Articles and FAQs
This section contains articles drafted by Saper Law Attorneys, links to sites of interest, and answers to frequently asked questions. Feel free to browse through the recent postings below, or use the topics list on the left to search for articles in a specific area of law. Please note that none of this material constitutes legal advice. You should confer with an attorney to discuss legal matters specific to your situation. Check back for updates or use our online form to submit a question.
By Saper Law | April 25, 2013
Five Trademarking Pitfalls
In XiYouJi, Sun Wukong launches his famous Havoc in Heaven with a simple act of rebranding. After a humiliating gig as stablegroom, the Handsome Monkey King adopts the title “QiTianDaSheng,” a catchy, distinctive name that perfectly reflects his idea of his own position in the marketplace. He’s so pleased with his innovative marketing efforts that he’s willing to fight both gods and demons to protect his brand.
Like Sun Wukong, business owners know that their name can be one of their most valuable assets, and selecting a name is one of the first important decisions entrepreneurs have to make. Unfortunately, many companies fail to consider the implications of trademark law on their choice of brand.
Trademarks are words or symbols that help consumers identify who makes a product. Trademarks can be strong or weak. The owner of a strong trademark can prevent anyone from using any name that’s even a little bit similar to theirs and can protect the name in connection with a broad variety of related goods and services. The owner of a weak trademark may only be able to prevent competitors from attaching an identical name to an identical product.
Having a weak trademark can allow competitors to free-ride on your company’s goodwill and hinder your efforts to build brand awareness. Here are a few of the most common mistakes companies make when selecting their name:
1) Picking a name that just describes your product
U.S. trademark law does not allow you to protect words that merely describe what your product is or what your product does. If you’re selling noodles, don’t call your product “Noodles.” If you design mobile apps, don’t call yourself Mobile App Design.
Trademark lawyers often argue about whether a name is too descriptive to be a trademark. For example, although “Energizer” is a well-known brand of battery, it is arguably merely a description of what a battery does (providing energy). Choosing a name that has no apparent connection to your product—for example, calling your computer company “Apple”—minimizes the room for argument and strengthens the protectability of your brand.
Choosing a descriptive name is understandably tempting for businesses. Companies naturally want a name that tells consumers exactly what they do. However, the more descriptive a name is, the harder it is to protect. It’s worthwhile exercising a little imagination before you call your delicious seafood restaurant “Delicious Seafood Restaurant.”
2) Picking a name that someone else is already using
Under U.S. trademark law, trademark rights go to the first person to use the trademark. Therefore, before falling in love with a particular name for your product, try to find out if anyone else is using the same name (or, better yet, hire an attorney to do a search for you). The United States Patent and Trademark Office (USPTO) keeps a database of trademarks that have been officially registered for use on a nationwide basis. In addition, a simple Internet search may give you a rough idea of who else is using similar names.
At worst, choosing a name that someone is already using could lead to a trademark infringement lawsuit. At the very least, it could prevent you from developing a unique and distinctive brand.
3) Not using your trademark
Again, trademark rights are based on use. A trademark is only protectable if it is attached to goods or services that you are actually selling. Some companies think that pasting their logo on a website next to a TM symbol is enough to protect it. It’s not.
The more you use your trademark and the better known it becomes, the stronger it is.
4) Not using your trademark consistently
Using multiple variations of your trademark or using multiple trademarks on a single product weakens the strength of those trademarks.
If a product is known by many different names, this hampers consumers’ abilities to form strong associations between a trademark and a product. Similarly, although a trademark owner can prevent others from using variations of their trademark to some extent, it is important to use a consistent version of your trademark: consistent spelling, consistent appearance, consistent color.
5) Not registering your trademark
You don’t have to register your trademark to begin acquiring trademark rights, but until you file a trademark application with the USPTO, your rights may be limited. Without registration, you may only be able to protect your trademark within the specific geographic region where you’re operating. In addition, if you do find that someone else is using your trademark without your permission, you may have a difficult time proving that you were the first to use the trademark, and you may have fewer options for enforcing your rights.
Registration with the USPTO gives you trademark protection throughout the United States and makes it easier to pursue legal action if you find that someone is attempting to copy your brand.
The QiTianDaSheng had to battle the gods to establish a strong trademark. By avoiding the common mistakes above, you may be able to protect your brand without resorting to violence.
