Friday, October 25, 2013

Report from council

REPORT FROM COUNSEL
October 2013 Issue

To add some levity to the otherwise serious topics in my newsletter and to show my lighter side, 
here is this issue's lawyer joke of the month. I hope you enjoy it!



Best regards!

Mark D. Klein


A plane full of New York lawyers was heading for their annual Las Vegas Convention when it 
was hijacked. The plane was forced to land at Chicago's O'Hare Airport, and the hijackers
 radioed to ground control with a huge list of demands.

When asked what would happen if their demands weren't met the hijacker spokesman stated, 
"If you don't do exactly as we say, we will release one lawyer every single hour."

LIMITED LIABILITY COMPANIES-THE BEST OF ALL WORLDS?

A limited liability company (LLC) is a business structure that combines some of the best features
 of sole proprietorships, partnerships, and corporations. LLC owners, like their counterparts for
 partnerships or sole proprietorships, report profits or losses on their personal income tax returns.
 Like a corporation, however, the owners of an LLC have "limited liability," that is, they are
 shielded from personal liability for debts and claims arising from the business.

Limited Liability
The limited liability for LLC owners is not absolute. Owners still can be held liable if they (1)
personally and directly injure someone; (2) personally guarantee a loan or business debt on
which the LLC defaults; (3) fail to deposit taxes withheld from employees' wages; (4) intentionally
 commit a fraudulent or illegal act that harms the company or someone else; or (5) treat the LLC
 as an extension of their personal affairs rather than as a separate legal entity.
The last exception to limited liability is the most significant. It carries the potential for complete
 removal of the protections for individual owners. If the line between LLC business and personal
 business becomes too blurred, a court could find that a true LLC does not exist, leaving the owners
 personally liable for their actions.

Ownership
Most states allow a single individual to be the sole owner of an LLC. An LLC makes the most
 sense in circumstances where there is a concern about personal exposure to lawsuits stemming
from operation of the business. Most laws prohibit establishment of an LLC in the banking, trust,
 and insurance fields.
Unlike corporations, LLCs can carry on their business without holding regular ownership or
management meetings. Of course, formal meetings backed up by written minutes still may be
advisable to document important decisions, such as a change in membership or a major expenditure.

Formation
Setting up an LLC is relatively simple. Articles of organization must be filed with the appropriate
state office, usually the Secretary of State. The articles of organization include the name and principal
 office for the LLC, the names and addresses of its owners, and the name and address of the person
or company that agrees to accept legal papers on behalf of the LLC.

Even if it is not legally required, the owners should prepare an operating agreement that spells out
 the owners' rights and responsibilities. The absence of an operating agreement will mean that state
 statutes will govern the operation of the LLC by default. An operating agreement acts as a guide
 for resolving common issues that an LLC will face, and thereby helps to avert misunderstandings
 between the owners. It also underscores the authenticity of the LLC itself, which can be helpful when
 a judge is deciding whether the owners are protected from personal liability.

A standard operating agreement includes the members' percentage interests in the business; the members'
 rights and responsibilities; the members' voting power; allocation of profits and losses;
 how the LLC will be managed; rules for holding meetings and taking votes; and "buy sell" provisions that control what happens when a member wants to sell his interest, becomes disabled, or dies. Although it is
 frequently overlooked when an LLC is created, a buy sell agreement is important as a sort of "premarital agreement" among the owners. The buy sell provisions can clarify and ease the transition 
when the inevitable changes come to the members of the LLC.

Taxes
Since an LLC is not considered separate from its owners for tax purposes, the LLC pays no income
 taxes itself. Like a partnership or sole proprietorship, an LLC is a "pass through entity." Each owner
 pays taxes on a share of profits, or deducts a share of losses, on a personal tax return. The IRS regards
 each member as a self employed business owner, not an employee of the LLC. There is no tax
withholding, and owners must estimate taxes owed for the year, then make quarterly payments to the IRS.

