Identifying Intellectual Property Issues in Start-Ups – Live Webcast!

Do you work with start-up companies and need a basic understanding of the various intellectual property issues that can arise?

I will be co-presenting in this online seminar that will help you:

  • understand the trademark and copyright problems your client may encounter with branding;
  • learn how to protect your client’s branding once established;
  • familiarize your practice with patents, including what they protect, timing, and strategies to prevent inadvertent loss of patent rights before filing the application;
  • understand trade secrets and the importance of non-disclosure and confidentiality agreements;
  • recognize intellectual property issues relating to technology, including open source code and the cloud;
  • establish a proactive approach toward intellectual property ownership between cofounders, employees, and vendors; understand business names, domain names, promotional issues, and website content concerns.

The program qualifies for 1.5 hours MCLE credit.

I would like to personally invite you to attend the upcoming Law Ed program titled, “Identifying Intellectual Property Issues in Start-Ups,” which I will be co-presenting via live webcast on Tuesday, May 27th.

Presented by the ISBA Business Advice and Financial Planning Section

Co-Sponsored by the ISBA Intellectual Property Section

Success = Scrutiny: recent trends in FTC actions against affiliate/online marketers

Online marketing continues to evolve and affiliate marketing can be a great method of building brand awareness. Online marketers need to stay ahead of legal and regulatory compliance trends. This article looks at recent Federal Trade Commission (“FTC,” “Commission,” or “agency”) activity that impacts online marketing.

Given the lack of a comprehensive federal regulatory scheme, and the increasing awareness of deceptive marketing practices, it is not surprising that the FTC has ramped up enforcement efforts against entities not covered by existing, industry-specific federal regulations over the last decade. Notably, one company has defended itself against the FTC by challenging the FTC’s authority to pursue such broad enforcement.

Jurisdiction

The widely-watched case of FTC v. Wyndham Worldwide Corp is not just about Cybersecurity.

The Federal Trade Commission (FTC) has just won the first major round of its fight with Wyndham Hotels over data security. However, the importance of the case has more to do with the FTC’s jurisdiction, challenged when Wyndham moved to dismiss the FTC’s case. Affirming the FTC’s broad jurisdiction, the federal judge overseeing the controversy noted that the case highlights “a variety of thorny legal issues that Congress and the courts will continue to grapple with for the foreseeable future.”

Affiliate Marketing: A Roadmap for Compliance: Text Message Marketing

The Commission is cracking down on affiliate marketers that allegedly bombard consumers with unwanted text messages in an effort to steer these consumers towards deceptive websites falsely promising “free” gift cards.

For example, in eight different complaints filed in courts around the United States, the FTC charged 29 defendants with collectively sending more than 180 million unwanted text messages to consumers, many of whom had to pay for receiving the texts. The messages promised consumers free gifts or prizes, including gift cards worth $1,000 to major retailers such as Best Buy, Walmart and Target.

By now, many in the Affiliate Marketing industry are familiar with the Legacy Learning Systems case. In March, 2011 the FTC settled charges against Legacy — which sells instructional DVDs — that Legacy represented, directly or indirectly, expressly or by implication, reviews of their products were endorsements reflecting the opinions of ordinary consumers or independent reviewers, when many of the favorable endorsements were posted by affiliate marketers who received a commission from Legacy for sales they generated.

Regardless of the form of affiliate marketing – email campaigns or text message campaigns – there are a couple key take-aways here.

First, identify and disclose a material connection between a product user or endorser and any other party involved in promoting the product. A “material connection” is a relationship that affects the credibility of an endorsement and wouldn’t be reasonably expected by consumers. See our article about complying with the endorsement guides here.

Second, set up and maintain a system to monitor and review affiliates’ representations and disclosures to ensure compliance. For example, Legacy looked at its top 50 revenue-generating affiliates at least once a month, visiting their sites to review their representations and disclosures. It has to be done in a way designed not to disclose to the affiliates that they’re being monitored.

Third, understand he requirements for conducting legally-compliant text message marketing. The Telephone Consumer Protection Act (TCPA) makes it unlawful to make any call (other than a call made for emergency purposes or made with the prior express consent of the called party) using any automatic telephone dialing system or an artificial or prerecorded voice … to any telephone number assigned to a . . . cellular telephone service … or any service for which the called party is charged for the call. The prohibition on calls to cell phones applies to text messaging.

Drafting Contract Termination Clauses – Termination for Breach by Non-Breaching Party

One of the key issues that must be examined when negotiating or drafting any contract is how the parties may get out of, or “terminate,” that contract. While many attorneys will rest on standard “termination for breach with notice and cure” language, the recent case of Powertech Tech. v. Tessera, Inc. demonstrates how artful drafting can put limitations on a party’s right to terminate. The Opinion in U.S. District Court for the Northern District of California case No. C 11-6121 can be found here.

