Insights on Corporate Venture Capital 03/04/2015
Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, New Resources, Public Companies, Venture Capital & Private Equity.add a comment
Last week, MBBP’s Scott Bleier attended a panel discussion hosted by the Johnson & Johnson Boston Innovation Center, which featured three corporate venture capitalists from Sanofi-Genzyme Bioventures, Boehringer Ingelheim Venture USA Inc. and Johnson & Johnson Development Corp. In a very informative and candid discussion, the panelists shared the investment philosophies behind their companies’ CVC funds, what issues they consider when making an investment and their insights for start-ups seeking access to CVC funding. The panel revealed several points of apparent consensus in the CVC community while also highlighting a divergence of philosophical approach in certain important areas.
To learn more about the panel discussion regarding CVC funds, please visit our VCs and Start-Ups blog.
Exciting Development Regarding H-4 EADs 02/27/2015
Posted by Morse, Barnes-Brown Pendleton in Employment, Immigration, Legal Developments, New Resources.Tags: department of homeland security, employee, FAQs, foreign national, H-4 EADs, immigration alert, Obama's Executive Order
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In light of the latest development from the Department of Homeland Security allowing H-4 spouses of certain H-1B workers to apply for employment authorizations, we have compiled a list of important FAQs to help employers, and their employees, understand the implications of this new regulation.
To learn about the FAQs regarding H-4 EADs , and how this new development will affect you, please read our full alert.
Forging Successful Strategic Alliances for Life Sciences Companies 02/25/2015
Posted by Morse, Barnes-Brown Pendleton in Corporate, Licensing & Strategic Alliances, Life Sciences, M&A, New Resources, Public Companies.Tags: alliances, licensing, Life Sciences, rights of first refusal, strategic partnerships, technology companies
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When entering into an exclusive licensing arrangement, the odds of success are against most companies. Typically within the first twelve months of an arrangement, 2/3 of all alliances crumble. If these ventures are so prone to failure, what preventative measures can a company employ to ensure success?
To learn how to achieve success when entering an alliance, read John Hession’s full article.
MBBP Ranked “Best Law Firm” in Boston by U.S. News and Best Lawyers 02/24/2015
Posted by Morse, Barnes-Brown Pendleton in Litigation, MBBP news, Taxation.Tags: Best Law Firms, Best Lawyers, boston, litigation, tax, us news
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U.S. News and Best Lawyers, the leading survey of lawyers worldwide, have joined to rank more than 12,000 firms in 120 practice areas in 174 metropolitan areas and 8 states. Morse Barnes-Brown & Pendleton P.C. has received a Tier 1 ranking of Boston’s “Best Law Firm” 2015 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.
Tips for Caring for Your Patent Garden During Economic Winter 02/20/2015
Posted by Morse, Barnes-Brown Pendleton in Intellectual Property, New Resources.Tags: patent application, patent law, patent portfolio audit
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There’s snow on the ground, snow on the MBTA tracks, snow on the roofs….it feels like winter will never end! But inevitably it will, and we’ll once again have warm spring breezes, singing birds and blooming tulips to refresh our spirits. In the meantime, while your real garden sleeps beneath the snow, this is the perfect opportunity to consider tending your patent garden to ensure that it flourishes for years to come.
Here are 5 tips from Patent Attorney Lisa Warren. Feel free to contact Lisa with questions about your patent portfolio.
MBBP Client Demiurge Studios Acquired by SEGA Networks 02/20/2015
Posted by Morse, Barnes-Brown Pendleton in Client News, Computer Software & Hardware, Games & Interactive Entertainment, Intellectual Property, Legal Developments, Licensing & Strategic Alliances, New Resources, Public Companies, Publishing & Media.Tags: console developer, Demiurge Studios, Marvel Puzzle Quest, mobile apps, mobile developer, SEGA
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MBBP Client Demiurge Studios, an independent game developer out of Cambridge, Massachusetts, has been acquired by SEGA Networks, a multinational video game developer, publisher, and hardware development company. Founded in 2002, Demiurge Studios made the transition into mobile gaming in 2008 and found success with Marvel® Puzzle Quest™, a top 100 grossing app on the App Store and top 50 grossing apps on Google Play. Previously, they worked with world-class developers like BioWare™ and Irrational Games™ on AAA console and PC games, contributing to titles such as Bioshock, Borderlands, and Mass Effect. Demiurge Studios will continue to make games under the Demiurge Studios name.
