Companies often spend a good deal of time and money building a portfolio of trademark registrations in countries in which they do business. However, when a company goes through a reorganization or its assets are purchased, foreign registrations are sometimes given short shrift.
“The new owner often puts off recording the transfer of the foreign registration until it is time to renew the registration,” says Colleen Flynn Goss, counsel at Fay Sharpe LLP. “This typically doesn’t end well.”
Companies risk losing their registrations and it is not always a given that a new registration will be granted.
Smart Business spoke with Goss about what companies need to keep in mind regarding trademarks in foreign countries during the transfer of assets.
How do companies run into trouble maintaining title to foreign trademark registrations during an asset transfer?
While a company’s trademarks and associated registrations are generally properly listed in sale or transfer documents, transactional counsel often doesn’t understand the regulatory requirements of different jurisdictions when it comes to formalizing the transfer of title. A common error we come across is that the transfer language simply says that the company transfers 'all worldwide right, title, and interest in the ABC trademark and to any and all registrations and applications throughout the world.' This simply will not suffice in many countries.
Although title to trademarks is transferred in a bill of sale or assignment document executed at closing, you still need to record the title change in the required format with the proper trademark registries around the world. This can be expensive when there are registrations in multiple countries.
Why wouldn’t one record the assignments as soon as the transaction is completed?
Because recording assignments can be quite expensive, companies are reluctant to incur the expense of recordation, particularly with a large portfolio registered in several countries. Often, the new owner will decide that it will wait until the particular registrations are due for renewal. The thinking is that if the mark is no longer of value in the particular country of interest, the registration will just be allowed to lapse and the cost of recording has been saved. That’s fine – if the mark is no longer valuable and the registration will be allowed to lapse. The problem with this approach is that in most countries a trademark registration is valid for 10 years. What happens if a mark remains important and a problem arises with the transfer documents several years after the transaction is completed?
Why shouldn’t a company wait to register the transfer of a trademark?
Many countries require the use of specific forms that have to be filled out in a very particular way in order to register a transfer. For example, the process might necessitate that you have documents signed both by the new and original owner, or you may need the original documents and not certified copies or legalizations by particular consulates. Or, you may have the situation described above where all of the particulars of the foreign registrations are not listed.
Consider this scenario - Widget Company acquires the assets of TT Inc., including the trademark registrations for house brand TOPSY TURVY in 15 countries in Europe, Asia and South America. The registration for TOPSY TURVY in Russia is due for renewal eight years later and, lo and behold, the yellowing photocopies copies of the trademark assignment that counsel forwards to its associate in Russia for recordation are refused because they do not conform to the requirements for transfer in Russia. This is easy enough to fix with a confirmatory assignment document. However, if there are no longer any officers from TT Inc. available, it can be difficult to finalize a simple confirmatory assignment.
While you may have thought that you were saving money by waiting to file the transfer documents at the time of closing, you may have just walked into greater expense. Additional documents with certifications and legalizations to correct title may be available but have added to the cost. More important, it may not be possible to record the documents at all. Now the company is faced with filing a new application. This is more expensive and is certainly more time consuming than recording title. And here is the unfortunate part – just because you had a registration does not mean that you will be able to obtain a new registration for the same mark. The end result may be that Widget loses its house mark in an important market.
Why not simply file the new application?
Just because you had a registration does not necessarily mean that you will be able to obtain a new registration for the same mark. When one files a trademark application, there is generally a mechanism that allows a third party to object to registration of a particular mark.
There may be entities with similar trademarks that did not contest your application when it was originally filed 20 years ago but might now be in a more financially and market secure position to do so. This could prevent the registration of your mark, even if it has been established in that country for many years.
In addition, the market growth of some countries, such as China, has been significant. Because such countries now have more trademarks on their registry with which to compare new filings, there is a greater chance of conflict with an existing trademark. If your registration is refused you may be prohibited from doing business in that country under your mark, face infringement claims by third parties, or encounter customs issues.
How can companies ensure they have done what is necessary to maintain their trademark rights?
When you are acquiring or reorganizing a company, involve intellectual property counsel for specific guidance on trademark transfer. Make sure that the transfer language and schedules completely and accurately list all of the trademarks and associated registrations and that the conveyance clause includes a specific reference to the transfer of the goodwill associated with the marks. Conduct due diligence to ensure that title to these registrations in various jurisdictions is correctly in the name of the seller. Take the time to contact foreign trademark counsel and obtain and execute the country specific transfer documents. You may still be able to avoid some of the immediate costs of recording transfer documents by postponing recordation of the executed transfer documents until the renewal is due. This way, you have short-circuited the problems that could occur eight years down the road when you need those signatures or papers to complete the transfer and the requisite documents or people are no longer available.
