Congratulations to Joshua Eichenstein 2017 Super Lawyer Rising Star

Cohen IP Law Group PC is proud to announce that associate Joshua Eichenstein has been named as a California Super Lawyer Rising Star for 2017.  Inclusion to the list demonstrates that Mr. Eichenstein has attained a high-degree of peer recognition and professional achievement.  To become a Super Lawyer, lawyers must go through a selection process including independent research, peer nomination and peer evaluations   Ultimately, no more than 2.5% California attorneys under the age of 40 are named to the Rising Stars list.

Blac Chyna Trademark Opposition with the Kardashians

Hollywoodlife.com recently asked us questions in an interview regarding Blac Chyna’s attempt to utilize the Kardashian name in a trademark.  It turns out the Kardashian family is not too keen on soon to be relative, Blac Chyna using the family name for business purposes. Blac Chyna is set to marry Rob Kardashian in 2017, and just recently filed an “intent-to-use” trademark application for “ANGELA RENEE KARDASHIAN” connected to advertising and entertainment services. While the trademark office (United States Patent and Trademark Office) did not have an issue with the application and issued a Notice of Publication, the various Kardashian business enterprises (Khlomoney Inc., 2Die4Kourt, and Kimsaprincess Inc) did and has filed an Notice of Opposition with Trademark Trial and Appeal Board preventing her from getting it.

While Blac Chyna will eventually become a Kardashian legally in her personally life via marriage to Rob (assuming she legally changes her name), her attempts to use the name for business is a different story. The Kardashaian clan essentially does not want her to utilize the Kardashian name in connection with any similar business endeavor that they are involved because they feel it will cause confusion and dilution of the Kardashian name. In fact, the opposition states “[Blac Chyna] is deliberately seeking to profit from the goodwill and popularity of Opposers’ KARDASHIAN Marks.” The have no less then 60 trademarks with the trademark office. In regards to her timing, while filing later after she legally changes her name would provide her with additionally support, however, it is not that significant as it did not make a difference to the trademark office as the trademark office conditionally approved her trademark.

LA Business Journal’s IP Roundtable Interview with Cohen IP Law Group

Michael Cohen of Cohen IP Law Group PC has been featured in the November 14th, 2016 edition of the Los Angeles Business Journal’s Intellectual Property & Licensing Law Roundtable, “What Businesses Need to Know”.  Mr. Cohen discussed a variety of IP issues impacting business ranging from IP protection strategies to recent Supreme Court cases.  The article can be viewed here: IP Roundtable Los Angeles Business Journal

llc vs corp

Is a LLC or Corporation Better for a Startup Company?

What type of business entity should be formed for a startup company, and which are preferred by investors, angels, or venture capitalists?  The common convention is that VCs tend not to like limited liability companies (LLCs) and prefer a C-corp over most other entity types.  Some of the reasons for that is because VCs tend to not like pass-through entities, and LLC are for the most part treated as partnership pass-through entities for tax purposes.  Further, LLCs do not allow for different classes of stock such as preferred stock (which is what most VCs require), many other instruments of ownership that corporations have.

However, the flip-side of the argument is that it may not really matter during the very early phase of a start-up.  Namely, if the start-up is not seeking VC or other substantial money early on, could an LLC be beneficial?  LLCs do tend to be easier in the early stages of a company, are flexible, and most smaller angels typically do not have a problem investing in them especially early on in the start-up’s life cycle for some of the following reasons:

  • LLCs can beneficial from a tax standpoint considering that LLCs do not have double taxation, namely they do not pay corporate level federal tax, as such they are “pass-through”.  (However, the LLC’s operation profits must be distributed each year and cannot be accumulated unlike a corporation, and most VCs favor accumulated profits to fuel growth rather than reaching to new equity.)
  • Founders, angels, and/or other investors can offset the tax loss from the LLC against their other income personally which could present a substantial tax advantage.
  • Although there are not different classes of stock, it is possible to create different classes of LLC “units” providing different types of rights and preferences attached to those units.
  • Given its flexible nature, LLCs could be a good choice if the company has a positive capital flow and will not require additional rounds of investments from others.

