Chicago Business Lawyer Blog

Chicago Small Business Attorney: Muffin-Gate Makes Headlines

Tue, 01 May 2012 07:19:00 -0600

It's been dubbed "Muffin-Gate."

It involves a Chicago contract dispute and the issue of trade secrets and intellectual property at a small - but famous - bakery in Evanston.

Our Chicago small business attorneys have taken a keen interest in this case because it gets to the heart of what so many small business owners grapple with when it comes to their employees: trust.

That's not to say that employees of small businesses in Chicago are untrustworthy. Rather, owners of smaller operations are more apt to place an enormous amount of trust in their workers. In many cases, employees are treated more like family, in a way you won't necessarily find at a larger firm.

This can be a good thing in many ways: It fosters good work ethic, loyalty and a sense of pride and ownership in the work done.

However, it can be a rude awakening for employers when you trust your workers like family - and you learn the hard way that it's all just business.

In this case, it was a small bakery held in high esteem. In fact, The New York Times had spotlighted the bakery. It's specialty - the cinnamon bomb - was also featured as one of the top 100 things to taste in Chicago last year.

Now, however, the bakery is garnering headlines for a much different reason.

The owner is suing a former chef, who allegedly left with two notebooks packed with recipes - including the one for the cinnamon bomb. The owner claims that these were recipes that were developed over the last several years, with the owner, the chef and other staff collaborating. She says that the chef had signed a non-disclosure agreement.

But when the chef left - presumably on bad terms - she returned to the bakery and took the recipes, saying the owner would have to sue to get them back. And she has.

The chef says, however, that she plans to return the recipes, but noted that most were adapted from various Web sites and cookbooks. She said it would not be difficult for anyone to reproduce them.

And this is what gets to the issue of trade secrets when it comes to recipes. Secret recipes for sauces and other savory eats can prove trickier to protect than other ideas. Like any original idea or invention, they can be patented, but it depends on a myriad of factors. (The recipe for Coca Cola recently made headlines when it was moved from a bank vault in downtown Atlanta, where it had been securely stored since 1925).

When it comes to food, you can patent either the composition of the matter - that is, the actual ingredients - or the process for making it, that is, the way in which you combine all those ingredients. First, it has to be edible and for the use of human nutrition (as opposed to medical), and then it has to be something novel. For example, let's say you invented a new hot cocoa recipe that involves water, cocoa and sugar. It might be yummy, but there's really not much new about it, unless there is some novel way you mix it that produces different or unexpected results, you aren't likely to secure a patent.

But this is where a Chicago small business attorney can help you. The goal is to protect your creations and, ultimately, your livelihood.

Chicago Business Litigation Attorneys Watching SCOTUS Overtime Review

Wed, 25 Apr 2012 11:57:31 -0600

Chicago employment litigation may spike as workers aim to cash in on recent court settlements that involved large chunks of change for unpaid overtime.

Now, Chicago business litigation attorneys are closely following the U.S. Supreme Court's review of Christopher v. Smithkline Beecham Corp, a class action suit in which sales representatives for the prescription drug distributor GlaxoSmithKline (GSK) say they were not paid overtime to which they were entitled. GSK, however, says that as sales representatives, these individuals are exempt under the federal Fair Labor Standards Act of 1938.

Being that this case is to be decided by the highest court in the land - probably by early summer - it has received more press than other cases. But the fact of the matter is, there has been an explosion of overtime pay cases in recent years.

Notably, there was the Mario Batali case, the celebrity chef who forked over $5.2 million to employees who claimed unpaid tips and overtime. Then there was the Norvartis AG settlement in which the Swiss drug maker settled for nearly $100 million with its sales representatives over similar complaints.

The Department of Labor reports that overtime cases that it has overseen have increased an astonishing 36 percent in a single year. In 2010, there were about 8,800 cases with $107 million in wages at stake, versus nearly 12,000 the following year with $140 million at stake.

In federal courts, these same types of cases were up 15 percent in a single year.

Business litigation attorneys in Chicago and throughout the country say that wage and hour lawsuits have spiked a jaw-dropping 325 percent since 2000.

Some have labeled these huge increases "show-me-the-money fever."

Those who speak on behalf of employee interests say there is an ever-intensifying pressure to work longer hours, while there overtime protections are markedly decreasing, with employers lumping more and more workers into categories that are exempt from receiving overtime pay.

However, the greater issue may be the vast confusion when it comes to overtime laws. First, we need to look at when the Fair Labor Standards Act was passed - nearly 75 years ago. So much technology has pushed work environments to greatly evolve. In fact, very few workplaces look anywhere near like they did in 1938. That makes application of certain aspects of the labor laws difficult in a modern workplace.