However, the best practice is to bite the bullet and file at the time that the acquisition or reorganization occurs because there is less chance of encountering problems. For companies operating in the international marketplace, trademark registration and protection of your trademark in other countries is just as important as protecting your trademark in the U.S.
Colleen Flynn Goss is Counsel at Fay Sharpe LLP. Reach her at (216) 363-9132 or email@example.com.
Insights Legal Affairs is brought to you by Fay Sharpe LLP.
With health care costs continuing to rise, many employers are turning to their health plans to find ways to cut costs. And one way to do so is to make sure that your health plan covers only those who are eligible, which can result in significant cost savings. Most employers do not like to hear the word audit, but a dependent eligibility audit can save a business a significant amount of money on their employee benefits, says Craig Pritts, a sales executive with JRG Advisors, the management arm of ChamberChoice.
“The objective of a dependent eligibility audit is to identify dependents who are not eligible to be on the health plan,” says Pritts. “Those can include dependents who have exceeded the age limit that allows them to be covered, divorced spouses or even friends, roommates or other relatives who are not eligible.
It is estimated that between 3 percent and 15 percent of dependents on an average plan are not actually eligible for coverage. And just one ineligible participant can have a substantial impact on a health plan, depending on the costs of their claims.
Smart Business spoke with Pritts about how performing a dependent eligibility audit and removing ineligible dependents from a health plan can translate into significant cost savings for employers.
Why should employers consider performing a dependent eligibility audit?
ERISA includes stringent eligibility rules for plan sponsors, and employers need to ensure that all plan documents, including the summary plan description (SPD), are consistent when defining dependents. A dependent audit helps ensure that you are in compliance with ERISA by providing benefits only to eligible participants.
It is recommended that plan documents be amended to reflect the process that will be followed in determining dependent eligibility going forward, i.e., frequency of audits, the verification process, potential penalties, etc.
One important factor to remember is the rule for dependent children based on the 2010 Patient Protection and Affordable Care Act (PPACA). For all plan years beginning on or after Sept. 23, 2010, children can be considered dependents until age 26, regardless of marital status and student status.
What are the steps to performing an audit?
There are typically two steps to performing a dependent audit. First, employers should establish a period of amnesty during which employees can voluntarily remove ineligible dependents from the plan with no penalty. The most common way of doing this is to notify employees of eligibility rules in writing so that they can review the status of covered dependents. Employers generally give employees one month to notify them of ineligible dependents they may have on the plan. Ineligible dependents that are voluntarily removed are then terminated from the plan at the end of the following month.
Second, for all dependents remaining on the plan after the initial amnesty period, employers should require employees to provide documentation to verify the dependent status/relationship and to confirm that such a relationship still exists. Examples of required documentation could include marriage certificates, domestic partner affidavits, birth certificates, adoption papers, tax forms, etc.
If an employee is unable to show proof of a dependent relationship — or declines to do so — the employer may impose penalties, terminate coverage or seek reimbursement for claims that were paid for dependents during the time in which they were deemed to be ineligible. While employers typically do not seek disciplinary action as a result of the initial audit, this is an option.
Many cases of dependent ineligibility are the result of oversight, such as forgetting to remove a child when that child reaches the maximum age limit, but other instances, such as failing to remove a former spouse, or stepchildren who live elsewhere, can be intentional and can be a serious issue to the employer. The health plan’s ability to provide for its intended beneficiaries is significantly compromised when ineligible dependents receive benefits.
Who should conduct the dependent eligibility audit?
Many employers choose to hire an independent firm to conduct an audit. This can be done on a risk-sharing basis, in which payment to the firm is based on the percentage of recovered amounts or estimated savings as a result of the removal of ineligible dependents from the plan. Using an outside firm can help your business with your employees’ perception of the independence and objectivity of the audit and make them less suspicious of the company gathering what they may perceive to be private information.
For a smaller employer who chooses to perform the audit internally, this may result in additional work but the potential savings can be worth the time and effort exerted to do so. It is important to weigh your company resources against the potential payoff of cost control and ongoing risk exposure when determining if a dependent eligibility audit is right for your company.
Talk to your benefits advisor to learn more and determine if a dependent eligibility audit is right for you. Because as many as 15 percent of dependents enrolled in a plan may not actually be eligible, spending money on an audit could prove to be an investment that saves your company a significant amount of money.
Craig Pritts is a sales executive with JRG Advisors, the management arm of ChamberChoice. Reach him at (412) 456-7253 or Craig.firstname.lastname@example.org.
