The High-touch Legal Services® Blog…for Startups!

© 2009-2021 Dana H. Shultz

Which Open Source License Should We Choose?

Logo for the Open Source Initiative, which can help developers choose which open source license to useSoftware developers may have decided to provide open source software, but they may not know which open source license to use. This post describes three resources developers can consult to help make that decision.

First, Open Source Initiative maintains a comprehensive list of open source software licenses. Licenses are grouped into categories, starting with the most popular licenses. However, the OSI site does not provide any tools to help decide which open source license to use.

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Open Source Developer Wins Big – But Can He Collect?

BusyBox Logo

BusyBox Logo

Erik Anderson developed certain software that he contributed to BusyBox, a compact set of embedded Linux utilities licensed under the GNU General Public License, Version 2 (the “GPL”). In October 2008, Anderson registered a copyright on the code that he contributed.

On September 2, 2009, Anderson’s counsel notified Westinghouse that it was infringing Anderson’s copyright because it was distributing BusyBox – both integrated into Westinghouse televisions and separately with other software – on terms that are more restrictive than the GPL. Westinghouse continued infringing Anderson’s copyright.

Anderson and the Software Freedom Conservancy brought suit against Westinghouse and 13 other defendants on December 14, 2009. Westinghouse initially mounted a defense, but stopped participating in the suit when it filed for bankruptcy.

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Open Source Developer Prevails in Copyright Infringement Suit

Photo of model trains, subject of open source software involved in copyright infringement litigationA federal court of appeals held in 2008 that an open source developer case sue for copyright infringement despite the breadth of the open source license. The closely-watched case recently settled, meaning that the opinion may well be cited for many years to come.

Plaintiff Robert Jacobsen holds a copyright to certain computer programming code that he makes available for public download for free pursuant to the Artistic License, an open source license.

Defendants Matthew Katzer and Kamind Associates, Inc. develop commercial software products for the model train industry and hobbyists. Defendants copied certain materials from Jacobsen’s website and incorporated them into one of their software packages without following the terms of the Artistic License. Jacobsen sued for copyright infringement and moved for a preliminary injunction.

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SaaS Use of Open-source Software is not Distribution (Who GNU?)

GNU logo

I recently answered a LinkedIn question about whether providing Software as a Service (SaaS) is considered a “distribution” under the open-source GNU General Public License. The question and answer (no longer available on LinkedIn) are reproduced, in slightly edited form, below.

Q. Is hosting a software as a SaaS offering considered as “distribution” under GPL / LGPL open source licenses?

A. I believe that SaaS hosting is not intended to be considered distribution.

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Creative Commons Commercial Licenses

Creative Commons logo for post about Creative Commons commercial licensesThis post is about Creative Commons commercial licenses. After describing each license, it discusses when you might want to use each license.

Creative Commons provides a summary of its various licenses at About The Licenses. (more…)

Top Ten Intellectual Property Mistakes of Startup Entrepreneurs

The document Top Ten Intellectual Property Mistakes of Startup Entrepreneurs is available as a Free Download on the Downloads page.

Here are the ten mistakes that are discussed:

  1. Failing to use employee invention agreements
  2. Assuming that the company owns contractors’ work product
  3. Using another company’s license agreement
  4. Thinking that patents are the only IP that matters
  5. Filing a for provisional patent before the scope of the invention is clear
  6. Treating the federal government like non-governmental infringers
  7. Neglecting to identify and protect trade secrets
  8. Believing that “open source” means “no restrictions”
  9. Giving the “family jewels” to an overseas supplier
  10. Registering the wrong entity as the owner of IP

Related post: The Top Ten Legal Mistakes of Startup and Early-stage Companies

Dana H. Shultz, Attorney at Law  +1 510 547-0545  dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

The Top Ten Legal Mistakes of Startup and Early-stage Companies

I am pleased to make the article “The Top Ten Legal Mistakes of Startup and Early-stage Companies” available as a Free Download on the Downloads page.

