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Part II, Communicating with Unpleasantness: Demand Letters

Demand letter.
Demand letter.

Demand letters are usually the start of unpleasant communications. Not the end.

What are Demand Letters for?

Usually, it is a demand on the other party take some corrective action or to stop doing something. It could be demanding payment because it is late. It could be demanding interest on top of the principal due to the lateness of the payment. Other times, if you are the customer and the service provider’s job remains undone, then you want specific performance. You are asking them to finish the job.

What about Cease and Desist Letters?

These letters are demanding that the other party stop doing something, such as Intellectual Property matters. Specifically, there is an infringing action that going on or about to happen and the owner of the IP wants the infringer informed of their rights. It could be an infringer’s use of an unauthorized copy of an image on their website and social media.

Sometimes the government uses cease and desist letters as a part of their enforcement powers. Agencies will indicate to the person that they are doing some type of illegal activity that should stop immediately. If not, and they ignore the notice of the letter, then they could face penalties, fines, or being charged with a crime.

Does it Need to be Drafted by an Attorney?

No. Attorneys don’t always draft them, but having them may help. You should consider the nature and context of the dispute. For instance, demanding a customer pay you $200.00 for kitchen supplies because the are past the due date might not be a good use of an attorney. However, if your client is not paying you $200,000.00 in consulting and construction fees and you have an obligation to continue working on the project, then are a lot of factors to take into consideration when making the demand.

Insurance Claims

Trejur will likely provide posts in the future that are more in-depth on this topic. However, for the discussion purposes of this post just know that for personal injury claims, the injured person usually starts the process by submitting a demand letter to the insurance companies. Further consider that negotiating and settling insurance claims may be aided by a lawyer’s counsel. The reason is there are certain structures and contents that go with the initial demand letter.

Examples include: describing the accident, medical treatments to treat the injured, and accompanying evidence and supplemental documents, such as police reports and medical bills. The initial demand letter is probably just the start; insurance companies tend to lowball their initial offer. A personal injury attorney’s knowledge and experience may assist in getting a higher settlement when communicating to the insurance companies.

What Goes into Demand Letters?

It depends. Every situation is unique. This includes drafting a demand letter for clients. Sometimes, short and sweet is perfect because the facts are simple, and the law is easy to understand. Other times, lengthy explanations are necessary. Such as when the legal rights and concepts are abstract. These include citing to the actual law, explaining case law, and providing some evidence to show the other side there is a provable case. At a minimum, a demand letter usually explains the situation, a view of the law that is favorable to the demanding party, and the demands. Money and/or taking an action (or stopping one) and deadlines to respond or comply.  Finally, consider lawyers communicate to other attorneys via these demand letters as well as laypeople, so they legal ethics applies.

I will say from an attorney’s perspective we, just as much as laypeople, enjoy creative demand letters. Demand letters don’t always have to be mean in tone. “Nastygrams” are not always effective. Consider many content providers realize that fans who are business owners flatter them through creative endeavors, but these actions may infringe on their copyright, trademark, and trade dress rights.

However, sometimes you do get a mean and unreasonable demand letter. The question then becomes how do you respond? Ridiculous cease and desist letters sometimes also open themselves to cheeky responses like this one.

Other than the Creative Way, How Should I Respond to One?

The opportunity to dare the writer of the demand letter to start a lawsuit by offering lollipops to the process server is not a frequent one. However, a lot of people feel that ignoring a demand letter is a reasonable response. It might not be, as sometimes silence may be viewed as an admission. The demanding party may just send another letter.

A strongly worded response letter may be able to dissuade the other side. Attorneys frequently engage in letter writing contests back-and-forth without even filing a claim because litigation can increase the costs dramatically. The hope is there is a resolution at some point, but a demand letter is not usually the end of the legal process. It starts a communication process.  So how you choose to respond sometimes requires a careful analysis of all factors:

  • What are the demands? What does it cost to comply with the demands?
  • Do you have any rights or claims?
  • What are the facts?  Are they verifiable?
  • How much would it cost to litigate? Take it through trial?
  • What are you willing to settle for?

Analyzing these factors sometimes helps clients make valuation decisions, especially for business owners. Sometimes it might be worth it to settle, other times not. The key is to understand the contents of the demand letter, and then the circumstances that surround it. It is the start of a communication process, not the end.

DISCLAIMER: This post discusses general legal issues, but does not constitute legal advice in any respect.  No reader should act or refrain from acting based on information contained in this post without seeking the advice of  an attorney in their relevant jurisdiction.  Hew & Bordenave, LLLP expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.