Insights Employee Benefits is brought to you by ChamberChoice
Shared decision making in health care can be simply defined as decisions that are shared by doctors and patients. These decisions are informed by the best evidence available and are weighted according to the specific characteristics and values of the patient.
In 2010, a study in the New England Journal of Medicine reported lower costs and fewer hospital admissions when patients were given shared decision-making tools to help understand their options and the consequences of those options.
“Shared decision making acknowledges that there is no single right answer for everyone and that medical decisions involve value judgments,” said Dr. Stephen Perkins, vice president of Medical Affairs for UPMC Health Plan. “Shared decision making doesn’t mean that the physician’s opinion does not matter in the ultimate decision. It means that the patient’s opinion will be given weight when a real choice is available.”
Smart Business spoke with Perkins about the concept of shared decision making and how it can be a force to raise quality and reduce cost in health care.
Why is shared decision making gaining acceptance?
Shared decision making encourages physicians to include, as part of their treatment routine, consultations with patients about options and outcomes. This gives the patient an opportunity to offer an opinion about those options and can result in a shared decision about treatment.
Both physicians and patients are increasingly coming to see the value of this. When decision making is shared, there is more comfort and satisfaction by the patient with the treatment decisions. This can lead to a greater acceptance of responsibility and engagement in developing and executing long-term treatment plans, which can lead to improved long-term health outcomes. As a result, there is a reduction of wasteful spending associated with noncompliance. Shared decision making can reduce wasteful spending because instead of physicians driven to practice ‘defensive medicine,’ ordering tests primarily to avoid potential lawsuits after the fact, physicians and patients can agree on a course of action beforehand and commit to that.
What are the barriers to shared decision making?
Shared decision making can be difficult because it balances two elements that can be in opposition to one another. One is the patient’s right to have input into treatment options, the other is a physician’s responsibility to provide the best evidence-based health care. Time is also an obstacle. Both physicians and patients may believe that they do not have the time necessary to go over all care choices.
What are some of the advantages of shared decision making?
If a decision is truly shared, there is a greater chance that it will increase patient satisfaction, which can lead to decreased anxiety and a quicker recovery because there is a greater likelihood that there will be full compliance with treatment regimens.
When shared decision making is done correctly, the treatment course will reflect what is most important to a patient who is well-informed and who fully understands all options and all of the potential outcomes of treatment. In addition, greater patient involvement in decision making often leads to lower demand for health care resources.
What does shared decision making look like?
The American Medical Association has recognized three core elements that need to be part of shared decision making: clinical information, values clarification, and guidance and communication.
Clinical information includes a synthesis of relevant scientific evidence about the patient’s medical condition, the available treatment options and the risks, benefits and outcomes associated with each option. Values clarification is a presentation of the more subjective elements of the patient’s condition and treatment options. This may require testimonials from actual patients and a questionnaire-type tool to help patients articulate their priorities.
Guidance and communication means providing the help and guidance needed in order for patients to make decisions with which they are comfortable. In short, the patient needs to be fully informed and fully engaged, and the final decision needs to involve both patient and physician.
A growing body of research indicates that both patients and physicians benefit when patients are well informed and play a significant role in deciding their treatment. Because any shared decision is more likely to match patient preferences, values and concerns, patients are more likely to stick with treatment regimens and experience better health afterward.
What is required of the patient in shared decision making?
The patient must not be too intimidated by their doctor to ask questions. The patient should not be shy about expressing personal feelings; they matter in this process. A patient must also come to grips with the idea that there are times when medical decisions need to be made, without complete assurance as to how they will turn out.
Patients can maximize the value of their physician visits by bringing a list of questions with them, by bringing a friend or family member to help them remember concerns, by taking notes, and by asking your doctor to summarize what you talked about at the end of the session.
Dr. STEPHEN PERKINS is vice president, Medical Affairs for UPMC Health Plan. Reach him at (412) 454-7682 or email@example.com.
Insights Health Care is brought to you by UPMC Health Plan
Eighty-five percent of small business owners feel that their cyber security is adequate, according to a recent survey. However, that sense of security may be a false one, as two out of three businesses have been victimized by a data breach or cyber security incident, according to a national preparedness report recently released by the Federal Emergency Management Agency.
“There’s a false sense of security out there by business owners,” says Jason Corrado, commercial insurance advisor for First Commonwealth Bank. “They believe that it will never happen to them or that they are properly protected, but things are changing so quickly that more times than not, that is not the case.
Smart Business spoke with Corrado about the cyber threats facing businesses and how to prepare for them and protect your business.
