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Legal news and small business tips.

Target’s Data Breach

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Shutterstock/Northfoto

Shutterstock/Northfoto

According to a U.S. News & World Report article, as the year 2014 started, there were over 317 million people living in the United States. Based on a January update by Target regarding the data breach, a good number of us shopped at Target recently.

“As part of Target’s ongoing forensic investigation, it has been determined that certain guest information—separate from the payment card data previously disclosed—was taken from Target. This theft is not a new breach, but was uncovered as part of the ongoing investigation. At this time, the investigation has determined that the stolen information includes names, mailing addresses, phone numbers or email addresses for up to 70 million individuals.”

A February 4, 2014 statement on Target’s website states that because of the data breach, they plan to implement chip-enabled smartcard technology by early 2015, which is six months earlier than previously planned.

Regardless of what Target plans to do in the future, the company is dealing with litigation now. A class action lawsuit was recently filed in U.S. District Court in Madison, Wisconsin. A Wisconsin State Journal article reports that not only are consumers are suing, but banks are joining in too.

“Eric Haag, one of the plaintiffs’ lawyers, said that this is the first Wisconsin case against Target over the data breach, and one of about 80 pending nationally. But this case is among the few that seek to certify not only a class of customers but a class of banks.”

What could be even more worrisome to the retailer are reports that two months prior to the incident, its own cybersecurity staff suggested an in-depth review of the payment system security. According to the American Banker article, the review was postponed initially leaving hackers able to compromise the system.

Written by Lisa C. Johnson, Esq.

March 14th, 2014 at 12:47 pm

Don’t Take a Bite Out of the Cronut® Name

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Shutterstock/Martiapunts

Shutterstock/Martiapunts

In May of 2013, Chef Dominique Ansel introduced the Cronut, a croissant-donut pastry, to customers at his eatery, the Dominique Ansel Bakery in New York. The dessert has been so revered since then that customers line up around the block every single morning outside of the bakery, sometimes arriving before 7 a.m. in order to ensure a spot.

Word quickly spread about the Cronut and it was soon being imitated in other bakeries across the United States and throughout the world. A few months after he first launched the yummy treat, Ansel decided to trademark it with the United States Patent and Trademark Office (USPTO). On January 14, 2014 that trademark was granted underneath International Class 30, which is a food category that includes confectionaries, pastries, and breads.

According to Natalie S. Lederman of Sullivan & Worcester, this trademark will “provide enhanced benefits and protections to Chef Ansel, including a broader geographical scope of protection and international deterrence of copycatters, the right to sue infringers in federal court and recover maximum monetary damages he would otherwise be ineligible for, and ultimately, the right to apply for incontestability status.”

Ansel could potentially go after numerous eateries worldwide that are making and selling imitations of his Cronut creation if they use the actual name “Cronut.” However, if they don’t sell the imitations under the trademarked name, there is not much he can do. Some are calling their offerings croissant donuts, while others are serving up “kronuts,” “croughnuts,” and “doissants.” These knockoffs can be found in places like Texas, Spain, California, and even New York City itself.

The pastry chef tweeted out his frustration at the situation last June, saying, “Hey there copycats, if we’re ever in a room together, I will be able to look you in the eye. Will you be able to do the same?

The trademark for Cronut® has given Ansel more credibility, but even that won’t be able to fully stop the fakers.

 

Written by Kylie Jane Wakefield

March 11th, 2014 at 8:09 am

Family of New York Dolls Guitarist Battle Over Estate

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New York Dolls on AVRO's TopPop by Avro via Wikipedia Commons

New York Dolls on AVRO TopPop by Avro via Wikipedia Commons

 

 

 

In life, rocker Johnny Thunders was an example of all things rock ‘n roll, but in death, his story is emblematic of what inadequate estate planning—no matter how small—could do to a family.

The New York Dolls member died in 1991 at age 38 of what many believe was a drug overdose in a Louisiana Hotel. And in his death, Thunders—also known as John Genzale—had only $4,000 to his name. And while many—including Thunders—thought that might not seem like a lot, the consequences of improper estate planning have since plagued his family.

“Estate planning is vital for everyone,” Rocco Beatrice, managing director of Estate Street Partners said. “In the scheme of one’s life, the amount of money it takes to set up documents that provide many positives, such as limiting litigation, qualifying for Medicaid nursing home care, and leaving specific instructions for the distribution of wealth, is well worth it.”

Thunders’ sister Mariann Bracken landed her late brother’s estate and made several hundreds of thousands of dollars through investments over the years. The estate grew to more than $250,000 with periodic payments being made out to the family every year. That kind of cash might come as a surprise to some people, Beatrice said.

“You never know what is going to happen if you don’t estate plan with a will or a trust,” Beatrice said. “People are always underestimating their worth and don’t take into account things like asset growth, real estate, potential inheritances, and windfalls.”