By Saper Law | February 11, 2013
Saper Law often receives inquiries related to employment law issues. For example:
- This employee is awful. How do I get rid of her?
- How should I properly hire and fire employees, and what accounting issues do I have to worry about?
- What policies should I have in place?
- What benefits do I have to give my employees?
- Do I need to carry any kind of insurance?
Just as often, we also receive inquiries related to post-employment law issues. For example:
- How do I make sure that former employees won’t steal my secrets or my customers?
- Are non-competes really enforceable?
- What is wrong with California law, seriously?
To delve into these issues in detail, we are inviting Charles Krugel, of Charles A. Krugel, Labor and Employment Law, & Marc Pullman, of Pullman and Gotkin, to speak at our February seminar.
Charles Krugel is an experienced, management-side, labor & employment attorney & litigator, & a small business person himself. He will help you understand the litigation process & costs by sharing examples of real cases he’s litigated & resolved.http://www.charlesakrugel.com/
Aaron Midler is a Saper Law associate whose practice focuses on a variety of business and intellectual property related matters. He will help you understand the considerations that go into drafting effective non-compete/non-solicit agreements and will highlight cases that Saper Law has litigated around these issues.
Marc Pullman is an experienced transactional attorney who has previously worked with a number of multi-national corporations. He will help you understand the basic ins and outs of employment-related transactions and provide guidance on creating employee policies that will help your business run smoothly. http://www.
Join us for an enlightening panel discussion and networking afterward!
Date and Time: February 19, 2013, 4:00 PM to 5:30 PM
Location : Saper Law Offices, LLC 505 N Lasalle, Suite 350
Cost: $10 with online registration: http://hiringandfiring.
eventbrite.com, $25 at the door
Topics: Seminars at Saper Law |
By Saper Law | January 11, 2013
Being sued for showing a pay-per-view event? Saper Law can help.
Every year, hundreds of individuals find themselves accused of illegally showing pay-per-view events such as boxing or mixed martial arts (MMA). If you received a demand letter or have been served in this type of lawsuit, Saper Law may be able to help.
Saper Law represents individuals and businesses sued for the unauthorized receiving and showing of pay-per-view sports events. This article provides some information to help you understand these “signal piracy” lawsuits and how they might affect you.
What you need to know:
Recently, the promoters of pay-per-view sporting events have been cracking down on what they consider “piracy.” The biggest players in this crackdown are J&J Sports Productions, Inc. and Joe Hand Promotions, Inc., although since 2010 Ultimate Fighting Championship (UFC) has been employing its own anti-piracy teams. In 2010 alone, J&J Sports filed 708 law suits, Joe Hand filed 515 law suits, and the UFC filed 41 law suits.
How do they know who’s showing these events? Pay-per-view providers send out private investigators and undercover surveillance teams to bars, taverns, and other public establishments. They look for commercial establishments who are exhibiting the pay-per-view events without paying the required subscription fee.
Under the Interception of Radio Communications Act and the Unauthorized Reception of Cable Service Act – you could face over $100,000 in damages if you are found to have willfully transmitted a cable or satellite signal (e.g. a pay-per-view boxing match) without the proper license. These federal statutes allow awards of up to $10,000 for each violation with a penalty as high as $100,000 if you have acted willfully and for commercial advantage or private financial gain.
In accordance with these Acts, pay-per-view plaintiffs have obtained considerable judgments. For example, in October 2009, a federal judge ordered a Bakery Shop in Queens, N.Y. to pay $110,000, plus $540 in costs for showing a March 2009 World Cup qualifying soccer match. Many recent cases in Illinois have resulted in awards for providers between $10,000 and $40,000.
These suits are not limited to commercial establishments. Even if you are a noncommercial establishment, if you are using a descrambling device or other improper means of acquiring a television signal, you may be subject to the same federal statutes and the same potential damages.
What to do now:
Do not ignore any letters from your cable/satellite provider or pay-per-view provider, and contact an attorney as soon as possible.
A knowledgeable attorney may be able to assist in negotiating a favorable settlement to your case or in directing you to another course of action. With the help of a knowledgeable attorney, many of these types of cases have been settled for well below the exorbitant demands made by the pay-per-view providers in their initial correspondence.