Why is cyber security so important to businesses, especially mid-sized ones?
Look at where technology has gone. Think about where we were 10 years ago, where we were five years ago and where we are today as far as the transfer of electronic data, customer information, etc. And it’s only advancing faster and faster. It’s an important subject, especially now, because many businesses have been slow to realize the severity of the risk they face, and 40 percent of businesses don’t even back up their data.
As larger companies — such as Sony and Zappos.com, that have had data breaches — take this more seriously, they are investing time, energy and money into protecting their clients’ information. As a result, hackers will pursue the low-hanging fruit — the smaller and mid-sized businesses that haven’t invested the time and energy into security because they don’t think they have the resources.
What are some of the risks that employers face?
There are the obvious ones, such as hackers who find weaknesses in software and electronic systems to gain access, sometimes with the aid of malicious codes such as viruses, worms and Trojan horses. Cyber extortion, in which someone will hijack your website and hold it hostage until you give them X, Y and Z, is also increasing.
However, there are other risks you might not think about. If a company allows its employees to take laptops with them on the road or home, and one of those is stolen, what happens to the data on there, especially if it includes sensitive customer information.
Another risk is your Wi-Fi network. Have you taken steps to make sure it is secure? It sounds simple and you may assume that most people do so, but as many as 50 percent of businesses have open Wi-Fi networks that can be picked up by a smartphone, making them easier to hack.
What steps can a business take to combat exposure?
The first step is risk assessment. If you have a website, if you do business online, you need to figure out what your exposures are, and if you don’t know, then enlist the help of someone who does. What kind of data are you capturing from clients? Where are you storing it and how are you backing it up? If you don’t understand your risks, you can’t eliminate them.
Risk management is the second part. Put together an IT risk management plan, which is a formal written document that addresses the scope of the plan, the roles employees in your company play, the responsibilities of individuals and departments, compliance criteria, how you’ll tell customers if there is a breach, etc.
The plan outlines what you can do to prevent cyber attacks. You can train employees on cyber security; install and update anti-virus, anti-spy software on computer systems; check your Internet firewalls; make sure software and systems are up to date; back up and make copies of critical data; and control physical access to computers by ensuring employees use the proper passwords and don’t leave terminals or laptops open.
You can also take smart business steps such as evaluating your Internet service provider. All service providers are not created equal, so beyond getting you on the Internet, what does it offer to reduce exposure with security and privacy?
Once the IT risk management plan is in place, you need to hold all employees – including yourself — accountable. Sometimes owners and officers are the biggest offenders for not following proper procedures where data is concerned. You also need to review your plan annually, or when you make significant changes to the systems that you are operating.
Aside from an IT risk management plan, are there other ways to manage your risk?
You can identify all the exposures that are out there and getting a plan in place, but risk financing can also act as a backstop if your prevention measures fail to protect your company.
With cyber liability insurance, you pay a premium to an insurance company to help you in case something does happen. If your systems are hacked and you’re down for a couple of days or you lose data, the insurance will protect your company’s assets and help you recoup costs. Cyber liability insurance also will protect you if one of your employees sends an email with a virus and a third party’s system gets infected. In addition, you can use business interruption insurance to fill the gaps of lost revenue if a cyber attack stops you from conducting business.
By using risk assessment, risk management, risk prevention and risk financing together, even mid-sized businesses can hedge against cyber attacks.
Jason Corrado is a commercial insurance advisor for First Commonwealth Bank. Reach him at (724) 934-4569 or Jason.Corrado@fcfins.com.
Insights Wealth Management is brought to you by First Commonwealth Bank
Last month I introduced the concept of a “dress rehearsal.” So here is where the dress rehearsal comes in. If you’re five years from retirement, begin to live now on that bottom-line number you identified to be your future retirement income need. Working within your budget and with your advisor will help you focus on what nonessential expenses need to be eliminated or adjusted prior to retirement. Statistics indicate that retirees will need 70 to 100 percent of their pre-retirement income during their retirement years. Rather than guess what that required income need is, let’s identify your future bottom-line monthly number now.
So as you begin to determine the actual monthly income need for your eventual retirement, you may stumble across insurance expenses for life, disability, long-term care and other insurance needs. What will you need to maintain and eliminate in retirement? Hopefully your children will be financially responsible and living on their own, minimizing your responsibility to cover their liabilities and commitments. However, if you have made assurances to your family to cover any of the shortfalls in their future, consider how these promises will affect your overall retirement income needs.