What's more, the laws are continuing to become more stringent. This is apparent in the Obama administration's recent proposal to revise the Fair Labor Standards Act to allow in-home care workers the ability to receive overtime pay as well. Another is a proposed federal law that would raise the income level for those who would be entitled to overtime - regardless of what their job classification is. Right now, the cap stands at $24,000 annually. That would more than double to $54,000 under the Rebuild America Act.

What's important to note here is that these are difficult times. The vast majority of employers want to do right by their workers - but forcing them to break the bank isn't the answer.

Amicas v. GMG Discusses Breach of Contract Law in Chicago

Sun, 15 Apr 2012 13:03:23 -0600

Contract law can be one of the most complex areas of the law. If you are involved in a Chicago contract dispute, it is important to know what type of relief you may be entitled to. Our experienced Chicago business attorneys focus on business law so that we can effectively represent your rights.

Contract negotiation and enforcement is critical to business growth. A recent First Circuit case discusses the law surrounding a breach of contract case. Amicas, Inc. v. GMG Health Systems, LTD, No. 11-1628 (1st Cir. Apr. 10, 2012). Amicas is a information technology (IT) company that developed software used in the medical field. This company is well-known and traded publicly. Gonzaba Medical Group (GMG) is a medical service company with hundreds of employees.

GMG needed computer software developed in order to handle the billing for its radiology services. GMG contracted Amicas and began negotiating the terms of a potential contract. GMG would pay Amicas for the development and license of two computer programs. Amicas' legal department drafted the contract that provided that GMG would pay over $1 million over five years for the development and software license for the two radiology computer programs.

The contract also contained a warranty on the part of Amicas to produce software that would conform to the concepts in the product manual. However, Amicas did add that they would not provide a warranty to assure that the software necessarily met all of GMG's requirements.

In order to create a binding contract, there are specific factors a court looks to. There must be a clear offer made, the offer must have been accepted, and there must be sufficient consideration to enforce the terms of the contract. In this case, Amicas offered to develop the software, GMG accepted the offer and the payments were consistent with the cost of the software development and licensing.

The contract was properly signed by both parties on the same date. Thus, this contract is considered to have been validly executed. Within the terms of the contract there was an integration clause. An integration clause verifies that the contract is the final and complete agreement between the parties. All previous communications, contracts or negotiations are considered void if they conflict with the terms of the final contract.

GMG was unhappy with the way the software integrated with their systems. Amicas continued to work on the software and provide program support to GMG. Without consulting with Amicas, GMG entertained negotiations with a competitor of GMG to discuss the creation of software to substitute that which was already developed. GMG then sent a notice of termination to Amicas claiming that their contract was cancelled because Amicas had failed to conform to the guidelines of the project because the software was not functional.

After trying to negotiate with GMG, Amicas found out that GMG had entered into a contract with Amicas' competitor. Thus, Amicas filed suit arguing that GMG had breached its contract. GMG counter-sued claiming that Amicas had breached the contract when it failed to produce a functional product.

The court stated that in order for a court to find that a party breached a contract, the plaintiff must prove that an actual contract existed, the plaintiff had been willing to comply with the terms of the contract, and that the defendant had breached the contract. Additionally, plaintiff must prove that the damages sought were causally related to the defendant's breach of contract.

GMG did not provide the court with any material evidence to support its contention that Amicas breached first; thus, the court found in favor of Amicas.

Protect Chicago Intellectual Property Now To Avoid Business Litigation Later

Sun, 25 Mar 2012 10:13:24 -0600

The question of who owns the right to Chicago intellectual property can become central in certain business disputes, such as the one happening right now between the legal team at Facebook and lawyers for a wood pellet salesman claiming half ownership of the social networking giant.

Our Chicago intellectual property attorneys know how important it is to have these elements settled when a business is in its infancy. It can be tricky because ideas aren't tangible. Unlike an actual piece of property, proving ownership of intellectual property can mean using a host of creative, forensic techniques.

While witnesses are key in many business litigation cases, in some situations, the heart of the issue is what was said or promised between the two disputing parties. A he-said-she-said type of situation is going to require a different legal approach.

The tack taken by Facebook is to discredit the plaintiff and his evidence by alleging that much of his "proof" has been doctored or simply made up. They have even gone so far as to call his lawsuit a "fraudulent shakedown."

Part of what does give some credibility to the wood pellet salesman was that he did meet and work with Facebook Founder Mark Zuckerberg while the latter was still a student at Harvard. The plaintiff claims that during that time, around 2003, he signed a contract with Zuckerberg that entitles him to 50 percent of "The Face Book."

The salesman said he had forgotten about the contract for a number of years, but later discovered it as he was looking for documents in his files amid allegations of sales fraud - (the latter of which doesn't help the credibility of his claim).

However, Zuckerberg's team says forensic experts have proven that the ink on that contract is less than two years old. What's more, it appears the salesman put the document out in the sun, to give it the distinct appearance of age.

Other e-mail records produced by the salesman were reportedly time stamped in an earlier year than it actually was after his computer clock was reset, the Facebook attorneys have alleged.

