S&A Newsletter Spring 2012
Protect Yourself and Your Brand by Trademarking Your Name!

Why in the world would someone feel compelled to trademark his or her name? Individuals already have legal documents and identification showing the name their parents gave them at birth, so what’s the big deal about protecting a name?

For celebrities, business people, and other notable individuals, your name can be everything. Lady Gaga, Julian Assange and even Bristol Palin have trademarked their names. Trademarking your name will protect the commercial use of your name and subsequently prevent others from using it in the sale of goods or services.

Moreover, trademarking your name will safeguard the name in particular categories, such as entertainment services, and further cover the conceivable uses of that name. For example, Lady Gaga might want to trademark her name in multiple categories to prevent a company from using the name to sell clothing. Registration can cover different classes of use, including video, film, books, calendars, and posters, just to name a few. This in turn gives the individual legal protection and rights to go after counterfeiters and false endorsements.

“It’s not about restricting free speech,” said Mark Stephens, Julian Assange’s lawyer. “It’s not that he’s out there trying to make huge amounts of money. It’s about protecting himself from being associated with things he doesn’t know about or approve of.”

Typical trademark applications take many months for approval. In California, Los Angeles entertainment lawyers and Los Angeles trademark lawyers counsel on the many legal requirements, strict deadlines, and complex paperwork that goes into securing a trademark or service mark. An experienced attorney is also critical to assist with any legal questions that the U.S. Patent and Trademark Office might have.

Once a trademark registration is approved the registrant will benefit from a bundle of rights, just a few of which include:

• preventing the importation of infringing foreign goods through the U.S. Customs and Border Protection Service;
• taking legal action in the federal court system to protect their intellectual property rights; and
• using the U.S. trademark as a way to gain registration in foreign countries.

The registration lasts so long as post-registration documents are maintained and paid for at the five-to-six-year ‘marker’ and again between the ninth and 10th year. From thereafter, the registration will only need to be updated every 10 years.

The Los Angeles entertainment attorneys and Los Angeles trademark attorneys at the Law Offices of Spotora & Associates, P.C. counsel celebrities, musicians and bands, business owners and other notable persons and businesses on how trademarks can protect their identity, brand and financial livelihood. The firm has decades of experience with the trademark process and litigating to fight for their clients’ rights throughout California, the U.S., and abroad.

Reality TV Contracts are full of Complex Stipulations
Reality television is big business and for many aspiring stars, a chance to make it in the entertainment industry. But before the cameras start rolling, an important part of the process is the negotiation and hopeful execution of the contract that will make the reality show, a reality. Most contracts ask individuals to sign away their privacy rights, have stiff confidentiality agreements and may further include defamation waivers.

The contract is the production company and network’s way of managing the value of a potential celebrity and controlling most of the creative and business elements of the show. If the “artist” becomes a star, the contract will spell out what kind of money the production company, network and talent will gain for future shows and licensing. Many reality show contracts are so ironclad, however, that they can portray your image in any way chosen by the producers, throughout various media. Oftentimes, by signing the various waivers accompanying the contract, cast members agree not to sue if something happens to them physically or emotionally.

When you agree to this, you are allowing a show to portray you in any way, even if it is unfavorable. It is important to have a good lawyer review the contract first to make sure your rights and safety are upheld or, at the very least, to provide you with a thorough understanding of the contract’s terms and your subsequent rights.

Be wary of any contracts that require upfront payment or minimal or contingent compensation. Reality TV participants must also give their consent before a show can use footage of them and, obviously, most shows will want rights for usage in perpetuity or to sell the show to someone else in the future. Most contracts are all-encompassing as oftentimes scenes are still in development after the cameras start shooting. The ‘fine print’ will likely discuss the potential of bodily harm, fights, sexually transmitted diseases and emotional distress.

It comes as a surprise to few that these shows may purposefully embarrass or humiliate the talent and, sometimes, they may even provoke violence, but still, so many people want to go on them because they think it will be their big break into stardom. If you are not asked for consent, you need to talk to an attorney immediately to safeguard your rights and privacy.

Many contracts also have hefty penalties should a cast member leak the winner or conclusion of the show. It is not uncommon to have a fine between $5 and $10 million in the confidentiality agreement.