So it is not uncommon that the early pre-seed startup will start off as an LLC, and when the time is right, typically in order to close a deal for venturing funding, the company will convert the LLC to a C corporation, usually a Delaware C corporation.  For the most part, in regards to the legal formation of converting from the LLC to a corporation is not that difficult.  But before determining that LLCs are a good choice for the pre-seed startup, there are some other complications from a practical standpoint:

  • The new corporation will have to get a new federal employer identification number (FEIN) and will lose credit history.
  • Changes must be made that previously identified the LLC to now identify it as a corporation, such as changes to the bank, web pages, insurance policies, etc. All of which may be extremely time consuming depending upon the history of the LLC.
  • If there is existing payables or debt on the balance sheet and those obligations get assumed by the corporation, the owners of the LLC will get attributed income from the LLC’s debt forgiveness and will have to pay income tax at ordinary rates.

So while every scenario is different and while forming an LLC for a preseed start-up has its advantages, if it is clear that the start-up will be seeking additional funding in the near future, careful consideration should be given and a frank discussion with one’s tax advisor to determine if it is more beneficial to start off with a C corporation from the beginning rather than LLC and later converting it.

Cohen IP Law Group, P.C. named Trademark Infringement Law Firm of the Year in California 2016

Cohen IP Law Group, P.C. is proud to announce that it has been named as the winner of the Boutique category – Trademark Infringement Law Firm of the Year in California – 2016 by Global Law Experts (GLE)
2016 GLE ANNUAL AWARDS WINNERSwww.globallawexperts.com. Over recent months, GLE has conducted its extensive nomination and research process for the 7th Annual Global Law Experts Awards. The shortlisted candidates were judged on client testimonials, key cases, legal rankings, overall reputation, publication contributions, speaking engagements and the performance and standing of teams and individual lawyers.

During the recommendations stage GLE received over 120,000 responses from business directors, in-house legal counsel, independent law firms, high net-worth individuals, bar associations. These recommendations were combined with GLE’s own independent research in order to create a shortlist for each award category.

Defend Trade Secrets Act

The Senate and the House of Representatives passed the Defend Trade Secrets Act, a new federal law that governs intellectual property disputes. President Obama previously indicated that he will sign DTSA into law.  Previously, trade secret disputes were based only in state law, but the passage of the new federal law creates a uniform trade secret statute over all fifty states. For the first time, civil litigants may bring a claim under the Economic Espionage Act of 1996. The federal courts have the authority under the new law to issue ex parte seizure orders to prevent dissemination of a trade secret. Under the Supremacy clause in the constitution, a federal law that governs the same area as state law would preempt the state law, making it obsolete. While the DTSA expressly states that it shall not preempt any other provision of law; affirming the continuation of state laws like the California Uniform Trade Secrets Act, the DTSA does add additional layers of protection. And by using the DTSA, one can get claims heard in federal court – including not only the trade secret misappropriation claim, but also state law claims that can be lodged with it.

A major implication of the DTSA is that employers may file civil lawsuits in federal court for trade secrets misappropriation against departing employees.  Access to federal courts may lead to a streamlined approach to trade secret causes of action as they can rely on the broader discovery tools and nationwide subpoena power granted to federal courts.

On the other hand, the DTSA provides a layer of protection, namely civil and criminal immunity for employees and contractors who (1) disclose trade secrets in confidence to the government or their lawyers solely for the purpose of reporting or investigating a suspected violation of law, (2) disclose the trade secrets to their personal attorneys in connection with a lawsuit alleging retaliation for reporting a suspected violation of law, or (3) disclose or use the trade secret in any complaint or other document filed in a lawsuit, as long as they file the trade secret information under seal.

