TRADEMARK AND PATENT ‘TROLLS’ DEMAND THEIR PRICE TO CROSS THE BRIDGE
Those of you savvy with the internet may be familiar with the term “trolls”. It generally refers to individuals who post inflammatory or provocative messages online, often in an attempt to harass others. The term “patent troll” refers to an individual or company who buys and then enforces patents against an alleged “infringer”, usually in an opportunistic manner. Blunter individuals would refer to them as extortionists. Similarly, the term “trademark troll” refers to an individual or company who attempts to register and enforce a trademark without any real intention to use that trademark, in an attempt to force others who use the same (or a similar) mark to pay them. The “troll” part of the name is a reference to the attempt to collect a toll from vulnerable people.
For the most part trademark trolls have had little success, as simple registration of a trademark does not give exclusive rights over the mark; Courts look for ‘actual use’ of the mark in commerce. Unfortunately patent trolls are another matter. These individuals often purchase dozens if not hundreds of patents cheaply from bankrupt companies, and then file demands or lawsuits against any company arguably infringing on the patent. Often the claims are legally specious, and rely upon the theory that a quick pay-out will be made rather than incur the costs of litigating the matter. Texas has apparently become a hotbed for these types of companies, and the issue is expected to continue to grow in 2012.
Trademarks and patents are not the only areas in which opportunistic individuals can prey. It is important that one understand their rights and obligations when buying or selling a business, including the rights and obligations that may be associated with the goodwill of the business, any potential trade secrets, and express and contingent liabilities. An ounce of prevention in this regard can often avoid substantial expenses and stress later. If you have any question about your legal rights do not hesitate to contact our offices.
New Employment Law Changes for 2012
Last month, Governor Jerry Brown signed into law numerous new addendums and edits to the California Labor Code, effective beginning January 1, 2012 for any entities doing business in the state. We have provided below a brief summary of some of the key provisions of the new laws. Employers may wish to take note of these changes and be prepared to potentially revise their employment practices and policies to comply with the new codes.
| “Wage Theft Prevention Act” | AB 469 – created Labor Codes §2810.5 and §1197.2; amended Labor Codes §1174 and §243 | Employers must provide newly hired non-exempt employees with written notice of information about their pay such as rate and timing of pay, including commissions and overtime, and any allowances claimed as part of minimum wage. Additionally, new hires must be supplied with information about the employer including any “doing business as” names, contact information, and the address and telephone number of the employer’s workers’ compensation insurance carrier. If any changes occur to this information, employers must provide written notice to employees within seven days. The Labor Commissioner is required to create a template for this purpose which employers may use. Additionally, employers are now required to keep employee payroll records for three rather than two years. AB 469 also sets stringent new regulations on employers regarding wage violations. An employer who willfully fails to pay a final court judgment or order for wages within 90 days may be criminally liable for a misdemeanor offense. If convicted, the employer can be fined up to $10,000 or imprisoned for six months if the amount owed is less than $1,000. If the amount exceeds $1,000, the employer may be fined between $10,000 and $20,000 and imprisoned for up to a year. Furthermore, until the employer posts a bond or pays the wages, the court may grant an order prohibiting the employer from conducting business in the state. |
| Independent Contractor Misclassification | SB 459 – created Labor Code §226.8 and §2753 | Imposes fines on employers for “willfully” misclassifying a worker as an independent contractor and gives joint liability to any non-attorney consultant who advises an employer to misclassify a worker. The initial fine ranges from $5,000 to $10,000 and repeat violations can be fined from $10,000 to $25,000 per infraction. Additionally, the employer is required to post a notice prominently on its website stating its violation of the code. The Labor and Workforce Development Agency also must report a licensed contractor in violation of this law to the Contractors State License Board, which must then pursue action against the licensee. |
| Employee Medical Leave | AB 592 and SB 299 – amended Labor Codes §12945 and §12945.2 | SB 299 requires an employer to provide full health coverage for up to four months during Pregnancy Disability Leave (PDL) at the same level and under the same conditions that would have been provided had there been no leave, regardless of whether or not this worker also qualifies for the California Family Rights Act (CFRA). AB 592 clarifies existing laws against refusal to allow a worker’s right to leave under PDL or CFRA by inclusion of the phrase that it is an unlawful employment practice “to interfere with, restrain or deny the exercise or attempt to exercise” rights to a leave of absence under these laws.
