April 27, 2012 in Business, Legal, Legal Articles by jferris

Battle for Airplane Wingtip Patent Could Stay in Austin Federal Court

The battle to keep airplane fuel costs low is now extending to the fight over where a patent lawsuit should be heard. In Airbus v. Aviation Partners, Airbus wants the rights to market a curved wingtip attachment that makes an airplane more fuel efficient. Aviation Partners says it has been using blended winglets on an estimated 3,500 Boeing jetliners that have enabled planes to fly further due to the technology decreasing fuel use by five to seven percent. Airbus calls its technology a “Sharklet” and purports its design cuts fuel consumption by 3.5 percent on single-aisle jets.

The dispute stems from the fact that Airbus had been discussing the designs with Aviation Partners for five years, reports the Wall Street Journal. They even had a memorandum of understanding to create a joint venture. But all the while Airbus was creating its own model to “keep its options open.” When Airbus showed Aviation Partners the Sharklet sketches, the company claimed it was similar to their blended winglets and demanded royalties.

Airbus then filed a federal lawsuit against Aviation Partners seeking to invalidate the winglets patent and avoid royalty payments. The two parties are now warring over which court should hear the case. Airbus filed suit in Austin, Texas’ U.S. District Court. Aviation Partners wants the case moved to Seattle where it is based.

Aviation Partners asserts this business litigation and patent case is a classic example of a big company trying to exert its influence over the underdog. Aviation Partners has 13 employees and yearly revenue of just under $500 million. Airbus and its parent company bring in $60.4 billion. Airbus feels differently and says that the winglet patent royalty demands are “…a significant hindrance” that makes them have a “…complete disadvantage.”

The lawsuit comes down to wanting a bigger share of the global aircraft market. For example, Southwest Airlines has blended winglets on at least 80 percent or more of their Boeing 737s. Currently, 100 other airlines use them too.

Patent disputes such as this one merit an aggressive business litigation attorney to resolve the matter in the most expeditious, cost effective way. These issues can impact a business’ bottom line and battles over coveted intellectual property assets merit a skilled litigator to uphold a business’ rights. The stakes are high, so retaining a patent attorney that is skilled in the technical details and is a respected opponent in the courtroom is key.

Gregory D. Jordan is an Austin business lawyer, Austin patent attorney, and Austin business litigation attorney. To learn more, visit Theaustintriallawyer.

April 2, 2012 in Business, Legal, Legal Articles by jferris

California Entertainment Litigation Case Involves Questions of Fair Use

Errors and omissions insurance, otherwise known as E&O, can help shield against claims a person or entity might make against a movie producer, video game company, or other entertainment and arts business. E&O reviews go through what objects are used in movies and video games, for example, to determine if clearance or permission is needed to depict an object due to the following factors:

-Is the object heavily used or prominent?

-Is the object depicted in a negative manner?

-Is using the object going to look like an endorsement of it?

-Does the object have a logo that is visible and trademarked?

-Does the object have another element on it that has separate copyright protection?

In some instances, entertainment companies will blur a logo or obtain necessary clearances to use an object that is critical to the success of a scene. It can be costly, but if it is an essential element, it will be worth the time and fees.

Otherwise, a person or entity that is affected by the use of its object can litigate to recover damages from improper use of its intellectual property. Sometimes, a company will be proactive and flex its power in court ahead of time to get what it wants. Recently, the gaming powerhouse of Electronic Arts did just that. EA’s Battlefield games have life-like helicopters and weapons to make it more of a realistic wargame. Because EA has been sued before by Textron, which makes military helicopters, this time EA sued Textron for declaratory relief so that a judge will rule whether they can use a similar Textron-like helicopter in their video games.

Video game companies have been gaining ground in the courts lately, such as in the U.S. Supreme Court’s decision in Brown v. Entertainment Merchants Assn. that found video game companies do have First Amendment fair use rights. Especially in light of a Battlefield 3 packaging disclaimer that reads “…the appearance of real-world weapons and vehicles doesn’t constitute any official endorsement by their maker,” the preemptive case could be sided in their favor. EA has also been successful in other cases involving likenesses of college basketball stars.

Textron says that EA’s use of helicopters that look like its AH-1Z Viper, UH-1Y transport helicopter, and a V-22 Osprey are trade dress infringement and dilution. EA’s case takes place in the same venue that decided in favor of fair use rights last year, so onlookers are curious to see if the case will bring new decisions or uphold First Amendment rights for the big game publisher.

Anthony Spotora is a Los Angeles entertainment litigation lawyer and Los Angeles trademark attorney. To learn more, visit Spotoralaw.com.

