Then there is the volunteer work we accomplished in 10 years, which for me, began before law school. I think that volunteering is how we show our greater selves, by giving without expectation of return, to help others as we were helped. My most recent work was reading the Augusta Chronicle for the visually impaired on the Georgia Radio Reading Service (hey, I started my career as a volunteer college radio disc jockey for WRAS Atlanta, 88.5FM). I now have a recording of myself performing 12 volumes of Little Women, complete with a parrot impersonation! In connection with my business, I served on a handful of boards since starting the Firm, and spent one on one time with a number of high school, college, graduate school, and law students, and recently minted lawyers, to talk with them about their careers. I remember how much that mattered to me, when I was a new lawyer!

In addition to volunteer work, my law school dean honored me when she hired me to teach non-lawyers how the legal ropes work in entertainment and corporate law, giving them a lecture in finance and private securities. This honor carried over to the next year when I was a group moderator for a talk with heavy hitters in our state film and media production industry, at the Creative Media Industries Institute. Teaching has always been part of the role of a counselor to clients, to enable them to make their own choices. Ironically, both of my parents are teachers (and veterans – Go Army!), and suggested that I avoid teaching. I think my mom made up for it when she said I should go to law school after I got my B.A. – my response? Never! The moral of the story? Never say “never,” and don’t believe everything you hear about you, even if it is well intended advice from a family member.

When I tell people about my journey to 10 years, it starts with some statistics. I had a 10 year break between undergrad and grad school. I started law school at 33 years. I was on academic probation my 1st semester. I recall sitting in my administrative law professor’s office one winter, crying over an exam that I thought I aced – only to find out I was really, really wrong. Thankfully, law school only teaches us skills, and with some elbow grease and application, I raised my gpa to above a 3.5 my final semester. I celebrated small victories that mattered, echoing the sentiment of my history professor, the late James Heitzman, when he wrote, that I would perform excellently when motivated by a topic that I wanted to learn. How true his statement was; I earned the highest grade in International Law, and Arts & Entertainment Law in my class. I specialize in arts and entertainment law.

When I graduated, I began studying for the bar exam. 3 months after passing the bar, one of my mentors in law school procured a contract for me, which led to another contract. At the time, the market seemed flooded with overqualified lawyers; finding a job was challenging. The usual entry-level jobs were not available (discovery center, anyone?). After passing the bar, I lost my home, because I had no job (and no readily available income), and moved back in with my parents. I took what contracts I could get, especially paralegal roles, when the employer did not want an attorney, but needed someone who understood “IP.” (I spent 8 years in intellectual property law departments and a blue chip firm before attending law school).

Three things therefore led to my business’s birth:

(1) realizing that I love freedom, independence, and being the boss of myself,

(2) attending a solo workshop at my alma mater that validated my motivations and showed that I was a “natural” entrepreneur and

(3), wanting to “do right by” a producer, who needed some help with an IP matter. All 3 ingredients combined and voilà, I started Morin Legal (née Morin Entertainment Law, LLC) on March 18, 2013.

I faced many of the same challenges that small business owners do – meeting client expectations (and knowing how to set expectations, which is arguably more important), marketing and promotions (that first website…), and trying not to do it all myself even though I could not afford to hire anyone. All of those years as an administrator helped me quickly and efficiently perform routine tasks and utilize technologies available to me to “streamline,” and “automate,” some, including billing, calendaring, scheduling, receivables, and invoicing. It seemed that for every billable hour I spent 3 more doing administrative work to keep the business functioning. I took calculated risks, too. Being a solo, I do not have the luxury of walking down the hall to an experienced “partner,” to assist with my work. So I created a network of specialty attorney mentors, who committed to always review my work and give me pointers on how to approach things, from the very first day and the very first client. Nothing is fool proof however, and the lessons I learned on this early road were very painful at times. These lessons taught me business resilience, which helped me and the Firm to survive in 2020.

