California businesses, including those that conduct business with California residents, need to pay attention to recent lawsuits that allege the “Shine the Light” law regarding the disclosure of personal information has been violated. Big media and technology companies have been sued, wherein the plaintiffs have said their personal information has been collected, stored, and sold and these companies have intentionally kept them in the dark about their info sharing practices.

“The penalties for non-compliance with the Shine the Light law are stiff at $500 to $3,000 per violation,” said Los Angeles business litigation attorney Anthony Spotora. “We can help you conduct an audit of your company’s privacy right disclosures to ensure compliance.”

Customer information that is collected online or offline is subject to the law if the business employs more than 20 people, conducts business with California residents, and shares personal information with third parties. Businesses that fall within this scope must have a mailing address or email where customers can request privacy disclosures or have a link accessible from a company’s homepage that details this information.

“The best practice is to have a link on a business’ homepage to direct customers to their privacy rights,” said Spotora. “California customers must be given the opportunity to opt-in or opt-out and be made aware if their information has been compromised.”

The current lawsuits do not assert that personal information has been misused, but the claims do allege that companies have failed to identify a way for customers to obtain disclosures of how their information is being shared. Companies should be proactive and consult an experienced business attorney to ensure they are compliant and taking the necessary steps to protect client information and privacy rights.

The Shine the Light law, which is contained in California Civil Code § 1798.83, has been in effect since 2005 but privacy rights practices vary widely amongst companies, which is why consumers are raising concerns. Some of the current litigation also involves the state’s Unfair Competition Law that bars unfair, unlawful, and fraudulent practices by keeping information to request disclosures away or concealed from customers.

Customers have the right to receive the names of third parties and their addresses where their information was shared and what type(s) of information was provided. “Your intentions might be good as a company, but you want to be proactive and have a toll free number, address, and hyperlinks online so that customers can request this information,” said Spotora.

To learn more about the Los Angeles business lawyer or The Law Offices of Spotora & Associates, visit Spotoralaw.com/.

It is toy robots versus tablet computers in the latest trademark litigation in California. Hasbro is vigilantly defending its Transformers line of toys and spinoff TV series, books and multimillion dollar films against Asus, the consumer electronics maker, and its Eee Pad Transformer Prime Tablet. Hasbro claims that Asus is taking away millions of dollars it has invested in Transformers since the 1980s.

“The lawsuit will be interesting to watch as the court will determine the strength of the company’s trademark and trademark infringement must show that consumers are likely confused by the competing goods,” said Los Angeles trademark litigation attorney Anthony Spotora.

Amongst other factors, trademark cases also explore the similarity of the two marks, intentions for why the defendant adopted its name, the likelihood for product expansion, and proximity of the trademarks in the marketplace. Will a tablet that transforms into netbook mode confuse consumers about the popular toy that transforms from a robot into a car and weapons, for example? Should the company have paid licensing fees to use the name Transformer Prime to connect with Hasbro’s client base?

“When a toy and cartoon show become such a franchise as Transformers has, it brings up big questions that can merit a court to review these concerns,” said Spotora.

Some say the tablet rights might be sold to Hasbro, production could be stopped, or if there is no trademark infringement, what other remedy there might be for the plaintiff or defendant. Recalling the tablets could dramatically hurt Asus and its quest to win consumer loyalty and a share of the millions of tablet buyers, but then again, the Transformer franchise is an even bigger money-making machine and has spent decades and multi-millions of dollars building its brand.

Moreover, the Hollywood Reporter notes that Hasbro is in discussions with Paramount again to create a Transformers 4 movie. Director Michael Bay announced that the new film will come out in late June of 2014. Last year’s “Transformers: Dark of the Moon” made $1.1 billion and serves as yet another example of why the stakes are so high no matter which side of this case wins.

To learn more about the Los Angeles trademark lawyer or The Law Offices of Spotora & Associates, visit Spotoralaw.com.

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.

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.

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 and these 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.

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.

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/.

