Blog

Terminating Your Contract: Things to Remember Part 2

Posted by on Mar 10, 2014 in Draft Your Contract, Practice Pointers

Let’s continue the discussion on issues to consider with regard to the termination of your contract. Most contracts have provisions governing what will constitute a breach or default and what the parties’ respective rights and obligations are in the event the contract is terminated for such breach or default (“termination for cause”). Right to Cure It is common in termination for cause provisions for the terminating party to allow the defaulting party to have a period in which to correct the default. This is typically called a “cure period.” Determining a reasonable cure period is dependent on the subject matter of the contract, the nature of the default and the parties’ respective bargaining powers. For example, if a party defaults in a service obligation under a contract, the provision may state that the defaulting party has ten (10) days to re-perform the service in accordance with the contract before the terminating party may officially terminate the contract. Notice One element of having the right to cure a default before the other party may terminate the contract is the concept of notice. Notice is important because it is a means by which the parties communicate to each other what is deficient or lacking in the other’s performance. Without adequate notice of what the breach or default is, it is difficult or impossible for the defaulting party to take full advantage of the cure period. Contracts typically have provisions stating when and how a party must notify the other of a default. The notice period is usually congruent with the cure period, such that the terminating party must provide a certain amount of prior notice of the default, coupled with providing the defaulting party the opportunity to cure the default, before the termination right is triggered. There are other matters to consider when dealing with termination issues, and these are just a few which pertain to termination for default. If you’re in the process of terminating or drafting a contract, please contact an attorney to discuss the particular termination issues that may be encountered in regard to your...

read more

Update! — Fee Changes at Patent and Trademark Office

Posted by on Feb 5, 2014 in Intellectual Property, Update!

The U.S. Patent and Trademark Office recently implemented a number of fee changes that will affect patent applicants and patent owners. Filing fees for patent applications have significantly increased, as have certain other patent prosecution fees. Issue fees, on the other hand, have been slightly decreased. Another change was eliminating the separate fee paid for publication of certain patent applications. U.S. patent applications for which a corresponding application is filed in another country are always published, but applications for which there is no corresponding foreign application are published at the option of the applicant. Publication does provide a limited benefit to applicants whose patents are subsequently issued with claims substantially the same as those published; however, until recently, there was a significant fee charged for publication. Patent owners whose applications have been published with issued claims substantially the same as those published, are entitled to recover a reasonable royalty from infringers who begin infringing prior to the issue of the patent, for the period from commencement of the infringement after publication until the patent issues. Such patent owners are also entitled to recover at least a reasonable royalty from infringers for infringement occurring after the patent issues. Some courts have held, however, that in order to recover a reasonable royalty from an infringer whose infringement began after publication but before issue of the patent, the patent owner had to prove that the infringer possessed a copy of the published application. Because this requirement, along with the requirement that the issued claims substantially mirror the published claims, limits the availability of the remedy for pre-issue infringement, some patent owners have elected to avoid publication of their U.S. application when no foreign application was filed, in order to avoid paying the publication fee. Now, with the publication fee having been eliminated, the only reason to choose not to publish your U.S. patent application is if you believe that the invention can be maintained as a trade secret if the patent application is not allowed. Because inventions directed to machines and other devices cannot be kept secret once the invention is placed on the market, there is no longer any downside to publishing U.S. patent applications directed to such inventions. Please contact any attorney should you have any further questions or if you are wondering how or whether to patent your...

read more

Terminating Your Contract: Things to Remember Part 1

Posted by on Jan 16, 2014 in Uncategorized

Contracts often have various provisions concerning when and how a party may terminate the contract. Typical termination provisions can cover situations in which the party terminates for cause or without cause. The distinction between the two types of termination clauses can be crucial to your contract rights and remedies. A provision governing termination without cause essentially gives one or both parties the right to terminate the contract for any reason, whether or not there has been a breach. Often called a “termination for convenience” clause, these provisions can have various effects on the practical terms of your deal, which you may want to consider when you’re drafting or negotiating your contract. For example, 1) If a termination without cause provision is going to be a part of your contract, consider how much notice you would like to have or give if you or the other party wants to terminate the contract without a breach. Things to consider would be how long it will take you to find another seller or service provider to fill in the void. 2) It is common for a service provider or seller to raise the price or quote a little bit in order to account for the fact that the other party may suddenly terminate the contract. Be aware of how the pricing structure works in your deal, and try to substantiate where the costs are attributed. 3) Consider your capital investment. Many times a termination without cause provision can expose you or the other party to losses resulting from a shorter contract period. If the contractual relationship is cut short early, the party may not have recovered their costs yet. Therefore, it is common to see some sort of cost recovery provision or penalty provision in the event a party terminates without cause. Stay tuned for more on termination for cause provisions. While there are many other issues to consider when you’re drafting termination provisions, these are just a few that you may want to keep in mind. You should always consult an attorney when you’re in the process of drafting and negotiating a...

