Are Your Children's Products Compliant?

The provisions of the CPSIA (Consumer Products Safety Improvement Act) went into effect this Friday. Based on a press release from the CPSC (Consumer Products Safety Commission), the chairperson stated that the rules will be "vigorously and fairly" enforced, so if you're not ready, you'd better get there fast.

The requirements of the CPSIA that became effective on August 14 include:


"Lead Content

The limit for lead in children’s products drops from 600 parts per million (ppm) to 300 ppm. After August 14, it will be unlawful to manufacture, import, sell, or offer for sale, a children’s product that has more than 300 ppm of lead in any part (except electronics) that is accessible to children.


Lead in Paint and Similar Surface Coating Materials

The limit for lead in paint and similar surface-coating materials for consumer use drops from 600 ppm to 90 ppm. The lead paint limits also apply to toys and other articles intended for children as well as certain furniture products. Products subject to these limits cannot be sold, offered for sale, imported or manufactured after August 14 unless they meet the new lower lead limits.


Civil Penalties

Civil penalties increase substantially to a maximum of $100,000 per violation and up to a maximum of $15 million for a related series of violations. Previously, civil penalties were a maximum of $8,000 per violation and up to a maximum of $1.825 million for a related series of violations.


Tracking Labels

Manufacturers must place permanent distinguishing marks (tracking label) on any consumer product primarily intended for children 12 and younger made on or after August 14, 2009. The permanent marks must enable consumers to ascertain basic information, including the manufacturer or private labeler, location, the date of manufacture, and more detailed information on the manufacturing process such as a batch or run number. The permanent distinguishing marks must appear on the product itself and its packaging to the extent practicable. Learn more about the tracking label requirement at www.cpsc.gov/about/cpsia/sect103.html#faqs


Catalog Advertising

Advertising for certain toys and games intended for use by children from three to six years old must have warnings regarding potential choking hazards to children younger than three. The requirement to include warnings in Internet advertisements went into effect on December 12, 2008. There was a grace period for the requirement for catalogues and other printed materials, but this grace period expired August 9, 2009. All catalogues and other printed materials distributed on or after August 9, 2009, regardless of when they were printed, must include the appropriate warnings."


Be careful and make sure that you’re in compliance. For more information, you can go to the CPSC for guidance (and you should be consulting an attorney familiar with these matters) at their website (http://www.cpsc.gov/about/cpsia/cpsia.html).

Just When You Thought That You Were Compliant With Privacy Law

You're a responsible business owner. I know that you are. If you weren't, you wouldn't have stopped to read this blog post.

You know that you have to follow certain privacy laws regarding the information that you collect on your site. You've even read my blog post on why you shouldn't use free privacy policies and hired a great lawyer to write them for you.

You're all done, right?

Sadly, no.

The law is an ever changing set of requirements. And there's just been another change that you should be aware of.

As of September 12, 2009, a new privacy law in the State of Maine will go into effect about the requirements for collecting and using information from minors in the State of Maine.

And it's a doozy.

Here's the gist of what it says. It says that you cannot collect any personally identifiable information from a minor in Maine without "verifiable parental consent".

Verifiable parental consent is defined as "any reasonable effort, taking into consideration available technology, including a request for authorization for future collection, use and disclosure described in the notice, to ensure that a parent of a minor receives notice of the collection of personal information, use and disclosure practices and authorizes the collection, use and disclosure, as applicable, of personal information and the subsequent use of that information before that information is collected from that minor."

And even if you collected the information properly, there are prohibitions about using that information "for the purpose of marketing a product or service to that minor or promoting any course of action for the minor relating to a product." There are also prohibitions against the transfer or sale of such information.

So, basically, even if you gather the information, you won't be able to use it.

And there's no grandfather clause. Starting on September 12th, you're responsible for making sure that your previously gathered lists are in compliance.

Here's the part where it gets interesting though...

If you violate, you can end up in a great deal of trouble with the Maine Attorney General's office and there are civil penalties of $10,000 to $20,000 for the first violation (and $20,000 per violation thereafter).

But that's not all.

