In House - The FindLaw Corporate Counsel Blog

January 2014 Archives

The Arguments Against Covered Business Method Review

Stupid, dated, and vague patents can be a nightmare for innovating companies. Just ask Google and Mark Cuban. And patent trolling, using these questionable patents, seems to be more popular than ever.

That's why the White House has repeatedly called for reform, including in this week's State of the Union address. That's why the House passed the Innovation Act last year. And that's why the Senate is currently considering their own version of the bill, which has one thing that the House's version doesn't: Covered Business Method (CBM) Review.

It's a good idea, in theory. Any company that is being accused of infringement can pause the litigation and attack the merits of the patent itself in an invalidation proceeding at the United States Patent and Trademark Office. So why are a handful of software companies so vehemently opposed to the idea?

Two Notable Patent Cases Add Fodder to Reform Talk

Once upon a time, there was an Internet powerhouse known as Lycos. The search engine-turned portal competed with Yahoo in the pre-Google days.

The site, with its familiar black dog logo, remains online, but it is now, for all practical purposes, an online ghost town. And patent relics salvaged from that ghost town, sold to a patent assertion entity, just came back to haunt the company that pretty much wiped Lycos off the map.

Sweet, sweet revenge, in the form of a patent troll.

Meanwhile, Red Pine took an existing idea (releasing movies online via on-demand services before the theatrical release) and slapped the word "cellular" on it. They're suing, amongst others, Amazon and Magnolia (a Mark Cuban company).

Last week, we discussed the burgeoning legal department operations ("LDO") manager position in corporate legal departments. The relative newness is exemplified by the fact that LDO managers have been surveyed for less than ten years. But during that time, the field has grown, and with large corporations the likes of Ford Motor Co. and DuPont Legal leading the way, the number of LDO manager positions is likely to continue expanding.

Today, we examine the results of the Sixth Annual Law Department Operations Survey ("Survey") conducted by Inside Counsel, Blickstein Group, and Huron Legal. The findings indicate there are four major areas of concern for LDO managers today: cost, metrics, personnel and IT/cyber security.

In-House Counsel: 5 Reminders About Breastfeeding Laws

By now, you may have heard about the Victoria's Secret customer in Texas who was not allowed to breastfeed in a fitting room.

The story, as reported by The Blaze, should give pause to in-house counsel to consider revisiting company policy and staff training to make sure everyone is up to speed on the legal status of breastfeeding -- both with regard to customers and employees.

Here are five breastfeeding-related legal reminders every corporate counsel should recall:

3 In-House Pitfalls to Avoid This Tax Season

In-house counsel can be subject to various in-company pressures from executives -- especially around tax season. But you should not let the stressors in your office lead you to recommend something only plausibly legal or just plain illegal.

To keep your head in the game and your keister out of federal jail, be mindful of these three potential tax season pitfalls:

One of the emerging trends of the past decade is the rise of the legal department operations manager ("LDO manager"), who reports directly to general counsel, and oversees the operational and managerial aspects of the law department, according to the Association of Corporate Counsel. In doing so, general counsel has more time to devote to leadership, counseling and strategy.

But what exactly do LDO managers do? Their tasks are ever evolving, but can be broken up into three main categories: finance, technology, and project management.

Candy Crush Saga's Developer: Protecting IP or IP Bullying?

King, a video game studio, created Candy Crush Saga. For those unfamiliar, it is an insanely popular free-to-play video game. How popular? Per the New York Daily News, it has been downloaded more than 500 million times, was the most downloaded free app of 2013, and was the year's top revenue grossing app. That popular.

It's big. And with success comes copycats and infringers. King is doing what any responsible company would do, attempting to protect its IP. But is it going too far?

How Should In-House Counsel Handle Hugs at Work?

Tuesday was National Hugging Day, otherwise known as every in-house counsel's sexual harassment liability nightmare.

A high-five, a handshake, or a hug -- which is appropriate in the workplace?

To get a "feel" for how to approach hugs at your workplace, here are different workplace hugging factors to consider:

3 Leasing Issues Every In-House Counsel Should Keep in Mind

Getting a grip on potential real estate issues is one of the less fun roles of an in-house counsel. But it can't be stressed enough how important to it is to check the lease from time to time. Leasing woes typically begin with a tenant's "out of sight, out of mind" approach. So, get off your ergonomic chair, remove the lease from your drawer, dust it off, look it over, and maybe breathe new life into it.

To help you get started on what to look out for, here are three common leasing issues:

Is the FTC Prepping for a War on Patent Trolls?

When it comes to fighting patent trolls, the government has been long on talk, and short on action. Legislation is in the works, but other than a few state governments standing tall, most of what we've heard is proposals and verbal condemnations, especially on the national level.

The hesitation, it seems, may have ended, and the first shots may have been fired in the federal government's War on Trolls. Earlier this week, one of the most notorious non-practicing entities, the "Scanner Troll" MPHJ, filed a lawsuit against the Federal Trade Commission. A troll litigating isn't the big reveal here, however. MPHJ was filing a preemptive attack against the FTC's own planned lawsuit, under Section 5 of the FTC Act, which prevents deceptive trade practices.

