LegalZoom Blog

Legal news and small business tips.

If You Didn’t Receive the Gift You Ordered, Maybe Blame Santa

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Shutterstock/Tashatuvango

Shutterstock/Tashatuvango

‘Tis the season for ordering gifts. Hopefully none of your purchases will leave you in a situation like that of Salt Lake City, Utah couple Jen and John Palmer.

As reported by ABC News, John ordered a desk ornament as a Christmas gift for his wife from KlearGear.com five years ago. Because of a problem with the order, she never received the item and wrote a negative review about the company on the website RipOffReport.com.

Since the incident was years ago, the Palmers forgot about it and were surprised to receive an email last summer from KlearGear.com. The company was demanding $3,500 per a clause in its Terms of Use on the website. The couple tried to have the review taken down, without any luck, and did not pay the money.

As a result, KlearGear.com considered the money owed to them as a debt and reported it to at least one of the credit agencies. The couple has had problems with their credit since then, including being unable to receive financing to buy a new furnace. They and their young son were without heat for three weeks until they were able to save up to buy it.

After the Palmers’ story went public, they received some help. Scott Michelman, an attorney with Public Citizen Litigation Group, is now representing the couple and sent a letter to KlearGear.com asking them to correct the reports of a debt to the credit agencies and seeking compensation of $75,000 for the couple. Attorney Michelman has given a deadline of December 16, 2013, for a response or else he plans to file suit.

It’s worth noting that Michelman has seen other companies try to do similar things to prevent negative reviews.

“So these contracts are ‘take it or leave it.’ They are not negotiated between parties of equal bargaining power,” he said. “A consumer going to a website to buy a product may not see or read through the terms of service by clicking ‘I agree.’”

Michelman also said that the “non-disparagement” clause was not even on the website when John Palmer placed his order in 2008.”

Written by Lisa Johnson, Esq.

December 16th, 2013 at 3:22 pm

Posted in Legal News

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Marvin Gaye’s Family Sues for Copyright Infringement

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Marvin Gaye by Billboard via Wikimedia Commons

Marvin Gaye by Billboard via Wikimedia Commons

Robin Thicke has sold six million copies of his song, “Blurred Lines.” This past summer, the hit topped the Billboard charts for an unprecedented 16 weeks.

It’s clearly been a great year for the R&B artist and his co-writers Pharrell Williams and “T.I.” Clifford Harris Jr. There’s only one problem: the song is a blatant rip-off of Marvin Gaye’s “Got to Give It Up,” claims the Gaye family in a new copyright infringement lawsuit.

On October 30th, two of Marvin Gaye’s children, Nona Marvisa Gaye and Frankie Christian Gaye, formally filed the lawsuit. It alleges:

A.) “Blurred Lines” has a similar signature phrase, vocal hook, backup vocal hook, variations, and keyboard and bass lines as “Got to Give It Up.” Also, both songs include “departures from convention such as the unusual cowbell instrumentation, omission of guitar and use of male falsetto,” according to CNN and musicologist Judith Finell, who is quoted in the lawsuit. The Gaye family is using quotes from music journalists who claim that the songs sound similar, as well as quotes from Thicke himself, who said in an interview that he wanted to make a song like “Got to Give It Up.”

B.) Thicke stole from “After the Dance,” a Gaye song from 1976, for his tune “Love After War,” recorded in 2011. The two songs, the lawsuit alleges, “contain substantially similar compositional material in their choruses, including the melodies of their hooks,” according to CNN.

C.) Sony/ATV Music Publishing’s EMI should have pursued a copyright infringement lawsuit against the “Blurred Lines” writers in order to protect Gaye’s musical legacy, according to Yahoo News. It states that intimidation tactics were used to try and stop the family from filing their lawsuit.

While “Blurred Lines” was topping the charts this summer, people started to point out the similarities between it and “Got to Give It Up.” Back in August, Pharrell and Thicke “filed a preemptive suit in August, claiming the summer smash did not infringe,” according to the Washington Post. It stated that the songs had some popular music elements in common, but that was it.

