Representative Cases

Are you in:

biotech, software development, device, game and video console and content, book publishing industry (writer side), property and casualty insurance, life insurance, real estate broker and real estate development, automotive, content development, cloud computing, fashion, manufacturing, food and/or food additives?

Some examples of the past and present clients/matters are:

1) Copyright/ Trademark infringement Litigation

a. Online and Web hosting

• Third World v. XHOT99, Inc. US DC CD. Defend web-host in contributory copyright infringement, RICO, trademark infringement claims. Affirmative defenses include DMCA and CDA.

• Jupitermedia (Fulbright Jaworski) v. Jupiter Hosting – US DC Northern District California. Defended web hosting company from injunctive relief trademark infringement and cybersquatting allegations. Successfully opposed motion for preliminary injunction. Published opinion. (Judge Claudia Wilken). Concurrently advised Jupiter Hosting on all of its commercial transactions and subsequently provided assistance regarding its sale to Navisite in 2007.

• DICK DACK LLC. Advise adult porn producer re DMCA and 2257 custodian of record issues. Review of COPPA and general business advisor.

b. Movie

• Rivera v. Does, US DC SDNY. Obtained TRO, seizure by US Marshall and preliminary injunction on behalf of filmmaker of “ENRIQUILLO” (Story of discovery of Dominican Republic) against cameraman and investor who purloined film. (Judge Kimba Woods)

• Brush Media v. Boujaklian. (2002 WL 1906620 (N.D. Cal.) US DC ND. Adult DVD movie producer. Successfully prevented copyright infringement action through motion to dismiss for lack of subject matter jurisdiction. (Judge Eliza Laporte)

• Eslinger-Galligani adv. Domingo Gutierrez. Advise movie production company on acquisition of life story rights, drafting options and partnership agreement.

c. Video Game

• Sudoku Developer adv. Danger Technologies. Advised on-line sudoku game re licensing agreement with mobile phone developer and mobile phone platform.

• Doe v. Investor. Advised on-line game/personal map developer re licensing agreement risk and litigation strategy re venture investor.

• Eidos acquisition of Crystal Dynamics. Conducted IP audit on behalf of Eidos and negotiation of various commercial agreements related to acquisition of Crystal Dynamics by Eidos including domain names, game titles, content and software.

• Beeck v. Cinemaware, US DC NDCA. Represented video game development team re claims of copyright infringement, breach of licensing agreement and non-payment of royalties.

d. Computer Accessory

• Grixxxx Technology adv. Apple, Inc. Re-negotiation of Made for Ipod agreement and litigation strategy re anti-trust and breach of contract claims

• Disruptive Technology adv. Apple, Inc. Re-negotiation of Made for Ipod agreement and related commercial agreements.

• Acme Studio v. Acme Made. US DC Northern District. Defended computer laptop and accessory manufacture, owner of acmemade.com from allegations of trademark infringement and cyber squatting.

e. Dance

• Creative Station adv. Apple Seeds. US DC SDNY Advise “teach kids to dance” school re copyright litigation and commercial agreements related to licensee

f. Wireless

• General Magic adv. Consolidated Freightways. Advised Apple, Inc. spin-off re commercial licensing of its hand-held device.

• AD USA v. Automan. US DC Pennsylvania. Obtained preliminary and permanent injunction on behalf of handheld computer manufacturer in automotive industry. Resulted in significant financial settlement on behalf of client.

g. Sculptural Works

• Ohtake adv. Sculpturesite Gallery. Defended allegations of breach of contract related to sale of kinetic sculpture.

• Rader v. Sutter. US DC ND. Prosecuted TRO and pursuit of preliminary injunction in copyright infringement claim on behalf of cemetery monument design company. Case proceeded through death threat allegations, expedited discovery and an appeal to the 9th Circuit for relief. (Judge Susan Ilston)

h. Software

• PC Tools v. Contour/Elle Mae, Inc. AAA San Francisco. Successfully brought copyright infringement claim on behalf of mortgage industry software developer. Resulted in six-figure settlement in client’s favor.

• Workshare v. Litera Corp. US DC ND. Successfully defended document management software co against injunctive relief action for copyright infringement.