Having a conversation with your property and casualty agent is a good starting point to determine what coverage is needed on your homeowner’s, auto and excess liability exposure. Hopefully you have had the conversation with your wealth manager/life planner as to where you plan on retiring. Your residence location will definitely impact your decisions. Determining where you will live during retirement and what risks you will need to cover will give your agent an idea as to what proposals to prepare.
As you begin to address your future property and casualty insurance needs, you’ll need to evaluate the other insurances that you have previously budgeted during your earning years. Begin by reviewing the needs, purposes and future status of these policies by creating a spreadsheet of all of your life, disability, long-term care, personal, and business policies. Identify the date of issue, premium amount, length of coverage, portability, and the ability to maintain coverage, and its importance in your overall strategic estate plan.
Some of the policies, e.g. disability insurance, may terminate at a specific time or event (such as at age 65 or when you are no longer gainfully employed due to retirement, etc.). There may be some insurance policies that you will have no control over whether they continue in your portfolio. Other policies, such as long-term care and life insurance, may provide you more flexibility with incorporating them into your new legacy plan. However, applying for any improvements into these policies may be dependent upon your current health and other factors. Once the spreadsheet is completed, identifying the various polices owned, your wealth manager can help you determine the relevance of each policy and how it fits in with your strategic estate and legacy plan.
With the increasing expenses of healthcare costs, a long-term care insurance policy should be a fundamental building block as you create the foundation for the preservation and transfer of your family legacy. As you receive proposals from your insurance agent, share this information with your wealth manager. Together you will determine which plan might best accomplish your overall strategic estate vision. Reviewing your LTC policy during this dress rehearsal phase pre-determines the budget allocation in your retirement expense projection.
Another way to protect, preserve, and/or provide heirs with liquidity of your legacy is through life insurance. What policies have you listed on your spreadsheet, and how are they owned? Are the policies personal or business? Which one(s) can you maintain or will you want to keep? Which ones are scheduled to terminate prior to or during your retirement? Remember, your health situation may limit your ability to purchase additional coverage or replace obsolescent contracts.
Initially, you are attempting to get a handle on your insurance expenses during this dress rehearsal phase. This in-depth discussion on estate planning and budgeting will now better prepare you for your discussion with your estate planning attorney to begin changes or amendments to your existing documents.
The focus of a wealth manager/life planner is to help you develop an ultimate legacy strategy. Once the vision is clear, then the techniques and products can more easily be assimilated to create your desired outcome. Many clients agree that they have been blessed with abundance, and they are concerned for the welfare of their children, grandchildren and other heirs. Long-term care insurance and life insurance can be great tools for wealth replacement or wealth preservation.
Make this dress rehearsal a powerful experience. You are preparing for the next phase of your life: a successful retirement.
Robert A. Valente, CFP®, AEP®, is CEO and Managing Member of RAV Financial Services LLC. He can be reached at firstname.lastname@example.org.
Insights Wealth Management is brought to you by RAV Financial Services LLC.
The evolution of Curse Inc. is the story of founder and CEO Hubert Thieblot’s coming of age. In 2003, he was a 17-year-old high school student in Paris. Rather than concentrating on his studies and attending class, he was engrossed in video games. Thieblot became enthralled with the massively multiplayer online game, “World of Warcraft.” When Thieblot wasn’t playing the game, he worked on developing a website to share “World of Warcraft” modi?cations and plug-ins to allow players to change their user interface.
He originally designed the website just for his friends, but quickly learned it was something the whole MMO and “World of Warcraft” community needed. His website created a centralized location where players could ?nd the best add-ons for their play styles. Launched in 2006, Thieblot’s website traf?c skyrocketed, and he realized he had a viable online business. Today, Curse is the No. 1 resource for online gamers and the largest MMO property worldwide.
As the company grew, Thieblot learned a lot about what it meant to be a CEO and entrepreneur. In 2008, he moved the company to the United States. He realized the add-ons market was too niche for the company to expand further, so the company began offering community news, forums and databases for quests and items. This decision has led to exponential growth ever since.
At Curse, employees are gamers and a part of the community for which they build products and services that are superior and will bene?t the community. What sets Curse apart is its focus on the player and his or her success in his or her virtual world of choice. Curse is focused on providing great content and platforms for online games and supporting players throughout their entire life cycle with a game, not just the purchase point.
HOW TO REACH: Curse Inc., www.curse.com
EMERGING, AWARD RECIPIENT
Geoffrey Barker had some solid experience as an entrepreneur when he noticed something in common with his previous two technology-related start-ups: Both companies had been tagged by patent trolls (those who purchase a patent just to sue another company claiming that a product infringes on the purchased patent). The legal issues escalated and, ultimately, led to defense costs of more than eight ?gures.