Morse, Barnes-Brown & Pendleton serves as counsel to Demiurge Studios, and advised it in connection with the structuring, negotiation and documentation of this transaction.
Joe Martinez was the lead corporate attorney on MBBP’s team, which also included attorneys Mike Cavaretta, Diana Española and Hillary Peterson.
To learn more, read the full press release.
Employment Attorney Scott Connolly authors Chapter in MCLE Book 02/17/2015
Posted by Morse, Barnes-Brown Pendleton in Attorney News, Employment, New Resources.add a comment
Scott Connolly, a partner in MBBP’s Employment Law Group, authored the chapter “Policies to Guide Employee Conduct and Respond to Misconduct” in MCLE’s book Drafting Employment Documents in Massachusetts (3rd Edition 2015). The book is published by MCLE and is an essential resource for Massachusetts employers, employment attorneys, and human resources professionals.
To learn more about what Scott’s chapter covers regarding employment, head over to our Employment Blog.
Attention: File H-1B Visas Early 02/09/2015
Posted by Morse, Barnes-Brown Pendleton in Employment, Immigration.Tags: employment, h-1b visa, immigrant visa, immigration
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On April 1st the 2016 H-1B cap will open. As the economic conditions continue to improve the demand for H-1B visas will likely vastly exceed the available supply. Last year, over 172,000 cap subject H-1B petitions were filed in the first week of April, which lead to a series of lotteries to determine which petitions would be accepted for processing. It’s projected that this year’s cap will reach its limit in the first week as well.
For information on H-1B visas and when to consider filing a petition read the full alert.
MBBP Welcomes New Member John Tumilty 02/06/2015
Posted by Morse, Barnes-Brown Pendleton in Attorney News, Litigation.Tags: arbitration, breach of contract, business litigation, commercial litigation, mediation
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MBBP is pleased to announce that John Tumilty has joined the firm as a member and Chair of the Firm’s Business Litigation Group. John has handled numerous complex business disputes for companies, partnerships, and individuals involved in litigation, arbitration, and mediation concerning issues ranging from ongoing management and operational issues to contractual, licensing, and dissolution issues. He has substantial experience successfully representing clients involved in a variety of commercial litigation matters involving breach of contract, unfair trade practices, breach of fiduciary duty, fraud, and misrepresentation claims.
Prior to joining MBBP, John practiced at Edwards Wildman, where he was a member, and former Co-Chair, of the Firm’s Commercial Litigation Practice Group. John earned a BA in political science from Boston College, and his JD from Suffolk University Law School, where he was a member and editor on the Law Review.
Please feel free to contact John Tumilty directly.
Insider Trading Prosecutions Going Forward: The Fallout from Newman 02/06/2015
Posted by Morse, Barnes-Brown Pendleton in Legal Developments, New Resources, Public Companies.Tags: insider trading, Second Circuit Court of Appeals, tippee, United States v. Newman
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By: Mark Tarallo
In its recent decision in United States vs. Newman, the Second Circuit Court of Appeals imposed a significant burden on prosecutors bringing insider trading cases. The Court articulated that in an insider trading case, the prosecution must prove that:
- the corporate insider was entrusted with a fiduciary duty
- the corporate insider breached his fiduciary duty by (a) disclosing confidential information to a tippee (b) in exchange for a personal benefit;
- the tippee knew of the tipper’s breach, that is, he knew the information was confidential and divulged for personal benefit; and
- the tippee still used that information to trade in a security or tip another individual for personal benefit.
The ruling makes it difficult, if not impossible, to prosecute remote tipees, who learn the insider information from someone other than the corporate insider who makes the original disclosure of confidential information. Given how difficult this standard will be to meet, it is not surprising that the prosecution has appealed the decision. US Attorney Preet Bharara’s office has both asked the three judge panel that issued the Newman opinion to rehear the case, and has requested that the entire US Second Circuit Court of Appeals to review the case en banc. A narrowing or reversal of the Newman ruling is critical to the efforts of prosecutors to continue to bring insider trading cases.
The Newman ruling has already had a negative impact on recent cases. A federal judge sitting in the U.S. District Court in Manhattan vacated the guilty pleas of four men charged with insider trading relating to IBM. Citing Newman as controlling law, Judge Andrew Carter ruled that the guilty pleas must be vacated based on the new standards for insider trading (although he did not go as far as dismissing the charges outright).
For additional information on this topic, please feel free to contact Mark Tarallo.