For years, I looked for a brick and mortar building where I could meet clients in my office and still work from home (for those tax deductions!). 4 years of hunting and then one day, the perfect place rose up. It was out of my price range, and not available. I still put my email in the box for communications when it hit the market. And the very next day, I got a call, with an offer to reduce the price by $5,000. I toured the building, which is a whole commercial space on the bottom floor, with a private residential space above it. It was perfect, and I began the transition of moving my business from Gwinnett County to the City of Atlanta. Returning to Atlanta after having lost my home because of job scarcity just 4 years prior, was a huge moment for me. Renovating the building gave me great pride, and hosting my clients, colleagues and friends was sublime. It is hard to believe that 6 more years have passed since we moved in, and I hope we continue for 10 more. Since locating to our downtown office, I have played a more meaningful role in my community, joining business associations and assisting small, local businesses and artists, entertainers and athletes, with their legal services needs.

Someone once told me, that if you take care of your firm for 10 years, it will take care of you! I hope that is true because I love to wake up every day, fulfilling my dream of being the boss, while enabling the many strong, smart, and creative people of our city to run their companies as they see fit, or to help a client secure IP rights to a property dear to them, or to support screenwriters as they bravely face rejection, or to close distribution deals for brand new movies!

I hope, after reading this blog, you will subscribe to our newsletter to stay connected. My social media team keeps telling me to make more videos, and I will, so having you in my network will make sure that you see my videos, for better or for worse (this coming from someone happy behind the mic with headphones, not in front of a screen!). And if you happen to be on the Atlanta BeltLine® trail, look us up! Or better, schedule a Discovery Call (FREE) to meet us before booking your consultation to get our legal advice. I hope we offer the solutions you need to pursue the American dream of freedom and independence! A HUGE thanks to every person who has made this journey so very special, thank YOU. 🤗

The post Celebrating 10 Years: My Small Business Journey appeared first on Morin Legal.

This will alter the way we create contracts and will change the circumstances that are facing lots of small businesses using independent contractors currently to meet their deadlines and to do business. 

Many companies in the entertainment sphere are dependent on independent contractors, so let’s talk about what that means. 

In 1989, the Supreme Court determined a case called Community for Creative Non-Violence v Reid. This was a copyright ownership case, but to determine the ownership of the copyright, the court looked at whether the individual was an employee or an independent contractor. And that was important because under the copyright definitions under Title 17, section 101, at the very, very bottom of the list under “W” for “Work Made For Hire,” you will see there are only two circumstances which require that to apply. And the first is being an employee. 

The court was interested in what determines employment versus independent contractor status, and therefore what determines whether the individual owned their copyright or if the employer owned the copyright by virtue of the employer-employee relationship. 

The 10 factors the court considered

The legal precedent that was issued under this case named 10 factors, and they’re what we call a “totality of the circumstances test,” meaning no one factor carries more weight over the others (although some courts might disagree with that position):

1. The sources and the instrumentalities of the tools.
2. The location of the work. 
3. The duration of the relationship between the parties.
4. Whether the hiring party has the right to assign additional projects to the hired party. 
5. The extent of the hired party’s discretion over when and how long to work.
6. Their method of payment. 
7. The hired party’s role in hiring and paying assistance. 
8. Whether this work is part of the regular business provided by the hiring party. 
9. The provision of benefits, employee benefits.
10. The tax treatment of the hired party. 

What does this mean for us now?

Last fall, the U.S. Department of Labor published a Notice of Proposed Rulemaking (NPRM), inviting the public to comment on their decision to bring the classification of independent contractors more in line with the definitions under the Fair Labor Standards Act (FLSA), which is the labor statute that applies to wage earners. 

Their proposal is to rescind the rule and replace it with a new way of defining independent contractors. 

Why are they doing this? 

The misclassification of independent contractors versus employees is a very serious issue. 

If one is misclassified as an independent contractor when they are an employee, they’re denied certain benefits and protections under the Fair Labor Standards Act, like minimum wage, overtime pay, and other protections. 

