Tags: business judgment rule, controlling stockholder, DE court, kahn v. Lynch, M&A Today, materiality scrape, mergers, shareholders
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In MBBP’s June issue of M&A Today, Scott Bleier provides insight into “Materiality Scrape” Provisions from both the Buyer and Seller perspective in merger and acquisition agreements, while Mark Tarallo discusses the business judgment ruling and how it benefits the defendants while providing a clear roadmap for controlling stockholders.
Read the June M&A Today here.
Still a Smaller Reporting Company? 06/25/2014Posted by Morse, Barnes-Brown Pendleton in Public Companies.
Tags: audited financial statements, common stock, compensation, determination date, MD&A, public float, SRC, SRC status
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Did you know that once a year smaller reporting companies (“SRCs”) are required to determine whether they continue to qualify as an SRC? For most companies the determination date is June 30 – the last business day of the company’s second fiscal quarter. To continue to qualify as an SRC, a company’s public float on the determination date must be less than $75M. Public float is calculated by multiplying the number of shares of common stock held by non-affiliates by the closing price (or average bid and ask price) on the determination date.
What changes if a company loses SRC status? If a company’s public float exceeds $75M as of the determination date it no longer qualifies as an SRC and must transition to the disclosure requirements applicable to larger companies. Some of the most significant changes include:
Timing? To assist with the transition in status, the SEC allows companies until the first quarter of the next fiscal year to begin to comply with the heighted disclosure requirements.
May a non-SRC qualify as an SRC? It is also possible for a non-SRC to transition to SRC status. This determination is also made as of the last business day of the second fiscal quarter. For a non-SRC to qualify as an SRC its public float must be less than $50M (or if the company has no public float, must have annual revenue in the last completed fiscal year of less than $40M). A new SRC may start taking advantage of the scaled disclosure requirements immediately.
For more information on this topic or assistance in determining whether your company qualifies as an SRC please contact Daniele Levy.
Tags: bridgewater-raynham, coffee pods, EurekaFest, innovation, inventeam, invention, lemelson-mit, MIT, STEM education
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By: Tracey Brenner
Lemelson-MIT hosted its eighth-annual EurekaFest June 20-21st, a celebration designed to empower the next generation of inventors by inspiring youth, honoring role models, and encouraging creativity and problem solving. Each EurekaFest Team, comprising high school students, educators and mentors, received up to $10,000 from the Lemelson-MIT Program to invent technological solutions to real-world problems of their own choosing.
Sixteen Teams, parsed into groups of four, presented their “pitch” to peers, teachers, and media in classrooms across the Stata Center at MIT the morning of June 20th. The young students, the most senior of which are now rising college freshmen, each handled themselves with youthful poise, enthusiasm, and eloquence. Teams actively displayed a product prototype during the presentation. Prototypes included, from Benjamin Banneker Academic High School in Washington D.C., a safety device that attaches to a door to prevent it from opening in an emergency situation; from Elkin’s High School in Missouri Texas, an automated disinfectant system for high-end 3D movie glasses; and from the School of Dreams Academy in Los Lunas, New Mexico, a system for detecting and alerting parked police officers of impending physical dangers.
In addition to displaying prototypes, Teams also described the need based/market-driven iterative ideation and development process in which they engaged, and touched on some of the ways they executed key to-market strategies. For example, students described building a well-balanced founding team, raising supplemental funds, securing support from the community/stakeholders, and, in some cases, conducting patentability studies and pursuing intellectual property protection. Students also answered a plethora of eager questions from and offered tips and advice to their peers.
This Lemelson-MIT Program is an example of collaborative cross-disciplinary STEM education reaching to its highest heights. May it incite and inspire educator and entrepreneur alike.
MBBP client Bridgewater-Raynham Regional Highschool’s InvenTeam was one of the 16 high schools nationwide to be selected for a $9,200 grant out of 250 applicants. Through this grant, the BR team has invented a device that separates and stores the materials of single-serve coffee pods allowing proper recycling and composting.
Congratulations Bridgewater Raynham InvenTeam!
