Spross & Associates, PLLC

What is the difference between ® and ™?

Everyone has seen them.  They are the ® and ™.  Just look on a can of Coke and you will see multiple ®.  Many times a newer product with have the ™.

 

The ® is known as a registered trademark.  It is used for a trademark that has been registered with the United States Patent and Trademark (“PTO”) office.  There is a process that involves filing a trademark application with the PTO.  When the application is approved, the use of the ® symbol may begin.

 

The ™ is used for an unregistered trademark.  This is used to denote common law protection of a trademark.  A trademark owner does not have to register their trademarks, but may rely on common law protection.  If someone has a trademark that they want protected they can use the ™ after the name.  For instance, we use the ™ for our trademark Diamond Docs™.

 

There are a couple of advantages to obtaining a registered trademark.  Among these are the following:

 

·         The ability to bring a lawsuit in federal court

·         A legal presumption of ownership in the trademark

 

One disadvantage of trademark registration is the cost of the application process.

S Elections

Typically, the income of a corporation is taxed to the corporation itself.  This can lead to double taxation.  For instance, if you own all of the shares of a corporation, the corporation would be taxed at the corporate tax rate and then any distributions to you would be taxed as individual income. 

 

This leads to the S Election.  All of the owners of a corporation may make what is called an S Election with the IRS on Form 2553.  In general, an S Election allows the income of an S corporation to be taxed to the company’s shareholders instead of the corporation.

 

There are multiple restrictions on S Elections, a couple of which are that you cannot have more than one class of shares, you can not have any foreign owners of the company and you must have less than 100 shareholders.

Do You Need a new EIN on Conversion from an LLC to an S-Corp

When you convert an LLC to an S-Corp, you do not need a new FEIN; however, the Internal Revenue Service does need to know about it.  You will need to file a new Form 2553 making the S election.  Note: this is not tax or legal advice.

Converting from a LLC to a Corporation in Texas

In order to convert from a LLC to a corporation in Texas, you must file a Certificate of Conversion.  As part of that Certificate of Conversion, you must attach a new Certificate of Formation.  Here is where it gets a little tricky.  Trick #1: the Certificate of Formation must contain a statement that says the new entity is being formed subject to a Plan of Conversion which is on file at the address of the entity.  This means there must be a Plan of Conversion in the corporate books.  Trick #2: the Certificate of Formation must have the name, state of incorporation, organizational form and date of incorporation of the converting entity.  As always, you should seek legal counsel when converting an entity.

Conflicts of Laws Provisions

Everyone has seen it in their contracts and wondered what it means.  It is always in the miscellaneous section at the end of agreements.  It usually says something like, “without regard to the conflicts of law provisions therein.”  The full text is “This Agreement shall be governed by the laws of the State of Texas, without regard to the conflicts of laws provisions therein.”  Why is it included?

 

This provision is used to take interpretation of an agreement outside of the state law where a cause of action occurs.  For instance, if you have an agreement with a company that is in California there could be a cause of action that arises in California.  However, you want the laws of Texas to apply.  You have added a “choice of law” provision for that very reason.  Unfortunately, most states have a rule that says the law of the state where the cause of action arose governs that cause of action.  This would mean that if the cause of action happened in California, even if you said you wanted Texas law to apply, Texas law would point back to California.  By adding the “without regard to the conflicts of law provision” we are able to negate the Texas law that points back to California.  That is why most choice of law provisions contain the described clause and you should think about verifying that yours does too.

Things to Keep in Mind for Blog Postings

Below is a short list of items that you should keep in mind when making corporate blog postings.

• Postings must NOT contain any confidential or proprietary information.
• Postings must be truthful and accurate.
• Postings must not contain any forward looking statements or other marketing/PR material that has not been approved for release.
• Ensure accuracy of your information before posting.  If necessary, have an additional person review the information.
• Write your posts in a way that is easy to read.  Use conversational style, but be sensitive to the ability of other cultures to understand idioms and pop culture references.
• Be professional and courteous at all times in both language and manner.

Why Should Lawyers Review Press Releases?

It’s a good idea to have legal counsel review all press releases, including third party press releases where you are quoted, prior to their public issuance.  Why?  There are several “hidden dangers” that could come back to haunt you later, in the form of a lawsuit or loss of goodwill for your company.

 

So what do lawyers look for in reviewing a press release?  First, a sweep of the press release for trademark and branding inaccuracies is a good idea.  Each trademark or brand should have the appropriate trademark symbol and identifying noun, and be used correctly (i.e. as an adjective, rather than a noun, not used in the possessive, etc.).  This will help preserve your trademarks and brands as valuable corporate assets.

 

Next, lawyers focus on substantiation of claims made in the press release and avoiding misleading statements.  The rationale for this type of review is that consumers don’t have the resources to conduct the necessary tests or investigations to determine whether a claim is true, so the burden is placed on the company making the claim.

 

The press release is also reviewed for comparative advertising claims.  This is important because there are particular guidelines to follow when comparing competing products.  And, in some countries, comparative advertising is illegal (for instance much of

Asia

).

 

The bottom line: share your good news with the public while protecting your company’s assets and goodwill.