Chicago Business Lawyer Blog

A recent case involving technology giant Apple shows that having the proper type of insurance can protect against even something as basic as a slip-and-fall claim.

Apple Insider reports that an insurance company recently lodged a complaint against the company disputing a claim by Apple, a Chicago construction company and the Chicago Transit Authority for an incident that happened while an Apple Store was being built here in 2010.

While Chicago Business Attorneys may focus on properly written contracts, protecting intellectual property and dispute resolution -- and all those are critically important as well -- making sure that your home base is protected is crucial too. Employee issues, whether providing protection from injury or ensuring the company is protected from discrimination suits, can just as easily damage a company as any other issue.

Chicago premise liability issues or those involving the products that are packaged and shipped for distribution are issue that must be taken into consideration by a successful business. Any workplace can be opened up to lawsuits and claims if they don't have the right kind of insurance to protect from injuries. This is even more important in business that involves machinery, manufacturing or construction.

According to the news article, Apple is in a pinch because in 2010, the technology giant entered into an agreement with the transit authority and a construction company to renovate a subway station near the store. The deal was to allow Apple to buy out the advertising space and rename the station.

Scaffolding and shoring was set up and Apple and the construction company were set up as "additional insureds" and were supposed to be covered by the insurance company's limited liability coverage. But while under construction, a woman fell and fractured her hip on a sidewalk. The scaffolding company's insurance was added 19 days after the injury, meaning Apple and the construction company were hung out to dry. The companies have now sued each other.

This type of situation can happen in any office setting or work site. Employees can become injured on floors, by chemicals or through hot objects. Companies must ensure they protect themselves to comply with state and federal standards.

Starting in March, the Americans with Disabilities Act will include additional changes that public places must comply with to avoid risking fines or penalties. Among the changes, 1 in 6 parking spaces, a change from 1 in 8 spots, must be van accessible. Mobility devices, other than wheelchairs, must be accommodated.

Shelving and other objects must be no more than 48 inches high. There are other changes in place that went into effect in March 2011, but won't be enforced until this year. This is just another thing that companies must adhere to in order to stay above-board in all respects.

Businesses have a lot on their plate and many things to remember. Dealing with employee issues to ensure premise liability problems don't derail the company is a big one. Complying with state and federal laws regarding the public is another. These issues shouldn't be prioritized over business-related matters, but they also shouldn't be overlooked, either. A Chicago business attorney can help companies ensure compliance and protect them from legal issues at the same time.

Continue reading "Proper Small Business Insurance Can Protect Chicago Companies From Liability Lawsuits" »

A case out of Illinois decided recently by the 7th Circuit Court of Appeals in Chicago shows just how important it is to have strongly worded contracts when dealing with major acquisitions in Chicago.

Our Chicago business lawyers would also point out the importance of doing your due diligence on the environmental factors on a piece of property for sale in Illinois. That cuts to the heart of the matter in this Illinois case that was recently decided.

In 2000, the Wilder Corp., a cattle company, agreed to a deal to sell 6,600 acres of land in Fulton County, Illinois to an organization that wanted to turn the land into a natural preserve. As part of the deal, the cattle company promised to ensure the land was free from any toxins or chemicals and to clean up any trash on the property. The total price of the deal was $16.35 million.

There were no issues until 2006, when the Nature Conservancy found there was petroleum on part of the site. The organization sued the cattle company for breach of warranty and a judge ruled in favor of the organization, forcing the cattle company to dish out $800,000, even though the cattle company claimed it wasn't aware of any problems. It appealed and lost.

In an effort to pass the buck, the cattle company sued a local drainage district that stored petroleum in tanks near the property. The company attempted to argue that the district was responsible for the contamination and should have to pay the damage.

A court found in favor of the drainage district and the 7th Circuit Court of Appeals recent affirmed the ruling, writing that a "blameless contract breaker...cannot invoke non-contractual indemnity to shift the risk that he assumed in the contract."

Experts said the ruling wasn't hard for the appeals court because the drainage district had no part in the contract. It was the cattle company's responsibility to ensure the property was free from environmental issues, per its contract.

Analysts believe that the ruling is significant for two reasons. For one, it shows the importance of strongly worded contracts that allow for no loopholes that could potentially harm a company doing business with another company or an individual. Secondly, it shows that companies must do their research of potential environmental hazards when purchasing a property.

Just as future home buyers must ensure the property is properly inspected not only for structural issues, but also potential toxins, a company planning to purchase a piece of land must make sure there aren't any environmental issues or local ordinances that would make the property unusable for the company's purpose.

Our Chicago business lawyers have experience handling these environmental issues as they relate to local, state and federal environmental laws and the potential hazards for companies looking to purchase land. It's not as simple as buying a property and starting construction.

