Monthly Archives: October 2019

Do You Own Your Company’s Internet Presence? (The Answer May Surprise You.)

Websites can make or break a business, and catchy social media posts are becoming part of a company’s brand.  Consumers look to websites and social media for company information, making the management of these digital assets crucial to a business’s success. While most companies put much effort into creating and sustaining their online presence, many do not implement policies to ensure that they own those digital assets.

Domain Names
Domain names are not traditional items of property but should be safeguarded nonetheless as vital company assets. A domain name signifies the primary identifier and addresses of a business’s website. To “own” a domain name, you must purchase it from a domain name registrar like GoDaddy. Purchasing a domain name registers it in the database of the Internet Corporation for Assigned Names and Numbers. This database keeps track of all registered domain names purchased from authorized registrars.

In many cases, companies will have employees, contractors, or IT consultants register the domain name. Often, that person will enter his or her own name as the registrant. However, this results in that person, rather than the company, being listed as the owner of the domain. If the employee or contractor ever terminates their relationship with the company, this can lead to arguments over the ownership of the domain name and the website.  There have been several cases where unhappy employees attempted to use their control of a domain as leverage against a former employer.

Social Media Accounts
What happens when a company has a well-established social media account run by an employee? Who owns the account? Who owns its content? If the employee leaves the company, what rights does the company have over the information for the account? It is important that business owners know the answers to these questions before issues arise. Leading cases make it clear that the answer to these questions depend on the facts of the case and a variety of identifiable factors.

In one case in California, an employee had managed a Twitter account used to promote its employer’s services. Upon termination, the employee refused to turn over the login information for the account or remove the company name from the account. The company sued the employee for misappropriation of trade secrets. The case eventually settled, with the employee allowed to keep all rights over the social media account and its followers.

In another case, a company hired an employee to develop websites and social media accounts to promote the company’s products. The employee signed an agreement stipulating that they would return all confidential information to the employer if employment was ever terminated. Upon termination, the employee refused to turn over the login information for the accounts. The court held that the employee was required to turn over the login information.

Protecting Digital Assets
Disputes over digital assets can be costly and time-consuming. The cases discussed above demonstrate that the best course of action is to prevent these types of issues from arising in the first place. This can be done with a with a well-drafted agreement. Many business owners have employees and contractors sign agreements ensuring that intellectual property created by the employee or contractor will be owned by the business. In the modern age of the internet, these agreements should be updated to include provisions making clear that digital assets such as domain names and social media accounts, along with their contents, are also owned by the business.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

Pink October: Be Careful That Giving Does Not Cause You Grief

For many years now, the arrival of October, which has been dubbed “Breast Cancer Awareness Month,” has been accompanied by an onslaught of pink products being sold to benefit various breast cancer charities. This practice of selling products or services to benefit a charity (often referred to as a “commercial co-venture”) has become increasingly popular among business owners—in addition to the philanthropic goal of donating to a worthy cause, the use of the charity’s name will also often result in an increase in sales for the company. Because these partnerships involve claims made to consumers regarding the recipient, and use, of the funds, many states have begun to regulate commercial co-ventures to ensure that accurate information is provided to consumers and that the money is ultimately used in the manner advertised.

Unfortunately, there is little uniformity among the regulations of the various states. For example, some states require a written contract with the charity specifying exactly how the donation will be calculated. In some cases, this contract must be filed with the state. Other requirements may include registration with the state and furnishing financial statements to the charity and/or the state. In each case, the regulations across the states differ with regard to whose responsibility (either the for-profit company or the non-profit company) it is to ensure that these requirements are satisfied. Adding to the complexity is the fact that many sales involve the internet and interstate commerce, so commercial co-venturers may unintentionally, and unknowingly, subject themselves to the regulations of multiple states.

