Business Law

Wednesday, November 7th, is our monthly Business Workshop and Networking Event

Wednesday, November 7th, is our monthly Business Workshop and Networking Event

This Wednesday, November 7th, from 5:30pm to around 7pm, we will be hosting our Millennials Who Work (For Themselves) meetup at Growler USA (upstairs) located at 314 S. Blount St in downtown Raleigh (City Market).

Join us on Wednesday for a Business Startup Social

Join us on Wednesday for a Business Startup Social

We will be reconnecting after summer break to network and talk about business.  So, if you are a small business owner or thinking about starting your own business come out to Growler USA this Wednesday.

To Trademark or Not to Trademark, That is the Question.

Is it Time to get a Trademark?

If you own a computer there’s a chance that at some point you have encountered Internet marketing (if you haven’t, I’m not real sure what you’re doing with you computer). It seems like every website I visit is pushing some sort of product or service. With so many marketers possessing an online presence, it is not uncommon for me to field questions from clients wondering what they can do to protect their brand. This is when I usually open the conversation about trademarks, and whether a trademark is a good idea for that client’s business.

In general terms, a trademark tells the consumer something about a good. It might indicate where the good originates or who produced the good. Trademarks take various shapes and sizes; they can be names, symbols, words, sounds, even the particular way a product is packaged.  Basically, trademarks evoke a brand’s reputation in the minds of consumers. The same applies for services, although the sticklers refer to trademarks for services as “servicemarks.”

What does it do, and how do you get it?

The benefit of having a trademark is that trademarks provide businesses a mechanism by which prevent other businesses from adopting confusingly similar names or marks that my potentially play off the reputation of the original business.  It takes a long time to earn a good reputation. A trademark helps prevent the new guy from coming to town and calling his brand of luxury car Nercadies. It is possible to enjoy some level of trademark protection by doing nothing. Common law trademarks protect brands in your local area. However, by choosing to file with the United States Patent and Trademark Office (“USPTO”) trademark protections can extend nationally. 

What content is Trademarkable?

Before you can get excited about trademarking your business name or logo, there needs to be something distinctive about that name or logo. The level of protection a mark receives is linked to its level of distinctiveness.  Arbitrary or fanciful marks receive the highest level of protection. These are marks that have no logical connection to the products or services associated with them. Think: naming a computer company after fruit. The next category, which receives a lesser degree of protection, is suggestive. Suggestive marks describe the product or service they are associated with, but do so in a way that forces the consumer to make the mental connection. For Example, Greyhound describes a bus company that is fast . . . like a greyhound. The last category is descriptive. Descriptive marks simply describe the product or service. If you go to Huge-Burger, you expect the burger to be big. Unlike arbitrary, fanciful, and suggestive marks, descriptive marks do not automatically receive trademark protection. Secondary meaning must first be established, which is accomplished over time through widespread recognition of the mark.

Why Now?

A trademark is a great place to start for a business looking to protect its brand. By register a mark now, a business gives public notice across the country that the mark is in use. It’s a government approved method of saying “I was using it first, knock it off.” Additionally, evidence of a prior registered mark, is extremely beneficial should a trademark dispute arise.  

EB-5 in da House (err, the Senate)

The EB-5 Visa is set to expire September 30th but a new bipartisan bill in the Senate is set to renew it... with some fairly significant changes.  For those of you who are not aware, the EB-5 program is a special visa for foreign investors who bring some major cash investments to the States (looking at you, China).  Although these changes may give the U.S. even higher investments, the revisions are also confusing and have left a lot of foreign investors scratching their heads and asking "why?"

The Current Law:

Under the current EB-5 requirements, foreign investors will qualify for the special visa if they (1) invest in a new commercial enterprise that (2) creates or preserves at least 10 full-time jobs and (3) includes an investment of $500,000 to $1 million (depending on whether or not the enterprise is located in a "Targeted Employment Area").  This visa is extended to the immediate family of the EB-5 recipient making coming to America much easier.  The U.S. limits EB-5 visas to 10,000 per year and the desire for these visas is growing rapidly.  In 2008, the U.S. received a little over 1,200 applications; in 2013 the U.S. received about 6,300 applications.  In 2014, the U.S. received over 10,000 applications which is the first year the maximum allocation was granted.  NBD. 

The Proposed Revisions:

The proposed revisions currently resting in Congress would increase the investment range from to $800,000 to $1.2 million.  The new law would also have a mechanism for adjusting this range every five years based on the U.S. Consumer Index.  

The proposed new law also specifies that in a  "Targeted Employment Area," at least 50% of the job creation must be within the statistical area or county where the Targeted Employment Area is located.  Speaking of the job growth factor, this part of the revised law is quite confusing and unclear when the commercial enterprise is part of a regional center and when other factors are contributing to job growth.  There is also new provisions written into the bill such as oversight and review requirements, new USCIS enforcement authority, and new requirements regarding Securities laws.  Fun stuff. 