MBBP Client Forge Worldwide Wins “Sweet” Partnership with Friendly’s 02/05/2015
Posted by Morse, Barnes-Brown Pendleton in Client News, Industries, Internet and E-Commerce, Public Companies, Publishing & Media, Telecommunications & Networking.Tags: Advertising, Forge Worldwide, Friendly's
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MBBP would like to congratulate client Forge Worldwide, a Boston-based advertising agency, for winning a partnership with Friendly’s Ice Cream. Forge Worldwide will now oversee all television, radio, print and out-of-home advertising for Friendly’s as well as provide support to the Friendly’s team as it focuses on its re-brand and resurgence in core markets. Some other clients Forge Worldwide works with include Cisco, Rockland Trust, Brigham and Women’s Hospital, and Dragon Speech Recognition Software.
You can read the full announcement here.
Well done, Forge Worldwide!
Reminder: Schedule 13G Amendments and Forms 5 due February 17, 2015 02/05/2015
Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, New Resources, Public Companies.Tags: Form 5, Schedule 13D, Schedule 13G, stockholders
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Significant stockholders of public companies have ongoing reporting obligations under Sections 13 and 16 of the ’34 Act.
- Beneficial owners of greater than 5% of a registered class of stock of a public company must disclose their ownership by filing a Schedule 13D. Certain stockholders may instead file the abbreviated Schedule 13G provided their ownership does not exceed 20% and they meet certain other requirements.
- Owners of greater than 10% of a registered class of stock of a public company must disclose all transactions in company securities under Section 16 within two business days of the transaction. Reporting of certain transactions – such as gifts – may be delayed until the end of each calendar year and reported on Form 5.
Amendments to Schedule 13G and Forms 5 are due on February 17, 2015 (45 days after the end of the calendar year, plus a few extra days due to the President’s Day holiday). These filings are required in order to disclose any changes in ownership during the past year or any transactions in company securities during the past year which were not previously disclosed.
Keep in mind that while changes in ownership may result from actions at the company level – such as option vesting or option grants – the obligation to make these filings is the responsibility of the individual stockholder.
For help determining whether you are required to submit a filing please contact Daniele Levy.
Dane Street Expands to Better Serve Their Customers 02/03/2015
Posted by Morse, Barnes-Brown Pendleton in Client News, M&A.Tags: Dane Street, mergers and acquisitions, NEN
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MBBP client Dane Street recently announced the acquisition of National Examinations Network (NEN) a Huntington, NY based company. The new partnership will further strengthen Dane Street’s ability to better serve their clients within that region. Morse, Barnes-Brown & Pendleton serves as counsel to Dane Street, and advised it in connection with the structuring, negotiation and documentation of this transaction. Shannon Zollo was the lead corporate attorney on MBBP’s team.
More details can be read here.
USPTO Reduces Certain Trademark Filing Fees 01/29/2015
Posted by Morse, Barnes-Brown Pendleton in Intellectual Property, Legal Developments.Tags: application, Trademark filing fees, trademark registration, USPTO
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By: Tom Dunn
On January 17, 2015, the USPTO reduced certain trademark filing fees and introduced a new electronic application filing option.
The fee for both the TEAS Plus application and the TEAS Regular application are reduced by $50. The TEAS Reduced Fee (TEAS RF) application is a new filing option, and one may still submit a paper filing, as well:
| Application for registration, per international class (paper filing) |
$375 |
| Application for registration, per international class (electronic filing, TEAS application) |
$325 |
| Application for registration, per international class (electronic filing, TEAS RF application) |
$275 |
| Application for registration, per international class (electronic filing, TEAS Plus application) |
$225 |
Each of the three TEAS options comes with a set of requirements; the lower the fee, the higher the number of requirements. (TEAS is an acronym for Trademark Electronic Application System.)
For example, to take advantage of the $225 fee per class of goods/services in the TEAS Plus application, one must meet the following requirements: include an e-mail address and authorization for the USPTO to send application-related e-mail correspondence; agree to file related submissions, such as responses to Office actions, electronically via TEAS; select an identification of goods/services from the USPTO Trademark ID Manual; pay all fees at the time of filing; and provide certain statements regarding the mark in the application as-filed, if applicable (e.g., translation statement, claim of ownership, color claim and description).
Only a subset of the foregoing requirements pertains to the TEAS RF application, while none pertain to the TEAS application.
If one files a TEAS Plus or TEAS RF application but does not satisfy the relevant requirements the applicant will be required to submit an additional processing fee of $50 per class of goods or services, and the application will then be handled as a TEAS application.