Tags: financial accounting, IFRS, JOBS Act, mary jo white, SEC
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By: Mark Tarallo
On May 20, 2014 U.S. Securities and Exchange Commission Chair Mary Jo White spoke at the Financial Accounting Foundation Trustees Dinner. Given the audience, it is not surprising that her remarks focused on accounting issues at the SEC. In her remarks, Chair White mentioned that the SEC is still considering the addition of International Financial Reporting Standards (“IFRS”) for domestic registrants. Although no timetable was given for when the issue would be addressed, White noted that the interests of U.S. investors would be front and center during the IFRS consideration process. In addition, Chair White commented on the continuing efforts of the Disclosure Effectiveness Project, noting that she has directed the staff to undertake a comprehensive review of disclosure requirements under Regulation S-K and make specific recommendations for updating the requirements pursuant to a JOBS Act-mandated report on Regulation S-K that provides the staff’s recommendations for a review of corporate disclosure requirements. She also noted that the Financial Reporting and Audit Task Force, formed in July, 2013, will continue its increased enforcement efforts and will work to look ahead to identify additional areas where financial reporting fraud may be likely to occur, while focusing on internal controls related to the areas that have already been identified as being susceptible to financial reporting fraud.
The complete transcript of Chair White’s remarks is available here.
Tags: native americans, petition, pro football, trademark, trial and appeal board, USPTO, washington redskins
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By: Sheri Mason
The Trademark Trial and Appeal Board issued a decision today cancelling six of the Washington Redskins’ registered trademarks, finding that the marks disparage Native Americans. In 2006, five Native Americans filed a petition to cancel the marks, which were registered between 1967 and 1990, on the grounds that the marks disparage Native Americans. The T.T.A.B. agreed, finding that the marks were disparaging to Native Americans at the time the marks were registered.
If Pro Football, Inc. decides to appeal the decision, the T.T.A.B. will suspend cancellation of the registrations pending a decision by the court, which may take years. If they do not appeal, the registrations will be cancelled at that point.
What does this mean for the Washington Redskins? While the T.T.A.B. has authority to cancel the registrations of the marks, it does not have the authority to issue a ruling concerning the use of the marks. Therefore, even if Pro Football, Inc. does not appeal and the registrations are cancelled, the T.T.A.B.’s decision does not prevent the Pro Football, Inc. from continuing to use the Washington Redskins mark as the name of its professional football team. This decision also does not mean that third parties may use the marks once the registrations are cancelled; Pro Football has well-established common law rights to the marks and can still prevent third-party use.
The full opinion can be found here.
For more information on trademarks, please feel free to contact Sheri.
Tags: discrimination, employment law, retaliation claims
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Retaliation is now the most common type of discrimination alleged nationally, topping both race and gender. What are retaliation claims and what steps can employers take to reduce their risks? Check out our most recent Employment Law Clip to learn more:
Please feel free to contact any member of our Employment Law Group with any questions on retaliation claims.
Tags: federal, priority, protection, trademark registration, USPTO
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Trademark registration is not required in the United States, however, owning a federal trademark registration enhances rights in a mark. Here are the top ten reasons why you should register your mark with the United States Patent and Trademark Office:
- Prevention: Registering your mark can prevent potential conflicts from arising. Prospective applicants or their counsel often search the USPTO’s free online trademark registry to determine whether a proposed mark is available. Prospective applicants who encounter your mark might be deterred some from filing a mark that conflicts with yours.
- Priority (U.S.): Upon registration, the filing affords you nationwide priority over all others who filed after you, except: (1) parties who used the mark before your filing date; and (2) parties who are entitled to an earlier priority filing date based on a foreign application.
- Priority (Foreign): You have six months from your U.S. filing date within which to file in many foreign jurisdictions and claim as a priority filing date the date of your first-filed application in the U.S. for the same mark for use with the same goods and/or services. For example, if you apply in the U.S. on May 15, you may apply for the same mark for use with the same goods and/or services in China up to November 15 and claim a priority filing date in China of May 15. Your application in China will take priority over all others who filed in China during those six months.
- Presumption: Once on file, it is presumed your rights extend throughout the United States and its Territories. Nationwide presumptive rights, as contrasted with geographic limitations inherent in unregistered marks, can be critically important in avoiding confusion in domestic markets in which you currently operate and into which you intend to expand.
- Protection: Registering your mark protects against the registration of a third party’s confusingly similar mark for related goods and/or services by leveraging resources of the USPTO, which is charged with refusing registration of marks that conflict with prior pending and registered marks.