Hashtags and Trademarks

The Wall Street Journal reported today that trademark applications for hashtags increased exponentially

in 2015. Hashtags are words or phrases that are preceded by the pound symbol (“#”) to classify a topic

of conversation on social media platforms.

Social media platforms like Twitter, Instagram, and Facebook have become essential marketing tools.

Businesses routinely use hashtags as a promotional device on social media to advertise its goods and

services. For example, Nike uses hashtags for its slogans or new products, for example, #justdoit and

#LunarEpic.

The primary purpose of using a trademark is for a business to indicate a source of origin for its goods

and services to the public. Companies that use non-generic and non-descriptive hashtags on social

media would benefit from federal trademark registration in order to limit competitors from using similar

or the same words or phrases as hashtags which could confuse potential consumers.

Businesses have historically filed trademarks for slogans and taglines before the invention of social

media. The trend of filing a trademark for a hashtag is a continuation of the same concept. However, in

most scenarios, a trademarked word slogan would not need a separate registration with a hashtag for

protection. Since “likelihood of confusion” is the test for trademark infringement, Nike’s “Just Do It” is

fully protected from a competitor using “#justdoit” in social media.

Trademark applications that should include the hashtag would be in cases where the hashtag is always

attached to the word or phrase seeking protection, outside social media.

Michael N. Cohen

El Chapo and his Trademarks

Just wrapped up an interview with Noticias 62 about Joaquin “Chapo” Guzman, the notorious drug lord who was recently captured, and trademark issues related to him believe it or not.  Evidently, his family has filed for several trademark applications in Mexico throughout the years, many of which have been rejected by the Mexican Institute of Industrial Property aka the Mexican trademark office.   The rejection was based on Mexico’s trademark law that prohibits the registration of trademarks that are contrary to morality and decency, namely that El Chapo signifies a person who is wanted by the authority for committing various crimes.  However, the Mexican trademark office did allow registration for some of the applications associated with some odd goods and services like “whips and saddlery” and “Christmas trees” among others.

The US has a similar basis for rejections of trademarks that are scandalous or disparaging.  Some of the most notable recent ones are the Redskins issue which I talk about last year and I believe is still ongoing, and the “Slants” trademark which was held to be disparaging but recently overruled and allowed registration by the Federal Circuit finding that the disparagement provision in that case would violate the Slant’s, an Asian rock band, first amendment right.  But with “El Chapo” it’s a bit different because we are talking about a nickname or possible surname if he decides to file for that.  Not sure if that would be held to be scandalous if his family decides to file in the US for similar goods and services as they did in Mexico.  The USPTO hasn’t been exactly consistent about these issues, but in one case an application for “Osama Bong Loadin” was rejected because “[a]ccording to the attached evidence from Google.com, the proposed mark OSAMA BONG LOADIN refers directly to Osama Bin Laden and is thus scandalous because Bin Laden’s actions are synonymous with his name”.

La Gadget Expo December 5th & 6th 2015

Michael Cohen of Cohen IP Law Group will be presenting a 30 minute lecture on IP issues on December 6th at the LA Gadget Expo.   We are also a Silver Sponsor of the LA Gadget Expo! They’re giving 50% off exhibitor fees to those of you who wish to exhibit (e-mail hello@lagadgetexpo.com for more information) and free admission for being a Cohen IP Law Group client. Use promo code ‘COHENIPLAW’ for complimentary admission to the event: https://www.eventbrite.com/e/la-gadget-expo-tickets-17334064654

LA Gadget Expo Cohen IP Law Group

We our happy to announce that Cohen IP Law Group, PC will be an exhibitor and speaker at the first LA Gadget Expo on December 5th and 6th, held at the Reef in downtown Los Angeles.  The LA Gadget Expo is a consumer show that will feature gadget enthusiasts and corporate buyers.  Michael Cohen will present a lecture on Sunday afternoon regarding intellectual property issues that many in the business face.  We are excited for the opportunity and look forward to meeting you.  For more information please go to the LA Gadget Expo website.