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Duff on Hospitality Law

Federal Court Denies Attempt to Halt Franchise Provision of Seattle’s Minimum Wage Ordinance

Posted in Employment Law

Victoria Slade, member of our Labor and Employment Group, brings us the latest ruling on Seattle’s Minimum Wage Ordinance.  Thank you, Vicky! – Greg

monimum wage increase aheadIn a 43-page ruling issued late Tuesday, Federal Judge Richard Jones denied the International Franchise Association’s (“IFA”) bid to prevent Seattle’s Minimum Wage Ordinance’s franchise provision from going into effect as written. As a result, starting April 1, most franchisees in Seattle will be treated as “large” employers under the Ordinance, meaning they must pay the higher initial rate of $11 per hour. They also will scale up to the $15 minimum wage in just three years, much more rapidly than small businesses. While this is not the end of IFA’s case attacking the franchise provision, it is a big setback and a strong indication that IFA is unlikely to ultimately be successful.

IFA had sought a preliminary injunction, challenging the Ordinance’s definition of “large” employers as including all franchisees that are part of a chain with more than 500 employees anywhere in the nation. It argued that franchisees are more like small businesses, because individual locations are separately owned and have far fewer than 500 employees. It argued that, by lumping small franchise owners together with large businesses, Seattle was putting franchisees at a competitive disadvantage. It further alleged the City had intentionally discriminated against franchisees because of its preference for local businesses. This discrimination, if proved, would be a problem because states and cities are not allowed to enact legislation that is intended to or has the effect of favoring local businesses over out-of-state businesses. IFA’s motion, if granted, would have put a temporary hold on the franchise portion of the Ordinance and required that franchisees with fewer than 500 employees be treated as small businesses until the case was fully resolved, which could take until the end of this year. The Court heard three hours of oral argument on the motion last week.

The Court’s Order rejected each of IFA’s legal theories. In sum, the Court found:

  • The Ordinance is not discriminatory as written because it applies equally to franchisees whose corporate headquarters are in Seattle.
  • The Ordinance does not have a discriminatory purpose. The stated purpose of the minimum wage hike is to reduce income inequality and promote the general welfare, health, and prosperity of Seattle workers, and the rationale for differentiating between small and large businesses is the recognition that large businesses will have less “difficulty accommodating the increased costs.” Although IFA argued that comments by a member of the Advisory Committee to the Mayor regarding “extractive national chains” revealed an ulterior motive to harm multi-state businesses, the Court gave these comments little weight. It reasoned that this was a “politically charged” issue with impassioned debate, “fervent remarks,” and lobbying on both sides, making it improper to focus so heavily on a comment by one member of the public. It also rejected IFA’s argument regarding statements by members of the City Council, reasoning that the statements, even if they were discriminatory, were “insufficient to override the entire City Council’s formal statements of purpose in the Ordinance itself.”
  • The Ordinance does not have a discriminatory effect on franchisees. To invalidate the franchise provision under this argument, IFA had to prove the Ordinance would harm franchisees so much that the ultimate effect would be that local goods would have a larger share of the market than goods that come from out of the state. The Court found IFA had only argued potential, rather than actual, harm to franchisees and refused to “speculate or to infer discriminatory effect without substantial proof.” Although IFA had argued that franchisees would be forced to close up shop or that new franchisees would not open in Seattle, there was insufficient proof of this. Moreover, the Court noted, there was some evidence that franchisees would not be harmed because they could draw upon the “greater financial resources” of their franchisors to support them during times of business stress. Even if the court did assume there would be some negative effect on franchisees from the law, this burden would not override the local benefit from assisting low wage workers, and, in any event, the court stated, “it is not the court’s place to second guess the reasoned judgments of the lawmakers who studied and analyzed this issue as part of an involved legislative process.”
  • There was no equal protection violation because it was rational for the City to believe franchisees would be able to tolerate the increased wage better than small independent businesses. The court pointed to economic benefits from the franchise relationship, such as national advertising, valuable and well-known trademarks, reduced cost for supplies and raw materials, training, and a network of other franchisees who provide valuable business advice. The Court also pointed out various benefits that individual plaintiff franchisees had acknowledged, such as one Holiday Inn franchisee’s use of a large on-line reservation system and access to a loyalty reward system with 74 million members worldwide.
  • The Court also rejected IFA’s other arguments, including its First Amendment claim, its argument that the Ordinance was preempted by federal law on copyrights (the Lanham Act) or health plans (ERISA), and its claim under the Washington State Constitution’s Privileges and Immunities clause. For each, the reasoning was essentially that these theories, while in some cases “novel and creative,” were not well-supported under the law and were otherwise unpersuasive, given the court’s reasoning on some of the previous claims.