 UFC officials vow to sue individuals for pay-per-view piracy in forthcoming crackdown, MMAJUNKIE.COM (Jan 4, 2010), http://www.mmajunkie.com/news/2010/01/ufc-officials-vow-to-sue-individuals-for-pay-per-view-piracy-in-forthcoming-crackdown.
 Pay-Per-View Wrestles With Bar Owners, BLOOMBERG BUSINESSWEEK (April 12, 2012), http://www.businessweek.com/articles/2012-04-12/pay-per-view-wrestles-with-bar-owners.
 47 U.S.C. § 605 (1996)
 47 U.S.C. § 605
 Pay-Per-View Wrestles With Bar Owners, BLOOMBERG BUSINESSWEEK (April 12, 2012), http://www.businessweek.com/articles/2012-04-12/pay-per-view-wrestles-with-bar-owners.
By Saper Law | December 5, 2012
The Fifth Annual Designer Roundtable at Saper Law will be held on December 18, 2012. Details below:
By popular demand, Saper Law is once again hosting a Designer Roundtable event. Attendees are invited to bring their unique pieces, their pocketbooks, or just themselves, to “shop, sell, and share.”
Continuing its tradition of supporting designers and entrepreneurs, Saper Law Offices will hold its Fifth Annual Designer Roundtable event on Tuesday, December 18th.
Read more about the first Designer Roundtable event here.
The roundtable discussion format focuses on a variety of business issues, both legal and operational. Daliah Saper, Principal Attorney at Saper Law and Chicago Fashion Foundation Board Member, will serve as the moderator and discussion leader for a number of key subjects, answering questions about: business incorporation, the hiring of independent contractors vs. employees, registering for copyrights and trademarks, and negotiating key contract provisions. Other important issues discussed will include social media strategies (and their legal implications), proper record keeping, and general public relations and marketing tips.
This event is geared towards entrepreneurs in creative disciplines, namely fashion design, jewelry design, interior design, film, music, and art. In addition to participating in the Roundtable, attendees will have time to network, eat lunch, and peruse the make shift boutique. Come to learn from and talk to other professionals in creative enterprises!
Tuesday, December 18, 2012
Saper Law Offices, LLC
505 N. LaSalle, Suite 350
Chicago, IL 60654
Time: 11:45 – 1:45
Cost $10 with advanced registration: http://5roundtable.eventbrite.com/
OR pay $25.00 at the door.
Lunch will be provided.
By Saper Law | October 13, 2012
Franchising can be a great way for a small business to expand quickly while sharing some of the risks and capital investments. Franchises, however, are subject to a confusing array of government regulations and requirements. Even if you don’t think of yourself as a franchisor, if you’re licensing your trademarks to a third party, there’s a chance you might fall within these franchise and business opportunity laws.
Saper Law Offices has drafted the following FAQ to help you determine if your business is licensing illegal franchises, and, if so, how to comply with the relevant government regulations. If you have any questions, just call us: 312.527.4100
Who regulates franchises?
The federal government regulates franchises through the Federal Trade Commission (FTC). In addition, about 20 states have either a franchise law or a business opportunity law that will affect franchises offered within those states.
What is a franchise?
What constitutes a franchise varies from jurisdiction to jurisdiction. Generally, though, a franchise relationship arises where a party: (1) pays a fee; (2) is granted a trademark license; and (3) is subject to a certain amount of control in its business operations.
How much control is necessary to turn a “licensee” into a “franchisee”?
Figuring out whether a fee is paid or a trademark license is granted is usually pretty clear-cut. The third element is the tricky one, and it varies by jurisdiction.
One of three standards is usually used: (1) the FTC looks at whether a significant degree of control is exerted or a significant degree of assistance is offered ; (2) certain states, including Illinois, look at whether a marketing plan is prescribed; (3) a few other states look at whether there is a “community of interest” between the parties.
Listed below are some questions to help you determine whether your trademark license is actually a franchise. If you find yourself answering “yes” to a significant number of the questions below, then you probably need to comply with franchise law regulations.
Do you exert a significant degree of control over or provide a significant degree of assistance to your licensees? (FTC rule)
- Do your licensees rely on your superior business expertise to reduce the risks of their enterprise and to increase their probability of success?
