By Ruth Binger
Co-authored by Ruth Binger and Jeffrey L. Michelman
Suppose you plan to buy a large supply of Disney books from an overstocked Barnes & Noble retailer in Taiwan, and then offer your employees the opportunity to purchase the books at a deep discount as gifts for Christmas. You reason that if the employees don’t buy up all of the books, you can always sell the remainder to a discount book chain or on the Internet.
You are approached by the human resources department manager and advised that Disney is very litigious about protecting its copyrights. Because your company is not an authorized seller for Disney products, the manager fears losing an infringement lawsuit.
Fortunately, your legal counsel is familiar with this issue. Upon learning that you intend to make the initial purchase from an authorized Disney retailer in Taiwan, counsel advises that your company is protected by the “First Sale” Doctrine of the Copyright Act.
And the U.S. Supreme Court agrees. In Kirtsaeng v. John Wiley & Sons, the Court held that a legally obtained copyrighted work can be imported into the U.S. and resold without permission from the copyright owner even if it was manufactured and sold overseas. The ruling applies to sale of physical, tangible works and not digital works that are licensed and not easily resold because of license agreements. The Court explained that in a complex and interconnected world, buyers, sellers, and retailers should be able to import and sell products without having to search out the copyright owner to determine if the U.S. copyright owner approves of the sale.
The facts are simple. Kirtsaeng, a Thailand citizen, moved to the U.S. to study mathematics at Cornell University, and entered a Ph.D. program in mathematics at the University of Southern California. Continue reading »
04/1/13 2:48 PM
Business Law, Intellectual Property, Manufacturing and Distribution | Comment (0) |
U.S. Supreme Court Backs Resellers in Physical Goods Copyright Case
By Ruth Binger
Owners and managers frequently face the difficult process of terminating an employee for a reason other than lack of work. The reasons are many and varied, ranging from being placed in the “wrong seat on the bus” to poor cultural fit to “good cause” reasons, such as performance or behavior. Although employment at will is the rule of law, laws exist that undercut the employer’s absolute power to terminate for any reason whatsoever. Many of these laws are just plain common sense and can be compared to administering discipline with your own children.
Decisions made in haste or poorly executed have a very long damage tail including lawsuits, reduced morale, and loss of business momentum. By looking through the lens of both human nature and law, managers and owners can learn to make and execute decisions that are generally defensible both inside and outside the company culture. Knowing what could be coming and where it’s coming from will create a wiser decision process, a more legally defensible position, and buy-in from your watchful employees.
Practicing the following 10 rules will put you on a road map of common sense when dealing with issues related to employee discipline or termination:
- Investigate. Investigating the facts protects the integrity of the process and lessens the ability of an employee to establish an unlawful motive. Poking in the weeds also provides feedback to you on what is working, what is not working, and what should be changed. Look for facts – not hearsay and speculation. Determining credibility is your job. Companies are human collaborative efforts containing many actors with varying motives and agendas that can be constructive, bad, opportunistic or even crooked. Consider plausibility, demeanor, motive to lie, corroboration, and past record when making judgment calls.
- Interview witnesses and the employee in question. Ask the employee in question to explain what happened in front of two management witnesses. Write down exactly what the employee states and ask him/her to sign it. Ask the employee for objective facts or witnesses to support his/her position. Your aim is to pin down the employee to “one recollection.” Interview complainants and witnesses by asking who, what, where, when and how questions. Let them know that you will try to keep the investigation as confidential as possible under the circumstances and in compliance with the law. This arduous process prevents tears at the fabric of your culture. Continue reading »
03/20/13 11:41 AM
Business Law, Employment Law, Manufacturing and Distribution | Comment (0) |
Common Sense Road Map to Employee Discipline and Termination
By Jeffrey L. Michelman
The St. Louis Business Journal recently ran an article on how to select an Intellectual Property attorney, yet solely focused on patents. There are other areas of IP that are equally important. I’d like to focus on trademarks, which are a unique proprietary right for several reasons.
A brand or trademark never wears out; with reasonable care, it can be a perpetual asset. Unlike most forms of property, a trademark becomes more valuable with use. The trademark is a reasonably liquid asset that can be sold or licensed. It is also a powerful merchandising shortcut, inducing consumers to purchase the company’s goods or services.