Overall, the Court found IFA did not prove it was likely to win on any of its arguments. Although it was “sympathetic to the concerns of franchisees,” it also found that any harm from the Ordinance taking effect was speculative and not supported by the evidence. It also balanced the harm to franchisees against the “concrete harm” to low-wage employees if they lost the expected wage increase and found the equities did not support the requested injunction. Finally, in a serious blow to IFA’s chances at ultimate success in this case, assuming it goes forward, the Court found IFA had failed to raise “serious questions” showing it had a “fair chance of success on the merits.”

Although this ruling is not the end of the case, Judge Jones’ thoughtful and comprehensive analysis of IFA’s claims is a strong indication that IFA will not ultimately be successful while the lawsuit is before Judge Jones. If you have any questions on this ruling, the IFA litigation, or Seattle’s Minimum Wage Ordinance in general, please contact me, Diana Shukis, or Victoria Slade.

Third Annual Travel & Technology Conference

Posted in Technology, Travel

Innovation PicDon’t miss out on the Third Annual Travel & Technology Conference/TNT: Connecting Concepts with Cash, scheduled for March 17, 2015, Hilton Union Square, in San Francisco, CA. This year’s event is being produced by our friends at Hospitality Upgrade, and looks to be another great conference, including a $10,000 prize package for the winning pitch company!  In addition to pitches by some of the industry’s most exciting start-ups, this year’s event will feature presentations and discussions on big data, distribution and restaurants, among other things.  For more detailed information, please see link to Agenda.  If you are interested in attending, please see registration link here — I look forward to seeing you at the conference! – Greg


Don’t Forget Copiers, Scanners and Fax Machines in Your Data Security Program

Posted in Data Privacy, Technology

VirusHow secure is the data on your office copier?  Today’s post from Benjamin Lambiotte, technology and data privacy attorney in Garvey Schubert Barer’s D.C. office, outlines the data security risks associated with office machines, as well as the warning signs and steps that you can take to reduce those risks.  Thank you, Ben! – Greg  

Current generation multifunction printer/scanner/copier devices are convenient, inexpensive, and very popular. Often overlooked is the fact that most modern printers, copiers, and scanners have many of the same attributes of computers, and are just as vulnerable to the same kind of cyber exploits and attacks as computers. A truly comprehensive data security and privacy risk management approach requires that these commonplace devices be viewed as an integral part of an enterprise’s IT systems, and that device-specific measures be taken to secure them. The National Institute of Standards and Technology (“NIST”) last month published a report on risk management practices for “replication devices,” The NIST report identifies risks associated with such devices, and provides guidance on protecting the confidentiality and integrity of information processed, stored, or transmitted on them.

Threats include:

  • Default administration/configuration passwords: Many devices have default passwords which can be easily obtained and used to access stored data, or to control the device.
  • Data capture: Unless encrypted, data transmitted or stored, including passwords, configuration settings, and data from stored jobs, is vulnerable to interception or modification.
  • Spam: Unless properly configured and without proper access control, many devices will process any job submitted, which could waste paper, toner, and ink, and tie up the device.
  • Alteration/corruption of data: If passwords or configurations are changed, denials of service for authorized purposes or potential damage to the device could result.
  • Outdated and/or unpatched operating systems and firmware: Many devices run an embedded operating system, making them subject to the same threats as any other computer running those operating systems. Also, older devices may have embedded versions of operating systems no longer supported by the manufacturer, which may leave “unpatched” security issues.
  • Open ports/protocols: For devices that can connect to local networks or the Internet via wireless or ports, open ports and protocols allow data to flow to and from a device. Through open ports, attackers may gain undetected access, and data tampering, unauthorized access, and denial of service can result.

