shares with greater rights or preferences. They likewise frequently provide these original shareholders with approval rights over corporate actions that usually only require board approval (for example taking debt above a certain amount, contracting with consideration above a certain amount, or selling corporation assets above a certain amount). Finally, protective provisions frequently give important shareholders pre-emptive rights to buy future issuances of securities.


7. Buy-Sell Clauses

These clauses stipulate the conditions in which the shareholders can force the corporation to buy back their shares or the conditions in which they can permit the corporation to buy back their shares. These conditions usually are situations such as when a shareholder dies or is incapacitated and when a shareholder who is also an employee is fired or let go.

USING THE COPYRIGHT SYMBOL

July 20, 2015

When thinking of the copyright symbol ©, many people might associate the symbol as the obligatory stamp added on to the end of every book title or album cover, but what exactly does it mean? More importantly, how can this symbol be used to protect the work of artists, authors and creators everywhere?


The copyright notice is typically denoted by the symbol © (the letter C with a circle around it). The symbol informs the public that the copyright law protects a piece of work. This law gives authors the sole right to publish and distribute their work in all forms. If you or your business produce creative work including books, essays, photographs, music, art, movies or videos, understanding when and how to use the copyright symbol may be useful to you.


How to Use the Symbol

A copyright notice must be visually perceptible and include three elements: (1) the appropriate symbol, (2) the first year of publication and (3) the name of the copyright owner. The copyright symbol used varies depending on the form of the creative work. For example, the copyright symbol used for sound recordings is the letter P with a circle around it. Or, in a movie, the copyright notice must be placed immediately before or after the work or near the title. If you are not sure which copyright notice to use, refer to the U.S. Copyright Office publication on Copyright Notice, Circular 3.


Companies such as Twitter and Microsoft typically use the symbol first, followed by the year and ending with the company name; however, the order in which the three elements are written can vary and will have no effect on the rights of the owner in the context of the law.


Registering a Copyright

Once a work is created in a way that is possible for tangible distribution, it will automatically have a copyright. You could also register the copyright for extra protections such the ability to sue or collect damages from those who infringe upon the copyright until it is registered. To register for a copyright, you must submit an application electronically or by mail. You must also include a deposit, or copy, of the work to the Copyright Office. You can also contact an attorney to assist you in the process.


Registering your work is optional, so when should you decide to register your work? As previously mentioned, there are benefits that come with registering a copyright such as the ability to sue for damages. Typically, if your work is not easily accessible others, registering a copyright will not be necessary. There are alternative ways to target those who unlawfully use your work even though you cannot sue them in court. For example, send cease and desist letters.


How the Symbol Can Protect You

Prior to the 1976 Copyright Act, it was mandatory for works to have the copyright notice printed on it in order to be protected by the copyright law. Omitting the copyright notice could have resulted in a loss of all copyright protection. For works published after March 1, 1989, the author’s work will be protected whether or not they have the copyright symbol attached to them.


Although the use of a visible copyright notice is no longer required, there are many benefits of using the symbol and registering your copyright. If you filed a lawsuit against a person who infringed on your copyright when your work did not have the copyright symbol attached, the defendant might use the “innocent infringement defense.” The innocent infringement defense is used to argue that the individual was not given proper notice of the copyright, which could result in decreased damages awarded to the copyright owner in the case of a lawsuit.


The purpose of the copyright symbol and notice is to demonstrate an author’s sole right to publication and distribution, in all forms, of their work. Registering and attaching a copyright notice to your work will guarantee you full protection of the law and the right to enforce your copyright in court.

COPYRIGHT TROLLS

July 25, 2015

Today we introduce you to the cousin of the infamous patent troll, the copyright troll. Similar to the patent troll, copyright trolls are people or organizations that contract with multiple copyright holders in order to obtain the right to litigate on their behalf. These “trolls” then track down copyright infringers, or people who they suspect will violate their copyrighted material, and send out pre-litigation settlement letters in bulk. Copyright trolls make their money by threatening to sue for the maximum amount under the law, but ultimately offering a settlement deal for much less, usually ranging from $1,500.00 to $2,500.00. This way, recipients often opt to pay the fee and move on to avoid the high cost of litigation.


Why are they allowed to get away with this? For starters, the U.S. Constitution and the Copyright Act of 1976 allows a copyright holder to sue for infringement claims against anyone who violates their exclusive rights. 17 U.S.C. 501. The Copyright Act also gives copyright holders a choice to collect either actual damages or statutory damages should they prevail. 17 U.S.C. 501.


This has resulted in a favorable business opportunity for enterprising groups who view “trolling” as a chance to make a quick buck without ever having the intention of actually pursuing litigation. For example, Righthaven LLC was a company created just for this purpose. Righthaven contracted with individual copyright holders who lacked the resources to fully exploit their legal rights. Righthaven then proceeded to utilize their advanced resources that many original copyright holders lacked. Righthaven’s resources allowed them to easily target large groups of alleged copyright infringers. Instead of actually seeking to prevent copyright infringement by sending cease-and-desist letters to alleged infringers, Righthaven would immediately send out settlement letters in order to cash in on the likelihood of the recipient wanting to pay rather than risk a lawsuit and legal fees.


This scheme is referred to as a “litigate-prior to notice” tactic and it is now useless. The law now makes it clear that copyright trolls like Righthaven who only hold litigation rights cannot file infringement suits as a copyright holder per the Copyright Act. See Righthaven v. Democratic Underground, No. 11-16751 (9th Cir., May 9, 2013). While the copyright holder can sue anyone who violates his or her EXCLUSIVE rights, the court ruled that copyright trolls who have only obtained litigation rights but not exclusive rights do not meet the Copyright Act’s requirements to file an infringement suit.

As a result, copyright trolls have since begun to acquire exclusive rights to their holdings; however, this too may backfire on them. As seen in AF Holdings v. Does, copyright trolls who rely on “deceptive techniques” are liable under the Racketeer Influenced and Corrupt Organizations Act (RICO) statute. AF Holdings v. Does et al., Case No. 1:12-cv-00048 (D.C. Cir., May 27, 2014). Effectively, copyright trolls may face an uphill battle in trying to restore their original framework, even with exclusive rights.

