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Delaware Increases Corporate Formation Taxes 04/14/2014

Posted by Morse, Barnes-Brown Pendleton in Corporate.
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Corporate Attorney Joseph MarrowBy: Joseph Marrow

On Thursday, April 10, 2014, the Delaware legislature passed a new law, effective retroactively to January 1, 2014, which raises the annual corporate tax on limited liability companies, limited partnerships and general partnerships from $250 to $300 per year.  In addition, the legislation increases the minimum annual corporate franchise tax on businesses incorporated in Delaware from $75 to $175.  The Delaware legislature passed the legislation in an effort to fix a state budget gap.  Delaware has always been considered one of the most attractive states in the country for forming a new business enterprise.  It remains to be seen whether the new law will have an adverse impact on the state’s ability to continue to attract new businesses.

For more information on corporate formations, please feel free to contact Joe.

Employment Law Clip: Internships – Paid or Unpaid? 04/14/2014

Posted by Morse, Barnes-Brown Pendleton in Employment.
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Student internships have become increasingly popular, and while internships generally benefit employers and interns alike, there is uncertainty regarding whether internships may be paid or unpaid. MBBP Attorney Christopher Perry explains the importance of distinguishing between the nonprofit and for profit sector and the regulations that apply to each:

Please feel free to contact any member of our Employment Law Group with any questions on paid or unpaid internships.

Tax Considerations in Choosing the Form of Business Entity 04/11/2014

Posted by Morse, Barnes-Brown Pendleton in Attorney News, New Resources, Taxation.
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Corporate and Tax Attorney Charles Wry, Jr. By: Chip Wry

Founders of a new business typically realize early on that they need to conduct the business through a legal entity to limit their personal liabilities for the debts and obligations the business generates. Often, the three entity types from which the founders must choose are the “C” corporation, the “S” corporation and the limited liability company (or “LLC”). While all three entity types insulate the founders from personal liability, the differences among the three types for tax purposes are substantial. A C corporation, on the one hand, reports and pays tax on its income separately from its owners. The income or loss of an S corporation or LLC, on the other hand, generally is reported by the owners on their personal returns. The choice, therefore, is often tax-driven and requires an analysis of how the founders expect to grow and profit from the business.

View the full article to learn more.

Reminder: Deadline for Nasdaq Certification Approaching 04/10/2014

Posted by Morse, Barnes-Brown Pendleton in Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

As described in prior posts, Nasdaq recently amended its listing rules regarding the independence of compensation committee members.  A description of the changes may be found here and here.

The deadline for complying with Nasdaq’s revised listing requirements is the earlier of (i) a company’s first annual meeting after January 15, 2014, or (ii) October 31, 2014.  Listed companies are required to certify to Nasdaq, within 30 days after the applicable deadline, that they have complied with the new listing rules. The certification must be filed through Nasdaq’s listing center and may be found here.

For more information on the new Nasdaq listing requirements affecting compensation committees please contact Daniele Ouellette Levy.

Cambridge-based Timbre Acquired by Seatwave 04/09/2014

Posted by Morse, Barnes-Brown Pendleton in Client News, M&A.
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SeatwaveOn April 4th Timbre, an app that helps music fans find live shows, announced it has been acquired by MBBP client Seatwave.  Morse, Barnes-Brown & Pendleton serves as counsel to Seatwave, and advised it in connection with the structuring, negotiation and documentation of this transaction. Joe Martinez and Joshua French were the lead attorneys on this deal.

Read more about it here.

Wage & Hour Tip: Are Your Commissioned Sales Employees Entitled to Minimum Wage and Overtime? 04/01/2014

Posted by Morse, Barnes-Brown Pendleton in Employment, MBBP news, New Resources.
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Many employers use commission payments to increase the productivity of their sales force. Commissioned sales people can earn significant compensation. But, are commissioned sales people also entitled to minimum wage and overtime?  Please see our full Wage & Hour Tip of the Month to learn more.

Please feel free to contact MBBP’s Employment Law Group with any questions.

USPTO Announces Glossary Pilot Program to Expedite Software Patent Applications 03/28/2014

Posted by Morse, Barnes-Brown Pendleton in Computer Software & Hardware, Intellectual Property.
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Patent Attorney Sean DetweilerBy: Sean Detweiler

The USPTO recently announced the launch of a new pilot program called the Glossary Pilot Program, to run from June 2nd until December 31st.  The program is for software patent applications and requires an applicant to include a glossary section in the patent application specification to define terms used in the patent claims. Applications accepted into this pilot program will receive expedited processing and be placed on an examiner’s special docket prior to the first office action, and will have special status up to issuance of a first office action.  More information on the program can be found at USPTO.

If you wish to participate in this program, please contact Sean D. Detweiler.

