Many companies train employees to enter phrases such as ‘confidential’ or ‘attorney work product’ and copy counsel when sending sensitive emails so that the information is protected under attorney-client privilege. In the event the company becomes embroiled in litigation, counsel would see such phrases and flag the messages as privileged, preventing them from inadvertently being produced to the other side during discovery.
However, while it’s a good idea to include such phrases in messages, it’s not always enough in the court’s eyes to designate it as privileged. Also, a computer’s auto-save feature may have saved versions of an email that didn’t include such phrases, leaving them unprotected. Both of these issues arose during Oracle America, Inc. v. Google, Inc.
“For each email being composed, Google’s system was saving multiple drafts of it. That’s probably something that you wouldn’t want to do,” says Jude A. Fry, a partner with Fay Sharpe LLP. “Then when the company got sued, there were, for this single email, multiple versions, and the only version put on the privileged log was the final one.”
Smart Business spoke with Fry about how companies can ensure privileged information sent through email is protected.
What happened in the Google case?
Oracle claimed Google’s Android smartphone platform infringed its patents, and the two entered into litigation. An email that included language that could be harmful to Google in the patent case was placed on a privileged log, a document describing items that can be withheld from a case under attorney-client privilege.
That internal email was sent to the vice president in charge of the Android smartphone platform at Google, copying Google’s counsel in the ‘to’ field. The email was captioned ‘attorney work product’ and ‘Google confidential.’
While the final version of the email was placed on a privileged log, auto-saves of the email were inadvertently produced to Oracle’s counsel during discovery. Since the auto-saved drafts did not include the phrases ‘attorney work product’ or ‘Google confidential,’ they were not caught by electronic scanning mechanisms.
Google demanded that Oracle return the emails under the clawback provision of the protective order, claiming the emails were privileged. Oracle returned the emails but filed a motion to compel their production. The district court ordered that the emails be reproduced.
How were the auto-saved drafts of the email not coded as privileged?
When doing the search, counsel was likely using key words to see what was coded as privileged. There were probably thousands of emails produced. Counsel was able to locate the final email because, by that point, the author had put the phrase ‘attorney work product’ in the email’s body and added the attorney as one of the recipients. However, in other auto-save versions those phrases weren’t included, so they didn’t get flagged.
What’s disturbing is that the system saved nine versions during the time it took to type it up. Why is it necessary to save all of those versions?
Consider only saving emails that are sent, and configure your email system to delete all other versions. Also, understand how your email system works — whether auto-drafts are saved, what happens to these drafts, where they’re stored. Figure this out now and not when a case is pending.
How should a corporate employee set up an email to make sure it is privileged?
Train your employees to direct the email to legal counsel in the ‘to’ field and salutation. State in the email that information is being given to or sought from the lawyer so that he or she can give legal advice. Also, include in the message that it is being prepared in anticipation of litigation, at the direction of an attorney, to further the provision of legal advice. Include headings such as ‘attorney work product,’ ‘privileged’ and ‘confidential.’ However, these headings alone will not make an email privileged, so limit the substance of the email to the legal issues.
People write a lot of emails but often don’t think about someone other than the intended recipient reading it. When doing business though email, consider who could possibly read the message and approach it accordingly. It’s a good practice to think carefully before you put something in writing.
Jude A. Fry is a partner at Fay Sharpe LLP. Reach her at (216) 363-9113 or firstname.lastname@example.org.
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Businesses with multiple locations or branches, in many cases, are not leveraging computer network efficiencies by taking advantage of existing technologies to limit equipment deployment and enhance cost efficiencies.
“Branch offices are too often set up with unique data centers instead of having centrally located servers,” says Pervez Delawalla, president and CEO of Net2EZ.
Deploying a great deal of equipment at each office diminishes the computing power of servers at the individual branches.
“Their capacity isn’t being utilized completely at a branch and is unavailable enterprise-wide,” he says.
Smart Business spoke with Delawalla about leveraging data centers for maximum efficiency in cost and use.