Maine is also allowing for a private right of action for any minor whose personally identifiable has been gathered or who has been marketed to in violation of the law. They can sue for up to $250 per violation (or actual damage, whichever is greater) plus attorneys' fees and court costs. And, worse yet, if it is found that it was a knowing violation, the court can increase the award to three times the statutory amount (so, $750 per violation).

That's nothing to sneeze at.

So, what should you do?

First, you need to amend your privacy policy to comply with the law and to amend your sign up process (if you're still allowing minors from Maine on your site) to create a way to comply with the verifiable parental consent portion of the law. I'm suggesting to my clients that they add a date of birth field to the sign up process and that they specifically exclude minors from Maine in their privacy policies.

Next, you need to figure out a way to cull your current marketing lists that you've gathered to eliminate any minors from Maine. I'm also suggesting to my clients that they send out an email to everyone they have in their list in Maine about the new law and requesting that those people respond with verification of their date of birth. If people don't respond, they're off of the marketing list.

I'm interested to see how this will be applied and whether it will extend to social media platforms like Facebook, where a business can send out an email to their fan group. By definition, those companies have gathered personally identifiable information about their "fans" and, as far as I know, there's no ability to keep someone from being a fan of a company based on their age. My opinion is that, in order to comply with the law, if you have a Facebook fan group (or another similar group at another networking platform), you're going to need to send an email to all of the fans who are from Maine asking them to verify their age if they want to remain fans.

And you need to get all of this done before the 12th of September.

Are All Trademarks Created Equal?

You've worked very hard to develop your brand and your branding for your business. It's hard work. We all know that.

You know that you want to file for a trademark to protect your investment in time, energy and money in developing your brand. And you're completely right.

You should file for a trademark.

But not all trademarks are equal in the protection that they offer your marks.

Ok, don't hyperventilate... I'm going to explain.

You can file to protect different things in several different ways....

You can file to protect the words themselves, which is called a "character mark". So, if your company is called "Tiny Toes", you can file to protect those words from anyone else using them in the same class as you use them in. You can also register a trademark for your tagline or any other words that you use to designate your "brand".

But what if you have your words are in a pretty font or you have a logo (with or without your company name" and you want to protect the words using that font. Then you'd be filing what is referred to as a "specialized form mark". It protects the items in the picture that you file as they appear in the picture. So, if you have words in the logo that you file, they're protected. Sort of.

If the words appear without the picture, stylization or design that you've registered, they don't have protection on their own. This is VERY important to remember.

I can't tell you the number of times that I have clients ask me if they should file their logo or their words. The official answer is that for the best protection, you should file both as separate marks. One will protect your logo. One will protect the words.

I know, I know. Not everyone can afford to do that....

Since most of my clients are entrepreneurs who are just starting out, they don't have a lot of money to spend either. I get asked all the time which is the more important mark to file.

So, what's the answer? I generally tell them that they should start out filing their brand name first and filing the logo later on when they have more cash to spend.

Hope that helps you to decide how to best protect your brand.

My Trademark was Granted. I'm done, right?

You go through the entire arduous trademark process, you've been granted the trademark and you've received your pretty little certificate in the mail. You're all done but the framing, right?

Yes and no.

For now, you've got nothing to do but to enjoy being a trademark holder. You need to defend your mark to keep it strong, but assuming that no one tries to infringe your mark, you're golden.

So what the heck am I talking about?

I'm talking about the requirements of Sections 8, 9 and 15 of the Trademark Act.

Wait a second! I know you don't know what I'm talking about. I'm about to explain... Sheesh!

Section 8 requires that you file a §8 Declaration of Continued Use or a §8 Declaration of Excusable Nonuse between your fifth and sixth anniversary of usage (and between your ninth and tenth year, but I'll discuss that later on). It currently costs $100.00 per class. If you fail to file, your mark will be cancelled.

For those of you who have just had a heart attack because your sixth anniversary has passed and you haven't filed, please relax. The USPTO allows a six month grace period (for an extra $100.00 per class).