Along with the frustrations of local government permitting, there are also bigger environmental issues that must be taken into consideration. Rushing through the process without an experienced Chicago business lawyer can make it much more expensive and time consuming.

Continue reading "Illinois Land Acquisition Case Shows Importance of Breach of Warranty Litigation in Chicago" »

A Chicago catering company has been shut down by federal inspectors in the wake of claims that the company did not properly protect food from contamination.

Our Chicago small business attorneys know how devastating this can be to a restaurant or food-service business. To be shut down any time of year threatens a company's survival. But to be shut down at the holidays may very well force a catering company out of business. To say nothing of the damage to reputation that food-contamination allegations present.

Triple A Services, a South Throop Street caterer, agreed to take a number of food-safety measures, including the hiring of food sanitation of food processing experts, before reopening, according to the Chicago Tribune. The lawsuit filed on behalf of the U.S. Food and Drug Administration found violations during inspections in July and August of this year. The company operates a 46,0000 square foot Chicago facility with a 24-hour kitchen and bakery. It provides catering and office coffee and bottled water services.

Complying with environmental, health and safety regulations is critical to the health and viability of any business enterprise. As this case illustrates, consulting an attorney and putting plans in place to ensure compliance is often much easier, and much less expensive, than dealing with the fallout from citations and other non-compliance issues.

The lawsuit alleges bacteria was found at the facility as far back as 2001. The government's reaching into the past as part of the lawsuit illustrates why a legal defense is always required, even when a business or facility believes a common citation is the extent of the consequences. On the surface, this lawsuit also alleges relatively routine complaints, including a lack of a written plan for dealing with seafood, pest control issues, failure to fix a leaking water issue and employee cleanliness issues. These are all problems common within the restaurant industry. A thorough review of this case may also reveal that the company could have easily prevented the case from escalating by either defending itself or resolving a few simple issues.

Instead it has a public relations issue and is facing fines of $2,500 a day if it fails to comply with a consent decree. Forced closure will likely cost it thousands more. Remaining proactive from the start, and having a thorough understanding of your rights, can literally save your business when dealing with local, state or federal regulators.

Other common issues involving Environmental, Health and Safety regulations include:

-Regulations involving the Occupations Safety and Health Administration: Issues related to employment regulations and work safety.

-Regulations involving the Environmental Protection Agency: Administrative and court defense of alleged violations.

-Regulatory compliance and affairs: Clean Air Act, Resource Conservation and Recovery Act, Toxic Substance Control Act, Clean Water Act.

-Due diligence and risk management: Environmental site assessments and compliance audits.

-Remedial actions and Brownfield projects: Cleanup options and obligations.

-Governmental inspections and proceedings: Defense and administrative resolutions.

Continue reading "Health & Safety Regulatory Compliance Critical For Chicago Small Businesses" »

Technology giant Apple recently won a key ruling in a case regarding the software in some of HTC's Android smartphones, CNNMoney reports.

Issues of intellectual property in Chicago are critical because protecting your ideas is the only way to run a successful business. This is especially true in the world of technology, which is constantly changing and improving.

Our Chicago small business lawyers understand that protecting your company is critical in surviving the market in which you are competing. Often, these matters require litigation in order to fix an issue that is a result of theft of ideas.

In this case, the U.S. International Trade Commission ruled in Apple's favor that the software used in some of HTC's Android smartphones violated a provision of Apple's patent. The ruling means that some of those phones will no longer be allowed in the United States.

Apple officials had hoped for a broader ruling, which bans HTCs phones in April. That gives the company time to figure out how to fix the phones without the Apple-patented software.

CNN reports that Apple had hoped for a "knockout punch" ruling that it didn't get from the commission. Analysts said that a "data tapping patent" was at issue, an invention that marks up phone numbers or other formatted data in emails, for instance, and allows users to bring up other programs that process the data. This is common when a user brings up a phone number from a website and it automatically brings up the phone dialer function to dial the phone number.

The CNN article reports that the ban won't affect HTC phones that don't have the feature or phones that implement it in ways that avoid the Apple patent. It's possible Google can implement the feature without using the Apple patents. If so, the ban will have little or no effect on the companies.

Obviously, the fight among smartphone companies is highly competitive. These phones are constantly changing and becoming more technologically advanced by the year. With millions sold each year and the products costing hundreds of dollars, the companies that design these machines are making a ton of money. They will go to great lengths to protect the technology that has made them successful.

Protecting ideas and patents is critical to ensuring a business survives. The reason that patents are registered and made public is so companies can check to make sure others aren't stealing their ideas. If everything were private, these patents could be stolen or sold improperly from business to business.

But, still, companies often try to skirt the rules and take credit for ideas that aren't there own. This can potentially sink a successful company if another business is able to get away with taking this information.