2) Patent and Trade Secret litigation

• Patentee v. L-3 Corp. US DC Georgia. Defended owner of multiple power utility sites from allegations of patent infringement over payment process method.

• Datapark v. GMG Systems, Inc. San Francisco District Court. Successfully prosecuted misappropriation of trade secrets related to parking garage computer equipment through three defense firms. Resulted in six-figure settlement for client.

II. Fraud litigation

• Sisters v. Brother in Family Partnership. Defended and advised brother/general partner in breach of fiduciary duty suit in LA Superior court alleging misuse of partnership funds, self-dealing.

• Shareholders v. NiftyNet, Inc. US DC ND. Successfully brought derivative action against former President of Delaware corp. on behalf of shareholder/director alleging fraud, corporate waste. Resulted in redemption of shares and a significant financial settlement for client (Judge Charles Breyer)

• Does v. Real Estate co, Inc., and President/director – San Francisco Superior Court. Defense of the President of commercial leasing agency in five separate actions alleging fraud and negligent supervision allegations by investors in multi-unit properties.

• Insurance brokerage v. Former partner– San Francisco Superior Court. Pursued computer fraud and abuse and trade secret misappropriation against former partner of general insurance broker. Resulted in financial settlement.


3) Online Torts

• CPA v. Yelp and anonymous poster. Advised CPA firm re: pursuit of claim against anonymous user on Yelp re: negative services. Consideration of privileges and “opinion” defense. Obtained a retraction by user to be less offensive.

• Jane Doe v. Armando Aguilar, LA Sup. Ct. Prosecute case alleging false light, invasion of privacy, and intentional infliction of emotional distress re: release and publication of sex tape and online harassment.

III. Anti-trust litigation

• Weinberg v. Ingenix. US DC, Connecticut. Participating plaintiffs’ counsel in class action claim of price fixing and unfair trade practices against Cigna, Wellpoint and Aetna.

IV. Outside General Counsel

• Galligani-Eslinger Productions. Outside general counsel to reality television and motion picture production company.

The 4 Best ‘Newly Discovered’ Reasons You Should Sign That Important Contract

I. The 3 essential issues most negotiators miss (most of which you’ve never cared about before…) that other top-preforming businesses owners tend to gloss over until there is a problem.

  • Your Maximum Gain and Maximum Exposure.
    • Do you know the most you can obtain, win, earn, pay from the contract you are about to sign?
    • What is the one-line (or one word) worst case scenario?
    • What is the other side’s answer to this same question?
    • What does the agreement say about the limitation of liability?
  • Are you Crystal Clear About What You Are Obligated To Deliver Under the Agreement and By When? What About the Other Party?
  • If You Or They Do Not Perform, What Is Your Remedy? 
    • Let’s say you’re negotiating a services agreement (cloud management services, architecture services, any services).
      • What happens if you do not perform? Is the first thing that happens a lawsuit? Doubtful. What do you do to (a) confirm that the deliverable is completely satisfactory; (b) to repair any part of the service deliverable that is not satisfactory? (c) Even if it is not in the terms of your agreement, what is your plan/policy/practice to solve this issue?
      • Quick Story on Microsoft: Early in my training I negotiated a multi-million dollar revenue transaction for cloud services with Microsoft.  Microsoft’s total liability was $999 – the cost of one copy of their server software – under the agreement no matter what. Since we knew that from the beginning, we had to understand that our ability to recover if something went wrong was $999.  Problem was: we needed the agreement. Does that info change your negotiation approach?   
  • Bonus: How Much Do You Know About The Otherside’s Ability To Solve Problems that Will Occur? 

II. The #1 best use of your negotiation time (and a strategy that you can implement in 30 minutes or less) to immediately make you less risk exposed.

  • Flush Our the Duck. You need to find leverage.  Leverage comes from information. It is often said that the first to speak loses. That is not true.  If you ask more questions than the other side and learn more, you win. The key is knowing exactly what answers you NEED (not merely want) to know. If you become smarter after you speak to the other side than you were before, then you might gain leverage.