JUDGE UPHOLDS CANCELLATION OF REDSKINS TRADEMARK

July 29, 2015

The debate surrounding the Washington “Redskins” name and logo has been ongoing for over two decades. On July 8, 2015, U.S. District Judge Gerald Bruce Lee upheld the earlier ruling of the Trademark Trial and Appeal Board (TTAB) and ordered the cancellation of the Redskins trademark. Lee agreed that the name “Redskins” is offensive to Native Americans and therefore cannot be protected by the trademark law.


History of the Debate

The legal battle first began in 1992, when a group of Native Americans led by Susan Harjo filed Harjo et al v. Pro Football, Inc. with the TTAB to remove the team’s registrations to the trademark. They claimed that the name was a racial slur against Native Americans, and the court ruled in favor of Harjo to remove the team’s registrations. However, the Washington Redskins successfully appealed in federal court on grounds that there was not enough evidence of the moniker being insulting.


Later in 2006, Amanda Blackhorse and four other Native Americans filed another petition with the TTAB to cancel the trademark. The TTAB once again ruled against the NFL franchise and ordered the cancellation of the team’s six federal trademark registrations because the name was indeed offensive to Native Americans.

Following their defeat in Blackhorse v. Pro Football, Inc., the Washington team sued Blackhorse and the five Native American activists in an attempt to overturn the decision. The team argued that since there were no objections when the copyright was granted between 1967-1990, the trademark should not be deemed offensive in the present time.


The Decision

Judge Lee disagreed with the team and stated that under the Lunham Act, 15 U.S.C. § 1052, the Redskins trademark is ineligible for legal protection because it could disparage or bring people into dispute. In 1898, the word “redskin” was deemed as contemptuous by the Webster dictionary. Judge Lee stated that as a dictionary-defined slur, the name “Redskins” should not have been chosen in the first place.


The decision to cancel the trademark means that the name “Redskins” will no longer have legal protection. The team is still allowed to use the name and fans are still able to buy apparel with the team’s logo, but no legal action can be taken against those who exploit the team’s name for profit. This will not go into effect immediately because the Washington team still plans to appeal the decision, even if they must take this legal battle to the Supreme Court.

TRADEMARKING A NAME

August 3, 2015

You have probably seen a trademark symbol denoted by a small TM at the corner of a word or phrase, but what exactly does it mean? A trademark symbol is placed on a word or phrase that identifies a product or service provided by a particular source. Similar to a copyright, obtaining a trademark means that only the source of the good can use the trademarked phrase or symbol.


Previously, politician Sarah Palin and daughter Bristol Palin stirred up controversy when they both applied to have their names trademarked. A trademark placed on a name is similar to a service mark since it denotes a service that is being offered by the person. A trademark can be placed on anything as long as it meets certain requirements.


Requirements to Trademark a Name

In order to trademark a name, the name must have three distinct properties: identify a good or service, distinguish the good or service from others, and be a source indicator. The most difficult requirement to fulfill is proving that the name is a source indicator. This is necessary because once a trademark has been approved no one else can use the name or phrase.


In order to be considered a source indicator, the name itself must inform the public of who you are and the service you will provide. This is incredibly difficult to prove, but it can be done with evidence of a “second meaning.” A second meaning means that although a name or phrase is descriptive, when people hear it they think of the specific subject in question. This is difficult with descriptive words such as “red”, but it is easier for a well-recognized name such as Sarah Palin.


Most people who file for a trademark are well established and easily distinguishable by name. It is common practice for celebrities to trademark their name and many have done so already such as Lebron James, Elvis, and Arnold Schwarzenegger. Although the typical person will not benefit from trademarking their name, it serves as good legal protection for public figures whose names may be exploited.

POWER OF ATTORNEY

August 5, 2015

In the event that you are incapable of making decisions for yourself, assigning the power of attorney to a trusted relative or loved one is important in protecting your assets. The power of attorney is a legal document where an individual, also known as the principal, can appoint another individual to act on his or her behalf. The appointed individual is referred to as the “attorney-in-fact”, and has the legal authority to make decisions for the principal – in private, business, and certain legal matters – when he or she is unable to.


Legal Requirements

In order for the attorney-in-fact to be valid, the correct procedure must be followed. First, the principal must be mentally competent and capable of understanding the implications of the document. Since the attorney-in-fact has the ability to handle all of the principal’s finances, it is important that the principal understands the power that is being handed over. The principal must also be acting by choice and without pressure from anyone. Secondly, there must be at least two witnesses during the signing of the document. The witnesses must be adults that are not related to the principal and the attorney-in-fact. These requirements are important in protecting the principal from mistakenly appointing an attorney-in-fact.


Generally, the power of attorney is “durable”, meaning that it is valid throughout the principal’s life, whether they are healthy or not. The document terminates when the principal dies and ends the power of attorney. After the death of the principal, the attorney-in-fact cannot handle affairs such as funeral arrangements or transferring property to heirs.


On the other hand, a “springing” power of attorney takes effect only when the principal is in a state in which they are unable to make decisions for themselves. Once the principal is incapacitated, the attorney-in-fact will be in charge of the principal’s responsibilities.


Disputes Over Power of Attorney

The most common power of attorney disputes occur when the attorney-in-fact is suspected of putting their personal interests over the interests of the principal. A claim can be brought against the attorney-in-fact by either the principal or the principal’s family. The attorney-in-fact may be accused of self-dealing, meaning they took advantage of principal’s assets for their own benefit. If the principal is incapacitated, their family members can argue that the principal was not in the right state of mind during the drafting and signing of the power of attorney document. If the principal is alive, he or she has the ability to revoke the power of attorney at any time.


It is important to pick a trustworthy individual who will receive the power of attorney. To avoid complications over power of attorney, the document should be drafted to clearly convey the principal’s objectives. Following the correct procedure in handing over power of attorney is crucial to guarantee that one’s assets will be protected.