That's where an experienced Chicago intellectual property law firm becomes valuable. In protecting your small business from other competitors and larger businesses that attempt to run people out of the market, it's possible that bringing a lawsuit will be the only way to successfully defend against these unlawful acts.

Continue reading "Apple Wins Key Chicago Intellectual Property Ruling in Android Case" »

A recent lawsuit filed in Chicago alleges that giant cell phone company Motorola misappropriated trade secrets on technology that allows cellular networks to track emergency callers.

This lawsuit comes down to employment issues that Chicago small businesses deal with all the time.

This is especially true with technology start-ups because of how intense the competition is and how high-impact the development of new technologies can be. In this global economy, new technology is perhaps the most valuable asset a company can have. Being able to create something that completely changes the face of business or consumer products can be very profitable.

But it can also be easily pilfered by employees who leave the company and take the company's trade secrets with them. This is why a small business start-up must consult with an experienced Chicago small business attorney.

Many small business owners are so concerned with office space, financing, registering the business and other important first-step acts that they don't consider the implications of structuring employment contracts, establishing policies and handbooks and making sure there are provisions to ensure employees don't steal company secrets when they leave.

In this case, Lemko Corp. alleges, an engineer that created technology that allows emergency callers from cell phones to be detected by law enforcement went to Motorola because she had "access to and knowledge of Lemko's trade secrets," according to a lawsuit filed in Chicago.

The engineer left Lemko, the lawsuit states, and then was hired by Motorola, which then incorporated the technology into its phones. The giant cell phone company, which is being acquired by Google Inc., allegedly destroyed computer files showing that it used Lemko's computer code. The engineer was fired in 2008, Bloomberg reports.

Lemko is asking for compensation for the loss of royalties as well as unspecified damages. The company alleges the engineer should have known or did know that she would be using her former company's trade secrets in creating the technology for Motorola.

Trade secrets are a major factor in making sure a business is successful and they can be illegally stolen through a variety of means. Trade shows can lead to leaked secrets, but employees tend to be a major source of this type of theft. A strongly worded and appropriately written employment contract can ensure that employees don't run off with important details or intellectual property that belongs to the company.

Intellectual property includes branding, trade secrets, and other developed ideas that a company relies on in order to thrive. An experienced Chicago business litigation attorney can help companies implement these secrets and protect them from outside businesses. From trademark registration to protecting those secrets along the way, this is one area of business that can't be taken lightly.

In this ultra-competitive market, companies must do all they can to protect what is theirs and what they have developed through their own hard work. Letting employees take this technology and carry it to competitors can have a crippling effect on a small business.

Continue reading "Motorola Sued By Lemko For Trade Secret Theft in Chicago" »

The Miami-based small business Rollashoe was hit with a lawsuit recently by Chicago-based candy maker Tootsie Roll, alleging that its Footzyroll ballet shoes infringed on the candy company's trademark, CNNMoney reports.

Chicago small business can be difficult because larger companies are trying to always dominate the market. Sometimes, it takes clever names, along with ground-breaking products to find a niche in the ever-competitive field they are in.

But large corporations will try to pummel any small business that is making a mark and can be seen as a threat. This can lead to lawsuits that attempt to intimidate and weaken a business owner who is simply trying to compete.

But a Chicago small business lawyer can be utilized for many functions aside from defending lawsuits. Whether hiring employees and requiring non-compete clauses to be written into contracts, or setting up contracts with other businesses for distribution or marketing of products, an attorney is helpful in making sure all your bases are covered.

According to CNNMoney, this lawsuit stems from a new line of ballet slippers that are so flexible and small they can be tied up with a string and carried in a canister. In a recently filed lawsuit in the U.S. District Court for the Northern District of Illinois in Chicago, Tootsie Roll claims that consumers could get confused and assume that the shoe is a part of the candy company's brand.

Tootsie Roll made $521 million in sales last year, compared to Footzyrolls' $2 million in sales in 2010. The Chicago candy maker claims the footwear will dilute or tarnish the value of the Tootsie Roll brand and that the actions are "willful, malicious and fraudulent."

The owners of the shoe company -- 28- and 34-year-old sisters -- say the lawsuit is without merit and will threaten their company. They have spent thousands in legal fees fighting with Tootsie Roll, which opposed the trademark application the shoe company made. It was later featured in Oprah's magazine and has gotten sizable contracts from that exposure.

They are concerned that the lawsuit could cripple their business, which could top $3 million in sales, but has been hampered by the candy maker's actions.

Sadly, business is cut-throat and lawsuits like these happen every day. Big businesses, even candy companies that claim shoe companies could confuse consumers, like to flex their muscle. They know that small businesses don't have the legal budget that they do.