What are some keys to centralizing a data source?
One important element is connectivity. If an enterprise sits in a major metropolitan area, then connectivity infrastructure should be reliable and readily available. However, when outsourcing to a data center, the connectivity piece is the least of a company’s challenges because data centers offer higher-capacity connections through multiple technologies, such as Multiprotocol Label Switching, point-to-point connection or bandwidth compression. This enables an enterprise to limit the amount of equipment it needs to deploy.
In what way does connectivity affect a business?
How a company sets itself up to utilize a data center hinges in part on the number of user accounts at that location. A smaller office with 10 or fewer employees could be well served by multiple 10-megabit connections that link to centralized hardware at a data center. Consider using an authentication server at each location. Employees log in through this server so passwords and usernames don’t travel outside of the building. Once a user is authenticated, he or she has access to all of the company’s data, enterprise-wide, housed in the data center.
Bandwidth capacity can always be added through a local provider as a company grows. From a technology perspective, it’s simply an upgrade to the connection and not a deployment of new equipment. Operationally, it amounts to simplifying that connection so it’s easier to support, monitor and track. The increased capacity of that connection helps facilitate the centralization of hardware, which allows the hardware burden to be decreased.
What savings can be realized through centralizing hardware?
A multi-branch enterprise is often using applications that are common across offices. Centralizing those common applications in a data center helps improve application management, which eliminates the need to employ IT personnel at individual locations because support can be provided at one site. It also means not having to deploy multiple servers for multiple sites, so cost savings can be realized by not buying as many server boxes.
Maintenance and upgrades also are made easier with a central data center because those don’t need to be accomplished on an individual basis. And if a security patch comes in it can be handled from one location. Further, having fewer servers means purchasing fewer licenses for software. Updates become easier, and license fees are less of an expense because software doesn’t have to be deployed in all locations.
However, just because hardware is centralized doesn’t mean everything is housed on a single server. The number of physical servers needed depends on capacity and redundancy needs of the company.
What can companies expect after centralizing their hardware?
The main benefits of centralizing are that the efficiency for support to the end user improves, deployment of upgrades becomes simpler and cost savings can be realized from reducing physical hardware. Having centrally located hardware also provides better security, management and handling of company assets. Security is improved because hardware can be physically monitored from a single location and server access can be better controlled. With less equipment to manage, limiting access becomes easier, meaning there’s less chance a costly mistake is made.
Pervez Delawalla is president and CEO at Net2EZ. Reach him at (310) 426-6700 or email@example.com.
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Identifying the intrinsic value of your company is an extraordinarily beneficial exercise, especially when business owners are looking to maximize the sale of their company, says Joshua Geffon, a shareholder at Stradling Yocca Carlson & Rauth.
“The crown jewel of an enterprise may be intellectual property (IP), the management team, key customers or brand recognition, and/or any combination of these ingredients. The key for an entrepreneur is to recognize, exploit and promote these attributes to gain maximum value for the enterprise during the acquisition process,” Geffon says.
Smart Business spoke with Geffon about what business owners should know before engaging in the acquisition process.
What are some mistakes owners make that jeopardize the sale of their companies?
A fairly common mistake is not doing enough to secure the company’s IP. Confidentiality and IP assignment agreements, patent filings and related IP protection should be in place to have clear and strong IP ownership and title.
Broad indemnification by the seller on contracts creates risk that buyers of companies don’t like. Material contracts that allow customers, suppliers, service providers or other partners to easily terminate can significantly undermine a seller’s value proposition.
Also, tax and planning is critical. Overlooking tax-related filings often leads to significant turmoil and financial hardship. Inversely, proactive corporate and personal tax planning for founders and executives also can create real economic benefits.
What’s important to have in order before initiating the acquisition process?
Be sure you are prepared to provide copies of well-organized and complete corporate, capitalization and financial records, as well as material contracts, as part of a due diligence review by the buyer. Being well organized on these matters ahead of time will buy a lot of credibility with the buyer. Messy or inaccurate records will cast doubt on the value of your company.