Mass. Court Denies Motion for Certification of Defendant Class 03/25/2014

Posted by Morse, Barnes-Brown Pendleton in M&A.
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Corporate Attorney Joseph MarrowBy: Joseph Marrow

A recent decision of the Massachusetts Federal District Court denied a motion to certify a defendant class related to an indemnification claim concerning tax liabilities from an alleged breach of a merger agreement. In Mercury Systems, Inc. v. Shareholder Representative Services, LLC, et al., Civil Action No. 13-11962-RGS, the plaintiff, Mercury Systems, filed a motion to certify a defendant class (the defendant securityholders and the stockholder representative appointed to resolve post-closing disputes). To learn how the court ruled and what you can do to avoid post-closing disputes read the full article here.

For more information on this topic, please feel free to contact Joe.

Intellectual Property Today Names MBBP a 2013 Top US Patent Firm 03/18/2014

Posted by Morse, Barnes-Brown Pendleton in Intellectual Property, MBBP news.
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In the March 2014 issue of Intellectual Property Today, Morse, Barnes-Brown & Pendleton was named to the list of 2013 Top Patent Firms in the United States. The list is composed of law firms and individual representatives, ranked according to the number of utility patents issued in 2013 where the firm is listed as the legal representative on the issued patent. The number of patents issued in 2013 for which MBBP was identified as the representative law firm increased by 47.4%, ranking MBBP 20th out of 286  in growth, relative to 2012, and landing MBBP at #253 in absolute numbers.

MBBP has had a strong focus on building its patent practice over the last few years and is pleased to have earned placement on this list. Keep an eye out for MBBP’s continued growth in the patent arena.

For the full list, please click here.

Visit our website for more information on our patent practice!

Employment Law Clip: Employee Terminations Under the MA Wage Payment Law 03/17/2014

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Employment.
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Employers, there are some important aspects of the Massachusetts Wage Payment Law that you may not be aware of when firing or laying off an employee or employees. MBBP Attorney Christopher Perry explains what you need to know below:

Please feel free to contact any member of our Employment Law Group with any questions on Massachusetts wage payment laws.

Action Item for Smaller Reporting Companies – Update Your D&O Questionnaire 03/13/2014

Posted by Morse, Barnes-Brown Pendleton in Public Companies.
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Corporate Attorney Daniele Ouellette LevyBy: Daniele Ouellette Levy

It is proxy season for public companies with December 31 fiscal year ends. While the proxy disclosure requirements did not significantly change in 2013, there are important updates companies should make to their D&O questionnaires.

Smaller Reporting Companies (“SRCs”) should consider making the following updates:

  1. Compensation Consultants Conflicts of Interest: All reporting companies are now required to disclose in their proxy statement conflicts of interest of any compensation consultants engaged during the year to provide advice on the amount or form of executive and director compensation. SRCs should revise their D&O questionnaires to include questions regarding personal or business relationships between directors or executive officers and compensation consultants engaged by the company.
  2. Compensation Committee Independence: As described in previous posts, Nasdaq recently adopted changes to its listing standards which require compensation committee members to meet heightened independence standards. While many of these changes do not apply to SRCs, SRCs should consider updating D&O questionnaires to include questions regarding compensation committee independence in order anticipate required changes in the composition of the compensation committee in the event the company no longer qualifies as an SRC.
  3. Bad Actors: SRCs should consider including questions in their D&O questionnaires which would help the company determine whether any directors or executive officers would be considered “bad actors” under the newly adopted Rule 506(d) under Reg. D. The bad actor disqualification in Rule 506(d) would make the Rule 506 exemption under Reg. D unavailable for any private securities offering in which certain bad actors are involved.

For more information or assistance revising your D&O questionnaire please contact Daniele Levy.

Boston Business Journal Revisits Local Biotech IPO’s: “Where are They Now? 03/12/2014

Posted by Morse, Barnes-Brown Pendleton in Life Sciences, Public Companies.
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On March 7, the Boston Business Journal (BBJ) published an article titled “A year of biotech IPOs: Where is their stock price now?” which highlights fourteen local biotech companies that went public last year, ranking them by their stock increase seen since the close of their first day on the market until the March 6 close. A year ago this month, Enanta Pharmaceuticals and Tetraphase Pharmaceuticals, both of Watertown, MA, became the first two Massachusetts biotech firms to go public in what turned out to be the busiest biotech IPO boom in more than a decade.

To see the full list visit the BBJ.

Obtaining Early Biosimilar Patent Certainty in the Aftermath of Sandoz v. Amgen 03/11/2014

Posted by Morse, Barnes-Brown Pendleton in Intellectual Property, Life Sciences.
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Patent Attorney David FazzolareBy: David Fazzolare

In December 2013, the court case of Sandoz v. Amgen became the first instance in which a court has been asked to interpret the patent litigation provisions of the Biologics Price Competition and Innovation Act (the “Biosimilars Act”), the outcome of which may have significant impact on future biosimilar development.

