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Clearing Away Cloud Confusion; MBBP Team to Illuminate Intricacies of Buying and Selling Cloud Services 02/01/2016

Posted by Morse, Barnes-Brown Pendleton in Computer Software & Hardware, Corporate, Events, Intellectual Property, Licensing & Strategic Alliances, Privacy and Data Security, Telecommunications & Networking.
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Lawyers for technology companies are increasingly asked to assess the risks of client companies shifting from standard sales and licenses to a cloud model, and lawyers for every company need to assess the pros and cons of receiving core technology as a service over the internet. On Wednesday February 3rd, at a NECCA (New England Corporate Counsel Association, Inc.) seminar  held at the Westin Waltham from 10:00 to noon, MBBP attorneys Howard Zaharoff, John Hession, Mark Tarallo and Faith Kasparian will address the complexities of cloud computing and offer guidance to in-house counsel and other professionals advising their clients on these critical issues.

Among the topics to be covered are understanding the legally relevant features of cloud computing, identifying the key contract issues, recognizing the terms a standard vendor contract should contain, and discovering the implications of  recent developments in data privacy, particularly in the EU, for companies that are purchasing or selling cloud services.

To explore these and many other aspects of this complex and rapidly -evolving subject, reserve your space for this important and edifying NECCA seminar. Lunch will be served at 12:30 p.m.

What’s in Your Employee Handbook? (It Matters!) 02/01/2016

Posted by Morse, Barnes-Brown Pendleton in Employment, Legal Developments.
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Employment Attorney Sandra KahnEmployee handbooks are helpful as long as they are accurate, up-to-date and do not unintentionally create contractual rights. But handbooks that contain promissory language, legally non-compliant policies or outdated information may result in confusion and potential liability.

Employment attorney Sandy Kahn addresses some common mistakes employers should avoid in her New England In-House article, “Employee handbook can be source of potential liability.”

The Delaware Supreme Court Issues a Ruling In Long Running Dispute 01/13/2016

Posted by Morse, Barnes-Brown Pendleton in Litigation, M&A.
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The case which arose out of the failed license agreement and merger between Siga Technologies, Inc. (“SIGA”) and PharmAthene, Inc. (“PharmAthene”) in 2006 resulted in the Chancery Court issuing an order awarding damages to PharmAthene.

Read more on our M&A blog.

The Contours of Copyright #3: Too Short for Copyright? 01/04/2016

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Intellectual Property, Licensing & Strategic Alliances, New Resources, Publishing & Media.
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M0846618It is axiomatic that copyrights do not protect words or short phrases. But how short is too short for copyright? 10 words? 5 words? 3 words? Consider Henny Youngman’s classic 4-word joke, “Take my wife … please.” Is that a copyrightable jocular expression, or an uncopyrightable short phrase (or, for you copyright pros, a merged idea)? The answer is important, not only to comedians, but also to epigrammatists, songwriters, poets … and anyone who wishes to include, in a work they are creating, word sequences they’ve seen used by another.

A recent case, William L. Roberts v. Stefan Kendal Gordy (U.S D.C., S.D. Florida 2015), provides helpful guidance, though not a definitive answer.

Discussion: The plaintiffs, Roberts et al., owned the musical composition Hustlin’, whose chorus consists of the repeated refrain “everyday I’m hustling.” The defendants, Gordy et al., had a hit song, Party Rock Anthem, which included the phrase “everyday I’m shuffling.” When the defendants began marketing their “shuffling” phrase on T-shirts and other merchandise, the plaintiffs sued, arguing that their copyright in the song included a copyright in the “hustlin’” refrain, and therefore they could prevent anyone from copying that refrain, whether in a similar song or standing alone on a garment.

The defendants disagreed, and the court sided with them. Yes, said the court, the plaintiff’s song was entitled to copyright protection. However, “copyright protection does not automatically extend to every component of a copyrighted work.” Rather, because “originality” is the sine qua non of copyright, and short phrases are common and unoriginal, the copyright in a work does not extend to individual short phrases (or, of course, single words) in the work. This doesn’t mean, the court explained, that the presence of “ordinary” phrases deprives a work of copyright protection; but it also doesn’t mean that the copyright umbrella shelters every word or phrase contained in a copyrighted work.

Or, as the court puts it: “The question presented … is not whether the lyrics of Hustlin’, as arranged in their entirety, are subject to copyright protection. The question is whether the use of a three-word phrase appearing in the musical composition, divorced from the accompanying music, modified, and subsequently printed on merchandise, constitutes an infringement of the musical composition Hustlin’. The answer, quite simply, is that it does not.”

