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Court Watch: Franchise Alert - May 2015
In the May 2015 issue of the Law Journal Newsletter’s Franchising Business & Law Alert, Cynthia Klaus and Bryan Huntington contributed two articles, "Circuit Court Reinstates Dealer's Defamation Claims Against Manufacturer" and "Court Denies Franchisee's Motion to Vacate Attorneys' Fees Award."
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Patents Certainly Have Value, But 50 percent of Gross Margin?
What is a patent worth? What are appropriate royalties for a patent license? These are typically very difficult questions to answer, but something business owners and inventors always want to know.
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Issue Preclusion by Trademark Appeal Decisions
The Patent and Trademark Office and its “judicial body,” the Trademark Trial and Appeal Board (“TTAB”), consider the registrability of a mark; and not infringement. Federal courts determine whether an infringement has occurred. In TTAB proceedings a “likelihood of confusing similarity” analysis is used to determine whether the mark in an application conflicts with another mark.
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Actual Use Necessary for Service Mark Registration
Actual use of a mark is a prerequisite for registration in the Patent and Trademark Office. For a trademark, it is well settled that use occurs when a product has actually been sold. For a service mark, the determination of what constitutes use has been a bit more problematic because there are no tangible items involved.
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Minnesota Court of Appeals Expressly Limits Claims That Can Be Raised by Illegal Holdovers to Delay Eviction Proceedings
The Court of Appeals decision in Federal Home Loan Mortgage Corporation v. Mitchell will unquestionably make it more difficult for illegal holdover tenants to improperly delay eviction proceedings to retain possession of real property. The case unambiguously holds that attorneys may be sanctioned for improper attempts to delay eviction proceedings on behalf of the illegal holdover tenants.
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Environmental Review Becoming Tripwire for Southwest Light Rail?
Is the Metropolitan Council properly conducting environmental review for its 16-mile, 17-station Southwest Light Rail transit project (SWLRT) that extends through five cities from Minneapolis to Eden Prairie? This is the fundamental question raised in two federal lawsuits by affected property owners in Minneapolis and Minnetonka over the agency’s conduct of the environmental review process.
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Court of Appeals Grants Property Owners Judgment as a Matter of Law – Jury Verdict Reversed in Premises Liability Action
Minnesota courts continue to define the extent to which landowners must take steps to protect the safety of independent contractors on their property. In Smith v. Wells Concrete Prods. Co., No. A14-0644, 2015 Minn. App. Unpub. LEXIS 115 (Minn. Ct. App. Feb. 2, 2015), a divided panel of the Minnesota Court of Appeals reversed a jury verdict in favor of a contractor injured while working on land owned by the company that hired her.
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Franchisor Prevails at Trial Despite Finding of Technical Disclosure Violation
A decision hot off the press of the United States District Court for the Southern District of Georgia, Massey, Inc. v. Moe’s Southwest Grill, LLC, No. 1:07-CV-0741, 2015 U.S. Dist. LEXIS 12281 (Feb. 3, 2015), has several lessons for franchisors. First, it demonstrates how franchisors can successfully avoid liability for technical disclosure violations by proving that franchisees actually benefitted because of the policy about which they complain. Second, it demonstrates that even when franchisees can make out a violation, franchisors can still prevail at trial. Third, it proves that careful drafting of a franchise disclosure document (FDD) by counsel experienced enough to anticipate changes in the business is critical to a young franchise system.
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Sick Time and Paid Leave Bills Proposed in Minnesota Legislature
Several bills regarding sick time and paid leave have been introduced to the Minnesota Legislature which, if passed, could have significant impact on Minnesota employers.
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Patents on Software and Business Methods – Still Possible but Challenging
In the past several months, it has been suggested that software and business methods can no longer be patented. Generalizations like this are often very easy to make, but the true analysis is typically more complex. This is especially true when examining the current state of law related to the patentability of software and business methods.
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Trade Dress: Another Way to Protect Websites
The law around trade dress is an offshoot of trademark law. While trademarks typically consist of words, phrases, or logos, trade dress relates to things like shapes, patterns, or the combination of features.
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New International Patent Protection Effective This Spring
Several years ago the United States adopted the Madrid Protocol, enabling firms in the U.S. to take advantage of international protection for their trademarks. This action enormously simplified the process for protecting trademarks on a worldwide basis, and dramatically reduced the cost of obtaining foreign protection.
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Federal Circuit Makes Two Significant Holdings Framing How Inter Partes Review Will Proceed
When introduced, the America Invents Act (“AIA”) provided revised mechanisms to challenge the validity of issued patents. These changes were intended to provide a more efficient and cost-effective method to deal with patent issues.
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State Regulators Circumvent Venue Clauses for Arbitration
Sawan Patel and Susan Tegt contributed the article, "State Regulators Circumvent Venue Clauses for Arbitration" to the Winter 2015 edition of The Franchise Lawyer.
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National Labor Relations Board Update
The National Labor Relations Board (NLRB) recently published a decision affecting the right of employees to use an employer’s e-mail system to discuss wages, hours and working conditions, and issued a new rule accelerating the time period for an election when a labor union has filed a representation petition.
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Tax Extender Law and ABLE Act Help Individual Taxpayers
On Friday, December 19, 2014, President Obama signed the Tax Increase Prevention Act of 2014 and the Achieving a Better Life Experience Act of 2014 (“ABLE Act”).
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More Special Assessments on the Horizon as Cities Contemplate Public Transportation Projects – Rights to Bear in Mind When Ordered to Pay a Special Assessment
Business owners along University Avenue in St. Paul have recently received notice of proposed special assessments from the city related to construction of the central corridor light rail (the “Green Line”). A number of these owners have been ordered to pay thousands of dollars, even though they have had to struggle with a multitude of issues and challenges stemming from the light rail project, including limited parking and sidewalk blockages from snow.
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Minnesota Court of Appeals Decision Expands Insurance Coverage for Commercial Lenders
Commerce Bank v. West Bend Mutual Insurance Co., 853 N.W.2d 836 (Minn. App. 2014)
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This recent Court of Appeals decision expands insurance coverage for commercial lenders in Minnesota by ruling that vacancy cannot void a lender’s coverage under a “standard” mortgage clause. Commercial property casualty insurance policies do not insure against losses stemming from vandalism, sprinkler leakage, glass breakage, water damage, theft or attempted theft if the property has been vacant for more than 60 days. Vacancy (defined specifically in the policy) means less than 31% use and occupancy. As a result of this decision, these vacancy clauses that void coverage apply only to owners, and not their lenders. -
Mistakes Happen. To Head Them Off, Training Program for Sales Team is a Must
Chuck Modell's article, "Mistakes happen. To head them off, training program for sales is a must," was published in the November/December 2014 edition of Franchise Times magazine.
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How Many FDDs Do I Need? New Rules on Disclosing Multi-Unit Franchising Arrangements
On September 16, 2014, the North American Securities Administrators Association (“NASAA”) adopted the Multi-Unit Commentary (the “Commentary”) that provides guidance on how multi-unit franchise arrangements are to be disclosed in Franchise Disclosure Documents (“FDDs”). Multi-unit franchise arrangements are known by a myriad of names—including area development, subfranchising, and area representation—but the new guidance is crystal clear: if you are a franchisor with multi-unit franchise arrangements, you will have additional work to do in your next franchise renewal cycle, and may actually have to create multiple versions of your FDD and filings in the registration states.
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