business ppt

Best Practices For Best Practices For The Growing The Growing

BusinessBusiness

The material provided herein is for informational purposes only and is not intended as legal advice or

counsel.

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Please help yourself to food and drinksPlease let us know if the room temperature is too hot or coldBathrooms are located past the reception desk on the rightPlease turn OFF your cell phonesPlease complete and return surveys at the end of the seminar

Corporate Maintenance, Corporate Maintenance, Tune Up and Succession Tune Up and Succession

PlanningPlanning

Stefanie McNamara

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I.I. Observing FormalitiesObserving Formalities1. Governing Bodies

• Shareholders/Members• Board of Directors/Managers• Officers

2. Documenting Corporate Action• Authorizing Resolutions• Delegations of Authority for Officers/Key Employees

3. Meetings• Annual/Periodic Meetings

4. Proper Record Keeping• Minute Book/Stock Ledger

5. File Annual Report With Department of Treasury

Note: These Requirements Apply to All Entities Regardless of

Size/Number Failure to Comply Creates Risk of Losing Corporate Shield

From Individual Liability

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II. Contract Trouble II. Contract Trouble SpotsSpots

• Indemnification• Warranty• Ownership of IP• Assignment• Term and Termination• Restrictive Covenants

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III. Corporate Succession III. Corporate Succession PlanningPlanning

Shareholder (Operating) Agreements• Restrictions on transfer or issuance of

stock/equity• Buy/Sell Provisions

Voluntary sales to third parties Upon death/retirement/termination/divorce Planning your exit strategy Planning for your partner’s exit Estate Planning

• Funding – Key Person Life Insurance; Disability

Insurance for the Growing Insurance for the Growing Business - and BeyondBusiness - and Beyond

Charles Miller

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Risk Management Risk Management AreasAreas

1. Liability Loss Exposures2. Income Loss Exposures3. Property Loss Exposures4. People Loss Exposures

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Liability Loss ExposuresLiability Loss Exposures

1. Commercial General Liability Insurance

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1. Commercial General 1. Commercial General Liability Insurance Liability Insurance

• Cover bodily injury and property damage claims

• Excludes coverage for employment practices claims

• Exclude coverage for professional liability claims

• Exclude coverage for pollution claims• How much?

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2. Commercial Auto Insurance

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2. Commercial Auto 2. Commercial Auto InsuranceInsurance

• Covers vehicles used by business• Both property damage and liability

coverage

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2. Commercial Auto Insurance3. Professional Liability/Errors and

Omissions Insurance

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3. Professional 3. Professional Liability/Errors Liability/Errors and Omissions and Omissions

InsuranceInsurance• Covers claims arising out providing

professional services• Covers financial loss• Excluded from coverage under CGL

policies

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2. Commercial Auto Insurance3. Professional Liability/Errors and

Omissions Insurance4. Employment Practices/Employers

Liability Insurance

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4. Employment 4. Employment Practices/Employers Practices/Employers Liability InsuranceLiability Insurance

• Discrimination• Wrongful termination• Sexual harassment

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1. Commercial General Liability Insurance2. Commercial Auto Insurance3. Professional Liability/Errors and

Omissions Insurance4. Employment Practices/Employers

Liability Insurance5. Business/Profession Specific Liability

Insurance??

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Income Loss ExposuresIncome Loss Exposures

1. Business Interruption Insurance

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1. Business 1. Business Interruption/Extra Interruption/Extra Expense InsuranceExpense Insurance

• Covers lost cash flow and profits• Often part of property insurance

coverage

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1. Business Interruption Insurance2. Workers Compensation Insurance

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2. Workers Compensation 2. Workers Compensation InsuranceInsurance

• Covers job-related injuries • Mandatory for most employers

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1. Business Interruption Insurance2. Workers Compensation Insurance3. Disability/Life Insurance

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3. Disability/Life 3. Disability/Life InsuranceInsurance

• Disability Insurance• Life Insurance

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Property Loss Property Loss ExposuresExposures

1. Business Property Insurance

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1. Business Property 1. Business Property InsuranceInsurance

• Covers business real and personal property

• Business auto (property damage)• Inland marine Insurance

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People Loss ExposuresPeople Loss Exposures

1. Workers Compensation Insurance2. Medical Insurance3. Business Continuity Insurance

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3. Business Continuity 3. Business Continuity InsuranceInsurance

1. Life/Disability Insurance

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Life InsuranceLife Insurance

1. Buy-sell agreement - set up by Owners.

2. Life insurance - fund the buy-sell.

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3. Business Continuity 3. Business Continuity InsuranceInsurance

1. Life/Disability Insurance2. Key Person Insurance

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Key Person InsuranceKey Person Insurance

Why?