A §8 Declaration must include:
- The registration number;
- The name and address of the current owner;
- The fee for filing the Declaration;
- If the mark is in use: a statement that the registered mark is in use in commerce; a list of the goods/services recited in the registration on or in connection with which the mark is in use; and one specimen per class of goods/services. Examples of acceptable specimens are tags/labels for goods, and advertisements for services.
- If the owner resides outside the United States, the designation of a domestic representative; and
- A signed and dated affidavit or declaration under 37 C.F.R. §2.20

Ok, so you've got that, right?

Here's something you may not know. Trademark registrations are only good for ten years.

So, between every ninth and tenth anniversary of registration, you need to file a Section 9 renewal application and a Section 8 Declaration of Continued Use. It currently costs $500.00 per class to file both of these documents.

A §9 Renewal Application must include:

- A request to renew the registration signed by the registrant or the registrant's representative;
- The registration number, mark and date of registration.
- A name and address for correspondence.
- The filing fee; and
- If the registrant resides outside the United States, the designation of a domestic representative.

The USPTO also has a grace period of six months beyond the tenth anniversary, but it'll cost you an additional $100.00 per class.

So, failure to keep up with those will cost you your trademark registration. Do them. Don't forget.

There is one other section worth mentioning. It's §15. A §15 Declaration of Incontestability is completely optional (though I certainly suggest filing it). It costs $200.00 per class and you file it at the same time as your first §8 filing (between the fifth and sixth anniversary of the initial registration of your mark), so together it would be $300.00 per class.

So, what is it? The USPTO explains it best:

"An 'incontestable' registration is conclusive evidence of the validity of the registered mark, of the registration of the mark, of the owner's ownership of the mark and of the owner's exclusive right to use the mark with the goods/services. The claim of incontestability is subject to certain limited exceptions set forth in §§15 and 33(b) of the Trademark Act, 15 U.S.C. §§1065 and 1115(b). 15 U.S.C. §1065."

The §15 Declaration must include:

- The registration number and the date of registration;
- The fee for each class of goods/services in the registration to which the Declaration pertains;
- A statement that:
(a) the mark has been in continuous use in commerce for a period of five years subsequent to the date of registration, or the date of publication under 15 U.S.C. §1062(c), on or in connection with the goods/services recited in the registration and is still in use in commerce;
(b) there has been no final decision adverse to the owner's claim of ownership of the mark for the goods/services, or to the owner's right to register the mark or to keep the same on the register; and
(c) there is no proceeding involving the claimed rights pending in the USPTO or in a court of law and not finally disposed of; and
- A signed and dated affidavit or declaration under 37 C.F.R. §2.20.

You can find the §8, §9 and §15 forms for filing here. Some that can be registered together are listed together. Make sure you're reading the directions and filling out the right forms....

Don't lose your mark by mistake. Make sure you keep up with your trademark filings...

Protect Your Brand by Protecting Your Domain Name.

I won a case at WIPO last week. A link to the decision, in case you're curious, is here.

I was quite proud of myself. A goliath company was trying to wrest a domain name out of my client's hands and they lost. Because they were wrong. And what I realized when I started telling people that I had won at WIPO was that people had no idea what I was talking about.

People were completely unaware that there is a mechanism to challenge domain name registrations. Were you?

So why would you need such a thing?

Let's say you weren't fast enough. Let's say you've got a business and a competitor has started buying up versions of your domain name.

Worse yet, he's put a site up that looks confusingly like yours and directs people to his competing site.

What can you do? I mean other than tearing your hair out, of course.

Are you just out of luck?

Actually, no. You've got options.

You could ask your competitor to give you the domain name. But that's not very likely.

But you have another option.

Have you ever heard of WIPO? If not, don't worry, you're not alone. Many people haven't.

Ok, this is going to get confusing for a second, because it's a bit of an alphabet soup, but bear with me...

WIPO(the World Intellectual Property Organization) is the international body charged with resolving domain name disputes over global TLDs (or Top Level Domains (e.g., .com, .net, .biz, .info, .mobi, .org). By following the UDRP (Uniform Dispute Resolution Policy) and the supplemental rules, panels of one to three international arbitrators decide whether the domain should remain with the party that registered it or should be transferred to the complaining party.