III. The 5 pieces of information you need before you spend any time negotiating with anyone over money.

  • Does the person on the other side have authority to make the changes and negotiate the issues you are discussing?
  • Do you know exactly what you will do if the agreement negotiation is aborted by you or the otherwise? (ie, if you agree not to move forward?)
    • For example, if you are making an offer on a piece of real estate or software, do you have a second, third, fourth choice? If the deal is critical, I recommend having at least two back-up plans.

IV. The #1 best question to ask your lawyer to see if they are a fit for you.

I encourage my clients to ask me hard questions.  One of the hardest questions to answer is “have you worked on the exact same type of deal like mine before?”  Even though it is hard, is can be answered. Here is  – in my opinion today – the number one best question to ask your lawyer to see if there is a fit.  But before I give you the question, you must be willing to hear the answer. And the answer might be essentially back on you, the client.

“For the next ten minutes, please ask me every question you can think of so that you, attorney, can understand exactly how I make money and the risks I take to deliver on my business promise?”

I am amazed how little attorneys often know about their client’s businesses until they are in the midst of a crisis.  I am also amazed by how willing clients are to get help to clearly explain what they do, to get help uncovering potential problems in their delivery of what they offer and in identifying the barriers to growth.

What is your number one burning question?  Email me

Thanks!

Now What: You’ve Messed Up Corporate Formation

I get quite a few calls from clients that MESSED UP their corporate formation.

  • Owners are afraid of being SUED because their entity is not “formally” set up
  • The State Franchise Tax Board has SUSPENDED the entity
  • NO ONE has been ISSUED any equity (stock if a C corp; units if an LLC)
  • NONE of the owners have a  shareholder agreement (e.g. c corp) or
  •  operating agreement (e.g. LLC)
  • Directors are ONE THE HOOK for anything that GOES WRONG
  • Someone has left the entity and there is NO RIGHT TO REPURCHASE

Some of these problems are EASY FIXES.

  1. Let’s Diagnose YOUR Problem

First – let’s compare notes.  Do you have all of the below?

screenshot-2016-11-14-14-30-18

2) Let’s drill down one more level.

a) DO YOU USE UNANIMOUS WRITTEN CONSENTS in lieu of Annual Meetings of Shareholders or Directors?  √ CHECK

–> (Note: LLC’s use Resolutions.)

b) Do your Unanimous Written Consents (or Resolutions) specify ALL material events to your shareholders or directors? √ CHECK

By material – I mean, that any event or decision or information that a reasonable person would need to make an informed decision.  Are we on the same page?

[the SEC defines materiality as: “to which there is a substantial likelihood that a reasonable investor would attach importance in determining whether to buy or sell the securities registered.”

Practice Tip: Consider being as specific about what you put into these Consents and Resolutions.  They can be used to disclose an entity’s important (ie. material) facts and events and can serve as a chronological record of the decisions made by the entity.

3) What is the status of these documents:

screenshot-2016-11-14-14-31-24

Have ALL shareholder’s executed a stock purchase, shareholder or if an LLC – an operating agreement?

Are there differences in the agreements between these individuals?

If so, is that because some have more or less rights than others?

Fiduciary duties:  In the LLC context, did you limit the duties that one member has to the others or between the manager and any member?

Deadlocks: How do you resolve deadlocks? If there are only two owners and they each own 50% of the equity, how will you resolve a deadlock?

Rights to Repurchase or Buyouts: What triggers the rights? what is the method of valuation? Does one equity holder have the right to force another equity holder to buy them out (ie. they have a put) versus the Company or a member have the right to buy away the equity of another member (ie. an call like option?).

4) Tax Matters: Many suspension and reporting problems come about because the tax preparer, advisor and the Client are not communicating about the following items:

screenshot-2016-11-14-15-37-03

 

IF YOU WOULD LIKE TO GO THRU MY APPROACH TO FORMATION, PLEASE GIVE ME A CALL 310-570-2399.  I offer fixed or flat fee programs for various scenarios. 

 

 

Commercial Drone Rules 1.0

On June 21, 2016 the FAA posted FINAL Rules for Commercial Drones – to go into effect August 2016.

A summary of the rules are attached here and a full text of the rules follow here.

