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.

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.

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.

Can You Make Your Office "Greener"?

I know, I know.

You're probably thinking... Why is a lawyer talking about green office policies?

Well, other than the fact that today is Earth Day and I like to try to be relevant, I think that this might be a topic where lots of businesses have trouble. Happy Earth Day, by the way....

As a lawyer, I can tell you, it's HARD to get rid of all that paper. Have you ever been to a lawyer's office? It's rows and rows and rows of file cabinets.

Do you ever wonder what's in those cabinets? No, of course you don't. Don't lie.

Seriously, do you have the time to think about how much paper is in your lawyer's file cabinets? Of course you don't. And if you do, you might want to consider focusing more on building your business. Really....

As lawyers go, I have very little paper in my firm. And I like it that way. But even I would like to have less paper.

I figure if I'm an entrepreneur and I would like to reduce my use of paper, maybe you would too. So, I want to tell you something that you may or may not already know that'll save you a lot of paper.

I want to talk to you about the E-Sign Act of 2000.

I know, sounds sexy doesn't it? No? Don't worry, I don't think so either....

Did you know that there is a law that permits you to sign any contract electronically with the same force and effect as you signing it with a pen? Well, there is.

If we all adopted the use of electronic signatures, it would enormously reduce the number of pages we print out, sign and fax back to people that we do business with. Just think about it....

So, why doesn't everyone do it? Beats me. I'm guessing it's probably the same reason that some people still feel the need to go to the teller in the bank to withdraw money from their account rather than using the ATM.

I know, I know, you're now going to ask, "Well how do I do that? What is an electronic signature?" Hang on.... I'm gonna tell you... Sheesh!


The Electronic Signatures In Global and National Commerce Act (or E-Sign Act) defines an electronic signature as "The term 'electronic signature' means an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record.'"

So, what does that mean?


It means that you make your mark on the document and it "may not be denied legal effect, validity, or enforceability solely because it is in electronic form".

I know, I can hear you think it... Oh yeah, that's very clear!

No, no. It's really easy. I promise.

The way most people do an electronic signature is that they type a slash (/) their mark and another slash. So, for me, mine look like this:

/deena burgess/ or /dbb/ or /Deena Burgess/

Or any other mark you like that can easily be identified as your mark. See? Piece of cake.

Don't you think you could start accepting electronic signatures on your agreements? Don't you think that if we all started doing it, it would do a lot to help the environment?

I do.

Happy Earth Day!

Facebook is Out to Get Us. Or are They?

I’ve been following the general outcry in the blogosphere and on Twitter about the revision of Facebook’s Terms of Service on February 4, 2009.

And I’d like to say this in response, “Could everyone please get a grip for five minutes? You’re giving me a headache....”

But seriously, if you haven’t been following the controversy, here’s what’s happening. Facebook updated their Terms of Service at the beginning of February and removed some language from their License section.

The Consumerist covered it in an article entitled Facebook's New Terms Of Service: "We Can Do Anything We Want With Your Content. Forever."

In pertinent part, the article mentioned that the new Facebook Terms of Service reads as follows:

You hereby grant Facebook an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to (a) use, copy, publish, stream, store, retain, publicly perform or display, transmit, scan, reformat, modify, edit, frame, translate, excerpt, adapt, create derivative works and distribute (through multiple tiers), any User Content you (i) Post on or in connection with the Facebook Service or the promotion thereof subject only to your privacy settings or (ii) enable a user to Post, including by offering a Share Link on your website and (b) to use your name, likeness and image for any purpose, including commercial or advertising, each of (a) and (b) on or in connection with the Facebook Service or the promotion thereof.

The article goes on to state that, “That language is the same as in the old TOS, but there was an important couple of lines at the end of that section that have been removed:”

The lines in question are as follows:

You may remove your User Content from the Site at any time. If you choose to remove your User Content, the license granted above will automatically expire, however you acknowledge that the Company may retain archived copies of your User Content.

This set off a hailstorm across the web. The Twitterverse (Twitter universe) went absolutely batty. People fretted about the content that they’re uploading (or have uploaded to Facebook). They even, in some cases, threatened to stop using Facebook altogether.

And they’re not altogether wrong. Your only recourse to avoid the provisions is to stop using Facebook.

Except...

Hey, I write Terms of Service for a living. You need to understand that Terms of Service are really a game of chess with your users where the penalty is not losing a player when you do it wrong, it’s a lawsuit. When I first read the articles, my first thought was that their lawyer was trying to avoid lawsuits for mistakes that might be made by Facebook by continuing to publish information from users who have terminated their accounts. I’m always trying to come up with the best way to protect my clients from lawsuits.

And I’m gratified to know that I’m about right. Today, Facebook CEO Mark Zuckerberg posted an update on the Facebook blog to let everyone know what was intended by the changes in the Terms of Service. You can find his post here. It is entitled, “On Facebook, People Own and Control Their Information.”

So, everyone stand down and take a deep breath. Please.

Are you still worried? Here’s what I would suggest...

Don’t place any information (photos, articles, blogs, etc.) on Facebook that you wouldn’t like for Facebook to have a license on. Simply place it somewhere that you have control over, and put the link on your Facebook page. That way you can share it with your friends and Facebook doesn’t have any of your copyrighted “content” to exercise their license over. It’s really the safest way to go...