ARE YOU READY TO FILE FOR A PATENT?

August 5, 2015

The United States Patent and Trademark Office (USPTO) grants patents for the protection of inventions. Patent holders have the exclusive right to make, use, or sell an invention for a certain period of time. Filing a patent application is a complex process but it is necessary for the legal protection of an invention. The USPTO examines applications and grants patents only to applicants who meet certain requirements. Before applying for a patent, consider the following questions:


1. What can be patented?

Statute 35 U.S. Code § 101 reads that anyone who “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.” The invention, also known as the article, being filed must be useful, functional, and have a purpose. It is also important to keep in mind that patents have expiration dates, after which the rights become public property.


There are two main types of patents, a utility patent and a design patent. A utility patent protects the functional aspects of an article such as the process, machine, or manufacture. The term “process” is defined as a method that includes technical processes. A “machine” is a new tool or invention that performs an intended action, and “manufacture” is used to refer to how articles are made. A utility patent provides broad patent protection that makes it difficult for competing products to avoid patent infringement.


A design patent protects only the external appearance of an article and cannot protect the functional features of an article. It is more difficult to obtain a licensing deal on a design patent because it is difficult to protect different variations of the product. It is possible to obtain both a design and utility patent on an article but the applications must be filed separately. It is important to understand which aspect of the invention that needs to be protected in order to file the correct patent.


2. Is my invention new?

An invention must be new in order to apply for a patent. The patent law defines new as an article that has not already been patented or otherwise available to the public before the date of filing. The article must also not have been described in another patent issued before.


It is necessary to conduct a patent search on all products and technologies related to the invention before filing for a patent to determine the aspects that differentiate it from the others. What makes this invention stand out from other? Identifying what makes the invention unique will be beneficial in the patent application process.


3. Is my invention novel and non-obvious?

In addition to being new, the invention must also be novel. This means that no other invention or product that is in the market can contain all of the elements of your invention. Even if the invention being filed contains one or more differences, it may still be denied. The article must be significantly different from any other article with the same function. In addition, the innovations of the article must be non-obvious to a normal person who possesses no extraordinary skill in the area of technology relating to the invention. The article must not contain any elements that are also found in other similar reference inventions. You must be able to claim your invention as unique and innovative.


4. Am I ready to file a patent application?

A patent cannot be filed on solely an idea or suggestion, it can only be granted to a new machine. One way to get an early filing date on a patent is to complete a provisional patent application to receive a patent pending on the invention. A patent pending gives the owner one year to continue experimenting and working on the project. There must be evidence of experimentation and progress being made on the invention. As an inventor, it is important to keep a detailed record of the changes made to the invention.


In order to increase the chances of approval on a patent application, the inventor must be able to prove that the article is new, novel, and non-obvious. It may also be helpful to contact an attorney to assist in the application process.

SUPREME COURT UPHOLDS PRECEDENT PROHIBITING ROYALTY COLLECTION ON EXPIRED PATENTS

August 5, 2015

On June 22, 2015, U.S. Supreme Court ruled against the inventor of a Spiderman toy who claimed that a 50-year-old precedent barred him from collecting the royalties he was entitled to. The court declared collection of post-patent royalty as unlawful and upheld the precedent set by Brulotte vs. Thys Co. (1964). The inventor of the Spiderman toy, Stephen Kimble, attempted to overturn the decision that has prevented numerous inventors from collecting royalties after their patent had expired.


History of the Case

In 1991, Kimble obtained a patent for his invention of a toy that shoots foam from the palm of the hand. In 1997, Kimble sued Marvel Entertainment for patent infringement and claimed that the company illegally used his idea to create the Web Blaster toy. After years of legal dispute, Marvel settled the case in by obtaining the patent for $500,000.00 and giving Kimble a 3% royalty on product sales made after December 31, 2000.


Later in 2008, Kimble filed a suit for breach of settlement because he disagreed with Marvel over the amount of royalty he would receive. Marvel countered the suit, claiming that the royalty payments to the inventor would stop when the patent expired in 2010 even though the agreement did not have an end date. Marvel sought a declaratory judgment confirming that the company would not need to pay royalties after Kimble’s patent term. The court approved Marvel’s judgment due to the precedent set by Brulotte v Thys Co.

Kimble attempted to appeal the decision by trying to overturn the ruling of Brulotte v Thys Co. He argued that inability to collect royalties beyond the patent term hurt could suppress innovation and harm the economy.


The Precedent in Question

In the case of Brulotte v Thys Co., Brulotte purchased a crop-harvesting machine from Thys Co. and accepted a licensing agreement that required him to pay royalties to the company based on the amount of crops harvested. Brulotte stopped paying royalties to Thys Co. when he realized that the patent had expired. The parties disagreed over the inventor’s collection of royalties and took the battle all the way to the Supreme Court. Brulotte argued that Thys Co. misused the patent by extending the licensing agreement past the expiration date of the patent.


The Court ruled that royalty provisions in patent licensing agreements are not enforceable beyond a patent’s expiration date. As a patent holder, Thys Co. has the exclusive right to make, sell, and use the invention, but those rights become public property after the 17-year expiration date.


The Decision

The Supreme Court defended the previous decision and ruled that Kimble did not provide “special justification” or enough evidence of economic harm to overturn the precedent. After the date of expiration on a patent, the rights to the invention become public property. Therefore, contracts that restrict public access to formerly patented inventions are not enforceable by the law. Furthermore, Brulotte v Thys Co. prevents royalties on expired patents, but it does not prevent other methods that achieve similar results such as royalty payments tied to non-patented rights.


Justice Kagan wrote the majority opinion of the ruling to uphold the precedent. Kagan expressed that the ruling was done reluctantly and stated in the opinion, “overruling a precedent is never a small matter and respecting stare decisis means sticking to some wrong decisions.” The Supreme Court generally uses the principle of “stare decisis” when deciding on the overruling of a precedent. This means that the Supreme Court will favor the precedent because it promotes stability of the law.