Overview: You need a certification to operate commercially. Most requirements are waivable. Most require a reasonableness standard.

You will need a certification to operate commercially.  Here are the min. requirements:

  • must either hold a remote pilot airman certificate with a small UAS rating or be under the direct supervision of a person who does hold a remote pilot certificate (remote pilot in command).
  • To qualify for certificate, a person must either: 
  • Pass an initial aeronautical knowledge test at an FAA-approved knowledge testing center; OR
  • Hold a part 61 pilot certificate other than student pilot, complete a flight review within the previous 24 months, and complete a small UAS online training course provided by the FAA.
  • Be vetted by the Transportation Security Administration.
  • Be at least 16 years old

I will attempt to give you a summary of the summary so that you can get a sense of what this first Final set of rules requires.

  • 55 lbs all in including packages
  • Visual line-of-sight (VLOS) only
  • Remain close enough to see the aircraft with vision unaided by any device
  • May not operate over any persons other than you, not under a covered structure, and not inside a covered stationary vehicle (imagine that one).
  • Day only
  • Must yield to other aircraft.
  • May use visual observer (VO) – will require further reading to understand.
  • First-person view camera cannot satisfy “see-and-avoid” requirement but can be used as long as requirement is satisfied in other ways.
  • Max. speed of 100 mph (87 knots).
  • Max. altitude of 400 feet above ground within 400 feet of a structure.
  • Min. weather visibility of 3 miles
  • Operations in Class B, C, D and E airspace are allowed with the required ATC permission.
  • Operations in Class G airspace are allowed without ATC permission. •
  • No person may act as a remote pilot or for more than one aircraft
  • No ops from a moving aircraft or vehicle unless the operation is over a sparsely populated area.
  • No careless or reckless operations.
  • No carriage of hazardous materials
  • Requires preflight inspection – must read full set of rules
  • A person may not operate if he or she knows or has reason to know of any physical or mental condition that would interfere with the safe operation of a small UAS.
  • Foreign-registered small unmanned aircraft are allowed to operate under part 107 if they satisfy the requirements of part 375.
  • External load operations are allowed if the object being carried by the unmanned aircraft is securely attached and does not adversely affect the flight characteristics or controllability of the aircraft.
  • Transportation of property for compensation or hire allowed provided that attached systems, payload and cargo weigh less than 55 pounds total;
  • The flight is conducted within visual line of sight and not from a moving vehicle or aircraft; and
  •  wholly within the bounds of a State and not between (1) Hawaii and another place in Hawaii through airspace outside Hawaii; (2) the District of Columbia and another place in the District of Columbia; or (3) a territory or possession of the United States and another place in the same territory or possession.
  • Most of the restrictions discussed above are waivable if the applicant demonstrates that his or her operation can safely be conducted under the terms of a certificate of waiver.

Call me to discuss if your commercial drone project falls within the Final regs and what you must know and do about it. 310-570-2399

Agreements with Strippers (never work out)

Today I saw on Bloomberg the lawsuit and countersuit ex-Sequoia partner sued by his former “stipper.” Before I get too far ahead of myself, here is the Complaint and the Countersuit A-0001316509-1.  Did you enjoy the read? Horrific right? What surprised you most?

What is great about these documents is that neither of them holds anything back. They are lewd, lascivious and raw. Exactly the kind of stuff you would not want public.  But the real shocker is that the ex-Sequoia partner actually agreed in writing to pay the woman, $40,000,000, had paid her the first $10,000,000 and she brought the law suit “simply” on breach of contract grounds to enforce the deal.

How does this relate to normal civil discourse you ask?

Well, it may not. Few of us bring any of these facts to the table. For better or for worse.

