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SHALL THE FOG BE FOREVER FORSAKEN?

As we covered inMandatory Paid Sick Leave for California Employees, all companies with employees working in California are subject to this state’s paid sick leave law (Assembly Bill [AB] 1522), effective July 1, 2015. AB 1522 requires each employer, regardless of size (and except for those with collective bargaining agreements and other very limited exemptions), to provide paid sick leave benefits to any temporary, part-time and full-time employee once he or she has worked for that company in Ca

April 11, 2015

California Labor Commissioner Again Attempts to Resolve Questions on New Paid Sick Leave Benefits Law

As we covered in Mandatory Paid Sick Leave for California Employees, all companies with employees working in California are subject to this state’s paid sick leave law (Assembly Bill [AB] 1522), effective July 1, 2015. AB 1522 requires each employer, regardless of size (and except for those with collective bargaining agreements and other very limited exemptions), to provide paid sick leave benefits to any temporary, part-time and full-time employee once he or she has worked for that company in California for a certain period of time.

As an indicator of the confusions created by ambiguous language in this law, the state’s Division of Labor Standards Enforcement (DLSE) website now includes a second, expanded version of her agency’s frequently-asked questions (“FAQs) (and answers) on employer AB 1522 obligations. That website also now includes a new “facts and resources” AB 1522 power point presentation.

(1) UPDATED FAQS:

The updated FAQs, posted February 2015, seek to further clarify employers’ notice requirements, to explain how seasonal workers accrue paid sick leave benefits, and to specify how to provide benefits for part-time employees as well as those on alternative work schedules:

• Wage Theft Prevention Act Notice (“Notice Form”): In addition to providing this notice form to new hires, employers must also now provide it to each hourly employee hired prior to January 1, 2015 and within seven days of implementation of or changes to the company’s paid sick leave policy. In the newly revised FAQs, the DLSE directs that an employer need not issue this separate notice if that company conveys the required information by an authorized “alternative method,” e.g. a pay stub or itemized wage statement.

• Seasonal Employees: Under AB 1522, employees who work in California for at least 30 days within a year are eligible to earn/receive paid sick leave. However, newly hired employees cannot start taking paid sick leave until the 90th day of their employment. This means that a seasonal worker who works 30 days or more but less than 90 in a year will be eligible for sick pay but ineligible to actually use it. The new revised FAQs specify a situation where such workers can use the benefit. If a seasonal employee leaves and returns to the same employer within one year, the 30 and 90 day counts will pick up where that worker left off for AB 1522 eligibility purposes. Thus, if a seasonal employee worked 60 days and then came back within a year, the re-hire date is equivalent to “day 61” of employment.

However, if a seasonal worker worked 60 days and doesn’t come back within a year, the DLSE gives no guidance, stating this is a question “not addressed in the new law and will depend on the particular facts of the situation to answer.”

• Part-Time Employees: 1522 allows an employer to limit the amount of paid sick leave taken to 24 hours or three days. This leaves an ambiguity for part time workers. Is a part time employee who only works six hours daily eligible for only 18 hours (3 days x 6 hours/day = 18) or 24? The DLSE’s expanded FAQs direct that “24 hours or three days” should be read in the manner that benefits the employee more. Thus, except for workers on an properly constructed alternative workweek schedule (see below), no employee – regardless of a shortened scheduled – may receive any less that 24 hours of sick leave benefit.

• Alternative Workweek Schedules of Four 10-Hour Days: According to the updated FAQs, employees who work an authorized alternative workweek schedule of four 10-hour days are eligible for a minimum of three days or 30 hours of paid sick leave (the equivalent of three ten-hour days). Again, the Labor Commissioner interprets “24 hours or three days” as whichever benefits the employee more.

(2) FACTS AND RESOURCES POWER POINT:

The DLSE’s new 21-page “facts and resources” power point presentation covers key 2015 implementation dates, facts on AB 1522, six steps to successful compliance, paid time off policies, exemptions, separation from employment, protection from retaliation, administrative penalties, and various hypothetical scenarios.

Perhaps the most interesting aspect of these new DLSE postings is that the agency issues no assurance that these publications will be the last it will issue before (or after) the July 1, 2015 effective date for AB 1522. Stay tuned.

