The First Amendment for Customers

September 17th, 2014

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By: Andrew K Jacobson

California Governor Jerry Brown has signed new legislation that voids language in contracts that prevents a consumer from commenting on the performance of a product or service.

New Cal. Civ. Code § 1670.8 states that a“contract or proposed contract for the sale or lease of consumer goods or services may not include a provision waiving the consumer’s right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services.” The hotel in Hudson, New York  that would withhold $500 from deposits for every negative review by someone in a wedding party had best be glad it is not on the Left Coast.

For customers, too.

For customers, too.

Some business may think it would be a good idea to add such a waiver to their terms of use, but not enforce it. However, including an unlawful provision, even without intending to enforce it, can be deemed an unfair business practice barred by Cal. Bus. & Prof. Code § 17200.

Some may worry that this could legalize defamation (which consists of oral slander or recorded libel). It doesn’t. Cal. Civ. Code § 1670.8 only prohibits provisions waiving rights to make statements. Defamatory statements are still prohibited under Cal. Civ. Code §§ 44-48a.

Over three centuries ago, Jonathan Swift said that “falsehood flies, and the truth comes limping after it.” In the social media age, where negative comments can be published immediately to thousands of potential customers, businesses have to resist the temptation to squash the negative comments. The better practice is to show the business is attuned to the criticism, and responds to the reasonable expectation of the customer. Potential customers appreciate businesses that show some flexibility; they don’t appreciate “I’m right, and you’re not.”

PATENT PENDING — what it is and how to obtain

September 10th, 2014

By: Sharon Adams

A product may be labeled as “patent pending” once a patent application has been filed, and until a patent is issued or the application is abandoned.  This includes all types of patent applications, including provisional applications.  Filing the application is all that is required. patentpending

If a patent application is abandoned for any reason, the product may not be labeled as “patent pending” and may be subject to a fine for improper use of the phrase.  Likewise, “patent pending” is no longer appropriate if the patent application results in an issued patent; instead the product should be labeled as patented and provide the unique patent number.

An invention that’s labeled as “patent pending” has provisional rights (provisional rights are distinct from, and not to be confused with, provisional applications, mentioned above).  These provisional rights include the right to send a cease & desist letter to potential infringers.  However, there is no right to collect damages for infringement unless and until a patent actually issues.

Four Advantages to Patent Pending:

  1. It may be the highest level of patent protection you ever get. Statistics from the U.S. Patent & Trademark Office indicate that roughly 50% of all patent applications result in an issued patent.  That includes all the people who absolutely believed that their invention was completely unique and patentable.  Therefore, the only time a product may ever have the word “patent” on the product (as in “patent pending”) is during the pendency of the patent application.
  2. It may deter some infringers. Many people are unsure exactly what “patent pending” means, and may assume that the product is patented, or is about to be patented.
  3. It provides notice to competitors that there is a pending application covering the product. In today’s market environment, with the timeline needed to develop and launch a product, competing businesses may choose to alter business plans, rather than risk developing a product that may infringe an existing product on the shelves that is labeled “patent pending”.
  4. Getting your product to the market with the label “patent pending” allows you to market get actual sales of the product. This is good for your bottom line!  In addition, “commercial success” may be used as evidence to overcome a rejection of the pending application for non-obviousness.

How to Obtain

Simply file a patent application online or contact us at Bay Oak Law for help filing your patent application.

Is Bitcoin in Your Wallet?

September 10th, 2014

By: Daniel Richardson 

This image is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license

Although virtual currencies are not new they have rapidly evolved in recent years and their use is entering the financial mainstream. Bitcoin is the most widely used of the virtual currencies and is accepted by over 10,000 online retailers including Overstock.com and Expedia.com. So, what is Bitcoin? Is it currency, property, a security, or a wholly new financial instrument altogether? More importantly, what are the upsides and pitfalls of using Bitcoin?

What are Bitcoins and How do You Get Them?   [i]

Bitcoin is used as a substitute for real currency. Bitcoin has no physical presence and is not backed by gold, U.S. Dollars, or any other thing of value. Instead, a database of Bitcoins is maintained over a peer-to-peer network where every transaction is documented in what is known as a “blockchain.” Bitcoin and other virtual currencies like it are known as cryptocurrency because the validity of each Bitcoin is verified through cryptography.