Couple of take aways:

 

  1. The guy really tried to make good on a bad decision. He clearly had the money and liked the woman, since he continued to see her, and thought he’d just throw money at it and make it go away. Lesson: Be prepared to pay for your decisions, always.  There is no free lunch.
  2. She was in it for the money.  It was her job and she was paid handsomely.  Lesson: Know what the otherside’s motivation is, always.  When it changes, be aware of the change.
  3. Is the agreement enforceable? Probably and more importantly, both of them have the funds to litigate the case to throw the question to a jury.  Lesson: Agreements are worth nothing until you seek to enforce them.  If you are not willing to enforce them or worry that the other side will not fulfill their promise, then don’t get into an agreement with them.
  4. Will it go to trial? Probably not. Most cases settle.  Lesson: Litigation generally only benefits the lawyers.  If you can resolve things yourselves, it will be less public, less costly and you will probably be able to sleep better sooner.  Otherwise, be prepared to fight for the long haul.

Criminal Law Must be Considered

As my right honorable colleague Matt Kumin reminded me, Criminal Law must be considered when advising a marijuna-preneur(sm). It is with that thought that I leave today’s comment.  In a recent Criminal case, the Court asked the jury three key questions on which the prosecution hinged:

(1) “Possession of marijuana with the intent to collectively or cooperatively cultivate marijuana for medical purposes is authorized under the Compassionate Use Act so long as the marijuana is not cultivated for profit.”

(2) “Possession of marijuana is lawful if authorized by the Compassionate Use Act. The Compassionate Use Act allows a person to possess marijuana for personal medical purposes when a physician has recommended or approved such use. The amount of marijuana possessed must be reasonably related to the patient’s current medical needs. The People have the burden of proving beyond a reasonable doubt that the defendant was not authorized to possess marijuana for medical purposes. If the People have not met this burden, you must find a defendant not guilty of this crime.”

(3) “Possession of concentrated cannabis is lawful if authorized by the Compassionate Use Act. In order for the Compassionate Use Act to apply, a defendant must produce evidence tending to show that his possession or cultivation of concentrated cannabis was for personal medical purposes with a physician’s recommendation or approval. The amount of concentrated cannabis possessed must be reasonably related to the patient’s current medical needs. If you have a reasonable doubt about whether the defendant’s possession or cultivation of concentrated cannabis was unlawful under the Compassionate Use Act, you must find the defendant not guilty.”

The Jury convicted in People v. RAYGOSA, Cal: Court of Appeal, 2nd Appellate Dist., 4th Div. 2014.

Afterall, they had four pounds in their car, cash, four cell phones and a scale.

“Here, the People presented substantial evidence from which the jury reasonably could have concluded that defendant intended to sell the large quantity of marijuana he possessed. Jackson testified that in his experience, people package marijuana like defendant did when they plan to sell it to a dispensary. He further testified that most people consume only one-half gram to one gram of marijuana per dose and that it would be unreasonable for one person to carry around so much marijuana for his personal use. Jackson opined that the knotted bags would not keep the marijuana fresh for very long, and that other evidence recovered during the arrest — the scales and cash — further indicated that defendant (and Hernandez) planned to sell the marijuana. A jury could conclude from this evidence that defendant possessed more cannabis than was reasonably necessary for his personal medical use and intended to sell it.”

Marijuana-preneur? You interested in attending my start up seminar?

One of the greatest resources for understanding the status of Medical Marijuana across the United States is: http://www.ncsl.org/research/health/state-medical-marijuana-laws.aspx

But this still does not tell an entrepreneur the answers to their basic questions:

1) How do I start at growing business?

2) Do I need to become a collective or dispensary to start selling to a dispensary?

3) Do I have to pay the collective tax?

For these answers and more, sign up for my free, starter seminar next week.

Sign up here and I will let you know the details.

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January 2015: Medical Marijuana Related Trademark Applications (only 258?)

I am sure I could dig up more but these are worth looking thru to find your way. This was generated with a Word and Design search using “medical marijuana” in goods and services only.  http://tmsearch.uspto.gov/

Screen Shot 2015-01-27 at 9.51.04 AM 1) The DEAD ones are the most telling. Screen Shot 2015-01-27 at 9.51.17 AM 2) The Registered ones are also Screen Shot 2015-01-27 at 9.51.26 AMimportant to review to see what types ofScreen Shot 2015-01-27 at 9.51.47 AM“products” the gov lets thru and which Screen Shot 2015-01-27 at 9.51.56 AM they do not. Screen Shot 2015-01-27 at 9.52.06 AM