The High-touch Legal Services® Blog • For Startup/Early-stage Companies

Cover from "Finding Rin Tin Tin" DVD

Those of a certain age will recall watching “Rin Tin Tin” on TV as kids. The venerable canine recently was the subject of a trademark infringement suit (Rin Tin Tin, Inc., et al. v. First Look Studios, Inc., et al.).

Rin Tin Tin was a German Shepherd dog found in France during World War I. He became famous through movies and remains well-known to this day.

Plaintiffs breed German Shepherds descended from the original Rin Tin Tin and manage related business endeavors. Rin Tin Tin, Inc. obtained federal trademark registrations for “Rin Tin Tin” pertaining to puppies and dogs of the Rin Tin Tin lineage.

Defendants distributed a movie on DVD titled “Finding Rin Tin Tin: The Adventure Continues.” The movie is based on the life of the original Rin Tin Tin and features German Shepherd puppies and dogs with that name. The movie and the DVD cover make no reference to the plaintiffs and do not claim any affiliation to the Rin Tin Tin bloodline.

Plaintiffs brought suit in the U.S. District Court for the Southern District of Texas, alleging that unauthorized use of the name “Rin Tin Tin” will cause confusion as to the origin, sponsorship and nature of the movie, thereby injuring or diluting plaintiffs’ trademarks. Plaintiffs asked for  destruction of all unsold DVDs, an injunction against  use of the Rin Tin Tin name, and various damages, incidental costs and attorneys’ fees.

Defendants countered that their use of the name falls under the “fair use” defense. The court agreed, noting that all three elements of fair use were satisfied:

• Defendants’ use of the name Rin Tin Tin was descriptive of the historical dog, rather than a reference to plaintiffs or their products.
• Defendant’s use of the name was fair in that it was the most precise way to describe the subject matter of the movie.
• Defendants acted in good faith because they did not use the name Rin Tin Tin to indicate the source of the movie (defendants clearly stated that they were the source).

Bottom line: This case illustrates that if one properly uses a mark in in a descriptive fashion, rather than as a reference to another’s company, products or services, the trademark fair use defense is available to protect such use.

Photo credit: Flixster

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

This evening I will present “Top Ten Legal Tips for Current and Would-be Independent Independent Contractors” at The Society for Technical Communication Silicon Valley Chapter.

If you are interested in the topics that I will be covering, please check out “Top Ten Legal Tips for Independent Contractors” on this blog’s Downloads page.

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

I recently ran across a situation where several members of a limited liability company wanted to get rid of a fellow member whose disruptive behavior was harming the LLC, but they did not know whether or how they could kick him out.

California Corporations Code Section 17100(c) says that an LLC operating agreement may provide for termination of a membership interest. Upon termination, the member is entitled to a return of the member’s capital contribution to the LLC.

Regrettably, the operating agreement in question did not address termination of memberships. As a result, the LLC was stuck with the trouble-maker.

The bottom line: At a minimum, an LLC operating agreement should include a provision for terminating memberships in the event of a serious breach, such as failure to make a required capital contribution.

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

ProtectMarriage.com (left) and Courage Campaign Logos

It appears that at least some gay marriage foes need to learn a thing or two about trademark law.

On January 12, ProtectMarriage.com sent Courage Campaign a cease and desist letter, alleging that Courage Campaign’s Prop 8 Trial Tracker logo infringes ProjectMarriage.com’s trademark and copyright in its logo.

On January 14, Courage Campaign responded that its trademark is protected as a parody (most notably, it has a family led by two women rather than a man and a woman), and that if ProjectMarriage.com brings suit, it will lose and have to pay Courage Campaign’s legal fees. In my opinion, Courage Campaign has the stronger argument.

The story, including lawyers’ letters in their entirety, is told at ProtectMarriage.com issues Cease and Desist for Prop 8 Trial Tracker logo depicting family of two mothers with two kids.

Image credit: Prop 8 Trial Tracker

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

A few months ago, I posted Does your Employee Handbook address social media? This post discusses a specific social-media issue that is of great importance to every employer: Online endorsements of products or services by employees.

The Federal Trade Commission has published Guides Concerning the Use of Endorsements and Testimonials in Advertising. Actions that are inconsistent with the Guides may result in an FTC enforcement action.

