WHAT IS A RETAINER AGREEMENT?

A retainer agreement is a legal contract between a law firm (or attorney) and the client by which the client agrees to hire the law firm for particular legal services.  The retainer agreement provides a detailed description of the parties to the agreement, the scope of legal services to be performed, the rules and manner in which those services will be performed, and a recitation of the agreed-upon fee arrangement between the parties.  Generally speaking, the law firm will require the client to review the agreement, sign the agreement if there are no changes to be made, and return the executed agreement along with a retainer fee (or deposit) to the law firm before any legal services are performed on a particular matter.

Authored by: Scott A. Meyer and John Sokatch

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Chalker Flores, LLP provides business, corporate, litigation and intellectual property legal services to individuals, inventors, entrepreneurs, start-ups, spin-offs, universities, research institutes, and small to large public and private companies and businesses.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us 214-445-4040 or info@chalkerflores.com.  Please follow us on Twitter at @chalkerflores.

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Rep. Paul Seeks Assistance from United Nations in Acquiring RonPaul.com from Loyal Supporters

In a seemingly ironic series of events, former U.S. Congressman and three-time presidential candidate, Rep. Ron Paul, has turned to, of all places, the United Nations, an international organization repeatedly criticized by Rep. Paul throughout his political campaigns, for assistance in acquiring the domain name rights of two websites bearing his own namesake: <RonPaul.com> and <RonPaul.org>.  Even more surprising may be the fact that the Respondents in this case appear to be ardent grassroots supporters of Rep. Paul who initially created the websites during Rep. Paul’s 2008 presidential campaign.

The World Intellectual Property Organization (“WIPO”), one of the seventeen specialized agencies of the United Nations, permits trademark owners to file complaints against domain-name registrants for purposes of obtaining relief or resolving disputes in matters concerning the registration and ownership of domain names.  For example, oftentimes, the Uniform Domain-Name Dispute-Resolution Policy (“UDRP”) procedures will be used to combat cybersquatting or situations where an individual will register a domain name with the bad faith intent to profiteer from the goodwill associated with another’s trademark by selling the rights to the mark owner at an inflated price.

On February 7, 2013, Rep. Paul filed his complaint against several unknown Respondents generally alleging in accordance with UDRP requirements that:

1)      The domain names are identical or confusingly similar to Ron Paul’s RON PAUL trademark;

2)      The registrants have no rights or legitimate interests in the domain names; and

3)      The registrants have registered and are using the domain names in “bad faith.”

The complaint further requests that the two domain names be transferred to Rep. Paul without any form of compensation to the current registrants.

While the complaint fails to allege any federal registrations of the RON PAUL mark, Rep. Paul’s complaint, instead, claims common-law rights to the RON PAUL mark by virtue of its use in the United States and in association with Rep. Paul’s “books, articles, public appearances, and political commentary.”  Even though UDRP procedures do not require successful claimants to obtain federal registrations of their marks, such evidence can be helpful in establishing the complainant’s ownership of the mark.  Notably, a search on the Trademark Electronic Search System (“TESS”) reveals that the rights to a RON PAUL mark once held by the Ron Paul Consulting Company were abandoned in November of 2009 due to a failure to file a Statement of Use of the mark.

Additionally, the complaint alleges a lack of any evidence that the Respondents have actually used the two domain names “in connection with a bona fide offering of goods and services,” that the Respondents only registered the two domain names for the purposes of “selling them to [Rep. Paul] for more than [Respondents’] out-of-pocket costs,” and that “the domain names are being used to sell Ron Paul merchandise by third party vendors which competes directly with [Rep. Paul].”

Many reports indicate that the domain owners initially made an offer to sell the domain name <RonPaul.com> to Rep. Paul prior to his filing of the complaint for $848,000.  The owners subsequently reduced their offer to only $250,000 and were even willing to throw in the rights to <RonPaul.org>.

To date, it does not appear that the Respondents have answered the Complaint or made any further efforts to settle or resolve the matter outside of the UDRP process.

Authored by: Scott A. Meyer and John Sokatch, March 9, 2013.

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Chalker Flores, LLP provides business, corporate, litigation and intellectual property legal services to individuals, inventors, entrepreneurs, start-ups, spin-offs, universities, research institutes, and small to large public and private companies and businesses.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us 214-445-4040 or info@chalkerflores.com.  Please follow us on Twitter at @chalkerflores.