For additional assistance understanding and implementing California’s paid sick leave benefits law, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth, April 11, 2015

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HEAT ILLNESS PREVENTION AMENDMENTS ARE LIKELY TO TAKE EFFECT MAY 1, 2015

As referenced in our previous article,Required Heat Illness Prevention for Outdoor Worksites, California’s heat illness safety regulations currently require employers with outdoor workers to provide access to ample drinking water and a shaded rest area when the temperature exceeds 85 degrees. The law also requires additional special high heat procedures in temperatures of 95 degrees or above as well as training and preparatory steps for preventing and rectifying heat illness. The heat illness gu

April 7, 2015

Likely to Take Effect May 1, 2015 — The Heat Is On For California Employers

As referenced in our previous article, Required Heat Illness Prevention for Outdoor Worksites, California’s heat illness safety regulations currently require employers with outdoor workers to provide access to ample drinking water and a shaded rest area when the temperature exceeds 85 degrees. The law also requires additional special high heat procedures in temperatures of 95 degrees or above as well as training and preparatory steps for preventing and rectifying heat illness. The heat illness guidelines apply to all outdoor places of employment including partial structures depending on the circumstances. Current regulations also require employers to count the time employees spend in recovering from high heat as “hours worked” without wage deduction.

Occupational Safety & Health Standards Board (OSHSB) has recently sent revised heat illness prevention regulations to the Office of Administrative Law (OAL) for final approval, including a requested accelerated May 1, 2015 effective date in time for the state’s growing season and warmer climate.

A March 23, 2015 government-issued Guidance for Employers and Employees on the New Requirements explains the key differences between existing and the proposed amended language, including:

1. Specified definition of drinking water: Currently, the minimum requirement is that drinking water must only be clean and sanitary. The amendment would clarify that all outdoor employees will require access to drinking water that must be “fresh, pure, suitably cool” and provided “free of charge.” The water shall be located “as close as practicable” to the employees’ work area.
2. Increased access to shade: Employers would have to provide shade when the temperature exceeds 80 degrees Fahrenheit, instead of the current 85 degrees, and accommodate all outdoor employees who are on cool-down rest periods or other breaks instead of the current requirement of accommodating 25 percent of employees working outside.

3. Monitoring of heat prevention cool-down: Cool-down rest periods would be expanded to include “preventative” cool-down and would create a new monitoring requirement. Specifically, employers would have to: (a) allow and encourage preventative cool-down rest breaks; (b) monitor and ask if the employee is experiencing heat illness symptoms; (c) encourage the employee to remain in the shade; and (d) wait until all signs/symptoms of heath illness have abated or the employee has rested for five minutes in the shade, whichever is greater. If exhibiting or reporting heat illness symptoms, the employer would also have to provide first aid or emergency response.

4. High heat procedures modified: Although high-heat procedures remain at 95 degrees, the employer would have to implement additional high-heat procedures such as: (a) observing all employees for alertness and signs or symptoms of heat illness by appointing a designated observer, a mandatory buddy system, regular radio or cell phone communication, or other effective means of observation; (b) designating at least one employee as authorized to call for emergency medical services; (c) pre-shift meetings to review high heat procedures; and, (d) for the agricultural industry the employer must ensure that the employee working in 95 degrees or above takes a ten minute preventative cool-down rest period every two hours.

5. Additional employee training: Employee training would be expanded to include informing the employee of the employer’s responsibility to provide water, shade, cool-down rests, and first aid access. Training would also include information about first aid and emergency response procedures and how heat illness can progress quickly into a life-threatening situation. Employers must also notify employees of their ability to exercise their applicable rights without retaliation.
As soon as the OAL issues any final approval of these amended regulations, covered employees should promptly review them in their entirety, update existing heat illness and prevention plans and any related policy, implement appropriate emergency medical services plans (including designated individuals for each job site to call for emergency services) and train all employees and managers on revised procedures and prevention tips.