Collecting post-patent royalty is unlawful and conflicts with laws regarding expiration dates. The court held that a patent holder is unable to charge royalties for the use of his or her inventions after its patent term has ended.

INCORPORATING A BUSINESS

August 9, 2015

When starting a business, it is important to research the different types of business entities to determine which one is best suited for your business. The most popular business entity is a corporation. Incorporating your business will make the business a legally separate entity from the owner. A corporation can do anything that a legal person can do, such as owning property and signing contracts. It is essential to understand the advantages and disadvantages of incorporating in order to decide what is best for your company.


The Advantages and Disadvantages of Incorporation

Incorporating a business is a popular choice because a corporation limits personal liability in business transactions. Incorporating a business will protect the business owner’s personal assets when someone else in the corporation makes a mistake. A corporation is able to sell shares of its stock. This makes the transfer of ownership much easier because owning a stock is equivalent to owning a share in the ownership of the business. Incorporating a business is a good choice if the business owner plans to sell the business in the future or seek investors. A corporation will also have perpetual survivorship, meaning that it will continue to exist even after the death of the founders.


Though there are benefits to incorporating, there are disadvantages as well. Incorporating a business may be a long and extensive process that requires a large amount of money. Furthermore, there are certain accounting and recordkeeping procedures that a corporation must comply which that may be costly. Small businesses and partnerships may not have enough resources to comply with the incorporation procedures and eventually the obligations may outweigh the advantages of incorporating. Furthermore, depending on the financial situation of the company, the taxes may increase after incorporation.


The Process of Incorporating a Business

If you decide to incorporate your business, you must research and comply with state laws. Some states favor corporations more than others. The laws governing corporations may vary between states, but there is a set of general rules to remember.


Every corporation must write a document called the article of incorporation that sets the primary rules that govern the management of a corporation. Some businesses may decide to incorporate out of state and obtain a license to practice elsewhere in order to have more freedom while doing business. The article of incorporation should also define the number of stocks the company is allowed to issue. The document must also list the names of the corporation’s decision-makers. The two types of decision makers in a corporation are incorporators and directors. Incorporators are the people responsible for preparing, signing, and filing the articles of incorporation. After the articles of incorporation are filed, the incorporator’s duties end and a board of directors will be chosen. The board of directors is usually made up of the business owners who are responsible for making the corporate goals and policies of the business.


As a corporation, the name of the business must be unique and differ from any other business registered to the state. The state of California offers a business name availability search to easily search for similar business names and avoid complications. The business name may not contain any obscene words or words that could be misleading to customer. For example, a business name cannot contain the word “bank” unless it is a financial institution. The business name must also end either with “Incorporated”, “Company”, “Corporation”, or an abbreviation of one of the three.


There are many benefits of incorporating a business such as the ability to sell shares of stock. However, incorporating a business may be detrimental if the business is small does not have the funds to comply with incorporation procedures. Ultimately, it is up to the business owner to decide whether or not it will be beneficial to incorporate their business.

THE IMPORTANCE OF INTELLECTUAL PROPERTY IN BUSINESS

August 10, 2015

Intellectual property is becoming an increasingly important business asset. Intellectual property refers to innovations in the form of copyrights, patents, and trademarks. Examples of intellectual property include novel inventions, artistic works, literary works, and distinctive signs pertaining to a company. Protecting intellectual property allows a company to grow by sharing their innovations while maintaining their rights as the owner.


Business owners must understand the importance of intellectual property in order to effectively protect the company’s assets. The business world is becoming more aware that intellectual property protection is a huge factor of a company’s success and value. Investing in intellectual property protection will prevent the key resources of a company from being abused by its competitors.


The Different Types of Assets

An enterprise normally has two broad categories of assets, physical assets and intangible assets. Physical assets refer to the more traditional aspect of assets, such as the business’ buildings, machinery, and financial assets. Intangible assets are more difficult to cover, as they range from resources such as human capital to brands and ideas. Anything that contributes to a company’s creative and innovative capacity can be defined as intangible assets. Intellectual property is a huge component of a company’s intangible assets, and is often times the most valuable asset the company owns.


Due to the growth of information technology and service economy, innovative ideas and brand differentiation are becoming a main source of income for enterprises. The creation of intellectual property allows companies to have a competitive advantage over others. Understanding the different types of intellectual property protection allows a company to optimize the use of their assets.


Legal protection of intellectual property is more important than ever before, because it turns the company’s intangible assets into exclusive rights, so competitors are unable to benefit from their innovations. Intellectual property rights encourage and rewards innovations. It gives the owner of the property the opportunity to share their creations with limited competition and protects the company’s competitive point of differentiation. Intellectual property rights can sometimes be an extremely valuable bargaining tool rights, and it can be sold for financial gain. By protecting intellectual property, a company can expand the value of their assets and increase future productivity.


Patents and copyrights give companies exclusive ownership to their creative innovations. The holder of the patent or copyright has the sole power to decide how their work should be distributed and to whom it can be distributed to. A company trademark will create a reputation among customers, potentially enhancing its consumer base. Making the correct investment decisions in an enterprise is essential. If a company decides not to invest in legally protecting their intellectual property, their key resources may be at risk for infringement by competitors. Without legal protection, a company’s assets are open to the public and may be freely and legally used to acquire profit.


Reasons to Invest in Intellectual Property

A company’s future profits may be affected by the acquisition of a new patent or copyright. There are many instances in which a company’s value heavily increased overnight due to the acquisition of a patent. Furthermore, a trademark with a good reputation may also expand market value and increase the future revenue of a company. Investing in new intellectual property is now seen as a strong way to enhance a company’s financial situation. Research, product development and marketing for intellectual property is an investment that that every company should consider making.

THE IMPORTANCE OF INTELLECTUAL PROPERTY IN BUSINESS

August 10, 2015

Intellectual property is becoming an increasingly important business asset. Intellectual property refers to innovations in the form of copyrights, patents, and trademarks. Examples of intellectual property include novel inventions, artistic works, literary works, and distinctive signs pertaining to a company. Protecting intellectual property allows a company to grow by sharing their innovations while maintaining their rights as the owner.