It also affects a wide range of workers, usually more vulnerable workers in home care, janitorial services, trucking, delivery, construction, personal services, hospitality, and restaurant industries, among others. Furthermore, misclassification allows certain employers who are heavily reliant on independent contractors to gain an unfair advantage over law-abiding businesses, which hurts the economy at large. 

What’s the economic reality test?

The economic reality test proposed by the Department of Labor provides five factors that were issued under the Supreme Court decision back in 1989. 

5 Factors from the Economic Reality Test:

1. The opportunity for profit or loss depending on managerial skill.
   If you are a worker and you earn the same paycheck every other week or every week or every month, you really don’t have a chance to change your profit or loss. Maybe you don’t even exercise any managerial control over your own actions, then it’s probably more likely that person is an employee than an independent contractor. Independent contractors are more entrepreneurial in nature. They manage themselves, and they also have an opportunity to create profits and losses depending on their activities.
   
   
2. Investments by the worker and the employer.
   This also parlays into number one, because an investment made by the worker, whether in equipment or tools for the job, like a hard hat or steel toe shoes or a crescent wrench, doesn’t necessarily mean that you’re an independent contractor; it could mean you’re an employee, so that’s not quite determinative.
   
   However, if you’re a worker making investments into your company in the form of capital or some more substantial investment to run the business, it’s more likely that you are in business for yourself and an independent contractor.
3. The degree of permanence of the work relationship.
   If you are a seasonal worker, that does not necessarily mean because you’re not there all year that you’re an independent contractor. But if you’re doing a job and say it has a definite start and a definite finish, it is more likely that you’re an independent contractor than an employee who has an indefinite period of employment or in Georgia, an at-will employment state.
4. The extent to which the work performed is an integral part of the business.
   That worker who is performing work that is integral and critical to the business is more likely an employee, whereas an independent contractor will be performing work that is not necessarily integral, but perhaps is a specialist, complimenting the routine affairs of the business.
   
   
5. Independent contractors have special skills.
   They take initiative in areas where the worker does not necessarily. Workers are more dependent upon employers for training to acquire skills, whereas independent contractors bring special skills to the table and do not require job training by the employer to perform their hired task.

The economic reality test asks two questions:

• Are you in business for yourself? 
• Are you economically dependent on your employer? 

Consulting Agreement Key Terms

What’s in a contract? Here’s a breakdown of some key terms:

Parties

Who are the parties to the agreement? 

Services

What is the nature of the work? What is the job being performed? 

Compensation

What is the payment for the work being provided? How is that structured? 

Did You Know?
Many independent contractors use what we call loan-out corporations, which can take the form of an LLC, or something similar. This is a very strong indication of an independent contractor as opposed to a worker.

Ownership

If someone is not your employee, then there’s worry over product ownership. Who owns the work that is produced, the independent contractor/employee or the company? It may include moral rights depending on the nature of the work being provided.

Control

Independent contractors generally decide when they’re going to work, and what they’re going to work on. In contrast, employees are required to submit to hours, given by the employer, and meet at locations and times set by the employer. The employer may have further controls over how the employee performs their tasks, in line with policies, whereas the independent contractor may have its own standards to which it adheres.

Confidentiality

Preserves trade secrets. Many independent contractors have more than one job. Because you have access to information that might not be public, confidentiality is something hiring parties look to when they’re hiring independent contractors.

The “Nons”

The non-compete, non-solicitation, and non-disparagement.

• Non-compete agreements***: Reduce competition and prevent the spread of trade secrets. ***The FTC is currently contemplating eliminating non-compete agreements.
• Non-solicitation agreements: Prohibits an employee from soliciting an employer’s clientele after they no longer work for that employer.
• Non-disparagement agreements: States you won’t speak negatively about a company or its products/services.

Reps, Warranties, and Indemnities

They go together like carrots and peas because they function as symbiotic ingredients.

• Representations: alleged facts, or material representations you make to enter into an agreement that other persons are depending upon.
• Warranties: promises of a level of conduct you’ll perform.
• Indemnities: in the event you misrepresented a fact or deviated from warranties, serve to protect the non-breaching party from any legal action.