For further information, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin

Cindy Bamforth, April 7, 2015

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HEAT ILLNESS PREVENTION AMENDMENTS ARE LIKELY TO TAKE EFFECT MAY 1, 2015

As referenced in our previous article,Required Heat Illness Prevention for Outdoor Worksites, California’s heat illness safety regulations currently require employers with outdoor workers to provide access to ample drinking water and a shaded rest area when the temperature exceeds 85 degrees. The law also requires additional special high heat procedures in temperatures of 95 degrees or above as well as training and preparatory steps for preventing and rectifying heat illness. The heat illness gu

April 7, 2015

Likely to Take Effect May 1, 2015 — The Heat Is On For California Employers

As referenced in our previous article, Required Heat Illness Prevention for Outdoor Worksites, California’s heat illness safety regulations currently require employers with outdoor workers to provide access to ample drinking water and a shaded rest area when the temperature exceeds 85 degrees. The law also requires additional special high heat procedures in temperatures of 95 degrees or above as well as training and preparatory steps for preventing and rectifying heat illness. The heat illness guidelines apply to all outdoor places of employment including partial structures depending on the circumstances. Current regulations also require employers to count the time employees spend in recovering from high heat as “hours worked” without wage deduction.

Occupational Safety & Health Standards Board (OSHSB) has recently sent revised heat illness prevention regulations to the Office of Administrative Law (OAL) for final approval, including a requested accelerated May 1, 2015 effective date in time for the state’s growing season and warmer climate.

A March 23, 2015 government-issued Guidance for Employers and Employees on the New Requirements explains the key differences between existing and the proposed amended language, including:

1. Specified definition of drinking water: Currently, the minimum requirement is that drinking water must only be clean and sanitary. The amendment would clarify that all outdoor employees will require access to drinking water that must be “fresh, pure, suitably cool” and provided “free of charge.” The water shall be located “as close as practicable” to the employees’ work area.
2. Increased access to shade: Employers would have to provide shade when the temperature exceeds 80 degrees Fahrenheit, instead of the current 85 degrees, and accommodate all outdoor employees who are on cool-down rest periods or other breaks instead of the current requirement of accommodating 25 percent of employees working outside.

3. Monitoring of heat prevention cool-down: Cool-down rest periods would be expanded to include “preventative” cool-down and would create a new monitoring requirement. Specifically, employers would have to: (a) allow and encourage preventative cool-down rest breaks; (b) monitor and ask if the employee is experiencing heat illness symptoms; (c) encourage the employee to remain in the shade; and (d) wait until all signs/symptoms of heath illness have abated or the employee has rested for five minutes in the shade, whichever is greater. If exhibiting or reporting heat illness symptoms, the employer would also have to provide first aid or emergency response.

4. High heat procedures modified: Although high-heat procedures remain at 95 degrees, the employer would have to implement additional high-heat procedures such as: (a) observing all employees for alertness and signs or symptoms of heat illness by appointing a designated observer, a mandatory buddy system, regular radio or cell phone communication, or other effective means of observation; (b) designating at least one employee as authorized to call for emergency medical services; (c) pre-shift meetings to review high heat procedures; and, (d) for the agricultural industry the employer must ensure that the employee working in 95 degrees or above takes a ten minute preventative cool-down rest period every two hours.

5. Additional employee training: Employee training would be expanded to include informing the employee of the employer’s responsibility to provide water, shade, cool-down rests, and first aid access. Training would also include information about first aid and emergency response procedures and how heat illness can progress quickly into a life-threatening situation. Employers must also notify employees of their ability to exercise their applicable rights without retaliation.
As soon as the OAL issues any final approval of these amended regulations, covered employees should promptly review them in their entirety, update existing heat illness and prevention plans and any related policy, implement appropriate emergency medical services plans (including designated individuals for each job site to call for emergency services) and train all employees and managers on revised procedures and prevention tips.

For further information, please contact one of our attorneys Tim Bowles, Cindy Bamforth or Helena Kobrin

Cindy Bamforth, April 7, 2015

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CALIFORNIA’S MOVE TO PASS THE HIGHEST MINIMUM WAGE IN THE NATION

As earlier reported, California’s minimum hourly wage will rise to $9.00 on July 1, 2014 and to $10.00 on January 1, 2016, thus ranking among the highest in the country. See,California Minimum Wage IncreasingandAmended Minimum Wage Notice Must Be Posted by July 1, 2014.The California Senate aims to place the state at number one in the nation,recently passing a measureto accelerate the minimum to $11.00 per hour on January 1, 2015, to $12.00 per hour on January 1, 2016, and to $13.00 on January 1

April 1, 2015

Bill to Push Minimum to $11.00, $12.00, then $13.00 per Hour Is Halfway Through the Legislature

As earlier reported, California’s minimum hourly wage will rise to $9.00 on July 1, 2014 and to $10.00 on January 1, 2016, thus ranking among the highest in the country. See, California Minimum Wage Increasing and Amended Minimum Wage Notice Must Be Posted by July 1, 2014. The California Senate aims to place the state at number one in the nation, recently passing a measure to accelerate the minimum to $11.00 per hour on January 1, 2015, to $12.00 per hour on January 1, 2016, and to $13.00 on January 1, 2017.