But an experienced Chicago small business attorney can help. Being able to attack the lack of merit of the lawsuit is a way to start. Showing that the products are so different they couldn't confuse the average consumer is another aspect.

Big businesses don't simply use lawsuits to attack competitors, though. They try to hire away their employees, make deals with other businesses to run them out of a specific geographical area or niche product area. These are all areas that can be addressed with a lawyer who can help write solid contracts.

Continue reading "Chicago-Based Tootsie Roll Sues Footwear Maker Footzyrolls For Trademark Infringement" »

As we reported recently on our Chicago Business Lawyer Blog, Groupon, the online coupon phenom, is facing a class-action lawsuit regarding overtime pay. We used it as a cautionary tale about the need for tech startups in Chicago to invest in the kind of experienced legal help necessary to keep them out of legal trouble through the incubation and gestation period.

Now the New York Times is reporting on "red flags" raised during IPO negotiations. Finance is another critical area where contacting a Chicago business lawyer can pay huge dividends while keeping your rights protected.

The Times reports the suit and a number of other accounting and disclosure gaffes have been brought to the attention of the Securities and Exchange Commission, darkening the company's Initial Public Offering Prospects and raising questions about its credibility. When Goldman made the successful pitch as one of the underwriters of the IPO this summer, the company was being valued at $30 billion. Analysts now believe the company would be lucky to fetch an evaluation of more than $10 billion.

The IPO is also debuting as the company's triple digit growth has slowed.

Also at issue is the unearthed business history of Groupon's chairman Eric Lefkofsky, which the media describes as a lawsuit-prone entrepreneur who flipped a dot-com in 1999 that quickly went bankrupt on its new owners. He also reportedly took home $319 million of an investment round in January that fetched $950 million. Most of the rest was paid to employees and investors, which the Times cited as a red flag to other would-be investors.

Some of this is undoubtedly legitimate. But never forget that perception is often nine-tenths of reality. Once a company stumbles, it can be hard to get back up for all the piling on. Experienced legal advice and careful planning can often help a company avoid some major pitfalls and common errors.

Industry watchers are now questioning why Wall Street investment firms didn't catch the red flags earlier, or whether they may have turned a blind eye to problems in the quest for profit. "Underwriters are supposed to be gatekeepers, not just a sales and marketing agent," said Lynn E. Turner, a former chief accountant for the S.E.C.

The information Groupon filed with its prospectus is also now being called into question. According to that information, the company has $250 million in the bank and lost $102 million last year on revenue of nearly $1 billion. The need for additional cash, either through an IPO or otherwise, quickly becomes apparent. It has also left some scratching their heads at the $30 billion valuation. Especially when matched against $376 million in assets and $681 million in liabilities -- including nearly $400 million currently owed to vendors.

And despite spending nearly $500 million on advertising in the first six months of the year, the company's revenues are up only 13 percent in August, compared to 96 percent during the first six months of the year.

In its quiet period ahead of the IPO, the company has not commented publicly but its founder expressed optimism in a recent note to employees.

Continue reading "Groupon Tale Continues to Offer Caution to Small Business Startups in Chicago" »

The U.S. Department of Labor has sued a Marshfield builder and its owners for more than $100,000 for alleged violations of the Employee Retirement Income Security Act. The case is being pursued by the EBSA's Chicago office.

Chicago business attorneys often see startups struggle to stay on the right side of state and federal employment regulations. Seeking small business legal advice can help ensure that success does not become as disastrous as business failure.

As we reported recently on our Chicago Business Lawyer Blog, employment issues and other legal issues can pose a threat to tech startups or other small businesses.

In this case, the lawsuit was filed in U.S. District Court. It alleges the company failed to forward nearly $18,000 in 401(k) contributions between 2006 and 2008. It also says the company failed to remit timely payments to the plan, which had 52 participants and about $250,000 in assets as of March 2009. The suit also accuses owners of failing to pay nearly $100,000 in employer contributions to the Prevailing Wage Plan from 2007 to 2009. The plan mandates that the builder make prevailing wage contributions to the plan using proceeds received under state and federal contracts.

"The Labor Department is committed to ensuring workers keep what they earn," said Steve Haugen, EBSA's regional director in Chicago. "We will continue to hold fiduciaries accountable when they ignore their responsibilities and put workers' hard-earned retirement income at risk."

The lawsuit seeks to restore contributions to both plans and to remove the company and its owners as plan fiduciaries.

Federal and state prevailing wage plan requirements are a complex part of doing work as a government contractor. As contractors have submitted increasingly lean bids to secure jobs in a tough economy, running afoul of wage and hour regulations, retirement regulations and other state and federal employment regulations has become more common.

