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.

SCOTT MEYER ASSISTS WITH $64 MILLION DEAL

Scott Meyer of Chalker Flores, LLP, recently helped close a stock sale valued at $64,000,000 for one of its valued clients.  Mr. Meyer dealt primarily with intellectual property issues related to the transaction.

The sale involved negotiations and agreement on the intellectual property to be transferred, concurrent use agreements, including a significant portfolio of patents and trademarks, licenses and the purchase of stock by a major industry player. “The sale allows our client to focus its business efforts on core strategies and on their development of new product materials,” reports Scott Meyer, one of the Chalker Flores partners who worked on the deal.

Authored by: 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 at 214-445-4040 or send an email to 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.

Personal Liability of Officers for Corporate Guarantees

Last January, the 1st District Court of Appeals issued a noteworthy opinion reinforcing the personal liability for loan guarantees made by corporate officers while acting within their capacities as officers of the company.  The court’s ruling in 84 Lumber Co. v. Powers, No.-01009-00986-CV, 2012 Tex. App. LEXIS 590 (Tex. App.—Houston [1st Dist.] Jan. 26, 2012, no pet.), will likely force many corporate officers, including those in larger corporations, to now rethink placing their own necks on the line for those companies to which they owe fiduciary responsibilities.

David Powers, acting within his capacity as president of his company David Powers Homes, Inc., signed a statement that he “UNCONDITIONALLY AND IRREVOCABLY PERSONALLY GUARANTEE[D] [THE] CREDIT ACCOUNT….”  Mr. Powers took the position that he no longer possessed any personal liability for the loan because he signed the guarantee as a corporate officer and he no longer held that position.

In rejecting Mr. Powers’ stance that his personal liability was precluded by the statute of frauds (which requires the guaranty to be in writing and signed by the person to be charged), the court held that liability remained on Mr. Powers, individually, and not merely with the office of president of his company.  As the court noted, generally speaking a guarantor of a debt is an individual who willingly stands for the debt of another.  The court reasoned that had it ruled in favor of Mr. Powers, it would essentially render a guarantor agreement meaningless because personal liability would thereby reside in the same person—i.e., the company would then become both the account debtor and the guarantor of the corporate debt.

Ultimately, the court determined that Mr. Powers remained liable for his “unambiguous” guarantee of personal liability for the company’s debt, largely due to the fact that Mr. Powers was the owner of the company.  The court did, however, leave open the question regarding liability under situations involving more ambiguous contractual terms or where the corporate officer-guarantor owned minimal or no shares in his or her company.

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.

New Rule Proposals for Expedited Lawsuits in Texas

In 2011, the Texas Legislature passed HB 274 which, in part, mandated that the Texas Supreme Court promulgate rules for expedited actions.  The intent behind HB 274’s mandate was to facilitate more efficient and speedier resolutions of lawsuits involving disputed amounts of $100,000 or less.

The following highlights of the proposed rules regarding expedited actions will be available for comment through February 1, 2013, and will take final effect on March 1, 2013:

Tex. R. Civ. P. 169 (new)

  • Would mandate the “expedited actions process” to apply in all causes of action where the claimant seeks monetary relief of $100,000 or less (excludes lawsuits seeking non-monetary relief).
  • Would cap the amount recoverable under the expedited actions process to $100,000.
  • Would allow removal from the expedited actions process only with “good cause” or upon filing of an amended or supplemental pleading seeking relief (i) other than monetary relief or (ii) in excess of the $100,000 limit.
  • Would limit the entire trial process (i.e., jury selection, opening statements, presentation of evidence, direct and cross-examination of witnesses, and closing arguments) to a total of 5 hours.
  • Would preclude the court from ordering parties to engage in alternative dispute resolution (such as mediation), unless the parties previously consented to such a process by agreement or contract.
  • Would prohibit challenges to expert testimony unless requested by the party sponsoring the expert.

Tex. R. Civ. P. 190.2 (amended)

  • Discovery period would run from time the suit was filed until 180 days after the first discovery request is served on a party.
  • Would restrict the total time for examination and cross-examination of witnesses in oral depositions to 6 hours.  Time could be increased to 10 hours on agreement by the parties.
  • Would limit written discovery to 15 requests for interrogatories, 15 requests for production, and 15 requests for admissions.
  • Would permit a party to submit additional disclosure requests of all documents, electronic information, and tangible items that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses.  Such additional requests would not count against a party’s requests for production.

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 214-445-4021.  Please follow us on Twitter at @chalkerflores.

How to Lose Your Trademark Through “Naked” Licensing

Initially utilized as a source or origin indicator, today trademarks further assure consumers about the quality and nature of a product or service.  In other words, consumers may justifiably assume and rely upon the fact that any product or service carrying a specific mark is necessarily of equal quality to that of other products or services carrying the same mark.

Implicit with any trademark, therefore, is a communication to consumers that the owner maintains control over the quality and nature of any sales or distributions of similarly-marked products or services made by third-parties.  Since the mid-1900’s, courts have repeatedly affirmed this implication by imposing an affirmative duty upon registered trademark owners to “take reasonable measures to detect and prevent misleading uses of [their] mark by [third-parties],” or, otherwise, “suffer cancellation of [its] federal registration.”  See Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F.2d 358, 366 (2d Cir. 1959).

One manner in which a trademark owner polices uses of its mark is by granting a license to a third-party.  The trademark licensing agreement contractually permits the licensee to sell a product or service carrying the owner-licensor’s mark.  A licensing agreement will be enforceable, however, only where the owner-licensor maintains a certain level of “control” over the quality and nature of those products or services that are sold and/or distributed by the licensee.

Because trademark licensing is generally governed by the laws of contracts, one way licensors can maintain control over a licensee’s uses is by inserting quality-control requirements into the their licensing agreements.  If the licensee then fails to abide by the licensor’s quality specifications per the agreement, the licensor may then assert claims against the licensee for breach of contract and trademark infringement.

“Naked” licensing, however, occurs when a trademark licensor enters into a licensing agreement, but fails to include or fails to enforce any quality control provisions.  For example, the Ninth Circuit held an agreement between the owner-licensor of the “Leonardo Da Vinci” mark and a wine vineyard to be a “naked” license because the owner-licensor: (1) failed to include quality control provisions in the licensing agreement; (2) made only sporadic wine tastings of the vineyard’s products; and (3) merely relied upon the vineyard’s reputation for quality control.  See Barcamerica Int’l USA Trust v. Tyfield Importers, Inc., 289 F.3d 589, 596-97 (9th Cir. 2002).  Consequently, the licensor was prevented “from asserting any rights in the mark.”  See id. at 597.

Additionally, “naked” licensing presents potentially dire consequences for the licensor and licensee, as well as the general consumer-public.  First, the general consumer-public will be deceived by misrepresentations about the quality of or the owner-licensor’s connection to the products or services.  Second, the owner-licensor and licensee may lose their abilities not only enforce their respective rights against each other, but also may lose their abilities to assert rights against any other unauthorized third-party uses.  And, finally, a court may determine that the owner-licensor has forfeited or abandoned its registration which, in turn, may ultimately lead to cancellation of the mark with the United States Patent and Trademark Office.

Authored by: Scott A. Meyer and John Sokatch.