The Trademark Modernization of 2020 (“TMA”) was signed into law on December 27, 2020, as part of the COVID-19 relief and government funding bill. It will be fully implemented and take effect on December 27, 2021. TMA brought some remarkable changes to the United States Trademark Act of 1946, a.k.a. the Lanham Act, that will significantly affect brand owners in the U.S.

TMA Codifies Rules for the “Letters of Protest” Practice

There has been a long-standing yet not well-known practice of the USPTO, called the “letter of protest,” which allows third parties to submit evidence to the USPTO prior to registration, regarding a trademark’s registrability. Before the TMA, the USPTO did not have a formal process in place for submitting or reviewing these letters of protest, and it has resulted in the underutilization of this process. The TMA formalizes this letter of protest process for submitting evidence against pending third-party trademark applications by giving it statutory authority. The letter of protest submissions must identify each legal ground for an examining attorney to refuse registration or issue a requirement, include evidence that supports those grounds, and a concise description for each piece of supporting evidence. Following the passage of the TMA, the USPTO issued rules setting out the letter of protest procedures and a $50.00 fee for these submissions that went into effect on January 2, 2021. TMA requires the USPTO to act on submissions of letters of protest within two months of receipt. 

The codified letter of protest process under the TMA provides third-parties with a simpler and cheaper procedure compared to the traditional opposition procedure, which limits third parties believing that they may be damaged by the federal registration of a mark to file an opposition during a 30-day opposition period occurring just before registration of the mark in question and pay the expensive opposition filing fees (increased to $600.00 per class from $400.00 this year).

  • Takeaway: Any brand owner now may use this simpler and inexpensive formal process to attempt to intervene in a third-party application for a trademark that may conflict with your mark, or that you believe should otherwise be refused registration, by asking the USPTO to consider evidence that it may not otherwise have in the examination record. On the other hand, the letter of protest process may also be disadvantageous to some brand owners by making it more difficult to secure a trademark registration. To help make the most of this new process, brand owners should consider setting up trademark watch services that alert the brand owner to pending applications for marks that may conflict with the brand owner’s mark.

TMA Enables the USPTO to Shorten Office Action Response Deadlines to Anywhere Between 2 Months and 6 Months

In order to free the USPTO trademark register from numerous illegitimate trademark applications that are not actually used in the U.S. commerce, TMA gives the USPTO the authority to set office action response periods that are shorter than the current six-month response time, but not less than 60 days from the Office Action issuance date. If needed, the applicant may request to extend the shortened response deadline to up to six months.

  • Takeaway: Brand owners now must pay special attention to the actual response deadline upon receipt of an Office Action, as we may start seeing much shorter response periods than the six-month response deadline that we are used to.

TMA Creates New Ex Parte Expungement and Reexamination Proceedings as New Methods for Seeking Cancellation of a Third-party Trademark Registration

Before the passage of the TMA, the USPTO permits inter-parte Cancellation proceedings that are similar to court litigation against trademark registrations, which occur before the Trademark Trial and Appeal Board (TTAB). There are a number of grounds on which someone may petition to cancel a third-party registration, including the registration owner’s abandonment or lack of use of the registered mark in interstate commerce.  

TMA provides a new post-registration procedure for ex parte expungement of certain improperly granted registrations. Specifically, it allows anyone to petition the USPTO to expunge a registration, either in whole or in part, where there are specific goods or services listed in the registration for which the trademark has never been used in U.S. commerce. This new procedure must be brought between three to ten years after the registration date.

On the other hand, a reexamination proceeding may be initiated against a registration any time before the fifth year following the registration date for any registration based on use in commerce. The new trademark reexamination procedure provides a process for challenging registrations based upon a false, but not necessarily fraudulent, declaration of the mark’s use in association with the goods and services identified in the registration. When preparing a trademark application, applicants often include many (or all) of the goods and services that fall within the “class” of goods or services initially selected by the applicant. Trademark applicants often try to include as many goods and services as possible under the same class because their filing fee covers the registration of a mark under the entire class. However, this practice violates the spirit of the law, which requires actual use of the mark in association with each good or service identified in the registration. To rectify the proliferation of overzealous registrations resulting from this practice, TMA’s reexamination procedure allows for the cancellation from the registration, each good or service with which the mark was not being used as of the filing date of the mark’s declaration of use.

For both the Ex Parte Expungement and Reexamination proceedings, the USPTO’s decision to cancel a registration is appealable, and these proceedings may be initiated against registrations that registered before or after enactment of the TMA.