- Do you approve the site of your licensees operations?
- Do you exercise control over (or offer assistance with) site design or appearance?
- Do you specify a specific area of operation for your licensees?
- Does you exercise control over licensees’ hours of operation?
- Does you exercise control over licensees’ sales techniques?
- Does you exercise control over licensees’ accounting practices?
- Does you exercise control over licensees’ personnel policies?
- Are licensees required to participate in your promotional campaigns?
- Do you place restrictions on what customers can be served by licensees?
Do you prescribe a “Marketing plan” for licensees? (rule in CA, IL, NY, MI, WI, etc.)
- Do you specify the prices charged by licensees?
- Do you prescribe special pricing schemes or discount plans?
- Do you mandate any sales quotas?
- Do you mandate the use of particular sales or display equipment or merchandising devices?
- Do you teach licensees specific sales techniques or mandate their use?
- Do you prescribe certain advertising or promotional materials?
- Do licensees cooperate in your advertising efforts?
- Do you provide licensees with formal operations or management training?
- Do you provide licensees with operational guidelines or assistance? Managerial guidelines or assistance? Technical guidelines or assistance? Financial guidelines or assistance?
- Do you exercise control over any of the following: lighting? employee uniforms? hiring?
- Must licensees purchase goods from a certain source?
- Must licensees follow an operating plan, standard procedure, or training manual? If they don’t, can you do anything about it?
Is there a community of interest between the parties? (rule in HI, MN, and SD)
- Do licensees derive a significant amount of their gross proceeds or profits from your goods or services?
- Are licensees required to make significant investments (in equipment, facilities, training, etc.) that would be useless if you terminated their license?
- Are licensees required to purchase a certain amount of goods from a particular source?
- Must licensees submit sales reports?
Attorneys at Saper Law can help you answer these questions and assist you with drafting either a trademark licensing agreement or assist you with the myriad of disclosure documents required to register a Franchise. Call us today: 312.527.4100
By Saper Law | October 13, 2012
Saper Law regularly handles copyright infringement cases involving businesses, software developers, artists, photographers, and production studios. Often times, digital distribution of the copyrighted works via social media, blogs, and most recently, via the Bittorenet network, is at issue.
For example, there has been an explosion of copyright infringement suits by adult entertainment studios against individuals accused of using Bittorrent or other file sharing technology to pirate pornographic films. In the archetypal Bittorrent piracy lawsuit, the plaintiff porn studio harvests the IP addresses of dozens or even hundreds of torrent seeders and files a mass-defendant complaint against a multitude of anonymous “John Does.” The plaintiff then leverages the lawsuit to subpoena Internet Service Providers for the identity of the subscribers assigned the IP addresses.
However, a new wave of lawsuits from the gay pornography studio Flava Works (proprietor of such adult entertainment websites as Cocodorm.com, Thugboy.com, and Papicock.com) fits a different mold. Rather than pursue a torrent swarm of anonymous Does, Flava Works has zeroed in on its own former subscribers, whom it accuses of distributing its videos on file-sharing websites such as gay-torrents.net. The basis for this accusation is apparently a mysterious piece of “proprietary software” that Flava claims to use to insert a “unique encryption code” into each video file that its users download.
Attempting to track digital content using some sort of unique marker—a technique sometimes referred to as “digital watermarking”—is a relatively new tool in copyright holders’ enforcement arsenals. The technology raises serious issues. Could watermarking software in theory provide a way to trace digital files back to their source? Perhaps, but allowing copyright infringement lawsuits to move forward based on evidence generated by a secret, proprietary software developed and controlled entirely by the plaintiff is troubling to say the least. The potential for abuse is boundless.
Even if rightsholders can demonstrate the reliability of their watermarking software, courts must consider carefully how much weight to give to this very indirect form of proof. The fact that a pirated video bears a particular subscriber’s code is paltry evidence that the subscriber is himself the pirate. As anyone knows who has ever had their Facebook account hacked, the six-digit passwords that protect our website subscriptions are far from secure. Furthermore, even if a pirated file could be legitimately tracked back to the subscriber, the chain of custody is full of holes. The video could subsequently have been stolen. Or it could have been distributed without the subscriber’s knowledge or authorization by someone else with access to his computer. Or it could even have been legally sold or given away, just like a used book or CD, under copyright law’s First Sale Doctrine. The connection between the alleged act of copyright infringement and the subscriber whose code is stamped on the infringed file is loose at best.