Conversion
By converting to the LLC business structure, sole proprietors and partnerships can gain the protection
 afforded to LLC owners without changing the way their business income is taxed. Conversion usually
 can be accomplished either by filling out a simple form or filing regular articles of organization. Federal
 and state employer identification numbers will have to be transferred to the name of the new LLC, as
 will such items as sales tax permits, business licenses, and professional licenses or permits.
The process for creating an LLC is streamlined and free of highly technical considerations. However,
there is an important place for professional advice concerning such matters as choosing an
LLC over other business structures, preparing or reviewing the operating agreement, and setting up
accounting systems. For more information on this topic or help with other legal concerns please 
email us or visit our website.
ADVERTISING

Mark D. Klein, Esq. is a senior attorney at Klein Law Corporation, a Southern California-based
law firm providing legal assistance to businesses and individuals alike. Klein Law Corporation
 provides an extensive range of legal services aimed at helping clients with issues involving 
corporate law, business law, intellectual property matters and estate planning while actively working 
 with entrepreneurs starting business ventures and those purchasing or selling businesses.

The foregoing information is presented by Klein Law Corporation as a news reporting service to clients
 and friends of the firm and is distributed with the understanding that Klein Law Corporation is not
rendering legal advice and assumes no liability whatsoever in connection with its use. If you have
questions about the subject matter presented or desire to obtain more information on legal issues related
 to your business, please contact us at mark@KleinLawCorp.com

© Copyright 2013 Klein Law Corporation. All rights reserved.
(949) 453-7979 * FAX (949) 453-3311
* E-Mail: mark@KleinLawCorp.com *
 Website: www.KleinLawCorp.com

Friday, July 26, 2013

Did You Hear That Trademark?

DID YOU HEAR THAT TRADEMARK? 
CONSIDERING TRADEMARK PROTECTION
UNDER THE LANHAM ACT

Reprinted with permission of Ron Oines, Partner, Rutan & Tucker

Every day, we are bombarded by hundreds, maybe thousands, of trademarks.  The vast majority of these marks consist of words (or abbreviations of words) that conjure up an image of a particular business and/or its products or services.  When we see “UPS” on the truck next to us on the freeway, we know immediately that we are looking at a United Parcel Service delivery truck.  But what if that truck had no “UPS” or other identifying word or logo on it?  Most of us would still know that the truck is a United Parcel Service delivery truck because it is painted that particular shade of brown, to which we are accustomed. 

As a business person trying to distinguish your company, products and services from all other companies and their products and services, you should keep in mind that the Federal trademark law, the Lanham Act, protects much more than mere words.  A successful branding campaign can include not only words and logos, but also packaging and product shapes, colors, sounds and perhaps more, all of which may be protectable under the Lanham Act. 

The essential purpose of a trademark is to identify and distinguish the source of goods or services.  In the example above, “UPS” identifies the source of the delivery services, as does the particular shade of brown consistently used by UPS. 

The law provides protection for a trademark only if it is “distinctive.”  Distinctiveness is simply another way to say a mark is capable of identifying and distinguishing goods or services.  Some marks are inherently distinctive, which means the mark is capable immediately of distinguished goods or services.  Examples of inherently distinctive marks include “Kodak” and “Exxon.”  These marks are inherently distinctive because they do not describe the goods to which they are applied.  Other marks become distinctive (or acquire “secondary meaning”) only after a certain amount of use in the marketplace.  For example, the mark “Windows” for an operating system that includes “windowing” on a computer screen is likely somewhat descriptive, but there can be no doubt “Windows” has acquired distinctiveness, and is a strong and protectable mark.  As explained below, certain categories of marks can be inherently distinctive, but other categories are protectable only after acquiring distinctiveness.

Words
These are the most common trademarks.  “Nike” is an inherently distinctive word mark.  But if you name your shoe company “The Shoe Palace,” you will not have trademark protection until you are able to show that you have acquired distinctiveness through use, advertising, etc.  Note also that the same word can be descriptive for one business, but not another.  “Apple” for a computer company is not descriptive.  But “Apple” for a fruit stand is likely descriptive.


Logos
Like word marks, logos can be inherently distinctive or descriptive, depending on the particular logo.  The Nike swoosh, for example, is inherently distinctive.  On the other hand, a logo that includes an image of a home for a home builder is not inherently distinctive.

Colors
Color marks are never inherently distinctive.  Thus, to obtain trademark protection for a color, one has to establish acquired distinctiveness.  Companies desiring to build a strong band around a color often incorporate the color prominently in marketing campaigns.  You may recall the UPS advertising campaign “What can brown do for you”? or Owens-Corning’s use of the Pink Panther character in its campaign for its pink fiberglass insulation.  These companies own federal trademarks for brown and pink, respectively.  Other well-known color trademarks include John Deere (green), Caterpillar (yellow) and Tiffany (blue).