Here are the ten mistakes that are discussed:

  1. Failing to comply with corporate formalities
  2. Pretending that employees are independent contractors
  3. Neglecting to provide and update an employee handbook
  4. Failing to establish or adhere to discipline or termination procedures
  5. Failing to ensure that the company owns its intellectual property
  6. Believing that “open source” means “no restrictions”
  7. Thinking that all NDAs have the same terms
  8. Believing that websites can unilaterally change their terms of use
  9. Using another company’s standard-form agreement
  10. Giving “family jewels” to an overseas supplier

Related post: Top Ten Intellectual Property Mistakes of Startup Entrepreneurs

Dana H. Shultz, Attorney at Law  +1 510 547-0545  dana [at] danashultz [dot] com
This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact a lawyer directly.

Intellectual Property Essentials for Start-ups

Intellectual Property Essentials for Start-ups” now is available as a Free Download on the Downloads page.

Here are some of the questions that the document addresses:

  1. Which types of intellectual property (IP) should a start-up be aware of?
  2. How can we be sure to own IP created by independent contractors?
  3. Are there special considerations if the contractor is located overseas?
  4. It is pretty easy to register a trademark online; where might I go wrong?
  5. A provisional patent application is inexpensive and can be filed quickly; are there any risks I should keep in mind?
  6. Money is tight; can we use another company’s form of agreement rather than paying to develop one of our own?
  7. Open source software is hot; does it bring along any special dangers?

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.

Top Ten IP Mistakes of Small to Mid-Size Tech Companies

On June 18, I will make a presentation to the East Bay MashEx. The title: “The Top Ten Intellectual Property Mistakes of Small to Mid-Size Technology Companies”. (The handout is available as a Free Download on the Downloads page.)

Here are the mistakes that I will talk about:

  1. Failing to use employee invention agreements
  2. Assuming that the company owns contractors’ work product
  3. Using another company’s license agreement
  4. Thinking that patents are the only IP that matters
  5. Filing for a provisional patent before the scope of the invention is clear
  6. Treating the federal government like non-government infringers
  7. Neglecting to identify and protect trade secrets
  8. Believing that “open source” means “no restrictions”
  9. Giving the “family jewels” to an overseas supplier
  10. Registering the wrong entity as the owner of IP

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.

* Consulting Services *

Dana Shultz retired from the practice of law in August 2020. As a lawyer, Dana dispensed as much business advice as legal advice. Accordingly, although he no longer is practicing law, Dana occasionally provides consulting services to owners and managers of small businesses.

As when he was a lawyer, Dana strives to provide succinct, easy-to-understand insights, analyses and recommendations.

Business issues that Dana is particularly likely to help clients address include:

  • Validating whether a new-business idea has a reasonable opportunity for success
  • Assessing risks
  • Focusing on the proper market for the relevant product or service
  • Exploring ways to approach that market, as well as prospective investors and business partners
  • Identifying human and other resources that will be required
  • Determining where a business should be located
  • Discussing unique challenges faced by, and opportunities for, international clients wishing to start businesses in, or bring existing businesses to, the U.S.

The fee for Dana’s consulting services is $300 per hour, billed in increments of one-tenth hour with a one-hour minimum for an initial consultation.

For more information about Dana’s work experience, please see About Dana Shultz.

Dana H. Shultz Business Insights

+1 510-547-0545

dana [at] danashultz [dot] com

KYC (Know Your Customer) Isn’t Just for Banks

Photo of a bank for post about KYC (Know Your Customer)

“KYC” (Know Your Customer) refers to how banks verify the identities of prospective customers. In this post I will show why KYC can be equally important for other types of businesses.

One of my European clients (“Client”) provides in-demand horticultural products. In 2013, we formed a Delaware corporation by which Client does business in North America.

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Foreign Qualification Can Be Easy, or It Can Be Difficult

geauxBIZ screen shot for post about foreign qualification

Foreign qualification is how a given state permits an entity, such as a corporation or limited liability company, from elsewhere to do business in that state. In this context, “foreign” can mean from another state or from a different country.

Recently, one of my international clients formed a corporation in Delaware. We have been qualifying that corporation to do business in about a dozen other states. This post explains how easy, or how difficult, various states makes the foreign qualification process.

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What are Liquidated Damages?

Photo of a $100 bill for a post about liquidated damages

This post explains the meaning of the legal term “liquidated damages“. It is part of Dana Shultz’s Canonical Questions on the Law® series of questions and answers about legal issues, concepts and terminology .

Sometimes a contract specifies an amount that a party must pay for breaching that contract. The legal terms for that amount is liquidated damages.

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What Does “Represent and Warrant” Mean?