April 1, 2012 in Business, Legal, Legal Articles by jferris

Best Practices to Form a Benefit Corporation or Flexible Purpose Corporation in California

California now allows two new stock corporation subtypes, a benefit corporation and a flexible purpose corporation. The new subtypes went into effect January 1 of this year and help entrepreneurs and investors who want to fulfill economic and social goals that these corporation subtypes permit. This will help corporations be shielded against litigation from shareholders who assert that charity and other social efforts have devalued or diluted the stock value. That said, it does not eliminate or limit liability due to other acts or omissions.

The new subtypes help bridge the gap between solely for-profit, traditional corporations and nonprofit corporations that purely promote social benefits. Many entrepreneurs want to have social or green initiatives and be able to raise venture capital, which these new subtypes now allow. An already existing company that wishes to convert to such a subtype must have 2/3 of its shareholders vote to become one.

An experienced entity formation attorney or business incorporation attorney can help entrepreneurs and investors explore the pros and cons of each subtype, and counsel on how they affect debts, obligations, and liabilities.

The new subtypes must include additional statements in the Articles of Incorporation. The specific public benefits that the benefit corporation will be organized around must be specified. This can include:

-helping low income or under-served populations with products or services that benefit them

-promoting economic opportunity beyond creating jobs for people and communities

-environmental preservation

-improving human health

-promoting the sciences, arts, and knowledge

-increasing capital flow to entities that have a public benefit purpose

-accomplishing other particular benefits for the environment or society

A flexible purpose corporation must identify in its statement what it is to engage in as its specific purpose. These purposes can be chosen from the list included in the California

Corporation Code section 2602(b)(2), including promoting short or long-term positive effects or minimizing adverse effects for:

-a corporation’s workers, vendors, clients, and creditors

-the society and community

-the environment

The California Corporations Code sections 2500-3503 provide further guidance overall. Filing fees are still the same as general stock corporations. Articles of Incorporation are more free-form for these subtypes rather than using the California Secretary of State’s simple form, and thus the need for legal assistance.

It is also important to get legal counsel when these types of business subtypes occur during merger, acquisition, and selling transactions. A seasoned business attorney can provide reliable formation services and comprehensive business advice to get your business started and running efficiently.

Anthony Spotora is a Los Angeles business lawyer, Los Angeles entity formation attorney, and Los Angeles business incorporation attorney. To learn more, visit Spotoralaw.com.

March 12, 2012 in Business, Legal, Legal Articles, Litigation by jferris

Decapitation May Have Been Due to Improperly Maintained Wood Chipper

No matter what way you look at this case, it’s gruesome. If there was mechanical failure involved, a wrongful death case could be filed.

This is one of the worst types of accidents on record due to death by decapitation that was caused by a wood chipper. It’s difficult to imagine that kind of a thing happening, but it did, much to the shock and horror of the man’s family. Evidently, the man was handling various types of debris and tree branches while feeding them into the wood chipper. On the surface, this is a fairly straightforward job, but one that needs to follow safety precautions.

The man operating the wood chipper was guiding a very large piece of wood through it when it appears the guide rope got stuck during the process. The rope wrapped around the man’s neck, slicing his head off. He had no chance to save himself, as his hand was nowhere near the shut-off switch.

Police at the scene feel that the rope was tangled in the brush being chipped, got caught on one of the tines and yanked him off his feet with such force he could not get untangled or reach the off switch. It appeared that the machine was a chuck-and-duck chipper, referring to the speed materials were processed through and dropped into the drum. These wood chippers are noted as having major safety issues, such as operators getting snagged on material being fed into the machine.

The initial assessment of the death was that it was an accident. Further investigation will reveal if it was or not. Consider if the wood chipper was faulty and this accident was as a result of an improperly maintained machine, an imbalance in the internal feeder mechanism, or lack of proper safety training. There are a number of explanations for the death, other than by misadventure on the part of the deceased. Should that be the case, the manufacturer of the chipper would be named in the lawsuit and perhaps the company that owned the chipper and employed the dead man.

For the family left behind in the wake of this shocking event, their first course of action should involve contacting a wrongful death lawyer and discussing their options. Should they be able to file a wrongful death action, they will need to know where they may source funding to allow them to wait until their case is handled by the justice system.

They might want to start their search by contacting a litigation funding company; a firm that specializes in lawsuit loans, approved in advance of an expected court settlement. Pre-settlement funding is designed to help victims (and their families) move forward in a financially secure way to deal with their bills. Lawsuit loans are often used to pay medical expenses, but they may be used to pay for anything such as student loans, mortgages or car loans.

