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" »

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" »

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.

Our Chicago technology attorneys were interested in a recent example of how patent owners can relatively quickly seek resolution of certain infringement claims.

In March of 2010, Apple filed a complaint against HTC Corporation claiming that the company infringed 10 of its patents with respect to Droid and other smartphone elements. On July 15, 2011, the U.S. International Trade Commission ("ITC") issued an initial ruling in Apple's favor on two of the patents at issue.

Because the ITC has the power to ban products from coming into the United States, a final ruling against HTC could mean that HTC products will be unable to enter the country. Given such a ruling could have widespread implications for HTC, the company plans on appealing the decision. However, if the appeal is not successful, HTC might have to settle with Apple. This means that in addition to paying Microsoft $5 for each Android device they sell, HTC might also have to pay Apple royalties from its sales. The General Counsel for HTC, Grace Lei, recently commented that "we are highly confident we have a strong case for the ITC appeals process and are fully prepared to defend ourselves using all means possible." However, these may just be fighting words.

This is not the first time that the ITC has had the potential to affect large companies in patent disputes. In fact, the ITC is quickly becoming a popular forum for owners of intellectual property trying to prohibit infringing products from the United States market. Using the ITC as a forum for resolving patent disputes has its advantages. Since it usually takes less than a year for cases going though the ITC to go to trial, the ITC is generally able to provide quick verdicts. The ITC also has in rem jurisdiction over the imports in question. This means that a complainant can bring one action against several respondents in different jurisdictions. Lastly, using a jury is not an option in ITC trials. Rather, an administrative law judge presides over the proceeding. As the judge usually has specialized knowledge in patent law, the result is arguably a fairer trial than if a jury was present.

However, going the ITC route is not without its problems. Since the ITC is a federal agency, ITC final decisions do not bind a U.S. District Court. This means that parties unsatisfied by an ITC ruling can choose to bring suit again in district court. Lastly, to have standing with the ITC, the complaining party needs to show that there is or will be a U.S. industry connected to the products protected by the alleged intellectual property rights. Such a requirement does not exist if a suit is being filed in a U.S. district court.

An ITC action is one of the first measures to be considered when considering patent infringement strategies involving imported goods or articles.

This post was prepared by summer research assistant Yelena R. Our Chicago business lawyers frequently counsel clients about protecting or defending their patent, trademark, copyright, trade secret and other intellectual property rights with corporations, limited liabilities companies and individuals in Illinois.

The owners of Vienna Beef is suing the grandson of one of the company's founders, alleging he ripped off the company's century-old recipe, the Chicago Tribune reports.

Chicago Trade Secret Lawyers have years of experience battling inside and outside the courtroom for the rights of businesses who either have been ripped off by competitors or wrongly accused of such. Trademark infringement in Chicago is a serious allegation and can do a world of damage to a business, small or large. This case demonstrates the importance of carefully preparing an intellectual property agreement to maximize your company's ability to enforce non-disclosure and non-competition obligations.

Chicagoans love their all-beef hot dogs fresh on a poppy seed bun chock full of pickles, onions, tomatoes, mustard and peppers. But they don't like ripoffs. And in this case, the allegation is that rival hot dog company Red Hot Chicago, headed by a person who had ties to Vienna, either stole the 118-year-old recipe or is lying by telling customers that its hot dogs are the real thing.

According to the lawsuit, the man who runs the rival company was formerly employed as a sales manager, but left Vienna in 1983. He signed employment and severance agreements, which included a gag order about Vienna's secret recipes. Three years after leaving, he started the Red Hot Chicago hot dog company. The lawsuit claims that he wasn't successful over the first 25 years in competing, but recently changed recipes and pretended to be Vienna.

Intellectual property, the ideas, products and other assets designed by a business or individual, are the bloodline of a successful business. Another company infringing on those ideas, patents, software or other assets must be challenged and often it requires litigation.