Did you understand that? Don't worry, you're not alone.

What you need to understand is that WIPO is where you go when you need to challenge a domain name registration. And the UDRP (and supplemental rules) give you the formula to determine whether you have a valid claim.

The domain name dispute procedure is only available to resolve disputes that concern an "alleged abusive registration of a domain name". The criteria to determine whether the domain name has been registered abusively under Section 4(a) of the UDRP are:

(i) the domain name registered by the domain name registrant is identical or confusingly similar to a trademark or service mark in which the complainant (the person or entity bringing the complaint) has rights; and

(ii) the domain name registrant has no rights or legitimate interests in respect of the domain name in question; and

(iii) the domain name has been registered and is being used in bad faith (examples of which are set out in Section 4(b)).

All three elements must be met to win at WIPO. If you can prove all three, the domain name will be ordered to be transferred to you.

Pretty cool, no?

It's also important to remember that if you are on the other side as a Respondent and someone brings an action against you at WIPO, you shouldn't necessarily capitulate to their threat. Some companies use threats of WIPO action (or even filing WIPO actions) as a ploy to get you to turn over your URL.

If you're in the right, hire someone who knows what they're doing and fight. Because it's not like a regular court case, the cost of doing so is far less than it would be in court.

Don't ever forget to protect your brand. Protecting your domain name is a big part of that.

Don't Leave Home (Or Your Business) Without One...

Are you a business owner? Do you execute a power of attorney when you go on vacation so someone can act on your behalf when you're gone?

Should you? Should you have one even if you aren't going anywhere?

Actually, yes.

If you need to leave your business and have someone make decisions for you (and/or sign documents for you) while you're unavailable, you need to have a power of attorney.

There are several kinds of power of attorney, but for the purposes of a business discussion, we'll only talk about the ones that apply here.

It is important to note that you can appoint whomever you want to be your agent (as long as they're a competent adult) with a power of attorney. The person you appoint doesn't, in fact, have to be a lawyer. But the person you appoint is often referred to as an "attorney in fact".

Make sure that the person you appoint is someone you trust. If the person were to be untrustworthy, they could cause you quite a lot of trouble.

The most broad is a durable power of attorney. The durable power of attorney allows someone to make decisions for you and act on your behalf even if you should become disabled physically or mentally and cannot make your own decisions.

It is something that, should you be a sole owner of a business, that you should consider having so that if something should happen to you, your business and your family can be taken care of. In fact, I often advise my clients to have one with their spouse so that if they should ever be incapacitated, your spouse can do things that require both of your signatures (like sell your house) even if you can't sign. Please note, however, that this will not cover medical decisions and that is a different kind of power of attorney.

Another kind of power of attorney is a nondurable or special power of attorney. It generally puts someone in the position of being able to sign documents for you for a specific purpose (e.g., to sell your house, to sign a contract for a merger, etc.) It does not survive your incapacity or incompetence though.

It's very important to check the laws of your specific state when giving power of attorney. Although some states allow an oral power of attorney, many states require it to be in writing. In fact, here in New York, your power of attorney is even required to be notarized.

I would suggest that you have it in writing even if your state doesn't require it. Here's why...

Some governmental entities, for example, the IRS, and even banks will not accept an oral power of attorney. Also, even states that allow a power of attorney to be oral require it to be in writing if the power that you're giving would require you to have a written contract (e.g., sale of real estate, wills, etc.).

It's not something that business owners think about very often, particularly small business owners, but you certainly should give it some thought.

Top 5 Factors for Choosing the Right Lawyer

You know you need a lawyer. You do.

You're a responsible businessperson and you want to make sure that you're protected. Or, you're too late to protect yourself and you need a lawyer to help you resolve the situation.

Either way, you've got a big decision to make. You don't want to choose the wrong person, do you?

As of the end of 2002, according to the American Bar Association, there were over 1,049,000 lawyers and the number certainly has gone up since then.

So, how do you pick the right one?

