GOOGLE and Genericide

It was bound to happen that someone would take a swipe at Google, claiming that the registered trademark should be cancelled because people use the word as a verb in a “generic” and “indiscriminate” way, which constitutes “genericide.”  The Ninth Circuit Court of Appeals rejected the effort. Here is a synopsis of the Ninth Circuit’s reasoning, as posted by Justia:

“U.S. Court of Appeals for the Ninth Circuit Opinions
Elliott v. Google, Inc.
Docket: 15-15809
Opinion Date: May 16, 2017
Judge: Richard C. Tallman
Areas of Law: Intellectual Property, Internet Law, Trademark
A claim of genericness or “genericide,” where the public appropriates a trademark and uses it as a generic name for particular types of goods or services irrespective of its source, must be made with regard to a particular type of good or service. Plaintiffs petitioned for cancellation of the GOOGLE trademark under the Lanham Act, 15 U.S.C. 1064(3), based on the ground that it is generic. The Ninth Circuit affirmed the grant of summary judgment in favor of Google, Inc., holding that plaintiffs failed to recognize that a claim of genericide must always relate to a particular type of good or service, and that plaintiffs erroneously assumed that verb use automatically constitutes generic use; the district court correctly framed its inquiry as whether the primary significance of the word “google” to the relevant public was as a generic name for internet search engines or as a mark identifying the Google search engine in particular; the assumption that a majority of the public uses the verb “google” in a generic and indiscriminate sense, on its own, could not support a jury finding of genericide under the primary significance test; and plaintiffs have failed to present sufficient evidence in this case to support a jury finding that the relevant public primarily understands the word “google” as a generic name for internet search engines and not as a mark identifying the Google search engine in particular.

You can read the entire opinion here: http://cdn.ca9.uscourts.gov/…/opini…/2017/05/16/15-15809.pdf.

Eric Goldman’s analysis can be found here: http://blog.ericgoldman.org/…/google-gets-big-ninth-circuit…

HIRING: IP & ENTERTAINMENT ATTORNEY

Our Santa Barbara firm is growing, and we are looking to immediately hire a full-time, career oriented attorney with 3 – 14 years’ experience to join the team. We have an eclectic practice, the foci of which are entertainment (filmed entertainment, music, publishing, and licensing), non-patent intellectual property (trademarks, copyrights, and trade secrets), Internet, business, and litigation in state and federal courts. We work with entrepreneurs, start-ups, and maturing companies, serving as outside general counsel, and represent a wide variety of businesses, including multi-media companies, music publishing companies, film and music producers, artists, photographers, songwriters, and others. We are looking for someone wanting a high quality, high energy, low key environment, who values relationships, innovation, and technology; is resourceful; and operates (or is willing to operate) on the principle that “THERE IS NO BOX.” Law review, great writing skills, and/or equivalent problem-solving and collaboration skills are highly valued here. We are willing and able to mentor the right person in any areas that may be needed. A book of business (small, medium, or large) is welcomed, although not necessary. This position is open now. Please let us know if you are the right person or know someone who is.  You may send resumes and writing samples to miblawgrp@gmail.com.  Please view our website at mbergerlaw.com and our LinkedIn profile at https://www.linkedin.com/in/matthewberger/ for more information about who we are and what we do.

Salons & Barber Shops Serving Beer & Wine in California (2017)

As of January 1, 2017, California beauty salons and barber shops in good standing with the State Board of Barbering and Cosmetology are permitted to serve their customers no more than 12 ounces of beer or 6 ounces of wine by the glass for no charge, providing that it is consistent with local zoning.  Of course, that permission does not extend to selling wine or beer, unless the salon or barber shop holds an appropriate beer or wine license issued by the Department of Alcohol Beverage Control (ABC).

As you might have guessed, barber shops and salons are treated as consumers, and can only purchase beer and wine from persons or companies that are legally licensed to sell to consumers, like licensed retailers and other licensees with retail privileges, such as licensed wineries and breweries.

The licensing process in California is challenging, especially to even understand what type of license or licenses are required.  Please make certain the you obtain qualified and knowledgeable assistance to ensure compliance with applicable rules and law.  One thing is likely: people probably won’t seem to mind the wait next time they visit their salon or barber shop.

