Franchise & Distribution Law Update, February/March 2009


Highlights From Commentary to Franchise Registration and Disclosure Guidelines
Trademark Watch Service Available to Protect Trademark Rights
Expansion of Top Level Domain Names Pending
The Role of the Internet and Other Media in Attacks Against Franchisors

Updates and Announcements
About our Franchise & Distribution Practice
Contact our Franchise & Distribution Attorneys

Check out IP/Tech Buzz - our newsfeed on topics that may affect businesses like data security, consumer privacy, Web 2.0, social media, domain names, copyright, patents, and trademarks.

Highlights to Consider from NASAA’s Commentary to the Franchise Registration and Disclosure Guidelines – Preparing for Renewal
The North American Securities Administrators Association (known as “NASAA”) has released commentary to the 2008 Franchise Registration and Disclosure Guidelines.  The commentary offers some practical tips for complying with the Amended Franchise Rule that franchisors should consider while preparing for their annual renewal.
Trademark Watch Service Available to Protect Trademark Rights
One of the most valuable aspects of a franchise system is its trademark ownership rights – without it, the franchisor does not have a brand or name recognition to sell to its franchisees.  It is therefore crucially important that franchisors take all possible steps in order to protect against infringement of their registered trademarks. 
Recently, Larkin Hoffman represented a client who registered a trademark with the United States Patent and Trademark Office (the “USPTO”), and subsequently the USPTO registered a mark that was very similar to a mark used by the client.  After thousands of dollars of legal fees, which could have easily been six figures if the infringing user had pushed the matter further, Larkin Hoffman was able to convince the infringing user that the grant of the trademark registration to him did not give him rights superior to a previous registration. 
To proactively address this issue, Larkin Hoffman recommends to its clients that they consider one of two independent watch services that are available to persons holding registered trademarks. 
The first service, called the “Pending Application Watch Service,” monitors trademark applications filed with the USPTO, and will notify Larkin Hoffman of any potentially conflicting trademark applications with clients' registered marks in the week following the filing of the application.  This service will provide trademark holders with the earliest possible warning of a potentially conflicting mark.
The second service is called the “Official Gazette Watch Service,” and it identifies trademark applications that have already gone through the application process and are about to be registered, pending the 30-day publication period.
As part of each service, Larkin Hoffman will advise any subscriber of the service in writing each time a notice is received, and will also provide an assessment as to whether action should be taken against the identified mark.
The cost to register with the independent agency for either watch service is $210, annually.  In addition to the annual fees for the watch service, Larkin Hoffman will also charge its standard hourly rate each time a notice is received from the watch service of a potentially conflicting mark.
For more information regarding either watch service, please contact Larkin Hoffman's Franchise and Distribution practice group.
Expansion of Top Level Domain Names Pending
Within the next year, Internet users could be visiting websites with web addresses such as http: // mail. yahoo or http: // accounts. wellsfargo, or sending an e-mail to an address such as orders @ store . amazon. Notice something missing? There is no “.com” or other familiar Top Level Domain (TLD) in these web addresses. Top Level Domain refers to the part of a domain name that is highest on the Internet domain name hierarchy. The most familiar of the so-called generic TLDs (gTLDs) to most people is “.com” (some others are “.org,” “.net,” “.gov”).


After years of pressure, the Internet Corporation for Assigned Names and Numbers (ICANN), the private organization that administers the unique identifiers for the Internet, decided to allow virtually any gTLD to become part of the TLD system. This means that some business may try to get a familiar generic term as its own gTLD, such as “.shopping” or “.sports.” This also means that a business could sign up for “.your company” or “.your brand” as a gTLD. Both of these possibilities create business decisions that brand owners should carefully consider.  Read More
The Role of the Internet and Other Media in Attacks Against Franchisors
As highlighted in this newsletter, forms of “new media” attacks have become an increasing threat to franchise systems in today's electronic world.  For more information, click here to see a previously distributed article on the issues posed by the use of websites, domain names, blogs, chat rooms, social networking sites, and virtual worlds.

Updates and Announcements: 
Modell and Fittante Speak at International Franchise Association’s Annual Convention
Chuck Modell and Joe Fittante were featured as presenters at the Annual Convention of the International Franchise Association, held on February 14-17, 2009 in San Diego.  Chuck Modell presented and led a roundtable discussion regarding private equity, and analyzed what multi-unit private equity investors look for in franchise systems.  Joe Fittante addressed the topic of franchise compliance programs, and advised attendees of best practices to ensure that such compliance programs are up to date under the Amended Rule. 

Klaus and Bauer Publish Article Regarding Recent Cases in Franchising
In the December 2008 issue of the Law Journal Newsletter's – Franchising Business & Law Alert, Cynthia M. Klaus and Meredith A. Bauer discuss the enforceability of jury trial waivers and arbitration provisions, as well as a recent case interpreting Wisconsin’s Fair Dealership Law.  To read the article, click here.
Fittante Presents Franchising CLE to Minnesota State Bar Association
Joe Fittante, along with co-presenter Ronald Gardner from the law firm of Dady & Garner, P.A., led a recent Minnesota State Bar Association continuing legal education seminar entitled “The Basics of Franchise Law for the Non-Franchise Lawyer.”
Property, Technology and Internet Practice Group Launch “Tech Buzz”
Larkin Hoffman’s Property, Technology and Internet practice group has recently launched a newsfeed related to issues arising in intellectual property and technology law.  To view or subscribe to the “IP/Tech Buzz” alert, click here.
About Our Practice:
For more information about Larkin Hoffman’s Franchise and Distribution practice group, visit our homepage by clicking here.
Contact our Larkin Hoffman Franchise and Distribution group members:
Charles S Modell, Chair
Email 952.896.3341
Joseph J Fittante, Jr.
Email 952.896.3256
William G Thornton
Email 952.896.1578
Jon S Swierzewski
Email 952.896.3280
Cynthia M Klaus
Email 952.896.3392
James M Susag
Email 952.896.1572
Pamela N Merkle
Email 952.896.3337
Meredith A Bauer
Email 952.896.3263
Andrew F Perrin     
Email 952.896.3394
Edward J Driscoll                            
Email 952.896.3235

This alert is provided as a service to our clients and firm associates.  While the information provided in this publication is believed to be accurate, it is general in nature and should not be construed as legal advice.