Many trademark owners thinks that their job is done once, they have registered their trademarks. However, trademark law rewards individuals that decrease the costs for consumers to find and identify products and services that they are looking to acquire. In order to facilitate this policy and designation of a source of the quality and nature of the origin of the goods or services, the Lanham Act, the USPTO and Trademark Law protects the owners’ goodwill and marks. But, the failure to properly monitor the mark and ensure that the marks are still able to serve these purposes may lead to a forfeiture or abandonment of the mark.
One of the ways, a trademark owner can lose or abandon his mark, is by engaging in naked licensing. If you have very lax or non-existent methods for ensuring that licensees that are using the mark are not required to meet your level of quality of the goods or services, then you may not be fulfilling the purposes of having your mark serve as an indicator of source, origin and/or quality. If you have oral or implied licenses that do not require payment of royalties, then you may have difficulty enforcing your trademarks in the future.
You may be unable to count on your licensees use to establish continue commercial use of the mark to sell a product or service and may have gaps in your claimed years of use. This may impact your priority rights, your rights to renew, your ability to make a mark incontestable, to sue counterfeiters and cyber squatters and maintain your low customer acquisition costs. Unfortunately, the old adage that if you do not own it you lose it is accurate with respect to trademark law. Moreover, trademarks that are not controlled by their owners and licensees that are not monitored for how they use your trademarks can become more of a liability than an asset.
If you have any concerns or questions about your trademark rights, protecting your barriers to entry and low acquisition costs for consumers, then please feel free to contact a trademark attorney at VRP Law Group.
Registering a trademark or service mark is the easiest method of establishing nationwide trademark rights. You can register a mark under section 1(a) based on use in commerce or register it under section 1 (b) an intent to use, as long as, you have a good faith intent to use it in commerce. However, even if your intent to use application is allowed, you still will not obtain a certificate of registration without demonstrating commercial use of the mark. Typically, this requires the trademark owner to file an Affidavit of Use. Although you may be able to claim priority based on the date of filing for the intent to use application; you will not be afforded any registered trademark or service mark rights, until you have demonstrated a commercial use.
Consequently, the key for any trademark or service mark holder is the need to demonstrate and establish a commercial use of the mark. However, sporadic and token uses of a mark are not sufficient to establish or demonstrate commercial use. Moreover, you have to demonstrate commercial use of the mark in connection with the goods or services that you are looking to register them in. It is true that trademark law allows for expansion of the geographic zone and into related products or services. However, unless you have a specimen demonstrating commercial use of the trademark or service mark in connection with the goods or services that you are attempting to register the mark in; the trademark examiner is unlikely to allow you to register the mark.
Therefore, having a good understanding of what is required to demonstrate commercial use and the specimen requirement are crucial to establishing federal and nationwide trademark or service mark rights. Otherwise, the goodwill and value of your brand is likely to be ripped off or usurped by copy cats or individuals that are second comers to a market you have developed.
There are a variety of rules and regulations to understand about Succession Planning and Corporate Risk Management. Generally, you want to work with a team of bankers, lawyers, accountants, insurance and investment advisors. For example, it may make sense for the Business to take out a life or disability insurance policy for key employees. This will help you use the funds to acquire an interim or turnaround employee to assist during the key employee’s absence.
It may make sense for you to create a trust and transfer your stock or equity interest to the trust and retain a life time interest in the business or income stream from the business. It may make sense to avoid signing a personal guarantee on a commercial loan to avoid ruining a corporate risk management strategy. It may make sense for you to cash out and sell your business four to five years before your planned retirement date to try to get a higher multiple on the sale price or EBITA with a lower tax liability.
You may be able to create an IRA or an ERISA covered plan that helps protect your assets from judgment creditors. You may be able to take advantage of the Homestead exemption for your state to avoid a lien or judgment that has been entered against you or your business. It may make sense for you to separate different businesses or assets in multiple corporations or LLCs to reduce the risks associated with a high risk or high liability business or venture. However, you really need a good advisor at the helm that can keep the overall strategy in mind to make sure that the plans and strategies created by different advisors are working together to protect you and your assets.
If you have any concerns or questions about succession planning and corporate risk management practices, then please feel free to contact us.
Whether or not you know if you need a Novation or an Assignment Agreement can be the difference between a good risk management strategy that works versus an ineffective risk mitigation strategy. Often times, clients will ask me to assign their contracts, intellectual property, licenses, permits, employment agreements, vendor agreements, customer agreements, but rarely will they ask me for a Novation Agreement.
It seems everyone is aware of the need to transfer title or right to receive the benefits of a contract or agreement to the proper individual or entity via an Assignment Agreement. So long as, there are no restrictions against assignments or change in control provisions or notice and approval requirements for assignments, it is fairly routine to prepare and execute an Assignment Agreement and record it with the proper agency. This will ensure that the Assignee is entitled to continue to own title to the asset or rights to receive the benefits of a contract, and ensure that the proper individual or party is paid or receives the benefits.