Bitcoins are “mined” by sophisticated computers using free software that solves a series of complex algorithms that verify a Bitcoin transaction. When an equation is solved, the “miners” that solved the equation first extract new Bitcoins in blocks of 25.  The number of Bitcoins that can be mined is limited by the Bitcoin protocol which requires each equation to be successively harder, thus limiting the total number of Bitcoins in circulation. The Bitcoin program is designed to only allow 21 million Bitcoins into circulation. Currently, there are just over 12.66 million Bitcoins in circulation with the final Bitcoin expected to be mined in 2140. Although the software to mine Bitcoins is free, the computing power required to mine the coins is substantial and off-the-shelf computers do not have the power to mine for Bitcoins. However, all is not lost for prospective miners on a budget. Small miners can contribute their computing power to pools of other miners on sites such as Slush’s Pool and receive a percentage of Bitcoins awarded based on the computing power they contribute. Read the rest of this entry »

License to Extort Stopped

September 9th, 2014

by: Andrew K Jacobson

One characteristic of mobsters is the threat of something bad happening if you don’t do what the mobster wants you to do. It is even an unforgettable part of The Godfather: when the Hollywood studio head wouldn’t let Johnny, Don Corleone’s godson, star in a movie, he wakes up with the bloody head of his prize stallion in his bed. The legal world sees it, too, but judges are increasingly wise to the wiseguys.

Holmes_-_Steele_1903_-_The_Empty_House_-_The_Return_of_Sherlock_Holmes

Sherlock lives on – in the public domain

In one recent copyright case, the wiseguy was the estate of Arthur Conan Doyle, the creator of Sherlock Holmes. Holmes first appeared in The Strand magazine in 1887 , and most of the Sherlock Holmes canon are in the public domain. However, because Doyle published a few Holmes stories in the mid-1920s, those few are still copyrighted in the United States.

Sherlock Holmes has had a renaissance in recent years, cropping up on television in both the United Kingdom and the US, to books by numerous authors, including a series by Bay Area author Laurie R King that imagines a pluckish San Francisco girl encountering the great detective during World War I.

One such author, Leslie Klinger, challenged the Doyle Estate’s practice of trying to force authors to pay a modest license fee, if only to avoid the possibility of litigating the issue. Mr. Klinger won a declaratory judgment in the trial court that he was free to use the “classic” (written before the 1920s) Sherlock Holmes. When the Conan Doyle estate appealed, Judge (and prolific author) Richard Posner affirmed the trial court in Klinger v. Conan Doyle Estate, finding no “basis in statute or case law for extending a copyright beyond its expiration. When a story falls into the public domain, story elements—including characters covered by the expired copyright—become fair game for follow-on authors.” Read the rest of this entry »

Now for The [Good] News…

September 5th, 2014

by: Andrew K Jacobson

The news has been dreary for some time now, and September has not been friendly in the recent past. Under all that gloom, it is easy to forget that there is a lot of good news out there:

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These good news stories lack the drama of conflict. Whether it is late night explosions in the Middle East, natural disasters in places you’ve never seen before, or the latest televised car chase, it is easy to believe that things are going to hell in a hand basket. The things that are getting better lack the immediate drama but are making lives better all the same.

Cell Time

September 3rd, 2014

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by: Andrew K Jacobson

Employers have long known that they have to reimburse employees for out-of-pocket expenses like mileage or meals with clients. Now employers can add cell phone costs, when an employee uses his or her own cell phone and plan.
Employers have long provided landlines and cell phones to their employees. However, cell phones are already in nearly every pocket or backpack. Employers are increasingly relying on the employees’ personal phones for contact, even if the employee is not regularly out in the field.

Cal. Lab. Code § 2802(a) states: “An employer shall indemnify his or her employee for all necessary expenditures or losses incurred by the employee in direct consequence of the discharge of his or her duties, or of his or her obedience to the directions of the employer . . . .”
Cal. Lab. Code § 2802(c) defines “necessary expenditures” as “all reasonable costs, including, but not limited to, attorney’s fees incurred by the employee enforcing the rights granted by this section.”

In August, 2014, the Second District Court of Appeals in California ruled that employers have to reimburse employees who use their own cell phones as part of their job. In Cochran v. Schwan’s Home Service, 2014 Cal. App. LEXIS 724, 2014 WL 3965240, the appellate court found that

“The threshold question in this case is this: Does an employer always have to reimburse an employee for the reasonable expense of the mandatory use of a personal cell phone, or is the reimbursement obligation limited to the situation in which the employee incurred an extra expense that he or she would not have otherwise incurred absent the job? The answer is that reimbursement is always required. Otherwise, the employer would receive a windfall because it would be passing its operating expenses onto the employee. Thus, to be in compliance with section 2802, the employer must pay some reasonable percentage of the employee’s cell phone bill.”

(Emphasis added). This ruling applies even if the employee is not personally liable for the costs of the cell phone plan – for example, when the employee’s parent pays for the cell phone plan.

Employers can avoid looking at this as yet another burden placed upon them, and instead look at this as an opportunity to provide a tax-free fringe benefit to their employees. The Internal Revenue Service has already clarified the tax treatment of cell phone reimbursements. The Small Business Jobs Act of 2010 removed employer-provided cell phones from the roll of “listed property,” which normally requires extra record keeping. Employer-provided cell phones are no longer taxable to the employee if they are for business purposes. Similarly, reimbursements for business-related cell phone use will be treated as a de minimis fringe benefit that does not have to be reported as part of the employee’s income.