To learn what this means for biosimilar applicants, see the full article.

Please feel free to contact David with any questions on this topic.

FDA Revises Interpretation of 5-year NCE Exclusivity 03/11/2014

Posted by Morse, Barnes-Brown Pendleton in Intellectual Property, Life Sciences.
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Patent Attorney Stan ChalvireBy: Stanley Chalvire

In an effort to incentivize the development of certain fixed-combination drug products, the Food and Drug Administration (FDA) recently issued draft guidance revising its interpretation of the 5-year New Chemical Entity exclusivity provisions of the Federal Food, Drug and Cosmetic Act (FD&C Act).

Sections 505(c)(3)(E) and 505(j)(5)(F) of the FD&C Act provide the holder of an approved New Drug Application with the benefit of limited protection from certain competition (e.g., generic competition) in the marketplace.  In particular, newly approved drug products that contain an active ingredient that has not been previously approved by FDA (a so-called “new chemical entity”) are eligible for 5-years of New Chemical Entity (NCE) exclusivity and, with one exception, during such 5-year exclusivity period, third party applications referencing the newly-approved drug cannot be submitted to FDA.

Fixed-combination drug products are combinations of two or more active ingredients in a single dosage form or drug product.  FDA has historically interpreted the 5-year NCE exclusivity provisions of the FD&C Act such that fixed-combination drug products that contained a previously-approved drug product were not eligible for 5-year NCE exclusivity, irrespective of whether such fixed-combination drug product contained a new chemical entity.

Based on FDA’s recognition of the increasing prevalence of fixed-combination drug products in certain therapeutic areas (e.g., cancer and infectious diseases, such as HIV) and the role that such combination products play in optimizing adherence to dosing regimens and improving patient outcomes, FDA has revised its interpretation of the 5-year NCE exclusivity provisions.  As a result of FDA’s revised interpretation, a 5-year NCE exclusivity determination will be made on the basis of each active ingredient in a drug product, such that a drug product that includes a new chemical entity will be eligible for 5-year NCE exclusivity, regardless of whether that drug substance is approved alone or in a fixed-combination.  FDA is soliciting comments in response to its draft guidance until April 25, 2014.

For more information or to discuss FDA’s new interpretation of the NCE provisions, please contact Stan Chalvire.

Delaware Court Grants Summary Judgment in M&A Class Action Suit 03/10/2014

Posted by Morse, Barnes-Brown Pendleton in M&A.
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Corporate Attorney Mary Beth KerriganBy: Mary Beth Kerrigan

On February 3, 2014, the Delaware Court of Chancery granted defendants’ summary judgment motion in the matter of In re Answers Corporation Shareholders Litigation. This case related to the acquisition of Answers Corporation by AFCV Holdings, LLC. The plaintiffs alleged that three of the Board members of Answers (comprised of the company’s CEO and two outside directors designated by a venture capital investor) were conflicted and in control of the negotiation process with the buyer and the Board breached its fiduciary duties by acting in bad faith as a result of “purposely engaging in a limited shopping process”. To learn the Chancery Courts ruling and what it means for other companies engaging in a merger or acquisition, please see the full post here.

For more information on this topic, please feel free to contact Mary Beth.

Supreme Court Expands Pool of Claimants in Whistleblower Case 03/07/2014

Posted by Morse, Barnes-Brown Pendleton in Public Companies.
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Corporate Attorney Joseph MarrowBy: Joseph Marrow

On March 4, 2014, the United States Supreme Court issued its decision in a much anticipated whistleblower retaliation case. In its decision, Lawson v. FMR, LLC, No. 12-3, the Supreme Court expanded the coverage of an anti-retaliation claim under Sarbanes-Oxley Act of 2002 (SOX) to an employee of a privately-held contractor (the contractor provided investment management services to Fidelity mutual funds). Pursuant to the Dodd-Frank Act, the Securities and Exchange Commission established an award program for whistleblowers creating a new private right of action for employees in the financial services sector who suffer retaliation for disclosing information about fraudulent or unlawful conduct related to the offering or provision of a consumer financial product or service. The First Circuit had ruled that the anti-retaliation provision only applies to employees of public companies. In a 6 to 3 vote, the Supreme Court reversed the decision of the First Circuit in favor of expanding the coverage of the whistleblower statute to cover employees of a public company’s private contractors and subcontractors.