  • Takeaway: It is critical for brand owners to make sure that they actually provide all the goods and services listed in their trademark registrations, or be exposed to the risk of losing part or all of their registrations for lack of use in commerce.

TMA Restores the Rebuttable Presumption of Irreparable Harm for Plaintiffs Seeking Injunctive Relief in Trademark Infringement Cases.

Before TMA, in order for a trademark infringement plaintiff to obtain a court-ordered injunction against a defendant to stop the defendant from continuing to use the disputed mark, the plaintiff must prove several elements, including that the plaintiff will be irreparably harmed without the injunction. In recent years, the federal circuit courts in the United States have been split on whether the irreparable harm element should be presumed in trademark infringement cases where the court has found either infringement (for a permanent injunction) or that the plaintiff is likely to be successful on the merits of its infringement claim (for a preliminary injunction).

The TMA resolves the circuit split by codifying into law that trademark infringement plaintiffs shall be entitled to a rebuttable presumption of irreparable harm without the injunction upon a finding of trademark infringement or likelihood of success on the merits, depending on whether the plaintiff is seeking a permanent or preliminary injunction.

  • Takeaway: Brand owners now have a reduced evidentiary burden for obtaining injunctive relief to protect their trademark rights. A brand owner who proves infringement will enjoy a favorable legal presumption that the harm caused by continued infringement will be irreparable.

If you need help with registering a new trademark with the USPTO, contact us today to discuss your trademark protection strategies with an experienced trademark attorney. Schedule an appointment with us to schedule a free initial consultation! 

In late June, 2018, following the European Union’s groundbreaking General Data Protection Regulation (“GDPR”), California passed its own consumer privacy law, AB 375, that imposes its own set of requirements on U.S. companies with regard to consumer’s “personal information.” You can read more about GDPR here. The new California law, referred to as the California Consumer Privacy Act (“CCPA”), took effect on January 1, 2020 and established new, groundbreaking consumer privacy rights for California consumers. Fines for non-compliance of CCPA can add up quickly; these fines are in addition to any loss of goodwill or consumer trust – or expenses associated with responding to any compliance investigations.

 

What consumer “personal information” is protected by CCPA? 

CCPA takes a broader view than the GDPR of what constitutes “personal information.” CCPA defines “personal information” to include “information that identifies, relates to, describes, is reasonably capable of being associated with, or could reasonably be linked, directly or indirectly, with a particular consumer or household.” The words “relates” or “reasonably capable of being associated with/linked” open up a very large class of non-traditional personal identifiers, that goes beyond name, address, social security number, to include information such as email address, online social media handles, IP addresses, biometric information, geolocation data, browsing, and search history.

 

Who needs to comply to CCPA?

Companies that meet the following criteria  must adapt their privacy policies and reporting to CCPA’s requirements: 

  1. companies that serve or hire California residents;
  2. have $25 million or more in annual revenue; 
  3. possess the personal data of more than 50,000 “consumers, households, or devices;” or
  4. earn more than half of its annual revenue selling consumers’ personal data.

 

What protection does CCPA give to consumers? 

The CCPA gives California residents the following rights:

  1. to know what personal information is being collected about them;
  2. to know whether their personal information is sold or disclosed and to whom;
  3. to say no to the sale of personal information;
  4. to access their personal information;
  5. to equal service and price, even if they exercise their privacy rights;

The CCPA provides California residents with a right to be informed of the categories of personal information that a business collects or otherwise receives, like smartphone locations or voice recordings, that a company has on them sells or discloses about them; the sources of that data; the purposes for these activities; and the categories of parties to which their personal information is disclosed. CCPA also grants California consumers the right to request detailed information about the personal information a business holds specifically about them, which may include detailed logs of a person’s online activities, physical locations, ride-hailing routes, biometric facial data, ad-targeting data, and the right to obtain portable copies of their personal information from the business. CCPA also gives California consumers the right to prohibit a business from selling their personal information, and to request that a business delete their personal information.

 

When will enforcement start? 

The CCPA took effect in California on January 1, 2020, with a six months grace period before enforcement of the law begins. Starting in July 2020, offenses of the CCPA will be assessed with fines. 

 

Does compliance with GDPR ensure compliance of CCPA? 

No. The CCPA and the EU’s GDPR do not share some same key requirements. Compliance with one does not imply or guarantee compliance with the other. The scopes, definitions, and requirements of the CCPA and the GDPR are different. 



What to do if you think a business is misusing your personal information under the CCPA?