Business owners must understand the importance of intellectual property in order to effectively protect the company’s assets. The business world is becoming more aware that intellectual property protection is a huge factor of a company’s success and value. Investing in intellectual property protection will prevent the key resources of a company from being abused by its competitors.


The Different Types of Assets

An enterprise normally has two broad categories of assets, physical assets and intangible assets. Physical assets refer to the more traditional aspect of assets, such as the business’ buildings, machinery, and financial assets. Intangible assets are more difficult to cover, as they range from resources such as human capital to brands and ideas. Anything that contributes to a company’s creative and innovative capacity can be defined as intangible assets. Intellectual property is a huge component of a company’s intangible assets, and is often times the most valuable asset the company owns.


Due to the growth of information technology and service economy, innovative ideas and brand differentiation are becoming a main source of income for enterprises. The creation of intellectual property allows companies to have a competitive advantage over others. Understanding the different types of intellectual property protection allows a company to optimize the use of their assets.


Legal protection of intellectual property is more important than ever before, because it turns the company’s intangible assets into exclusive rights, so competitors are unable to benefit from their innovations. Intellectual property rights encourage and rewards innovations. It gives the owner of the property the opportunity to share their creations with limited competition and protects the company’s competitive point of differentiation. Intellectual property rights can sometimes be an extremely valuable bargaining tool rights, and it can be sold for financial gain. By protecting intellectual property, a company can expand the value of their assets and increase future productivity.


Patents and copyrights give companies exclusive ownership to their creative innovations. The holder of the patent or copyright has the sole power to decide how their work should be distributed and to whom it can be distributed to. A company trademark will create a reputation among customers, potentially enhancing its consumer base. Making the correct investment decisions in an enterprise is essential. If a company decides not to invest in legally protecting their intellectual property, their key resources may be at risk for infringement by competitors. Without legal protection, a company’s assets are open to the public and may be freely and legally used to acquire profit.


Reasons to Invest in Intellectual Property

A company’s future profits may be affected by the acquisition of a new patent or copyright. There are many instances in which a company’s value heavily increased overnight due to the acquisition of a patent. Furthermore, a trademark with a good reputation may also expand market value and increase the future revenue of a company. Investing in new intellectual property is now seen as a strong way to enhance a company’s financial situation. Research, product development and marketing for intellectual property is an investment that that every company should consider making.

FAIR USE OR INFRINGEMENT?

August 11, 2015

When a copyright is obtained, the owner has the exclusive right to use and distribute all copies of the material. Any other use of the copyrighted material may be considered copyright infringement. However, there are instances where the use of copyrighted materials can be justified due to limitations on the exclusive rights of a copyright owner, known as fair use. It is often difficult to determine whether or not the use of a particular piece of work is considered “fair use”.


Under section 107 of the Copyright Act, determining whether or not the use of the work is considered as fair use includes the four following factors:

(1) The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) The nature of the copyrighted work;

(3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) The effect of the use upon the potential market or value of the copyrighted work.


The Fair Use Analysis

The fair use analysis usually falls under two major categories: commentary and criticism, or parody. The use of copyright materials for these purposes does not require the permission of the copyright owner.


If one is commenting or critiquing a piece, such as in a book review, they have the right to reproduce parts of the copyrighted material in order to achieve the intended purposes. Furthermore, quoting a few lines of a book in a review, or using a paragraph from an article to teach a class would also be considered fair use. As long as the commentary or criticism enhances the original copyrighted work and benefits or educates the public, it will not be considered as an illegal infringement.


A parody is a piece of work that closely imitates another work for ridicule purposes. The fair use analysis for parodies is more complicated. A parody must closely resemble the original work in order for the audience to recall the original work, and it must do so without actually infringing on the work. If the parody creates bad faith of the copyrighted material among the public, it could be considered as infringing. A special quality of parodies is that they can be considered fair use even if they are done for profit.


How to Legally Use Copyrighted Works

Use of copyrighted material can also be problematic when there is an extensive use of the original work, especially if the original author does not receive credit. Using a copyrighted piece would be considered fair use under the circumstances in which it is used for teaching, research, scholarship, news reporting or nonprofit educational purposes. However, when the piece is used in commercial activity, and the user is profiting from the use, it is considered infringement. In all cases, credit must be given to the original author.


Typically, in order to use or distribute copyrighted work, permission must be obtained from the copyright owner. In certain cases, a compulsory license can be obtained that allows a person to use copyrighted material without the permission of the copyright owner. The license allows a person seeking to use copyrighted material the ability to do so by paying the copyright owner a set fee for the license. However, these licenses are limited and apply only under specific circumstances.


The copyright grants exclusive rights that can be exercised by the owner in any way they see fit. Copyright owners have the power to prevent distribution and publication, but fair use allows others to use the copyrighted work legally under certain situations. Understanding the limits of copyright protection and the conditions of fair use are essential to avoid possible copyright infringement.

STATE TRADEMARK VS. FEDERAL TRADEMARK

August 11, 2015

Trademark rights are obtained simply by having a distinctive word, phrase, or symbol that indicates a product. No registration is needed to have basic trademark rights under the common law. However, if the distinctive phrase or logo is gaining recognition, applying for a trademark may be necessary to ensure full legal protection.

The United States has two types of trademark registration, state and federal. A state trademark is issued by a state office, whereas a federal trademark is issued by the United States Patent and Trademark Office (USPTO). The process of registering a state trademark is relatively quick and inexpensive. On the other hand, registering a federal trademark requires more effort to and can be very costly.

However, registering a trademark federally offers much more legal protection. A federal registration gives the right to use the mark exclusively throughout the county while a state registration only covers within the territory of the state. State trademark protections vary by state, however, most states have adopted a version of the Model State Trademark bill, which is written under the influence of the federal trademark law.

The Trademark Registration Process

To register a state trademark, the applicant must to file an application to the state trademark office. The general requirement is to fill out a form and attach a drawing of the trademark. Filing fees range from around $15.00 to $70.00 dollars. Registering a trademark with the state will save you at least 200 dollars for each registration. The states will then review the application for conflicting registrations in the state’s database. The process of registering a state trademarks is much quicker than the federal trademark registration process.