If in current form it successfully navigates the Assembly and is signed into law by Governor Brown, Senate Bill 935 is intended to “stimulate the economy and combat poverty and the decline of California’s middle class.” The measure’s opponents include the California Chamber of Commerce, viewing these prospective increases as a “job killer”, saying “The bill unfairly increases employer costs by increasing the minimum wage to $13 by 2017 and then increased thereafter according to the Consumer Price Index.”

This is one of several related developments nationally. A move earlier this year to increase the federal minimum from $7.25 per hour stalled and is not expected to revive before this fall’s mid-term elections. On the other hand, a number of major municipalities have passed “prevailing wage” ordinances setting minimums above their state’s standards. San Francisco’s minimum is now $10.74 per hour, San Jose’s is currently $10.00. Departing from Washington state’s current $9.32 per hour standard (currently the nation’s highest,) the City of Seattle is raising its minimum in increments, starting with $10.00 on April 1, 2015 and in 2017 will begin phasing in $15.00.

Stay tuned and we will keep you posted on the fate of Senate Bill 935.

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OAKLAND PAID SICK LEAVE LAW PROVIDES GREATER BENEFITS THAN THE UPCOMING STATE REQUIREMENT

Effective March 2, 2015, Oakland’spaid sick leave ordinance (Measure FF), requires employers to provide paid sick leave benefits to part-time, full-time and temporary employees who perform at least two hours of work in a particular workweek within the city limits. This new law provides benefits greater than those required statewide byCalifornia’s The Healthy Workplaces, Healthy Families Act (the Act), going into effect on July 1, 2015. For basics on the Act’s paid sick leave benefits, see our re

March 27, 2015

Measure Took Effect March 2, 2015

Effective March 2, 2015, Oakland’s paid sick leave ordinance (Measure FF), requires employers to provide paid sick leave benefits to part-time, full-time and temporary employees who perform at least two hours of work in a particular workweek within the city limits. This new law provides benefits greater than those required statewide by California’s The Healthy Workplaces, Healthy Families Act (the Act), going into effect on July 1, 2015. For basics on the Act’s paid sick leave benefits, see our recent articles such as California Labor Commissioner Provides the FAQs on New Paid Sick Leave Benefits Law and Shall The Fog Be Forever Forsaken?, California Labor Commissioner Again Attempts to Resolve Questions on New Paid Sick Leave Benefits Law.

Under Oakland’s Measure FF, eligible employees shall accrue one hour of paid sick leave for every 30 hours worked, which is identical to the Act’s accrual rate. Employers may cap accrued paid sick leave at 40 hours for small businesses (fewer than 10 workers) and at 72 hours for other employers. Employees may use paid sick leave for the employee’s own illness or injury, or to care for family members or other designated persons as defined by the ordinance. Accrued sick leave will carry over from year to year but need not be paid out upon termination of employment.

Employers covered by Measure FF are required to post a notice informing employees of their rights under the paid sick leave ordinance.

The Act “establishes minimum requirements pertaining to paid sick days and does not preempt, limit, or otherwise affect the applicability of any other law, regulation, requirement, policy or standard that provides for greater accrual or use by employees of sick days,… or that extends other protections to an employee.” California Labor Code section 249(d). Thus, employers affected by both Measure FF and the Act must comply with the highest standard imposed by either law. Such employers will also have to post the notices required by each of these laws.

Some of the main differences between Measure FF and the new Act include:

• State law allows employers to provide the sick leave benefit up front instead of accruing over time, Oakland’s does not.
• Oakland allows an employee without a spouse or registered domestic partner to designate another person for whom they may use paid sick leave, state law does not.
• Oakland does not include parents-in-law in its definition of “family members,” state law does.
• Oakland allows employers to require medical certificates to verify paid sick leave under certain circumstances, the state law is silent on the issue.
• Oakland’s small business 40-hour cap on accruable sick leave does not comply with state law’s cap of 48 hours or 6 days. Thus, small business employers must cap at the higher state threshold.
• Oakland’s 72 hours cap on accruable sick leave for other employers is greater than the Act’s accrual cap of 48 hours or 6 days.
• State law caps or limits amount of accrued sick leave an employee may use in a year at 24 hours or three days, Oakland does not permit a usage cap. Thus, under Oakland law an employee may take or use all of his or her accrued sick leave throughout the year without restriction.