Note: The passage of AB 592 was contingent on the passage of SB 299 – both bills were successfully passed. |
| Commission Agreements | AB 1396 – amended Labor Code §2751 | Employers who pay employees commissions must have a written and signed contract containing the method of calculating and paying commissions. This contract, even after expiration, will be presumed to be in full force and effect until termination of employment or until the contract is specifically superseded.
Note: This law does not take effect until January 2013. |
| Employer Credit Checks | AB 22 – created Labor Code §1024.5 | Bans most employers from obtaining credit information about applicants or employees (with exceptions for certain positions including law enforcement, some positions at financial institutions, positions involving access to proprietary trade secret information, and others). If a credit report is necessary and legal, the employer must provide written notice to the applicant or employee that a credit investigation is being conducted, citing which specific exception makes it legal to obtain the report. If an applicant is denied a position on the basis of information in a credit report, the applicant must be supplied with the name and contact information of the credit reporting agency that supplied it. |
| E-Verify |
AB 1236 – amended Labor Code §1391.1 |
Allows employers to use E-Verify to determine employees’ work eligibility on the basis of I-9 citizenship forms and social security information, but bans counties and cities from requiring private employers to use these checks. |
| Definition of “Gender” | AB 887 – amended Labor Code §3600 | Amends California’s antidiscrimination laws to clarify that “gender expression” and “gender identity” are protected classes covered in the definition of the term “gender” already included in these laws. “Gender expression” refers to a person’s gender-related appearance and behavior and “gender identity” refers to what gender a person identifies with, regardless of the individual’s biological sex at birth. This also strengthens protection for equal health coverage for registered domestic partners and married spouses. |
New Rad|Kro Attorney
We are pleased to announce the addition of a new attorney to our practice, Kristine Scribner. Kristine is a graduate of McGeorge School of Law and UC Davis. She is experienced in many areas of law including intellectual property, civil litigation, employment law, and business disputes and will serve as a great asset to our clients who are facing issues like these. In her free time, Kristine enjoys taking day road trips and cooking. We are excited for the quality legal expertise and service she brings to our firm and to our growing client base.
Who Usually Wins At Trial
One issue that may not be discussed in the litigation context as often as it should be is: “who usually wins this kind of case… plaintiff or defendant?” Of course, this question is, by its very nature, broad and ill-defined. It fails to take into account that every case stands on its own and the presence or absence of a few key facts can often result in a win over a loss. In other words, the facts of each case vary considerably, and thus generalizations are often hard to make.
While understanding that this principle is true, there are still patterns to be gleaned from the awards juries and judges make at trial. With this in mind, take a look at some of the statistics found in certain types of cases.
A study of medical malpractice cases in California from 1993 to 1999 shows that approximately 1,283 medical malpractice cases went to verdict. Plaintiffs “won” in only 310 of those cases, a success rate of 24.1%.[1]
From a 1990s report on auto accident jury verdicts in California, the statistics show that plaintiffs won at trial approximately 61% of the time. However, these verdicts varied statewide with plaintiffs in Los Angeles County only winning approximately 54% of the time, versus plaintiffs in Alameda County who won approximately 60% of the time.[2] What exactly accounts for this statistical variation may be any number of factors, including regional bias and prevailing attitudes, cultural make-up, and the severity of the cases making their way to trial.