Starting July 2020, California consumers may bring a legal action for statutory damages ranging from $100 to $750 per violation or actual damages, whichever is greater. The California Attorney General may bring actions for civil penalties of $2,500 per violation, or up to $7,500 per violation if intentional. No actual damage or specific evidence of identity theft is required. A CCPA plaintiff must inform the California Attorney General of the situation within 30 days of filing a CCPA lawsuit. The California Attorney General is the sole individual who has the power to delay or block such individual litigation under the CCPA. 

Find out how Carbon Law Group can help you prepare for CCPA compliance by scheduling a meeting with us using this link.

Today’s workplace has become increasingly regulated and complex. Employers have started to recognize the importance of complying with misclassification statutes, and are trying to educate their executives on the process.

In determining whether a worker is an employee or an independent contractor, courts in California generally apply the common law test under which the employer’s right to control the manner and means by which the employee’s work is accomplished, rather than the amount of control actually exercised, is the principal factor in assessing whether a plaintiff is an employee or an independent contractor.

On September 18, 2019, California Governor Gavin Newsom signed Assembly Bill 5 (“AB5”) into law. Thus, California businesses will soon face new challenges in their use of independent contractors. AB5 raised the bar for companies that otherwise might rely on freelance or contract workers. The new law establishes stricter criteria, known as the “ABC test”, to maintain a worker as an independent contractor. Specifically, a business must prove that:

  1. The worker is free from the company’s control.
  2. The duties performed by the worker are not central to the company’s core business.
  3. The worker is customarily engaged in an independently established business, trade, or industry.

Workers that do not satisfy all three criteria will be reclassified as employees, which could allow them to start earning a minimum wage and qualify for overtime pay, paid sick leave, and health insurance benefits.

AB5 is landmark legislation for gig economy workers and employers in California. Yet, the passing of AB5 does not mean that gig economy workers in California who were categorized as independent contractors are now automatically employees. They will still need to challenge their employers in court to apply the ABC test and reclassify them. 

If you need help with your questions about employee and independent contractor categorization, feel free to schedule a consultation with an attorney using this link or calling our office at 323.543.4453.

As the Earth completes another rotation around the Sun, we take pause to both reflect on all that has happened over this last year and to make sure we are on the right path to where we want to go.

Guided by our mission statement to empower our community by providing invaluable business and legal solutions to help our clients and community thrive, we are lucky to say 2018 was a great success. Some of our highlights from 2018 were:

  • Filed our first IPO for a client
  • Set up a $25 million venture fund
  • Advised companies and investors on 23 private placement transactions
  • Handled 12 M&A transactions
  • Guided over 20 startups with early-stage financing
  • Filed over 75 domestic and international trademark applications
  • Formed or wound-up over 100 businesses
  • Counseled over 300 individuals and businesses
  • Received 41 5-star reviews from both Google and Yelp combined
  • Held a volunteer event to feed the homeless with assistance from the Azusa Lighthouse Mission in DTLA

To say we have had a busy year would be an understatement. And it couldn’t have been accomplished without the trust and support of our amazing clients who we have the honor of serving as they strive to make a small dent in the universe (in the words of Steve Jobs.).

We are beyond grateful for the support we saw in 2018, but more so, we are excited for what is in store for 2019. We are poised to take on even larger deals, expand to new cities, and help more clients see greater success than they ever imagined.

Here is to a wonderful 2018 and an even better 2019!

Upward and onward!

 

Sincerely,

Carbon Law Group

Pankaj, Hayk, Lyris, Sarine, George, Cristal, and Sunny

Every so often the question arises, “how much of a copyrighted work can I use? I heard if it was less than 30%, I am okay.” I am sure I am not the only attorney who has heard this and I am sure it makes us all cringe–if only the law was so simple. The […]

Until now, the general prohibition against the sale of unregistered securities to the public limited the options for startups and emerging companies to raise capital.

Now, after years of discussion and analysis, the Title III of the JOBS Act (“Act”) is about to take effect. Title III of the Act addresses equity crowdfunding. Under Title III, registered broker-dealers or registered funding portals can solicit investments of up to $1 million from the general public.  A funding portal is any person acting as an intermediary   in a transaction involving the offer or sale of securities for the account of others, solely pursuant to the “crowdfunding exemption” that does not:

(a) offer investment advice or recommendations; (b) solicit purchases, sales, or offers to buy the securities offered or displayed on its website or portal; (c) compensate employees, agents, or other persons for such solicitation or based on the sale of securities displayed or referenced on its website or portal; (d) hold, manage, possess, or otherwise handle investor funds or securities; or (e) engage in such other activities as the SEC, by rule, determines appropriate. [1]

If you are interested in learning more about Title III and opportunities under the JOBS Act, feel free to contact our firm to speak to an attorney.