While Zuckerberg did end up agreeing to a multi-million dollar settlement with two other Harvard students who claimed he heisted their social networking idea, the claim by the salesman appears a bit far-fetched, especially in light of the evidence that appears to have been tampered with.

Facebook has asked the court to dismiss the claims, but the court has yet to rule on that motion.

While the vast majority of individuals aren't going to have half of a $5 billion business on the line, it's important to remember that Facebook wasn't always this lucrative. The fact that it has made so much money is what has made it a prime target for these types of lawsuits.

The whole situation illustrates why it is so important to protect intellectual property. When you leave your car on the curb, you lock it up, right? Your ideas - which have the potential to be exponentially more valuable - should be no different.

Chicago Business Litigation Watch: Gardner v. Leitgeb & Vitelli, LLP Looks at Duty to Client

Wed, 14 Mar 2012 12:46:33 -0600

Chicago business litigation is a very complex area of law that requires experienced attorneys. Do not allow a lawsuit to ruin the reputation of your business and livelihood.

Our Chicago business attorneys know what it takes to fight your case and give you your opportunity to be heard.

In a recent case coming out of New York, the court discusses the different duties an accounting firm owes their clients. Gardner v. Leitgeb & Vitelli, LLP is the result of a dispute regarding business ownership, and the possible remedies that can be sought against a business. Although the defendants in this case did not act wrongly, this case provides a very good illustration of the possible causes of action and equitable defenses available in business litigation.

There was a dispute between parents ("plaintiffs") and their son over the corporate ownership of their family pizzeria called CJEFA ("business"). Son contends that during a four year span ending in 2001, he was the sole shareholder and president of the business. In 2001, son went to the accounting firm of Leitgeb & Vitelli, LLP ("defendants") to receive tax preparation and audit services.

Defendants signed a retainer agreement with the son indicating that the defendants were responsible for representing CJEFA in their New York tax audit, preparing the state sales tax returns and preparing the federal and state income tax returns ending on December 31, 2001.

Furthermore, the defendants did indicate that they were aware of a dispute involving the corporate ownership of CJEFA but upon hiring the defendants, son stated he was the sole owner. Son also represented that his parents, plaintiffs, were engaging in a systematic scheme to illegally acquire the assets from this business.

The firm never signed a subsequent retainer to prepare any further tax returns. The son terminated the firm in 2003 and upon this termination the firm returned all of the legal corporate CJEFA documents to him. At that time the plaintiffs made several attempts to attain these documents but the defendants would not release them because of their belief that the son was the sole shareholder and president of the corporation. This caused plaintiffs to sue the defendants.

Plaintiffs argued that the defendants should be held liable under four separate counts including malpractice, breach of contract, breach of duty and conversion.

As to the issue surrounding breach of duty, the court held that in the state of New York there is no fiduciary relationship between an accountant and his client. A fiduciary relationship describes a relationship where one of the parties has a good faith duty of confidentiality to another party. This is seen in cases involving trustees and attorneys. However, the court here found that there should have been no expectation of this duty, and therefore this count of the suit was dismissed.

Secondly, the court addressed the claims of malpractice and breach of contract. Retainer agreements are binding contracts between two parties that identify the scope of the representation and services agreed to. In this instance, the defendants had been hired by the son and it was only for the preparation of the tax returns associated with the fiscal year ending on December 31, 2001. Therefore, there was no legal agreement between the parties that imputed an obligation on the defendants to complete the tax returns for any other years. This shows that the firm had not acted negligently in their failure to prepare any further tax returns, but were well within their obligations stipulated in their retainer. Because of the foregoing reasons, this court dismissed the claims for malpractice and breach of contract.

As to the last count of conversion. Because there was still a dispute over who the verifiable president and sole shareholder was, the court could not identify the party who had legal ownership of the corporate documents to begin with. In an instance where the plaintiffs can not prove that they are the owners, then they do not have the standing to argue that someone else took unauthorized control over the business documents.

As seen in this case, having the right attorney guiding you through this multifaceted area of law is an invaluable asset.

Chicago Taverns Require Small Business Legal Representation

Mon, 20 Feb 2012 15:55:45 -0600

The recent closing of several local Chicago neighborhood bars and taverns shows that city officials are putting the squeeze on these local and often long-running businesses.

In many cases, liquor law licensing and zoning issues require the skills of a Chicago small business attorney, who can assist in helping these companies stay afloat despite political pressure. Chicago small businesses may also need legal representation when handling Chicago real estate issues. Whether zoning or the sale and purchase of real property, a small business' location and contract to lease, rent or purchase must be iron-clad.

A recent Chicago Sun-Times article reports that local neighborhood taverns -- once considered the lynchpins of many Chicago communities -- have been going out of business. The newspaper reports that old standbys Johnnie's Lounge, Paulie's Place and MaxTavern have all closed in recent years.