The fee to electronically renew a trademark registration has been reduced by $100, to $300 per class of goods/services, as well.
Please see the Reduced Fee FAQs page for more information about the new filing fees and the Trademark Fee Information page for information on payment options and a listing of other trademark fees.
To discuss trademark filing options and related matters, please contact Tom Dunn by email at tdunn@mbbp.com or by phone at (781) 697-2248.
Action Item for Smaller Reporting Companies – Update Review of Internal Controls to COSO 2013 01/29/2015
Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, New Resources, Public Companies.Tags: 10-K, COSO 2013, SEC, SOX 404
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In response to the requirements of SOX 404, a majority of public companies adopted the 1992 framework prepare by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) to assess the design and effectiveness of their internal controls over financial reporting. Effective as of December 14, 2014, COSO no longer makes the 1992 framework available and encourages public companies to transition to its revised framework – COSO 2013.
Public companies are required, on an annual basis, to evaluate the effectiveness of their internal controls over financial reporting and to disclose in their 10-K the results of such evaluation and the framework used to make such evaluation. Public companies must also disclose any material changes to internal controls – for example changes resulting from a transition to COSO 2013.
Companies who delay the transition to COSO 2013 face the risk of increased scrutiny by the SEC. In a recent public meeting, the SEC staff stated “the longer issuers continue to use the 1992 framework, the more likely they are to receive questions from the staff about whether the issuer’s use of the 1992 framework satisfies the SEC’s requirement to use a suitable, recognized framework”. To avoid questions form the staff, smaller reporting companies will want to take steps to transition to COSO 2013.
For more information regarding this topic, please feel free to contact Daniele Ouellette Levy.
In Honor of Data Privacy Day, MBBP’s Data Privacy “Bell Ringers” 01/28/2015
Posted by Morse, Barnes-Brown Pendleton in New Resources, Privacy and Data Security.Tags: data privacy, personal information, security, Stay Safe Online
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Happy Data Privacy Day!
Information and data are everywhere. Indeed, as of 2010, it was noted that “every two days, we create as much information as we did from the dawn of civilization up until 2003.” And as information and data have proliferated, so too have the laws applicable to privacy and data security. Understanding — and complying with — this rapidly changing landscape of laws is critical for any business, because the penalties for violation can be significant and may include substantial fines plus destruction of unlawfully obtained data.
So, in honor of this week’s Data Privacy Day, the privacy team at MBBP would like to share with you some of the major privacy “bell ringers” — the contexts that should “ring a bell” indicating the presence of privacy-related legal issues and prompt you to consult with privacy counsel.
For instance, handling any of the following classes of information should ring a bell: 
- Medical or Health
- Credit/Debit Card or Bank/Financial Account
- Social Security Numbers
- “Personal Information” within the meaning of the Massachusetts Standards for the Protection of Personal Information of Residents of the Commonwealth, 201 C.M.R. § 17.00 et seq. (Massachusetts resident’s first name and last name or first initial and last name in combination with anyone or more of the following data elements that relate to such resident: (a) Social Security number; (b) driver’s license number or state-issued identification card number; or (c) financial account number, or credit or debit card number, with or without any required security code, access code, personal identification number or password, that would permit access to a resident’s financial account).
Check out our other “bell ringers“.
To discuss your specific privacy and data security legal services needs, please contact Faith Kasparian, Michael Cavaretta, or Howard Zaharoff.
Court Outlines Requirements for Insider Trading Case 01/23/2015
Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, New Resources, Public Companies.Tags: insider trading, US v. Newman
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By: Mark Tarallo
In a decision dated December 10, 2014, the Second Circuit Court of Appeals clarified its position on insider trading cases where the discloser of the information committed no crime. In US v. Newman, the Court addressed a situation where the defendants, who were several “degrees” removed from the discloser of the information, received the information without any knowledge as to the criminal liability of the discloser. The Court ruled that since the defendants did not know that the discloser committed a crime, then the defendants cannot be guilty of a criminal act, stating in part “we find no support for the Government’s contention that knowledge of a breach of the duty of confidentiality without knowledge of the personal benefit is sufficient to impose criminal liability.” The Court then went on to lay out a clear statement of the requirements for an insider trading case:
In sum, we hold that to sustain an insider trading conviction against a tippee, the Government must prove each of the following elements beyond a reasonable doubt: (1) the corporate insider was entrusted with a fiduciary duty; (2) the corporate insider breached his fiduciary duty by (a) disclosing confidential information to a tippee (b) in exchange for a personal benefit; (3) the tippee knew of the tipper’s breach, that is, he knew the information was confidential and divulged for personal benefit; and (4) the tippee still used that information to trade in a security or tip another individual for personal benefit.