Photo of contract being signed for post about meaning of the phrase "represent and warrant"

This post discusses the meaning of the phrase “represent and warrant“. This is part of Dana Shultz’s Canonical Questions on the Law® series of questions and answers about legal issues, concepts and terminology.

Distinguishing Representations from Warranties

To understand what the contractual phrase “represent and warrant” means, we need to know what representations and warranties are.

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Which Personnel Records Can an Employee Inspect?

Image of magnifying glass for post about inspecting personnel records

This post describes California employees’ rights to inspect, and receive copies of, their personnel records.

The relevant statute is California Labor Code Section 1198.5(a), which states:

Every current and former employee, or his or her representative, has the right to inspect and receive a copy of the personnel records that the employer maintains relating to the employee’s performance or to any grievance concerning the employee.

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What is Dissociation?

"Goodbye Friends" sign for post about dissociation from a partnership or LLC

This post explains what dissociation is. This is part of Dana Shultz’s Canonical Questions on the Law® series of questions and answers about legal issues, concepts and terminology.

Definition of Dissociation

Dissociation is the process by which one:

  • Stops being a member of a limited liability company (LLC); or
  • Stops being a partner in a partnership.

Alternatively, this process sometimes is called withdrawal.

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Protect Your IP when You Hire a Freelancer

Upwork logo for post about freelancer work product and intellectual property

This post explains how to make sure that you own work product and intellectual property (IP) when you use a freelancer service. Most of the following first appeared on Quora. Please see How can I protect my source code and its Intellectual Property Right while working with a very large team of remote freelancers (Upwork and Fiverr etc)? Are freelancing platforms ensuring IP protection?

When you use a freelancing platform, you need to ensure that you have an agreement with each freelancer. And that agreement must assign to you all work product and all intellectual property rights.

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How Most States Chose “Shareholder” as Delaware Kept “Stockholder”

Cover page from Delaware Laws 1875 for post about terms shareholder and stockholder“Shareholder” and “stockholder” are synonyms. This post explains how most states came to use the former term in their laws, while Delaware consistently has used the latter.

Before Delaware had a general corporation law, Delaware’s legislature created each corporation. The Constitution of Delaware – 1831 so provided in Article II, Section 17, but made no mention of stockholders (or shareholders).

Following a constitutional amendment, Delaware adopted its first general corporation law in 1875. (See Laws of the State of Delaware, Vol. 15 – Part 1, beginning at page 181.) That law includes a few references to “stockholder”, none to “shareholder”. (more…)

Blame Your Lawyer – An Underappreciated Legal Service

Photo of Scrabble tiles spelling "lawyer" for post about how to blame your lawyerIn this post I will explain why, sometimes, it can be helpful to blame your lawyer for something that really is not the lawyer’s fault.

In my experience, this situation typically arises when a client is negotiating business terms with a counterparty. (more…)

GDPR and CCPA – Two Approaches to Privacy

Logo for Quora, where Dana Shultz wrote about GDPR and CCPAThis post compares the EU’s General Data Protection Regulation and the California Consumer Protection Act of 2018 (GDPR and CCPA).

It includes much of a Quora answer that I wrote on this topic. Please see How does the California Consumer Privacy Act of 2018 compare to GDPR?

Disclaimer: This comparison, of necessity, is limited to the broadest generalizations. While the California Consumer Privacy Act or 2018 (“CCPA”) is of a respectable length, the EU’s General Data Protection Regulation (“GDPR”) has 99 Articles, most with several Sub-articles – and that’s preceded by 173 lengthy paragraphs of recitals! Consequently, most of what follows is, in reality, subject to significant additional details, qualifications and exceptions that are too numerous to include here.

Now available for download: A four-page GDPR-CCPA comparison table that includes many more details than are in this post.

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Software Escrow No Longer Required

Picture of a lock box, symbolizing software escrowSoftware escrow requirements once were common in my law practice. In this post, I will explain why that no longer is the case.

I have seen such arrangements principally with respect to software that a developer hosts (software as a service – SaaS). In a software escrow, the developer delivers a copy of the software’s source code to an escrow company. The developer provides updated versions of the source code from time to time.

If the developer goes out of business, the escrow company delivers the source code to the developer’s licensee (customer). The licensee then has the right to use and modify the source code for its own internal purposes. (more…)

What Does “Amended and Restated” Mean?