For generations, these small businesses were representative of the many ethnic communities throughout the city. Then, many factors such as the economy, a change in preference as well as city regulations and other difficulties have led to problems. Gentrification -- where wealthier landlords buy up properties and fight against small businesses located within -- has also been one of the final nails in the coffin of these neighborhood hubs.

Some bar owners believe that today, bars and clubs are catering to 20- or 30-year-olds who want a different atmosphere than in years past. The older taverns were about camaraderie and a sense of the neighborhood. Now, many modern bars are located in entertainment districts.

Opening a new tavern can be difficult. Liquor license moratoriums can be put in place in local neighborhoods and buyers must purchase the entity that owns the existing tavern and license, the newspaper reports.

Whether opening a new tavern or attempting to keep alive an existing business that has been around for generations, a Chicago small business lawyer can be helpful. The legal hurdles provided at the city level are one issue. You also need to consider that making the right funding, real estate and personnel decisions can be challenging.

Any small business can have a difficult time settling real estate issues, especially if there are zoning guidelines that must be handled as well. As the character of a community transforms, especially as properties change hands in the battered economy, these issues can be even more prevalent. When the culture of neighborhoods morph, so do the needs and desires of property owners.

When small businesses are attempting to start up and find a permanent home, the right location isn't always the one with the most traffic. Often, a good location for the company also depends on the neighborhood and the level of community resistance.

In any situation, picking the right location and dealing with the contractual issues, possible sales and purchases and other real estate issues is important to getting off to a good start as a small company. An experienced Chicago small business attorney can help in these situations and more.

Chicago Business Attorney Crucial When Small Biz Decides on Financing

Fri, 10 Feb 2012 15:32:45 -0600

Three recent stories show that small businesses can't afford to make many mistakes. This is especially true when they are deciding how to best deal with financing a small business in Chicago .

If a mistake is made early on, it could be a cloud that hangs over the company for years. If the wrong terms are agreed upon or the structure of a financing deal isn't beneficial to the company, they could be sunk.

In many of these cases, an experienced Chicago small business lawyer is the tool needed to make sure that the company's leaders are making sound decisions, weighed with the possible legal repercussions, to ensure the business' funding is going to allow it to be successful. Small businesses are a risky proposition for banks and lenders and without much of a history or proven track record, a business could get sucked into poor financing rates or terms that can keep them in a rut.

Several recent stories show the perils of making small business owners who make poor financing decisions. For one, The Wall Street Journal is reporting that the Chicago News Corporation is halting operations over this very issue.

The company, started just over two years ago, was designed to compete with Chicago's daily newspapers and other media options at a time when the newspaper industry was struggling. But because of funding issues, the company has told its employees it intends to shut down.

The news source, which has covered politics, business and other issues on its website and has dedicated articles to The New York Times every week, was started by a group of prominent journalists. The staff was recently told that because of funding problems, the website would soon be shut down.

As newspapers have struggled with increasing costs to print to supplies as well as the increase in Internet competition and a hit to circulation, many start-up nonprofit news sites have surfaced in recent years.

CNNMoney is reporting that small businesses are in a tough position because banks, which are recovering from the Great Recession themselves, are having a difficult time lending to small businesses. And while banks demand collateral, such as land or equipment, that may not be possible for many small companies.

This has led to many companies to seek riskier loans to get by. The article goes on to state that the cash advance industry -- which may charge outrageous interest rates to make up for the risk -- are making a killing at the expense of small business owners.

CBS Chicago reports that there may be some help for local businesses, however. The City Treasurer's office has a program that has provided 115 loans since 2009. City leaders believe that the loan program for small businesses is a jobs boost, as 90 percent of the city's businesses are classified as small business.

The city loans range from $2,000 to $50,000 and these are amounts that small businesses typically can only get by dipping into personal funds or high-interest loans.

Small businesses must be successful in order for our country to continue to grow and prosper. But if companies are taken advantage of by these risky, high-interest loans, it can sink as many businesses as it helps. While city-run programs may be beneficial, they must be properly vetted as well.

An experienced and skilled Chicago small business attorney understands the concerns of a small business owner. Analyzing all the risks and ensuring that legal loopholes aren't going to come back to bite the business is important. Be prepared when making the critical decision of how much to finance and from whom.

Proper Small Business Insurance Can Protect Chicago Companies From Liability Lawsuits

Wed, 25 Jan 2012 14:29:33 -0600

A recent case involving technology giant Apple shows that having the proper type of insurance can protect against even something as basic as a slip-and-fall claim.

Apple Insider reports that an insurance company recently lodged a complaint against the company disputing a claim by Apple, a Chicago construction company and the Chicago Transit Authority for an incident that happened while an Apple Store was being built here in 2010.