For more information, please contact one of our attorneys, Timothy Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth, March 27, 2015

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OAKLAND PAID SICK LEAVE LAW PROVIDES GREATER BENEFITS THAN THE UPCOMING STATE REQUIREMENT

Effective March 2, 2015, Oakland’spaid sick leave ordinance (Measure FF), requires employers to provide paid sick leave benefits to part-time, full-time and temporary employees who perform at least two hours of work in a particular workweek within the city limits. This new law provides benefits greater than those required statewide byCalifornia’s The Healthy Workplaces, Healthy Families Act (the Act), going into effect on July 1, 2015. For basics on the Act’s paid sick leave benefits, see our re

March 27, 2015

Measure Took Effect March 2, 2015

Effective March 2, 2015, Oakland’s paid sick leave ordinance (Measure FF), requires employers to provide paid sick leave benefits to part-time, full-time and temporary employees who perform at least two hours of work in a particular workweek within the city limits. This new law provides benefits greater than those required statewide by California’s The Healthy Workplaces, Healthy Families Act (the Act), going into effect on July 1, 2015. For basics on the Act’s paid sick leave benefits, see our recent articles such as California Labor Commissioner Provides the FAQs on New Paid Sick Leave Benefits Law and Shall The Fog Be Forever Forsaken?, California Labor Commissioner Again Attempts to Resolve Questions on New Paid Sick Leave Benefits Law.

Under Oakland’s Measure FF, eligible employees shall accrue one hour of paid sick leave for every 30 hours worked, which is identical to the Act’s accrual rate. Employers may cap accrued paid sick leave at 40 hours for small businesses (fewer than 10 workers) and at 72 hours for other employers. Employees may use paid sick leave for the employee’s own illness or injury, or to care for family members or other designated persons as defined by the ordinance. Accrued sick leave will carry over from year to year but need not be paid out upon termination of employment.

Employers covered by Measure FF are required to post a notice informing employees of their rights under the paid sick leave ordinance.

The Act “establishes minimum requirements pertaining to paid sick days and does not preempt, limit, or otherwise affect the applicability of any other law, regulation, requirement, policy or standard that provides for greater accrual or use by employees of sick days,… or that extends other protections to an employee.” California Labor Code section 249(d). Thus, employers affected by both Measure FF and the Act must comply with the highest standard imposed by either law. Such employers will also have to post the notices required by each of these laws.

Some of the main differences between Measure FF and the new Act include:

• State law allows employers to provide the sick leave benefit up front instead of accruing over time, Oakland’s does not.
• Oakland allows an employee without a spouse or registered domestic partner to designate another person for whom they may use paid sick leave, state law does not.
• Oakland does not include parents-in-law in its definition of “family members,” state law does.
• Oakland allows employers to require medical certificates to verify paid sick leave under certain circumstances, the state law is silent on the issue.
• Oakland’s small business 40-hour cap on accruable sick leave does not comply with state law’s cap of 48 hours or 6 days. Thus, small business employers must cap at the higher state threshold.
• Oakland’s 72 hours cap on accruable sick leave for other employers is greater than the Act’s accrual cap of 48 hours or 6 days.
• State law caps or limits amount of accrued sick leave an employee may use in a year at 24 hours or three days, Oakland does not permit a usage cap. Thus, under Oakland law an employee may take or use all of his or her accrued sick leave throughout the year without restriction.

For more information, please contact one of our attorneys, Timothy Bowles, Cindy Bamforth or Helena Kobrin.

Cindy Bamforth, March 27, 2015

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THE ANNALS OF INTELLECTUAL PROPERTY NUMBER 2

In our blog, “What is Intellectual Property?”, we identified several kinds of intellectual property, i.e., products created through one’s creativity and intellect, that others may not use without permission. One of those is trade secrets. The most famous example is theCoca-Cola formula, maintained as a trade secret since its creation.

February 18, 2015

What is a Trade Secret?

In our blog, “What is Intellectual Property?”, we identified several kinds of intellectual property, i.e., products created through one’s creativity and intellect, that others may not use without permission. One of those is trade secrets. The most famous example is the Coca-Cola formula, maintained as a trade secret since its creation.