Unilaterally-Issued “Covenant Not to Sue” May Divest Trademark Claimants of Article III Standing

According to the recent Supreme Court ruling in Already, LLC v. Nike, Inc., __U.S.__, 133 S. Ct. 721 (2013), a broadly-drafted, unilaterally-issued “Covenant Not to Sue” may now provide defendants with alternative measures to combat cancellations of their federally-registered trademarks.

In July of 2009, Nike, Inc. (“Nike”) filed a complaint against Already, LLC d/b/a Yums (“Yums”) generally alleging claims of trademark infringement of the design of Nike’s Air Force 1 shoe product line.  Known for its distinctive stitching and numerous color combinations, Nike had originally obtained the registration for the Air Force 1’s shoe design in June of 2008 (U.S. Reg. No. 3,451,905).  In response, Yums filed a counter-claim by challenging the validity of the mark’s registration and seeking cancellation.

Four months later, Nike delivered to Yums a comprehensive “Covenant Not to Sue,” whereby Nike “unconditionally and irrevocably covenant[ed] to refrain from making any claim(s) or demand(s) . . . against [Yums] . . . on account of any possible cause of action based on or involving trademark infringement, unfair competition, or dilution, under state or federal law . . . relating to the [Air Force 1 mark] based on appearance of any of [Yums’] current and/or previous footwear product designs, and any colorable imitations thereof . . ..”  Nike also dropped the remainder of its claims against Yums.

Amid investors’ prospective concerns for potential lawsuits from Nike and fear of tarnishment of its reputation in the shoe industry, Yums ignored Nike’s efforts to dismiss the matter in its entirety and continued to maintain its counter-claims to cancel Nike’s design mark.

But according to Nike’s attorneys, Yums’ federal claims had been rendered moot vis-à-vis Nike’s unilateral “Covenant Not to Sue”—i.e., Yums no longer possessed Article III standing as there was no longer a “case” or “controversy” between Nike and Yums.  Yums countered with evidence of investor concerns and statements that Nike had intimidated other retailers into refusing to carry Yums’ products, but to no avail.  The district court dismissed Yums’ counter-claims and the issue was appealed up to the Supreme Court.

Reviewing the issue in light of the “voluntary cessation” doctrine, the Court determined that the breadth of Nike’s unconditional and irrevocable Covenant sufficiently demonstrated that it “could not reasonably be expected” to resume its enforcement efforts again Yums.  In other words, once Nike asserted that it would permit Yums to produce all of its existing footwear designs, or any “colorable imitations” of the Air Force 1’s design, such assurances made it “absolutely clear” that Nike would no longer seek to enforce its mark against Yums.

As a result, the Court held that Yums lacked any “legally cognizable interest in the outcome” of the litigation and that the district court had been divested of subject-matter jurisdiction over Yums’ cancellation proceedings.  The Court additionally noted, however, that in any future trademark proceedings Nike would be bound by the Covenant’s broad language; therefore, Nike was precluded from initiating any suit against Yums for alleged infringement unless the shoe was “an exact copy or counterfeit version of the Air Force 1 shoe.”

Authored by: John C. Sokatch and Scott A. Meyer

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services to individuals, inventors, entrepreneurs, start-ups, spin-offs, universities, research institutes, and small to large public and private companies and businesses.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us 214-445-4021 or by email at info@chalkerflores.com.  Please follow us on Twitter at @chalkerflores.

Second Circuit Finds No Copyright Infringement of Sit-Com Modern Family

In July of 2010, Martin Alexander filed suit for copyright infringement against several defendants in U.S. District Court (S.D.N.Y.) based upon allegations that defendants’ creation, distribution, production, and broadcasting of the nationally-acclaimed tv show, Modern Family, violated his rights under the Copyright Act, 17 U.S.C. § 101 et seq., and other state law claims.

Alexander alleged that the characters and plots from Modern Family were largely copied from the pilot episode (“Treatment”) of Alexander’s proposed television series entitled Loony Bin.  Specifically, Alexander focused upon alleged similarities from scenes depicting children’s birthday parties where things go wrong, coping with odd family issues and therapy sessions, as well as distinct character and physical traits between the two shows’ main characters.