Read more…

The December 2009 issue of les Nouvelles, a publication of Licensing Executives Society International, has an interesting article about the interplay between domain name disputes and trademark licensing.

“WIPO Domain Name Cases Offer Trademark Licensing Lessons,” by Hee-Eun Kim, an LLM student in Munich, Germany, starts by describing the Uniform Domain Name Dispute Resolution Policy (UDRP) and the role of the World Intellectual Property Organization (WIPO) in resolving disputes under the UDRP.

Read more…

The evening of Wednesday, January 20, the Silicon Valley Association of Startup Entrepreneurs (SVASE) will present All Cash is Green – Which Source is Right for You? at the beautiful Crow Canyon Country Club (dinner included!).

Panel members from venture investment, angel investment and lending will explain how entrepreneurs can choose among the many ways to fund their businesses:

There are so many ways to capitalize a business that it can be confusing to figure out which is the best fit for your company’s stage, risk profile, and capital needs. Our panel will discuss the pros and cons of different sources of capital. Along the way, they will explain how to determine the cost of capital, when collateral can be used for raising debt, when leasing is appropriate, what angel investors are looking for, and when to approach an institutional investor such as a VC. Before you mortgage your house, borrow money from your in-laws, or sell a portion of your company, learn what our financial experts have to say!

If you are in the San Francisco Bay Area and want to learn more about raising capital for your business, this event is for you!

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

As I write this post, I am in the process of helping an early-stage client develop a stock-based compensation plan for a key officer. The principal choice was between a stock option and restricted stock.

A stock option is the right to purchase a specified number of shares at a specified price at some point in the future. The option typically “vests” over a period of years – the longer the individual stays with the company, the greater the portion of the option s/he has the right to exercise. At the end of the vesting period, the individual has the right to purchase all of the shares specified in the option.

With restricted stock, shares are granted to the individual immediately but are subject to “reverse vesting”: If the individual leaves the company, a specified portion of the stock is forfeited to the company (if the individual paid nothing for the shares) or is subject to repurchase by the company at the price the individual paid. The portion that is subject to forfeiture or repurchase declines to zero over a specified number of years.

Read more…

Last evening I attended a meeting of eBig’s Startups / VCs SIG. Sramana Mitra’s presentation, “Bootstrapping – Weapon of Mass Reconstruction”, was highly informative for the entrepreneurs in attendance.

Her first comment was one with which I agree completely: There is too much emphasis on on venture capital funding – few businesses qualify, and other forms of financing allow the entrepreneur to retain greater control and a larger share of the business. (See Realistic Financing Options for Startup Companies.)

Sramana then proceeded to expose a large number of myths about entrepreneurship, and she finished by answering attendees’ questions.

The Entrepreneur Journeys page of Sramana’s blog provides a large number of informative interviews with entrepreneurs from around the world.

Photo credit: Blog Business World

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

I recently was consulted twice with respect to whether a minor can enter into a contract. In the first case, a teenager wanted to start a business. In the second, a father wanted his child to become a member of his limited liability company (LLC).

Here is an overview of California law with respect to minors entering into agreements:

A minor is an individual who is under 18 years of age. An adult is an individual who is 18 years of age or older. Family Code Sections 6500-6501

Subject to certain exceptions (some of which are far-reaching, such as those precluding contracts related to real property or personal property not in the minor’s immediate possession or control), minors may enter into agreements. Family Code Sections 6700-6701

However, the minor generally may disaffirm (reject) the agreement before reaching majority, or during a reasonable time thereafter. Family Code Sections 6710-6713

There are extensive provisions to protect minors who enter into contracts for employment in the arts, entertainment, or professional sports. Family Code Sections 6750-6753

However, a minor is treated as an adult with respect to contracts if the minor has been emancipated as a result of entering into a valid marriage, being on active duty with the armed forces of the United States, or receiving a court declaration of emancipation. Family Code Section 7002; Family Code Section 7050(e)

Conclusion: The principal risk for an adult who enters into an agreement with an unemancipated minor is that the minor may be able to walk away with impunity, whereas the adult will not have that freedom.

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.