- Presentation: Registration affords you the right to use the ® symbol when displaying your mark. Use of the ® symbol communicates to your current and prospective clients you are serious about protecting your intellectual property rights. Use of the ® symbol is required at the time an enforcement action arises in order to recover profits and damages in federal court.
- Property: Your Certificate of Registration constitutes prima facie evidence of your exclusive ownership of the mark for use with the goods and/or services identified in the registration. After five years of continuous use your property right becomes “incontestable” by operation of law and can no longer be challenged by any third party claiming your mark is likely to cause or is causing confusion with their mark.
- Plaintiff: Federal trademark registration grants you the right to sue for trademark infringement under federal law. Other claims might be available depending on the facts, such as unfair competition, false advertisement, etc., but Section 32 of the Trademark Act, which governs infringement claims, expressly provides for relief to “the registrant” only.
- Profits: When a violation of any right of the registrant of a mark registered in the USPTO is established in a civil action, the registrant may recover certain statutory damages, including defendant’s profits. If you do not register your mark, you cannot recover lost profits.
- Ports: You may record your federal trademark registration with U.S. Customs and Border Protection to block imports that infringe your mark or are counterfeits of your goods.
For more information on trademark registration and other trademark topics, please contact Tom Dunn.
Tags: mary beth kerrigan, Showa Boston, the business coalition
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The Business Coalition (TBC) and the Showa Boston Institute for Language and Culture are uniting to host a panel discussion entitled “Shattering the Bamboo Ceiling” on June 12th. MBBP Corporate Attorney Mary Beth Kerrigan will sit as one of five panelists, all Boston-area women of distinction, who will discuss their personal journeys of where they are today in their work life. The event will be simulcast to students located at Showa Tokyo on Friday morning as well.
To learn more about the event, please visit The Business Coalition.
MBBP Co-Hosts ‘Best Practices for Powerful Relationships between Innovative Small Companies & Successful Large Companies’ 06/03/2014Posted by Morse, Barnes-Brown Pendleton in Events.
Tags: enterprise, innovation, small business, startup
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MBBP’s Robert Finkel is pleased to co-host the Boston IE (Innovation and Enterprise) Club’s panel session, ‘Best Practices for Powerful Relationships Between Innovative Small Companies and Successful Large Companies’ on Monday, June 9th at the Venture Café at CIC. Registration is complimentary, please RSVP here.
The event will begin at 6:30pm with networking over refreshments followed by the panel session as well as an introduction to the recently-formed Boston IE Club, its plans and future programs – both domestic and international – based on its successful predecessors the Paris IE Club and the IE Clubs of Montreal and Tel-Aviv.
Other co-hosts include Alexander Bok, Maurice Khawam and David Ayache. Questions about the Boston IE Club and the Panel can be directed to Alexander Bok.
MBBP Opens Law Office in Salt Lake City 06/02/2014Posted by Morse, Barnes-Brown Pendleton in Attorney News, MBBP news.
Tags: Law Firm, Salt Lake City, Utah
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We are pleased to announce that we have opened a Utah office to serve the fast-growing market in private equity and emerging growth companies in and around Salt Lake City, Utah, and the broader Mountain West region. According to Managing Partner Lisa Warren Treannie, Utah’s “increasing demand for lawyers who represent high tech, medical device, and life sciences companies and the investors who invest in these companies,” as “a perfect fit” for MBBP.
The Salt Lake City office is led by partners Jeffrey P. Steele and James J. Kelly. Steele focuses on emerging growth companies in a variety of industries including life sciences and medical devices and represents a range of clients in angel and venture capital financing, mergers and acquisitions, joint ventures, and business partnering transactions. Kelly represents private investment fund managers in all aspects of their businesses, including fund formation and compliance, operational and regulatory matters. For more information see our official press release and view the announcement video below.
Tags: crowdfunding, enterprise center, family money, funding, salem state, seed money, startups
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The Enterprise Center at Salem State University is hosting an event titled “Raising Money from Friends and Family – How to Do it Right” on Friday, June 6th. MBBP Corporate Attorney Mary Beth Kerrigan is one of three speakers at the event who will provide an interesting discussion on early sources of funding, from both traditional and non-traditional sources, how to do it right, and the crucial pitfalls to avoid.