Saper Law is currently representing several former Flava Works subscribers accused by the studio of copyright infringement, all on the basis of “codes” that were allegedly found embedded in pirated copies of Flava videos. These individuals all vigorously maintain their innocence. If you’ve been accused of distributing copyrighted videos that you downloaded from Flava Works or from some other website, contact Saper Law Offices to explore your options: 312.527.4100.
By Saper Law | August 6, 2012
Needless to say, mobile application or “app” developers have an ever growing need to distinguish their apps from the other half-billion available. A search for an app can produce dozens of apps with similar names and designs. This is where trademarks fit in. A unique name or logo allows consumers to identify a particular app, and a trademark can help keep that brand distinctive. After properly registering a trademark, a developer can then monitor and prevent infringing app creators from using its protected name or look.In addition to protecting their own app, developers should search similar applications and trademarks to lower the risk of trademark infringement liability. Here’s one example that’s made a lot of noise. Fart-based application Pull My Finger sued competing app, iFart, for using the phrase “pull my finger” in its promotional video. Pull My Finger alleged that the phrase was a protected trademark that consumers associated with the Pull My Finger application. This case shows the importance for app developers of doing a trademark search before settling on a name or design. You never know what existing trademarks might be out there waiting to raise a stink.Whether you are registering a trademark, attempting to enforce the rights of your mark, or being sued for infringement, please don’t hesitate to contact us at Saper Law Office for a consultation.
By Saper Law | July 2, 2012
Saper Law gets questions all the time about the licensing schemes required to transmit music on a website or via a mobile application. This article serves as an overview of the various copyright licensing requirements inherent in music streaming and distribution. If you have questions, just give Saper Law a call: 312.527.4100.
Copyright Licensing and Mobile Aplication Development
Mobile application developers are regularly approached by companies wanting to create apps using copyrighted music. Navigating through legal complexities of music licensing can certainly be a difficult task and create a lot of confusion. Many developers have questions regarding what rights are involved in the streaming and downloading of music, who controls those rights, and how royalties will be collected and paid. For example, most people are familiar with Pandora, a personalized radio station that streams music to listeners. In order to transmit digital music, Pandora must compensate the various music right holders by paying performance royalties to ASCAP, BMI, and SESAC for the underlying music, and by paying digital performance royalties to SoundExchange for the sound recording. To clear up some of the confusion surrounding music licensing, this article will provide a general framework of the the rights attached to musical works and also how to license those rights.
First, most music consists of two separate copyrights and both must be licensed in order to broadcast or copy a piece of music. The first copyright is for the song itself, or the musical work. The musical work is the actual melodies, harmonies, arrangement of instruments, and lyrics comprising the song. The musical work generates royalties for the writer and the music publisher. The second copyright is the sound recording of the work, the actual instruments, voices and other sounds affixed permanently in a physical (or digital) form . The sound recording generates royalties for the record company, the recording artist, non-featured vocalists, musicians, and sometimes producers.
Second, copyright encompasses several distinct rights, and a different license may be necessary depending on how the music’s being used. The performance right for musical works encompasses both playing a song in a public place and also transmitting a song to the public, which includes internet or wireless transmission. The performance right is set forth by United States Copyright Law and requires music users to pay fees when a user performs a copyrighted musical work. When you transmit a song over the Internet, whether by means of a website or a mobile app, you must acquire a performance license from one or all of the Performing Rights Organizations (PRO) — ASCAP, BMI, or SESAC. These organizations act as an intermediary between right holders in musical works and music users by monitoring public performances of music, collecting fees from music users, and distributing royalties back to the members. ASCAP, BMI, and SESAC are three separate organizations and represent different artists, and a music user may be required to obtain a license with all three organizations. In addition to a performance license for the underlying musical work, a separate license is necessary to digitally transmit a sound recording. These licenses are governed by a statutory scheme and are administered by the PRO SoundExchange.
Third, a license from a PRO does not authorize the reproduction or distribution of either the underlying musical composition or the sound recordings. Allowing users to download an mp3 or some other permanent form of a song would require separate authorization from both the owner of the musical composition and the owner of the sound recording. The Harry Fox Agency, for example, is the largest mechanical licensing agent for the reproduction of distribution of musical compositions.