Litigation funding is considered to be an emergency loan to help the plaintiff deal with their financial situation and give them breathing room while their lawyer deals with their case. If the case is lost, the plaintiff does not pay the legal funding back. It’s a good deal for plaintiffs, and worth checking out.

Daren Monroe writes for Litigation Funding Corp. To learn more about lawsuit funding and litigation funding, visit Litigationfundingcorp.com.

March 7, 2012 in Business, Legal, Legal Articles by jferris

Texas Oil and Gas Lease Dispute Catches Landowner in Legal Trap

A recent Texas oil and gas appeals case taught a hard lesson to an unsuspecting landowner. In Aston Meadows v. Devon Energy, Aston Meadows had purchased approximately 182 acres in Tarrant County. Unknown to them, Devon Energy held an oil, gas, and mineral lease that encumbered hundreds of acres of land in a tract that spanned Tarrant and Wise Counties and included the property Aston Meadows had purchased. Devon’s lease was originally recorded only in Wise County in 1977. Aston had purchased the land in Tarrant County for a residential development in 2001.

When Aston Meadows bought the land, no oil and gas production was occurring. But in 2007, they sued Devon and its parent company for allegedly drilling horizontally under their property. Aston claimed that Devon’s lease was invalid because it was not recorded in Tarrant County’s records. Aston claimed they were owed damages for trespass, conversion, breach of contract and unpaid royalties, and that they were entitled to injunctive relief.

The Texas Property Code generally provides that a property transaction is properly recorded when it is recorded in the county wherein a “…part of the property is located”. This thereby gives notice to everyone of “…the existence of the instrument”. When a piece of land crosses multiple counties, if a transfer involving that land is recorded in either county, it is usually deemed sufficient constructive notice to all persons of the transfer.

Since the lease owned by Devon Energy spanned two counties and was recorded in one of them, the appellate court affirmed the trial court’s judgment in Devon’s favor.

Oil and gas disputes can be complex. They involve precious land assets and may turn on intricate issues of title. Aston Meadow’s title policy did not show the lease as an encumbrance. Nevertheless, Aston lost their case. This case illustrates why it is crucial to have a knowledgeable and experienced Texas oil and gas attorney in your corner if you are dealing with an oil company or involved in an oil and gas dispute.

Gregory D. Jordan is an Austin oil and gas attorney, Austin oil and gas litigation attorney, and Austin business litigation lawyer. To learn more, visit Theaustintriallawyer.com.

February 29, 2012 in Business, Legal, Legal Articles by jferris

Domain Name Disputes Go Worldwide As Businesses Expand

American companies that are looking to take their products worldwide should seek to set up domain names overseas. With more than 250 country domain names, businesses will want to consider what markets are the most attractive to keep costs and paperwork down. Business experts recommend strategizing where you want to sell your products or services for the next three years.

Each country has its own Country Code Top Level Domains, also known as CCTLDs. Each country has its own standards, so that is why working with a skilled intellectual property attorney can help determine what legally needs to be done to get your domain up in the countries desired. Some countries require a trademark, others need local business registration, and some still require a company to have a local address to get that country’s domain attached. It is important to select a domain name that is not similar to a competitor’s name or trademark to minimize disputes.

But if you should find that someone else has taken your business’ name in bad faith and for their gain, an intellectual property lawyer can pursue the allegation of cyber squatting. Settling cross-border disputes involves showing that your business name is distinctive and that the domain name is being used in bad faith. Having a trademark already established can be crucial to protecting your business’ intellectual property.

A person or company might have obtained the domain name in bad faith, which could mean that they did so for no other reason than to resell it to you at an inflated price, to appear as though they are related to your business, or for economic gain off of your company’s good name. Cybersquatting costs $1 billion annually for U.S. businesses, reports CNN World. Countries have varying dispute resolution policies, so an attorney can help your business uphold your trademark, seek relief from the damages incurred, and halt the squatter from continuing to erode the business’ livelihood.

During the dispute resolution or court proceeding, you must show that you own a trademark that is the same or confusingly similar to the opposing party’s domain. It must be proven that the party that took the domain name has no legitimate interest in that name, and that it was registered and operated in bad faith. When these three points are evidenced, the domain name can be cancelled or transferred to the rightful trademark owner.

Anthony Spotora is a Los Angeles intellectual property lawyer and Los Angeles business attorney. To learn more, visit Spotoralaw.com.