To learn more or to register for the event, please visit the Enterprise Center.
Do you have questions regarding seed funding? Feel free to contact Mary Beth.
Jon Gworek Leads Private Equity and Venture Capital Committee at ABA Business Law Spring Meeting 05/30/2014Posted by Morse, Barnes-Brown Pendleton in Attorney News.
Tags: ABA, business law, venture capital
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Last month the Private Equity and Venture Capital Committee of the Business Law Section of the American Bar Association met at the recent Business Law Section Spring Meeting in Los Angeles, CA. As chair of the PEVC committee, MBBP Partner Jon Gworek was involved in the planning of several committee meetings and CLE’s. The PEVC committee’s main CLE event was called “Exiting the Venture Backed Company: Jurisprudence and Practice”, in which the panelists took an in-depth look at the Trados case. Panelists included James Honaker of Morris, Nichols, Arsht & Tunnell, Daphne Chang of Google Ventures and Rachel Proffitt of Wilson Sonsini Goodrich and Rosati with moderator Eric Klinger-Wilensky of Morris, Nichols, Arsht & Tunnell.
To learn more on the topic, please contact Jon Gworek.
Tags: acquired, entrepreneurs, investors, IPO, Life Sciences, m&a, technology, TiECON East
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TiECON East, the largest startup conference on the East Coast, is being held at the Cambridge Marriott on May 29th-30th. Entrepreneurs from technology, life sciences, education and cleantech industries attend the two-day conference to learn about the latest trends in innovation, get advice from experienced entrepreneurs, and network to find their next big opportunity. On Friday, May 30th MBBP Attorney Shannon Zollo will be moderating a panel titled “M&A or IPO, That’s the Question” in which distinguished experts will help answer questions such as:
- How early is too early to start thinking about the Exit?
- What are the important factors to consider for an exit event, whether IPO or M&A?
- What steps do you need to take today to ensure the best return for yourself and your investors?
- Does the type of investor you seek matter?
To learn more about the panel, visit TiECON East.
For more information on the specifics regarding M&A transaction or IPOs please feel free to contact Shannon Zollo.
USPTO Proposes Reducing Fees for Trademark Applications and Renewals Filed Electronically 05/20/2014Posted by Morse, Barnes-Brown Pendleton in Intellectual Property.
Tags: renewals, TEAS, trademark applications, USPTO
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By: Thomas Dunn
The USPTO has issued a notice of proposed rulemaking relating to the reduction of fees for trademark applications and trademark renewals filed electronically.
Currently the per-class fees for filing an application for registration of a trademark are set at $375 for filing a paper application, $325 for filing electronically using the regular Trademark Electronic Application System (TEAS) form, and $275 for filing electronically using TEAS Plus form, which involves additional requirements. The per-class fee for renewal of a trademark registration is currently $400.
The USPTO proposes to reduce by $50 the fee for an application filed using the regular TEAS application form from $325 to $275 per class if the applicant authorizes email communication and agrees to file all responses and other documents electronically during the prosecution of the application. This option will be known as a TEAS Reduced Fee (‘‘TEAS RF’’) application. The USPTO also proposes to reduce by $50 the fee for a TEAS Plus application for registration from $275 to $225 per class and reduce by $100 the fee for a TEAS application for renewal of a registration from $400 to $300 per class.
The filing fee of $375 per class for trademark applications filed on paper will not be changed. The filing fee of $400 per class for renewal of a trademark registration filed on paper will likewise not be changed.
The full notice is available here. The comment period closes on June 23, 2014. We expect the reduced fee structure will be implemented shortly thereafter.
Trademark attorneys at Morse, Barnes-Brown and Pendleton file every application and renewal electronically, authorize email communication with the USPTO, and file all responses and other documents electronically during the prosecution of an application. By meeting these requirements, we are positioned to help reduce filing costs for our clients. We invite you to talk with us about how we can meet your trademark needs in a cost-efficient manner.
MBBP Named “Best Law Firm” in Boston 05/12/2014Posted by Morse, Barnes-Brown Pendleton in Client News, Taxation.