While Chicago Business Attorneys may focus on properly written contracts, protecting intellectual property and dispute resolution -- and all those are critically important as well -- making sure that your home base is protected is crucial too. Employee issues, whether providing protection from injury or ensuring the company is protected from discrimination suits, can just as easily damage a company as any other issue.

Chicago premise liability issues or those involving the products that are packaged and shipped for distribution are issue that must be taken into consideration by a successful business. Any workplace can be opened up to lawsuits and claims if they don't have the right kind of insurance to protect from injuries. This is even more important in business that involves machinery, manufacturing or construction.

According to the news article, Apple is in a pinch because in 2010, the technology giant entered into an agreement with the transit authority and a construction company to renovate a subway station near the store. The deal was to allow Apple to buy out the advertising space and rename the station.

Scaffolding and shoring was set up and Apple and the construction company were set up as "additional insureds" and were supposed to be covered by the insurance company's limited liability coverage. But while under construction, a woman fell and fractured her hip on a sidewalk. The scaffolding company's insurance was added 19 days after the injury, meaning Apple and the construction company were hung out to dry. The companies have now sued each other.

This type of situation can happen in any office setting or work site. Employees can become injured on floors, by chemicals or through hot objects. Companies must ensure they protect themselves to comply with state and federal standards.

Starting in March, the Americans with Disabilities Act will include additional changes that public places must comply with to avoid risking fines or penalties. Among the changes, 1 in 6 parking spaces, a change from 1 in 8 spots, must be van accessible. Mobility devices, other than wheelchairs, must be accommodated.

Shelving and other objects must be no more than 48 inches high. There are other changes in place that went into effect in March 2011, but won't be enforced until this year. This is just another thing that companies must adhere to in order to stay above-board in all respects.

Businesses have a lot on their plate and many things to remember. Dealing with employee issues to ensure premise liability problems don't derail the company is a big one. Complying with state and federal laws regarding the public is another. These issues shouldn't be prioritized over business-related matters, but they also shouldn't be overlooked, either. A Chicago business attorney can help companies ensure compliance and protect them from legal issues at the same time.

Illinois Land Acquisition Case Shows Importance of Breach of Warranty Litigation in Chicago

Thu, 12 Jan 2012 10:57:31 -0600

A case out of Illinois decided recently by the 7th Circuit Court of Appeals in Chicago shows just how important it is to have strongly worded contracts when dealing with major acquisitions in Chicago.

Our Chicago business lawyers would also point out the importance of doing your due diligence on the environmental factors on a piece of property for sale in Illinois. That cuts to the heart of the matter in this Illinois case that was recently decided.

In 2000, the Wilder Corp., a cattle company, agreed to a deal to sell 6,600 acres of land in Fulton County, Illinois to an organization that wanted to turn the land into a natural preserve. As part of the deal, the cattle company promised to ensure the land was free from any toxins or chemicals and to clean up any trash on the property. The total price of the deal was $16.35 million.

There were no issues until 2006, when the Nature Conservancy found there was petroleum on part of the site. The organization sued the cattle company for breach of warranty and a judge ruled in favor of the organization, forcing the cattle company to dish out $800,000, even though the cattle company claimed it wasn't aware of any problems. It appealed and lost.

In an effort to pass the buck, the cattle company sued a local drainage district that stored petroleum in tanks near the property. The company attempted to argue that the district was responsible for the contamination and should have to pay the damage.

A court found in favor of the drainage district and the 7th Circuit Court of Appeals recent affirmed the ruling, writing that a "blameless contract breaker...cannot invoke non-contractual indemnity to shift the risk that he assumed in the contract."

Experts said the ruling wasn't hard for the appeals court because the drainage district had no part in the contract. It was the cattle company's responsibility to ensure the property was free from environmental issues, per its contract.

Analysts believe that the ruling is significant for two reasons. For one, it shows the importance of strongly worded contracts that allow for no loopholes that could potentially harm a company doing business with another company or an individual. Secondly, it shows that companies must do their research of potential environmental hazards when purchasing a property.

Just as future home buyers must ensure the property is properly inspected not only for structural issues, but also potential toxins, a company planning to purchase a piece of land must make sure there aren't any environmental issues or local ordinances that would make the property unusable for the company's purpose.

Our Chicago business lawyers have experience handling these environmental issues as they relate to local, state and federal environmental laws and the potential hazards for companies looking to purchase land. It's not as simple as buying a property and starting construction.

Along with the frustrations of local government permitting, there are also bigger environmental issues that must be taken into consideration. Rushing through the process without an experienced Chicago business lawyer can make it much more expensive and time consuming.

Health & Safety Regulatory Compliance Critical For Chicago Small Businesses

Tue, 27 Dec 2011 10:14:15 -0600

A Chicago catering company has been shut down by federal inspectors in the wake of claims that the company did not properly protect food from contamination.