People across the globe can identify the Nike swoosh and the McDonald's golden arches because of great marketing by those two companies. If another company, possibly a rival, began using those symbols, which have great power in identifying those companies, Nike and McDonald's would swoop in to protect their identities.

While it may seem silly to think of a company other than Nike or McDonald's trying to use those symbols, what if a smaller less-popular company had their design stolen? While it may be less recognizable, every company has customers and a public symbol, and it can do real damage to a business if someone else is using their ideas for profit.

It's possible that these issues can be decided by dispute resolution in Chicago, such as by assessing the merits of a potential claim, contacting the other party and trying to work out the issue without court intervention. While that may be the quickest and cheapest alternative, it's not always the most likely. So, taking the case to trial and putting the allegations out into the open may also be a way of getting rivals to do the right thing.

Continue reading "Wiener Wars Heat Up in Chicago in Trademark Infringement Lawsuit" »

This week a federal jury in Oakland, California awarded Oracle $1.3 billion in damages from SAP as a result of SAP's infringing the intellectual property of Oracle. The trial was limited to the question of damages. SAP already had admitted that personnel at a now closed Tomorrow Now subsidiary had intentionally gained access to, copied and resold software related to running the data centers of large corporations. SAP also obtained other propriety information and trade secrets, such as manuals and technical support guidance.

The case is stunning in many respects. It is a clear example of blatant copryright infringement and apparently patent infringement. It appears that numerous and senior mananagers at SAP were aware of the subterfuge. And, it demonstrates just how damaging a breach of corporate integrity can be in terms of money, publicity and prestige.

Perhaps, the most interesting aspect is how vulnerable a copyright infringer is if discovered. SAP argued that Oracle's damages should be in the $25 to $40 million range based upon the relatively few customers and amount of income that SAP gained from the effort. Oracles claimed that it would have charged SAP fees amount to as much as $2 billion if it had licensed the software and related materials to SAP. The jury appeared to give much of the benefit of the doubt to Oracle and settled on $1.3 billion, 35 to 40 times what SAP argued.

This reminds me of a case I handled where an advertising and marketing firm made a lengthy infomercial for an appliance that played on national outlets in heavy rotation. The infomercial allegedly included a short bit of background music for which a license had not been obtained. Most likely, the licensor would have charged a very nominal fee if the matter had been negotiated in advance, perhaps less than $50 ro $100. Howevever, after the fact, the licensor was free to demand a fee many, many times that, coupled with potential risks of litigation expenses and treble damages, even though any unlicensed use probably had been an oversight. Accordingly, the client concluded it was worth settling the case promptly for a reasonable amount, but one that was still greatly higher than if a license had been purchased upfront.

The principle in the infomercial case is the same as the one in the SAP trial, the exponentially different sums involved notwithstanding. Be very careful about misappropriating software, music, video or other content that has commerical value. Even if the misuse was inadvertent, if detected, you can now be held hostage for license fees far above an arms length level.

The Chicago intellectual property attorneys of Jeremy A. Gibson & Associates, PC frequently advise companies and employees on legal matters involving software and copyright protection, including trade secret and infringement issues. Our Illinois business and corporate attorneys are available throughout the region to meet at offices in Chicago, Deerfield, Rosemont, Schaumburg and Oak Brook and elsewhere. Please phone or email us to schedule your business law consultation.

The commentary that I've observed so far suggests that HP's lawsuit in California against its former CEO, Mark Hurd, for joining Oracle in a president position is weak at best. (For background, here's a good article.) However, even if so, if I'm HP, then I would still be pursuing this action. That's because I can't think of a better set of facts for trying to protect trade secrets and other confidential information or intellectual property.