Powertech and Tessera were parties to a patent license agreement, although the court’s reasoning does not seem limited to only those types of agreements. The license agreement allowed Powertech to use Tessera’s patents in exchange for payment of license fees.

The contract contained the following clause regarding termination for breach:

“Termination for Breach. Either party may terminate this Agreement due to the other party’s breach of this Agreement, such as failure to perform its duties, obligations, or responsibilities herein (including, without limitation, failure to pay royalties and provide reports as set forth herein). The parties agree that such breach will cause substantial damages to the party not in breach. Therefore, the parties agree to work together to mitigate the effect of any such breach; however, the non-breaching party may terminate this Agreement if such breach is not cured or sufficiently mitigated (to the non-breaching party’s satisfaction) within sixty (60) days of notice thereof.”

The court held that Powertech was not permitted to terminate a license agreement with Tessera for Tessera’s breach because Powertech itself was in breach of the agreement by its failure to pay royalties to Tessera.

Acknowledging Powertech’s argument that Tessera was itself in breach, that in and of itself did not give Powertech the right to terminate the contract. Only a “non-breaching” party may terminate the agreement. Said the court “[a]lthough the first sentence of the termination clause is broad – ‘Either party may terminate this Agreement due to the other party’s breach’ — the language of the clause as a whole makes clear that only a non-breaching party may terminate. Reading the clause as a whole, the court concluded “[t]he termination clause refers to a “breaching party” and a “non-breaching party” in every sentence after the first… [therefore]…the clause requires the party seeking to terminate for the other party’s purported breach to be substantially in compliance with its own obligations first.

The Powertech agreement’s termination clause is useful because it put conditions on a party’s ability to terminate the agreement even when the other party was in breach.

Amended California Do Not Track Disclosure Law Requires Websites Disclose Do Not Track Signal Response

At the end of August, the California passed an amendment to the California Online Privacy Protection Act that will require commercial websites and services that collect personal data to disclose how they respond to Do Not Track signals from Web browsers.

AB 370, as introduced by California Assemblyman Al Muratsuchi, requires a business that discloses a customer’s personal information to a third party for direct marketing purposes to provide the customer, within 30 days after the customer’s request, as specified, in writing or by e-mail the names and addresses of the recipients of that information and specified details regarding the information disclosed.

This bill, available here, would declare the intent of the Legislature to enact legislation that would regulate online behavioral tracking of consumers.


Owning Design: Protecting Original Design in an Age of Knock-Offs

A presentation on what goes into creating original designs and how these differ from copycats.

WHERE: Decoration & Design Building, J. Robert Scott Showroom, Suite 220

WHEN: Wednesday, October 2,2013 !2 p.m.

WHAT: From film to fashion, creative industries are taking steps to protect and promote original work. Designers and manufacturers need to know what steps they can take to protect their designs, their businesses, and their profits. The discussion will address issues related to how to protect original design (copyright & design patent) and the manufacturers (trademark, unfair competition).

WHO:

INTERIORS Magazine Editorial Director Michael Wollaeger

J. Robert Scott Founder Sally Sirkin Lewis

Designer Laura Kirar [Web Site]

Intellectual Property lawyer David Adler

Showroom reception to follow.

 

Download the full Fall Decoration & Design Building Market Brochure Here.

Bad Faith Not Required for Attorney Fees in Patent Disputes

Monolithic Power Sys., Inc. v. O2 Micro Int’l Ltd., Fed. Cir., No. 2012-1221, 8/13/13

On August 13, 2013 the Federal Circuit held that litigation misconduct and unprofessional behavior may be sufficient to meet the “exceptional case” standard under 35 U.S.C. §285 for an attorney fees award of $9 million.

Relying on Brooks Furniture Manufacturing, Inc. v. Dutailier International, Inc., 393 F.3d 1378 (Fed. Cir. 2005), the court clarified that “it is only absent litigation misconduct or misconduct in securing the patent that we require the finding of both ‘bad faith’ and ‘objectively baseless’ litigation to warrant sanctions under §285.” In this case, the district court did not err in awarding attorney fees for the entire litigation because Defendant’s “extensive misconduct was enough to comprise an abusive ‘pattern’ or a vexatious ‘strategy’ that was ‘pervasive’ enough to infect the entire litigation.”

Whose Social Media Account Is It Anyway?

As a result of the rapid shift in marketing from unilateral one-to-many communications, to the multilateral, many-to-many or many-to-one conversations enabled by Social Media, employees and employers are struggling to manage accounts that are used for both work and personal purposes.