So Barker and his partners in 2008 founded RPX Corp., the ?rst defensive patent litigation company in the intellectual property market. It has become a leading supplier of patent risk solutions, offering defensive buying, acquisition syndication, patent intelligence and advisory services to technology companies worldwide. Being the ?rst business of this kind resulted in unique challenges, including learning how to build the right team for a new venture that is trying to accomplish something quite innovative in the market and identifying the right blend of employees and resources.
Under Barker’s leadership as co-founder and COO, he focused not only on obtaining individuals with top skills and an impressive education, but those with great aptitude and attitude. Barker promotes the ?rm’s innovative, honest and entrepreneurial culture to attract and retain talented individuals.
Barker also thinks that employing people should include signi?cant investments in training and professional development for them. As such, RPX is investing to create a best-in-class analyst training program to recruit and develop the next generation of business leaders. Barker believes that developing the skill sets of employees will not only bring value to RPX, it will create more dynamic professionals who will contribute to the company and society for years to come.
HOW TO REACH: RPX Corp., www.rpxcorp.com
Health care reform is a topic that is on everyone’s mind, and for good reason.
How health care reform evolves over the next several years will impact all of us. We have already witnessed more than 1 million dependents under the age of 26 being added to their parents’ employer group insurance plans.
In addition, these plans no longer have lifetime limits for coverage and many plans have removed any cost sharing, such as copays, deductibles and coinsurance for selected preventive services. High-risk pools have also been established for those who have previously had difficulty obtaining coverage, says Chuck Whitford, a client advisor with JRG Advisors, the management arm of ChamberChoice.
“As we move through 2012, there are several events that will determine exactly what health care reform will look like in 2014, the first full year of full reform implementation as spelled out in the Patient Protection and Affordable Care Act (PPACA) legislation that President Barack Obama signed into law more than two years ago,” says Whitford.
Smart Business spoke with Whitford about health care reform and the impact it will have on your business.
What is the first major action that will impact health care reform?
The first major action that will have an impact on reform will come in June from the United States Supreme Court. In March, the Supreme Court heard arguments over legal challenges to the health care reform law. The main controversy with the law has been whether Congress had the authority under the Constitution’s Commerce Clause to require individuals to purchase a product — health insurance -— or be required to pay a penalty (referred to as the individual mandate).
The court also heard a challenge to the health care reform law’s expansion of the eligibility requirements of Medicaid to cover individuals beginning in 2014. A third issue is whether the law can function as intended if the individual mandate is found to be unconstitutional.
Are there new requirements in the law that will impact employers?
The health care reform law does contain new requirements for 2012 that employers need to be aware of. The first one is the Summary of Benefits and Coverage (SBC), which must be provided to participants following the guidelines established by the regulations. The SBC will be limited to four double-sided pages and provides straightforward and consistent information about health benefits and coverage provided by the employer.
Its purpose is to help health plan consumers better understand the coverage that they have and to help make easy comparisons of different options. The SBC must be provided on the first day of the first open enrollment period that begins on or after Sept. 23, 2012.
What does the Patient Protection and Affordable Care Act require plans to provide?
PPACA requires plans and issuers to provide at least 60 days’ notice of any material modifications in plan terms or coverage. The final regulations clarify that plans and issuers are required to issue the 60-day advance notice when:
- A material modification is made that would affect the content of the SBC
- The change is not already included in the most recently provided SBC
- The change is a mid-plan year change — that is, it does not occur in connection with a renewal of coverage
Under the final regulations, plan and issuers must provide the SBC each year at renewal. When a plan timely provides the 60-day advance notice in connection with a material modification, the final regulations provide that the plan will also satisfy ERISA’s requirement to provide a Summary of Material Modification (SMM)
What changes are coming later this summer?
Effective for health plan years starting on or after Aug. 1, 2012, nongrandfathered plans must cover specific preventive health services for women with no cost sharing. These services include well-women visits, STD screening and contraceptives.
In addition, fully insured plans may be entitled to receive rebates in August 2012 if they qualify due to the medical loss ratio rules requiring insurance companies to spend a certain percentage of premium dollars on health care, rather than on administrative or other expenses. The rebates must be used for the benefit of the plan’s enrollees, which may include reducing enrollees’ premium payments.
Also, beginning with the 2012 tax year, employers that are required to issue 250 or more W-2 forms must report the aggregate cost of employer-sponsored group health coverage on employees’ W-2 forms. For now, smaller employers are exempt from this requirement until further guidance is issued, but they may be subject to it at a later date.
It has never been more critical for employers to understand what they must do to be in compliance with health care reform as it continues to evolve and be absolutely clear on their responsibilities from a reporting standpoint.