The Law Offices of Spotora & Associates had national and international experience in domain name and intellectual property disputes. Anthony Spotora is a respected Los Angeles intellectual property lawyer and Los Angeles business attorney. To learn more, visit http://www.spotoralaw.com/.

February 28, 2012 in Business, Legal, Legal Articles by jferris

Legal Counsel is Critical During a Company Spin Off Transaction

As companies vie to remain profitable and increase shareholder revenue, some may strategically decide to spin off business lines that can be viable, standalone companies. Last year, spinoff transactions happened at notable companies such as Kraft Foods, Sara Lee, Tyco International, McGraw-Hill, and Abbott Laboratories. The Washington Post called 2011 the “Year of the Oops” as companies decided to “…sever business lines into separate companies underscored [by] new thinking about strategy.” Many sought to “…undo strategic shifts that had been panned by investors and threatened their valuable franchises.”

When spinoffs occur, two or more public companies can be created andthese businesses would be well advised to hire an experienced business attorney to consider the legal issues and potential ramifications that must be addressed.

First, the board of directors must deem that a spinoff is in the best interests of shareholders and other key stakeholders. Spinoffs can be a complex, challenging task, so the board must balance their interests with the need to treat the decision with care and fairness. It is not just about increasing share price or calming shareholder activists; spin off companies should be created for best interests in the long-term.

Companies should remember that extensive disclosures to shareholders must be completed when a spinoff transaction occurs. Legal counsel can help to prepare these required disclosure documents and inform directors of the new company what their responsibilities are in conjunction with securities regulations. Thorough due diligence is also needed to separate assets and liabilities between the original company and the spinoff. Decisions on these matters can affect the company’s future growth and risk profile, so bringing in a business attorney and financial experts can make this undertaking more successful.

Spinning off can also involve decisions on how the management team will change. This can involve employment contracts, pension plans, option and incentive plans, and collective agreements. Legal counsel can review changes in these matters to ensure that the decisions are fair and appropriate. Arrangements must also be made so that any shared services and business opportunities do not create conflicts.

Spin offs can be created without big tax implications, and legal counsel can review the requirements needed to lessen or eliminate taxes. These requirements include that the company being spun off must have been operating for at least five years and will need to have three years of audited financials. Additionally, at least 80 percent of the spinoff’s equity must be distributed to existing shareholders to avoid large capital gains tax.

Anthony Spotora is a Los Angeles business lawyer and Los Angeles business litigation lawyer. To learn more, visit Spotoralaw.com.

February 28, 2012 in Business, Legal, Legal Articles by jferris

Disability Discrimination Lawsuit Against CVS Pharmacy Asserts Harassment and Retaliation

A pharmacist at CVS Pharmacy has filed a discrimination lawsuit against the company claiming she experienced harassment and retaliation after she requested an accommodation for her disability. In Juanita Gilbert v. CVS Pharmacy Inc., Gilbert seeks compensation for her pain and suffering, lost wages, punitive and statutory damages, and all related attorney and court costs.

Gilbert was a pharmacist at CVS since 1999. She worked her way up to the position of pharmacist in-charge. In August of 2009 she told her district pharmacy supervisor that she had a disability and requested accommodations. After that, Gilbert asserts her supervisor began to harass and retaliate against her. Gilbert claims that in March 2010, the supervisor told her that she had three complaints against her. By the time her employee review came around in August 2010, she received an unfavorable review. She was written up due to the complaints and her pay raise was affected. On January 3, 2011, she was discharged from her job.

Gilbert alleges that because of her request for a disability accommodation, she was treated differently. Such retaliation would violate the Americans with Disabilities Act as it is illegal to retaliate or terminate an employee based on their disability. A disability generally also cannot be made the basis for discharging, demoting, or changing other terms and conditions of a person’s job. Persons with a history of disability, new concerns stemming from a disability, or limitations from an existing disability cannot be treated badly because of their condition.

Employers are usually required by law to provide reasonable accommodations to employees or job applicants unless it would create undue hardship to the employer. They cannot discriminate based on a disabled person being unable to carry out functions that are not essential to the job. Reasonable accommodations may include helping an employee perform his or her job duties, access the benefits and privileges of the job, and even assist a disabled person to apply for a position in the company. Harassment is also illegal and includes situations where offensive remarks become so persistent or severe that it makes the work environment hostile or offensive.