Employers may consider the question of cell phone usage reimbursement itself of minimal interest. However, under Cal. Lab. Code § 2802, employees can sue for up to three years of past reimbursement, and be awarded their attorneys’ fees and costs. For a company with fifty employees using their own cell phones, the three years’ past usage (at $50/month) would quickly rise to $90,000 – and attorneys’ fees could be twice that. This will be a lucrative area for employees’ lawyers. Employers will be wise to develop a policy that avoids a lawsuit. The Cochran court left the question of what a reasonable percentage of a cell phone plan is for another day, leaving employers to decide a reasonable reimbursement. Spending a little time now, putting a good reimbursement policy in place, can pay off for a long time into the future, while improving employee morale.

eJuror Scam

August 5th, 2014

Don’t get scammed — there is a scam email pretending to be from your friendly federal district court. It states that you have been selected for jury duty in federal court, and that you have to provide them with lots of information, like your social security number, your driver’s license, mother’s maiden name, and the like.
While federal courts do call people for jury duty, they do NOT request private information like that in an email.
Lawyers like us respect those who serve on juries. While it is an imposition, our system of justice needs the common sense of jury members. Pretending to be a jury summons to get private financial information is wrong, and we are happy to warn about it.

A Skull Full of Mush

August 4th, 2014

by: Andrew K Jacobson

 

The New York Times recently featured an article  on Oakland’s own Sustainable Economies Law Center, which helps prospective lawyers apprentice with a lawyer for a few years while learning the law. Every law student who suffered “the ramen noodle and Contracts casebook at 12:30 am” existence finds it tempting. My publicly funded law school, Boalt Hall, demands  nearly $50,000 a year in tuition, fees, and books for California residents; for shelter and food, tack on another $23,000. Boalt now costs only a few dollars less than what the private Stanford Law School charges. A law student can rack up over $200,000 in loans in three years – making large, well-paying law firms the only realistic option. Liberating yourself of those soul-draining costs sounds tempting. 

According to the New York Times’ article, only four states – Virginia, Vermont, Washington, and California – allow people to only read the law before taking the bar exam. Just 60 people nationwide took the bar exam after apprenticing with a lawyer, and only 17 passed. SELC’s legal apprenticeship program is designed “to train lawyers on the specific legal needs of the resilient communities movement.” SELC identifies a real problem with law schools – the cost – but ignores the benefits of a solid legal education – a boot camp for the mind.
Read the rest of this entry »

Don’t Put It On My TTAB

July 30th, 2014

 

by: Andrew K Jacobson

If an executive agency, the Trademark Trial and Appeal Board (“TTAB”) decides an issue, are courts bound to follow that decision? The circuit courts of appeal have multiple conclusions, but the Supreme Court seems poised to resolve this in the next year, because of its decision to hear a case  called B&B Hardware v. Hargis Industries. At stake could well be both the right to trial by jury, and the power of the judiciary.

The President, subject to the advice and consent of the Senate, appoints the Secretary of Commerce, who then appoints the TTAB judges. Most of the 21 current TTAB judges are former TTAB examining and interlocutory attorneys; few have much experience outside of the United States Patent & Trademark Office. Their powers derive from the President’s powers under Article II of the Constitution. Federal courts derive their powers from Article III of the Constitution. The President specifically appoints federal judges, and the Senate gives its advice and consent. While few Article III judges have the depth of trademark registration By Joseph Morewood Staniforth [Public domain], via Wikimedia Commonsexperience that most TTAB judges have, they do have much broader experiences, both as judges and in their former careers as lawyers.

Further, trademark infringement litigants have the right to a trial by jury under the Seventh Amendment. The Ninth Circuit Manual of Model Jury Instructions has its own jury instruction (No. 15.16) for establishing likelihood of confusion, which lays out the Ninth Circuit’s traditional Sleekcraft test. Requiring federal courts to give preclusive effect to TTAB decisions would rob a jury of its right to decide matters, and instead grant that right to an executive agency. Such a ruling would violate both the Constitution’s Seventh Amendment, and the Separation of Powers doctrine. Read the rest of this entry »

Foiling the Hyenas

July 5th, 2014

by: Andrew K Jacobson

Hyena 313pixBiologists assure us that scavengers are an important part of the ecosystem, because they consume the carrion so that the material can enter the food chain again. In the financial world, scavengers take the form of buyers of bad debt, but there is a difference – the carrion, regular people in difficult circumstances, are still very much alive.

The plunge from the easy money of the 2004-2008 era to The Great Recession hurt a lot of people. The easy credit of plastic morphed into a nightmare of bills and the inability to make even minimum payments. People who lost their jobs or were unable to afford finance charges that, in some cases, exceeded 20% annually, were saddled with debt that they couldn’t pay back, and no one gave them a break. However, the banks that initially extended the bad debt, at worst case, were folded into healthy banks, and usually sold their bad debt at a deep discount – as low as 1%-2% of the total value – to companies that make their living suing those who can’t pay back their debt. How does someone in tough circumstances fight back against the hyenas? Read the rest of this entry »

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