Advisors who are knowledgeable on health care reform can be a great asset to any organization as employers undertake a level of change that has never been seen before.
Chuck Whitford is a client advisor with JRG Advisors, the management arm of ChamberChoice. Reach him at (412) 456-7257 or email@example.com.
Insights Employee Benefits is brought to you by ChamberChoice
When the developers of Watters Creek at Montgomery Farm were looking for a location for their unique, resort-style, mixed-use development, they had a number of options.
Plans for the 52-acre project included a large creekside village green, interactive public art, a variety of retail options, restaurants with al fresco dining and views of the water, and office space and residential lofts, says Cornell Holmes, senior general manager of Watters Creek.
Ultimately, they found that Allen, Texas, offered everything that they needed to succeed.
Smart Business spoke with Holmes about the reasons for choosing Allen and the role the Allen Economic Development Corporation has played in its success.
What played into your decision to locate Watters Creek in Allen, Texas, over other available locations?
As a developer of regional malls, outdoor retail and mixed-use properties, we were conducting a nationwide search for development opportunities. At the time, we used a software program that identified pockets of areas of qualifying population density, growth trends and demographics.
After that, population pockets were further qualified by distance to existing higher-end retail centers. As a company based in Fort Worth, Texas, we were pleasantly surprised when Allen, Texas, ranked in the top five of our nationwide search. Additionally, award-winning Montgomery Farm was being developed and land within a half mile of Central Expressway frontage was available.
What role did the Allen Economic Development Corporation play in your decision to locate in Allen?
Initially, we were attracted to Allen for the fundamentals: strong job growth, an educated work force, household income levels and an outstanding location with available land. Next, the stakeholders committed to creating a truly unique environment and due diligence was conducted based upon plans of creating a LEED certified, vertically integrated urban village with ample open space and top retailers.
At that point, things became challenging. We had already decided that we loved Allen before we knew much about the Allen Economic Development Corporation. But when the due diligence process started to get rough, the AEDC really stepped up and made this opportunity go much more smoothly for us. The AEDC bridged the gap and played a monumental role in making Watters Creek at Montgomery Farm a reality.
How has your relationship with Allen Economic evolved and been maintained?
As a developer/landlord in multiple markets, we appreciate the economic or business Development teams in all the cities in which we have projects. A good ED/BD team helps get the initial project done, assists with attracting quality tenants and helps drive up occupancy. Many cities have good economic development teams. However, Allen has a great economic development team.
The AEDC continues to connect with the existing business community in Allen and they have a real pulse on everything that is happening in the business community. They continually reach out and share ideas. They also provide introductions between existing area businesses and are committed to maintaining a happy and productive work force in Allen.
And of course, they promote our businesses. The Allen Economic Development team is like an extension to our own team and it is incredible to have access to such talent and support.
How has the location impacted your success?
The old cliché is that the three most important things in real estate are location, location and location, and Watters Creek at Montgomery Farm nailed all three. Besides being in a city that is strategically located just 10 minutes north of Dallas, the location along Central Expressway is approaching the 200,000 cars per day mark.
Second, the location is surrounded by growing daytime employment centers. Just across the street is Allen Central Park, a 38-acre site which, when complete, will be a million-square-foot, master-planned office development. Directly across the interstate are more than 500,000 of existing square feet of office, with plans for further development.
Third, the location is part of the Montgomery Farm development, an interconnected master plan on one of the most beautiful landscapes in North Texas. Montgomery Farm is a model for the environmentally conscious community and connects prairie, forest, upscale residential (high, medium and low density), retail and office within 500 acres.
What advice would you give to other business owners considering moving their companies to Allen?
I would advise other business owners not only to meet with the Allen Economic Development Corporation but to take a look at the total package that Allen has to offer as a place to work, live, and play.
- Ranked among the Top 10 Safest Cities in the country.
- Ranked among Forbes Top 20 Best Places to Move.
- Allen Independent School District is lauded as one on the best in the nation, with 10 campuses rated as exemplary and seven earning a recognized rating under the accountability standards set by the Texas Education Agency.
- The city council, mayor and city manager, and every department from planning to parks to police to fire exhibits the same level of commitment that the AEDC exhibits in partnering with the business community. It is like having additional members of your team without the additional payroll.
And when you’re not working, there is also plenty to do and places to play, including 700 acres of parks, 40 miles of hiking and nature trails, five recreation complexes, a skate park, Hydrous Water Park and top dining and shopping.
To anyone looking to relocate a business, I would recommend contacting the AEDC to see what Allen, Texas, has to offer.