Warning Signs
The Report identified several signs indicating that the security of such a device may be compromised:

  • Display malfunctions or shows incorrect information;
  • Materials (ink, paper, or other supplies) run out faster than usual;
  • Increased number of failed or timed-out jobs;
  • Unexplained/unauthorized changes in configuration settings;
  • Device completes processes slower than expected;
  • Device uses more network time/bandwidth than usual;
  • Time stamps do not align or make logical sense;
  • Communications with unknown IP or email addresses increase; and
  • Markings indicating tampering around key areas of the device (e.g., hard drive or SSD compartment, display area).

An Appendix to the Report provides a very useful device risk assessment template and checklist. It gives practical guidance on best security practices, across the entire lifecycle of the device. Examples of some countermeasures include:

  • At acquisition, or in third party supply and support contracts, ensure that the device meets common data security standards, is capable of operating in a secure mode, and that the OS is actively supported by the OEM;
  • At deployment, change vendor default passwords, and configure the device to operate in a secure mode;
  • During operation, control device access through PINS and passwords, control physical access to the device itself and its components, such as the SSD or hard drive, and track usage, ensure that stored and transmitted data are encrypted, and timely implement OEM security “patches” and fixes;
  • During operation, control network access using standard organization practices, close unused open ports and protocols, disable wireless identifier broadcasting, and configure the device to prevent communications to and from unknown and unwanted addresses (blacklist/whitelist); and
  • When taking the device out of service, change all passwords and PINS to vendor defaults, and remove or sanitize all hard drives and SSDs on which data may be stored.

The NIST report is available here.

If you have any questions, or for more information on data security, please feel free to contact me or Ben, directly.

BrandVerity’s Latest Study on the Use (and Abuse) of Branded Keywords in Paid Search

Posted in Brands and Trademarks, Hotels

We are excited to announce thBrand. Business Concept.at The State of Branded Keywords in Paid Search, Q4 2014 is now available for download from our good friends (and former contributors) at Seattle-based BrandVerity. This comprehensive report shows how third parties use popular brand terms in paid search advertising, and includes over 250 brands from 10 different categories. This report is an update of their Q3 2014 study, previously featured on our blog.

If you have any questions about the report, please feel free to contact me.

How Does the NLRB’s Ruling on Non-Business Use of Email Affect Your Business?

Posted in Employment Law, Technology

Are your employees using company email during nonworking hours?  Victoria Slade, member of our Labor and Employment Group, brings us the latest developments in NLRB’s ruling and important policy changes that employers can implement to comply with the ruling.  Thank you, Vicky! – Greg

As you may have heard, the NLRB recently ruled that employees who are given access to their employer’s email system for their jobs must be permitted to use that email system during nonworking time to engage in protected activity, such as forming a union or discussing terms and conditions of employment.  This ruling applies to both unionized and non-unionized workforces.  The ruling has caused some controversy because it overturned long-established precedent.  It is not, however, a reason to panic.  Employers who are already complying with the NLRB’s guidance on social media need only make a few changes to their policies.

The case is called Purple Communications, Inc., and all 70-plus pages of the order are available here (under “Board Decision” dated 12/11/2014).  The rule before this case was that an employer had the right to restrict non-business use of its email system, so long as it did so in a non-discriminatory fashion.  In Purple, the Board held that employees must be granted access to use their employer’s email system during nonworking time to engage in protected activity, such as discussing terms and conditions of employment.  Employers with a strict rule that work email is for business use only will therefore need to revise their policy to allow employees to use company email during nonworking time to engage in protected activity.  There are some limited exceptions to this rule, for circumstances where permitting use of company email for protected activity will seriously disrupt productivity or business operations.  If you think this is the case for your business, please contact us, and we can help you craft a policy that should satisfy the NLRB.

If, like many employers, you already allow non-business use of work email during nonworking time, this decision still impacts you.  Most employers have some kind of policy that regulates what employees can do on the company’s email and other communication systems.  Because the Purple ruling requires employers to allow employees to use company email to engage in protected activity, restrictions that infringe on this right are no longer OK.  This, too, is no reason to panic, however, because it simply means your use of technology policy has to look a bit more like your social media policy (you have one of those, right?).  As discussed in the blog posts available here, the Board has already issued a series of rulings and memoranda explaining how it will evaluate social media policies.  Generally speaking, the Board has stated that a policy will be struck down if it could be read by a reasonable employee to prohibit protected activity, such as engaging in collective action or discussing conditions of employment.