This new phenomenon has benefits, but it also creates a number of legal challenges. For employees, it may result in greater efficiency, more opportunities for authentic customers engagement and the ability to stay on top of the most current grands and business issues. For employers, it presents opportunity to reap substantial benefits from lower communications and customer support costs. For in-house counsel, it raises a host of legal and practical issues with few easy solutions and significant liability and regulatory risks.

First, there are hardware issues. Smartphones, tablets and other personal electronics often have social networking capabilities built in. in addition, they contain contain both personal and business data. Because these devices are always on and always connected, they are more than just personal property. They have become essential business tools. For both sides of the workplace equation, employers and employees must understand where the privacy lines fall between personal versus work-related information.

Second, there are data issues. Employers must balance their needs to monitor employee usage, employees’ privacy concerns, and the risk of liability for theft or exposure of data if a device is lost or stolen, or from lack of proper safeguards on account usage. For in-house counsel tasked with drafting policies to address these risks, , Prior to implementation of any policy, the legal team needs to educate front line employees and management on reasonable expectations of privacy and security and the harms that the organization seeks to prevent.

Lastly, recent cases such as the Cristou v. Beatport litigation, highlight the struggle to define and control the beginning and end of employee social media accounts, ownership and protection of intellectual property and the post termination risks that arise from the absence of appropriate policies.

As we prepare to start a new year, the time is ripe to establish security and privacy policies governing creation, maintenance and use of employees’ social media accounts for work functions. In-house counsel must lead the charge to educate, inform and train employees about privacy, security and evidence-recovery implications associated with use of social media.

Evidentiary Authentication of Social Media Data

Although courts have called the Internet “one large catalyst for rumor, innuendo, and misinformation,” nevertheless, it provides large amounts of evidence that may be relevant to litigation matters. Increasingly, courts are facing presentation of, and challenges to, data preserved from various websites. According to a survey conducted by the X1ediscovery blog, there are over 320 published cases involving social media/web data in the first half of 2012.

Evidentiary authentication of web-based data, whether it’s Internet site data available through browsers, or social media data derived from APIs or user credentials, presents challenges. Given the growing importance of social media posts and data, businesses should be prepared to offer foundational evidence to authenticate any posts that are vital to a case.

Authentication of social media and web data is a relatively novel issue for many courts. Courts have been extremely strict in applying foundation requirements due to the ease of creating a profile or posting while masquerading as someone else. Therefore it is important to go beyond the surface of a social media profile or a post to provide the foundation necessary to authenticate what he evidence for use in court.

Regardless of the type of data, it must be authenticated in all cases. The authentication standard is found in Federal Rule of Evidence 901(a), “The requirement of authentication … is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims.” United States v. Simpson, 152 F.3d 1241, 1249 (10th Cir. 1998).

The foundational requirement of authentication is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims. See US v. Tank, 200 F. 3d 627, 630 (9th Circuit 2000) (citing Fed.R.Evid. 901(a)). This burden is met when “sufficient proof has been introduced so that a reasonable juror could find in favor of authenticity.” This burden was met where the producer of chat room web logs explained how he created the logs with his computer and stated that the printouts appeared to be accurate representations. Additionally, the government established the connection between the defendant and the chat room log printouts based on IP addresses.

See also, Perfect 10, Inc. v. Cybernet Ventures, Inc. (C.D.Cal.2002) 213 F.Supp.2d 1146, 1154, and Lorraine v. Markel American Insurance Company, 241 F.R.D. 534, 546 (D.Md. May 4, 2007) (citing Perfect 10, and referencing additional elements of “circumstantial indicia” for authentication of electronic evidence).

Clearly, there is an emerging trend in the use of social media and web data as evidence. As the use of this type of evidence increases, so too will the consistency and predictability of the foundational matters required by courts. Thus, businesses are well advised to include web collection and social media support in the investigation process so they are prepared to offer the necessary foundational evidence to authenticate any social media posts that may be vital to a case.

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Social Media Legal News Roundup

1. Content & Marketing

MutualMind Signs Agreement With LexisNexis to Offer Advanced Social Media
MarketWatch (press release)

PRNewswire via COMTEX/ — MutualMind, an award-winning social media technology developer based in Dallas, Texas, announced an agreement today with LexisNexis, a leading provider of legal content and technology solutions.

Facebook: Should Law Firms Bother?
Business 2 Community

While consumer brands have embraced Facebook as a key tool in building deeper customer engagement, the biggest social network largely remains terra incognita in the legal world. The sector has certainly harnessed professional networking sites.

2. International

Bahrain may act against social media abuse
Trade Arabia

Legal action could be taken against people in Bahrain, who incite violence and spread sectarianism on social media, said a top official. The initiative comes as a new code of honour for social media users is set to be launched by the Bahrain Bloc.