In Lawson v. FMR, the Supreme Court interpreted a provision of SOX, namely 18 U.S.C. Section 1514A protecting whistleblowers, which provides in part: “No [public] company …, or any officer, employee, contractor, subcontractor, or agent of such company, may discharge, demote, suspend, threaten, harass, or in any other manner discriminate against an employee in the terms and conditions of employment because of [whistleblowing or other protected activity].” The Supreme Court was faced with the question whether the protected class was simply limited to employees of the public company itself or would include “employees of privately held contractors and subcontractors – for example, investment advisers, law firms, accounting enterprises – who perform work for the public company?” Noting that SOX was enacted following the Enron scandal and in part in response to that scandal, the Supreme Court interpreted the statute as a response to a “concern about contractor conduct of the kind that contributed to Enron’s collapse.” As such, the Supreme Court held that a broader interpretation of the statute (to capture contractors that perform work for public companies) was warranted.

The implications of the Supreme Court’s decision are far reaching. The Supreme Court’s holding significantly expands the pool of potential whistleblower claimants. It remains to be seen whether the parade of horribles predicted by the dissent – resulting in a multitude of spurious claims – will come to fruition.

For more information on this topic please contact Joe Marrow.

Duck Dynasty or Patent Dynasty? 03/06/2014

Posted by Morse, Barnes-Brown Pendleton in Intellectual Property, New Resources.
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Patent Attorney Sean DetweilerBy: Sean Detweiler

If you are reading this because the title caught your eye, then there is a good chance that you are aware of the recently popular Duck Dynasty® television show on A&E Television Networks, which is in its 5th season as I write this article. The frequent promotion for the show states, “meet the Robertsons; they turned duck calls into a multi-million dollar empire.”What you may not realize is that the family patriarch, Phil Robertson, is also a patent holder. He is listed as the inventor on at least two patents related to duck calls.

The cost of filing for, and obtaining, patent protection is not trivial. Independent inventors, startup companies, and small companies alike all have a common issue with which to grapple at the genesis of their own developing back stories. As a patent attorney, I repeatedly hear the same question, “Should we file a patent application to cover our invention, or should we put that money into the company for manufacturing and/or marketing or other areas to build the business?” My response to these questions usually is, “What is the value of your idea?”

Mr. Robertson made the tough choice early on in a market where there were a lot of competitors making duck calls. He invested in patents when he was just starting his company and making duck calls by hand in a shed in Louisiana. So what is the value of those two Phil Robertson duck call patents? Should you patent your idea? Read the full article to find out.

For more information about how MBBP’s Patent Practice can assist you, please contact Sean D. Detweiler.

Howard Zaharoff Interviewed for HoGo Blog Piece 03/04/2014

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Intellectual Property.
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IP and Technology Licensing Attorney Howard ZaharoffOn March 4 MBBP IP Technology and Licensing Attorney Howard Zaharoff was featured in a blog post by HoGo, a DRM (digital rights management) platform that lets users copy-protect, distribute and manage PDF files. The blog post titled “Ten Questions with… Howard Zaharoff (Part One)” shares his legal perspective on copyrights and copy protection with readers of HoGo Blog Confidential.

Visit HoGo to see the first half of Howard’s interview.

Please feel free to contact Howard with any of your own questions on IP and Copyright law.

Employment Law Clip: Pitfalls of Using Independent Contractors 03/03/2014

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Employment.
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Many businesses use “independent contractors” to augment their regular workforce. They see advantages to using trained, non-employee workers with specialized skills who can provide needed services on a short-term or long-term basis. However, the ability of businesses to classify workers as independent contractors is not unchecked. Businesses cannot avoid employer obligations simply by designating certain workers as independent contractors.

In this video Massachusetts Employment Lawyer Robert M. Shea discusses the serious danger that independent contractors can pose to a business when they do not comply with government and tax laws and are misclassified as such:

Want more information? Try some of our other resources on this topic:

Please feel free to contact any member of our Employment Law Group with any questions on independent contractor laws.

MBBP’s Employment Law Clip Series will provide quick, easy-to-digest snapshots of common Employment issues, as well as practical information on how to avoid complicated, expensive and time-consuming pitfalls. Stay tuned for the next topic on Wage Payment Laws: Termination.

SEC’s No Action Letter Provides Relief to M&A Brokers 03/03/2014

Posted by Morse, Barnes-Brown Pendleton in M&A.
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Corporate Attorney Joseph MarrowBy: Joseph Marrow

On January 31, 2014, the Securities and Exchange Commission (“SEC”) Division of Trading and Markets (the “Division”) issued a no action letter (the “No Action Letter”) providing relief to M&A Brokers (as defined below), in certain stated circumstances, engaged in the purchase or sale of privately-held companies from compliance with the registration requirements of Section 15(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). By reason of the no action relief, M&A Brokers may be entitled to receive transaction-based compensation without having to register as a broker-dealer under Section 15(a) of the Exchange Act. In issuing the No Action Letter, the SEC set a number of conditions to be followed. Please see the full post for more information including the full list of conditions.

For more information on this topic, please contact Joe.

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