Term and Termination

Term is a finite period. It’s not indefinite. So you’re going to want to know when your job starts, where your job is, and where it ends. Knowing how the job ends, what may cause a premature ending, and the effects of ending early, are in termination.

Liabilities, remedies, and the usual boilerplate.

Learn more about key terms in our Contracts 101 Masterclass here.

What’s An Employer-Employee Relationship/Agreement?

The employer-employee relationship is governed by a few key statutes:

1. Title 17 – Copyright Law (1976, as amended)

A federal statute that governs ownership of the results and the proceeds of your work.

The results and proceeds of one’s work are by default in favor of the employer so long as there is an employer-employee relationship between the parties. An example of an agreement which may reference this statute is an invention disclosure agreement that governs the ownership of the work product that you provide for your employer.

2. The Fair Labor Standards Act

Another federal statute which distinguishes between exempt and non-exempt workers. The importance of that distinction is that non-exempt workers benefit from provisions under this act, including earning a minimum wage with overtime pay and other benefits.

3. National Labor Relations Act Statute

This is a third federal statute which created the National Labor Relations Board (NLRB), which helps facilitate conversations amongst workers, whether to elect to organize and join a union.

The Federal Trade Commission

The Federal Trade Commission (FTC) is the agency that has proposed the rule banning non-competes in employer agreements.

They also solicited comments from the public on the proposed rule to ban non-competes. Proponents of the rule believe there is some dubious authority by the FTC over certain entities, and in particular, over non-profit corporations since the FTC allegedly only has jurisdiction over for-profit companies.

The proposed rule will be challenged by people who challenge that authority. People who have been studying this rule have said this rulemaking is part of a broader trend that began around 2014 and really just rose to a fever pitch of late.

What happens next?

The FTC is either going to finalize or revise their proposed rule. 

Currently in front of Congress are two laws that summarize the aspects of the proposed FTC rule:

1. The Workforce Mobility Act: Contains aspects of the proposed FTC rule banning non-competes with certain exclusions for certain workers.
2. The Freedom to Compete Act: Eliminates non-competes for non-exempt workers, which are more skills, less knowledge-based workers.

Employee Agreement Examples

• Invention Disclosure Agreement or otherwise, an Ownership Agreement on work product on the results and proceeds of workers.
• Confidentiality Agreements can be particularly detailed and are signed usually at the moment the relationship is engaged or you are hired.

Note for employers: Ensure your policies meet the latest rules and regulations.

To work with Morin Legal for your small business’ employer and employee agreement needs, reach out to (404) 800-5568 for a courtesy discovery call. 

The post Employment Agreements: Independent Contractors, Employers/Employees appeared first on Morin Legal.

“What’s in a name? That which we call a rose/ By any other name would smell as sweet.” – “Romeo and Juliet,” William Shakespeare

When Juliet utters these words to her Romeo, it is because she is questioning naming conventions. I did the same as I sat in the audience at the Jimmy Carter Presidential Library and Museum in 2004 for the premiere of the motion picture, Iron Jawed Angels. Starring Hilary Swank and Patrick Dempsey, the film traces the path of the first suffragettes and the men, who helped bring women the right to vote in 1919 under then-president Woodrow Wilson.

Passed by Congress on June 4, 1919, and ratified on August 18, 1920, the 19th amendment granted women the right to vote. The 19th amendment legally guarantees American women the right to vote. Achieving this milestone required a lengthy and difficult struggle—victory took decades of agitation and protest. Iron Jawed Angels demonstrates this agitation and protest. 

After the film, women in attendance from the American Association of University Women (AAUW) gathered at the podium to read aloud statistics that were upsetting and depressing, even in the 21st century. They illustrated the pay gaps in wages for women with various degrees and careers. I was so shocked and upset by this data; it took me a while to process. 