Here's why:

• Hurd was terminated for conduct that goes to his judgment, handling of information and veracity. (He allegedly misrepresented or omitted information from his expense reports concerning his dealings with an attractive marketing consultant.)
• Hurd presumably had access until just a few weeks ago to HP's most sensitive information including that concerning the markets and businesses with which it competes or will compete with Oracle.
• Hurd's new position at Oracle seems very likely to involve the exact sames markets and businesses as those he oversaw at HP.
• Hurd received millions and millions of dollars in compensation at HP, including as part of a generous severance package, and doesn't need this particular position or role to make a living.

HP's case has its challenges. Hurd, surprisingly, apparently is not subject to a non-compete covenant or similar restriction. California law typically errs on the side of protecting an individual's right to work in this context. It has not been alleged that Hurd has actually breached any confidentiality obligation he owes HP. And, Oracle and its chairman, Larry Ellison, are known to be tough negotiators and no doubt anticipated such a fight when they brought in Hurd.

That said, it is difficult to imagine ever having a stronger set of circumstances to present to a court for arguing that, at least for six or 12 months, an individual cannot possibly fulfill his or her duties without disclosing or using his previous employer's protected information. My guess is that HP's litigation efforts probably will result in delaying in Hurd's work or effectiveness for Oracle for a limited period of time. For example, whether by virtue of caution, settlement or court order, Hurd likely will have to limit the commencement or scope of his work.

The Chicago business lawyers of Jeremy A. Gibson & Associates, PC frequently advise companies and employees on confidentiality, trade secret and covenant not to compete issues. We are available to meet at offices in Chicago, Deerfield, Rosemont, Schaumburg and Oak Brook and elsewhere in Illinois. Contact us to schedule a consulation.

Recently, I consulted with a new client about some corporate matters. The client provides certain routine and specialized maintenance services to building owners and operators. In the course of discussing the business, I obtained a copy of the company's standard services agreement with customers. This form had been used with a number of customers for a long time without incident. But, it was a time bomb.

If you are a vendor or seller there are several basic protective steps you can take with contracts that literally can save your business. And, virtually all purchasers will find them acceptable most or all of the time because these measures are reasonable and done by the purchasers themselves when acting as a supplier. However, this client had not focused on this matter.

In short, every vendor or seller should make some effort to: (1) disclaim all warranties except those that are specifically provided; (2) limit aggregate liability to the amount of the purchase or some other reasonable amount; and (3) avoid liability for consequential or punitive damages. If this is not done, then the vendor or seller potentially faces unlimited or very high liability if something goes wrong and the purchaser's business is interrupted or suffers lost revenues or profits. For example, what if the maintenance client's personnel accidentally disconnected or damaged network wiring that caused lost data or brought down online sales? It's unlikely this client expects to have such high potential liability where it is getting paid a relatively small amount; but that can happen without the right contract provisions.

These are just some of the items in the fine print of contracts that can be easy to ignore or gloss over but actually can be critically important for when that one in a thousand or million event happens. So, take some care to make sure you have appropriate contract and agreement forms and have them reviewed every so often.

We have extremely deep experience with all types of contracts and agreements, including the risk management points discussed above. Contact us to speak to a Chicago contract attorney about your particular needs. We are available for meetings in Chicago and Deerfield and many surrounding towns.

Here's the exception that proves the rule. What's the rule? Here's the rule: The time and expense to complete any legal matter will exceed whatever is estimated.

In a prior life, among other things, I managed the intellectual property portfolio for a large, global technology and consulting company. Given our profile, we had quite a few instances of typosquatters and other unsavory types putting up websites with variations of our name and domain name. So, we used a commercial Internet monitoring service to keep an eye on this and we would take action to suppress those instances that seemed infringing, damaging or otherwise objectionable.

Our service identified the website of what appeared to be a small firm in a large city in China that not only held itself out as in same business as we were, but also operated under the same name and exact same logo. In other words, they completely misappropriated our identity and trademarks, which I guess in hindsight was rather flattering. Well, this was something we could not tolerate. We actually has significant operations in China and had to stamp this out.