In the countersuit, the Gaye family states that they would like $150,000 for every copyright infringement found, as well as profits from both “Blurred Lines” and “Love After War.” They are also looking to block Thicke, T.I., and Pharrell from using any more of Gaye’s musical elements in “Blurred Lines” or additional songs.

Written by Kylie Jane Wakefield

December 11th, 2013 at 12:18 pm

Posted in Legal News

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Small Business Scams

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Shutterstock/cristovao

Shutterstock/cristovao


Small businesses are susceptible to scams because scammers assume that owners don’t know any better. Entrepreneurs just starting out may, in fact, not be aware of the scams that are frequently targeted at small businesses.
 
To protect yourself and your business, here are some of the top scams that you should look out for and avoid whether you’re a new or seasoned small business owner.

The Sham Award

According to Open Forum, one of the biggest scams that occurs to small businesses involves a fake award. The scammer will reach out to a small business and express that they’ve won an award for their work. The catch is that the scammer will ask for a partial or full payment for the award and then charge a credit card yearly “membership fees.”

If someone calls your business and requests payment for any type of award, beware. Google the name of the organization and you’ll most likely find complaints from other small business owners.

The “Yellow Pages”

Scammers will call up small businesses and ask for someone to confirm the business’ address, phone number, e-mail, website and other contact information. They will say they are from an online directory like The Yellow Pages, and then some time later, a bill will come in the mail for the listing. Though the owner never agreed to the charges, the scammer cuts together the audio to make it sound as if there was confirmation.

If someone calls your business and asks you to confirm any type of information, don’t. Hang up on them immediately and report the scam to the BBB with the phone number that the scammers called from.

Fake Overpayment

When scammers pretend to purchase products from small businesses, they will send a bogus check for more money than required. That way, they will receive a check for the difference and get to keep this money and the products.

Never accept a bigger check than necessary from a client—return it right away and then ask for a new check for the right amount of money. If a client is rushing you to cash it, it’s probably going to bounce.

False Investors

Scammers will say they are representatives from a financial institution and offer to invest in small businesses. The first step, though, is for a small business to “qualify.” This takes a substantial amount of paperwork as well as fees and in the end, there are no investments made.

Stick to your own investors and banks. No one is going to come to you and make you pay for applications if they’re really interested in investing in your business.

Digital Money

Bitcoins and other digital currency websites are under scrutiny from The North American Securities Administrators Association because they are feeding grounds for scam artists. They are threats to investors and can prove to be detrimental to a business’ funding.

Stick to investors who have real sources for funds and not Bitcoins or other digital currencies. You never know who is lurking and looking to take advantage of you on those websites.

 

 

 

Written by Kylie Jane Wakefield

December 9th, 2013 at 1:59 pm

The Death of Lou Reed

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Shutterstock/Michal Durinik

Shutterstock/Michal Durinik


Last month, at 71 years of age, Lou Reed died from complications of liver disease. But that was not the end nor how his fans will remember him. A few weeks later in Lincoln Center, several hundred fans gathered together to celebrate his life and music. The New Yorker article said that Reed’s widow, Laurie Anderson, was there too.

“It was a cold, brilliantly sunny day. There were no speeches, no visuals—just people, trees, and tall poles with powerful speakers mounted on top. Beige chairs were set up in diagonal rows, and people of all ages, in black overcoats, leather jackets, sunglasses, knitted hats, and berets, sat in the chairs or along the wall or stood, leaning against trees, nodding their heads, looking at one another, gazing up at the leaves. Many took pictures or video. The bright sunlight was dappled under the flaking branches, extremes of light and shadow adding to the unreal, happy strangeness.”

According the New York Post, Reed left Anderson, their home in the Hamptons, a Manhattan apartment, all his personal property, his touring company Sister Ray Enterprises, plus 75 percent of his estate. The remaining 25 percent of his estate was left to his only sibling, Margaret Reed Weiner. Weiner was also given a $500,000.00 bequest to care for their 93-year-old mother.