When a company is looking to raise funds without an initial public offering, a private placement memorandum (PPM) is one of the best ways to raise capital. A company must have the consent of the Securities Exchange Commission (SEC) before this can be done, and will need an information memorandum along with the PPM. Because of the complexity of SEC rules and documentation, it is highly advised to seek a knowledgeable business attorney to help throughout this process.

PPMs are a great sales tool to attract investors, which are also known as subscribers. This document shows that the company directors and officers are serious about their company, have the professionalism to succeed in their particular industry, and are committed to having good products, no matter what sector they are in. The content should be focused on information that allows the investor to make an informed investment decision. Some of the information is required by law, and this is where the business attorney provides valuable insight.

The length of a PPM will be greatly influenced by the caliber of angel investors sought and the amount of capital needed. All PPMs should be very polished, professional documents. The company must disclose all material and relevant facts. No half truths, omissions, or false statements of facts are tolerated. Otherwise, making material misstatements can lead to a securities fraud claim that can affect the company as well as the company’s directors and officers. The SEC can also levy civil and criminal penalties for securities fraud. Thus, taking the time to create and thoroughly review the PPM with a business lawyer’s guidance is well worth the effort and money.

A PPM has numerous technical sections. This includes:
• Summary of Offering Terms: Usually laid out via a term sheet
• Issuer Description: Describes the company and its structure, a short overview, a cap table and context of the offering
• Business plan: Contains information on the company’s position in the market, its unique value proposition and products, as well as the sales and marketing plan, financials, intended use of proceeds, and management
• Risk factors: Details potential and actual risks that could affect the investor; cautionary language should also be included about investment risks in general with unregistered securities; and conflicts of interest should also be described
• Supplemental information: Any additional information should be included that is critical for the investor to make an informed decision
• Subscription procedures: Describes the steps for investors to participate in the offering

Having a trusted business attorney to create, review, and file the PPM allows a business to focus on its daily operations and long-term plan. Business owners can have peace of mind that all the paperwork is done in a thorough way to minimize issues and attract key investors.

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

Buy-Sell agreements are critical parts of a business’ foundation. This type of an agreement is a contract between the business partners that needs to be defined at the start of any business operations or when any new partners are added to the company. An experienced business attorney can help to create and review the buy/sell agreement for its legality, fairness, and to make sure it accounts for any unforeseen events.

The biggest obstacles most companies deal with, and nobody likes to think about them, relate to what happens if a partner should have a serious accident or illness that leaves him or her disabled, dies unexpectedly, withdraws from the partnership, or retires. A company can falter when it has a partner leave, so spending adequate time up front to create a solid buy-sell agreement (also known as, “Buy and Sell Agreement” or “Buyout Agreement”) will make sure the partnership ends in a way that sustains the business. The specifics should outline who is eligible to buy a leaving partner’s share and what the fair price is. It can also establish a buyback option. This helps to protect the remaining partners to have an appropriate new partner/owner come in and a fair price for his/her shares of the business.

Of special note in California, business partners are subject to certain property laws when they pass away. When the business partner dies, the company becomes business partners with the remaining spouse or heirs. As is often the case, these individuals might not have a clue about the business nor be interested in being involved. What they will be interested in is money. They will want payment for their loved one’s portion of the business or stock shares.

This is where setting a fair price up front or establishing a proper evaluation method comes into play. With a trusted business lawyer and a certified public accountant, a fair price can be derived from the various calculations that are typically used. These include:
- Multiple book of value: Accounts for tangible and intangible assets such as brand and trade names, copyrights, and patents
- Appraisal: Before a transfer of ownership, an experienced business appraiser will set the business price
- Book value: Price is based on assets minus liabilities from the most recent fiscal year balance sheet
- Capitalization of earnings: Value is based on past profits
- Fixed price: Current partners agree on the business price and list that value in the buy/sell agreement

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

It is a must to have a partnership agreement when two or more people are the entrepreneurs of a company. Without a written agreement, the viability of the long-term business can be compromised. At the start of a business, it is close to impossible to forecast how the company will evolve over time. As such, a formal agreement helps to create a foundation between partners that should define significant business issues such as how funds are distributed, how disputes will be handled, and the job duties expected of each partner.