How could my generation that challenged the status quo, not challenge the pay gap also? What could I do to perhaps shorten that gap, as I was a wage earner then in corporate America? I stopped using my first name and began using my middle name, which is spelled L-E-E, a form of masculine spelling, which my parents gave me on my birth certificate, instead.  

My colleagues had mixed feelings; one was flustered that she would be learning a new name for calling me. Others were quite comfortable with the switch. I was 27 years old. I kept using my middle name for the next 20 years, long after that job ended, and I started my law firm, which is now celebrating 10 years of supporting small businesses, artists, and entertainers.

According to the Pew Research Center, the gender gap in pay has remained relatively stable in the U.S. over these same 20 years. In 2022, women earned an average of 82% of what men earned, according to a new Pew Research Center analysis of median hourly earnings of both full- and part-time workers. In 2002, women earned 80% as much as men.

Now that I am the boss, I choose how to value my worth and work. I do not regret switching to my middle name for business; many colleagues in the entertainment industry use other names. I use my “lawyer name” for work; personal friends and family use my first name. It has a nice separation of work/life – a hidden benefit to having decided, decades ago, to make the switch.

So I ask you the same question William Shakespeare once asked, “What’s in a name?” 

The post When Girls Use a Masculine Name in Business appeared first on Morin Legal.

A question that pops up frequently in our small business practice is the distinction between tax status and legal status. Let’s dive in.

What’s a Legal Status?

When we’re referring to legal status we mean that sole proprietorship and general partnership are both situations where the individual and the business are regarded as one and the same. 

The legal status essentially is that of the individual. That’s what it means when you have unlimited personal risk of liability exposure. So the legal status that we’re referring to in this context is really with respect to business entities and to registered entities.

If you missed our LinkedIn live about Business Registrations: Partnerships, Corporations, & LLCs, watch the replay here.

Legal status essentially is in relation to the form that business entities take, and in specific registered entities such as the three basic formations: the corporation, the limited liability company (or LLC,) and the limited partnership. Limited partnerships are comprised of at least one general partner (which may be another entity) and a series of limited partners. 

The formation of the registered entity is a way of stating who the managers are, how the company operates, and who the owners are, or who is in control of the company. Those are two distinct roles and they’re often expressed in different ways within the structure of the corporation, the limited liability company, and the limited partnership. 

In short, the legal status is the ownership structure and how company operations execute. 

What’s a Tax Status?

In contrast, the tax status of a company is just one small aspect of the company, whereas the legal status provides the foundation. Tax status is just how one administrative agency regards business entities. We’re talking about the IRS and various state tax entities in each respective state like in Georgia, it is the Department of Revenue. 

Your business entity’s tax status is how your business income will be regarded when you’re filing tax returns. There are a few ways that you might elect to be regarded. There’s obviously default elections that are automatically selected when you file your returns versus when you are filling out a form to affirmatively elect a new tax status, which is another option that you have. 

The default election is to be disregarded for the sole proprietorship and the partnerships, which disregarded means that for tax purposes, your business status is disregarded. So the income, profit or losses are regarded as against your individual and not a business tax return. That’s the default tax status as a sole proprietorship or as a partner in a general partnership. 

Another way that the IRS regards you is pass-through, which means that the income passes through to the individual or the partner, schedule. Instead of paying corporate tax, you are paying at the individual rate on wages, or the dividend rate as a business owner on profit distributions. The most popular example is the S-corp election. Again, this is a tax status, not a legal status. So what’s interesting about that is since they work in tandem, you can have for example, an LLC (which can be one or more persons) that is taxed as an S corporation.

That reduces the individual income tax to only what your reasonable salary might be. Certainly, there are regulations about that which you can discuss with an attorney about changing your tax status. If you haven’t done that yet and you’re interested in talking about switching to an S-corp tax status then that’s a discussion and decision that we can help you with at Morin Legal.

The last tax status everyone’s familiar with is the corporate tax. That’s infamous because nobody likes to pay more tax than they have to, but corporations are double-taxed! This is because you pay the corporate tax, then your individual income tax on your paycheck, and finally, any dividend tax on profit distributions for shareholders is accounted for. 