To compensate the business for its losses and to facilitate business continuity when that key person is lost to the business.

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Key Person InsuranceKey Person InsuranceWho?

Death or disability would be a financial detriment to the company

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““Do I Have Enough Do I Have Enough Insurance?”Insurance?”

Let’s talk!

Questions & Answers Questions & Answers SessionSessionPart 1Part 1

Seminar IntermissionSeminar Intermission

No Excuses! No Surprises!No Excuses! No Surprises!Employee Handbooks and Employee Handbooks and

Employment PoliciesEmployment Policies

Pat Collins

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Key Practical IssuesKey Practical Issues

• Who is covered– Location– Status– Union/Non-Union– Salaried/Hourly

• What is covered– Are these your policies in practice

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Key Practical IssuesKey Practical Issues

• Drafting– Conversational – Non -Threatening– Avoid Legalese– Consistency

• Terminology• Conflicting policies

• Distribution– Format (hard copy – intranet)– Time to Review– Acknowledgement of Receipt

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Key Legal IssuesKey Legal Issues

• EEO – Discrimination Prohibited• Anti-Harassment• Employment At-Will• Benefits/Payroll Administration• Privacy Expectations• Employee Contract • General Work Rules

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N.J. Law Against Discrimination N.J. Law Against Discrimination (“LAD”)(“LAD”)

N.J. Conscientious Employee N.J. Conscientious Employee Protection Act (“CEPAProtection Act (“CEPA”)”)

• Extremely liberal interpretation– Easier administrative process. No caps on damages.

• Lower Thresholds than Federal Laws• Allows Suits Against Individuals• Broader Scope of Protected Classes under LAD• CEPA “Reasonable Belief Standard”

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LAD• Applies to employers, individuals, and

“any person who aids, abets, or otherwise assists” in prohibited conduct.

• Makes it unlawful to refuse to buy from, sell to, license, contract with or provide goods or services to anyone on the basis of a protected class.

• Prohibits harassing conduct by third parties (visitors, customers, vendors).

CEPA• Applies not only to employees, but

independent contractors as well.

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EEO – Non-Discrimination EEO – Non-Discrimination – –

Anti-Harassment PoliciesAnti-Harassment Policies• Written Policy Mandatory in NJ

– Presumed negligent without one

• Training of Managers Mandatory in NJ

• Risk Losing “Employer Defense”• Employee Liability• Good Business Practice

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Employment At-Will Employment At-Will No ContractsNo Contracts

• Policy emphasized repeatedly• Introductory Disclaimer• At-Will Statement• Benefits Disclaimer• Codes of Conduct• Discipline & Termination• Signed Acknowledgement

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Benefits/Pay PracticesBenefits/Pay Practices

• Disclaimer – “The Company reserves the right to amend or terminate any of these programs and to require or increase premium contributions toward any benefit programs in its discretion.”

• Benefit Explanations• Leaves• Pay Practices

– Safe Harbor Language • Hours of Work

– Employee Classification– Overtime Policy

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Privacy ExpectationsPrivacy Expectations

• Confidentiality Issues• Conflicts of Interest• Company Property/Trade Secrets• Employee Reference Requests• Medical Information• Company Investigations

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Privacy ExpectationsPrivacy Expectations

• Drug and Alcohol Testing• Searches• Internet and Electronic Media• Social Media and Networking

– Cell phones, Blackberrys, Smartphones

– Facebook, LinkedIn, Twitter

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Employee ConductEmployee Conduct

• Codes of Conduct• Performance Reviews

– Counseling• Discipline

– Avoid progressive– Require documentation

• Termination– Commissions/Bonuses– Benefits paid– Return of property– Exit Interview

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General Work RulesGeneral Work Rules•Moonlighting •Jury Duty •Emergency Procedures

•Personnel Files •Tuition Assistance •Office Supplies/Machines

•Office Hours •Dress Codes •Mail/Telephones

•Inclement Weather •No Smoking •Media Contacts

•Comp Time •Weapons •Inventions

•Direct Deposit •Violence •Gifts

•Performance Reviews •Solicitations •Customer Relations

•Vacations •Bulletin Boards •Arrests/Convictions

•Sick Days •Radios •Garnishments

•Holidays •Layoffs •Expenses

•Safety •Resignations •Language

•Workplace Injuries •Terminations •Nepotism

•Family Leave Issues •Exit Interviews •Grievance Procedure

•Military Leave •Office Searches •Open Door Policy

•Bereavement Leave •Visitors •Interns/Trainees

Keeping Key EmployeesKeeping Key EmployeesAgreements with Employees and Non-

compete Issues – Protection of Company Assets and Retention of

TalentDavid Harmon

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Retention, Protection and Retention, Protection and EnforcementEnforcement

COMPETITION

CUSTOMERS COURTS

TRADE SECRETS,CONFIDENTIAL/PROPRIETARY

INFORMATION, FILESAND RECORDS

EMPLOYEES

COMPANY

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Take Your Employment Take Your Employment TemperatureTemperature

Ask the following questions regarding your employees and your business:

Who? What? When? Why? How?

