Law Toolkit

Matthew Franken,
Hellmuth & Johnson:
952.941.4005
mf******@*******rm.com
www.hjlawfirm.com

Christopher Jones,
Hellmuth & Johnson:
952.941.4005
cj****@*******rm.com
www.hjlawfirm.com

Margie Bodas,
Lommen, Abdo,
Cole, King & Stageberg:
612.336.9329
ma****@****en.com
www.lommen.com

Stacey DeKalb,
Lommen, Abdo,
Cole, King & Stageberg:
612.336.9310
st****@****en.com
www.lommen.com

Bryan Feldhaus,
Lommen, Abdo,
Cole, King & Stageberg:
612.336.4389
br***@****en.com
www.lommen.com

Deborah Swenson
Lommen, Abdo,
Cole, King & Stageberg:
612.336.9351
de**@****en.com
www.lommen.com

Joseph Fittante Jr.,
Larkin Hoffman
Daly & Lindgren:
952.896.3256
jf*******@***********an.com
www.larkinhoffman.com

Charles Modell,
Larkin Hoffman
Daly & Lindgren:
952.896.3341
cm*****@***********an.com
www.larkinhoffman.com

Karen Bertulli,
Winthrop & Weinstine:
612.604.6604
kb*******@******op.com
www.winthrop.com

Kick squatters
off your site
with 3 methods

Establishing a domain name for your Web site based on your company’s name or trademark is a great way to help prospects find information on your business, writes Matthew Franken, an attorney with Hellmuth & Johnson in Eden Prairie. But what do you do if someone tries to capitalize on your company’s name or product by registering a domain name that is a little too similar – or even identical – to yours?

This process, referred to as cybersquatting, can confuse potential consumers and keep them away from your site or, even more troubling, direct them to the site of a competitor.

Fortunately, Franken writes, there are options available to keep your rights in your domain name your own:

1. The first – and easiest – step is usually to write a strongly worded “cease and desist” letter to the cybersquatter. These types of letters typically include a demand that the cybersquatter return the domain name. The demand is accompanied with a threat of legal action and possible sanctions if this is not done. These letters often accomplish the goal of ending the cybersquatting quickly and at minimal cost, Franken writes.

2. But a stern letter is not always enough to discourage someone from violating your intellectual property rights. If that is the case, there are two effective routes you can take to resolve the matter: the first is the “big gun” approach, filing a lawsuit in federal district court under the Anticybersquatting Consumer Protection Act (ACPA). This allows recovery of damages of up to $100,000 per domain name, plus attorneys fees and costs associated with the action. It can also be an expensive and lengthy process, so think carefully. But if you have a claim that involves significant damages – for example, if a competitor is hijacking your Web traffic and deriving significant profits as a result – this may be your best option.

3. The second recourse, if that stern letter failed, is arbitration under the Uniform Domain Name Dispute Resolution Policy (UDRP). This may be a good choice when your goal is simply to obtain the offending domain name for your business to either shut it down or use it to steer web traffic to your legitimate site, Franken writes.

When bankruptcy
happens, beware
the automatic stay

The automatic stay goes into effect as soon as the bankruptcy petition is filed by the debtor. The automatic stay is absolute and prohibits anyone from taking any action against the debtor without first obtaining an order from the bankruptcy court that allows them to proceed, according to Margie Bodas and Deborah Swenson, attorneys at Lommen Abdo in Minneapolis.

Among the prohibited actions are any attempts to collect debts owing on the petition date, continuation of litigation, and foreclosure against real or personal property of the debtor. Creditors who persist in efforts to collect pre-petition debts or continue with litigation or foreclosure efforts may be found to be in violation of the automatic stay, which may result in court-ordered monetary sanctions.

 In addition, contracts in existence as of the petition date cannot be terminated by the creditor because of the bankruptcy filing (even if the contract specifically provides so) without relief from the automatic stay, Bodas and Swenson write.

A creditor should contact a bankruptcy practitioner before taking any action that could violate an automatic stay because penalties can be very harsh. A creditor’s recourse against the debtor may be to file a proof of claim for the pre-petition amount, or seek relief from stay.