Acquiring the proper copyrights for music can be complex and technical. Copyright law is an evolving field affected by legislation, court decisions, and interpretations of copyright acts. If you have copyright questions, don’t hesitate to contact us at Saper Law Offices for a consultation.
By Saper Law | May 19, 2012
A few e-mails from participants who attended the May Seminar at Saper Law–Food Based Business ventures:I really enjoyed this event. It was a very interesting and exciting panel of experts in the food industry who represented many facets of that industry. These events never seem long enough because they are so interesting. You did a great job asking questions of the panel as well. I spoke to a few of the panelists after the event and they were very helpful in answering my questions.Keep up your great work and a big thank you for keeping your clients connected to such interesting and successful business people and innovators. I so appreciate the opportunity to participate in these events. They inspire me to continue focusing on my Entrpreneural ideas, beliefs and ways to make them happen.Best Regards,C. Therese————–I loved the event and topic. Although my professional interests are not in the food industry per say, I was extremely inspired by the “leap of faith” of the panelists. Dare to dream and even if someone says it will never work, push ahead and stay with your concept. This is something I can relate too as an early investor and visionary with Tom. Loved the space too.
Thank you – it was great. You are the best – your fan,
I found every thing i heard very informative. Most of the comments from your panel that applied to us were things that confirmed our thoughts. such as the negatives of groupon and discounting. sticking to quality and stop chasing the dollar. Costomer service. We got alot out of it.
Thank you, Tim
Thanks for yesterday’s invitation and for hosting a great event. You really do a wonderful job moderating and keeping the conversation interesting by asking compelling questions. I’ll definitely be attending future events.
I endorse the entire event in terms of the highly respected group of business people,of their unique status, experience, success and to shared information of value. The key to the event was the fine job you demonstrated in ( mcing ) the dialogue and talking points of their profile,mentors and Q an A session was brilliant in moving the conversation forward.It was very cordial, focus and friendly seminar. A final comment, keep me in mind for the next event.
Topics: Seminars at Saper Law |
By Saper Law | May 18, 2012
Despite the ongoing efforts of the Electronic Frontier Foundation, ISPs, and a number of John Doe defendants to challenge the recent onslaught of mass adult film copyright infringement lawsuits, adult film plaintiffs remain undeterred. (Click here for an explanation of these lawsuits.) If you received a Subpoena Notification Letter from your Internet Service Provider regarding a lawsuit filed by any of the film companies listed below, Saper Law can help.
Call or Email Saper Law for a confidential, free, consultation today.
808 Holdings, LLC, AF Holdings, LLC, Axed Braun Productions, Baseprotect UG, LTD, Boy Racer, Inc., Bubble Gum Productions, LLC, Camelot Distribution Group, Inc., Celestial, Inc., Cinetel Films, Inc., Combat Zone Corp., CP Productions, Inc., Digital Sin, Inc., Discount Video Center, Inc., Evasive Angles Entertainment, Exquisite Multimedia, Inc., First Time Videos, LLC, 4 Twenty Media, Inc., Future Blue, Inc., GRHK, LLC, Hard Drive Productions, Inc., Heartbreaker Productions, Inc., Imperial Enterprises, Inc., John Wiley & Sons, Inc. v. Does 1-35, K-Beech, Inc., Liberty Media Holdings, LLC, Lightspeed Media Corp., MCGIP, LLC, Malibu Media, LLC, Maya Ent. Group, Inc., Media Products, Inc., Metro Interactive, LLC, Millennium TGA, Inc, New Sensations, Inc., Next Phase Distribution, Inc., Nu Image, Inc., NuCorp, OpenMind Solutions, Inc., Pacific Century International, Pacific Century International, LTD., Patrick Collins, Inc., Pink Lotus Entertainment, LLC, Raw Films, Ltd., SBO Pictures, Inc., Stagliano dba Evil Angel Productions, Sunlust Pictures, LLC, Third Degree Films, Inc., Third World Media, LLC, Voltage Pictures, LLC, Well Go USA, Inc., West Coast Productions, Inc., World Digital Rights, Inc., Xpays, Inc., and Zero Tolerance Entertainment, Inc.