As a cost-effective first step, I tried emailing the firm and people in question. Not surprisingly, I got no response and there website remained up. Same result when I asked my colleagues in China to do so. Then, fearing we were about to step into a bottomless moneypit, I chatted with our outside trademark counsel, a very large firm with offices in China. Our outside counsel suggested engaging what sounded to be the equivalent of a local private investigator to visit the target and speak with anyone there. This would entail a relatively modest fee for an international matter, which was in the low four figures.

Not having any real choice, we authorized this. Before too long, we got back a thorough report of what was going on. More important, the local investigator apparently notified the personnel there of our IP rights and concerns and even obtained a promise to cease and desist from using our name and marks. I was a little skeptical that this was going to be enough, especially with the well-known piracy issues in China.

Yet, indeed our problem was solved. The offending activity stopped and we moved on to the next offensive website linking our company to inappropriate services. I can honestly say that, even with all my experience working on cross-border matters, I was amazed how easy, inexpensive and quick it was to make this go away with a few phone calls and emails. I hope lightning will strike twice someday.

Jeremy A. Gibson & Associates, P.C. handles trademark, trade secret, domain name and other intellectual property matters such as the one discussed above. We are available to serve and meet with clients throughout the Chicago, Illinois area, including Arlington Heights, Buffalo Grove, Deerfield, Des Plaines, Evanston, Glenview, Highland Park, Hinsdale, Lake Forest, Libertyville, Mount Prospect, Naperville, Northbrook, Oak Brook, Palatine, Rolling Meadows, Schaumburg, Skokie, Oak Brook, Oak Park, Vernon Hills, Waukegan, Wheeling and Wilmette. Contact us anytime for a complimentary consultation with a Chicago business lawyer.

As Toyota's president prepares to testify before Congressional committees tomorrow, it is a good time to consider some basic principles when businesses learn of possible defects, safety risks or violations of law. The Toyota vehicle acceleration recalls and similar reports present a good case study. Apart from the underlying vehicle design, performance and correction issues, Toyota now faces even more attention, not to mention potential sanctions, over its handling of and response to the situation.

For example, the automaker has received subpoenas from several federal agencies that will review its approach. And, an internal presentation touting a Toyota's team success in minimizing corrective measures required by NHTSA and realizing huge costs savings has come to light, raising questions about priorities in the response. So, this story quite possibly will turn into another installment of: "what did they know and when did they know it" or "was the cover up worse than the crime?"

It may well turn out that Toyota has acted completely appropriately in responding to defect and safety concerns. Just like UFO sightings, it's not as if every consumer complaint has merit. And, it is reasonable to respond in a measure fashion when it is not clear exactly what is going on.

In any case, my experience with scores of regulatory, health and safety matters has led to a few basic starting guidelines. The old saying "safety first" still rings true. Take the initiative with potential problems and regulators and be proactive. And, do not put anything in writing in an unprivileged setting that you do not want to see on the front pages next month or next year.

In essence, although there always is an imperative to avoid unneeded expenditures, usually it is better to deal with potential safety problems as quickly and effectively as possible. In addition to putting human welfare over the bottom line, it's a basic quality matter and brand management. These problems usually only get worse and more expensive to address over time. Dealing with them upfront sends strong, positive messages to all constituencies: customers, employers, suppliers and regulators. In the long run, taking short cuts leads to illusory savings.

All that said, it is not always easy to decide what the right course of action is and it is important to have full and frank discussions when there is a crisis or potentially damaging or expensive problem. The purpose of the attorney-client privileges is to promote those types of internal conversations and reviews, by shielding certain (even potentially embarrassing) communications with counsel from disclosure. But, when a privilege is not applicable, and even when they are keep safety first in mind, executives and managers always should ask themselves whether they would want that PowerPoint slide, memo or email to be presented in a courtroom before sending it around.

Our Chicago and Illinois business lawyers are experienced in regulatory and risk management matters and would be happy to discuss this topic in further detail.