Our Chicago small business attorneys know how devastating this can be to a restaurant or food-service business. To be shut down any time of year threatens a company's survival. But to be shut down at the holidays may very well force a catering company out of business. To say nothing of the damage to reputation that food-contamination allegations present.

Triple A Services, a South Throop Street caterer, agreed to take a number of food-safety measures, including the hiring of food sanitation of food processing experts, before reopening, according to the Chicago Tribune. The lawsuit filed on behalf of the U.S. Food and Drug Administration found violations during inspections in July and August of this year. The company operates a 46,0000 square foot Chicago facility with a 24-hour kitchen and bakery. It provides catering and office coffee and bottled water services.

Complying with environmental, health and safety regulations is critical to the health and viability of any business enterprise. As this case illustrates, consulting an attorney and putting plans in place to ensure compliance is often much easier, and much less expensive, than dealing with the fallout from citations and other non-compliance issues.

The lawsuit alleges bacteria was found at the facility as far back as 2001. The government's reaching into the past as part of the lawsuit illustrates why a legal defense is always required, even when a business or facility believes a common citation is the extent of the consequences. On the surface, this lawsuit also alleges relatively routine complaints, including a lack of a written plan for dealing with seafood, pest control issues, failure to fix a leaking water issue and employee cleanliness issues. These are all problems common within the restaurant industry. A thorough review of this case may also reveal that the company could have easily prevented the case from escalating by either defending itself or resolving a few simple issues.

Instead it has a public relations issue and is facing fines of $2,500 a day if it fails to comply with a consent decree. Forced closure will likely cost it thousands more. Remaining proactive from the start, and having a thorough understanding of your rights, can literally save your business when dealing with local, state or federal regulators.

Other common issues involving Environmental, Health and Safety regulations include:

-Regulations involving the Occupations Safety and Health Administration: Issues related to employment regulations and work safety.

-Regulations involving the Environmental Protection Agency: Administrative and court defense of alleged violations.

-Regulatory compliance and affairs: Clean Air Act, Resource Conservation and Recovery Act, Toxic Substance Control Act, Clean Water Act.

-Due diligence and risk management: Environmental site assessments and compliance audits.

-Remedial actions and Brownfield projects: Cleanup options and obligations.

-Governmental inspections and proceedings: Defense and administrative resolutions.

Apple Wins Key Chicago Intellectual Property Ruling in Android Case

Thu, 22 Dec 2011 09:46:49 -0600

Technology giant Apple recently won a key ruling in a case regarding the software in some of HTC's Android smartphones, CNNMoney reports.

Issues of intellectual property in Chicago are critical because protecting your ideas is the only way to run a successful business. This is especially true in the world of technology, which is constantly changing and improving.

Our Chicago small business lawyers understand that protecting your company is critical in surviving the market in which you are competing. Often, these matters require litigation in order to fix an issue that is a result of theft of ideas.

In this case, the U.S. International Trade Commission ruled in Apple's favor that the software used in some of HTC's Android smartphones violated a provision of Apple's patent. The ruling means that some of those phones will no longer be allowed in the United States.

Apple officials had hoped for a broader ruling, which bans HTCs phones in April. That gives the company time to figure out how to fix the phones without the Apple-patented software.

CNN reports that Apple had hoped for a "knockout punch" ruling that it didn't get from the commission. Analysts said that a "data tapping patent" was at issue, an invention that marks up phone numbers or other formatted data in emails, for instance, and allows users to bring up other programs that process the data. This is common when a user brings up a phone number from a website and it automatically brings up the phone dialer function to dial the phone number.

The CNN article reports that the ban won't affect HTC phones that don't have the feature or phones that implement it in ways that avoid the Apple patent. It's possible Google can implement the feature without using the Apple patents. If so, the ban will have little or no effect on the companies.

Obviously, the fight among smartphone companies is highly competitive. These phones are constantly changing and becoming more technologically advanced by the year. With millions sold each year and the products costing hundreds of dollars, the companies that design these machines are making a ton of money. They will go to great lengths to protect the technology that has made them successful.

Protecting ideas and patents is critical to ensuring a business survives. The reason that patents are registered and made public is so companies can check to make sure others aren't stealing their ideas. If everything were private, these patents could be stolen or sold improperly from business to business.

But, still, companies often try to skirt the rules and take credit for ideas that aren't there own. This can potentially sink a successful company if another business is able to get away with taking this information.

That's where an experienced Chicago intellectual property law firm becomes valuable. In protecting your small business from other competitors and larger businesses that attempt to run people out of the market, it's possible that bringing a lawsuit will be the only way to successfully defend against these unlawful acts.

Motorola Sued By Lemko For Trade Secret Theft in Chicago

Wed, 30 Nov 2011 12:21:03 -0600

A recent lawsuit filed in Chicago alleges that giant cell phone company Motorola misappropriated trade secrets on technology that allows cellular networks to track emergency callers.

This lawsuit comes down to employment issues that Chicago small businesses deal with all the time.