Sounds
Unlike colors, sound marks can be inherently distinctive if they are arbitrary and unique.  But if the sound is a common sound, you may need to establish distinctiveness.  Well-known examples of sound marks include MGM’s roaring lion, NBC’s three note jingle (the notes G – E – C) and Twentieth Century Fox’s “D’oh,” as expressed by Homer Simpson.  Several years ago, Harley Davidson sought to obtain a trademark registration for the distinctive sound of its V-Twin engine, but after years of opposition and legal wrangling, Harley decided to stop its application.

Product designs and packaging
Product designs and packaging are potentially protectable as trade dress, a type of trademark.  Trade dress involves the total image of the product and can include features such as size, shape, colors or color combinations, texture, and/or graphics.  Under applicable law, product packaging trade dress can be inherently distinctive.  However, trade dress relating to the design of the product itself cannot be inherently distinctive.  Moreover, one cannot obtain trade dress protection for functional aspects of a design.

Other trade dress
Courts have held (??) trade dress protection can extend beyond product design and packaging, and can protect, for example, the total image and overall appearance of a business, such as a restaurant or other service establishment.  Such trade dress may be inherently distinctive under certain circumstances.  Again, however, functional aspects of that which makes up the total image and overall appearance are not protectable. 

Pushing the limits of trademark protection
If we can hear a trademark, can we smell or taste a trademark?  Maybe.  Although these types of trademarks are very rare, more than 20 years ago, the USPTO allowed a registration for a scent reminiscent of plumeria blossoms to a company that makes sewing thread.  More recently, a registration issued for a peppermint scent for office supplies.  An applicant for one of these non-traditional trademarks must establish acquired distinctiveness and non-functionality.  One could not, for example, obtain trademark protection for the natural scent of a product.

Conclusion
Of course, not every business needs all of these different categories of marks.  But it is useful to remember that the protections of the Lanham Act are potentially very broad, and limited only by the imagination of your marketing department.


Reprinted with permission of Ron Oines, Partner, Rutan & Tucker


Mark D. Klein, Esq. is a senior attorney at Klein Law Corporation, a Southern California-based law firm providing legal assistance to businesses and individuals alike. Klein Law Corporation provides an extensive range of legal services aimed at helping clients with issues involving corporate law, business law, intellectual property matters and estate planning while actively working with entrepreneurs starting business ventures and those purchasing or selling businesses.

The foregoing information is presented by Klein Law Corporation as a news reporting service to clients and friends of the firm and is distributed with the understanding that Klein Law Corporation is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at mark@KleinLawCorp.com