To add insult to injury, the court also notes that the terms “hustling” and “hustlin’” were used in many earlier songs, and that the plaintiffs never asserted that the phrase “everyday I’m hustlin’” originated with them – which in itself could have killed their copyright claim (to be copyrightable, a work needn’t be novel, as in the patent sense of never before appearing anywhere, but does need to be original, in the copyright sense of having composed it oneself without copying from another). Finally, says the court, there is no substantial similarity between the original musical composition, containing the (uncopyrightable) phrase “everyday I’m hustlin’,” and the defendant’s T-shirts, containing the (uncopyrightable) phrase “everyday I’m shuffling.”  In short, none of the plaintiff’s original expression was infringed by the defendant’s apparel.

An Interlude for Copyright Aficionados: There was nothing earthshaking about this decision, though it is interesting to read the court’s sampling of many short phrases that failed to win copyright protection, including: “so high” (2 words), “get it poppin’” (3 words), “fire in the hole” (4 words – uh-oh, Henny), “most personal sort of deodorant” (5 words), and “You Got the Right One, Uh-Huh” (5 words, plus an “Uh-Huh”). So, one might conclude, a half dozen words or more are probably the minimum required for copyrightability.

Perhaps the reason this court – and no court I’m aware of – has stated a bottom line number below which copyright cannot apply is that no one can be absolutely certain that a creative author couldn’t be original in even a handful of words. Let’s cheat, make up a word, and stick it in a short phrase: “She’s my joyzilla mama.” Four words – really 3 plus a mashup – which have never appeared before (a Google search more or less confirmed this).  Can I use copyright law to prevent another person from using my original phrase in a song or on a T-shirt?

My answer is a definite “maybe.” The epigrammatist Ashley Brilliant has successfully registered – and once successfully asserted – copyrights in his epigrams, many of which are quite short (such as, “When all else fails … Eat” = 5 words). Poets and songwriters often feel that their short but creative phrasings are worthy of protection. So maybe we can’t state an absolute bottom line because we can’t guaranty that a brilliant writer or composer won’t dash our assumptions.

Conclusion. Still, it’s hard to imagine anyone successfully claiming copyright in any 2- or even 3-word (real words, not coined) phrase – if for no other reason than given the relatively small number of meaningful 2- and 3-word phrases, and the exhaustive output of English speakers, each of those short phrases would have already appeared so frequently that no one using such a phrase could convincingly assert it originated with them, or that they should have the right to keep anyone else from using it.

So, unlike Roger Bannister running a mile under 4 minutes, the possibility of someone writing a copyrightable phrase of under 4 words (probably 5, possibly 6) should stand the test of time.

For more information on this topic, please contact Howard Zaharoff.

Q3 Venture Capital Data Published – Get it here! 12/31/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, Legal Developments, MBBP news, Venture Capital & Private Equity.
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MBBP’s Q4 VC Spotlight Newsletter is fresh off the press. This quarter we provide an analysis of data for 23 companies that closed their first institutional round of financing in the third quarter of 2015.

Here’s one of several charts available in our publication. Visit our VCs and Startups blog to learn more.

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Further data analysis, as well as featured articles, can be found in this quarter’s VC Spotlight Newsletter.

2016 Rings in Changes for Employers 12/30/2015

Posted by Morse, Barnes-Brown Pendleton in Employment.
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With 2016 upon us there are a few important changes to keep in mind, as well as recommendations to get your employment law practices in order.

Below is a short list to be aware of.

  • Minimum Wage Goes Up
  • Earned Sick Leave Safe Harbor Ends
  • Sexual Harassment Law Compliance
  • Data Protection Compliance

For all the details read our Employment Law Alert.

If you have questions about any of the above suggestions, please contact Sandy Kahn or any member of MBBP’s Employment Law Group.

Tax Alert: Last Minute Legislation Makes Permanent Business-Favorable Tax Breaks 12/28/2015

Posted by Morse, Barnes-Brown Pendleton in Legal Developments, Taxation.
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M0846558In early December, Congress passed and President Obama signed the “Protecting Americans from Tax Hikes (PATH) Act of 2015,” a tax package making permanent certain tax breaks that had previously expired every year or two years (requiring legislative action to be renewed). These now permanent tax breaks cover a range of entities and business practices. This alert addresses selected business provisions of the Act.