This is especially true with technology start-ups because of how intense the competition is and how high-impact the development of new technologies can be. In this global economy, new technology is perhaps the most valuable asset a company can have. Being able to create something that completely changes the face of business or consumer products can be very profitable.

But it can also be easily pilfered by employees who leave the company and take the company's trade secrets with them. This is why a small business start-up must consult with an experienced Chicago small business attorney.

Many small business owners are so concerned with office space, financing, registering the business and other important first-step acts that they don't consider the implications of structuring employment contracts, establishing policies and handbooks and making sure there are provisions to ensure employees don't steal company secrets when they leave.

In this case, Lemko Corp. alleges, an engineer that created technology that allows emergency callers from cell phones to be detected by law enforcement went to Motorola because she had "access to and knowledge of Lemko's trade secrets," according to a lawsuit filed in Chicago.

The engineer left Lemko, the lawsuit states, and then was hired by Motorola, which then incorporated the technology into its phones. The giant cell phone company, which is being acquired by Google Inc., allegedly destroyed computer files showing that it used Lemko's computer code. The engineer was fired in 2008, Bloomberg reports.

Lemko is asking for compensation for the loss of royalties as well as unspecified damages. The company alleges the engineer should have known or did know that she would be using her former company's trade secrets in creating the technology for Motorola.

Trade secrets are a major factor in making sure a business is successful and they can be illegally stolen through a variety of means. Trade shows can lead to leaked secrets, but employees tend to be a major source of this type of theft. A strongly worded and appropriately written employment contract can ensure that employees don't run off with important details or intellectual property that belongs to the company.

Intellectual property includes branding, trade secrets, and other developed ideas that a company relies on in order to thrive. An experienced Chicago business litigation attorney can help companies implement these secrets and protect them from outside businesses. From trademark registration to protecting those secrets along the way, this is one area of business that can't be taken lightly.

In this ultra-competitive market, companies must do all they can to protect what is theirs and what they have developed through their own hard work. Letting employees take this technology and carry it to competitors can have a crippling effect on a small business.

Chicago-Based Tootsie Roll Sues Footwear Maker Footzyrolls For Trademark Infringement

Sun, 20 Nov 2011 11:17:11 -0600

The Miami-based small business Rollashoe was hit with a lawsuit recently by Chicago-based candy maker Tootsie Roll, alleging that its Footzyroll ballet shoes infringed on the candy company's trademark, CNNMoney reports.

Chicago small business can be difficult because larger companies are trying to always dominate the market. Sometimes, it takes clever names, along with ground-breaking products to find a niche in the ever-competitive field they are in.

But large corporations will try to pummel any small business that is making a mark and can be seen as a threat. This can lead to lawsuits that attempt to intimidate and weaken a business owner who is simply trying to compete.

But a Chicago small business lawyer can be utilized for many functions aside from defending lawsuits. Whether hiring employees and requiring non-compete clauses to be written into contracts, or setting up contracts with other businesses for distribution or marketing of products, an attorney is helpful in making sure all your bases are covered.

According to CNNMoney, this lawsuit stems from a new line of ballet slippers that are so flexible and small they can be tied up with a string and carried in a canister. In a recently filed lawsuit in the U.S. District Court for the Northern District of Illinois in Chicago, Tootsie Roll claims that consumers could get confused and assume that the shoe is a part of the candy company's brand.

Tootsie Roll made $521 million in sales last year, compared to Footzyrolls' $2 million in sales in 2010. The Chicago candy maker claims the footwear will dilute or tarnish the value of the Tootsie Roll brand and that the actions are "willful, malicious and fraudulent."

The owners of the shoe company -- 28- and 34-year-old sisters -- say the lawsuit is without merit and will threaten their company. They have spent thousands in legal fees fighting with Tootsie Roll, which opposed the trademark application the shoe company made. It was later featured in Oprah's magazine and has gotten sizable contracts from that exposure.

They are concerned that the lawsuit could cripple their business, which could top $3 million in sales, but has been hampered by the candy maker's actions.

Sadly, business is cut-throat and lawsuits like these happen every day. Big businesses, even candy companies that claim shoe companies could confuse consumers, like to flex their muscle. They know that small businesses don't have the legal budget that they do.

But an experienced Chicago small business attorney can help. Being able to attack the lack of merit of the lawsuit is a way to start. Showing that the products are so different they couldn't confuse the average consumer is another aspect.

Big businesses don't simply use lawsuits to attack competitors, though. They try to hire away their employees, make deals with other businesses to run them out of a specific geographical area or niche product area. These are all areas that can be addressed with a lawyer who can help write solid contracts.