Tags: best law firm, Best Lawyers, boston, litigation, tax, taxation, us news
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U.S. News and Best Lawyers, the leading survey of lawyers worldwide, have joined to rank more than 11,000 firms in 120 practice areas in 170 metropolitan areas and 8 states. Morse Barnes-Brown & Pendleton PC has received a Tier 1 ranking of Boston’s “Best Law Firm” 2014 in two practice areas: Tax Law and Litigation-Tax. The U.S.News – Best Lawyers “Best Law Firms” rankings are based on an evaluation process that includes the collection of client and lawyer evaluations, peer review from leading attorneys in their field, and review of additional information provided by law firms as part of the formal submission process.
MBBP is proud of our impressive tax department. Please feel free to contact the members of our team with any tax-related questions.
Delaware Legislature Proposes Amendments Allowing Escrowing of Director and Stockholder Consents 05/08/2014Posted by Morse, Barnes-Brown Pendleton in M&A.
Tags: board of directors, delaware court, DGCL, escrow, M&A transactions, stockholder
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By: Scott Bleier
In response to the practical concerns raised by AGR Halifax Fund, Inc. v. Fiscina (743 A.2d 1188 (Del. Ch. 1999)), new legislation has recently been proposed that would amend Section 141(f) of the General Corporation Law of the State of Delaware (“DGCL“) to clarify that an individual, whether or not then a director, may consent to Board action at a future time (including upon the occurrence of an event) no later than 60 days after the consent is given. If enacted, the proposed amendment would become effective on August 1, 2014 and would allow a soon-to-be-appointed director to consent to a future action of the Board and place the consent in escrow, such consent to become effective upon the closing of a transaction (provided that the closing does not occur more than 60 days after the consent was provided and placed in escrow).
Please see our full blog post to learn the concerns brought about by Halifax and what this may mean for your merger/acquisition transaction.
Tags: innovation awards, iZotope, new england, SBANE
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MBBP client iZotope, Inc. has been selected as a winner of the 2014 New England Innovation Awards, an annual award program put on by the Smaller Business Association of New England’s (SBANE) that recognizes companies that are potential game changers in their specific markets. iZotope is an audio technology company that develops professional audio software for audio recording, mixing, broadcast, sound design, and mastering.
Congratulations iZotope and thank you for allowing MBBP to be a part of your success!
To learn more about the New England Innovation Awards, please visit SBANE.
Tags: conflict minerals, court of appeals, dodd-frank, form sd, gold, SEC, tantalum, tungsten
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By: Mark Tarallo
On April 14, 2014, the U.S. Court of Appeals for the D.C. Circuit struck down a portion of the “conflict minerals” rules promulgated by the Securities and Exchange Commission pursuant to the Dodd-Frank Act. In National Association of Manufacturers v. Securities and Exchange Commission, the court concluded that the provision of the conflict minerals rules that required an issuer to state on its website that its products may incorporate conflict minerals was unconstitutional on free speech grounds. In a 2-1 decision, the court struck this requirement, while leaving the other conflict minerals reporting obligations in place.
In an effort to combat the ongoing abuses and exploitation in the Democratic Republic of Congo and other African countries, Congress incorporated into the Dodd-Frank Act a provision that the SEC issue regulations requiring certain reporting companies to investigate and disclose the source of any “conflict minerals” such as gold, tantalum and tungsten used in their products. The goal of the rule is to identify those publicly-traded companies that use conflict minerals in their products and to pressure those companies to find legal sources for those materials. The final rule promulgated by the SEC required an issuer to undertake a three step process: i) determine if conflict minerals are used in the issuer’s products, and if so, ii) undertake a “reasonable country of origin” inquiry to determine the source of those conflict minerals, and if the issuer determines that the conflict minerals may have originated in certain countries, iii) “exercise due diligence on the source and chain of custody of its conflict minerals.”
Once an issuer determines (or has reason to believe) that the conflict minerals used in its products originated in covered countries, the issuer has an obligation to file a Conflict Minerals Report on Form SD, including a required third-party audit. In addition, in certain circumstances, issuers were required to post a notice on their website that their products “have not been found to be DRC conflict-free.” The recent ruling struck down just this last requirement, while leaving much of the remaining framework (including the obligations to investigate sources and file a Form SD) in place. Issuers should continue to prepare to File Form SD, as it is difficult to predict that any further action will take place prior to the upcoming May 31 deadline.
The SEC has indicated that it is reviewing the ruling.
For more information on this topic, please feel free to contact Mark Tarallo.