When it comes to employment wrongful termination lawsuits in California, the statistics show that in 1992 plaintiffs won approximately 52.4% of jury verdicts, whereas only four years later in 1996, plaintiffs only won 46.5% of jury verdicts.[3] Of these cases, unlawful discrimination was alleged in 56% of the cases, and unlawful retaliation in 31% of them. The other cases usually involved contract matters where the employee claimed there was an express or implied agreement not to terminate them except for good cause. The statistics showed that plaintiffs were less successful in discrimination and retaliation cases than they were in contract cases, and that the contract cases were likely to be filed by executives, professionals, or higher level managers. The employment law statistics can be compared to the overall success rate for all tort cases in selected California counties, in which plaintiffs won between 45.7% to 73.3% of the time in matters involving financial harm.[4]
A 2005 report by the U.S. Department of Justice found that at a national level, viewing all types of cases as a whole, plaintiffs won approximately 53.2% of jury trials and 65.7% of bench trials (where a judge decides the case).[5] The report noted that bench trials usually involved business litigation. Nationwide, plaintiffs won approximately 66% of contract cases, and 52% of tort cases. Plaintiffs were most successful in litigation involving animal attacks (winning 75% of the time), followed by motor vehicle accident (64%), asbestos (55%), and intentional tort (52%) cases. Plaintiffs had the lowest percentage of wins in medical malpractice trials (23%), products liability cases not involving asbestos (20%), and false imprisonment or imprisonment trials (16%). The Department of Justice report is an interesting read for lawyers and non-lawyers alike, and can viewed at: http://bjs.ojp.usdoj.gov/content/pub/pdf/cbjtsc05.pdf.
Any good lawyer would agree that statistics are only one aspect of whether or not someone should file a lawsuit or take a case to trial. Statistics are no substitute for knowing a case inside and out, and knowing in your bones that your client has been “wronged,” or that your client is truly innocent. Scholars who have researched the topic of jury verdict statistics have convincingly argued that you cannot draw concrete inferences from jury verdict statistics because there are so many competing explanations as to why a certain jury found a certain way.[6] Moreover, depending on the type of case, jury trials usually account for only 1% to 12% of the total cases filed in court.[7] However, as they say “statistics don’t lie,” and for this reason they can help provide an overall impression of a case, as well as a bit of the wisdom only learned once a trial is completed.
[1] J. Clark Kelso & Kari Kelso, Jury Verdicts in Medical Malpractice Cases and the MICRA Cap (1999)
University of the Pacific McGeorge School of Law
[2] National Association of State Jury Verdict Publishers, Trials Digest, Oakland California.
[3] David Jung, Jury Verdicts in Wrongful Termination Cases, (October 29, 1997.) Public Law Institute, Hasting College of Law
[4] Id.
[5] Bureau of Justice Statistics, (October, 2008) NCJ 223851 http://bjs.ojp.usdoj.gov/content/pub/pdf/cbjtsc05.pdf
[6] Neil Vidmar, Making Inferences About Jury Behavior from Jury Verdict Statistics, Law and Human Behavior, (1994) Vol. 18, No. 6.
[7] Id.
CALGREEN v. LEED
Since its inception in 1998, the Leadership in Energy and Environmental Design system, more commonly known as LEED, has been held as the highest echelon of green building standards in the United States. For meeting any of LEED’s stringent environmental requirements in construction, a project is awarded LEED points on a 100 point scale. These points correspond to a certification hierarchy, with a “platinum” certification entitling its bearer to advertise that the building in question meets the highest possible standard of environmental awareness in construction techniques. Until recently, these green building qualifications were entirely voluntary in the state of California; no minimum environmental standards for new construction existed. Many contractors sought to achieve high levels of LEED accreditation for the positive, earth-conscious reputation that comes along with certification, but it was not legally required that new construction meet environmental standards.
However, on January 1, 2011, the 2010 California Green Building Standards Code (Part 11 of the California Code of Regulations, Title 24), also known as CALGreen, went into effect, establishing mandatory minimum standards of green building practices for most new construction in the state, along with some additional voluntary components. CALGreen is notable as the first state-wide green building code in the country, in keeping with California’s typical role as a leader in environmentalism across the nation. While CALGreen is not meant to replace LEED, its writers did take into consideration the standards addressed at the lower levels of LEED certification in an attempt to make comparable legislation. Satisfying the mandatory components of CALGreen qualifies a project for 10 LEED points, with an additional 25 to 40 points possible under the voluntary components of CALGreen.