Alaska Air Amended and Restated Certificate of Incorporation“Amended and restated” is a term that lawyers use a lot. (A Google search produces approximately 792,000 results.) This post discusses that term’s meaning and why lawyers use it. This is part of Dana Shultz’s Canonical Questions on the Law™ series of questions and answers about legal issues, concepts and terminology.

“Amended and restated” can apply to virtually any type of legal document. Examples:

  • Certificate/articles of incorporation;
  • Corporate bylaws;
  • Limited liability company operating agreement;
  • Any other type of agreement;
  • etc.

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” Legal Tender ” Does *Not* Mean that You Must Accept Cash

Logo for Quora, where Dana Shultz answered a question about legal tenderThis post about legal tender is a bit off-topic for this blog. However, I am writing it because it clears up a common misunderstanding, about which I recently wrote on Quora. Please see On every US dollar bill the message “This note is legal tender for all debts public and private” is printed. How is it then legal for some businesses to not accept cash?

The U.S. Department of the Treasury discusses whether the “ legal tender ” language on U.S. currency requires that cash payments be accepted. Quoting a portion of Legal Tender Status (link and emphasis added): (more…)

Trade Dress Protection for Look and Feel

Logo of Ingrid & isabel, plaintiff in a case about trade dress protection of website look and feelIn How Can I Protect the Look and Feel of My Website?, I explained that the “look and feel” of a website – or a smartphone – can be protected as trade dress or by a design patent.

This post examines a recent case that discusses the elements of trade dress protection in detail. That case is Ingrid & Isabel, LLC v. Baby Be Mine, LLC, decided by the United States District Court for the Northern District of California. (more…)

Plagiarism and Copyright Infringement – Two Sides of the Same Coin

Logo for Quora, where Dana Shultz answered a question about plagiarismThis post compares plagiarism and copyright infringement. It is prompted by a Quora question that I answered several months ago. (See Have your ideas or works ever been plagiarized? What happened?)

Plagiarism Defined

Plagiarism is the wrongful appropriate on another’s work and presenting it as one’s own. One typically thinks of plagiarism occurring in academia or journalism. However, as discussed below, it can occur in other professions, too.

Copyright Infringement Defined

The holder of the copyright in a work has certain exclusive rights with respect to that work. These include (as applicable) the rights to reproduce, distribute, publicly perform, publicly display, and make derivative works of the work. Copyright infringement is use of a work, without permission of the copyright holder, that infringes on one of those exclusive rights.

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Nonbank Lenders Increasingly Attractive to Small Businesses – WSJ

Logo for WSJ.com, which published an article about nonbank lendersNonbank lenders are becoming increasingly attractive to small businesses, according to an article published today in the Wall Street Journal. (Alternative Lenders Peddle Pricey Commercial Loans)

The lenders cited in the article include OnDeck Capital Inc., Kabbage Inc., CAN Capital Inc. and Business Financial Services Inc.

Loans Offered by Nonbank Lenders

Nonbank lenders offer loans that typically are for less than $50,000 and have high interest rates – sometimes more than 50% per year. The article says that such loans, nevertheless, are popular for the following reasons. (more…)

Negotiating Successfully: The #1 Thing You Need to Know

Two playing cards: 7 of spades and 2 of hearts

Several years ago, a friend lamented that he was not very good at negotiating on behalf of his professional-services business. He felt that clients were better at “bluffing” and other negotiating techniques than he was, so he often was paid less than he should have been. I told him the single most important thing he needed to know if he wanted to negotiate successfully:

You have to be willing to walk away.

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WSJ: Rent a Desk, Rather than an Office

wsj.com logo

In an article yesterday (Can’t Afford an Office? Rent a Desk for $275), the Wall Street Journal observed that use of shared workspaces – renting a desk in an open space, rather than renting an office – is increasing throughout the United States.

Such resources have been used for many years by technology startups here in the San Francisco Bay Area. The article specifically cited Plug and Play Tech Center in Sunnyvale (which is exploring expansion to other cities).

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Non-compete Enforced to Protect Trade Secrets

Cover page from Richmond Technologies v. Aumtech court decision, which saw a non-compete enforcedCalifornia is well-known for enforcing post-employment non-compete provisions only under narrowly-defined circumstances. A recent case in the United States District Court for the Northern District of California (Richmond Technologies v. Aumtech Business Solutions) saw a non-compete enforced for the protection of trade secrets.