The structure of a partnership agreement should be tailored to fit the business and management style. It should state the compensation, including the profits, losses, and draw each partner will take. Moreover, and surprising to many new partnerships, it is also commonly considered as wise for one partner to have more shares than the other(s). Otherwise, it can become a situation where the company becomes stalled with equal decision makers at the top.

The agreement should additionally show the contribution each partner has made to the business, including property, funds, and services. It should further list how new partners can be added at a later time, when applicable. Of equal importance are outside business activities a partner might take on, and what is permitted.

Basics such as who has check-signing privileges and decision making authority or voting rights is also very important and should be included. And while legalese to many, miscellaneous provisions that cover matters like how the agreement can be revised at a later date to meet the growing needs of the business should also be incorporated into the partnership agreement.

Of particular importance are the portions of the agreement that define what action will be taken if a partner leaves or can no longer perform the job duties. This facet is also important for financing as lenders want to see a rational agreement that will help the business maintain stability should this occur.

Stipulating what will happen should a dispute ensue is also critical. Partners should think this through as arbitration or mediation can be a better route than litigation in most cases.

Partners should get a skilled business attorney to create the contract and review it to ensure that each person’s rights and obligations have been addressed and are fair. Without legal representation, the agreement might be so threadbare that state law might override it during a dispute. It might feel awkward to think about all of the “what ifs” during the infancy of the business, but it is crucial to ensure that the business can develop in a healthy way. Time spent with a qualified business attorney will pay off later.

In California, Los Angeles business attorney Anthony Spotora, of Spotora & Associates, P.C. is accomplished in counseling business partners to create solid partnership agreements. Their team of Los Angeles business lawyers helps many businesses, from California companies to major international corporate entities. They are known for their high-quality services and prompt attention to a client’s business needs.

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

Musicians who want to regain control of their hit songs from the mid 1970s can now reclaim them due to the copyright law termination rights. As long as music artists apply for these rights two years before the 35th anniversary of the songs being copyrighted, they can reclaim them. Music labels are livid about this development, but musicians have been waiting for this opportunity for decades. Award-winning musicians such as Bruce Springsteen, Van Halen, Billy Joel, and Steve Miller have made millions for record companies and songs from 1978 are now in the two-year timeframe.

“In terms of all those big acts you name, the recording industry has made a gazillion dollars on those masters, more than the artists have,” said Don Henley, from the Eagles and a founder of the Recording Artists Coalition. “So there’s an issue of parity here, of fairness. This is a bone of contention, and it’s going to get more contentious in the next couple of years.”
The big record companies such as Universal, EMI, Sony BMG, and Warner Brothers are ready to battle this copyright provision. They believe these songs and records are classified as works for hire. Musicians are thus employees and not independent performers for the record label from their viewpoint.

The Recording Academy is concerned about termination rights disputes overwhelming the courts. Musicians are getting legal representation now to send termination rights notices to labels and get ready for 2013. As it stands now, record labels are not giving in. Some onlookers predict the issue might even make it to the U.S. Supreme Court in due time.

Next year, musicians will be able to send notices for songs made in 1979, and with each passing year more hits will be up for grabs. When a song qualifies for the 35-year expiration, an author has five years to claim it; otherwise the right to reclaim it passes. This issue also brings up questions of what a song author is – do record producers, foreign artists (think Led Zeppelin), and songwriters who write for big names have the right to request termination rights from labels?

As many of these songs and artists from 1978 defined their generation, this issue also becomes important for licensing rights. Many of these songs are coveted by advertisers, used in TV and film, and for ringtones and video game soundtracks. Musicians will therefore greatly benefit by having an experienced attorney represent their concerns for their song rights and licensing agreements.

In California, Los Angeles entertainment attorney and Los Angeles business lawyer Anthony Spotora is a strong ally for musicians as they exercise their rights. The Law Offices of Spotora & Associates, P.C. is experienced in negotiations, contracts, and litigation to uphold a client’s rights. Their team is skilled in all genres of the industry and represents some of the biggest names in the recording business.

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