From an environmentalist standpoint, it is hard to find theoretical fault with any law mandating green construction techniques, yet the new law remains controversial because of the implications of forcing conformity with its requirements on nearly all new buildings. Some environmental advocates argue that CALGreen does not go far enough in its requirements and that it should have been written to adhere to the higher levels of LEED-qualifications. Some critics worry that CALGreen will be seen as a replacement for LEED certification rather than a supplement, deterring the pursuit of the platinum LEED rating and allowing builders to settle for lower standards. After all, if everyone is required to comply with green building techniques, there is no longer the incentive of “bragging rights” to encourage more environmentally-friendly construction. LEED accreditation used to be a golden goal for many builders, but the new requirements may make green buildings so ubiquitous that builders will no longer be able to use their “greenness” as a subject of advertisement to appeal to environmentally-conscious consumers. By negating this key incentive, some fear that CALGreen may do more harm to the environment than good because fewer builders will be inclined to strive for high levels of certifications.
Conversely, some contractors and builders resent being forced to follow these standards from an economic standpoint as they can prove costly and can slow the pace of construction. The main goals of CALGreen are to reduce the environmental impact of construction through minimizing waste, as well as to make new buildings more efficient in their use of energy. Accomplishing these two goals can require more expensive building strategies, such as irrigation to reduce runoff of contaminated water from the construction site and recycling of at least 50% of building materials. Furthermore, since the law is new, builders and architects are scrambling to learn what standards are included in CALGreen and what methods of construction they must follow in order to be in compliance. Additionally, some inspectors must be trained to specialize in CALGreen in order to adequately determine projects’ fulfillment of requirements, a costly and time-consuming process.
In the chart below, we have highlighted five key sections of CALGreen and LEED (Sustainable Planning and Design, Energy Efficiency and Atmosphere, Water Efficiency and Conservation, Material Conservation and Resource Efficiency, and Environmental Quality), along with some key standards addressed under each of these sections for non-residential construction. This can provide a brief, rough comparison of how LEED’s standards are similar or dissimilar to requirements established under CALGreen.
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CALGreen v. LEED
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Sustainable Planning and Design Similarities:
Dissimilarities:
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Energy Efficiency and Atmosphere Similarities:
Dissimilarities:
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Water Efficiency and Conservation Similarities:
Dissimilarities:
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Material Conservation and Resource Efficiency Similarities:
Dissimilarities:
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Environmental Quality Similarities:
Dissimilarities:
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For a comprehensive overview of the CALGreen legislation, view the Housing and Community Development Department’s brochure at http://water-concepts.info/newsportal/wp-content/uploads/2011/08/CALGreenGuide_COMPLETE.pdf
For a more in-depth side-by-side comparison of LEED requirements to CALGreen requirements, view the United States Green Building Counsel’s websites here:
http://www.usgbc-ncc.org/storage/usgbcnccdev/documents/advocacy/gbcec_2010_calgreen_residential_gpr_leed_comparison.pdf (for residential projects)
http://www.usgbc-ncc.org/storage/usgbcnccdev/documents/advocacy/gbcec_2010_calgreen_non_residential_leed_comparison.pdf (for non-residential projects)
New Law Against Rental Restrictions in HOA communities
If you live in a homeowner’s association you are probably familiar with rental restrictions, or at least the feeling that renters are a bad thing for neighborhoods. For the last decade there has been an increase in amendments to the governing documents to include a restriction for renting the property. Normally the restrictions prohibit an owner from renting the property for terms of less than thirty days. The catalyst behind the rental restriction movement is rooted in the idea that owners take better care of the property.
Covenants, conditions and restrictions (CC&Rs) strive to reach a delicate balance between making homeowners maintain their property while at the same time allowing owners to retain some of their “frontier” land rights. Due to the increased nature of rental restrictions and based on successful lobbying efforts, early this year Governor Brown signed SB 150 into law which prohibits a rental restriction provision in a homeowner’s association governing documents. Effective January 1, 2012, Civil Code section 1360.2 will prohibit a rental restriction provision if the following conditions are met:
(1) The provision must be located in a governing document or an amendment to a governing document;
(2) The governing document or amendment must take effect on or after January 1, 2012; and
(3) The owner of the property must have acquired title to the interest in the property before the governing document or amendment became effective.