Requirement for Designating Agent for Copyright Takedown Notices Under the DMCA

For those who allow users to generate content on your website, please note the following about the Copyright Office requirement for designating a person to receive take-down notices under the Digital Millennium Copyright Act:

Electronic System for Designating Agents under DMCA Launched December 1, 2016

The U.S. Copyright Office launched its new electronic system to designate and search for agents to receive notifications of claimed infringement under the Digital Millennium Copyright Act (DMCA). The final rule implementing the new system and governing what is required of service providers to designate an agent also comes into effect on December 1st.

As of December 1, all new designations must now be made through the online registration system. Additionally, any service provider that has previously designated an agent with the Office through the old paper-based system will have until December 31, 2017, to submit a new designation electronically through the new system. Until that time, an accurate designation in the old paper-generated directory will continue to satisfy the service provider’s obligations under section 512(c)(2), and the public will need to continue to search the paper-generated directory if the service provider is not yet listed in the new electronically generated directory.

Check out these links: https://www.copyright.gov/dmca-directory/; https://www.copyright.gov/rulemaking/onlinesp/NPR/; http://www.newmediarights.org/guide/copyright/how_register_dmca_agent

Fashion and Copyright: Will the U.S. Supreme Court (SCOTUS) Address the Dress?

Here is a link to the Copyright Blog about the intersection of fashion designs, copyright, protection of useful articles, design patents for the ornamental design of a functional item, and the Supreme Court of the United States (SCOTUS): http://copyrightlitigation.blogspot.com/.  Enjoy.

The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors

For guidance on classifying employees and independent contractors, please check out the U.S. Department of Labor’s Administrative Interpretation Number 2015-1: SUBJECT: The Application of the Fair Labor Standards Act’s “Suffer or Permit” Standard in the Identification of Employees Who Are Misclassified as Independent Contractors, found at http://www.dol.gov/…/workers/Misclassification/AI-2015_1.pdf.

“Documenting The Deal: How Quality Control and Candor Can Improve Boardroom Decision-Making and Reduce The Litigation Target Zone”

Here is a link to an excellent paper that all corporate lawyers (and board members) should download, read, and absorb, by the Honorable Leo E. Strine, Jr., Chief Justice of the Delaware Supreme Court: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2514520.

Doing Business in California: The Franchise Tax Board Definition

Many people ask about incorporating or forming an LLC in a state other than California. California law changed a few years back, and made it more clear what it means to be “DOING BUSINESS IN CALIFORNIA.” The California Franchise Tax Board (FTB) has provided guidance on the subject, which can be found at . The following is a brief summary:

“For taxable years beginning on or after 1/1/2011, a taxpayer is doing business in California if it actively engages in any transaction for the purpose of financial or pecuniary gain or profit in California or if any of the following conditions are satisfied:”
 The taxpayer is organized or commercially domiciled in California.
 Sales of the taxpayer in California, whether by the taxpayer or its agents or independent contractors, exceed an indexed amount, which in 2013 was $518,162, or 25 percent of the taxpayer’s total sales.
 Real and tangible personal property of the taxpayer in California exceed an indexed amount, which in 2013 was the lesser of $51,816 or 25 percent of the taxpayer’s total real and tangible personal property.
 The amount paid in California by the taxpayer for compensation exceeds an indexed amount, which in 2013 was the lesser of $51,816 or 25 percent of the total compensation paid by the taxpayer.

All of the above items include the taxpayer’s pro rata or distributive share of pass-through entities (partnerships, an LLC treated as a partnership, or an “S” corporation). Indexed amounts for 2014 are not yet available from the FTB.

The law affects out-of-state corporations, LLCs, and pass-through entities (partnerships, S corporations, LLCs treated as partnership) and their partners/shareholders/members that have property, payroll, or sales in this state. An out-of-state taxpayer that is considered to be doing business in California will need to file the appropriate tax return and pay the appropriate tax and fees.

Keep in mind that there are two basic tests. An out-of-state taxpayer that has less than the threshold amounts of property, payroll, and sales in California may still be considered doing business in this state if the taxpayer “actively engages in any transaction for the purpose of financial or pecuniary gain or profit in California.”

The FTB guidance contains several examples, some of which include the application of exemptions to the rules. This is an important change in the law, of which all businesses formed or operating in other states should be aware.

Please let us know if we can be of assistance in this or any other business-related legal matters. Matthew I. Berger Law Group, A Professional Corporation: (805) 456-1200.