A federal trademark is only available for marks used in interstate or international commerce. Registering a trademark federally requires the applicant to fill out a form and provide the name of the mark’s owner, type of mark, a drawing of the mark, and a description of the goods or services the mark is used for. The current filing fee is range from $275.00 to $375.00 dollars depending on the class of the goods or services. After filing the trademark application, it will be assigned to an examining attorney who will then identify all issues with the application. A federal trademark application process can take from several months to a few years. Though the federal trademark application is more extensive, there are also many more benefits. If a mark is used in trade within the state as well as interstate commerce, it is possible to apply for both a state and federal trademark.

Legal Benefits of a Federal Trademark

The federal trademark furthers the restriction of any use of confusingly similar marks. The registered trademark will be on a public database. This will prevent other similar marks from being filed and make the use of the trademark will be. The federal trademark also grants the right to use the ® symbol for goods and services while a state trademark are only allowed to use the superscript “TM”. By registering your trademark federally, you are granted the right to sue in federal court in case of infringement.

Under the Lanham Act, a person that obtains a federal trademark has superior rights to use the mark throughout the United States. If a federal registration is obtained before the use of a similar mark in a state, the federal registration has priority over the state registration. If there is any conflict between a federal and state trademark, the Court will most likely rule in favor of the federal registration.

Understanding the depth of protection between the two trademark registrations will help you decide if it is necessary to invest in a federal trademark.

LLC VS. CORPORATION

August 12, 2015

When starting a business, choosing the correct form of business entity best suited for your company will be advantageous in the long run. There are two common business entities to consider, a corporation and a limited liability company.


Corporations

Corporations are the traditional form of business entity that is normally used by larger companies. A corporation is legally recognized as an independent entity, separate from the owners. A corporation would require strict management and recordkeeping procedures. A corporation will protect shareholders from liability issues.


The owners of a corporation are referred to as shareholders. The corporation issues shares and the number of shares the shareholder has would correspond to the percentage of ownership. Corporation shares are easily transferable from shareholders. A corporation has perpetual life, meaning that a death of a shareholder would not interfere with the existence of the company. A corporation management structure is very strict. There must be a board of directors who oversee the Entire Corporation, and officers that run the company. They must hold an annual shareholder meeting and make annual reports.


Members of a corporation are protected under the business, which is also known as the corporate veil. It protects the shareholders from personal liability for business debts and claims. If the company cannot pay off a creditor, the creditor cannot go after the assets of a member of the company. This is desirable because if one shareholder makes a mistake, not all shareholders must pay the price.


One reason a corporation is not preferable is the tax structure. The profits of a corporation are taxed when they are earned. Later when the profits are distributed to shareholders, it will be taxed again.


Limited Liability Companies

The owners in a limited liability company (LLC) are referred to as members. Each member owns a specific percentage of the business. Transfer of ownership in an LLC is not as easy in a corporation. It is required that all members of the LLC agree on the transfer. Depending on the state, a LLC may have to be dissolved if a member is no longer able to be part of the company. LLCs function more as a business partnership than a corporation. Members of a LLC do not need to have formal business titles, or be run by a board. Establishing a LLC will essentially allow a company to have the flexibility of a partnership while having the protections from liability and debt that a corporation entity would provide.


Similar to a corporation, the members of a LLC are also protected by the corporate veil. Only in extreme cases – such as fraud within the company – can a member of a LLC be held personally liable for his actions in the business.


A LLC is similar corporation, however it has more flexibility in management. Taxation in a LLC is also more lenient, and the entity in its own has less recordkeeping procedures. The tax structure of an LLC is also preferable to that of a corporation. The income that the business earns is transferred to the members of the LLC who then report their share of profits on their individual income tax returns, and pay taxes accordingly.


Deciding which entity would be right for you would depend on the scope of your business. A corporation would be more preferable for larger companies that require more formation and structure. It would also be more viable if the company needed investors or if the company would like to provide shares for employees. However, if you own a small business, a LLC may be a better option, as it will be easier to choose reliable business partners.

UNDERSTANDING THE DIFFERENT TYPES OF PARTNERSHIPS

August 12, 2015

In the business world, a general partnership is a form of business that has more than one owner. A general partnership can come with a great deal of liability. All partners in a general partnership are all personally liable for all business debts. For example, a partner in the partnership makes a poor business decision and it results in debt, all partners will be responsible for the actions of that one partner. Each partner also has agency authority, meaning that a single partner can bind the entire business to a contract or business deal. Although a general partnership is easiest to form, there are other business entities that one can form with multiple people that will protect all owners of the business from the liability issues.


Limited Partnership

A limited partnership (LP) is a form of business with more than one owner. Unlike a general partnership in which all parties in the partnership are held liable for all business activities, a limited partnership gives greater protection to the individual owners of the business.


Within a limited partnership, at least one of the owners must be considered a “general partner”. The general partner is responsible for all business decisions made in the company and is held personally liable for all of the business debts. The other investors in the business, known as “limited partners” are not personally liable for any business debts. However, limited partners also have limited ability to make decision on day-to-day business operations.


Limited Liability Partnership

A limited liability partnership (LLP) provides all owners of the business limited personal liabilities. Unlike a limited partnership, all partners of the LLP can participate in general management decisions and have authority in day-to-day operations. However, it is important to note that because the management of the LLP is shared, liability may be shared as well. Generally, a partner’s personal assets will be protected from legal action. However, if a specific partner made an error while in practice, they could be personally liable.


Many professional businesses such as a law firms, medical practices, and accountants use the LLP format as their business entity. As professionals, entering a partnership allows them to expand their resources and lower the cost of business. However, in their line of work, liability issues arise frequently. A LLP allows the business to be generally liable for the contracts that the business enters, however individual partners are not liable for the negligence of another partner.

A LLP is also a flow through entity for taxes, meaning that partners in the LLP must pay taxes individually. This is preferable to a corporation because a corporation is first taxed as an entity, and then its shareholders are taxed individually.


