photo-Palantir-300x169A start up company may be in need of funding and see an investor as a savior for the company. But companies need to protect themselves and be wary of investors as much as they may need their money. A company needs to guard itself against the possibility of an investor stealing intellectual property and using it for its own purposes.

Data analytics company Palantir Technologies has filed a lawsuit against one of its earliest investors, Marc Abramowitz, accusing him of stealing intellectual property (new business ideas) then trying to patent them under his own name, according to Law.com. Abramowitz, invested in 2005 and had an office at the company’s Palo Alto headquarters.

The complaint, filed in Santa Clara County Superior Court, alleges he used his position to steal Palantir’s plans for applying the use of massive amounts of data in new ways for new types of customers. The situation resulted in the company’s other major investors changing Palantir’s Investor Rights’ Agreement to prevent Abramowitz from getting access to additional confidential information.

Hey, everyone on Facebook.  Good afternoon, good Saturday.  This week I received a number of phone calls asking whether or not a noncompeting clause is enforceable in California, and I just thought I would to take this opportunity to share some general information with you on the topic.  Again, I’m providing general information so if you have a specific question about your unique circumstance, consult with your local attorney.

Now, this particular situation starts with a salesperson that is currently employed by Company A that now wants to work for Company B.  There is a noncompeting agreement between the sales person and Company A, but Company B is telling this salesperson to go ahead and work with us because a noncompeting agreement is not enforceable in California.  Well, I wouldn’t say that noncompeting agreements are not enforceable as a blanket statement, because there are situations where the court does uphold the noncompeting clause agreement.  So, before we start, I’m going to tell you that there is a public policy in California court that states everybody in California has a right to make a living.  This public policy is pretty much just a guiding principle for the judges that they go by when they are deciding on this type of issue.

photo-QLogic-300x200
The major drivers of corporate purchases are trying to grow a business at a lower cost. Often that lower cost comes when the new, larger company is able to do more with less people. That appears to be the case at Aliso Viejo-based QLogic, a computer networking and storage provider.

The company plans on laying off 69 people effective October 17, according to documents filed with the state, reports the Orange County Register. QLogic announced in June it had been purchased by San Jose-based chipmaker Cavium Inc. for $1.36 billion. The deal was finalized on August 16.

QLogic is now a wholly owned subsidiary of Cavium which makes switches, adapter cards and other networking equipment. QLogic provides a number of high tech products, including the Fibre Channel Adapters, which allow the storage and movement of large amounts of data.

photo-Supreme-Court-insider-trading-case-300x285Can someone be guilty of insider trading if that person gives no money to the source of information? If the person is just tipping off friends or family members with no money paid back in return? The answer from the Supreme Court is yes.

Illegal insider trading is generally buying or selling a security, in breach of a fiduciary duty or other relationship of trust and confidence, while in possession of material, nonpublic information about the security, according to the federal Securities and Exchange Commission (SEC). Violations can also include “tipping” such information, securities trading by those receiving the information and trading by those who misappropriate this information.

The Supreme Court issued a decision in an insider trading case for the first time in two decades earlier this month. Despite its reputation for a hard philosophical divide often resulting in split decisions, this ruling was unanimous: a Chicago man, Bassam Salman, was guilty of insider trading, reports Reuters. The precedent should make it easier to prosecute those accused of profiting from confidential investment information.

photo-CA-bathroom-bill-199x300This year the culture wars burst into public bathrooms across the country with repercussions in California. If you have a single stall bathroom at your place of business a state law passed this year mandates that it doesn’t matter your sex, that bathroom has to be a place of equal opportunity. It can’t be a men’s or a women’s room. Gender can’t matter when using single-stall public bathrooms in California, reports the San Jose Mercury News. Your bathroom is just a bathroom.

Gov. Jerry Brown signed legislation in September that requires single user restrooms be designated all-gender, a small move to bolster transgender rights as other states passed restrictions as to who could use which bathroom.

State Assemblyman Phil Ting of San Francisco stated that restricting access to single-user restrooms by gender was a burden on LGBT community, parents and caretakers of dependents of the opposite sex. It’s also seen as a way to provide greater privacy and safety in public restrooms.

https://www.orangecountybusinessattorneyblog.com/files/2017/02/photo-Ms.-America-pageant-300x225.jpgThose of us running businesses have a supporting cast, whether they’re contractors, suppliers, funders, banks, attorneys or employees. If a trusted cast member disappears at a critical time what do you do? Susan Jeske found herself in that situation in September. Like most of us she made due with what she had and went forward.