It appears with its double-taxation to be an onerous tax structure, but why use corporations? Most of the time it’s to raise capital. Fundraising in S corporations is tricky because there’s only one form of stock, common stock. When you’re raising funds, you don’t always want to share your management and control with your fundraising partners. You might want to make all the creative and business decisions, but that stock structure would not permit that. Furthermore you might want to invite investors that are not U.S. citizens or natural persons and who might be foreign investors, business entities or institutions, which cannot invest in an S-corp.

So there are reasons people pay the double tax with a corporation (or individual income tax under an LLC), but certainly whatever tax status is right for you is a personal and professional decision that you want to make with the advice of a small business counselor and your CPA. 

Contracts are extensive, but we’ve outlined the basics for you to better understand them.

Contracts Masterclass

To better understand the tenets about contracts, we’re breaking down the nature of the practice, which for us is mostly transactional and involves either some type of intellectual property rights based in copyright law, trademark law, or some type of personal rights. 

Top 10 Aspects of a Basic Transactional Contract

1. Key Terms

Key terms to any contract include the identity of the parties to the contract, and that can be really important depending on how you want to be taxed for the income you receive or expenses you pay in the contract. 

The subject of the contract, the consideration to be paid in the contract (which can include compensation but doesn’t have to), the term or period during which the contract should apply, and the territory in which the contract applies are also key terms. Contracts are guidelines to behavior in which parties agree to a certain course of conduct of doing business. 

If you verbally agree to the key terms and depending on the nature of the agreement, you may have a binding agreement just verbally on reaching those key terms. Consult an attorney if you’re not really sure if you’ve reached a binding agreement. 

2. Rights (Property/Personal)

In the rights section of each Contract, there’s a provision discussing the rights to be transacted. The rights might either be based in intellectual property law, in some aspect of copyright law, trademark law, trade secrets, or personal rights, including commercialization of the person’s identity, including the name, image and likeness, and so forth. Celebrity endorsements fall under this category, as well as other types of merchandising or otherwise licensing agreements. 

3. Confidentiality/NDA

In doing business with another party, you might get access to information that might not otherwise be publicly available, but be necessary for performing the agreement. The parties agree that sharing such information will be done under certain conditions outlined usually in some section related to confidentiality. Those provisions are normally in the chief agreement. 

Another way of looking at these sections is in the context of non-disclosure agreements or NDAs. Usually you’ll enter into something like this prior to entering into a longer form or even a short-form agreement. The functionality of these agreements is to maintain disclosures to a minimum in order to perform the agreement and protect against any future disclosures.

4. Representations, Warranties, & Indemnities

I like to tell my clients that representations, warranties, and indemnities go together like carrots and peas because they function as symbiotic ingredients.

• Representations are alleged facts, or material representations that you make in order to enter into an agreement that other persons are depending upon.
• Warranties are promises of a certain quality or level of conduct that you will perform.
• Indemnities are there in the event you have misrepresented a fact or acted to deviate from your conduct, and serve to protect the non-breaching party from any legal action. 

You’ll see reps, warranties, and indemnities usually go in that order in an agreement, sometimes mutually by both parties. Depending on the type of agreement, there might be more reps on one side than the other. Again, consulting a lawyer on this is essential if you’re going to understand what you’re actually agreeing to. 

5. Remedies (Notice/Cure)

What happens if somebody doesn’t perform and suddenly they’re in what we call breach? A notice and cure provision is extremely helpful because it keeps you from having to go to court right away to enforce an agreement. It essentially means you’re letting the person know they’re not performing up to what they agreed to, and they have maybe 2 weeks to cure the conduct. 

Certainly that is one tool in the toolbox that is great to exercise. Maybe it was an innocent or accidental breach, like for mispayment or misfiring of a check. Needless to say, it’s one step before having to go into the next bit, which is considering the effect of breach or termination. 