Each state, including California, enacts its own trade secret laws. California Civil Code sections 3426 – 3426.11 define a trade secret as “information, including a formula, pattern, compilation, program, device, method, technique, or process” which meets two criteria. First it must have “independent economic value” whether “actual or potential,” based on the fact that it is not “generally known to the public” or to people who would be able to make money or gain other economic value from using or disclosing the information. Second, its owner must take reasonable efforts to keep it secret from unauthorized persons.

If you have an invention, source code, a chemical formula that you are developing to create some product, an idea or prototype for some device, or anything with current or potential economic value, you can claim trade secret protection. An advantage over patents is that trade secrets are not filed with the government and thus not made public.

However, to claim trade secret protection, it is crucial that you comply with the second requirement by taking reasonable measures to safeguard the secrecy of the information that fit the situation. For example, you developed source code for a new computer app, but need funding to market it. If you give a potential funding source your source code to review without any confidentiality measures, you are not making reasonable efforts to keep the source code secret. On the other hand, if you have an attorney create a strong non-disclosure agreement (NDA) and require the potential funding source and its staff to sign that document in advance of disclosure, this could well be deemed a reasonable effort. In 2012, a small company, TechForward, won a $27 million verdict against Best Buy for misappropriating its trade secrets because it had done that.

If you left the papers containing such source code lying around the office conference room where unauthorized persons might be able to pick it up, you would not be taking reasonable efforts to keep it secret. Such material should be stored securely with access permitted only by people with a need to know and obligated to non-disclosure by an adequate, signed NDA. Your measures might also include non-disclosure of access passwords or encryption codes by otherwise authorized persons as well as other special technological procedures, such as required deletion or erasure by any employee who inadvertently receives trade secret data he or she is not permitted to hold.

What measures will be deemed reasonable under the trade secret law depends on various factors, such as the value of the trade secret, the size and income of your company, and the likelihood of industrial espionage in your industry aimed at the particular type of property. For the Coca-Cola Company, this meant specially constructing a large vault to protect its trade secret.

A downside to relying on trade secret protection is that if it does get out in spite of your efforts and becomes generally known to the public or to those who can profit from using it, that protection likely will be lost. A decision to treat information as a trade secret – as well as just what confidentiality measures are necessary to protect it – should be made deliberately with skilled attorney assistance.

For any questions concerning trade secrets, please contact attorney Helena Kobrin.

Helena Kobrin, February 18, 2015

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THE ANNALS OF INTELLECTUAL PROPERTY NUMBER 2

In our blog, “What is Intellectual Property?”, we identified several kinds of intellectual property, i.e., products created through one’s creativity and intellect, that others may not use without permission. One of those is trade secrets. The most famous example is theCoca-Cola formula, maintained as a trade secret since its creation.

February 18, 2015

What is a Trade Secret?

In our blog, “What is Intellectual Property?”, we identified several kinds of intellectual property, i.e., products created through one’s creativity and intellect, that others may not use without permission. One of those is trade secrets. The most famous example is the Coca-Cola formula, maintained as a trade secret since its creation.

Each state, including California, enacts its own trade secret laws. California Civil Code sections 3426 – 3426.11 define a trade secret as “information, including a formula, pattern, compilation, program, device, method, technique, or process” which meets two criteria. First it must have “independent economic value” whether “actual or potential,” based on the fact that it is not “generally known to the public” or to people who would be able to make money or gain other economic value from using or disclosing the information. Second, its owner must take reasonable efforts to keep it secret from unauthorized persons.

If you have an invention, source code, a chemical formula that you are developing to create some product, an idea or prototype for some device, or anything with current or potential economic value, you can claim trade secret protection. An advantage over patents is that trade secrets are not filed with the government and thus not made public.

However, to claim trade secret protection, it is crucial that you comply with the second requirement by taking reasonable measures to safeguard the secrecy of the information that fit the situation. For example, you developed source code for a new computer app, but need funding to market it. If you give a potential funding source your source code to review without any confidentiality measures, you are not making reasonable efforts to keep the source code secret. On the other hand, if you have an attorney create a strong non-disclosure agreement (NDA) and require the potential funding source and its staff to sign that document in advance of disclosure, this could well be deemed a reasonable effort. In 2012, a small company, TechForward, won a $27 million verdict against Best Buy for misappropriating its trade secrets because it had done that.