Jeske owns the Ms. America® Pageant. She purchased it in 1999 after winning the competition in 1997. Ms. America contestants are often well into their careers, sometimes are married and often range from 26 to 40 years old. The 2017 event was scheduled for September 3 in Brea. At the last minute Jeske got some bad news.

She learned on August 30 that Costa Mesa based BTB Event Productions, the company hired to produce the pageant, was shutting down and their equipment was being sold off. As a result Jeske was left scrambling to find a stage, runway and proper lighting. “I have 43 contestants flying in from across the country that are coming in tomorrow and I don’t have anything,” Jeske told the Orange County Register on August 31.

photo-trademarks-search-terms-and-fruit-300x200A recent federal court decision from Connecticut has laid down some potentially new rules when it comes to trademarks and internet marketing. The lawsuit pits two competing companies and a dispute as to whether marketing practices of one company were meant to illegally steal away potential customers of the other.

The products being sold are fruit. Plaintiff Edible Arrangements, LLC, is a seller of artfully designed fresh fruits that are sculpted in the shapes of flowers and arranged to resemble floral arrangements. Defendant Provide Commerce, Inc., is a direct competitor which sells a variety of products including flowers, chocolates, fresh fruit, gift baskets and personalized gifts under brands such as “ProFlowers” and “Shari’s Berries” which offers a variety of items through its online store.

Judge Vanessa L. Bryant’s decision on defendant’s motion for summary judgement covered trademark infringement in the world of internet keyword advertising. She denied Provide’s request for partial summary judgment against trademark owner Edible Arrangements, which sued it for trademark infringement.

photo-PDC-EB5-scam-300x200It’s never a good thing to have a federal judge order a freeze on your business’ assets. That’s what happened to an Orange County firm that federal officials claim stole money from foreign investors, mostly Chinese citizens, who hoped their cash would lead to permanent U.S. residency, the Los Angeles Times reports.

Newport Beach lawyer Emilio Francisco and his investment firm, PDC Capital, face civil fraud charges filed by the Securities and Exchange Commission (SEC). It claims Francisco spent at least $9.5 million of investors’ cash on personal expenses (some going to help pay for a yacht, a yacht-club membership and his credit card) instead of investments that would qualify investors for the EB-5 visa program, which offers permanent residency to foreigners who make job-creating investments in the U.S.

Investors provided PDC with more than $72 million from 2013 to 2016, according to the SEC’s suit. More than a hundred investors put in $500,000 each. They believed the money would be spent building assisted-living facilities and opening new locations of Caffe Primo, a Los Angeles coffee shop and restaurant chain. The SEC states some of the money went to the promised projects, but millions of dollars were invested in other projects and more than $2 million went to pay Francisco’s personal expenses.

Continue reading

photo - toy idea theftA stagnant company, one that’s not looking to improve on its products or come up with new ones, may not have a bright future. There may be pressure to come up with the next successful products as well as pressure to cut costs and improve profits. That may result in legal problems if a company illegally uses someone else’s concept without their approval or paying them. A recent Bloomberg article spelled out this problem of intellectual property theft in the toy industry.

Ellie Shapiro came up with a toy in 2012. They were little animal figurines with snow globes in their bellies which she called Wishables. She worked as a freelance toy inventor but prior to that she spent ten years as an executive at Mattel Inc. and Walt Disney Co. Shapiro pitched her toy ideas to toymakers including Hasbro, Inc.

She signed a confidentiality agreement, met with Hasbro executives in Santa Monica in 2013 and showed off her prototypes, sample packaging and feed back from focus group testing. Executives liked the presentation, asked for samples but later told her they were passing on the idea.

In the fall of 2014 she walked into a Target store and saw a new Hasbro toy, an animal figurine that was also a snow globe. “At first, I was in shock and in disbelief,” Shapiro told Bloomberg. “Then I felt completely sick.” She later sued Hasbro for stealing her idea in federal court in the Central District of California. The company responded by saying snow globes have been used in toys for years and a similar design was developed in-house in 2012, prior to her submission.

Shapiro sued an Australian toy maker previously and settled the case in 2014. In the past she felt Hasbro stole a previous idea, threatened to sue them but ultimately did not. Freelancers like Shapiro face the double threats of having their ideas stolen and not making any money or suing (which can be expensive) and getting a litigious reputation risking being avoided by toy companies and not making any money. Some inventors see theft as the cost of doing business, hoping eventually a company may agree to pay for an idea.

Continue reading