*Nothing herein shall constitute legal advice and the information provided should not be construed as such.

 

by Pankaj S. Raval

So you have decided to quit your job and pursue your dream of starting a new business with a friend. First of all, congratulations. You are among the few who are willing to take the risk to follow their dreams of being their own business owner. However, before you get carried away with finding office space and forming your company, as an attorney and counselor for numerous small businesses, I can tell you with a good amount of confidence, that it would be wise to hit pause and really look at the person (or people) you are going into business with before you take the plunge.

The saying that a “partnership is like a marriage” is about 95% accurate. Remember, the person who you choose as your business partner (or who chooses you) should be by your side through thick and thin over the next several years (if you manage to beat the odds of entrepreneurship and create a viable business). And, undoubtedly, those first few years are going to be bumpy.  You and your partner are going to be dealing with fire after fire as you build and scale your business. Whether it is a shortage of capital, a hiring decision, or deciding on product-market fit, these are all questions you are both going to have your own ideas about. Invariably, both founders will have to compromise on certain facets of the business. That means you are both going to have to learn to keep your egos in check and figure out how to put your personal issues aside to take on the competition.

One of the most prevalent issues that all new ventures face is dealing with the expectations of your fellow co-founders.

At some point, no matter how close you are with your co-founder, there will be a moment where one founder is up working at 3 am and the other is on vacation with family, and the question will enter that midnight-oil-burning partner’s mind: “why am I busting my butt on this while Andre is posting to Instagram from a beach in Thailand?”

Now, we don’t know the Andre’s backstory–maybe he just closed a round of funding and needed a break. Maybe he had to go to a family wedding. Nonetheless, the time will come where one partner feels like they are putting in more of the work, and preparing for those moments can be the difference between the success of failure of a business.

So how does one prepare for such scenarios? Luckily, the problem is not new, therefore, we have the benefit of looking at how other’s have dealt with it. Here are a two options:

1. The Pre-Formation Agreement

Before you start a partnership, you should sit down and answer the following questions:

  1. What is our mission?
  2. Who is our market?
  3. Why are we doing this?
  4. What do we hope to get out of it?
  5. What is each founder bringing to the business?
  6. How much time are we each expected to devote to the venture?
  7. What is the vacation policy?
  8. What if one partner needs to leave? Is there a buyout? Can they compete if they leave?
  9. What if one partner is not performing?
  10. Who is a neutral third party we can trust to help resolve split decisions?
  11. How much money are we each putting in?
  12. Will the intellectual property be shared equally?

These are all questions that will form the basis of a formal partnership agreement but not weigh you down with details can be discussed later once you decide you have a viable business.

2. The Slicing Pie Model

An alternative model that has gained a good amount of popularity over the last few years is the Slicing Pie model, developed by entrepreneur Mike Moyer. The model proposes a dynamic equity transfer where partners get equity in a company based on what they put in, whether it be time, money, connections, etc.

Mike is a seasoned entrepreneur who speaks from experience, so the model is tested and it works. I actually purchased several of his books and give them out to my clients.  The model does require a bit of work and monitoring, so some entrepreneurs have been hesitant to adopt it. However, based on the tools he provides, it can be a great way to track the value founders are contributing to a venture to avoid the conversation where you question someone’s commitment because it isn’t clear that they are dedicated to seeing the company succeed. The Slicing Pie model prevents this by tracking the time and effort each person is contributing so you have concrete data from which you can make informed decisions on how to move forward.

Conclusion

While there is no right way to plan a partnership, not doing any planning is a good way to increase your chances of failure. With a little work before you dive in and understanding of the risks ahead, you can put yourself in a position to deal with the trials and tribulations of starting a new business with a roadmap that will prevent you from getting sidetracked by the inherent difficulties of a partnership.

The Law Offices of Pankaj S. Raval focus on serving startups, new ventures, and scaling businesses. We help companies draft their founding documents but also put them with financing agreements to help them grow. Based on years of experience, we pride ourselves on looking at both the legal and practical aspects of starting and growing a business. You can reach us a 323.413.7958 or [email protected]

 

 

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Thank you for visiting the new and improved website for the Law Offices of Pankaj S. Raval. The site was just launched and we realize it has some kinks to be worked out. Please excuse our dust as we clean things up and turn it into the streamlined site that you deserve.

Until then, please let us know if there is anything we can do to improve the website or services. We are here for you.  Our main interest is to provide you with the best service possible.

Sincerely,

Pankaj

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