Although the defendants conceded that Alexander held a valid copyright for Looney Bin and they had access to “Treatment,” the District Court dismissed Alexander’s Complaint upon the grounds that no “substantial similarity” existed between Modern Family and the protectable elements of Loony Bin.

On appeal to the Second Circuit, the Court of Appeals noted that “the appropriate inquiry is whether the copying of protectable elements ‘is quantitatively and qualitatively sufficient to support a finding of infringement.’”  Alexander v. Murdoch, No. 11-4291, slip op. at 3 (2d Cir. Nov. 14, 2012).  The Court of Appeals further acknowledged that application of the test, as applied to television shows, requires an examination of “the similarities in such aspects as the total concept and feel, theme, characters, plot, sequence, pace and setting.”  Id.

The Court of Appeals ultimately affirmed the District Court’s dismissal of Alexander’s claims by determining that Loony Bin and Modern Family only shared concepts “at the most general level,” as the “specific overlapping character traits and plot aspects identified by Alexander reflect superficial and de minimus details . . .; involve general abstractions insufficiently developed to merit protection . . .; or are ‘standard[ ] in the treatment of [the] given topic’ of modern family life, and are therefore unprotectable scènes à faire.”  Id. at 3-4.

Authored by: Scott A. Meyer and John Sokatch.

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services to individuals, inventors, entrepreneurs, start-ups, spin-offs, universities, research institutes, and small to large public and private companies and businesses.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us at 214-445-4040.  Please follow us on Twitter at @chalkerflores.

Official-Looking Trademark Solicitations Meant to Confuse Applicants

Several owners of federally-registered trademarks have recently received “official-looking” trademark solicitations from the non-federally affiliated United States Trademark Registration Office (“USTRO”).  The USTRO, along with several other like-minded private, for-profit companies, are not associated with, or approved agents of, the United States Patent and Trademark Office (“USPTO”)—the federal agency officially responsible for issuing patents and trademark registrations in the United States.

Nevertheless, letters from these private, for-profit companies, like the USTRO, are often strategically designed to mimic the appearance of correspondence from an official U.S. governing body.  These letters include highly specific information regarding the registered trademark, including serial number, filing date, international classes, and citations to various sections of the Lanham (Trademark) Act.

Specifically, the USTRO letter demands an immediate payment “NOW DUE” of $375, which upon receipt will purportedly entitle the payor to (1) recordation of the U.S. Trademark Registration with the U.S. Customs & Border Protection, (2) monitoring of the trademark using the USTRO’s proprietary search engine and notifications of potential third-party trademark infringements, and (3) reminder notices of certain future filing requirements.  The letter also provides an inconspicuously-placed notice providing “THIS IS NOT A BILL. THIS IS A SOLICITATION.  YOU ARE UNDER NO OBLIGATION TO PAY THE AMOUNT STATED ABOVE UNLESS YOU ACCEPT THIS OFFER.”

The USPTO’s official website, http://www.uspto.gov, acknowledges awareness of these mailers and warns that these private companies are not affiliated with the USPTO.  The USPTO advises recipients to “read trademark-related communications carefully before making a decision about whether to respond.”  Likewise, all mail correspondence from the USPTO will either be sent from the office in Alexandria, VA, or, if by e-mail, from the domain @uspto.gov.

It is highly advisable that owners of federally-registered trademarks, instead, seek legal advice from an attorney knowledgeable in this particular field before responding to these types of mailers.

Authored by: Scott A. Meyer and John Sokatch.

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services to individuals, inventors, entrepreneurs, start-ups, spin-offs, universities, research institutes, and small to large public and private companies and businesses.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us at 214-445-4040.  Please follow us on Twitter at @chalkerflores.

Websites’ Terms of Use Agreement Traps

In response to the steady increase in online shopping and cyber-transactions, several website owners have resorted to implementing more precarious measures to increase website activity while still protecting the website’s legal interests.  Generally, “Terms and Conditions” of use for the website are accepted by forcing the user to manually click an “I Agree” or “Accept” button—a method termed in the industry as “Clickwrap” agreements.  This method of acceptance has been highly criticized for the manner in which it seemingly misleads consumers into accepting terms of which they are not fully aware.