3. Law Enforcement

Infographic: How police investigators are using social media
Police News

An overwhelming majority of investigators using social media for investigative purposes are “self taught,” according to a new survey of 1200 Federal, state, and local law enforcement professionals.

Social media for investigators: Why Police departments should invest in training
Police News

That’s but one of the many conclusions found in a comprehensive new survey — conducted in a partnership between PoliceOne and LexisNexis Risk Solutions — focused on the impact of social media on law enforcement in criminal investigations. Among the …

4. Employees & Workplace

What your social media profile is telling future employers? (Take our poll)
Plain Dealer

The State of Maryland already has passed a law forbidding employers from asking job candidates for their passwords to Facebook and other social media sites, and California is considering a similar law. 01fgSCREEN2.jpg View full size · The Society for …

Social Media in the Workplace – July 2012
JD Supra (press release)

With an understanding of some of the relevant issues, employers can implement meaningful and reasonable policies and guidelines for employees and respond appropriately and legally to social media issues that arise. Below are a few of the discrete issues …

5. Financial Services

Quest IRA, Inc. Develops New Interactive Website & Social Media Campaign
Equities.com

The trick for us is trying to provide legally correct information, in such a way that is easy to understand, to the American public so that investors truly understand their options with retirement savings.” “Internet, the online experience and social media are the 21st Century.”

The New Social Metrics
Bank Technology News

Below are methodologies and metrics for determining the ROI of these specific social media use cases. The metrics roll up to three major categories of benefits: revenue impact, operational efficiencies, and legal and compliance risk avoidance.

David M. Adler, Esq. is an attorney, author, educator, entrepreneur and partner with Leavens, Strand, Glover & Adler, LLC, a boutique law firm in Chicago, Illinois created with a specific mission: provide businesses with a competitive advantage by enabling them to leverage their intangible assets and creative content in order to drive innovation and increase overall business value.

We meet this challenge by providing legal counsel on issues related to creation, protection and commercialization of intangible assets, our comprehensive understating of the relevant law, our team of seasoned professionals and our client service philosophy.

Social Media, Technology, Privacy, Security & TheLaw

REGULATORY COMPLIANCE
17a-4 llc Provides Free Social Media Capture Service
Virtual-Strategy Magazine

By using a hosted version of 17a-4’s DataParser for Social Media schools, financial institutions, government agencies and other regulated institutions can now avail themselves of this free option to capture social media public profiles and other web content into their email archive. (PRWEB) July 24, 2012 … Most regulated institutions have archival systems in place to support the monitoring of textual content, the retention of the data, and the facilities to run legal holds and e-Discovery productions.

SOCIAL MEDIA E-DISCOVERY
Personal Injury Attorney Social Media Marketing Program Offered by Social Media

July 22, 2012 – Social media agency Maximize Social Media LLC announced its social media marketing program today for personal injury attorneys, providing needed support to law firms nationwide.

Mid-Year Report: Legal Cases Involving Social Media Rapidly
As part of our ongoing effort to monitor legal developments concerning social media evidence, we again searched online legal databases of state and federal agencies.

HOT TOPICS IN AUSTRALIAN SOCIAL MEDIA & THE LAW
Get a new perspective on social media
Dynamic Business

Join us after work on 1 August at the Vibe Hotel in Sydney’s Milsons Point to hear from super connector Iggy Pintado, Switched On Media’s head of social media Hannah Law, and Amelia Zaina, director of Small Business Services at American Express.

YOUTH LEADERSHIP IN SOCIAL MEDIA
The So-Called Arrogance of Gen Y Social Media Managers
Business Insider

So if she had just toned it down a bit, perhaps suggesting that younger people shouldn’t be ruled out for their youth, or that age and experience are different qualifiers in the context of social media, I might actually agree with her. What I believe, firmly, is that the 25-year-old should not be excluded from leadership.

SOCIAL MEDIA USE BY LAW ENFORCEMENT
LAwS Communications Announces ConnectedCOPS Awards Finalists
PR Web (press release)

Quote start The ConnectedCOPS Awards were created with the intent of recognizing the great work being done with social media in six categories, by individual sworn officers and law enforcement agencies.

Officer’s Facebook post sparks uproar
Detroit Free Press

A 2011 survey of 800 law-enforcement agencies conducted by the International Association of Chiefs of Police found that 88 percent of the agencies used social media, mostly for investigations. Almost half of those agencies have a social media policy.

Role of Social Media in Law Enforcement Significant – LexisNexis

LexisNexis® Risk Solutions today announced the results of a comprehensive survey focused on the impact of social media on law enforcement.

SOCIAL MEDIA AND CYBERSECURITY
Workplace Diversity, Social Media Implications, Cybersecurity
CHICAGO, July 19, 2012 — Ensuring a diverse and inclusive workplace, the implications of social media on law practice and privacy, cybersecurity, and access.