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Ask These Questions Ask These Questions While Considering The While Considering The

Importance Of:Importance Of:• Protecting company assets and

customer relationships, retaining key employees, and safely engaging consultants.

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Who? What? When?Who? What? When?• WHO does my company need? From whom does the company need

protection and ongoing loyalty?

Executives, consultants and rank and file employees privy to trade secrets and confidential/proprietary information, including customer relationships. Protection from competitors is critical.

• WHAT can we do to keep key people and protect the company from theft of data, confidential and proprietary information and interference with employee, consulting and customer relationships? What happens when the consultant leaves or completes the engagement?

Create binding contracts that impose reasonable restrictions on activity both during and after the employment and consulting relationships.

• WHEN should this be done?

Put agreements into effect at the commencement of employment and/or consulting arrangements. Or, for employees make them concurrent with reviews and increases in compensation/benefits.

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WHY? – Just a Few WHY? – Just a Few Reasons:Reasons:

• Costs/losses incurred by companies• Increase of theft by employees during recession• Security of company assets and retention of files• Provide protection from competitors poaching

employees and theft of information and relationships

• Put your employees and the competition on notice and create right to bring claims against departing employees/consultants for breach of contract and against your competition for tortious interference with your contracts

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How? How? • Create agreements• Provide adequate consideration to

make sure the agreements are enforceable

• Create employment practices and policies that dovetail with your agreements

• Enforce those agreements

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Agreements With Agreements With Employees and Employees and

ConsultantsConsultants• Employment Agreements/Consulting Agreements (key executives, consultants)

• Confidentiality/Non-disclosure Agreements• Non-Solicitation Agreements (non-poach/raiding)

• Non-Interference Agreements• Non-Competition Agreements (reasonable in scope,

duration and geography)

• Non-Disparagement Agreements (including “no kiss and tell” covenants; no ”bad-mouthing”)

• Return of Materials Agreements • Invention Assignment Agreements (Work for Hire)

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Retention, Protection and Retention, Protection and EnforcementEnforcement

COMPETITION

CUSTOMERS COURTS

TRADE SECRETS,CONFIDENTIAL/PROPRIETARY

INFORMATION, FILESAND RECORDS

EMPLOYEES

COMPANY

Intellectual Property Intellectual Property Essentials for the Small Essentials for the Small

Business OwnerBusiness Owner

Kenneth Kaplan

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Categories of Intellectual Categories of Intellectual PropertyProperty

• Copyrights• Trademarks and Service Marks• Patents• Trade Secrets

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Copyright Law BasicsCopyright Law Basics• Protects the creative expression of ideas• Does not protect ideas• Basic legal requirements:

– Originality– Fixation

• Protection arises automatically upon fixation• You get a basket of rights:

– Make copies– Distribute work– Prepare derivative works– Perform the work

• Lasts for 70 years (for works created after 1977)

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Registration of Registration of CopyrightsCopyrights

• Registration not necessary, but gives you additional rights:– Right to sue in federal court– Ability to recover attorneys’ fees and

statutory damages

• Registration also puts potential infringers on notice

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Maintaining CopyrightsMaintaining Copyrights• Periodic checks of internet• Use copyright notice to put potential

infringers on notice and prevent them from claiming “innocent infringement”

• Proper notice:– © or “copyright” or “copyr”– Year of first publication– Name of owner– “all rights reserved”

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Trademark Law BasicsTrademark Law Basics• Trademarks distinguish your

products and services from those of your competitors

• Protects your investment in brand loyalty and good will

• Any word, symbol, slogan, logo or design may qualify for trademark protection

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Acquiring Trademark Acquiring Trademark ProtectionProtection

• Starts with the choice of a name for your business

• Continues with the way you brand your products and services

• Must be used in commerce (“use it or lose it”)

• Protection arises automatically from use in commerce (first to use takes precedence)

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Selecting and Vetting Selecting and Vetting Your TrademarksYour Trademarks

• Using the Internet• Using a public database like the

USPTO• Professional Search Companies

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Not All Trademarks are Not All Trademarks are EqualEqual• Choose a strong mark instead of a weak one