In Reed’s will, he wrote, “It is my hope and desire, without imposing any legal obligation, that my said sister will use a portion of this cash bequest to help care for our mother, Toby Reed, for the balance of her life,”

Love for Reed from his family and fans will no doubt last long into the future. A biography about him is in the works, according to a Billboard article. Music writer Anthony DeCurtis is slated to write the book, though there isn’t a known release date or title yet.

Written by Lisa Johnson, Esq.

December 5th, 2013 at 8:47 am

“Get Your Legal House in Order” Google+ Hangout

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Hear a panel of experts discuss the various ways small businesses can get their legal house in order as the year comes to a close.

Written by Johanna

December 4th, 2013 at 9:42 am

SEC Proposes Rules on Crowdfunding

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Shutterstock/bikeriderlondon

Shutterstock/bikeriderlondon

Crowdfunding is a way for just about anyone or any small organization to raise money. Many individuals make sometimes micro-donations in amounts as low as five dollars. But if you can get enough people along with a few larger donations, a young business can get itself up and running. You may have even read a post here recently about how crowdfunding is being used by some craft breweries.

Back in October, a Brooklyn bakery and cocktail bar called Butter & Scotch, started a Kickstarter campaign in order to raise $50,000.00, so they could sign a lease and build their dream space. They surpassed their goal in the time allowed with the help of 528 backers.

Backers receive different incentives like thank-you shout outs on social media, tote bags, aprons, or a menu item named after them. As the pledges increase, the rewards get sweeter. Pledges of $2,500.00 gave backers a private party for 20 friends including custom beverages and desserts.

Because crowdfunding is so popular, there are organizations interested in gathering together many small investors and giving them shares of their companies instead of customized incentives. However, the laws are strict about buying and selling stock in private companies.

On October 23, 2013, the Securities and Exchange Commission released proposed rules on crowfunding. An article on Crowdfund Insider seems a bit wary of the proposed rules.

“It looks like the SEC has purposely tried to make equity crowdfunding expensive. They were tasked with taking a simple nine page law that passed Congress with overwhelming bilateral support and creating rules that would give the average small businessman a way to fill the void left by banks unwilling to lend them money. Instead, the SEC has created a quagmire of complicated rules and economic roadblocks. If a small business needs to raise $100,000, are they going to spend $15,000 in background checks, compliance costs and legal fees to give equity crowdfunding a try, knowing that if they do not reach their goal, they do not get the money raised, and are out the up front costs?”

Currently the SEC is taking comments on the proposed rules. The deadline for comments is February 3, 2014.

Written by Lisa Johnson, Esq.

December 2nd, 2013 at 7:11 pm

Posted in Legal News,Startups

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How Can I Ensure I Own My Business Name, Slogan, Logo and Website Legally?

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Joe Escalante, Attorney

Joe,

How do I make sure that I own my business name, slogan, logo and website legally so no one else can claim it???

-Sunshine R.

Barely Legal Radio w/ Joe Escalante

There are different types of protection based on different types of use. You can copyright designs that you use for a logo, website, stationary, etc. by filing for protection with the U.S. Copyright Office. LegalZoom can help you do that right the first time (people can do this themselves but I recommend getting help if it’s your first time as corrections can be costly).

With respect to your business name, you’re going to want to register for a trade or service mark for that with the U.S. Patent and Trademark Office. With a trademark, help is vital. You won’t be able to do this easily on your own and you could spend a year trying to get it right.

However, you can only get federal trademark protection for something you are using in interstate commerce. You can file an “intent to use” application but it will only last 6 months.

If it’s a local thing (like a restaurant), you will receive a certain amount of protection from unfair or anti-competitive business practices on the state level, without registering.