What legal pitfalls often trip up the sale?
Buyers are always concerned about risk. Risk comes from inside your company in the form of personnel — employees, consultants and others — and outside from lawsuits, warranty and return claims, supplier terminations and limits on business operations.
Employees are often the company’s greatest asset and typically a company’s largest expense. Sellers usually engage in pre-emptive measures to entice employees to stay by offering equity, cash and other incentives that require personnel to work as diligently for the buyer as they did prior to the transaction.
Your company’s value proposition may be significantly weakened, and deals have died, if buyers identify agreements that limit rights to develop, manufacture, assemble, distribute, market or sell products.
How do you determine a realistic price?
Depending on the stage of your business and the industry, there are a few methodologies available. The most common are discounted cash flows and price to sales, but this relies upon a history of revenues and costs and/or sales. Early stage companies have a harder time utilizing these valuation methods.
When traditional valuation models are inapplicable, recent transactions in the sector or the valuation of similar public companies can be used. Gauging your value proposition with board members, advisers and strategic partners can help you solidify an approximate value.
Remember that buyers are valuing your business on your financial statements, projections, business plan and opportunities in your industry, along with synergistic opportunities with the buyer.
Who should help a business owner in a sale?
Secure competent, experienced service providers. These people will help you get a better sense of the market, your company’s value and your risk exposures. Get them involved well before the sale to ensure the process runs as efficiently as possible.
A good merger and acquisitions attorney will lead you through the process, identify and mitigate risks, and explore potential resolutions to issues ahead of the transaction. An independent accountant who can review and audit your financial statements also may be needed.
Joshua Geffon is a shareholder at Stradling Yocca Carlson & Rauth. Reach him at (424) 214-7000 or firstname.lastname@example.org.
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The high-profile arrest of computer programmer Aaron Swartz for illegally downloading millions of academic journal articles resulted in federal charges against him for violations of the Computer Fraud and Abuse Act (CFAA), which highlighted its use as a broad tool to combat hacking. However, varied interpretations of the CFAA have left businesses guessing when it comes to deciding how best to pursue employees who have used their access to steal and misuse confidential information.
“Currently, the law can be applied differently depending on your location. A decision in the U.S. Circuit Court of Appeals for the 9th Circuit makes it more difficult to use the law against current employees who have used their access to obtain information for the purpose of misuse. In contrast, courts in other parts of the country have adopted relatively broad readings of the statute, making it a more viable tool in those jurisdictions,” says Travis P. Brennan, a litigation attorney with Stradling Yocca Carlson & Rauth.
Smart Business spoke with Brennan about the CFAA and protecting sensitive information.
What is the CFAA and how is it applied by businesses?
The CFAA is a federal, primarily criminal, statute, though it does provide for civil remedies for private plaintiffs when someone accesses a computer without authorization or exceeds authorized access to obtain information. One of the questions presented in several cases involving the statute is: If an individual is authorized to access a company’s computer network, does that person exceed authorized access by obtaining information to use for unauthorized or competitive purposes? Some courts have said yes, which turns the statute into a tool to help police improper use of company information, in addition to a tool to help protect against outside hacking.
What are the benefits and limitations of this act?
Filing a claim under the CFAA gets the case into federal court, which is more often better equipped to handle complex disputes. Plaintiffs also aren’t required to prove the information accessed rises to the level of a trade secret. However, the remedies under the CFAA are limited. A private plaintiff has to show it suffered a loss of more than $5,000, and in most instances the recoverable loss is limited to the cost of investigating the unauthorized computer access and fixing related data disruption. That’s important to think about when considering if this is a tool that would bring a tangible benefit.
How does United States v. Nosal affect the use of the CFAA?
That case makes it more difficult to use the CFAA against current employees. The 9th Circuit affirmed a narrower interpretation, in April 2012, when it dismissed criminal counts against employees who accessed information through company-issued passwords while still employed. The court reasoned that the phrase ‘exceeds authorized access’ is limited to violations of access, not restrictions on use.