If you left the papers containing such source code lying around the office conference room where unauthorized persons might be able to pick it up, you would not be taking reasonable efforts to keep it secret. Such material should be stored securely with access permitted only by people with a need to know and obligated to non-disclosure by an adequate, signed NDA. Your measures might also include non-disclosure of access passwords or encryption codes by otherwise authorized persons as well as other special technological procedures, such as required deletion or erasure by any employee who inadvertently receives trade secret data he or she is not permitted to hold.

What measures will be deemed reasonable under the trade secret law depends on various factors, such as the value of the trade secret, the size and income of your company, and the likelihood of industrial espionage in your industry aimed at the particular type of property. For the Coca-Cola Company, this meant specially constructing a large vault to protect its trade secret.

A downside to relying on trade secret protection is that if it does get out in spite of your efforts and becomes generally known to the public or to those who can profit from using it, that protection likely will be lost. A decision to treat information as a trade secret – as well as just what confidentiality measures are necessary to protect it – should be made deliberately with skilled attorney assistance.

For any questions concerning trade secrets, please contact attorney Helena Kobrin.

Helena Kobrin, February 18, 2015

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THE ANNALS OF COPYRIGHT NUMBER 7

Protecting your own copyrights is of paramount importance. See “Annals of Copyright Number 2.” Vigilance in avoiding violations of others’ copyrights is equally necessary to prevent expensive legal disputes. See “The Annals of Copyright Number 3”. Monster Energy has learned this the hard way in a lawsuit brought by Beastie Boys. SeeBeastie Boys v. Monster Energy Co.

February 4, 2015

Copyright Owners “Make Some Noise” for Infringement of Their Songs

Protecting your own copyrights is of paramount importance. See “Annals of Copyright Number 2.” Vigilance in avoiding violations of others’ copyrights is equally necessary to prevent expensive legal disputes. See “The Annals of Copyright Number 3”. Monster Energy has learned this the hard way in a lawsuit brought by Beastie Boys. See Beastie Boys v. Monster Energy Co.

To promote its products, Monster Energy engages in so-called “lifestyle marketing.” As the Beastie Boys judge observed: “This entails sponsoring action-sport athletes and musicians, promoting concert and “festival-styled” tours, and hosting events. Monster’s advertising goal is to create an aggressive and fun “brand personality,” which will lead consumers to associate its beverages with music, action sports, video games, and attractive girls … (“Monster is a lifestyle in a can.”).

Monster strayed into the copyright infringement minefield when it made a four minute, six second video filled with Beastie Boys’ music and containing other, written references to the group. Beastie Boys “made some noise” when they sued Monster for copyright infringement and false endorsement under the federal Lanham Act. This law protects against trademark infringement and other actions that are “likely to cause confusion . . . as to the origin, sponsorship or approval” of a person’s distinct product or service.

Monster Energy admitted to copyright infringement but claimed its actions were not intentional. The Beastie Boys pressed on through a jury trial on the false endorsement claim and on whether some 15 instances of copyright infringement were willful. The jury found Monster Energy liable for 10 infringements, awarding damages at $120,000 per instance. It also awarded $500,000 for the false endorsement claim, for a total of $1,620,000.

So how did a large company like Monster Energy go wrong? Its first error was “recklessly disregarding” Beastie Boys’ rights by making a video with five songs by the group without seeking any permission. The court found Monster Energy’s infringement “derived from a gross lack of attention at corporate level to others’ intellectual property rights.” In contrast with protecting its own copyrights vigorously, it lacked any copyright licensing policy or training for its staff using others’ music for videos or other purposes.

These days, it is common for companies and organizations to use copyrighted music and other content that they do not own for a variety of purposes. For some uses, including playing music at an event, there are licensing agencies – primarily BMI, ASCAP and SESAC – that provide licenses permitting the action. For other uses, such as putting music in commercials, multiple types of licenses may be required. As Monster Energy learned, if you do not seek help to ensure you are covered with all the needed licenses, it may turn into an expensive mistake. While the Beastie Boys set-back will not put Monster Energy out of business, a similar judgment against a smaller company might have that result.
For help in obtaining the appropriate licenses, contact Helena Kobrin, a knowledgeable copyright attorney.

Helena Kobrin, February 4, 2015

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