Good records make
all the difference
for contractors

It should come as no surprise that attorneys are constantly reminding their clients to keep good records regardless of their line of work. The construction industry is no exception, writes Christopher Jones, an attorney with Hellmuth & Johnson in Eden Prairie, who supplied the following advice:

Always having a written contract, written change orders and any other documents that establish the relationship between a contractor and a customer is essential for avoiding problems down the road. Most disputes between contractors and customers arise because of a misunderstanding relating to the scope of the work, payment or other issues which often can (and should) be addressed in written documentation on the front end of a project.

Having a proper contract form can head off any potential disputes prior to the project even being commenced. However, we also know that most projects undergo numerous changes once they are started. Again, having a system for written change orders and sticking to it can avoid many problems, Johnson advises.

In addition, Minnesota statutes require that all proposals, estimates, bids, quotations, contracts, purchase orders, and change orders between a licensee (contractor) and a customer must be in writing and must contain a detailed summary of the services to be performed; a description of the specific materials to be used or a list of standard features to be included; and the total contract price or a description of the basis on which the price will be calculated.

The statute also requires that those agreements be signed and dated by both the contractor and the customer and that the customer be provided a copy of all signed project documents at no charge, Johnson writes. Thus, having projects in writing makes practical sense and keeps you in compliance with the laws governing contractors.

A new provision to this statute becomes effective January 1, 2011. This provision is significant and creates an additional requirement to all contracts over and above simply requiring all contracts to be in writing. Specifically, the new law will require that each customer, before entering into an agreement, be provided with “written performance guidelines” for the services to be provided. Those written performance guidelines must also be included or incorporated into a written agreement between the customer and the contractor, according to Johnson.

SEVEN STEPS
for creating a successful franchise

1. While the business model for your franchise should be simple, the system should not be, according to Joseph Fittante Jr. and Charles Modell, attorneys with Larkin Hoffman Daly & Lindgren in Bloomington.

2. You may attract prospective franchisees by your unique concept or name, but to be successful, franchisees need systems that allow them to operate the business and stay ahead of the competition.

3. You need to not only develop a prototype, but also to document the systems, recipes, procedures, marketing techniques and the like that you will provide to your franchisees, and develop training programs that enable franchisees to replicate your success.

4. Ideas are the backbone of every franchise system. However, many ideas that were franchised too quickly are now mere footnotes in the history of franchising. Implement your idea before licensing it to others.

5. Even then, proving your idea at one location may give you a successful business, but having a successful business does not necessarily equate to a successful concept. To be certain your success is not due solely to a location, or to your own personal efforts in the business, test the concept at multiple locations before embarking on a franchise rollout.

6. Apart from the concept itself, the most important element of many franchises is the name under which the business operates. It must attract customers, but it also must be one you can prevent others from using. The name must be unique.

7. While you may know that nobody else in your market is using a simlar name, is it being used in other markets? If so, even if no one else has obtained a federal trademark registration for that name, you will not be able to expand the business under that name, or a similar name, in those markets. Conduct a nationwide search to determine whether others are using the same or a similar name.

EXPERT ADVICE…
…ON CRUCIAL DOCUMENTS

Every business should have the following documents in place, says
Karen Bertulli, an attorney with Winthrop & Weinstine in Minneapolis.

1. Formation and governance documents (articles of incorporation/organization, bylaws, written actions/resolutions): Read, understand and utilize your formation and governance documents. They contain important, ongoing requirements for making and documenting key business decisions. Keep updated corporate records/minute books; document your formal decision-making.

2. Shareholder/buy-sell/member control agreements (governs the relationship between owners of a business, how and to whom that ownership can or cannot be transferred): These agreements can help guide owners through difficult events that often happen unexpectedly (partner’s divorce, incapacity, death) or require prompt resolution (unresolvable conflict).

3. Standard contracts: For consistency, efficiency and ease of administration, develop and utilize standard agreements whenever possible, Bertulli advises. It is harder to lose track of your contractual obligations (and rights) when all of your customer/vendor/client relationships are on substantially similar terms.

4. Risk management/asset protection documents (employment agreements; confidentiality/non-disclosure agreements; intellectual property agreements such as patents, licenses; insurance): Do a worst-case scenario risk analysis and identify ways to mitigate the impact. As part of that analysis, identify your company’s biggest assets (real estate, intellectual property, inventory, human capital, customer lists) and make sure they are protected contractually.