Companies may also be best served by using an attorney to establish wage and benefit plans, retirement plans, medical plans, employee benefits and health reimbursement accounts.

Chicago small business attorneys can assist in many areas, including:

-Contracts and Agreements

-Corporate and Finance

-Intellectual Property and Technology

-Executive and Employment Issues

-Licensing Distribution and Sales

-Real Estate

-Environmental Health and Safety

While we all think of economic struggles as the primary destroyer of small businesses -- they can also become a victim of their own success. This is particularly true when a growing business fails to get experienced legal advice at critical steps in its evolution. Discussing your overall legal needs and legal strategies with a Chicago attorney who is experienced in small business issues is an excellent first step. Knowing you have a solid legal foundation can make all the difference when building for the future.

Continue reading "Small Business Legal Advice Can Keep Chicago Companies in Compliance with State and Federal Regulations" »

The Internet has opened a new legal frontier; businesses must now be as concerned about online ownership, trademark and copyright issues as they are about their brick-and-mortar operations.

In some cases, businesses survive and thrive entirely online. In all case, protecting the online name and reputation of your business is critical to success. Annual Internet sales are increasing by double digits each year -- and passed $100 billion a year in 2007. When issues involving intellectual property and technology threaten the health and welfare of your business, a Chicago business law firm familiar with Internet issues must be contacted at the earliest stages of such cases.

In Go Pets Ltd. v. Hise, GoPets LTD. filed a lawsuit against Joseph Hise and a California corporation over www.gopets.com. The suit was filed under the Anticybersquatting Consumer Protection Act.

The court ruled Hise registered the domain in 1999, long before GoPets LTD registered its service mark, and therefore he was not in violation of the cyber squatting laws. The law was put in place to prevent individuals from buying domain names for a few dollars each and then holding them hostage for outrageous fees.

Where the court found Hise in violation, was for registering additional domain names. The U.S. Court of Appeals for the Ninth District found he had acted in bad faith and affirmed the district decision that Hise violated the Lanham Act with his use of www.gopets.com. The case was returned to the district court for a determination of damages.

In this case, the defendant had registered the domain and built a business plan as part of a marketing class in 1999. The defendant, together with a relative who was a veterinarian, also owned a company that had owned and registered more than 1,300 domain names. Most seemed to be geared toward plausible businesses but were not the names of existing corporations.

By 2004, a South Korean company, Go Pets Ltd., had made several attempts to register the name. In 2005, the companies filed a dispute over ownership of the domain with the Internet Corporation for Assigned Names and Numbers (ICANN), which oversees domain names. A dispute was also later field with the World Intellectual Property Organization (WIPO), which administers ICANN's dispute policy. A WIPO arbitrator found in favor of Edward Hise. It was ruled Hise had been registering the name for years and had not initially registered it in bad faith.

Hise later sent a letter stating that Go Pets Ltd's registration of www.gopetslive.com could confuse consumers and hurt the www.gopets.com name. While purchase of the name could clear up any confusion and provide for less search result competition. The letter offered to sell the domain for $5 million. Meanwhile, screen captures of Internet archives reveal that Hise began building site content for the domain and turning it into a viable web property. After the decision by WIPO, company owned by Hise began registering other names similar to www.gopets.com

In 2007, the South Korean company filed the complaint in U.S. District Court, claiming a violation of the cybersquatting statute and unfair competition under the Lanham Act. The Lanham Act violation stems from putting content on the site and calling it the "Official GoPets site." The Act contains the statutes covering federal trademark law.

In other words, the court found Hise may have had the right to the domain name but did not have the right to conduct business or infringe upon the trademark rights of GoPets Ltd.

Continue reading "Go Pets Ltd. v. Hise Highlights Importance of Internet Property Rights for Chicago Businesses" »

Groupon is facing the possibility of a class-action employment lawsuit in Chicago amid allegations of unpaid overtime by sales reps, according to Crain's Chicago Business.

Chicago business attorneys can often help growing companies avoid the common pitfalls of employment law. Whether wage and hour disputes, sexual harassment or discrimination issues, consulting an experienced law firm can ensure a company's growing human resources department is on solid legal footing. In some cases that could involve drafting employment agreements or determining executive compensation, in other cases it could be as simple as ensuring the employee handbook properly and legally addresses issues like the Family and Medical Leave Act.

In this case, a former Chicago sales rep filed a lawsuit against Groupon in U.S. District Court. She left the company's employment last month. She is seeking retroactive overtime plus 2 percent in damages. The suit claims the 3-year-old company didn't pay enough, failed to pay overtime, and violated other wage laws.

The suit seeks class-action status on behalf of all employees who may not have received proper overtime pay. It's the latest legal setback for the Chicago-based company, which sells daily deals via Internet coupons. The company's initial public offering is on hold and it's facing multiple lawsuits over whether it's e-mailed coupons violate the consumer protection laws that regulate gift cards. The company has a workforce of nearly 10,000 -- including about 4,800 sales reps.