Yet some myths abound. A business sometimes attempts to protect its name by incorporating, qualifying to do business, or reserving the name in various Secretary of State offices. However, the scope of brand name protection afforded by such measures is rather limited. Such methods do not mean that the company’s name is available for use as the brand on products or services because the company name may still infringe another’s pre-existing trademark. Further, incorporating or reserving a business name does not necessarily create the right to exclude others from using the same or similar name on goods and services. A better method offering more comprehensive coverage at a substantially lower cost is federal trademark registration.
You need not register a trademark to have a protectable, exclusive right to it. Under common law, you can acquire trademark rights in the narrow geographic area of your use. State registration of trademarks provides no more protection than is afforded by common law rights. Continue reading »
07/25/12 12:40 PM
Business Law, Intellectual Property, International, Manufacturing and Distribution | Comments Off |
The Benefits of Trademark Registration
By Jeffrey L. Michelman
As a manufacturer, you will have “trade secrets.” But do you have a clear understanding of what is considered a trade secret?
Under Missouri law a trade secret can be any:
“… technical or non-technical data, a formula, pattern, compilation, program, device, method, technique or process that (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; and (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”
Trade Secrets in Manufacturing
Typical trade secrets in manufacturing include tolerances, specifications, formulas, recipes, unusual applications for use of non-evident material, unusual combinations of materials or processing steps, use of non-evident devices, processes of manufacturing, drawings.
The remedies for misappropriation of trade secrets by others can include: getting an injunction against use and further disclosure; your actual losses attributed to the disclosure; reasonable royalty; attorneys’ fees; and punitive damages.
Where Are Your Trade Secrets Most at Risk?
The risk of losing your trade secrets in the manufacturing industry often comes from: Continue reading »
06/20/12 12:02 PM
Business Law, Intellectual Property, Manufacturing and Distribution | Comments Off |
Protecting Your Manufacturing Trade Secrets
By Christopher D. Vanderbeek
The Workers’ Compensation Research Institute recently released the results of a study documenting the costs of medical professional services in workers’ compensation cases.
The study, entitled Medical Price Index for Workers’ Compensation (MPI-WC), defined medical professional services as “nonhospital, nonfacility” services provided by physicians, physical therapists, and chiropractors. It measured the difference between medical professional service costs in states that do not have medical fee schedules versus states that do have medical fee schedules. More specifically, the study compared the increase in medical professional services between 2002 and 2011 in states without fees schedules versus states with fee schedules.
A medical fee schedule is essentially a listing, rendered by a state government, of the amounts medical providers are allowed to charge for given services. The allowable amounts are based on the codes for given services. For example, in New York, the code for a level one ambulatory surgery is “PAS 1” – each provider licensed to administer ambulatory surgeries has an allowable fee for a level one surgery.
Continue reading »
05/24/12 8:21 AM
Business Law, Manufacturing and Distribution, Workers' Compensation | Comments Off |
Worker’s Comp Medical Costs Rising Faster in States without Medical Fee Schedules
By Joseph R. Soraghan
The JOBS (Jumpstart Our Business Startups) Act (the “Act”), was signed into law by the President on April 5, 2012.
The Benefits to Entrepreneurs
Probably, to entrepreneurs, the most important change in the “Act” is the elimination of the ban on “general solicitation”. This elimination in effect allows advertising of small (heretofore “private”) offerings of investments in their businesses. For companies seeking pre-seed, seed and angel investment, this step creates or implements essentially two new types of offerings:
- Accredited investor offerings, in which the investments may be sold only to accredited investors (those who meet significant net worth or income requirements), which offerings are not new, but in which now the issuing company may advertise the offering in mass settings, such as newspapers, broadcast, and most importantly, on the Internet and in social media; and
- “Crowdfunding” offerings, also generally solicited, in which non-accredited investors may purchase the investments, but only (a) up to the lesser of $10,000 and 10% of their annual income; (b) with the assistance to the company of “intermediaries” who must meet certain requirements; and (c) with maximum sales in each offering limited to $1 million in any 12 month period (hereinafter called “crowdfunding”).