Other counts in the case dealt with access by outsiders using stolen passwords to obtain information. Some of those counts proceeded to trial and resulted in a recent conviction.
What other tools can companies use to protect their sensitive information?
State law governs the protection of trade secrets and other sensitive information. Most states have adopted some form of the Uniform Trade Secrets Act through which companies can get damages and other relief if they can show information taken contained trade secrets.
Ultimately, it behooves companies to limit or segregate access to sensitive information and have employees sign clear, written policies. If the agreements are violated, there are contractual remedies, as long as you can show harm from the breach.
While the CFAA is worth keeping an eye on, particularly in light of divergent court rulings, in instances where companies have information misappropriated, the first place to look for a remedy is through state law, such as those that govern trade secrets or the relationship between employers and employees.
Travis P. Brennan is a litigation attorney at Stradling Yocca Carlson & Rauth. Reach him at (949) 725-4271 or email@example.com.
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When manufacturing companies are looking for a new or additional location, they’re often concerned with the availability of quality labor, utility costs, freeway and rail accessibility, local and state taxes, and building availability and costs.
While these are all important considerations, there are some things to look at that might not be as apparent, which is why working with an experienced commercial real estate broker can help.
“Brokers will talk with members of the business community from similar industries to give their client a more three-dimensional picture of what it’s like doing business in the area,” says George J. Pofok, CCIM, SIOR, senior vice president of CRESCO Real Estate. “They’ll also connect with their area colleagues who live and work in those markets to give company executives both the 30,000-foot and on-the-ground views.”
Smart Business spoke with Pofok about conducting a nationwide site search and how brokers can help companies dig deeper.
What might be the biggest hurdle in conducting a national site search?
It can be difficult to get quality and timely data on building availability from existing databases. When casting a search that wide, it’s important to talk with state economic development groups in addition to searching the national databases such as CoStar and LoopNet. Commercial real estate brokers also can help companies in their search by tapping into the Society of Industrial and Office Realtors (SIOR) professional network to solicit potential sites that suit a client’s needs.
However, relying on listings is precarious. Properties as advertised are not always what they seem. Once properties of interest have been identified, phone calls should be made to all the listing agents to start verifying accuracy and solicit property brochures, photographs, floor plans and site plans.
How much weight should a company give to economic incentives?
Economic incentives can be extremely beneficial, but they often come with strings attached. Sometimes to get the benefit of an incentive a company needs to meet certain hiring requirements or pay a certain wage. But if the company fails to do so, which can be the result of factors outside of the company’s control, there can be clawback provisions.
Incentives are helpful but shouldn’t be the key driver for a decision to move. They should be weighed against other factors such as the state or county’s environmental regulations, corporate income tax and municipal tax rates. But all things being equal, incentives can tip the scales.
How can commercial real estate brokers help companies choose a site?
Many brokers come from full-service firms with coverage in most major markets, both nationally and globally. They can help tenants and/or buyers with site acquisition, incentive and location analysis, and often partner with their consulting arm to perform a network rationalization study, which allows companies to compare regions to determine the impact each would have on the different aspects of their businesses and end users.
Further, brokers can work closely with key individuals in federal, state and local government to vet initial search findings and see how each agency might be able to work with the incoming company. Being on the ground also allows a broker to determine if the local quality of life suits the business. They’ll look at housing values, the retail areas and other local amenities to give CEOs a good sense of the community they could soon become a part of.
What are some important qualities of the agent who helps conduct the search?
Look for a broker who has experience. If an agent hasn’t completed similar deals he or she won’t know the right questions to ask. Also, a broad network is key, in regards to both the firm he or she represents as well as his or her professional network. An affiliation with groups such as SIOR and the Certified Commercial Investment Member Institute (CCIM) provides a network of top-producing real estate professionals throughout the country. Ultimately, you need a broker who is diligent, works hard to earn your business, and is timely and responsive.