But her death in 2009 left Thunders’ estate and those annual payments once again in the balance.

Thunders’ daughter Jamie Michelle Suzanne Genzale was then named the administrator of the rocker’s estate but she was unable to pay the $75,000 bond required to oversee the payment.

“The issue of a bond to manage an estate or trust is not often discussed. The majority of states require some kind of ‘insurance’ to protect the beneficiaries,” Beatrice said. “Either the estate or the person charged with managing the estate must pay for the bond. This can put a great strain on relatives.”

The estate has since been at the core of a bitter family legal battle, in which Thunders’ sons Vito and Dino Genzale—who have not received a payment in four years—have sued their sister Jamie to bar her from gaining control of the remaining $160,000.

Thunders’ estate debacle has since become a lesson for all, according to Estate Street Partners. Such legal battles could be avoided with things like a will, or an irrevocable trust for an LLC that would hold onto revenues, the group said.

Beatrice said that because Thunders was an entertainment celebrity, he could have collected royalties even after his death.

“You don’t want the state deciding what happens to your assets after you pass. Most of the time they just pick the nearest relative and put them in charge with very little guidance,” Beatrice said. “Best to put together and estate plan and make sure you’re the one dictating where your assets go.”

Written by Phil Corso

March 7th, 2014 at 1:34 am

Government Shutdown Impact on Small Business Loans

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Small Business Administration Seal by US Government via Wikipedia Commons

Small Business Administration Seal by US Government via Wikipedia Commons

It wasn’t the owner of your favorite local mom-and-pop shop who decided to shut down the United States government in October, but they were the ones who paid the price in the end.

Small business lending took a serious hit as a result of this year’s government shutdown, according to the Biz2Credit Small Business Lending index, with approval rates dropping as high as 20 percent.

Bigger banks with over $10 billion in assets recorded a measly 14.3 percent approval rate in October alone. Small banks dropped from 50.1 percent in September to 44.3 percent because of the shutdown, while credit unions dropped 4 percent to a 43.4 percent approval rate, SmallBizTrends.com reported.

And with the Small Business Administration out of commission, the numbers had nowhere to go but down.

“SBA loan approvals stalled because the agency was closed for three weeks,” Biz2Credit CEO Rohit Arora told Smallbiztrends.com. “Similarly, non-SBA loans could not be processed during the government shutdown because the IRS was not operating.  Banks could not acquire income verification from the IRS during the shutdown, which is needed to approve many loan requests.”

The damage spanned far beyond just the shutdown, too, Arora said. According to the CEO, it should take months for the SBA to play catch-up with a huge backlog of loans to process –all of which might be impacted by future political impasses in Washington, D.C.

But there was a silver lining in the government’s inability to execute earlier this year –especially if you worked for a non-traditional alternative lender. Small businesses were left desperate for anyone willing to pick up the slack leftover from the SBA on lockdown and their wishes were granted.

Reports showed that approval rates for alternative lenders skyrocketed to an Index-high 67.3 percent in October 2013, up from 63.2 in the previous month. But nothing was perfect for small businesses, which in return had to pay much higher interest rates to stay afloat.

“Small business owners desperate for capital during the shutdown turned to alternative lenders, who were willing and able to provide money, but at a much higher interest rate than a bank or credit union would charge,” Arora told the website.  “The stop in the flow of capital came at a time of year when small businesses traditionally search for funding.  The economy, which is still in the weak recovery phase, simply cannot sustain this kind of disruption.”

Those dark days, however, should be behind America’s small businesses. The government has since rebounded and so will small businesses, Arora told the small business website.

What’s Trending Now in Small Business

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Shutterstock/Tyler Olsen

Shutterstock/Tyler Olsen

Last year, small business owners and entrepreneurs had to pay more attention to technology, the Internet, and mobile than ever before. If they weren’t executing content marketing campaigns online, optimizing their marketing and sales through mobile, or setting up security systems to combat cyber attacks, they would be left in the dust.

The following are some trends that small business owners need to be aware of and put into practice in order to succeed in today’s climate.

Protecting against cyber security ambushes

According to USA Today’s Steve Strauss and a McAfee study, cyber criminals are going after small businesses more and more because they are easy targets. It’s been found that a majority of small businesses have no security in place. After they’re the victims of a cyber attack, about 60% of businesses can’t recuperate and are forced to close up shop within six months’ time. Small businesses should put a firewall in place and hire an IT specialist to fight back against the hackers.

Transitioning from paper to digital

Small business owners are living in a digital world that is dominated by the cloud, email, and file sharing websites. These days, small businesses need to be using these digital resources and eliminating paper and hard copies. It saves time and money, and makes documents much easier to share among employees.