6. Termination

I always tell clients to never get into an agreement you cannot get out of. Look for the termination conditions and what the effects of termination are. 

• Do you have to give back documents? 
• Are the materials you create frozen in the process? 
• What type of agreement really determines what the effect of termination is? 

It’s always good to see that you have a paragraph related to termination or otherwise an exit from the contract. If you do not understand the steps of exiting the agreement, then please consult with a lawyer to make sure you understand how to navigate the process.

7. Alternative Dispute Resolution (ADR)

Alternative Dispute Resolution (ADR) is an inexpensive and effective way of resolving business disputes. If the person doesn’t cure their conduct, you may then start with basic negotiation on the side of either party through their authorized representatives. 

If that doesn’t work out, you may proceed into mediation, and after that, arbitration. Litigation, depending on where the forum is, can be expensive and time consuming. Our firm does not litigate disputes (yet). We would send clients externally to a litigation and trial practice. ADR is great in trying to take baby steps to prevent more expensive “dispute resolution.”

8. Choice of Law/Forum

Choice of Law/Forum is important if you are going to have to settle your problems under the contract. 

Some contracts say, “Listen, we know that you’re in Georgia, but the choice of law in this contract is gonna be California or New York.” 

And guess what? 

That’s where the forum will be. So that’s where you’ll have to travel if you have to enter any mediation or arbitration.

That’s something just to be aware of when you’re making those tiny selections. If the worst should happen, what are the consequences and what are the costs involved? Keep some type of business reserves on hand for that. 

9. Boilerplate

Boilerplate is on every contract. We like to think of it as one giant paragraph. You see it very often where people just smash together a bunch of what seem like sentence fragments, but really they boil down to a science that probably only lawyers speak. 

It’s a paragraph talking about how this is the entire agreement. There’s no other agreement that applies. All of your intentions are reflected in this one single document. That’s something we call a merger agreement. It also provides a mechanism for if the parties want to amend or change their terms, or if somebody waives their rights to enforcement or to something else that they’re not agreeing to a future waiver. It further says if terms are illegal or impossible to perform, we can sever them from the agreement and not destroy the contract. 

There are other sections in the boilerplate on headings and counterparts if you’re signing two different originals in different areas, which brings us to our last point…

10. Signatures

You can electronically sign documents in the transactional space, with the exception solely of affidavits, which need to be notarized. Otherwise, electronic signatures have served us well in the contract world for transactional agreements.

Have questions about a legal status, tax status, or contracts? Reach out to Morin Legal at +1 (404) 800-5568 if you’re looking for an attorney’s assistance.

Selling the American dream of freedom and independence to small business owners since 2013. ™

The post Legal Status, Tax Status, & Contracts 101 appeared first on Morin Legal.

What Are Trade Secrets?

Oxford dictionary defines trade secrets as: A secret device or technique used by a company in manufacturing its products. To dive in deeper, trade secrets are intellectual properties (IP) that include formulas, practices, processes, designs, instruments, patterns, or compilations of information that have inherent economic or pecuniary value. They are not known by the general public and are not readily ascertainable by others. The owner of this type of IP typically will take reasonable action to keep it a secret. 

The 3 main components of a trade secret are as follows:

1. It is confidential information.
2. It has economic value because it is unknown to others.
3. Its owner has made reasonable efforts to keep it secret.

In general, trade secret protection grants owners the right to prevent the information from being disclosed, taken, or used by others without the owner’s consent. 

What Is Trade Secret Theft?

Trade secret theft occurs when someone knowingly steals or unfairly takes a trade secret to the economic benefit of anyone other than the original owner. These thieves can be from both inside and outside of the organization that they steal from. 

5 Steps To Protect Trade Secrets

Did you know that one 64GB flash drive can hold approximately 4 million pages? It would take an 18-wheeler to carry the physical copies, but a pocket-sized flash drive can be used to whisk away 4 million pages worth of company secrets. It’s that easy and that’s why it is so important to protect your trade secrets. The U.S. Patent and Trademark Office estimates $250 billion in losses due to trade secret theft. 