George J. Pofok, CCIM, SIOR, is senior vice president at CRESCO Real Estate. Reach him at (216) 525-1469 or firstname.lastname@example.org.
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Cloud computing is a broad term that can include hosting a website and data management. Unfortunately, small businesses are picking up many misconceptions in the marketplace about what the cloud is and what it means to be in the cloud.
“It’s not always the right solution for every business,” says Ryan Niddel, CEO of QuickLaunch Solutions. “It takes research and consultation from someone with knowledge to really understand how it can work for your business.”
Smart Business spoke with Niddel about cloud computing and its applications for small businesses.
What is the cloud?
There are two main aspects to cloud computing. There’s the data management side, which is primarily utilized to back up files — think Dropbox or iCloud. This allows anyone, anytime, anywhere to store and access files on servers that exist all over the world.
The other aspect to cloud computing is hosting services, which provides the infrastructure that allows a company to host its website entirely in the cloud. Anything from an entry-level blog to something of enterprise value could be hosted in the cloud. There’s no need for redundancy between the cloud and a dedicated server because the cloud gives you myriad hosting options in its architecture. Even if you’re on a dedicated server now, that data can be easily migrated to the cloud.
Is cloud hosting cost prohibitive?
Cloud hosting for small businesses is really the entry-level for commoditization of a website, and there are pay-as-you-go options that suit each company’s needs. While many hosting services take a one-size-fits-all approach, the pay-as-you-go model is more fluid, offering a billing program similar to those offered by utility companies where you pay for what you use. Using this model, business owners can spend 20 percent less than those using a dedicated server.
There are also deeper cost savings. For example, research has shown that cloud computing reduces IT labor by more than 50 percent. Because the cloud is extremely stable, it’s unnecessary to pay for IT support staff to ensure infrastructure stays operational. Cloud hosting saves money on maintenance, hardware, licensing and support, and is all around more efficient than using a dedicated server.
Is cloud hosting secure and reliable?
Cloud infrastructure is at least as secure and possibly more secure than the dedicated servers many companies are currently using. The hardware virtualization architecture used in cloud hosting keeps systems working through redundancy, which means utilizing multiple servers to back up clients’ data. And the transition from one environment to another happens with no perceived interruption in service. There’s no easier way to have that kind of redundancy. It’s a very fluid, secure and dynamic environment that seamlessly adapts to the needs of the client.
Is cloud computing a fad?
Amazon, Google and Apple have adopted the cloud as the new wave of Internet technology, and this new commoditization, pay-as-you-go model is being widely used. More companies are shifting to the cloud from dedicated servers, and much of the new infrastructure being developed by startup companies is in the cloud, so it’s here to stay. It’s where data management and hosting are going.
What sort of savings might a company realize by utilizing the cloud?
On average, companies can expect to realize an 80 percent reduction in their hosting bill if they can optimize their cloud correctly. Once in the cloud, a company can have its bandwidth utilization monitored to establish benchmarks that show usage during high- and low-traffic periods. Bandwidth will be monitored during a three-month settling period to determine the right services for that company’s needs and ensure it’s only paying for what it uses.
Hosting in the cloud is the wave of future. It allows companies to operate more efficiently and effectively, and keeps the bottom line healthy. It’s also the logical progression in the evolution of data management. And with a good partner in the endeavor, it can be a painless and seamless transition.
Ryan Niddel is CEO of QuickLaunch Solutions. Reach him at (419) 631-1270 or email@example.com.
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California passed more than 800 new laws in 2012, and Shane P. Criqui, litigation attorney at Stradling Yocca Carlson & Rauth, says, “It’s virtually impossible for any business person to keep track.”
He says among those of interest to businesses are new laws that govern social media in the context of an employee and employer relationship, and broad legislative changes regarding California LLCs.
“That’s why it’s important to have a discussion with your counsel and make sure you understand how these laws may affect your business,” Criqui says.
Smart Business spoke with Criqui to better understand two of California’s law changes.
What is changing regarding social media?