Groupon Tale Continues to Offer Caution to Small Business Startups in Chicago

Sun, 23 Oct 2011 09:30:16 -0600

As we reported recently on our Chicago Business Lawyer Blog, Groupon, the online coupon phenom, is facing a class-action lawsuit regarding overtime pay. We used it as a cautionary tale about the need for tech startups in Chicago to invest in the kind of experienced legal help necessary to keep them out of legal trouble through the incubation and gestation period.

Now the New York Times is reporting on "red flags" raised during IPO negotiations. Finance is another critical area where contacting a Chicago business lawyer can pay huge dividends while keeping your rights protected.

The Times reports the suit and a number of other accounting and disclosure gaffes have been brought to the attention of the Securities and Exchange Commission, darkening the company's Initial Public Offering Prospects and raising questions about its credibility. When Goldman made the successful pitch as one of the underwriters of the IPO this summer, the company was being valued at $30 billion. Analysts now believe the company would be lucky to fetch an evaluation of more than $10 billion.

The IPO is also debuting as the company's triple digit growth has slowed.

Also at issue is the unearthed business history of Groupon's chairman Eric Lefkofsky, which the media describes as a lawsuit-prone entrepreneur who flipped a dot-com in 1999 that quickly went bankrupt on its new owners. He also reportedly took home $319 million of an investment round in January that fetched $950 million. Most of the rest was paid to employees and investors, which the Times cited as a red flag to other would-be investors.

Some of this is undoubtedly legitimate. But never forget that perception is often nine-tenths of reality. Once a company stumbles, it can be hard to get back up for all the piling on. Experienced legal advice and careful planning can often help a company avoid some major pitfalls and common errors.

Industry watchers are now questioning why Wall Street investment firms didn't catch the red flags earlier, or whether they may have turned a blind eye to problems in the quest for profit. "Underwriters are supposed to be gatekeepers, not just a sales and marketing agent," said Lynn E. Turner, a former chief accountant for the S.E.C.

The information Groupon filed with its prospectus is also now being called into question. According to that information, the company has $250 million in the bank and lost $102 million last year on revenue of nearly $1 billion. The need for additional cash, either through an IPO or otherwise, quickly becomes apparent. It has also left some scratching their heads at the $30 billion valuation. Especially when matched against $376 million in assets and $681 million in liabilities -- including nearly $400 million currently owed to vendors.

And despite spending nearly $500 million on advertising in the first six months of the year, the company's revenues are up only 13 percent in August, compared to 96 percent during the first six months of the year.

In its quiet period ahead of the IPO, the company has not commented publicly but its founder expressed optimism in a recent note to employees.

Small Business Legal Advice Can Keep Chicago Companies in Compliance with State and Federal Regulations

Tue, 18 Oct 2011 09:01:51 -0600

The U.S. Department of Labor has sued a Marshfield builder and its owners for more than $100,000 for alleged violations of the Employee Retirement Income Security Act. The case is being pursued by the EBSA's Chicago office.

Chicago business attorneys often see startups struggle to stay on the right side of state and federal employment regulations. Seeking small business legal advice can help ensure that success does not become as disastrous as business failure.

As we reported recently on our Chicago Business Lawyer Blog, employment issues and other legal issues can pose a threat to tech startups or other small businesses.

In this case, the lawsuit was filed in U.S. District Court. It alleges the company failed to forward nearly $18,000 in 401(k) contributions between 2006 and 2008. It also says the company failed to remit timely payments to the plan, which had 52 participants and about $250,000 in assets as of March 2009. The suit also accuses owners of failing to pay nearly $100,000 in employer contributions to the Prevailing Wage Plan from 2007 to 2009. The plan mandates that the builder make prevailing wage contributions to the plan using proceeds received under state and federal contracts.

"The Labor Department is committed to ensuring workers keep what they earn," said Steve Haugen, EBSA's regional director in Chicago. "We will continue to hold fiduciaries accountable when they ignore their responsibilities and put workers' hard-earned retirement income at risk."

The lawsuit seeks to restore contributions to both plans and to remove the company and its owners as plan fiduciaries.

Federal and state prevailing wage plan requirements are a complex part of doing work as a government contractor. As contractors have submitted increasingly lean bids to secure jobs in a tough economy, running afoul of wage and hour regulations, retirement regulations and other state and federal employment regulations has become more common.

Companies may also be best served by using an attorney to establish wage and benefit plans, retirement plans, medical plans, employee benefits and health reimbursement accounts.

Chicago small business attorneys can assist in many areas, including:

-Contracts and Agreements

-Corporate and Finance

-Intellectual Property and Technology

-Executive and Employment Issues

-Licensing Distribution and Sales

-Real Estate

-Environmental Health and Safety

While we all think of economic struggles as the primary destroyer of small businesses -- they can also become a victim of their own success. This is particularly true when a growing business fails to get experienced legal advice at critical steps in its evolution. Discussing your overall legal needs and legal strategies with a Chicago attorney who is experienced in small business issues is an excellent first step. Knowing you have a solid legal foundation can make all the difference when building for the future.