Cornell Holmes is senior general manager of Watters Creek. Reach him at (972) 521-5005 or firstname.lastname@example.org. For more information on the Allen Economic Development Corporation, visit www.allentx.com.
Insights Economic Development is brought to you by Allen Economic Development Corporation
U.S. patent law is going through some changes with the implementation of the America Invents Act (AIA), and these changes could affect businesses.
“The biggest change is that in the past, a patent would be awarded to the first to invent and under the AIA, it is now the first to file,” says Tim Nauman, a partner with Fay Sharpe LLP.
The transition represents a big change in U.S. patent culture because the first to invent system in the U.S. was viewed by many as beneficial to entrepreneurs. If you were the first to invent, you could fight for the patent regardless of how quickly someone else filed for it. However, under first to file, some say it is now the one with the most resources who gets to the patent office first who wins.
Smart Business spoke with Fay Sharpe partners Joe Dreher, Eric Highman and Nauman about how changes to U.S. patent law will impact businesses when they take effect in March 2013.
What benefits come with the change in the patent law?
The U.S. was historically the only country that issued patents under first to invent, so this harmonizes U.S. laws with those in other countries. People want consistency; they don’t want to deal with different laws in each country.
Also, the determination of who invented first was sometimes a complicated process, called interference, which the Patent Office or federal District Court would undertake in the event of a dispute over who came up with an idea. The new system eliminates that administrative or court proceeding with regard to this issue, which created some uncertainty for businesses
What can companies do to stay competitive, given the changes to the law?
Ideally, if you think of an idea today, file it today. But while there is no quicker process to getting an invention application on file and established, reality would tell you that this probably isn’t going to happen.
Companies are accustomed to having their employees/inventors fill out an invention disclosure form that they then submit to an internal review process. But that takes time. So under the AIA, the best thing to do is file a provisional patent application as quick as possible and flesh out the internal review details later so as not to get beat to the Patent Office.
While that takes care of the early part, filing multiple provisional applications is just as important because as the idea transforms into a marketable concept, it can change. As the development process goes forward, there could be other features that need to be filed in much the same way as the first. If you haven’t described all of those features in the original filing, you can potentially be second to someone who has.
What’s the difference between a provisional and a nonprovisional application and which is preferred?
In the U.S., provisional patent applications can serve as a basis for garnering an early filing date. It establishes a reliable priority date for “first to file” purposes, but a patent won’t be issued from it. Rather, a nonprovisional patent application must be filed within one year from the earliest provisional application. It is the nonprovisional application that is searched and substantively examined by the U.S. patent examiner. The official fees for nonprovisional applications are more than twice as expensive, so it makes sense to file multiple provisional applications quickly and at a lower rate.
However, there are competing concerns of getting the provisional application filed quickly and getting it filed with sufficient detail. It’s important to get as much detail as possible in the provisional application(s) because only that which is disclosed in a provisional application is entitled to the priority date. If there isn’t enough detail in the application to make the invention work, it may not qualify for patent protection.
Does public disclosure by the inventor impact rights to a patent?
The best approach is to file a detailed provisional application before the product is made public or file as soon as possible after the disclosure. If the application is not filed before public disclosure, the inventor still has one year from such disclosure to file a patent application in the U.S. However, under the AIA, this one-year grace period is subject to someone else filing modifications or variations ahead of the inventor’s patent application on what has been disclosed. There is a risk that businesses might suffer from a false sense of security thinking that they don’t have to file their patent application immediately because of public disclosure. Therefore, if the disclosure has occurred, file the detailed provisional application as soon after as possible.
Foreign filing considerations may also come into play. If you file for a patent application in the U.S., you have one year in which to file in a foreign country with the benefit of your first filing date. However, if you publicly disclose your invention before you file your patent application, you destroy your patent rights abroad. So, public disclosure before filing is not advisable if you are going to file for a patent in another country. Filing a provisional application prior to public disclosure preserves the potential of getting foreign patent rights.
What should companies do ahead of enactment of the new laws?
Under the current law, you can go back and prove an earlier invention date. For applications filed under the new law — beginning March 16, 2013 — it’s first to file, which means you can’t go back before your initial filing date to prove earlier invention.
Before AIA takes hold, finish all of your provisional applications and, in some instances, convert existing provisional applications with added features/subsequent development work to nonprovisional applications by March 15, 2013 so you still have the benefit of the first to invent law.
Tim Nauman, Eric Highman and Joe Dreher are partners at Fay Sharpe. Reach them at (216) 363-9000.
Insights Legal Affairs is brought to you by Fay Sharpe.