About 1,000 U.S. reps are paid $32,500 a year plus commissions. The lawsuit accuses the company of failing to pay overtime until last spring when management discovered the problem. The company reportedly promised to calculate and pay overtime owed, but that never happened. By some estimates, reps are owed as much as $5,000 each, which could amount to a $2 million payout by the company.

These are not issues unique to Groupon. Too often, startup companies minimize the need for sound legal advice for far too long. They see it as an expensive line-item and not an investment. As the legal woes at Groupon illustrate, sound legal advice now can save a company from dealing with expensive legal headaches in the future.

For its part, Groupon has brought in new management to address the growing pains. While the company's massive sales force is hurting its bottom line (the company has yet to turn a profit), it is also seen as a barrier to entry for other companies.

The Wall Street Journal reports that Groupon is downplaying the suit's significance, saying similar suits have been filed against Cisco, Salesforce, Nortel and others.

The Journal reports the fast-growing company has reported revenue of $1.5 billion this year, compared to $131.5 million during the same period last year.

Continue reading "Chicago Tech Startups: Employment Issues are Avoidable with Sound Legal Advice" »

A privacy lawsuit in Chicago accusing comScore, an online tracking and analytics firm, highlights the ongoing issues involving technology and privacy.

Intellectual property and technology attorneys in Chicago are seeing an increasing number of such cases. From privacy concerns involving Facebook, to allegations against Apple for tracking users of iPads and iPhones, technology continues to complicate privacy issues. Last year, Google's Street View car also came under fire after it accidentally collected reams of data from unsecured Wi-Fi networks.

In this case, the proposed class-action lawsuit accuses comScore of numerous alleged violations, including:

-Secretly collecting social security numbers.

-Collecting consumer data without permission.

-Changing security settings and opening backdoors into user systems.

-Stealing information from electronic documents.

-Redirecting user traffic.

-Injecting code into computer applications.

The Chicago Tribune reports that credit card information and passwords are also involved.

Two plaintiffs -- one from California and one from Illinois -- have filed suit claiming violation of their rights to privacy. The lawsuit seeks an injunction and damages, alleging that the company violated the Stored Communications Act , the Computer Fraud and Abuse Act and other statutes.

"The scope and breadth of data that comScore collects from unsuspecting consumers is terrifying," the 30-page complaint alleges.

A spokesperson for comScore denied the allegations and promised an aggressive defense. The company said it makes "commercially viable efforts" to purge itself of private consumer data whenever it's inadvertently collected.

comScore is a publicly traded company that provides Internet audience measurement statistics and customer tracking. It provides the information to some 2,000 customers, including advertising agencies and commerce sites.

The software behind such technology is usually downloaded onto a user's computer via other free products -- such as screen savers. In some cases, the user downloads the product to win entry into sweepstakes or because of other inducements.

It's the second high-profile tracking issue to surface in recent days -- earlier this month Microsoft came under fire after a Stanford University report accused the company of using "supercookies," to persistently track users. Microsoft agreed to immediately disable the technology.

Privacy advocates continue to sound the alarm -- particularly as more and more sensitive activities move online -- including banking and medical records. Several lawmakers have begun to consider Do Not Track legislation, which would permit consumers to opt-out in a fashion similar to Do No Call regulations. Still, privacy issues are bound to continue as new technology uses consumer data in a way never before anticipated.

The case is Mike Harris and Jeff Dunstan, individually, and on behalf of a class of similarly situated individuals v. comScore Inc, case no. 11-cv-5807. It was filed in U.S. District Court, Northern District of Illinois.

Continue reading "Chicago Privacy Lawsuit Highlights Ongoing Issues Involving Technology " »

With Google coming to Chicago, change will no doubt be coming to Motorola.

With the U.S. regulatory approval process ahead in the wake of Google's announced purchase of Motorola Mobility, there will be platoons of attorneys working on both sides of this deal. Even China is weighing in with claims that Google must seek its government approval. The $12.5 billion deal represented a 63 percent premium to Motorola's stock price at the time.

Chicago merger and acquisition attorneys should be consulted whenever two businesses merge, or one entity decides to purchase another.

Seeking qualified legal advice when dealing with the purchase or sale of a business in Chicago is critical. Common issues include:

-Strategy and Structure: Corporate structure, accounting and tax implications, personnel issues and a host of other legal considerations must be taken into account.

-Negotiation and Drafting: Non-disclosure agreements, term sheet, letter of intent, stock purchases, and asset purchase agreements are just a few of the legal documents that can have a major impact on your sale, purchase or merger. Getting them right -- and ensuring that they are drafted in the best interest of your company -- is critical to the long-term success of your business.