M0846557Action: Taxpayers should review all extended breaks; but may find those highlighted here particularly relevant. Tax benefits may be available by taking year-end action. Businesses and individuals that have already filed tax returns including 2015 tax periods should consider filing amended tax returns to take advantage of the new law.

Learn more about the key business tax provisions made permanent by the Act in our December Tax Alert.

Please contact Robert M. Finkel or Diana C. Española to learn more.

President Obama Signs Law that Changes the Visa Waiver Program 12/24/2015

Posted by Morse, Barnes-Brown Pendleton in Immigration, Legal Developments.
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IAOn December 18, 2015, President Obama signed the 2016 Consolidated Appropriations Act (H.R. 2029) (the “Law”) which not only funded the government through September 30, 2016, but also made several changes to the Immigration and Nationality Act.

Read the full Alert.

Questions? Contact a member of our Immigration Team.

Star Wars And Technology: May The Patent Office Be With You… 12/18/2015

Posted by Morse, Barnes-Brown Pendleton in Intellectual Property, Licensing & Strategic Alliances, New Resources.
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Today, December 18, 2015, is the official release in the U.S. of Star Wars: The Force Awakens, which is the seventh installment in the film series. The original trilogy began in 1977, and 38 years later is still going strong; a highly regarded film franchise to say the least. In part, the film series owes some of its success to the technology that “surrounds and penetrates” the movies.

Since the original trilogy, inventors have focused on creating or improving upon such Star Wars technologies as human prosthetics, solar power, robotics, lasers, rocket and missile technology, force fields, clones and genetic engineering, cybernetics, forms of levitation, and holography.

If you are thinking about trying to make something from the Star Wars universe a reality, “do…or do not. There is no try.” “You can’t stop change any more than you can stop the suns from setting.” And if you invent something, remember that it is “unwise to lower your defenses.”

Read the full article here!

M&A Video Clip – Stockholder Representative: Common Issues in M&A Transactions 12/14/2015

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, M&A, New Resources.
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In the twelfth video of MBBP’s M&A Clip Series, Attorney Joe Martinez discusses stockholder representatives and describes how one should be selected.

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M&A Video Clip – Closing Conditions: Common Issues in M&A Transactions 12/08/2015

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, M&A, New Resources.
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In the eleventh video of MBBP’s M&A Clip Series, M&A attorney Joe Marrow discusses closing conditions in M&A Transactions.

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M&A Video Clip – Non-Competes & Non-Solicits: Common Issues in M&A Transactions 12/02/2015

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, MBBP news, New Resources.
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In the tenth video of MBBP’s M&A Clip Series, M&A attorney Shannon Zollo explains the importance of non-competition and non-solicitation covenants when buying a business.

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M&A Video Clip – Post-Closing Indemnifications: Common Issues in M&A Transactions 11/23/2015

Posted by Morse, Barnes-Brown Pendleton in Corporate, M&A, New Resources.
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In the ninth video of MBBP’s M&A Clip Series, M&A attorney Mary Beth Kerrigan describes post-closing indemnifications in M&A transactions.

M&A Clips Video #9 - Post-Closing Indemnifications in Purchase Agreements

Changes to Canadian Trademark Law 11/17/2015

Posted by Morse, Barnes-Brown Pendleton in Intellectual Property, Legal Developments, New Resources.
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On June 19, 2014, Bill C-31, Canada’s Economic Action Plan 2014 Act, No. 1, received Royal Assent. The Bill contains a large series of amendments to Canada’s Trade-marks Act and will allow Canada to (among other things) accede to three key international treaties: (1) the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (the Madrid Protocol); (2) the Singapore Treaty on the Law of Trademarks (the Singapore Treaty); and (3) the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks (the Nice Agreement).

The new regime is expected to come into force by late 2016 or early 2017. Those already owning or considering registration of a Canadian trademark should be aware of these new changes to Canadian trademark law. Read the full article here.

For more information on trademark matters, please contact Callie Pioli, Thomas Dunn or Sean Detweiler.

M&A Video Clip – Representations & Warranties: Common Issues in M&A Transactions 11/16/2015

Posted by Morse, Barnes-Brown Pendleton in M&A, New Resources.
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In the eighth video of MBBP’s M&A Clip Series, M&A attorney Mary Beth Kerrigan talks about representations and warranties in M&A transactions.