California has added protections for employees using social media to the state’s labor code, which establishes privacy protections for individuals and limits what employers can lawfully demand of employees. It helps avoid situations where employers demand private social media passwords and take adverse actions against an employee based on the content of his or her account. The law also applies to job applicants.
Specifically, an employer can’t require an employee to disclose username or password information for personal social media accounts; require an employee to access his or her social media accounts in the presence of the employer; or otherwise divulge personal social media information. Further, employers can’t discharge, discipline or retaliate against employees for not complying with such requests.
There are, however, exceptions. An employer can go after information on a social media account that’s reasonably believed to be relevant to investigations of employee misconduct or a violation of law. Employers also may require employee disclosure of passwords necessary for accessing an employer-issued electronic device.
What constitutes social media?
The definition of social media as it applies to this law is very broad and can include any electronic service, account or content such as videos, photos, blogs, podcasts, text and instant messages, and websites.
Further, while the law applies to accessing ‘personal social media,’ the term ‘personal’ is not further defined, which may create ambiguity. For example, an employee’s LinkedIn account could be used to promote his or her employer’s business but is also ‘personal’ to the employee.
What changes are coming for limited liability companies?
A 2012 bill that becomes effective Jan. 1, 2014, repeals California’s Beverly-Killea Limited Liability Company Act and replaces it with the California Revised Uniform Limited Liability Company Act. It will apply to all California LLCs existing on Jan. 1, 2014, and no LLC can opt out.
The new law presumes an LLC is member managed, unless the company’s articles of incorporation and operating agreement specifically provide otherwise. In member-managed agreements, all members can act as agents of the LLC, where in manager managed arrangements, it’s only the managers.
Other provisions are specific to fiduciary duties. Expressly, the law says managers can’t eliminate the duty of loyalty, which a manager typically owes to the LLC along with the duty of care. However, duties of care and loyalty can be modified ‘in a written operating agreement with the informed written consent of the members.’ For instance, the duty of care can be lowered, although not ‘unreasonably reduced.’
The new act also states that while an operating agreement may ‘eliminate or limit’ a member or manager’s liability for monetary damages with respect to a breach of the duty of care, it cannot do so with respect to a breach of the duty of loyalty.
What should affected companies do?
While prior operating agreements will remain in effect after Jan. 1, 2014, the new act will apply to ‘acts,’ ‘transactions’ and ‘contracts’ entered into on or after that date. Accordingly, it makes sense for LLCs to talk with counsel to make sure the new default rules don’t change an LLC’s understanding of its existing rights and obligations.
Shane P. Criqui is a litigation attorney at Stradling Yocca Carlson & Rauth. Reach him at (949) 725-4226 or firstname.lastname@example.org.
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Companies have information that gives each of them a competitive advantage over competitors. Patenting this information is sometimes legally impossible or disadvantageous — patents expire, leaving vitally important information publically exposed.
Some companies choose to treat the information as a trade secret because such a designation can offer legal leverage in certain situations. And unlike a patent, a trade secret can last forever.
A patent expires 20 years from its effective date of filing, and that previously protected invention enters the public domain. With a patent, you’re disclosing how to make and practice an invention in exchange for 20 years of exclusive rights to do so,” says Daniel R. Ling, an associate with Fay Sharpe LLP.
He says many companies, especially smaller ones, don’t often consider the role of trade secrets, but in certain instances companies could be well served by recognizing and protecting such valuable information. But there’s one catch: “You have to take reasonable steps to maintain it as a secret.”
Smart Business spoke with Ling about identifying and protecting trade secrets.
What are some examples of information that could be a trade secret?
Customer and supplier lists, the arrangement of equipment in a factory and certain manufacturing processes are examples of valuable proprietary information that may not rise to the level of something that can be patented. Often, it comes down to that which makes your product better than that of your competitors but can’t be patented because it doesn’t meet the basic legal standards, which are that the invention is new, not obvious, useful and eligible to be patented.
How long does trade secret protection last?