However, the Assignment Agreement, even if it includes an indemnification provision (including the costs and fees of defending) does not protect the Assignor from claims by third parties to the contract, asset, intellectual property, customer agreement, vendor agreement, employment agreement, license, permit or anything else that is included in the Assignment Agreement. The Assignor and his, her or its assets are still subject to claims from these third parties. Thus, many Assignors fail to realize that he, she or it may not be as protected as the risk management strategy would lead them to believe.
Often, the protection of a corporation, limited partnerships, LLCs, S-Corps, or similar entities is lost by the Assignor and the personal assets of the individual are subject to claims by third parties. The best method for ensuring that Assignors are not going to continue to be liable to third parties under contracts, licenses, permits, employment agreements, customer agreements, vendor agreements, or for intellectual property that has been assigned is to make sure that you Novate the prior Agreement.
A Novation Agreement requires that the prior agreement with the Assignor is extinguished, but the agreement and the obligations under the prior agreement will now be assumed by the Assignee. Thus, the Assignor has to have the other party agree to Novate their Agreement with the Assignor and transfer the obligations of that agreement to the Assignee. This will ensure that the obligations along with the benefits are being transferred to the Assignee.
If you have any concerns or questions relating to these matters, then please feel free to contact us.
The common law tort of interference with contractual relationships claim is often ignored in deciding how to respond to a business partner, employee or a competitors’ actions. However, interference with contractual relationship claims stem from the common law tort claims for intentional interference with business relationships. This is a good tool to use when there are no written agreements with employees, business partners, vendors, or customers,…
Another option is interference with prospective economic advantage, which is a great tool to use when you were expecting a business opportunity or profit that was thwarted by a competitor, business partner, employee, vendor or customer. Often times, these business or contractual relationships torts can be utilized in place of or to supplement a written agreement. These business torts are a great way to recover lost profits, sales, or compensatory damages that a business owner or company may have lost due to a dispute with employees, business partners, shareholders, vendors or customers.
In situations, where non-competition agreements are non-existent or found to be unenforceable, business owners may be able to recover the same types of damages by using the: a) interference with contractual relationship; b) intentional interference with business relationship; and c) intentional interference with a prospective economic advantage torts. If you have any concerns or questions relating to how to handle the disruption of your business or operations, then please feel free to contact us.
In a recent, Seventh Circuit Opinion, the Court found that Title VII’s requirement that a charge be filed with the EEOC within 300 days of an adverse employment action was an affirmative defense akin to a Statute of Limitations. Based on this Ruling, the Seventh Circuit stated that it was improper for a trial judge to conduct an evidentiary hearing to determine if, the Employee had complied with the 300 day time limit.
Where a Plaintiff or Employee makes a jury demand the question of affirmative defenses, such as, Statutes of Limitations must be decided by a Jury. A trial judge may not decide the matter, even if, the trial judge conducts an evidentiary hearing to see if, the Plaintiff or Employee had complied with the 300 day time limit.
The Seventh Circuit pronounced that the Exhaustion of Administrative Remedies requirement for Prisoner Litigation Cases was not the same as the 300 day time limit. The Prisoner Litigation Act requires that an arbitration tribunal first consider the matter and issue a ruling. On the other hand, Title VII’s 300 day limit to file an administrative charge does not require an Arbitration Panel to rule on the allegations in the Charge before filing suit. It merely acts a time limit or a statute of limitations that an Employer can raise in defense of claims of discrimination and retaliation.
The implications are that now more Plaintiffs or Employees will be able to survive motions to dismiss based on the 300 day time limit and potentially even motions for summary judgment. This Ruling makes it harder for Employers to defend claims that may be time barred.
See: Belogi v. Home Depot
In a recent ruling by the Federal Circuit it expanded the class of individuals or Plaintiffs for Walker Process Claims. Typically, these types of claims are asserted by Defendants that are sued for patent infringement as a counterclaim.
However, the Federal Circuit stated that direct purchasers that were not liable for patent infringement or subject to claims by the Patent owner were allowed to assert Walker Process Antitrust claims. Even if, the direct purchaser was not entitled to seek declaratory relief relating to patent non-infringement or invalidity, they are permitted to assert Walker Process Antitrust claims against the patent owner.
Thus, a new class of claimants that purchase products from licensees or further down the distribution channel will be able to assert infringement claims against the Patentee. In the pharmaceutical case, this may be patients, doctors, pharmacists or hospitals that may get tired of paying the high cost of drugs. In the case of blocking patents that cover technology used in variety of industry segments now there can be class Plaintiffs alleging Walker Process claims.
However, it remains to be seen, whether class certification would be granted for Walker Process claims. To read more see: Ritz Camera v. SanDisk Corporation