The Court reversed the lower court’s guilty finding, and ordered a finding of not guilty. In addition to clearly setting out the standards for an insider trading case, the case serves as a reminder to all public companies that they should incorporate robust protections to ensure against even the inadvertent disclosure of confidential, non-public information.
For more information regarding this topic, please feel free to contact Mark Tarallo.
Tax Alert – February 2, 2015 Deadline for Information Reporting with Respect to Exercised Incentive Stock Options 01/23/2015
Posted by Morse, Barnes-Brown Pendleton in Taxation.Tags: incentive stock option, IRS, taxation
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Action May Be Required
Corporations, both publicly and privately held, that transferred stock in 2014 pursuant to the exercise of incentive stock options (ISOs) are required to report each transfer to both the IRS and the exercising person.
Form 3921 (Exercise of an Incentive Stock option Under Section 422(b)) is used for both reporting purposes. Form 3921 requires the corporation to furnish certain information regarding the exercise, including the fair market value of the shares of stock on the date the ISO was exercised.
This year, corporations must furnish Forms 3921 to all exercising persons on or before February 2, 2015 and to the IRS on or before March 2, 2015 (March 31, 2015, if forms are filed electronically). Each exercise by an employee requires a new Form 3921, which may require corporations to fill out and furnish multiple 
Forms 3921 for some employees.
In general, for each Form 3921, failure to furnish all statements in a timely manner, failure to include all required information, inclusion of incorrect information, or the filing of unofficial Forms 3921 that cannot be scanned by the IRS will result in the imposition of penalties on the corporation.
Transfers of stock under an employee stock purchase plan (ESPP) are also subject to similar reporting requirements (using Form 3922) and deadlines.
Morse, Barnes-Brown & Pendleton would be pleased to assist you in understanding and complying with these ISO and ESPP reporting obligations.
Please contact Robert M. Finkel, or Diana C. Española, to learn more.
This Tax Alert provides general information only. It is not intended to provide advice with respect to any specific set of facts, nor is it intended to advise on all developments in the law.
Massachusetts Lawyers Weekly Seeks Carl Barnes Opinion in Matter of Control of Attorney-Client Privilege 01/21/2015
Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, Legal Developments, M&A, MBBP news, Public Companies.Tags: BBN Technologies Holding Corporation, MA Lawyers Weekly, Massachusetts Business Corporation Act, Raytheon
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MBBP Partner Carl Barnes was recently quoted in a Massachusetts Lawyers Weekly article written by Patrick Murphy, entitled “Survivor of Merger Controls Attorney-Client Privilege.” The article discusses Novack v. Raytheon, a recent Massachusetts Superior Court decision holding that, under Delaware law and the terms of a merger agreement, control of the attorney-client privilege relating to pre-merger communications between BBN Technologies Holding Corp. and its counsel passed to the acquirer, Raytheon Company. The privilege could not, therefore, be asserted after the merger by the representative of BBN’s former shareholders. The Superior Court, applying Delaware law, simply followed the Delaware Chancery Court’s 2013 decision in Great Hill Equity IV, LP v. SIG Growth Equity Fund I, LLLP. As an M&A attorney for more than 30 years, Carl considered whether the same result would be reached under the Massachusetts Business Corporation Act. Carl stated:
Under Delaware law, the effect of a merger is the conveyance of all property, rights, privilege, powers and franchises to the surviving corporation. On the other hand, G.L.c. 156D 11.07(a)(3) is more narrowly drawn, providing merely that the surviving entity is vested in all property owned and every contract right possessed by the entity that is merged into the survivor. There is probably more room for interpretation in Massachusetts than there is in Delaware, Barnes said. But he said there is still a strong argument to be made under Massachusetts law that the control of the attorney-client privilege passed to the surviving corporation in a merger.It defies logic that the successor will get the property and contract rights, and nothing else.
For further analysis and practical recommendations for M&A lawyers in Massachusetts, see Carl’s own article, “Massachusetts Court (Sort of) Adopts Delaware’s Great Hill Holding Regarding the Attorney-Client Privilege in Mergers” or please feel free to contact Carl.