Trade secrets last indefinitely, as long as the information is maintained confidential and the holder of the trade secret continues to take reasonable precautions against disclosure.
How are trade secrets best protected?
There are many methods of protecting sensitive information. If it’s a process that involves multiple steps, a company could isolate the responsibility for each of those steps across multiple locations so the entire process isn’t carried out in one place and a single person isn’t privy to the entire production.
It’s also fairly common to include confidentiality agreements and nondisclosure clauses in employment contracts for not only employees who might be aware of a trade secret in its entirety, but also for employees who may have only some knowledge of the process. Companies with such sensitive information should work with a business attorney to put together those agreements.
What can be done if a trade secret is leaked?
If the trade secret was misappropriated — obtained illegally or otherwise improperly disclosed — there are steps that can be taken to prosecute the perpetrator. The Uniform Trade Secrets Act, the general framework of which has been enacted by 46 U.S. states, offers remedies when a trade secret is acquired through improper means or through a breach of confidence. This can provide some relief to a trade secret holder in the form of injunctive relief (e.g., stopping the use of a misappropriated trade secret), monetary damages and/or attorney’s fees.
However, if the information is developed independently or introduced to the public lawfully, nothing can be done. Further, if the secret that was being held is a patentable idea, another company or individual could secure the rights to it and bar others from acting on it. That’s why it’s important to carefully consider what you hold as a trade secret; if it can be easily reverse engineered it’s not right for trade secret protection.
Regardless of whether the secret got out legally or illegally, once it’s widely disclosed the remedies under the law might not be sufficient to make a company whole again — once it’s out, it’s out. The trade secret holder ultimately has an obligation to take reasonable protective measures to guard its secrets.
Daniel R. Ling is an associate at Fay Sharpe LLP. Reach him at (216) 363-9000 or email@example.com.
Insights Legal Affairs is brought to you by Fay Sharpe LLP.
Securing trademark protection provides a company with legal rights to market and sell its services or products, and offers this same company an opportunity to stop other companies from marketing or selling services or products that are, or could be, infringing upon its protected marks.
However, each country has different criteria guiding the trademark process, which introduces varied time and cost elements that can be difficult to navigate. Ignoring these laws could mean forever losing legal protection and the opportunity to market and sell goods or services under a valued brand name in key markets.
“There is no such thing as an international trademark, but U.S. copyrights can be enforced internationally,” says Tom Speiss, a shareholder at Stradling Yocca Carlson & Rauth, who works as a business adviser and brand manager.
Smart Business spoke with Speiss about managing domestic and global brand portfolios for companies operating at home and abroad.
How can companies protect their brands domestically?
Companies can protect their brands domestically through both trademark and copyright law. For trademark, the U.S. is a common-law country, which means trademark rights begin to be established as soon as a company starts using a mark in commerce. But it’s important to conduct a trademark availability search and, if the mark doesn’t infringe upon another’s mark and appears to be available as a federal trademark, then file an application with the U.S. Patent and Trademark Office to acquire federal trademark protection.
In addition, companies also can file for federal copyright protection through the Copyright Office. To start this process, product packaging, website material or other advertising material can be used as part of a copyright application. Once a copyright registration issues, the registration potentially can protect a company’s product packaging, Web content and advertising content, as well as the design elements of a trademark. The U.S. copyright registrations then may be enforced internationally, through a treaty known as the Berne Convention Treaty.
If a company has plans to expand in foreign markets, when should management consult an intellectual property (IP) attorney?
A company should bring in an IP attorney as soon as it starts thinking about foreign market expansion, even if the plan’s realization is years away. Companies must be advised concerning all trademark rules for the countries in consideration, including possible infringement issues; whether the brand name is even available; the timelines and costs for applications; how use and non-use might affect the rights being granted; and when a company is required to exercise any rights it has been granted before a mark is vulnerable to cancelation. Each of these steps can be measured in years and have a lot of moving pieces, so — as ideas are generated — counsel needs to be involved.
What are the criteria for foreign market selection?
