Beverly A. Berneman
Tuesday, 16 January 2018
The USPTO can no longer ban scandalous and immoral trademarks. Erik Brunetti wanted to register the word “FUCT” for his apparel line. The USPTO refused registration because the word sounded like a swear word. Erik appealed to the Federal Circuit. The appeals court overturned the ruling saying that the government’s rule against registering profane, sexual and otherwise objectionable language violates the First Amendment. Acknowledging that the government didn’t have a substantial interest in policing offensive speech, the Federal Circuit opined that the First Amendment “protects private expression, even private expression which is offensive to a substantial composite of the general public.”
**WHY YOU SHOULD KNOW THIS. ** With this decision and the decision in the Slants case (“Bleeping Trademarks” Blawg post of 1/12/2016 and 3/29/2016), the courts have drawn the line in the sand regarding trademark choice. The USPTO is being told not to determine registrability of trademarks based upon whether something is offensive to a certain segment of the population. But the impression a trademark makes is very subjective. A trademark should always take the potential consuming audience into account. In this case, Erik’s market is the skateboarding crowd. To them, the jokey and offensive nature of the mark might be a good selling point. However, the same may not be true if Erik’s market was a more a sedate one, like banking for instance.
Andrew S. Williams
Thursday, 11 January 2018
Your retirement plan may have an outside third party administrator (TPA) to assist with plan administration. However, a TPA typically is not a fiduciary to the plan and does not act as “plan administrator” (that’s usually the employer itself as provided in a typical TPA services agreement). This leaves the employer ultimately responsible for the plan’s compliance with all applicable legal requirements. So, even if your TPA makes a mistake, the employer is likely on the hook for any resulting liability because the TPA’s services agreement usually imposes damage limits and employer indemnities that protect the TPA.
An independent service provider (maybe your current TPA) can be engaged to act as the “plan administrator” pursuant to Section 3(16) of ERISA. As a 3(16) fiduciary, the service provider assumes fiduciary responsibilities in administering the plan. The 3(16) fiduciary is responsible for all compliance activities, including the following:
- Determining employee eligibility
- Retaining plan service providers
- Preparing and filing annual reports
- Maintaining fidelity bond coverage for employees who handle plan assets
- Interpreting and applying plan provisions
- Distributing summary plan descriptions and supplements on a timely basis
- Preparing an investment policy statement
- Administration of participant loans, hardship withdrawals, as well as benefit computations and distributions
- Distributing participant notes such as summary annual reports and, as applicable, annual qualified default investment alternative (QDIA) notices, safe harbor notices and investment fee disclosures
- Reviewing and acting on reports of plan investment advisors and any private auditor
- Reviewing and implementing qualified domestic relations orders (QDROs)
Are your bases covered on all of the above? If your TPA is not involved in these compliance functions, are they adequately performed by your own employees? If not, your plan may need help from an outside service provider or even a 3(16) fiduciary.
Engaging a competent 3(16) fiduciary should provide any retirement plan the maximum compliance protection available. Just bear in mind that the employer still retains a legal obligation to prudently select the 3(16) fiduciary and to monitor the fiduciary’s ongoing performance of its duties.
Beverly A. Berneman
Tuesday, 09 January 2018
Welcome to the Second Annual Crippys. The Crippys are awarded to those who achieved infamy by committing Intellectual Property crimes during the previous year. In other words, an IP Criminals Hall of Fame. The field of candidates was crowded last year. But the award winners rose to the top. The 2017 Crippys go to:
Second Runner Up Crippy Goes to David Nosel: David was an executive with Korn/Ferry International. After he left, his ex-assistant gave him a password with which he could access his former employer’s computer system. He used the password to hack into the system and steal trade secrets. David’s conviction for violating the Computer Fraud and Abuse Act (“CFAA”) was affirmed by the Ninth Circuit Court of Appeals. The CFAA criminalizes accessing a computer without authorization or exceeding authorization to obtain anything of value from a protected computer. David argued that it wasn’t hacking because he had a valid password. Somehow, David missed the point. David didn’t have authorization to use the password. So his actions fell squarely within the prohibited acts in the CFFA.
First Runner Up Crippy Goes to Walid Jamil: Walid pled guilty to conspiracy to commit criminal copyright infringement and conspiracy to introduce misbranded food into interstate commerce. A predecessor of Walid’s company, Midwest Wholesale Distributors, was a legitimate exporter of the 5-Hour Energy drink to Mexico. Jamil and his cohorts replaced the Spanish labels with fake English ones so they could sell to the U.S. market. When the stock ran out, Walid switched to fully counterfeit drinks made in a filthy factory. He distributed more than 4 million bottles putting the health of millions of customers into jeopardy. And if that weren’t enough, Walid is also alleged to have been involved in similar schemes involving Equal, Splenda, Truvia, Uncle Ben’s Rice and Pillsbury products. Walid has been sentenced to 7 years in jail plus payment of criminal restitution in the amount of $555,800.00. Walid wins this award for shear audacity and tenacity. He’ll need those skills in prison.
Grand Prize Crippy Goes to Gregory David Justice: Gregory (whose last name has a good sense of irony), a former employee of a defense contractor, pled guilty to one count of economic espionage and one count of attempting to violate the Arms Export Control Act. He tried to sell information about his (now former) employer’s satellite security systems which included trade secrets. Unfortunately for Gregory, he offered the sale to an undercover agent who was posing as a Russian spy. He told the ersatz Russian spy that he loved spy movies and television shows like “Jason Bourne” and “James Bond” and “The Americans”. He sold the secrets for $3,500.00 telling the undercover agent that he needed it for his wife’s medical expenses. Actually, he sent the money to his on-line girlfriend, an alleged European model named Chay. Actually, the “girlfriend” wasn’t named Chay nor was she a model. She was some woman who lived in Florida with her boyfriend and son. Gregory was sentenced to 60 months in jail. U.S. Attorney Sandra R. Brown said, “This defendant sold out his employer and betrayed his country in exchange for a few thousand dollars. His actions posed an imminent threat to our national security.”
WHY YOU SHOULD KNOW THIS. Criminal Intellectual Property activity is no laughing matter. Those who criminally interfere with the Intellectual Property of others cause damage, endanger public health and harm national security. They justly face jail time and fines. So no one should strive to be awarded a Crippy for 2018.