read more

When Disasters Plague Your Contract

Posted by on Jan 6, 2014 in Draft Your Contract, Limiting Liability

Part of the contract drafting process entails a bit of forward thinking: trying to identify and minimize ahead of time those things that could go wrong. If you’re new to the business world, or you’ve just entered into a new sector or started a new business, it can often be difficult to predict the downfalls your business may face– or the downfalls the other contracting party may face. There are some risks that every business must face which are more predictable than others. For example, every business at some point can expect to have an invoice dispute with a supplier, customer or independent contractor. On the other hand, there are those risks which are completely unpredictable and therefore less controllable. In the world of contracts, these risks are often called “force majeure events,” and well-drafted contracts usually contain a Force Majeure provision dealing with how such events will affect the parties’ respective obligations during the course of the contract. Force Majeure refers to acts of God and other events which are wholly outside of the control or influence of the party. Typical force majeure events include things like floods, fires, tornadoes, hurricanes, tsunamis, earthquakes, riots, etc. While these events are pretty intuitive and it is hard to contest their occurrence being completely outside the control of the contracting party, there are some events, such as supplier bankruptcy and currency and market fluctuations which are less clear and which are often heavily negotiated. Force majeure provisions list the events which will constitute force majeure and set forth the parties’ respective obligations or release from obligations if the force majeure event occurs. For example, a force majeure provision may excuse a supplier from complying with a deadline or delivery date. As a startup company or entrepreneur, be cautious when you see a provision dealing with force majeure and, if you’re drafting an agreement, ask yourself how your contractual relationship may benefit from including a provision to help manage uncertainties. If you are interested in learning how to protect against risk, including force majeure risk, please contact an attorney or have an attorney review your agreement before you sign...

read more

App Development: Privacy Issues to Consider

Posted by on Dec 13, 2013 in Intellectual Property, Limiting Liability

If your company is developing an app, or having an app developed for it, there are key issues concerning privacy that your company should keep in mind. Apps can often require or facilitate access to personal information about end users which is typically regarded as private and subject to protective laws or regulations. Some apps gradually collect personal information about the end user as the end user navigates the app. Such information can include: financial account information health information location data personally identifiable information (e.g. name and address) There has been greater focus of the Federal Trade Commission (FTC) on privacy issues in mobile devices and apps. Therefore, to help avoid liability or harm to your company’s reputation as a result of privacy breaches, at the initial stages of the app development process and throughout your operations, your company should understand the types of personal information would be shared or accessed as a result of an end user navigating your company’s app. It’s never too early to consider privacy issues–especially if your app facilitates or requires access to information which is highly regulated, (e.g. financial, health or children information). If your company is developing and app or having an app developed, please contact an attorney who can help you minimize risk with respect to privacy...

read more

Developing an App? Protect your Intellectual Property!

Posted by on Dec 4, 2013 in Uncategorized

If your startup company is working on developing an app, remember that the app, or the development process, raises intellectual property issues that you should consider. For example: if there is a process or method embodied in the app, it may be something worth patenting the app may have a name that should be protected by a trademark the app may have terms used in connection with it that should be protected by a trademark the app developer may treat the app’s source code or other aspects of the app’s development as a “trade secret“ the content of the app itself should maybe be protected by copyright–if original (e.g. the app’s graphic, textual, images and artwork, database elements and software code) If you’re working on an app, or having an app developed for your company, please see an attorney for further discussion on how best to protect your IP in the...

read more

Social Media, Marketing and Privacy Issues: Tips to Remember

Posted by on Nov 20, 2013 in Uncategorized

Before launching a social media marketing campaign, consider the following: Be sure you disclose what information you collect from your audience, why you collect it, and how you use that information. Does your marketing campaign or website use “cookies”? If so, disclose it. If you do not know, ask your web developer (or someone else who could explain this practice to you), then disclose accurately what your site uses. Does your marketing campaign target children? If not, be sure to address this honestly- for example by prohibiting use of your site by children under the age of 13. If so, be sure you comply with the Children’s Online Privacy Protection Act. It would be a good idea to have a lawyer review your policies or advise how to comply with this law. Always remember to contact an attorney if you have any specific questions or...

read more

Trademarks 101 PART 5 — Avoiding Mistakes in the Trademark Process by Assessing the Likelihood of Confusion