Companies can point to home successes with their products, including sales and brand equity, as they venture out. However, the mark used in their home country may be unavailable in a foreign market, which means the company won’t be able to transfer that equity even though it’s a proven brand.
The recourse is to develop a new name. But that brings risk because then its history at home won’t translate to the new market. This is another reason to bring in an IP attorney at the onset of brand expansion to assist in successful brand development or expansion.
What should you ask your attorney regarding brand management in other countries?
The most important first step is determining whether the target country’s trademark laws are governed by the principle of first-to-use or first-to-file. IP attorneys also can help companies establish timelines, such as when a company needs to start using or selling a product in the target country. Good counsel will thoroughly search to discover if the mark to be used in the foreign market is already in use for the same or similar goods or services. Along the way, counsel can help clients understand what other regulations might be advantageous or impede selling in foreign markets.
Tom Speiss is a shareholder at Stradling Yocca Carlson & Rauth. Reach him at (424) 214-7042 or firstname.lastname@example.org.
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In the past 20 years, companies have been generating an increasing amount of data. The growth of social media has also created a massive pool of information that any company can access, mine and use.
“Utilizing big data can help a company uncover the relationships it has with consumers and businesses that perhaps it didn’t previously realize it had,” says Pervez Delawalla, president and CEO of Net2EZ. “In many ways, that data can help a company gain a better understanding of its clients’ needs and formulate its products to win more business.”
Smart Business spoke with Delawalla about big data and how to effectively store and utilize it to the benefit of your business.
Where can companies find big data, and how can they use it?
With the advent and proliferation of social media, there is information that companies can collect called ‘big data,’ which can be used to analyze, in a cost-effective and time-efficient way, the social habits of consumers. This information allows them to devise targeted marketing campaigns and develop products.
Data about consumers is being collected from social media outlets such as Facebook and Twitter, data about businesses can be collected from sources such as LinkedIn and Foursquare, and there is data contained in emails coming into a company.
Do all companies have access to big data?
In today’s world, any company that uses computers has a big data resource or is collecting it without realizing it. For example, most salespeople have a contact database that includes people they’ve met through work, in their personal lives and through networking. If you are going to meet with the CFO of a potential client company and you learn that someone on your sales team knows that CFO, that is an invaluable personal connection. Knowing about that relationship allows you to bring the person to the meeting and quickly establish a connection.
What challenges come with big data?
Storing big data was traditionally cost prohibitive, which is why only large companies could do it. However, solutions such as new, lower-cost hardware have recently hit the market, which has given smaller companies the ability to have large sets of storage devices to store big data. At the same time, cloud computing allows a company to rent storage on a monthly or short-term basis, meaning more companies can collect, store and mine big data.
Indexing this data so that it can be used to benefit the company is a challenge, but there are plenty of tools available from major software manufacturers that can be used to mine it.
What methods are available to companies to help store this data?
Big data can be stored privately or on servers that host multiple clients. Which option a company chooses depends on how important it is to keep information secure.
Private cloud services give companies a certain amount of secure storage on a server that only belongs to them. The type of data being stored determines which tools are applied to extract it, such as a dashboard through which a company can query or search its data. There are also data feeds that provide ticker updates as data comes in, giving fast access to information.
Public cloud services are available, but are less secure than private services.
How can companies efficiently navigate such large data sets to get the most use out of the information being retained?
It takes some time to understand which data is going to be useful and to learn which tools are available to store and sort it. For example, you could buy and deploy big data-mining tools to start collecting various sets of data from multiple sources, then create a dashboard that puts that information at your fingertips. However, you can’t simply keep storing information and expect results. You need to better understand your company’s demographics and understand what is going to help your company grow. You have to know your end result and employ the tools necessary to achieve it.
Many companies don’t realize what they have beyond their traditional database and that is sometimes where the treasure trove of data exists. Accessing that data will open a world of opportunities.
Pervez Delawalla is president and CEO of Net2EZ. Reach him at (310) 426-6700 or email@example.com.
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