The Law Offices of Spotora & Associates specializes in negotiating and drafting contracts, securing copyrights and trademarks, and litigating and protecting entertainment clients’ rights. Many celebrities, upcoming TV stars, studios, agencies, and production houses have sought their expertise and individualized attention.

Reality TV can be a lot of fun, but cast members must take the contract seriously. It is worth the extra effort to consult an attorney to know what you are getting yourself into.

Piercing the Corporate Veil
Piercing the Corporate Veil via the Alter Ego Theory Can Devastate Shareholders.

Liability protection is one of the biggest advantages to incorporating a business. When forming a corporation, LLC, or similar entity, a “corporate veil” is formed that creates a separation between the entity and personal shareholder liability and assets. In some instances, courts will pierce this protection and hold shareholders personally liable for the debts and liabilities of the corporation, if the shareholders are found guilty of having misused the corporation as their alter ego.

Many lawsuits apply the legal theory of the “alter ego” wherein the corporate entity is shown to be a sham and/or an alter ego of one or more shareholders that have brought on injurious conduct and who essentially utilized the entity as a blanket to hide behind. Oftentimes this allegation comes into play when a corporation’s assets or insurance are inadequate to pay debts or claims. The shareholders can become personally liable.

In California, two requirements must be met to pierce the corporate veil:

1) Unity of Interests – the shareholders in question must have treated the corporation as their alter ego; and

2) Inequitable Result – the shareholders sanctioned fraud or injustices.

A step-by-step process is commonly used to examine and ultimately determine if alter ego liability is appropriate in a lawsuit. The landmark case of Associated Vendors Inc. v. Oakland Meat Packing, Co. spells out the steps to determine the severity of their actions:

1. Did the individual(s) act in bad faith?

2. Did the individuals contract with one another with the intent to avoid performance by using a corporate entity to shield against personal liability?

3. Did the individuals divert assets from a corporation by or to a stockholder, other person, or entity to the detriment of creditors?

4. Is the corporation dominated by a few key individuals?

5. Is the same office or business location used by the individuals and corporation?

6. Did the individuals and the corporation employ the same attorney?

7. Did the individuals use the entity to procure labor, services and merchandise for another person or entity?

8. Did the individuals fail to adequately capitalize the corporation?

9. Did the individuals fail to maintain minutes or adequate corporate records?

10. Will there be an inequitable result if the court fails to pierce?

A plaintiff has the burden of establishing alter-ego liability. Courts do not typically make a distinction between different forms of corporations, whether they are non-profit or for-profit, so alter-ego liability is evaluated equally.

If a corporation is properly created and maintained, shareholders will not be liable for corporate debts or exposed to lawsuits. Shareholders must uphold corporate formalities and avoid any misuse of corporate funds, property and means of manipulation.

The keys to making sure an entity stays separate from its shareholders are:

1) Documentation and Formalities: Ensure that all letterhead, business cards, and corporate signs include the words “Inc.” or “Incorporated”, for example. Shareholders who sign contracts or documents should sign them in a corporate capacity indicating their corporate position. Create bylaws, issue stock, maintain corporate minutes, have separate account books, file annual reports, and have regular board meetings with all directors.

2) Avoid Commingling: Never commingle corporate assets with those of the shareholders. Corporations should have their own separate bank account. If you borrow from or lend to the corporation, record an appropriate resolution, sign a promissory note, charge a fair market rate of interest, and make regular payments.

3) Capitalization: Capitalize the corporation sufficiently and purchase adequate liability insurance.

4) Employment Agreements: Establish one between you and the corporation.

5) Multiple Corporations: Avoid identical stock ownership of several corporations along with similar officers and directors. Use different business addresses, telephone numbers and employees.

This valuable advice is critical to minimize a corporation’s exposure to litigation and help them manage their operations. Small and big companies need to understand the importance of having a lawyer to help them with increasing complexities in today’s business environment.

DISCLAIMER: The information provided herein is intended to provide general information and does not constitute legal advice. You should not act or rely on such information without seeking the advice of an attorney and receiving counsel based on your particular facts and circumstances. Some of the legal principles mentioned might be subject to exceptions and qualifications which are not necessarily noted. Furthermore, laws are subject to change and vary by jurisdiction. Please see our entire web site disclaimer, available in our menu options and incorporated herein by this reference.
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