This represents a substantial change to the Davis-Stirling Act, which is the section of the California Civil Code which governs most common interest developments, or as they are known, homeowner’s associations. While this law represents a victory for landlords and tenants, it may have less impact than anticipated. If an association properly records a rental restriction amendment prior to the effective date of January 1, 2012, the law will only protect future amendments and preserve any restrictions in place. Naturally, if you live in an association who has wrestled with passing a rental restriction amendment, you can expect that there will be a rush to pass amendments before January 1, 2012.
The Economic Toll On The Construction Industry
In an economic downturn, the construction industry is often hit harder and longer than other industries with decreases in demand, funding, and development. When relatively large portions of our population are facing issues like foreclosure and bankruptcy, it can be difficult for investors and builders to justify the construction of new homes or businesses. Even once other sectors of the economy begin to recover, the construction industry is often the last to improve as buyers and financers become more frugal and less willing to take a risk on an investment.
According to a report in the Sacramento Business Review, the US Census Bureau reported that the vacancy rate of buildings in the Sacramento area reached 7.4% in 2009, and has likely risen even higher since then. Additionally, Sacramento was listed in the top 10 cities for foreclosures at the end of last year. Given the excess supply of empty buildings in our city, it is not surprising that construction virtually ceased altogether when the recession hit. Unemployment in the construction industry has hovered at a national average around 20%, compared to about 9% nation-wide across all industries. In 2005, construction jobs comprised 8.6% of Sacramento’s payrolls; today that figure has fallen to only 4.3%. In fact, Forbes Magazine ranked Sacramento as the fifth worst city for unemployment in the country, a negative designation it attributes to the slow recovery of the construction industry here.
In light of these statistics, one might look around the city of Sacramento and expect to see hundreds of forlorn-looking abandoned buildings, not the giant construction tower cranes which have obscured the skyline in many parts of the city in the past year. Until recently, these cranes provided a beacon of hope that, despite the extended hiatus from most building projects, Sacramento’s construction industry was slowly beginning to turn around as a product of federal and state funding into New-Deal-esque public works programs.
So far, these public works projects have infused the local economy with more than $4 billion in development, mostly centered on four areas: the rail yard and Township 9 in downtown Sacramento, the Bridge District in West Sacramento, and the Curtis Park Village in the neighborhood of Curtis Park. According to the Sacramento Business Journal, the four projects were primarily funded through infrastructure bond programs administered by the Department of Housing and Community Development and additional public subsidies. The projects created thousands of construction jobs in our community using public funding. In turn, the development and construction in these four areas was intended to spur demand for other private construction around the newly revitalized parts of the city.
As a product of some tacked-on additions to the state budget passed at the end of June, however, the construction on these areas of our city has screeched to a halt. The new state budget laws effectively dissolve four hundred redevelopment agencies in the state, including those responsible for the public works projects here in Sacramento. Under the law, these agencies can only remain in existence if they agree to pay a portion of their financial resources, a yearly total of about 1.7 billion dollars statewide, toward schools and other public programs. In the current economic climate in which these revitalization projects have been struggling to succeed, this additional taxation could be an insurmountable challenge to the revival of the construction industry in Sacramento.
John Shirey, executive director of The California Redevelopment Association, stated an intention to sue to maintain funding for redevelopment projects and to block implementation of the new budget laws before they take effect on October 1 (see the Sacramento Bee article linked below). State legislators, in contrast, maintain that the state budget deficit does not leave room to fund redevelopment construction projects at this time. It remains to be seen which side of this debate will come out on top. Those tower cranes, once emblematic of hope and revitalization in our community, may now stand unused until the state budget becomes better balanced or until Shirey and others can convince the California Supreme Court of the importance of their projects.
To see the Sacramento Business Review report, go here.
View the Sacramento Bee article on the budget laws here.
For the Forbes Magazine ranked list of cities with the worst job markets, go here.
And to see the Sacramento Business Journal’s report on the public works programs, go here.