Jennifer Polito, a former employee of plaintiff Richmond Technologies (which does business as ePayware), started working for defendant Aumtech. ePayware brought suit, alleging that Ms. Polito misappropriated ePayware’s source code, license keys and customer list to help Aumtech compete against ePayware. (more…)

How I Sent my Client Weird E-mails

Gmail logo

This post is somewhat off-topic for my blog, being less about business and more about technology. However, it is being written in the context of my forming a corporation for a new client, and it discusses an issue that I find interesting, so here it is. When I noted that the client and I were having trouble communicating effectively online, he commented that some of my e-mails were “weird”.

I had never encountered these sorts of problems before. The client sent screen shots and a description of his actions. I then saw the source of the problem: I use Outlook, while my client uses Gmail.

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Does My New Employer Now Own My Software?

Quora logo

This post is adapted (with editing) from a Quora question that I answered. Q. I developed a software application on my own, then adapted it for my new employer, where it is used enterprise-wide. What are my ownership rights in this situation?

A. It would help to know whether you signed any type of proprietary information and inventions agreement with your employer. If you did, its terms (obviously) will be of great importance. You did not mention any such agreement, so I will assume, for the purposes of the discussion below, that there is no such agreement.

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Recover Your Domain Name, and Perhaps Some Money, Too

Display from defendant Nahum's website at the hijacked domain

From defendant Nahum’s website at the hijacked domain

Just over a year ago (Who is the Master of Your Domain? [or, How to Prevent Domain Name Hijacking]), I wrote about recovering a client’s domain name from a disgruntled former employee via ICANN’s Uniform Domain-Name Dispute-Resolution Policy. A recent case from the U.S. Court of Appeals for the Ninth Circuit (DSPT International v. Nahum) shows that under federal trademark law, an aggrieved domain name owner may be able to recover monetary damages, too.

Defendant Lucky Nahum worked for plaintiff DSPT International and worked with an outside supplier to set up DSPT’s website. Without telling DSPT’s owner, Nahum registered the website’s domain name in his own name.

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Forming an LLC Online: You Get What You Pay For

Mannequins with "sale" signs symbolizing forming an LLC online

Update (November 17, 2010): I have decided to start identifying by name providers of corporate and LLC online formation services who, in my opinion, have delivered inadequate service to my clients. (The clients used those providers before retaining me.) The inadequate provider referenced, below, in this post is Rocket Lawyer, which has been added to the Hall of Shame page.

Update (April 27, 2011): I had a cordial conversation this afternoon with Rocket Lawyer’s VP of Sales & Business Development. He acknowledged that, last year, Rocket Lawyer was using a filing service (filing operations are outsourced) that did not meet the company’s expectations. He reported that the current filing service is performing at a much higher level and that Rocket Lawyer is paying closer attention to ongoing support of its customers.

* * *

Almost a year ago, I suggested (in Can I form an LLC without a lawyer?) that entrepreneurs seeking to save money when forming a limited liability company would be better off buying a book from Nolo than using an online LLC formation service. I now believe that more than ever.

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How Can I Protect the Look and Feel of My Website?

U.S. Patent and Trademark Office Seal, symbolizing trade dress and design patent protection of website look and feel

This post discusses whether and how you can protect your website’s “look and feel.

The reason you would want such protection: Your website has particularly effective visual and interactive elements that help promote your business. You would not want another website to copy those elements, thus make your website and your business less special.

Look and Feel as Trade Dress

Look and feel falls in the category of trade dress, i.e., visual appearance that signifies the source of a product or service. You may be able to obtain a federal trademark registration for the non-functional elements of the website’s look and feel and bring suit against infringers based on that registration. (more…)

How the UDRP can Defeat a Cybersquatter

Logo of ICANN, which promulgated the UDRP

Someone has obtained a domain name that is the same as, or confusingly similar to, a trademark or service mark that you own. How can you take the domain name from this “cybersquatter”? The UDRP (explained below) may come to the rescue!

When he registered the domain name, the cybersquatter (the Registrant) agreed to ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP).

Under the UDRP, you (the Complainant) will be required to prove all of the following:

(i) The domain name is identical or confusingly similar to a trademark or service mark in which you have rights.
(ii) The Registrant has no rights or legitimate interests in respect of the domain name.
(iii) The domain name has been registered and is being used in bad faith.