What’s the Purpose of a Trademark? How is it Used?

What's the Purpose of a Trademark

LEGAL DISCLAIMER: The following information is provided to be just general information, and therefore, should not be taken as specific legal advice that pertains to any particular situation.  The reader should not base any decisions on the information here to act or refrain from acting regarding a legal problem.  If you believe you have a legal problem please seek legal advice from a licensed attorney in the relevant jurisdiction.
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So it’s amazing how time flies when you have a lot of work to do.  I have been very grateful for these past couple of months for the clients that have come through my door (or via electronic means), but more work means less time for blogging and sharing information to all you interested soon-to-be or current business owners.

Anyway, as some people know I was fortunate last month to attend the American Bar Association’s Annual Conference in San Francisco.  I attended many Intellectual Property, Business Law, and a couple of Employment Law seminars.  When I can, I will update my blog or provide one-sheet resources on the information I obtained from these seminars to share with all of you.

So today’s post is about the use of trade and service marks.  A prior Draw the Law post covered the difference between a trade name and trademark and I have a one-sheet on What is Trademark?.

Purpose of Marks

Before we get to the using of a trademarks, let’s first consider that the purpose of a trademark.  The point of a trademark is to distinguish one company’s set of goods and/or services from another company’s.  Basically, it is meant to avoid confusion to consumers, so they can readily ascertain from the mark which company the goods and/or services are originating from.

So How are Marks Used in Commerce?

A mark can be used on goods (products), which would make it technically a “trademark”.  Specifically, this would mean the mark is applied, engraved, embroidered directly on the goods, POS displays, the use of labels or tags affixed to the good, or shipping labels when sending the goods through commerce.  It is not just merely advertising, but must have a Point of Sale component.

In the case of a mark used in connection with services, clearly there is no tangible part to a service.  Therefore, service marks are found on websites, brochures, advertising (but not printer’s proofs), on or at locations associated with the services, such as vehicles used with the service, or on the uniforms of employees while they perform the service.

How do I Properly Use my Trademark?

You can use ℠ for service marks, ™ for trademarks, and registered trademark symbol (the ‘R’ that has a circle around it) ONLY for registered marks (it is a violation of the law to use the registered symbol when your mark is NOT registered).  Further, the mark should be distinguished from regular text, through the use of quotation marks, larger print, all capital letters, or through colorization of the wording.  Also your grammar lessons are important for trademark usage.  A noun should ALWAYS follow a mark.  The mark should NEVER be used as a verb.  For example, it is a XEROX copier and NOT xeroxing. Or perfect for the web as another example, it is NOT you googled the answer, but it is rather you ran a GOOGLE search.  Finally, the correct spelling should be used and moreover, the mark should not be pluralized.

The point of all this proper usage is to avoid a loss in rights in the mark.  Many trademarks of famous brands have become generic, and generic terms are not entitled to trademark protection.  Consider that the word “escalator” used to be a registered trademark, but the Otis Elevator Company has lost that mark due to it becoming generic.  Therefore, you should be actively policing your trademark usage and avoid losing rights that you worked so hard to create with your brand.

That’s it for this time.  I hope to be back soon with more information to share.

Mahalo for stopping by!

-RKH

 

 

 

Using Social Media at Work: Part I

Admit it.  You have posted something on Facebook or Tweeted on your phone while you are at work today.  I bet you are even doing it now as you read this blog!  However, there are some legitimate concerns that an employer and employee should have when dealing with the workplace and social media usage.

The Employer and Social Media Use by Employees

As an employer should I be concerned that my employees are using social media on the job?   The answer to this question is a definite, “yes.”  Today, we will focus on an employer’s liability for the actions of their employees, what that means for social media use by an employee, and the various laws that come into that type of situation.

Employer Responsibility for the Actions of Employees: Respondeat Superior

Remember, how I mentioned in the last post that it is part of your due diligence to research qualified applicants?  Well, the reason is that you, the employer, is responsible for actions by your employees during work.  In the law we call it respondeat superior and it means “let the master answer” in Latin.

For example, let’s say a local moving company’s careless truck driver crashes the company truck into another car during rush hour in Downtown Honolulu.  The car driver will sue the moving company for hiring such a terrible employee.  It is due to respondeat superior that the driver can sue the employer (the master) for the negligent action of their employee.