Making original, noteworthy content

Instead of focusing on SEO, big companies transitioned to creating high quality content online. That way, they would rank higher on Google and other search engines and increase their sales, gain new customers, and establish their expertise in the market. Small businesses should be looking at the example set by corporations and produce blogs, videos, photographs, and other sources of valuable content that will be shared by consumers.

Structuring a mobile plan

Strauss cites evidence from different studies that “63% of women and 73% of men check their cell phones at least hourly” and “40% of the time spent on the Internet is done via mobile phones.” This means that people are using their phones for everything: to browse, to shop, and to socialize. Small business owners should be creating mobile-friendly websites and online stores as well as sending offers out on mobile phones. Otherwise, they’re going to miss out on a key portion of their customer base.

 

Written by Kylie Jane Wakefield

March 3rd, 2014 at 3:15 pm

With Two Sons and a Significant Other, What Would Be Fair in My Will?

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Joe Escalante

Hi Joe,

I have two children who are adults and I want to make a will and leave my home to them to sell and divide the money up into 1/3 for Brian, my oldest son, and 1/3 to my son Eric and to my significant other, 1/3 of the house when it is sold, which I want done as soon as possible when I die. Paul Hahn, my significant other, would like to have the home until he dies and I worry about my sons getting their share of the house being sold. The house is the only equity I have to leave them; besides a retirement account with Arizona. Paul has worked harder than them on keeping the house up, so what would be fair for when I die in my will? I want the boys to receive their share also. I had a son die, Justin, and Paul basically would be getting his share, which is 1/3.

– Patty Vida

 

Barely Legal Radio w/ Joe Escalante

My advice is to place the home in a living trust. When you pass, the trust will live on just long enough to divide your property according to your wishes. And the house will not be subject to the probate process that the courts govern.

You can do all the things you are talking about with a living trust. Look at LegalZoom’s living trust package.

I’ve helped several people through this after they started the LegalZoom process and most of the time, they didn’t really need my help because it was self-explanatory, they just wanted me around. It’s always great to have an attorney for advice when you need it. Especially since you have some special instructions.

However, you can do this with a will, which is the cheapest route. But it will be subject to a probate process and that takes at least a year. The court basically holds your property until they are sure, in their mind, that your wishes are being granted, and all tax and debt issues are resolved. It’s a pain.

Attorney Joe Escalante answers your legal questions for free on our Facebook page every Tuesday and Friday at 10 a.m. PT.

The advice Joe gives is general; it is solely his opinion and not that of LegalZoom. He is a licensed California Attorney with years of experience; users from other states should take care to review the laws in their own states. LegalZoom is not a law firm. This free service is intended to get you headed in the right direction, not to replace an attorney. This is a public forum. No attorney-client relationship is formed with Joe, or LegalZoom, and the attorney-client privilege does not apply. LegalZoom does not verify, validate, or confirm the advice given by Joe. LegalZoom cannot guarantee the quality, or reliability of any legal advice provide by Joe.

 

Written by Joe Escalante

March 3rd, 2014 at 10:24 am

Posted in Free Joe

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Is a Recent Unsigned Will More Valid Than an Older Signed Will?

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Joe Escalante
Hi Joe,

I have a half sister who was purposefully left out of the will (stated in the will) by my father. However, it was not signed. I have an older (signed) will that was written before he knew of her existence. Do I follow the signed will and does my half sister have legal rights in this matter? Thank you.

– Bill Rabenstein

 

Barely Legal Radio w/ Joe Escalante:

From these limited facts, I would say that the unsigned will would not be considered the true wishes of the decedent by the court. The first will would however. The rights of the half sister would be determined by the wording of the will. For example, it could say, “I leave this stuff to all my issue, equally.” In that case, she has rights. However, if it says, “I leave my stuff to Bill only and I purposely exclude any other issue, known or unknown,” then she has less rights, and perhaps none. It all depends on the language and validity of that previous will.

Attorney Joe Escalante answers your legal questions for free on our Facebook page every Tuesday and Friday at 10 a.m. PT.

The advice Joe gives is general; it is solely his opinion and not that of LegalZoom. He is a licensed California Attorney with years of experience; users from other states should take care to review the laws in their own states. LegalZoom is not a law firm. This free service is intended to get you headed in the right direction, not to replace an attorney. This is a public forum. No attorney-client relationship is formed with Joe, or LegalZoom, and the attorney-client privilege does not apply. LegalZoom does not verify, validate, or confirm the advice given by Joe. LegalZoom cannot guarantee the quality, or reliability of any legal advice provide by Joe.


Written by Joe Escalante

March 3rd, 2014 at 9:51 am

Posted in Free Joe

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How Can I Patent an Idea While I’m Still Trying to Find Capital for My Business?

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Joe Escalante
Hi Joe,

How can I patent an idea and keep it from the public while I am still trying to find capital for my business? What could I do to protect my ideas while I’m in school?