In my opinion, there are five major points to examine before hiring an attorney. They are (in no particular order) area of practice, cost, firm size, reputation and personality.

Many people make the mistake of thinking that cost is the most important factor, but it's certainly not. It's better to pay a little more and have it done right the first time than to have to have your matter cleared up later on by an attorney who could have done it right in the first place.

So, let's take a look at these factors (listed, in my opinion, in order of importance):

1. Area of Expertise - You wouldn't go to a cardiologist to deliver your baby, would you? Of course not. You want a doctor who specializes in delivering babies.

Contrary to popular belief, attorneys also have areas of the law that they specialize in. It's a little confusing because there are laws in many states that forbid attorneys to claim that they are a "specialist" in a certain field.

That being said, certain lawyers are good at certain things and no lawyer is good at everything. Don't believe otherwise and if a lawyer tells you that they can handle every matter that comes up for you, don't believe them.

I can even use examples from my own practice.

I focus my practice on online businesses. Although I do general business law (i.e., setting up companies, drafting general business agreements, etc.), I specialize in the special things that online businesses need (i.e., privacy policies, terms of service, contest rules, trademarks, copyright issues, WIPO domain name disputes, etc.)

And I wouldn't suggest that you have someone who isn't familiar with all of the issues surrounding a particular part of the law. For example, I won't do tax law. I know nothing about taxes and I wouldn't feel comfortable advising a client on tax law and tax liability. I also don't do litigation work anymore. I have other attorneys that I refer my clients to, but I don't have the time or bankroll to do a good job for a client.

2. Reputation - You should check out the person you're about to hire. Use the Internet. Google them. Do some searching and see what they've done. See what past clients have to say about them.

Attorneys can't give out their past clients' names without permission, but often they have permission from some of their clients to allow other people to call for references. If not, they may have testimonials on their website, their LinkedIn page, or other places that may allow you to gauge the reputation of your potential lawyer.

Ask your friends, family, colleagues or network who have had similar legal situations for recommendations. Who did they use? Were they happy? What do they wish they asked at the beginning?

3. Personality - You wouldn't think that your lawyer's personality would matter that much. But it does.

Assume that you're going to be working closely with this person for the duration of time that your project takes. You want someone who is easy to talk to, who takes time to listen and really understands and cares what you want to achieve.

You want to be comfortable asking your lawyer all of your questions, even the ones that you think are dumb. You also want someone who doesn't sound like they're rushing you off of the phone every time you call or that you're bothering them when you need to talk to them.

They work for you, not the other way around. If they can't be nice to you, then there are about a million other lawyers to choose from. Certainly, one of them would be more than willing to be nice to you.

4. Cost - I'm not nutty. Cost is certainly a factor. You should feel like you're getting the best representation that you can afford for the money that you can spend.

Ask up front what it's going to cost. If the lawyer works on an hourly fee and the project is something that they do often, they should be able to give you a ballpark figure as to what it is going to cost.

The exception here is litigation (or other negotiations). I've seen them take as little as $5-10 thousand dollars to way over $100 thousand.

Here's what I would suggest. If you really want to hire an attorney who can't give you a good ballpark estimate, have them keep track and update you on how much is being spent on a more frequent basis than monthly. That way you have a better idea of how much you'll be spending.

5. Size of Firm - This factor actually ties into some of the others.

As a rule, larger firms tend to charge more. A lot more.

They tend to have a team working on your project rather than a single attorney (as it would be in a solo practice), so you don't necessarily get to talk to the same person all of the time. This can sometimes lead to confusion in your project.

That being said, for complex matters, like litigation, it makes sense to use a larger firm. They have the finances to withstand the costs of a long, drawn out litigation. They tend to have very experienced people in very focused fields.

However, as a solo practitioner, I can tell you that most large firms that do what I do charge about $400 - $600 per hour for an attorney with my level of experience. I don't have their kind of overhead and I pass that savings on to my clients.

Who is the best lawyer for you?

Only you can answer that question. But if you keep the factors I've discussed in mind, you'll find yourself in a good relationship with a good lawyer.