How Social Media Fits into this Employer-Employee Relationship

With social media replace that truck with tools like Facebook and Twitter, and you see how you could be on the hook for your workers.  For example, let’s say you are a Honolulu marketing firm, and one of your employees decides to help your company by blasting your Maui competitor via Facebook;  they make false claims and are using the Maui company’s images in their Facebook attack.  They also then spend a better part of the working day harassing the Maui company’s Twitter feed by tweeting lewd questions.  Are you in big trouble for their actions?

Yes.  Now, let’s briefly look at some of the legal concerns that you should worry about when dealing with employees that use social media.

Trademark, Copyright and Patent Infringement

In the example story of the employee who used social media to attack the Maui company, they used another company’s image.  Whenever, you use another company’s intellectual property (trademarks, copyrights, and patents) without authorization you will face an infringement claim.  Let’s say an employee uses a rival company’s logo and crosses it out by using a digital media editor.  He then shares the picture through Facebook to proclaim that your company’s brand is better.  The use of their logo is a violation of their property right. Posting photographs, published works, or video clips owned by someone else can also present legal risk to the employer.

Defamation

An employee that is Tweeting or posting false statements that hurt another person or business’s reputation opens you up to a potential lawsuit.  Your employee that spends half her day attacking another company and making false claims about their products or services is a problem for you.

Harassment/Discrimination

We have heard in the news about “cyberbullying” in the schools, but apply those same behaviors to workers.  The employer has a duty to create a safe working environment and if one guy is “textually harassing” other workers it could open you to harassment claims by those workers.  If this bully is also singling out someone of a protected class (race, religion, sexual orientation, etc . . .) that also can lead to a discrimination claim.

Invasion of Privacy

Now, let’s say one of your managers accesses a worker’s private file and discovers that worker is a recovering alcoholic.  He then posts something to the effect of, “Did you know that so-and-so had alcohol problems?” to his friends on Facebook or tweets about it.  This would be an invasion of privacy of the worker.

Endorsements: Too Much of a Good Thing

Endorsements?  Isn’t it a good thing that my employee is helping me out?  It can be, sometimes.  However, in Hawaii were there are tons of workers who love their company like a family, the employer has to watch that their employees are not gushing over the company’s products and services and not disclosing their allegiance.  The Federal Trade Commission (FTC) has issued several rules and guidelines regarding employees promoting their employer’s services and products via social media.  Basically, if they do not disclose their relationship and reader of the post that gets injured because of it the employer may be sued even though it was the employee who wrote the post.

For Medical Providers: HIPAA Concerns

This is a special note for medical practitioners and those in medical-related fields that handle patient information.  I’m sure you all are aware of HIPAA.  Then you should realize that the following combination of a patient’s private information, an unhappy employee, and that unhappy employee’s access to social media is a potentially explosive legal situation.

In fact, a similar situation has already occurred in Hawaii, where in 2009 a hospital worker was sentenced to a one-year jail term for accessing a patient’s medical record and posting the patient’s HIV status on her social media account.  While, the state was suing the employee, you should remember that employers are responsible for their employees and medical employers should always be concerned with a breach in Protected Health Information (PHI). In the case of posting a patient’s medical condition on a social media site, such an action is a definite breach.

For Lawyers and their Staff: Violating Attorney-Client Confidentiality

Those in the legal industry should already be able to see the headache that social media means for attorney-client confidentiality.  It easily takes one tweet or Facebook post by a legal secretary or paralegal that discusses what they are working on to violate legal ethics and rules.  Lawyers should take pains to train their staff from posting or tweeting about anything related to cases and clients.

Last Words

While, these things should of be concern to any business owner with employees in this day of social media there are steps they can take to deal with the situation.  Other than having a good screening and hiring process for thoughtful employees and employer can fashion a social media policy.  An attorney can investigate your workplace, make recommendations, and draft such a policy to be added to your handbook.  A rational and coherent social media policy would discourage many of the aforementioned behaviors and allow you to explain to workers what is acceptable with regard to social media and its use.  Finally, it may allow you to take steps to possibly terminate or punish that employee for violating your policy.  However, there are certain boundaries of what can be enforced in a social media policy.

With that, see you in the next Social Media and the Law where we will continue with Part II of Using Social Media at Work.  We will discuss the situation more form the employee’s side and some of the boundaries of what an employer can do with their social media policy.

*Disclaimer:  This post discusses general legal issues, but does not constitute legal advice in any respect.   No reader should act or refrain from acting based on information contained herein without seeking the advice of counsel in the relevant jurisdiction.   Ryan K. Hew, Attorney At Law, LLLC expressly disclaims all liability in respect to any actions taken or not taken based on the contents of this post.