– Tiana Holmes

 

Barely Legal Radio w/ Joe Escalante:

You have to actually apply for patent protection. Once you’ve successfully filed for a patent, or completed a provisional patent application, you are protected as the “first to file” to some degree. Then you have to successfully complete the patent process, which takes time. Theoretically, your “invention” is protected from being exploited by anyone else during this process. The provisional patent application only gives you a year before you have to file for a patent.

While you own the patent, you are still protected, even if you haven’t released the product to the public yet. Eventually your patent protection will expire if all maintenance fees aren’t paid, and eventually it will expire no matter what.

However, this is what patent trolls do. They file for, or purchase, lots of patents and sue people later for violating them. It’s ugly, but usually legal.

Attorney Joe Escalante answers your legal questions for free on our Facebook page every Tuesday and Friday at 10 a.m. PT.

The advice Joe gives is general; it is solely his opinion and not that of LegalZoom. He is a licensed California Attorney with years of experience; users from other states should take care to review the laws in their own states. LegalZoom is not a law firm. This free service is intended to get you headed in the right direction, not to replace an attorney. This is a public forum. No attorney-client relationship is formed with Joe, or LegalZoom, and the attorney-client privilege does not apply. LegalZoom does not verify, validate, or confirm the advice given by Joe. LegalZoom cannot guarantee the quality, or reliability of any legal advice provide by Joe.

Written by Joe Escalante

March 3rd, 2014 at 9:43 am

Posted in Free Joe

Tagged with

Should I Do a Sole Proprietorship or LLC for My Photography Business?

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Joe Escalante
Hi Joe,

I’m a photographer and planning on starting a business (professional service) under my name. I would be the only one in the business and it’s mostly just freelance stuff. Can I just do a sole proprietorship or should it be an LLC?

– Jason Landrum


Barely Legal Radio w/ Joe Escalante:

I would do this as a sole proprietorship until you have specific advice from a tax specialist about changing it to an LLC. In my state there is an $800 minimum tax for having an LLC even if you made no money that year. Get insurance though. That can provide you with the liability protection you lose by not having an LLC.

Attorney Joe Escalante answers your legal questions for free on our Facebook page every Tuesday and Friday at 10 a.m. PT.

The advice Joe gives is general; it is solely his opinion and not that of LegalZoom. He is a licensed California Attorney with years of experience; users from other states should take care to review the laws in their own states. LegalZoom is not a law firm. This free service is intended to get you headed in the right direction, not to replace an attorney. This is a public forum. No attorney-client relationship is formed with Joe, or LegalZoom, and the attorney-client privilege does not apply. LegalZoom does not verify, validate, or confirm the advice given by Joe. LegalZoom cannot guarantee the quality, or reliability of any legal advice provide by Joe.

Written by Joe Escalante

March 3rd, 2014 at 9:09 am

Posted in Free Joe

Tagged with

3D Printing & A Duck’s Left Foot

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Shutterstock/Andrii Kondiuk

Shutterstock/Andrii Kondiuk

If it looks like a duck and quacks like a duck, it just might be a duck named Buttercup that has a 3D printed foot.

Over the last year, you may have noticed an increasing amount of news about 3D printing. It’s rather confusing to think about initially, but a recent LegalZoom article about the process may help to explain how a 3D printer works.

“As the machine begins laying down layers of “ink,” the software directs it to make minute changes to each layer, so that its shape begins to emerge as it gains depth. For this reason, 3D printing is known as an “additive” manufacturing process, as compared with traditional manufacturing processes that are “subtractive.” …  Building objects layer upon layer makes it possible to create more complex objects than could be achieved with subtractive manufacturing. 3D printing is faster than traditional manufacturing because no special tooling is needed. It’s economical because there is no waste and it can be done on a small scale.”

The small scale that be achieved with 3D printing includes the creation of a custom foot for Buttercup the duck. A Mashable article explains that Buttercup was born with a backwards left foot and was unable to walk properly. 3D printing company NovaCopy printed a replica of a normal duck’s left foot, then used that copy to make a silcone foot that fit Buttercup perfectly. The prosthetic foot was attached to a custom sock and now Buttercup is walking like a duck too.

The technology of 3D printing continues to rapidly improve and is becoming cheaper. A TechRepublic article says that disruption of many industries will be happening on a massive scale.

“Educators can print tools or designs in schools. Artists will have a new medium to work with. Healthcare providers can quickly create what they need in-house. Parents will be able to replace toys or broken household items in a matter of hours.”

While most of us have never seen a 3D printer in person, it seems that within just a few years, we may all be enjoying some of the benefits.

Written by Lisa C. Johnson, Esq.

February 24th, 2014 at 8:10 am

Posted in Legal News

Tagged with