Entering into a commercial co-venture is a noble, but complicated, endeavor. If you are considering entering into a commercial co-venture, you should take steps to ensure that you are complying with all applicable laws.  Some best practices include:

  • Entering into a written agreement that grants a license to use the charity’s name in connection with sales;
  • Including an honest disclaimer of the amount being donated (including any minimums or maximums) in advertisements and on the product;
  • Keeping a detailed accounting of sales during the promotion; and
  • Consulting with a lawyer to confirm all state-specific requirements are met.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

Protecting Your Company’s Brand Through Trademarks

Protecting your company’s trademarks is important to grow your brand and prevent other companies from trading off your hard-earned goodwill. Below are a few things to keep in mind when creating and protecting trademarks.

Choosing a Trademark
There are a number of considerations when choosing your company’s trademark.  Among other things, you should:

  • Make sure that your mark will not infringe on an existing mark. Your trademark could infringe another trademark because it is spelled the same, looks the same, or even sounds the same.
  • Consider choosing a more “distinctive” mark to receive a higher level of protection. While marks that are descriptive of your goods or services may be desirable from a marketing perspective, they can be harder to protect as trademarks.
  • Make sure that the domain name is available for purchase. Even if the trademark has not been registered, the domain name may be in use by another company.

Registration
The best trademark protection comes from registering the mark. Where you register will depend on where the trademark is used.

  • If the trademark is used for goods sent across state lines or services that affect interstate commerce, a federally registered trademark would provide the most complete protection.
  • If the trademark will only be used within one state, state trademark registration may be a simpler alternative to consider.

Keep in mind that just because your company is registered with your state’s Secretary of State or because you have registered a fictitious name does not mean your trademark is automatically registered.

Protection
Once a trademark application has been filed and the mark has been registered, you must have a plan in place to police your brand to make sure that others are not infringing it. If someone is infringing your trademark, this could lead to a loss of business or could affect your company’s reputation and its ability to fully protect its trademark.

Evolution
As your company evolves, so must your trademarks. As you create new products and services or expand the area of your business, you may want to create new trademarks or file existing trademarks in new jurisdictions.

These are just a handful of items to keep in mind for creating and protecting your company’s trademarks. Other forms of intellectual property protection for your company may also be available through copyright and trade secret protection. For more information on using intellectual property law to protect your brand, please give us a call or email.

Elizabeth M. Stamoulis
estamoulis@williamsparker.com
(941) 552-5546

New Overtime Rules for Employers to Adopt Before the New Year

Employers, the long wait is over. You finally have an answer regarding whether the federal overtime regulations are going to be changed. As discussed in previous blog posts Let’s Try this Again: Department of Labor Proposes Salary Increases for White-Collar Exemptions and Once More, With Feeling: Proposed Increase to Minimum Salary for Highly Compensated Employees, in March 2019, the U.S. Department of Labor abandoned its 2016 attempt to increase the salary threshold for exempt employees when it issued a much-anticipated proposed rule. On September 24, 2019, the DOL formally rescinded the 2016 rule and issued its new final overtime rule.

The new rule, taking effect on January 1, 2020, increases the earnings thresholds necessary to exempt executive, administrative, professional, and highly compensated employees from the Fair Labor Standard Act’s overtime pay requirements from the levels that had been set in 2004.  Specifically, the new final rule:

  • Increases the “standard salary level” from $455 to $684 per week (equivalent to $35,568 per year for a full-year worker);
  • Raises the total annual compensation level for “highly compensated employees” from $100,000 to $107,432 per year; and
  • Revises the special salary levels for workers in U.S. territories and in the motion picture industry.

And, for the first time, the final rule allows employers to use nondiscretionary bonuses and incentive payments (including commissions) that are paid at least annually to satisfy up to 10 percent of the standard salary level for executive, administrative, and professional employees (not highly compensated employees).

Employers take note, however, that the new final rule does not change the duties portions of the otherwise affected exemptions. For more information about the new final rule, you can go to the Department of Labor website.

As New Year’s Day will be here before we know it, this is a good time for employers to audit their pay practices to make sure that employees are properly classified, update timekeeping and payroll systems, and train reclassified employees on new processes before the new rule takes effect.

Gail E. Farb
gfarb@williamsparker.com
941-552-2557

This post originally appeared on The Williams Parker Labor & Employment Blog.