Thursday, June 27, 2013

Take The Time To Update Your Will

No group has been the subject of more jokes than lawyers. Perhaps this stems from the fact that most of our contact with the law is in regard to something negative (i.e., a divorce, a will contest, a criminal charge, a mortgage foreclosure). Those unfortunate situations may taint your impression of attorneys. As a lawyer, I decided that I could go around being upset at the lawyer stereotypes portrayed in these jokes or roll with the punches and have a good laugh along with everyone else.
Thus, I'm including some of my favorite lawyer jokes/stories as part of my monthly newsletters in an attempt to show that I do not take myself too seriously, have a sense of humor and am a real person who just happens to be an attorney. I hope you will enjoy these inserts in our newsletters each month and that they will add some levity to the more serious and important information contained therein.
Best regards! Mark D. Klein
A woman and her little girl were visiting the grave of the little girl's grandmother. On their way through the cemetery going back to the car, the little girl asked, "Mommy, do they ever bury two people in the same grave?"
"Of course not, dear," replied the mother. "Why would you think that?"
"Because the tombstone back there said, 'Here lies a lawyer and an honest man.' "
TAKE THE TIME TO UPDATE YOUR WILL
By some accounts, 70% of adult Americans do not have a will. If you have at least gone to the trouble of making a will, consider yourself
ahead of the curve and pat yourself on the back. Then come back to earth and understand that your work is not completely done. A will is not a static instrument. To serve its purposes, it must keep current with life changes, including an individual's financial circumstances, and with some external factors, such as tax laws. With the help of a professional, you should periodically review your will, staying alert to new or different circumstances that might call for updates.
MARRIAGE, DIVORCE AND REMARRIAGE
Obviously, a marriage usually brings a new beneficiary into the picture, and a divorce may remove one. Some of the changes in a will prompted by a change in marital status may not be so apparent. For example, when a widow or widower remarries, the will may need to be updated to show how children from the previous marriage and the new spouse are to be provided for.
ADDITIONS AND SUBTRACTIONS
A new child is a new beneficiary, but a will can and should cover more than just the distribution of property to heirs. Parents can name a guardian, and even an alternate guardian, to care for their children in the event that something happens to both parents. Absent such a provision in a will, a court will appoint a guardian.
The death of an executor, guardian, beneficiary, or trustee creates a gap in how the will is supposed to operate. Fill in the gaps by making necessary changes, such as naming a new individual or, in the case of a deceased beneficiary, simply removing him or her from the will.
CHANGING FORTUNES
If you enjoy an unexpected windfall, you may still want the larger pie divided up as before. But it is likely that some changes in your will are called for. If the increase in the potential estate is large enough, it might trigger the need for planning to avoid or minimize estate taxes. A reversal of fortune could also suggest some changes. For example, you may have to revise downward that fixed sum you were planning to leave to a favorite charity.
MOVING OUT OF STATE
You will not have to start from scratch if you move to another state, because all of the states recognize a will that was properly created in another state. Nonetheless, legal advice should be sought in the new state because changes in the law from state to state could require some tinkering with the will. There may be more than tinkering involved if you move to or from a community property state.
CHANGES IN TAX LAWS
The government's intentions can change even if your intentions have not. Some of the changes benefit individuals with wills, but you can take full advantage of them only if you are aware of them. The big item here is changes to the federal estate tax exemption, which is the amount an estate can reach before it is subject to a (hefty) estate tax. In recent years the exemption has headed up, but there are no guarantees about what Congress will do with the exemption going forward.
YOU CHANGE YOUR MIND
If you decide you want to change beneficiaries, a guardian, an executor, or anything else in a will, you can do so. For example, you want to make sure that the beneficiaries in your will are the same as the beneficiaries you have named in your insurance policies and retirement accounts. Otherwise, the beneficiaries actually named in those documents, not the beneficiaries under the will, will get the money from the policies and accounts. Bear in mind that no amount of talking about your new intentions will make them happen. The changes must be indicated in a properly executed will.
You should keep the finished (at least until the next update) product in a safe place. When "they" say "keep this with your important papers," think of your will. Your family should know where to find the executed will. An unsigned copy of your will in its latest form is a good starting point for the next periodic review.
LETTER OF INSTRUCTION
Even the best drafted will is not likely to cover everything needed for a smooth disposition of your estate. To supplement the will, consider executing a letter of instruction. It generally is not legally binding, but it can go a long way to expedite the process and provide information not to be found in the will.
Some items appropriate for a letter of instruction include a list of bank, brokerage, and mutual fund accounts; directions on where to find important documents or personal property; user names, PIN numbers, and passwords necessary for access to electronic records; and contact information for legal and financial advisors. Be sure to list any life
insurance policies, as beneficiaries will collect on those policies outside of the will. Any advance plans for the funeral and burial also should be mentioned in the letter of instruction.
ADVERTISING
Mark D. Klein, Esq. is a senior attorney at Klein Law Corporation, a Southern California-based law firm providing legal assistance to businesses and individuals alike. Klein Law Corporation provides an extensive range of legal services aimed at helping clients with issues involving corporate law, business law, intellectual property matters and estate planning while actively working with entrepreneurs starting business ventures and those purchasing or selling businesses.
The foregoing information is presented by Klein Law Corporation as a news reporting service to clients and friends of the firm and is distributed with the understanding that Klein Law Corporation is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at mark@KleinLawCorp.com


Tuesday, June 4, 2013

OUR 10 POINT UNMATCHED LEGAL REPRESENTATION GUARANTEE


OUR 10 POINT UNMATCHED LEGAL REPRESENTATION GUARANTEE

Have you ever heard of a law firm offering a 10-point guarantee?  At Klein Law Corporation, that’s exactly what you get!  Consider our 10 Point Unmatched Guarantee:

GUARANTEE #1:  We Will Conduct A Complementary Detailed Analysis of Your Business (known as our “ON-TRACK REVIEW”) During Our Initial Consultation and Give You a Roadmap of What Needs to Be Done.