Posted by on Nov 7, 2013 in Intellectual Property

So, startups and entrepreneurs, you think your trademark situation is totally cool because you conducted a full trademark search, right? Wrong. Well, at least not necessarily… Sometimes even a full trademark search isn’t enough because it often doesn’t reveal important details about the actual use of a trademark in the marketplace. In order to assess the likelihood of confusion and the level of risk associated with a third party’s trademark that may potentially conflict with yours, you should determine the nature and extent of any potentially conflicting trademark’s use. “Likelihood of confusion” is the crucial test in trademark infringement and unfair competition claims. Although there is some variation among our circuit courts of appeal, there are similar factors that are generally considered when assessing the likelihood of confusion with a potentially conflicting third-party trademark. Some important factors to assess with regard to a potentially conflicting mark’s use are: The length of time the third party mark has been in use The goods or services for which the mark is used The representative consumer of the good or service The price point of the good or service Finally, one other important factor to assess is the third party’s history of trademark enforcement—If the third party has a history of active litigation regarding trademark infringement or unfair competition, you may really want to think twice before pursuing a mark that could potentially conflict or be confused with that mark. Because basic internet searches may not be sufficient to determine the information needed to fully assess the use of a third party’s mark, it may be advisable to engage a trademark investigator to do the job—those do exist. And, as always, please consult a trademark attorney if you’re interested in protecting your image or brand or you find this discussion murky and...

read more

Trademarks 101 PART 4: Avoiding Mistakes–Don’t Ignore Abandoned Applications or Cancelled Registrations

Posted by on Nov 1, 2013 in Intellectual Property

Here’s another mistake startups and entrepreneurs make when it comes to protecting their brand or image: Even if they’re trying to go through the trademark process and conduct searches, many startups and entrepreneurs mistakenly assume that they shouldn’t worry about applications that have been abandoned or trademarks that are the subject of cancelled registrations. The thing to remember is: Although a trademark registration is cancelled or an application is abandoned, there is still the possibility that the underlying trademark may be in use and/or that the owner of the underlying trademark may have common law rights in the mark. Ignoring those applications and registrations can be a huge mistake if the mark is in use or if the trademark has not been officially and legally abandoned (e.g. the use has stopped temporarily). There are many reasons why a trademark registration may be cancelled or an application abandoned which have nothing to do with whether the trademark is in use. For example, docket failures and failures to overcome USPTO office actions are reasons a trademark registration may be cancelled or an application abandoned. Therefore, if you’ve conducted a trademark search and you come across an abandoned application or cancelled registration for a mark that is similar to the mark you want to use and the mark is for a related good or service, you will probably want to conduct further investigations to determine whether the mark is still in use and, if the mark is no longer in use, to determine when the use stopped and whether the owner has plans to pick the use back up again. If you have questions concerning your brand, image or trademark search, please contact a trademark...

read more

Trademarks 101 PART 3: Avoiding Common Mistakes– Preliminary Searches

Posted by on Oct 21, 2013 in Intellectual Property

We’ve been discussing common mistakes small businesses and entrepreneurs make when dealing with their brand, mark or image. Last week we discussed that one common mistake is that people fail to properly conduct a trademark search. Trademark searches can either be preliminary trademark searches or they can be full trademark searches. Today we’ll discuss preliminary trademark searches. PRELIMINARY TRADEMARK SEARCHES Preliminary trademark searches generally involve searches conducted for free on the internet and the U.S. Patent and Trademark Office (USPTO) database (using the Trademark Electronic Search System (TESS)) to see if there are any direct conflicts. If one of these searches identifies a direct conflict, it either means that the potential mark is either unavailable or will only become available if additional acts are taken to obtain clearance (e.g. purchasing conflicting rights). Depending on time and budget constraints, taking such clearance actions may not be a realistic option–especially for a small company or entrepreneur. A USPTO search will typically pull up existing federal applications or registrations for marks that are identical to or applicable to products or services which are closely related or identical. While USPTO searches are useful as a preliminary search, they are not good enough to completely clear a proposed mark for full registration. Limitations on USPTO searches are: The USPTO database only includes federal trademark applications and registrations. The USPTO database does not include common law marks. A USPTO search may not reveal applications or registrations for marks that may be similar enough to cause consumer confusion although they are not identical, nor do they appear to have a direct conflict. Thus, if you have a brand, mark or image you would like to protect by obtaining a trademark, it is probably not a good idea to rely solely on a USPTO or general internet search unless: You intend to use your mark in a limited manner for a short period of time or Your mark is so descriptive and distinct that it would be extremely unlikely for a third-party to have conflicting rights that would be enforceable. If you are interested in learning more about how you can protect your brand, please consult a trademark...

read more