• Arbitrary marks are the strongest• Suggestive marks are the most common• Descriptive marks may put you in a grey

zone• But, you can protect a descriptive mark by:

– Establishing “secondary meaning”– Demonstrating exclusive and continuous use for 5 years

• Generic words cannot be protected

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Benefits of RegistrationBenefits of Registration

• Federal and State Registration possible• Right to use ® symbol• More damages available• Mark can become “incontestable” if

used in commerce for 5 years• You can apply for federal registration

based on an “intent to use”

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Maintaining Maintaining TrademarksTrademarks

• Marking your products and marketing materials

• Use ® for federally registered marks

• Establish policies and guidelines for use

• Policing your Marks

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Patent Law BasicsPatent Law Basics

• A monopoly on technology• Does not arise automatically – must

be filed• Can take several years to obtain and

can cost several thousand dollars• Essentially a contract between

patent holder and the government

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What Can be PatentedWhat Can be Patented

• Often said that “Anything under the sun that is made by man” can be patented

• A “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” (Title 35, section 101 of U.S. patent laws)

• Patents in U.S. can be sought for almost any kind of invention

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What Cannot be What Cannot be PatentedPatented

• Laws of nature (E=mc²)• Physical phenomena• Abstract ideas

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Types of PatentsTypes of PatentsTwo Main Types:

1. Utility Patents:– Most common– Protects a new and useful process, machine, manufacture, or composition of matter, or

any a new and useful improvement thereof– Protects what is useful about your invention

2. Design Patents:– No requirement for utility– Protects the appearance of a functional article– Covers only the nonfunctional aspects of a product design (e.g. the design of a car)– Patents protect the ornamental design of an article. Trademarks protect the public

identity of the product.

What about Business Method Patents?– Historically, “methods of doing business” were not patentable because they did not fall

into any of the four categories of invention: process, machine, manufacture or composition of matter

– Up until about 2000 the USPTO took the position that "methods of doing business” are not patentable

– Many business method patents granted in last 10 years– BMPs have been under assault in recent years and recent decisions call into question

the enforceability of many if not most BMPs issued during last 10 years

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Requirements for Requirements for PatentabilityPatentability

Invention must be useful, new and non-obvious

• Utility/Usefulness:– Usually the easiest of the 3 requirements to establish

• Novelty/Newness:– Invention cannot be patented if (1) it was described in a publication more

than one year prior to the filing date; or (2) was used publicly, or offered for sale to the public more than one year prior to the filing date.

– Inventor who does not file for patent protection on new invention within this one year grace period will lose all right to obtain patent protection on the invention.

– Most other countries do not grant a grace period. Therefore, it is almost always preferable to file a patent application before any public disclosure of the invention.

• Non-obvious– Invention must be a non-obvious improvement over prior art. – Determination is made by deciding whether the invention sought to be

patented would have been obvious "to one of ordinary skill in the art. In other words, the invention is compared to the prior art and a determination is made whether the differences in the new invention would have been obvious to a person having ordinary skill " in the type of technology used in the invention.

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What Rights Does a Patent What Rights Does a Patent Holder HaveHolder Have

• One word: “exclusivity” • Only a right to exclude others from making,

using or selling your invention• Unlike a copyright, which only protects actual

copying, patents can protect against commercial use of an idea and its functional equivalent

• Right to preclude functionally equivalent works• Doctrine of Equivalents is what makes patents

the most comprehensive form of IP protection• Design patents = 14 years• Utility patents = 20 years

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Trade Secret BasicsTrade Secret Basics• Business secrets, unlike published patents

and copyrights which are available for the world to see

• A trade secret is information that:– Derives value from not being generally known– Is the subject of efforts to maintain secrecy

• Examples:– Formulas– Marketing strategies– Research pertaining to product formulations– Specialized training materials

• Protection can last forever (unlike patents and copyrights)

• Once disclosed, protection is lost forever

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Trade Secret ProtectionTrade Secret Protection

• Protected under federal and state laws• Most states have a version of the

“Uniform Trade Secrets Act”• Federal Law: the Economic Espionage

Act of 1996: makes it a federal crime to steal a trade secret or to possess information that is known to be stolen

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Advantages over Advantages over Patent ProtectionPatent Protection

• Perpetual protection• Broader protection that can extend

to business know-how• Timely and automatic• No proof of novelty required

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Safeguarding Valuable Safeguarding Valuable Trade SecretsTrade Secrets

• Employee Confidentiality and non-compete agreements

• Customer/Vendor Non-disclosure Agreements

• Consultant work-for-hire agreements (making sure you own what you pay for)

Questions & Answers Questions & Answers SessionSessionPart 2Part 2

Thank you for coming!

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