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Visa Basics for Foreign Entrepreneurs Coming to the U.S.

Seal of the US Citizenship and Immigration Services, from wich a work visa may be obtained

Non-immigrant foreign entrepreneurs who want to start businesses in the U.S. often – and rightly – have visa-related concerns. A typical question: “What kind of visa do I need to start my business?”

This post provides a brief answer to that question.

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Hotels.com Loses Major Trademark Battle

On July 23, 2009 the United States Court of Appeals for the Federal Circuit decided, in In re Hotels.com, L.P., that Hotels.com was not entitled to a federal registration for its service mark HOTELS.COM. (For a brief overview of trademarks and service marks, see Trademark Protection in One Easy Lesson.)

Background: Hotels.com sought to register its mark for the services of ?providing information for others about temporary lodging; travel agency services, namely, making reservations and bookings for temporary lodging for others by means of telephone and the global computer network.? The Trademark Trial and Appeal Board (TTAB) refused the registration on the ground that the mark is a generic term for these services (generic terms, by definition, are incapable of indicating the source of goods or services). (more…)

Commercial E-mail and CAN-SPAM: What You Need to Know

Seal of the FTC Bureau of Consumer Protection, which publishes a CAN-SPAM guide for businessesUnsolicited commercial electronic mail – “spam” – is the bane of the modern electronic existence. In an effort to limit this problem, the One hundred Eighth Congress enacted the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003. This legislation, usually referred to as the “CAN-SPAM Act of 2003” or “CAN-SPAM”, took effect January 1, 2004.

The CAN-SPAM Act

CAN-SPAM has four main provisions, which together aim to make commercial email (including commercial content on websites) more truthful, more transparent and more avoidable.

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Client Testimonials

Photo of individuals with right hand raised taking oath, conveying the idea of client testimonials

Dana Shultz recently retired from the practice of law. As a lawyer, Dana dispensed as much business advice as legal advice. Accordingly, although he no longer is practicing law, Dana occasionally provides business consulting services to owners of small businesses.

If you need legal representation, Dana provides referrals to experienced business lawyers.

The remainder of this page is being retained online for archival purposes.


Client testimonials concerning Dana Shultz and his services (a) are based outcomes that result from each client’s factual and legal circumstances and (b) do not constitute a guarantee, warranty, or prediction regarding the outcome of any client’s legal matter. (Just in case you are wondering, Board of Governors Standard (2) adopted pursuant to CA Rule of Professional Conduct 1-400(E) – now governed by Chapter 7 of the Rules of Professional Conduct that took effect on November 1, 2018 – requires that I provide a disclaimer.)

Please see, in addition to these client testimonials, the recommendations on Dana’s LinkedIn profile. (more…)

International Business and Agreements: Learning about Legal Culture

Over the years I have negotiated a number of international agreements, typically representing domestic clients. My more recent work with EU-based clients, however, has given me additional insights about the U.S. and other legal systems.

These clients have established technology businesses in Europe. Each recently set up operations here in the Bay Area and asked that I adapt existing agreements for use in the U.S. As I work with these clients, two differences between the U.S. and the European Union jump out at me.

Length of Agreements

First, in the U.S. we often have longer agreements. European contracts tend to rely on, and implicitly or explicitly incorporate, detailed statutory provisions that do not exist here in the U.S. Furthermore, agreements here tend to include more business details and legal protections in case the relationship sours and ends up in litigation. For example, one client shared its existing reseller agreement. I found the document charming in its brevity and the abundance of white space on the page. By the time I added everything that is considered normal here in the U.S., the new version had four times as many words!

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Corporate Housekeeping: Keeping Documents in Order

From time to time, clients with established businesses have asked me to bring order to their legal affairs. I refer to this as ” corporate housekeeping “.

Usually, the request results from an extraordinary, but desirable, event. This might be an acquisition offer, a prospective new investor, or a restructuring for tax purposes. In each instance, the client quickly realizes that it has not been paying close enough attention to legal documentation.

Although the clients are in different industries, their stories are similar. In essence, they limit their legal activities and expenditures to those required to bring business in the door, satisfy customers’ needs, and pay employees. This approach works on a day-to-day basis. Yet when the extraordinary event comes up, the company suddenly needs to devote scarce resources to legal clean-up. (more…)