-Due Diligence: Preparing to hurdle the due-diligence threshold is often no easy task -- particularly when dealing with the sale of a private company. Likewise, it's critical that buyers make the most of due diligence. Few surprises at or after closing is typically the result of proper due diligence.

-Risk Management: This is the critical task of assigning responsibility for liabilities that occur before a deal's closing. This may include product liability or environmental concerns. Risk management is an area that can be particularly vital to both buyer and seller.

Google already supplies the Android operating system for smart phones. With the purchase of Motorola, Google is getting a once-proud company that invented the cell phone only to see its market share be taken away by more nimble competitors.

"Motorola Mobility's total commitment to Android has created a natural fit for our two companies," said Google CEO Larry Page. "Together, we will create amazing user experiences that supercharge the entire Android ecosystem for the benefit of consumers, partners and developers."

Industry watchers say a primary motivation for the purchase of Motorola was the control of its patents. As we continue to report on our Chicago Business Lawyer Blog, the patent wars among tech companies has made buying available patents a critical step in protecting against lawsuits.

The issues surrounding mergers and acquisitions are almost limitless. Already, the Chicago Tribune is questioning whether the move will result in layoffs at Motorola's headquarters or renewed vigor for the once-proud company.

Lower taxes could lure some of Google's workforce to Chicago. Relocating Motorola Mobility, however, could be devastating to the area surrounding its headquarters in Chicago's northwest suburbs. Motorola Mobility has about 3,300 Illinois employees.

Continue reading "Google - Motorola Mobility Deal Highlights Complexity of Mergers and Acquisitions in Chicago" »

Helferich has filed a patent lawsuit against Nokia, saying the company is violating its patent protection in Illinois, Reuters News reported.

Intellectual property attorneys in Chicago have watched as the copyright wars have heated up among smartphone companies. Many companies are snapping up patents by the thousands in order to avoid litigation or the need for dispute resolution.

Helferich Patent Licensing vs. Nokia Corp. contends 27 other companies, including Motorola Mobility Holdings Inc., have honored Helferich's patents or obtained licenses. The company is seeking an injunction against Nokia that would prohibit the company for making or selling products using technology for which Helferich owns the patents.

Apple, Microsoft and other tech companies have spent billions snapping up thousands of available patents in recent years -- to avoid such litigation. CNN Money reports Apple recently shelled out $4.5 billion for 6,000 patents owned by Nortel.

-Research in Motion and Ericsson partnered to put up $1.1 billion.

-Microsoft and Sony spent another $1 billion.

Google apparently played number games at a recent auction, bidding 1.902160540 (Brun's constant) and 3.14159 (pi). The company was apparently having a little fun. Yet its Android partners -- including HTC, Motorola and Samsung -- continue to be under fire by companies claiming copyright infringement.

When it comes to patent protection, tech giants have been in a buying frenzy. Google bought 282 patents last year. Apple bought 563. Microsoft led the way with 3,121. Industry watchers say Google has not yet placed the emphasis on protecting itself through patent purchases; Microsoft made a similar mistake in its infancy.

"There are a lot of phenomenal portfolios for sale," Dean Becker, a patent broker, told Bloomberg News. "Every operating company is in the market because of the expense, distraction and the potential financial risk of patent litigation."

Winning the bidding for Nortel's portfolio would have increased Google's patent holdings ninefold; currently the company has about 700 patents, according to the U.S. Patent & Trademark Office.

Google is facing lawsuits from Oracle Corp. Meanwhile, Apple is demanding licensing revenue from makers of products that run Google's Android operating system. In some cases, a Google executive said, lawsuits have involved low-quality software patents. By purchasing and maintaining large war chests of patents, companies hope to discourage such lawsuits.

"One of a company's best defenses against this kind of litigation is (ironically) to have a formidable patent portfolio," said Google's General Counsel Kent Walker.

Helferich Patent Licensing is a Chicago company that holds, manages and licenses patented technology involving multimedia delivery.

Continue reading "Helferich Patent Licensing vs. Nokia Corp. filed as Smart Phone Copyright Wars come to Chicago" »

Our Chicago intellectual property lawyers were intrigued when, on July 20, reality star and celebrity Kim Kardashian filed a $20 million lawsuit in a federal district court against Old Navy and Gap, Inc., its parent, for using her doppelganger in an advertisement for the retail store.

First aired in February 2011, the ad shows the "look-alike" getting her picture taken by the paparazzi, finessing her way out of tickets, and dressing in clothing particular to Old Navy. The ad has already been viewed more than two million times on Old Navy's YouTube channel.