NLRB Stretches Section 7 to Protect Workplace Gossip

Dirty, dirty gossip. It has no place in the workplace, unless you are the enterprising sort who uses it to your advantage. However, for employers, it usually hurts more than it helps.

Easy solution: ban it. After all, free speech doesn't extend into the private workplace, does it?

It's not a bad idea, but if you do ban office gossip, just be sure to provide a Section 7 exemption.

While you may not have had to deal with the Foreign Corrupt Practices Act ("FCPA") at your firm, now that you are in-house counsel, complying with the FCPA can be your day-today reality.

While the prohibitions of the FCPA regarding payment/gifts to foreign government officials, or government owned/funded entity, as well as the accounting and reporting provisions, may seem clear -- one thing does not -- how the FCPA applies in real life, daily transactions. That's where you -- oh great corporate counsel -- come in.

Here is a three-pronged approach to preparing for, and dealing with FCPA bribery compliance.

The Biggest Loser: Diet Supplement Companies for False Advertising

The FTC recently imposed hefty fines on four high-profile diet supplement companies in a growing effort by the agency to curb deceptive advertising in the weight loss product industry. In all, the weight-loss marketers will pay approximately $34 million for consumer redress.

The FTC will make these funds available for refunds to consumers who bought the products. Here is a list of the products fined.

While death and taxes are a certainty for most of us, if you're a tech company in Silicon Valley, taxes may be optional (yeah, we're looking at you Apple). We're going to assume that your company is much more ethical, and actually pays taxes in the U.S. for purposes of this discussion. Which leads us to the inevitable ... are you ready to advise your company on tax issues?

Audit and tax advisory firm KPMG has put together a list highlighting business tax issues for 2014, and while everything on the list was important, we've selected some of our favorites to tell you about.

This week we've been taking a look at the ACC's report "Skills for the 21st Century General Counsel," and giving you a brief synopsis of the kinds of skills that lawyers, board members and executives value in their GC. First we looked at the GC's role as the fearless leader of the legal department, and then we looked at the GC's role as the "counselor in chief."

Today, in the last of a three-part series, we look at the GC's role as business strategist.

The Evolving Role of GC

Interestingly, directors and GC value the strategic input given by GCs very differently. While 62% of GCs value strategic input as a "top three value driver," only 27% of board members do the same. However, both directors and GCs alike forecast an increase to the value given to strategic input in the next five-to-ten years.

Becoming General Counsel to a Startup Company

It's harder than it sounds, and it sounds impossible.

The path to an in house counsel position at a startup company isn't too different than any other type of company: BigLaw is basically the path you must follow. If you're fresh out of law school, and unemployed, your best bet is to either (a) spam BigLaw firms with your resume, (b) stand outside of their offices with a "please hire me" sign, or (c) find a job as a paralegal or contracts administrator and hope that you end up in the right place at the right time.

But, if you've done your time in the BigLaw trenches, and are considering fleeing to greener pastures, here are a few resources that can help:

NLRB Gives Up Fight Against Notice Posting Rule Cases

The NLRB's Notice Posting Rule, which required businesses to post notifications reminding workers' about their right to unionize, has met its demise in a legal war of attrition. The National Labor Relations Board gave up the fight and will not challenge two federal court decisions that invalidated the Posting Rule.

Here's a breakdown of the employer-friendly cases and what this means for employer obligations:

On Monday, we posted part I of a series that takes a look at the Association of Corporate Counsel's findings in a publication they researched called "Skills for the 21st Century General Counsel." The ACC surveyed GCs, directors, executive recruiters and CEOs to find out what GC skills were valued, how much they were valued, and what skills will matter in the future.

Part I discussed the importance of the GC as the leader of the legal department, which is perhaps the most obvious aspect of being GC. Today, we look at GC as the "Counselor in Chief" as the ACC calls it.

3 Cost-Saving Tasks to Tackle in 2014

A new year brings new opportunities and new challenges for in-house counsel. If you're not sure where to turn your attention, focus on finances. Kick off 2014 with cost-saving goals.

Here are three goals to focus on to make 2014 a bigger and better year:

As corporations expand globally, the skill set for General Counsel is constantly evolving. The Association of Corporate Counsel conducted a survey of board members, GCs, CEOs and executive recruiters to find out what skills the "21st Century General Counsel" will need.

This week, we'll be exploring the ACC's findings in a three-part series. First up, we look at the importance of the GC as the "fearless leader" of the legal department.

Martha Stewart Living, Macy's Reach Long-Awaited Settlement

Martha Stewart Living Omnimedia Inc. and Macy's reached a settlement in a breach of contract lawsuit, bringing an end to Macy's claims against Stewart's company for allegedly violating an exclusivity agreement by selling products at rival chain J.C. Penney.

But the confidential settlement leaves Macy's suit against J.C. Penney intact.

3 New Years Resolutions for Patent Reform

Everyone, it seems, has an opinion on patent reform. A White House task force chimed in with anti-trolling proposals. The House of Representatives passed a reform-minded bill late last year. Federal Circuit Chief Judge Randall Rader continues to argue on behalf of fixing fee-shifting. And the Supreme Court has two cases on its docket that may grant him his wish.

So maybe, 2014 will be the year of patent reform. Out of all of the proposals floating around, what changes would we like to see?