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Orange County Business & Commercial Law Blog

Handling a non-performing business partner

If a California business owner is dissatisfied with the performance of a business partner, certain actions can be taken to resolve the dispute. How the situation is dealt with depends on a variety of factors, including how the business is organized and the contents of any written agreements regarding this kind of situation.

When a company is organized as corporation, individuals who own the majority of its stock can generally vote on whether or not to remove a non-performing partner. If a company is legally designed to function as a partnership or the non-performing partner owns at least 50 percent of the shares in the company, this method is not valid.

Breaching a sales contract

A sales contract is any contract between a buyer and a seller where the seller agrees to provide a certain product or service and the buyer agrees to provide some type of payment. Once both parties sign, the contract is legally binding, and the customer may sue if the terms described in the contract are not carried out. Sales contracts are common, and it is worthwhile for California residents to understand how they work.

Breaching a sales contract can occur in a variety of ways. If the product provided does not match the description in the contract, that is considered a breach. If a service is provided, then the service must match the description, and providing a different service would constitute a breach. The seller must also follow through on service agreements, such as promised warranties. These are considered material breaches because they go against the core intention of the contract.

Supreme Court to hear patent defense claim involving Cisco

A multi-million dollar lawsuit between California-based Cisco Systems and a competitor has reached the U.S. Supreme Court, after the justices agreed to hear an appeal of a $64 million verdict from earlier on in the case.

The case centers on patent law. Commil USA LLC accuses Cisco of infringing one of its patents on a piece of wireless-transmission technology. Commil won at trial and was awarded a $64 million verdict.

Understanding the value of protecting business trademark rights

When your California business invests time, money and manpower into developing a brand and the goodwill that goes with it, the resulting trademark is worth protecting. This trademark is an important and valuable asset that identifies your company as the source of your products. When competitors take advantage of this and attempt to capitalize on that goodwill and value, our firm may be able to help.

If you don't defend your mark against unscrupulous use of a confusingly similar mark by competitors, you may put those hard-earned rights in jeopardy. Additionally, the goodwill may be tarnished by the existence of lesser-quality knock-offs on the market. Consumers may believe that the original product and any trademarks associated with it are signs of poor quality.

Band sue Sirius XM for copyright infringement

On Sept. 22, a federal judge in California ruled in favor of the popular 60s band The Turtles that had filed a copyright infringement lawsuit against Sirius XM Holdings Inc. According to the judge's ruling, a California law about copyrights of sound recordings made before 1972 was not limited to control over live performances of the songs.

The Turtles are a band that is most recognized for their 1967 hit song 'Happy Together". In August 2013, the band's copyright infringement lawsuit against the satellite broadcasting company was moved from state court to federal court. According to the band, Sirius XM used their music without permission and did not provide them with any compensation. The band is seeking more than $100 million in damages.

Steps to take to avoid partnership disputes

Many entrepreneurs in California elect to form partnerships when they go into business with others. While this type of arrangement is often productive, problems may develop as the business matures and grows. Other partnership disputes may occur when new partners who may have differing views about how to move the business forward are brought into the picture. Partners who fail to address these issues in a timely manner run the risk of turning a mild disagreement into a serious confrontation.

Many partnership disputes may be avoided by identifying potential areas of disagreement and putting contingencies in place. An operating agreement that clearly defines roles and responsibilities should be drawn up and signed, and it would be prudent for this agreement to outline how future conflicts will be resolved. The language of this document should be clear because its purpose is to provide enforceable action plans for anticipated scenarios.

How long does copyright protection last?

California residents who are interested in copywriting a work may have questions about the duration of protection. According to the U.S. Patent and Trademark Office, differences exist based on the date the work was created. If the work represents a collaboration, further rules apply.

Copyrighted works created after Jan. 1, 1978, are protected for 70 years plus the author's lifetime. Creation means the work was newly placed in a tangible format. If the author uses a pseudonym, or if the work is considered anonymous, the copyright lasts for 95 years after publication or 120 years after creation. If the author's name is listed at the copyright office, anonymity in this context does not apply. This holds for works done as an employee or contract worker, although the employer is the holder of copyright. Collaborators are protected by copyright for the life of the last living author plus 70 years.

Trade secrets litigation in California

Trade secrets such formulas, computer algorithms and marketing strategies are often among the most valuable assets of California businesses, and protecting them is usually a high priority for business law attorneys. However, the courts may be placed in a delicate situation when hearing cases regarding trade secrets: They must weigh the promotion of competition and free enterprise against the wishes of a business to legitimately make the most of its strong position in the marketplace.

If you operate a business in California, its trade secrets are protected by the federal Uniform Trade Secrets Act. Violations of this law usually involve trade secrets being acquired by misrepresentation or theft or an individual breaching his or her legal duty to maintain secrecy. Damages in cases where trade secret rules have been violated can be high, and if your business wins such a case, it could be awarded exemplary damages and compensation for attorneys' fees and lost profits.

Material breach and available remedies in California

Written agreements in many cases will contain provisions regarding remedies in the event of a material breach. A material breach in contract law is a failure to perform that irreparably breaks the contract and is often also referred to as a total breach. In the event of a material breach by one party to the contract, the other party reserves the right to terminate the agreement and go to court in an effort to collect damages related to the breach.

In certain cases, the parties to a contract will include provisions relating to remedies in the event that a breach occurs. Sometimes such provisions are only restating what is already provided under the law. Often these provisions will simply serve to lengthen the agreement. In addition, including a large number of provisions for remedies in an agreement could serve to imply that one or more of the parties will not be entitled to any remedies not referenced within the agreement. Some remedies, especially equitable ones, remain at the discretion of the court. This also includes an award of specific performance. Basically, any breach could result in a claim for damages, but a material breach is generally the only type that serves to excuse a non-breaching party from its obligation to perform.

The value of a notary in avoiding contract disputes

One way that a number of contract disputes in California actually start is when someone who feels they are getting the worse side of a deal say that they did not sign the agreement. Once a person states that they did not actually sign when they did, a large and expensive legal battle may ensue. However, by having a notary witness signatures to the contract, this is no longer the case.

The point of having notaries present during signing is that they not only view individuals signing a document or contract, they also verify that the person is who they say they are, usually through some form of acceptable photo indentification. Notaries are required by state law to keep a log of all signatures that they witness as well as stamping the document. The benefit of using a notary is that a number of state courts and all federal courts have decreed that a notarized signature is automatically considered authentic.

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