With increased interest in the EB-5 visa, it can be assumed that the program will be renewed.  However, it may become more difficult to obtain and understand  if this proposed bill becomes law.  For those of you interested in the EB-5 program, we'll be watching as the renewal bill  develops. 

Raleigh's New Outdoor Seating Ordinance: What Local Businesses Need to Know

"51 Complaints involving Calls for Service to RPD and Complaints to City Staff
- One of the reasons cited in the Raleigh City Council's August 11, 2015 presentation on the proposed Raleigh Outdoor Seating Ordinance - dubbed by locals as the "Save the Patio" campaign.  

Like it or not, the Raleigh City Council passed the Outdoor Seating Ordinance, causing concern for many Raleigh restaurants and bars and their loyal patrons.  Because this will impact most of Raleigh's nightlife, here is a summary of what you need to know:

Outdoor Seating Permits Required:

If you are an "Eating Establishment," "Food Business,"  or "Private Club,"  you must apply for an outdoor seating permit if you wish to use City sidewalks.  

  • Eating Establishments ("EEs") are defined as "any establishment engaged in the business of regularly and customarily selling food and non-spiritous liquor, to be consumed on the premises." EEs include restaurants, cafeterias, cafes, lunch stands, grills, snack bars, fast-food, and drug stores with lunch counters.  See revised §12-2121(a)(2) of Raleigh City Ordinance. 
  • Food Businesses ("FBs") are defined as "an establishment engaged in the business of regularly and customarily selling food and non-spiritous liquor, primarily to be consumed off the premises." FBs include groceries, drugstores, and convenience stores. See revised §12-2121(a)(3) of Raleigh City Ordinance. 
  • Private Clubs ("PCs") are defined as "an establishment that is organized and operated solely for a social, recreational, patriotic, or fraternal purpose and that is not open to the general public, but is open only to the members of the organization and their bona fide guests as set forth in G.S. §18B-1000."  See revised §12-2121(a)(4) of Raleigh City Ordinance. 

Only the property owner can apply for the Outdoor Seating Permit (so if you are leasing property, you will need to talk to the property owner before applying).  Also, if you are in a multi-floor building, the first floor will always have the right of first refusal and you must have direct access to the sidewalk in order to apply for the permit/ use the sidewalk for seating.  In other words, if you are not on the first floor but you have direct access to the sidewalk (a la The Hive), be nice to your first floor neighbors. 

Applications must include things such as a scaled drawing of the proposed outdoor seating area, hours of operation, evidence of a valid insurance policy with minimum liability of $1M, an indemnity statement to hold the City of Raleigh harmless, and all permits applicable to your establishment.  There is also a $300 permit fee.  A copy of the application can be found here.

Outdoor Seating Hours & Other Restrictions

Hours of Operation:   If your business is closed, your outdoor seating must be closed too.  You can allow patrons to dine and drink outside until 1am on Fridays and Saturdays and 12:00am on all other days of the week.  You can still serve alcohol until 2am- it just has to remain inside the establishment. 

Boundaries:   If you allow alcohol in your outdoor seating area, you must clearly show the boundaries of the seating area so people do not wander with their beers into "public" territory.  You must also post signs at all "designated exit points" that clearly state it is illegal to remove alcohol from the specific outdoor seating area.  You as the establishment (and those that operate it) are responsible for any alcohol that makes its way outside of these boundaries. 

Pedestrian Right of Ways:  Pedestrian clearances are also mandated under the new ordinance.  You must have a 5 foot wide (unobstructed) pedestrian corridor at all times through the "public right of way."  If your are located on Fayetteville Street, as many of you are, your unobstructed pedestrian corridor must be 7 feet wide.   There is also a chance additional restrictions may apply under the Americans with Disabilities Act and the NC Building Code. Talk to your attorney for more information.

Occupancy:   Occupancy of outdoor seating areas are based on actual seating capacity and must comply with the Maximum Floor Area Allowances under Table 1004.1.1 of the NC Building Code.  Outdoor Seating areas cannot include cash registers, minibars, tents, or similar appurtenances.  

I got the Permit, Now What?

Outdoor Seating Permits are valid for one-year and expire on June 30th of each year.  Renewal applications must be received no later than June 30th.  These permits are NOT assignable.  This means if the establishment changes ownership, the permit follows the Permit Holder and may be rendered invalid.  The new ordinance defines a "change in ownership" to include "any change in the ownership of shares in a privately held corporation, [the] sale of all or part of a sole proprietorship, or any change in the membership of any form of [LLC]."  If you are publicly traded, an acquisition of more than 10% of stock also equates to a "change in ownership."   Talk to an attorney if you are unsure whether this applies to you. 

Violations

Now for the stuff you really care about: what happens if I don't comply.  Violations can lead to a $100 penalty for first time offenders, $500  penalty + suspension for 30 days for second time offenders, and revocation for 12 months for third time offenders. 

The full text of the new ordinance can be found here.