During our initial consultation, during which we do not want you to feel rushed and often takes upwards of an hour, we provide you with an in-depth analysis of your current financial situation with one of our top attorneys. At the end of our meeting we will be in a position to give you a roadmap of what needs to be done. Such is done in an honest and non-self serving manner. Guaranteed!

GUARANTEE #2:  Our "No Wait Policy" Guarantee.

Since we know your time is valuable, if you are on time for your first appointment, we will not keep you waiting like doctors and many attorneys are notorious for doing.  If we keep you waiting more than 10 minutes after our scheduled time, we will pay you $25.00. Guaranteed!

GUARANTEE #3:  Our Initial Complimentary Consultation Will Provide you with Helpful and Meaningful Information and Answers to Your Business Related Questions. 

We feel that the information we discuss with you at the initial consultation is so valuable that, regardless of whether or not you decide to retain us, you will have been benefited by such. Just having knowledge on these matters can alleviate a lot of the unnecessary concern and stress you have been dealing with.  If you cannot honestly admit that we provided a valuable service to you, we will pay you $25.00. Guaranteed!

GUARANTEE #4:  Our Office is a “Legalese" Free Zone.

Our attorneys will communicate with you in English (or Spanish) – not in the dreaded legalese!  When we refer to certain documents, procedures, or hearings by their proper legal name, we will make sure to explain everything to you in everyday language — free of legalese.  Guaranteed!

GUARANTEE #5:   Flexible Payment Plans.

We offer several options besides our traditional hourly-based rate, including flat fees and high/low project ranges.  This takes the element of uncertainty out of the professional relationship.  We fully understand that in today’s bottom-line oriented business culture, legal fees are an expense, and not an investment, which companies need to contain in order to stay competitive Guaranteed!

GUARANTEE #6:   An Attorney is Involved at All Phases of Your Matter.
                                                     
Unlike competitors who only allow you to visit with the secretaries and paralegals because the attorney’s time is considered too valuable, when you deal with us you will have a real attorney involved throughout all phases of your legal representation. Guaranteed!

GUARANTEE #7We Are Committed to Keeping You Promptly Informed of the Progress of Your Matter.

Whatever your legal needs, they can only be fulfilled if your attorney is there when you need him.  At KLEIN LAW CORPORATION, we understand that our responsibilities are to be available to you, whatever the circumstances, and to produce high quality work in a timely manner.  We promise to involve you and communicate with you regularly, promptly return all telephone calls and emails, usually within 8 hours, and stay in regular contact with you to keep you informed of all developments on your matter and the progress we are making.  Guaranteed!

GUARANTEE #8:  Our Information Privacy and Confidentiality Guarantee.

We guarantee that when you come and speak to us about your financial situation, your information will be kept confidential to the highest degree.  To adapt the popular saying “What you say in our offices stays in our offices.”  Furthermore, we allow you to submit information to us using our encrypted website.  Guaranteed!

GUARANTEE #9:  Non-Judgmental Attitude.

As we handle 100s of sensitive matters for our clients every year. We strive to make each client feel important and show them the dignity they deserve - regardless of the difficulties they are facing.  By maintaining a non-judgmental attitude, our clients and prospective clients are treated courteously and respectfully and do not feel embarrassed or worried about the sensitive things they share with us.  We have represented everyone from business executives to attorneys to rock stars to professional athletes and know that they all have one thing in common – the need for competent legal services.  Guaranteed!

GUARANTEE #10:  Highest Ethical Standards.

We assist our clients in making sound legal decisions while adhering to the highest standards of professional ethics and excellence.  The importance of this cannot be overstated in light of today’s well publicized business scandals.

We’re sure you will realize that the above guarantees help make us a truly unique law firm! To experience this for yourself, you are invited to call us at (949) 453-7979 to discuss, in detail, any of the above Guarantees or how we may help you on your road to a fresh start.

Mark D. Klein, Esq. is a senior attorney at Klein Law Corporation, a Southern California-based law firm providing legal assistance to businesses and individuals alike. Klein Law Corporation provides an extensive range of legal services aimed at helping clients with issues involving corporate law, business law, intellectual property matters and estate planning while actively working with entrepreneurs starting business ventures and those purchasing or selling businesses.

The foregoing information is presented by Klein Law Corporation as a news reporting service to clients and friends of the firm and is distributed with the understanding that Klein Law Corporation is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at mark@KleinLawCorp.com