 

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

Written by Joe Escalante

November 26th, 2013 at 12:23 pm

Is Using LegalZoom to Make a Will Perfectly Legal in My State (Oregon)?

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Joe Escalante, Attorney

Joe,

Is using LegalZoom to make a will perfectly legal in my state (Oregon)? My father-in-law is a (will and trust) attorney in Illinois, and when I asked him, he said, “See an attorney in Oregon.” We had a will done in Washington ($600) and don’t want to spend another $600 for the same (simple) thing in Oregon. Can you please give me the skinny on this?

-Steve B.

Barely Legal Radio w/ Joe Escalante

I can make $600 or more making a will for people, but I never do. I always say, just go to LegalZoom, and if you have any questions, call me when you are on the site. No one ever calls me, they just thank me.

It’s understandable why many lawyers don’t like this scenario, but I’m a lawyer, and I do. It’s good for everyone.

Check out the Sammy Davis Jr. Estate ruling for more info on the validity of LegalZoom wills.

http://blogs.laweekly.com/…/05/sammy_davis_jr_suit.php

If it’s good enough for the Rat Pack…

 

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

 

Written by Joe Escalante

November 26th, 2013 at 12:13 pm

What Are the Criteria for Deciding Which Country to Manufacture a Product In?

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Gary Milkwick, Tax Pro

Gary,

What are the criteria for deciding on which country to manufacture a product in (U.S. vs. China/India)?

–Mort B.

Gary Milkwick from Corporate Tax Network:

There is a lot to consider: cost of production, time, import/export expenses, ease of communication, reliability, etc. This is a very broad topic, with a lot of moving parts. If you already have offers lined up from different countries/manufacturers, and don’t know which one to choose, you may need to consider sitting down with a qualified CPA and an attorney to go through the pros and cons of each one from both the accounting and legal perspectives.

 

Gary Milkwick from Corporate Tax Network answers your tax questions for free on our Facebook page every Thursday at 11 a.m. PT.

 

Written by Gary Milkwick

November 26th, 2013 at 12:02 pm

Posted in Ask The Tax Pro

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Legal Protection for Facebook Likes

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Shutterstock/Sarawut Aiemsinsuk

Shutterstock/Sarawut Aiemsinsuk

With just about everyone seeming to be on Facebook these days, it’s hard not to see what your friends have “liked.” Reading most articles online give you the opportunity to give a thumbs up. Clicking the “like” button may seem like a relatively personal action at the time, but in reality we should know that our Facebook friends and others can see this information as well. Sometimes the consequences of that “like” go far beyond what we could imagine.

Daniel Ray Carter Jr. of Virginia learned the hard way. He “liked” the page for a candidate running against his boss. His problems started in the summer of 2009, according to a Washington Post article.

“[L]ongtime Hampton Sheriff B.J. Roberts was running for reelection, according to the lawsuit, filed in federal court in Newport News in March 2011. Roberts learned that some of his employees, including Carter, were actively supporting another high-ranking Sheriff’s Office official, Jim Adams, in the election.

Carter liked Adams’s campaign page on Facebook, according to court records. When Roberts learned of the campaigning on the site, he became “incensed” and called a meeting of employees, according to the lawsuit. He allegedly told them that he would be sheriff for “as long as I want it.”

After the meeting, the lawsuit says, Roberts approached Carter and told him: “You made your bed, now you’re going to lie in it — after the election you’re gone.”

Sheriff Roberts won the election and Carter was fired. Carter sued claiming that his First Amendment rights were violated and his case reached the U.S. Court of Appeals for the 4th Circuit. Facebook and the ACLU filed briefs supporting him.

A follow-up article this past September showed the Court ruling that indeed “liking” something on Facebook is a form of protected speech. Virginia’s ACLU legal director said, “The court properly recognized that in an era when so much of our communication takes place through social media liking a political Facebook page is an important means of political expression that deserves First Amendment expression.”

Written by Lisa Johnson, Esq.

November 26th, 2013 at 8:00 am

Posted in Legal News

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