Limited Liability Company

A limited liability company (LLC) is essentially a hybrid that combines the characteristics of a corporation and a partnership. The owners of a LLC, referred to as members, have many options on how to run their business. They can either hire other professionals to run the company for them, much like a corporation, or they can run as a partnership and run business affairs themselves. The flexibility of an LLC is what makes it such an appealing option for small businesses.


A LLC offers protection similar to a corporation. Members of a LLC are protected under the business, often referred to as the corporate veil. They are protected from personal liability for business debts and claims. If the company cannot pay off a creditor, the creditor cannot go after the assets of a member of the company. Only in extreme cases – such as fraud within the company – can a member of a LLC be held personally liable for his actions in the business.


Taxation for a LLC is the same as a LLP. The business income passes on to the LLC owners, who then report their share of profits on their individual income tax returns, and pay taxes accordingly.

Reviewing the advantages and disadvantages of different business partnership entities is necessary in order to select the best option for a particular business business. Having multiple overseers of a company can be beneficial to the growth of a business, but it is extremely important to ensure the protection of personal assets.

U.S. GOVERNMENT URGES GLOBAL ENFORCEMENT OF IP LAWS

August 13, 2015

The Office of United States Trade Representative (USTR) released the 2015 Special 301 Report. The report is the annual review of intellectual property rights protection and enforcement within the United States and in countries that participate in trade with the United. The report is a reflection of the United States’ efforts to maintain effective intellectual property rights.


The report highlighted the inadequate efforts of foreign countries such as China and India. The repot further accused these countries of misappropriating trade secrets, which puts U.S. intellectual property rights holder’s at a significant disadvantage.


The Watch List

The Special 301 subcommittee reviewed 72 U.S. trade partners and focused on assessing their intellectual property enforcement, as well as other related market areas affecting intellectual property. Their assessment identified whether a particular trading partner should be named as a priority foreign country and whether it should be placed on the regular Watch List or on the Priority Watch List.


Countries named on the Priority Watch List include Algeria, Argentina, Chile, Ecuador, Indonesia, Kuwait, Pakistan, Russia Thailand, Venezuela, India, Ukraine, and China. Countries on the Priority Watch List are the countries in which the United States is particularly concerned about regarding the enforcement of intellectual property rights. These countries have exhibited failure to stop knockoff products such as pharmaceuticals, software and digital media.


There is also a trend in which the countries on the Priority Watch List fail to provide penalties for copyright and trademark infringement. Although in some countries, investigation and prosecution does take place, the imposed penalties are not enough to make infringers refrain from committing the same crime again.


When there are no consequences for violating intellectual property rights, infringers will continue to abuse laws and fail to give credit to the appropriate parties. Consumers suffer from purchasing knock-off products that are of lower quality. Intellectual property rights holders also suffer because their ideas are exploited for profit.


Intellectual Property Theft

China is responsible for up to 80% of the U.S. intellectual property theft. However, it has been noted in the report that there is a positive development towards the protection of intellectual property rights in China. The Chinese government has issued documents stating their high level commitment to enforcing intellectual property rights. The Chinese government will also allow industry entrepreneurs to have more said in the policy development of intellectual property protection.


The U.S. has encouraged China to engage with foreign governments and stakeholders to make sure that the regulatory intellectual property reforms are articulated properly and clearly. There has been an effort to make a bilateral cooperation. The U.S.-China Joint Commission on Commerce and Trade (JCCT) and the U.S.-China Strategic and Economic Dialogue (S&ED) are two of the most significant bilateral annual trade engagements between the United States and China.


Reforming Foreign Intellectual Property Policies

The USTR plans to continue to engage in trade with the listed trading partners. They will use the trade relationship to conduct extensive discussions regarding trade regimes and encourage the countries to reevaluate their enforcement on intellectual property. The USTR hopes that using trade as a bargaining tool will be effective in improving intellectual property protection in foreign countries.


The USTR plans to work closely with the governments of the countries on the Priority Watch List to address more concerns regarding the infringement of intellectual property rights.

SOCIAL MEDIA COPYRIGHT LAWS

August 13, 2015

Many companies are beginning to include social media as a part of their business strategy. Social media can create new marketing opportunities and give companies the ability to mass publish and distribute content to anyone who has access to the Internet. Many companies use social media as a way to increase profits by helping expose the business to many potential customers. However, there are many copyright issues that must be taken into consideration once a post is made social media websites.


Posting Original Material

When posting original material on social media, one must remember that it is available for anyone and everyone to view. Although copyright laws protect any author’s work produced on a tangible medium, it is hard to prove the originality of a short social media posts. The shorter the material, the more original it must be, therefore it is extremely difficult to obtain a copyright on tweets and other short social media posts.


One barrier that limits copyright protection for posts such as tweets is that most posts are factual statements that cannot be copyrighted. Though there are exceptions to this rule, such as news stories and textbooks, a short social media post normally does not meet the requirement of a copyright.


Reposting Material

Reposting work is also a common practice in the social media world. Giving credit for work may not always be enough to avoid copyright infringement on social media. Giving credit is not the same as receiving permission to repost an author’s work. Generally, the holder of a copyright has exclusive rights to their own work and decides how they want their work distributed. Simply giving credit to the copyright owner does not protect someone from an infringement claim.

Many authors and companies actively seek to increase the popularity of their work, but there is a difference between using an image to help increase it’s exposure to the public and using the imagine for personal profit. The original author of a post has all the intellectual property rights to the content he or she posts on social media. Social media users are liable for any infringement of copyrighted material and other intellectual property.


The Terms of Use

It is also important to note that every user agrees to the terms and agreement of the social media platform when making their account. The terms often include a statement of which every user has intellectual property rights to the content that they are posting on the site.


For example, Facebook’s Statement of Rights and Responsibilities governs the terms of agreement from users. It states that users “will not post content or take any action on Facebook that infringes or violates someone else’s rights or otherwise violates the law”. It also states that any content posted on Facebook is covered by intellectual property rights and that the user owns all the content and information they decide to post.