It is my belief that perhaps the most beneficial of the above two “new” offerings will be the first, that which simply removes the prohibition on advertising on offerings to accredited purchasers only. The removal of that prohibition will allow an issuer to reach many more possibly interested persons, and therefore many more accredited investors. And although those offerings will not require the use of registered brokers dealers or unregistered intermediaries, the entrepreneur offering companies will now be able to use “intermediaries” (or “portals”) who no longer must be fully registered as broker-dealers, to assist in finding and working with accredited investors. This will be a huge advantage to entrepreneurs seeking capital. And this type offering will place no restrictions on the dollar amount which the purchasers may acquire or the amount which the entrepreneurial business may raise.
Continue reading »
05/17/12 3:14 PM
Business Law, Emerging Business, Intellectual Property, Manufacturing and Distribution | Comments Off |
Crowdfunding is Not the Best Thing in the Jobs Act for Entrepreneurs
By Ruth Binger
Thanks to an exponential growth rate in technology, the Internet has changed the world and how we communicate with each other. In 1995, 16 million people used the Internet. Last year, 2 billion people used the Internet and in 2020 it is predicted that the number will be over 5 billion.
Google, a 12-year-old company, has certainly fueled this growth. Social media platforms have also supercharged Internet usage. Facebook claims to have over 800 million active subscribers, LinkedIn claims 85 million subscribers and YouTube has over 100 million videos online.
However, the way we relate to and judge each other, whether it is for employment, relationships, or credit history, has not changed. We are all trying to predict each other’s future behavior for the relationship(s) and transactions we seek.
Facebook purports to be worth $104 billion with its purchase of Instagram. Why is it worth so much? Because companies are spending over $2 billion per year to collect information from social media outlets about what we as consumers want. Our behavior and our opinions can be measured in fine detail as we post and that behavior can be monetized. For example, it is estimated that your personal/buying information is worth $50 to $500 to Google, depending upon how much you spend. On Twitter, each of your followers, assuming you have a large following, could be worth as much as $2.50 each per month. In short, personal data greases the Internet. The data we share (names, addresses, pictures, precise locations, and links) helps companies target advertising based not only on demographic but also on personal opinion and desires.
What does all of this information mean to you as an individual? Technology rules will continue to change, so you need to be vigilant. It is important for you to keep up with the positives and negatives of the rapidly changing technology. Right now, social media is at its height but it is designed for websites. That is predicted to change as the world moves to smartphones. Nearly $1 million worth of features come with any smartphone and there are a billion smartphones in the world. Within the next decade, 6 billion people will have a constant connection to the Internet. This explains why Facebook recently bought Instagram, a mobile app company, for $1 billion. Facebook wants to conquer the smartphone market and not be left behind. Continue reading »
05/2/12 9:04 AM
Business Law, Digital Media, Employment Law, Manufacturing and Distribution | Comments Off |
Social Media: Six Ways to Protect Today’s You and Tomorrow’s You
By David A. Zobel
Within the past few months more and more news outlets have reported stories of employers asking job applicants for their Facebook login information. While many applicants understandably feel uncomfortable with the idea of their potential employer delving through their private lives, applicants are typically not in the position to decline.
This new trend has sparked an inevitable inquiry: is it legal? At this time, the answer is uncertain. Like many issues arising from the fast-paced and ever-changing world of the Internet and social media, the law has not caught up with the question. There does not appear to be a statute, regulation or court decision directly on point – either at the federal or state level. Consequently, experts on both sides of the issue have begun considering and arguing whether any statutes, regulations, or court decisions indirectly apply to the issue.
Missouri statute does not appear to directly prohibit such a practice; however, this does not mean it is wise for employers to engage in it. The reason has little to do with the actual practice of asking for the login information, but rather concerns what may be potentially discovered by such practice. No, I am not referring to finding rants about past employers or photos of bad decisions and misdemeanors. Employers should be concerned about finding family or pregnancy photos, photos of the applicant in the hospital, and/or religious views.
Continue reading »
04/23/12 11:56 AM
Business Law, Digital Media, Emerging Business, Employment Law, Litigation, Manufacturing and Distribution | Comments Off |
The Facebook Folly: Why Browsing an Applicant’s Facebook Profile Could Present Problems for Missouri Employers