More recently, however, many online shoppers have been forced to deal with a newer form of terms acceptance known as “Browsewrap” agreements.  Unlike the more readily-apparent “Clickwrap” agreements, “Browsewrap” agreements allow website owners to indiscreetly cache the content of such agreements somewhere on the website, which then become accessible only by clicking on the hidden hyperlink.

These “Browsewrap” agreements recently came under heavy judicial scrutiny when the online shopping website Zappos.com attempted to compel arbitration in a lawsuit with several customers whose online accounts had been hacked.  See In re Zappos.com, Inc., Customer Data Security Breach Litigation, Civ. No. 3:12-cv-00352-RCJ-VPC (D. Nev. Sept. 27, 2012).  Zappos.com’s “Disputes” section, which was buried within the site’s “Browsewrap” agreement, permitted Zappos to compel arbitration in the event a dispute arose between the website and the purchaser.

Despite the broad and liberal federal policy favoring arbitration, the District Court of Nevada maintained that “arbitration is a ‘matter of contract,’ and no party may be required to submit to arbitration [in] ‘any dispute which he has not agreed so to submit.’”  Id. (quoting Howsam v. Dean Witter Reynolders, Inc., 537 U.S. 79, 79 (2002).

In finding for the plaintiffs, the court struck down the arbitration provision because (1) the purchasers were never prompted to accept those terms and conditions, and (2) the provision permitted Zappos to unilaterally change the terms, thereby rendering the contract illusory.  The court’s ruling reinforced the notion that, notwithstanding the increased popularity of buying and selling on the Internet, such paradigmatic shift may not overcome even the basic principles of contractual formation (i.e., offer, acceptance, meeting of the minds, and consideration).  As such, the Zappos.com opinion appears to have essentially negated the enforceability of “Browsewrap” agreements, barring evidence that the user actually possessed constructive knowledge of their existence and terms of use.

Authored by: Scott A. Meyer and John Sokatch.

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services of the highest quality.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.  Clients include individual inventors, start-ups, spin-offs, major national universities, research institutes and medium to large corporations.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us 214-866-0001.  Please follow us on Twitter at @chalkerflores.

11th Circuit Finds No Fraud on the USPTO where Declarant had No Personal Knowledge of Use of Similar Marks

The United States District Court for the 11th Circuit surprised several legal commentators with its recent ruling of a trademark infringement case by holding that fraud upon the USPTO was not present if the declarant was personally unaware of other organizations using an identical or near-identical form mark.  Sovereign Military Hospitaller Order of Saint John of Jerusalem of Rhodes and Malta v. Florida Priory of the Knights Hospitallers of the Sovereign Order of Saint John of Jerusalem, Case No. 11-15101 (11th Cir. Sept. 11, 2012).  At issue was the standard for cancellation on the basis of fraudulent procurement of a trademark.

The Lanham Act, § 14(3), 15 U.S.C. § 1064(3), permits cancellation of a registered trademark on the grounds that the mark was procured by fraud.  Proving this type of fraud is difficult as there is generally a heavy burden upon the challenger to show that the applicant knowingly made false material representations of fact in connection with an application for a registered trademark.

The 11th Circuit, however, interpreted the declarations to the USPTO made by the applicant’s representative to be a “subjective” good-faith belief of the applicant’s superior rights to use the mark, notwithstanding the possibility the declarant’s belief was mistaken or the cause of “willful blindness.”  Consequently, the court held that that no fraud was present where the declarant lacked any actual, personal knowledge of another’s use of the same or similar mark.  Likewise, proving that the declarant “should have known” was also not enough to cancel the trademark registration on the basis of fraud.

Authored by Scott A. Meyer and John Sokatch.

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Chalker Flores, LLP provides intellectual property, business, corporate and litigation legal services of the highest quality.  Founded by Dr. Edwin Flores and Daniel Chalker, additional partners include Scott Meyer, Chainey Singleton and Tom Jacks.  The lawyers of Chalker Flores, LLP provide big-firm expertise with boutique service and pricing.  Clients include individual inventors, start-ups, spin-offs, major national universities, research institutes and medium to large corporations.

If you would like more information about Chalker Flores, LLP, or to schedule an appointment please contact us 214-866-0001.  Please follow us on Twitter at @chalkerflores.