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Orange County Business & Commercial Law Blog

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.

Billionaire facing lawsuit from his son's business partner

Pacific Investment Management Company's co-founder remained a partner at the company until very recently. After his departure, however, other partners at the firm claimed that billionaire damaged the company. Now, in addition to those allegations, the man is facing a lawsuit from his son's former business partner.

The complainant met the billionaire's son while involved in the music industry, and after some time, the two decided to start a company known as G Squared. The two each went to Monte Carlo, a firm that the co-founder of Pacific Investment does business through, and borrowed $1.5 million each to fund their new venture. In a lawsuit filed by the partner, however, it is claimed that the father began to dislike the arrangement.

Protecting a trademark against infringement

California business owners recognize that a trademark is an important facet in a commercial world, enabling a company to establish its identity while encouraging easy recognition by customers. Unfortunately, successful trademarks can be easy targets for copying due to the desire of others to capitalize on the success of the companies that have created them.

There are various options for addressing and stopping trademark infringement. The dates for use of a trademark are not factored into consideration as attorneys for the U.S. Patent and Trademark Office evaluate applications. However, the trial and appeal process may include consideration of dates of use. It may be important for a company alleging trademark infringement to substantiate claims of use preceding that of another entity. A company may also seek to cancel a competitor's mark by engaging in opposition proceedings. Trademark infringement action can also be filed in order to obtain an injunction against another entity's use of a mark.

Monster to 'face the music' over Beastie Boys flap

California based energy drink maker, Monster, has been embroiled in legal troubles stemming from accusations about the amount of caffeine in its drinks and how it reportedly has caused a number of deaths. Now it is fending off allegations that it used several recordings without permission in promoting an event.

According to a Bloomberg.com report, Capital Records, LLC and Universal-Polygram International Publishing Inc. are suing Monster over the drink maker’s alleged use of several Beastie Boys tracks in a video shown at a snowboarding event in 2012. The recording companies reportedly own the rights to the songs and claim that Monster did not seek their permission before using them to promote the event.

What is a trade secret?

Ever wondered what Apple does to make its products cool, even though it has competitors who essentially sell the same products? Ever wonder how McDonald's makes its fries so crispy and irresistible? What about the way Krispy Kreme doughnuts are made, or the special way that BMW cars hug the road?

If you had questions about what goes into these products (or how they are made), you are not alone. Yet, they all have a distinction that sets them apart. The recipes or makeup behind these unique identifiers are called trade secrets. 

Appellate court rules for Yelp over reviews placement dispute

In a prior post, we highlighted the possibility that businesses who received bad reviews on Yelp.com could sue customers who posted such reviews. We explored the threshold of proof a company would have to meet in order to be successful given that customers are free to make their feelings known about a company or its products in any way they choose, as long as they are not providing false information.

Yelp is in the news again because of how negative reviews were allegedly posted on some businesses’ profiles. Four different businesses brought suit against Yelp claiming that it extorted (or at least attempted to extort) larger advertising fees out of the companies by threatening to post negative reviews higher on a business’ profile page if it did not purchase a costlier advertising package. 

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