Securities and Exchange Commission Provides Broker-Dealer Relief for M&A Brokers

The Securities and Exchange Commission (SEC) recently provided advice in a “no-action letter” that it would not recommend enforcement action against an “M&A Broker” that is involved in advising privately held companies in M&A transactions where the M&A Broker, as defined by the SEC, failed to register as a “broker-dealer” pursuant to Section 15(b) of the Securities Exchange Act of 1934 (the “Exchange Act”). In the past, the SEC had taken the position that third parties who participated in M&A transactions involving securities through advising, negotiating, or receiving transaction-based compensation should be subject to the traditional broker-dealer rules. According to the no-action letter, M&A transactions include mergers, acquisitions, business sales, and business combinations.

The SEC defined an “M&A Broker” as a person engaged in the business of effecting securities transactions solely in connection with the transfer of ownership and control of a privately-held company through the purchase, sale, exchange, issuance, repurchase, or redemption of, or a business combination involving, securities or assets of the company, where the buyer will actively operate the company or the business conducted with the assets of the company. A buyer could actively operate the company through the power to elect executive officers and approve the annual budget or by service as an executive or other executive manager, among other things. Other examples of when a buyer is deemed to have the necessary control include where the buyer (or group of buyers) has the power to directly or indirectly direct the management or policies of the company, and such control is presumed to exist if the buyer(s) will have the power to vote, sell (or direct the sale), or receive upon dissolution of the company, 25% or more of the voting securities or capital of the company.

A “privately-held company” for purposes is a company that does not have any class of securities registered, or required to be registered, with the SEC under Section 12 of the Exchange Act, or with respect to which the company files, or is required to file, periodic information, documents, or reports under Section 15( d) of the Exchange Act. This would not apply to a “shell” company, but would apply only to an operating company that is a going concern.

The no-action letter applied to a company based on several representations, some of which include:
• The M&A Broker did not have the ability to bind the party to an M&A transaction;
• The M&A Broker did not provide financing for the M&A transaction directly or indirectly;
• The M&A Broker at no time had custody, control or possession of the securities or funds issued or exchanged in the transaction;
• The M&A transaction did not involve a public company; and
• The securities received by the buyer were restricted securities within the meaning of Rule 144(a)(3) of the Securities Act of 1933.

It should be noted that Congress recently has made some effort to address this issue, and it is not clear what effect, if any, the no-action letter would have those efforts. See H.R. 2774, January 14, 2014, passed by the House of Representatives on January 14, 2014, and S. 1923 currently pending, both of which would amend the Securities Exchange Act of 1934 to exempt M&A brokers from the broker-dealer registration exemption with different applications.

The no-action letter can be accessed here: http://www.sec.gov/divisions/marketreg/mr-noaction/2014/ma-brokers-013114.pdf.

Click to access ma-brokers-013114.pdf

Some Legal Issues About Websites

Most every business now has a website, among the purposes of which are to attract customers, disseminate information to attract customers and inform the population, provide the means for customers to purchase products and/or services, and to become better known as a credible expert in a chosen field, ultimately to attract customers. A brief survey of websites reveals some similarities, broken down into two categories: those with Terms of Use and Privacy Policies, and those without.

It may seem like a small thing, but the consequences of not having Terms of Use and Privacy Policies on the webpages may have serious repercussions. This is especially so when the website provides an opportunity for its visitors to leave Personal Identifiable Information (PII), such as an e-mail address, when subscribing to a blog; or name, address, telephone number, and credit card information when purchasing a product through eCommerce. California and Federal law each impose various requirements, and additional requirements are imposed when there is a likelihood that children 13 and under may visit the site. There are other areas that require compliance, such as rules promulgated by the Federal Trade Commission (FTC) regarding endorsements and testimonials, as well as misleading and deceptive advertising.

The Womens’ Economic Ventures (WEV) maintains an online library of webinars and other materials, including a webinar that the Matthew I. Berger Law Group presented on the Legalities of Websites. The following are the links that will begin the download of the files for the audio portion: http://wevonline.org/index.php/about-wev/learning-library/doc_download/352-legalities-of-web-sites, and the PDF file containing the slides: http://wevonline.org/index.php/about-wev/learning-library/doc_download/351-legalities-of-web-sites-pdf. If you would like to merely browse the library, click here: http://wevonline.org/index.php/about-wev/learning-library/cat_view/48-main-categories/49-thrive-in-five/37-webinars

Please feel free to contact us if you have any questions about the many areas of compliance for all aspects of eCommerce, the Internet, and websites. Our phone number is (805) 456-1200 You can find us on the web at www.mbergerlaw.com.