Kim Kardashian is arguing that the advertisement violates her "right to publicity" because it portrays her as falsely promoting Old Navy. She contends that since consumers may become confused by the advertisement and its endorsements, the advertisement violates her right to publicity noting that she "has invested substantial time, energy, finances, and entrepreneurial effort in developing her considerable professional and commercial achievements and success, as well as in developing her popularity, fame, and prominence in the public eye."

The right of publicity prevents the unauthorized commercial use of an individual's likeness, name, or some other recognizable quality. This means that the right of publicity gives an individual the limited right to license his or her identity for a commercial reason. The purpose behind the right of publicity is the protection of a person's economic interests.

This is not the first time that a celebrity has asserted her right of publicity. Bette Midler had previously filed a lawsuit against Ford Motor Co. alleging that the company violated her publicity rights by hiring an individual that sounded like her to sing in a car commercial. The jury ultimately ruled in favor of Midler holding that it is unlawful to imitate a person's voice to sell a product if the person has not given permission.

Although Bette Midler was successful, that does not necessarily mean that Kim Kardashian will be as well. To prevail under California law, she will have to establish the "knowing use of [her] name, photograph, or likeness for commercial purposes, and a direct connection between the use and the commercial purpose."

This is an interesting case and is a little different from soundalike cases, like Midler's. For example, with a "lookalike," the viewer has more information and opportunity to evaluate the actor. And, in this situation, there is no use of Kardashian's name. (We're not informed about reality TV news enough to know whether any ad elements would resemble any "signature" aspects of Kardashian's persona.) However, it seems highly likely that Melissa Molinaro, the ad's actress, was selected with awareness of her physical similarities to Kardashian and there is a reference to celebrity status in the ad. Furthermore, there clearly is a commercial purpose if a jury would find that the portrayal constitutes Kardashian's "likeness."

In any event, it seems like Kim Kardashian will not give up without a fight. Gary Hecker, the attorney who filed the suit on Kim Kardashian's behalf, noted that "Kim Kardashian is immediately recognizable and is known for her look and style. Her identity and persona are valuable. When her intellectual property rights are violated, she intends to enforce them." That is a very bold statement, and it will be interesting to see if it will be realized.

This post was prepared by summer research assistant Yelena R. Our Chicago business attorneys regularly assist clients with advertising, marketing and related intellectual property matters and our available to meet about your corporate law needs in Chicago, Deerfield, Northbrook, Oak Brook, Rosemont, Schaumburg, Skokie and other offices in the area.

A Tinley Park-based healthcare company is being sued by the Illinois Attorney General's Office, which claims it pressured consumers into buying expensive, and perhaps needless, body scans.

Obviously any suit filed by the state must be taken seriously. As the healthcare system continues to fracture and become more specialized, and as the introduction of technology continues to make procedures more complex, such companies must seek the legal advice necessary to stay on the right side of the law -- and must aggressively defend themselves from unwarranted allegations. Finding small business legal help in Chicago or hiring an attorney with the knowledge and experience to help ensure you are in compliance with laws and regulations governing product safety and liability, is essential to a young company's growth and viability.

Frankly, paying for expensive and perhaps unnecessary medical scans sounds like routine medical care! Perhaps we are being facetious, but you see how quickly that line begins to blur. Whether it's by telephone or over the Internet, rules and regulations govern the sale of goods and services to the public. In some cases -- such as medical or legal services -- other legal or ethical rules may apply.

The lawsuit filed in Cook County Circuit Court accuses Heart Check America of using unfair and deceptive business practices to pressure consumers into buying 10-year screening contracts. The lawsuit contends consumers were not evaluated by medical providers and claims that the procedures could detect cancer or other diseases were false or misleading. It also claims consumers may have been exposed to risks, such as radiation exposure or false positives and that the company solicited from people on the National Do Not Call Registry.

Heart Check America had local offices in Arlington Heights and Tinley Park. The suit seeks civil penalties of $50,000, which could double if there is evidence of intent to defraud. The state is also seeking to recover the costs of investigating and prosecuting the case.

Illinois AG Lisa Madigan is also focusing on Internet scams. Internet sales in general are subject to an increasing number of complex state and federal laws, as illustrated by the recent passage of the sales tax in Illinois. Companies that do business online must stay abreast of new rules and regulations in the various states in which they operate. Madigan said she is particularly concerned about seniors.

"The Internet provides us with amazing opportunities, but unfortunately it also provides criminals with the opportunity and powerful means to deceive and defraud," Attorney General Madigan said. "It's important that we help seniors equip themselves with the tools needed to recognize online scams, deal safely with insecure websites and avoid other potential pitfalls online."

Continue reading "Allegations of Heart Monitoring Fraud in Chicago show Sales by Phone and Internet Subject to Increasing Regulation" »