The U.S. Equal Employment Opportunity Commission, the Department of Justice and the Texas Workforce Commission are all involved in disability matters. All employers, including local and state government, with 15 or more employees are required to follow the ADA. Individuals who believe they may have a disability discrimination claim are strongly advised to contact a knowledgeable Austin Employment Attorney prior to going to the EEOC or TWC. Employers who have concerns about applying the ADA or who have experienced a claim are encouraged to do the same.

Gregory D. Jordan is an Austin employment lawyer, Austin disability discrimination attorney and Austin business litigation lawyer. To learn more, visit Theaustintriallawyer.com.

January 26, 2012 in Business, Legal, Legal Articles by jferris

Model Severely Injured After Walking Into Plane Propeller

A professional model from Texas recently lost a hand in an accident at an airport when she walked into a moving propeller after deplaning a small airplane at night.

She was up and walking around after only a few days in the hospital with the help of a physical therapist.

The model and fashion blogger, 23-year-old Lauren Scruggs, suffered head, shoulder and brain injuries in addition to losing her left hand. She had gone up in the small, two-seat plane to view holiday light displays around Dallas from the air. Her family speculated that she was trying to return to the plane to thank the pilot when she unknowingly walked into the spinning propeller. Scruggs is the founder of LOLO Magazine and LOLOmag.com.

Small-engine airplane pilots are saying it is rare to let a passenger out of the plane with an open propeller until the engine is cut off and the prop has come to a stop. The plane, an Aviat Husky, has an engine that is far louder than the propeller and it might have been difficult to know in the dark that the loud noise was the engine and not the prop, according to ABC News.

The pilot of the plane is a friend of the Scruggs family and Lauren’s parents have said they have no plans to take legal action against him. But passenger safety is generally regarded to be the responsibility of the pilot – even on the tarmac.

The Federal Aviation Administration is looking into the incident. There is no word whether the engine was running when Scruggs was hit or whether the propeller was powering down. Some pilots have speculated that since it did not kill her, it might have been powering down. It is rare to survive such a catastrophic event.

In many catastrophic injury cases blame can be difficult to place on anyone but the person who was injured. It has been speculated that in this case the pilot may be at fault since the propeller was still running when Scruggs left the plane.

The plane’s propeller struck Scruggs on her left side, fracturing her skull and her collarbone. She was able to open and use her right eye within days of the accident, but her left eye was still bandaged. Doctors said the left eye would be their next focus after they amputated her left hand. Scruggs damaged the globe of her left eye, but doctors were able to repair it in surgery.

Seth Wilburn writes for the Gomez Law Group, a Dallas employment lawyer and Dallas business lawyer. To learn more, visit Gomezlawyers.com.

January 25, 2012 in Business, Legal, Legal Articles by jferris

Board Duties During a Sale Best Carried Out with Legal Guidance

When a corporation is being sold, merged, or acquired, the duties of the board of directors shift.
The board members must not think of the business’ survival and instead focus on getting the best price and upholding the shareholders’ interests. Of utmost importance is the duty of care for the directors to utilize and gather all the materially accurate information to be able to determine the most appropriate buyer and make the most informed decision.

The business judgment rule will be used by the courts to see if the duty of care was upheld. This rule analyzes if actions were done in good faith and in line with how a reasonable person would have acted.

Board members should not be acting with self interest, bias, or only looking to preserve their roles. This duty of loyalty also includes the board of directors disclosing any conflicts of interest and a duty of confidentiality to prevent potentially harmful publicity or crises.

In real terms, all efforts must be made to receive the highest value for the corporation. Any preference for one bidder over another should be in line with getting the maximum price. If bias is discovered or a dispute ensues because favoritism is occurring for the wrong reasons, a breach of fiduciary duty can be claimed.

The courts recognize that even when the sale of a corporation is completed, some amount of business risk is taken. If the board of directors has made a decision that is in the shareholders’ best interests to further its’ goals, board members will be greatly protected from liability. But if the duties of care, loyalty, and disclosure are not upheld, a lawsuit can ensue. When wrongdoing is proven and shown to have caused damage to the shareholders, compensation for actual damages and sometimes even punitive damages can be sought. Courts do not rule favorably in circumstances where a board of directors or select individuals on the board have a conscious disregard for their duties in a sale, merger, or acquisition.

It is therefore advised to have a team in place to help the board of directors make the soundest judgments when an opportunity arises for the business to change ownership. An experienced business attorney is essential for the board of directors to have to review their duties and actions as the research and transactions unfold. Enlisting a competent attorney ahead of time can help to minimize risk and comply with all pertinent regulations.

Anthony Spotora is a Los Angeles business lawyer and Los Angeles business litigation lawyer. To learn more, visit Spotoralaw.com.