Intellectual property within social media is still a developing area of the law. Though some social media users may not want his or her materials reposted, businesses may be enthusiastic about their materials being shared.


Every social media user that creates a post can be considered a publisher. Ownership of one’s creative work is automatic and becomes a person’s legally protected intellectual property. Once a post is made, social media users are open to potential copyright liabilities. Social media is still growing at a rapid rate and users must understand their rights to their published works on social media.

GRANDPARENT VISITATION RIGHTS

August 17, 2016

Traumatic events such as death or divorce can cause a strained relationship between a grandparent and a grandchild. Sometimes, parents challenge visitation laws, claiming that grandparent visitation laws infringe on their constitutional right to raise their children. If one or both parents deny you access to your grandchildren, it is important to know how to restore your visitation rights.


Restrictions on Visitation

State laws vary regarding the restrictions of grandparent visitation rights. Restrictive states only allow grandparents to seek visitation of the child if the parents are divorced, or if one parent has passed away. In these states, grandparents have no visitation rights if the family is intact or when a parent remarries and the new spouse adopts the child. Other states have more liberal grandparent visitation rights that allow grandparents to petition for visitation even if both parents are alive and married.


In order to prevent complications, communication between the grandparent and the parents should be open at all times. Family counseling is a viable option to sort out any disputes between family members. In some cases, parents realize later on that it might be best for the grandparent to have a part in their child’s life. Mediation is one of the best options for both parties to come to an agreement in the best interest of everyone.


Petitioning the Court

It is best for your family to keep the dispute out of court, but a court battle may be unavoidable. In California, grandparents can ask the court for reasonable visitation rights. Building a strong and healthy relationship with your grandchild is important. When making a decision, the courts will take the relationship that the grandparent has with the grandchild into consideration. If the parents try to cut all lines of communication, document your attempts to reach your grandchild. These records may be helpful when meeting with an attorney.


A grandparent who wants rights to visit their grandchildren can file a petition in court. Courts will make a decision on the petition based on what is best for the child. If there is already a family law case between the parents of the children, the grandparent may ask for visitation rights in the existing case. However, if there isn’t an existing case, filing a petition from scratch may be an extensive process.


Establishing Visitation Rights

Generally, under California law, grandparents cannot file for visitation while the parents are alive and married. However, if the parents are living separately, or if one of the parents joins the grandparent’s petition for visitation, exceptions can be made to that rule. If the child is not living with the parent, or if the grandchild has been adopted by a step parent, the grandparent can file for visitation as well. However, if a petition was filed under one of the conditions previously mentioned, but the issues are later resolved, parents may ask the court to end the grandparent’s vitiation rights.


In order to establish visitation rights, the grandparent must submit proof that there was a good relationship between the grandparent and child. Some states require proof that denying visitation rights would cause “real and significant harm” to the grandchild. If you are a grandparent that is raising your grandchildren because their parents are unable to or are absent, it is possible to file for custody of the children. This is called establishing guardianship which is a separate court process.


Grandparents rarely have legal right to visitation of a grandchild even if they have a close relationship. If the relationship between the grandparents and child has “engendered a bond”, meaning that visitation is in the best interest of the grandchild, the grandparent may have a good chance of obtaining visitation rights.

GRANDPARENT VISITATION RIGHTS

August 17, 2016

Traumatic events such as death or divorce can cause a strained relationship between a grandparent and a grandchild. Sometimes, parents challenge visitation laws, claiming that grandparent visitation laws infringe on their constitutional right to raise their children. If one or both parents deny you access to your grandchildren, it is important to know how to restore your visitation rights.


Restrictions on Visitation

State laws vary regarding the restrictions of grandparent visitation rights. Restrictive states only allow grandparents to seek visitation of the child if the parents are divorced, or if one parent has passed away. In these states, grandparents have no visitation rights if the family is intact or when a parent remarries and the new spouse adopts the child. Other states have more liberal grandparent visitation rights that allow grandparents to petition for visitation even if both parents are alive and married.


In order to prevent complications, communication between the grandparent and the parents should be open at all times. Family counseling is a viable option to sort out any disputes between family members. In some cases, parents realize later on that it might be best for the grandparent to have a part in their child’s life. Mediation is one of the best options for both parties to come to an agreement in the best interest of everyone.


Petitioning the Court

It is best for your family to keep the dispute out of court, but a court battle may be unavoidable. In California, grandparents can ask the court for reasonable visitation rights. Building a strong and healthy relationship with your grandchild is important. When making a decision, the courts will take the relationship that the grandparent has with the grandchild into consideration. If the parents try to cut all lines of communication, document your attempts to reach your grandchild. These records may be helpful when meeting with an attorney.


A grandparent who wants rights to visit their grandchildren can file a petition in court. Courts will make a decision on the petition based on what is best for the child. If there is already a family law case between the parents of the children, the grandparent may ask for visitation rights in the existing case. However, if there isn’t an existing case, filing a petition from scratch may be an extensive process.


Establishing Visitation Rights

Generally, under California law, grandparents cannot file for visitation while the parents are alive and married. However, if the parents are living separately, or if one of the parents joins the grandparent’s petition for visitation, exceptions can be made to that rule. If the child is not living with the parent, or if the grandchild has been adopted by a step parent, the grandparent can file for visitation as well. However, if a petition was filed under one of the conditions previously mentioned, but the issues are later resolved, parents may ask the court to end the grandparent’s vitiation rights.


In order to establish visitation rights, the grandparent must submit proof that there was a good relationship between the grandparent and child. Some states require proof that denying visitation rights would cause “real and significant harm” to the grandchild. If you are a grandparent that is raising your grandchildren because their parents are unable to or are absent, it is possible to file for custody of the children. This is called establishing guardianship which is a separate court process.


Grandparents rarely have legal right to visitation of a grandchild even if they have a close relationship. If the relationship between the grandparents and child has “engendered a bond”, meaning that visitation is in the best interest of the grandchild, the grandparent may have a good chance of obtaining visitation rights.