Typically, you need to protect your IP from these 3 parties:

• Thieves – They want to take your intellectual property for personal gain.
• Competitors – They want your intellectual property to outdo or compete with you.
• Adversaries – They want your intellectual property for the purpose of putting you out of business.

To protect yourself and your business against trade secret theft, implement these 5 steps.

1. Register the copyright, trademark, or patent for your IP
2. Protect your IP from within the business
3. Limit access to IP (both physical and digital)
4. Identify and assess risks
5. Train employees & vendors as needed

Copyright, Trademark, or Patent Your IP

Depending on what type of intellectual property you have created, it will most likely need to be protected in one of 3 ways, or a combination: a trademark, a patent, and/or a copyright. For example, computer software is eligible for copyright protection because it is text; however some believe to keep it confidential it should remain a trade secret, while certain versions of code may express novel processes that arise to the level of patent protection.

Protecting your intellectual property prevents anyone from using it without your knowledge and permission. It also creates a presumption (in Latin, prima facie) of ownership, and that you are compensated properly for your work.

Trade secrets, if protected by a patent, are no longer a secret after they publish and/or grant. Patents protect novel inventions that are non-obvious to one skilled in the art. Inventions can be anything with a utilitarian or functional purpose: from a machine to a hybrid plant to chemical compositions to business methods.

A patent will grant you the right to produce your invention without the worry of competitors replicating it for the duration of the patent’s protection. 

More examples of what a patent will protect are phone applications, pharmaceuticals, engines, and even plants. 

There are 3 different types of patents: 

• Utility patents
• Design patents
• Plant patents

In basic terms, utility patents protect a new or improved process, machine, or composition. Plant patents protect asexually reproducible plants and new plant characteristics. Design patents protect unique looks or designs, for example, the curvy structure of a Volkswagen Beetle or women’s underwear. 

Learn more about patents, trademarks, and copyright here. 

Protect Your IP From Within the Business

The first line of defense against trade secret theft is confidentiality and non-disclosure agreements (NDAs) with employees, business partners, and anyone else who has access to the IP. 

Policies and procedures should be in place to support confidentiality and they need to be followed consistently.

PatientPoint health information services lost a case against a former employee who used information he had access to help a competitor. They had not asked for an NDA until one year into his employment and hadn’t asked him to return his laptop until six months after his termination. Therefore, PatientPoint hadn’t taken “reasonable steps” to secure its trade secrets. 

Limit Access to IP (Both Physical and Digital)

It is vital to have security for both physical and digital intellectual property. More and more, courts are requiring it, ruling that if the information is deemed secret, the company must take action to implement physical and electronic access restrictions.   

The information technology security system should also be regularly assessed and updated. 

Identify and Assess Risks

Make sure you, first, identify what information should be kept confidential. Trade secrets should be documented internally. Once the trade secrets have been identified, risk assessments should be run to determine what information is at risk, is most vulnerable, and could do the most damage in the event it was stolen. Are there particular departments within the company that are more at risk, such as salespersons with access to customer lists, vendors, and other third parties valuable to the business? Make sure measures are taken to better secure those areas. 

Train Employees & Vendors As Needed

Both third parties and employees should be trained so that they know exactly what is expected of them when handling Confidential Information. Companies that fail to inform their employees what is and isn’t confidential in their training have been known to lose cases against employees who have stolen trade secrets.  

How Morin Legal Can Help You

Morin Legal has 18 years of experience in intellectual property (IP) law. Of that, we have ten years of experience in United States trademarks, copyrights, and trade secrets. Coupled with a background in patents and working relationships with a global network of IP attorneys, we identify your ideas, creations, and brands and develop a strategy to help you to fiercely protect them. 

We also offer guidance for developing and maintaining a portfolio of your intellectual property assets for the long-term success of your estate.

We offer copyright, trademark, and trade secret IP legal services as well as guide you in how to develop and maintain an IP portfolio.

Learn more and book a discovery call with Morin Legal today.

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