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Happy Birthday Coca-Cola® Bottle! 11/16/2015

Posted by Morse, Barnes-Brown Pendleton in Intellectual Property.
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Coke Bottle100 years ago today, inventor Alexander Samuelson was granted the design patent for the bottle that would come to be known as the iconic Coca-Cola® bottle. The design patent lasted 14 years and then expired, but obviously the design has lived on, and is now considered protected under trade dress laws. The term of design patents filed on or after Dec. 18, 2013 is now 15 years from the date of grant. However, if the ornamental features covered by the design patent are sufficiently distinctive, such as the Coca-Cola® bottle, then over time the design may be protected by common law trade dress, and may even be registered at the Patent and Trademark Office, both of which can provide intellectual property protection for years beyond the design patent term.

For questions about design patents – or to Share a Coke® – please contact Sean D. Detweiler.

M&A Video Clip – Earn-outs: Common Issues in M&A Transactions 11/09/2015

Posted by Morse, Barnes-Brown Pendleton in Attorney News, M&A, New Resources.
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In the seventh video of MBBP’s M&A Clip Series, M&A attorney Joe Marrow discusses earn-outs.

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The Contours of Copyright #2: Can You Copyright Yoga Poses? 11/06/2015

Posted by Morse, Barnes-Brown Pendleton in Intellectual Property, Legal Developments, New Resources.
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Attorney Howard ZaharoffBy Howard Zaharoff

Section 102 of the Copyright Act tells us that “choreographic works” – i.e., dances – are protected by copyright. So if you’re Alvin Ailey or Saroj Khan, the copyright police will protect you if someone copies or publicly performs your original choreography.

But what if you’re Beto Perez, who created Zumba; or Arnold Schwarzenegger (governor, actor, bodybuilder), who developed his own workout routines; or Bikram Choudhury (yoga guru and plaintiff), who in 1979 published a book describing his “Sequence,” 26 asanas and two breathing exercises performed for 90 minutes in a room heated to 105 °F? Does copyright protect original workouts or yoga sequences?

Probably not. At least according to the 9th Circuit in the recent case, Bikram’s Yoga College v. Evolation Yoga.

Discussion: Bikram Choudhury, self-proclaimed “Yogi to the stars,” was important in popularizing yoga in the U.S. He claimed he developed his Sequence after many years of research and verification, and he touted its many health and fitness benefits. But when two students who attended his 3-month teacher training started their own studio, offering a “hot yoga” class very similar to his Sequence, he sued for infringement.

The district court ruled that the Sequence was a “collection of facts and ideas” not entitled to copyright protection. Choudhury appealed and the Circuit Court upheld the lower court’s finding.

The Court first reasoned that the Sequence is “an idea, process or system designed to improve health” (Choudhury himself described his Sequence as a “system” or “method” designed to “systematically work every part of the body”). Since Section 102 of the Copyright Act is clear that copyright does not protect any idea, process or system, the Court easily concluded that the Sequence was an unprotectable idea or system. Put differently: “Choudhury thus attempts to secure copyright protection for a healing art,” an obvious no-no.

Nor does the grace and beauty embodied in the Sequence matter, since many processes can be beautiful –a surgeon’s movements, a baker’s kneading – without being copyrightable. In other words, “beauty is not a basis for copyright protection.”

The Court similarly dispensed with Choudhury’s argument that, even if individual yoga poses cannot be copyrighted, the original sequence of poses he developed is copyrightable as a “compilation,” that is, a work formed by “the collection and assembling of preexisting materials.” Not so, said the Court: because Choudhury himself claimed that “the medical and functional considerations at the heart of the Sequence compel the very selection and arrangement of poses and breathing exercises,” the entire Sequence, no less than the individual poses, is itself a process and “therefore ineligible for copyright protection.”

The final – and, as discussed below, least satisfying – part of the Court’s holding is that the Sequence cannot be protected as a “choreographic work.” The Court acknowledged that this term isn’t defined in the Copyright Act (though the legislative history makes clear that the term excludes “social dance steps and simple routines”). But that doesn’t matter, says the Court: “The Sequence is not copyrightable as a choreographic work for the same reason that it is not copyrightable as a compilation: it is an idea, process, or system to which copyright protection” may not extend.

The Court also noted that daily life consists of “many routinized physical movements, from brushing one’s teeth to pushing a lawnmower,” which could be characterized as forms of dance (by whom, the Court does not say). Only the idea/expression dichotomy prevents people from obtaining “monopoly rights over these functional physical sequences.” So at least in the 9thCircuit, arrangements of physical movements with a functional purpose, such as improving one’s health or fitness, no matter how aesthetic or beautiful, are merely unprotectable ideas or processes and therefore cannot be claimed as anyone’s copyright.

An Interlude for Copyright Aficionados: The Court’s final argument – that compilations of physical movements that “serve basic functional purposes” are unprotectable ideas/processes and not protectable choreography – begs the question. It’s cheating for a court to simply declare that a sequence of physical movements that functions as a means to health and fitness is thereby an uncopyrightable process without explaining why other sequenced movements that have similar fitness benefits are copyrightable choreography (which is surely true of the athletic choreographic routines of Alvin Ailey and Pilobulus).

Is it the functional purpose (or effect) of Choudhury’s sequence of poses – i.e., that despite their grace and beauty, they are particularly conducive to fitness – which makes the Sequence an uncopyrightable process? Why? Rarely does the functionality of a work completely deprive it of copyright. Even the designers of “useful articles” can claim copyright in any “pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects.” If functionality were a copyright killer, architecture and software would have no protection.

Indeed, why not treat physical movements like architecture and software? Just as copyright law provides no protection for “individual standard features” of architectural works, or for standard routines and features of software applications, can’t we conclude that, although individual poses (or short sequences of poses) that are included in the Sequence and that are unoriginal, standard, or highly effective for fitness cannot be monopolized by copyright, the original overall selection and order of the poses can be deemed sufficiently original and aesthetic to qualify as copyrightable choreography?

In short, nothing in the Court’s opinion explains why the entire 28-step Sequence was ruled an unprotectable idea and no aspect or feature of these graceful movements could be deemed choreographic and copyrightable. This is not to say the Court is wrong. Rather, right or wrong, the Court failed to articulate any principles that distinguish movements constituting “a healing art” from movements constituting athletic dance.

Conclusion: Despite its unfortunate failure to provide a principled distinction between copyrightable choreography and uncopyrightable workouts, it remains undeniable that, in the 9th Circuit at least, there is no copyright protection for sequences of yoga poses intended to improve health and fitness, no matter how graceful or beautiful they may be.

Still, given the gaping hole left by this decision, and the popularity of fitness and yoga, it’s hard to imagine that the issue of copyrightable choreography won’t reappear soon. Or, as Arnold Schwarzenegger (as actor, not bodybuilder) might say: “I’ll be back.”

For more information on this topic, please contact Howard Zaharoff.

Massachusetts Data Protection Regulations 11/03/2015

Posted by Morse, Barnes-Brown Pendleton in Internet and E-Commerce, Legal Developments, New Resources, Privacy and Data Security.
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As a reminder, Massachusetts has enacted stringent data protection regulations (the Massachusetts Standards for the Protection of Personal Information of Residents of the Commonwealth, 201 C.M.R. 17.00 et seq. (the “data protection regulations”) and data disposal legislation (Mass. Gen. Laws ch. 93I) (the “disposal law”).

These laws likely apply to your business to the extent that you collect information (either from your own employees or in connection with providing goods/services) that falls within the meaning of “personal information” under the data protection regulations.  Although the definition of “personal information” under the data protection regulations is relatively narrow (a Massachusetts resident’s first name and last name or first initial and last name in combination with any one 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), the data protection regulations impose high minimum standards for protecting such information.  (The definition of “personal information” under the disposal law includes the same information as that in the data protection regulations’ definition, except that the disposal law’s definition also includes a Massachusetts resident’s first name and last name or first initial and last name in combination with a biometric indicator.)

Among other requirements, the data protection regulations require the adoption of a written information security program (WISP) including certain minimum administrative, technical, and physical safeguards – among which are to oversee third-party service providers and adhere to specific computer system security requirements.  The disposal law sets forth minimum standards for the proper disposal of records (including paper documents and non-paper media) containing personal information.

To assist in the compliance process with respect to the data protection regulations, the Massachusetts Office of Consumer Affairs and Business Regulation has created a compliance checklist, as well as a guide for small businesses entitled “A Small Business Guide: Formulating A Comprehensive Written Information Security Program.”

If you would like help in preparing a WISP or addressing other compliance issues, please contact MBBP Attorney Faith Kasparian.

M&A Video Clip – Working Capital Adjustment: Common Issues in M&A Transactions 11/03/2015

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, M&A, New Resources.
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In the sixth video of MBBP’s M&A Clip Series, M&A attorney Scott Bleier explains why working capital is a vital piece of the M&A transaction.

M&A Clips Video #6 Common Issues in M&A Transactions- Working Capital Adjustment

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