Although Purple Communications was a dramatic opinion, in that it overturned decades of previous Board law, it should not be difficult for businesses to adapt.

If you have any questions about how to comply with this decision, we would be happy to help.  Please feel free to contact me or Vicky.


Does Your Employee Have a New Social Security Number? How to Comply with Form I-9 Requirements

Posted in Employment Law

Gregg Rodgers chairs GSB’s Immigration Practice Group and is a member of our Hospitality, Travel & Tourism practice team.  His post today provides important steps to take when employers are faced with an employee with a new SSN or Employment Authorization Document.  Thank you, Gregg! – Greg

How would you respond if a valued, long-time employee notified you that she has a new social security number (SSN) and/or an Employment Authorization Document (EAD) that includes different information about her than in your current records?  This happens for hotel and restaurant employees more often than you may realize.  Being ready to act quickly, and legally, can be important for you, the employee, labor relations (if in a collective bargaining situation) and your business.

The first question that many employers want to ask is, “Why did your number change?”  The employee may voluntarily provide that information without you asking.  But do you want or need to know, and can you believe whatever explanation is provided?  The safer course of action is to proceed with a protocol that you can apply uniformly in all situations.

What could be the reason for assignment of a “new” social security number?

There are few situations in which the Social Security Administration (SSA) will change someone’s legitimate SSN, including witness protection, domestic violence issues, the correction of an SSA error in which it assigned the same number to multiple individuals, or because of identity theft.  But otherwise, the most common reason to report a changed SSN to an employer is because the person has only recently become legally authorized to work and the number previously used was not legitimate.

President Obama’s Executive Actions in mid-2012 and again in late 2014 have made it possible for certain people who came to the U.S. without documentation as children, or for certain undocumented parents of U.S. citizens or Lawful Permanent Residents, to be issued time-limited EADs, which have allowed them to be issued legitimate SSNs.  Those eligible for consideration under these programs, called Deferred Action for Childhood Arrivals (DACA) and Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA), are the most likely to present themselves to you.  (As we go to “press,” Congress is already taking aim at eliminating both DACA and DAPA.  I will have more to say about the effects of the President’s 2014 Executive Action regarding employment-based immigration in a future blog entry.)

Long-term hotel and restaurant employees may appear to be more affected by DACA and DAPA than in many other industries.  This may be because these individuals have had little opportunity or motive to move from job to job, even in the highly mobile service industry, because of concern that Form I-9 procedures could result in a new employer’s discovery of the lack of official documentation or employment authorization.  For many affected by DACA and DAPA, job security has been more important than mobility.

Should I discipline the employee?  Am I required to discipline the employee?

What if you become aware of the fact that the SSN you have previously associated with this employee was not that person’s legally assigned SSN?  This would certainly be the case for a DACA or DAPA set of facts.  This could be considered falsification of business records or a violation of a company’s “honesty in the business” policies.

As a business, you have a couple of choices, based your policy/ies, collective bargaining agreement (if the employee is represented by a union), and/or history of action in similar circumstances.  You must be sure that, whatever you do, it does not result in disparate treatment involving any legally or contractually protected status.  Make sure that proper protocols are followed for any investigation or action taken.  If the employee is represented by a union, proper protocols should include reviewing the discipline-related articles of the collective bargaining agreement to ensure compliance, and providing representation for the employee if requested and required.

Assuming it is determined that the employee had purposely provided false information, taking disciplinary up to and including dismissal may be appropriate, considering other cases with that employer, the employer’s policy regarding honesty in the business, collective bargaining agreements, and status in any protected class.

Many employers confronted with DACA or DAPA cases are unwilling to dismiss a valued worker in this situation.  Taking disciplinary action, or taking no disciplinary action, is not mandated by the government.  However, you should be sure that whatever choice is made, it is not illegally discriminatory or in violation of a collective bargaining agreement.

How do I comply with Form I-9 Requirements?

The underlying basis of the presentation of a new SSN, or an EAD (which is likely to be accompanied by reference to a new SSN) may be of no real interest to you.  Assuming you decide to continue her employment, your focus should be on what to do with the new information, which involves the Employment Eligibility Verification form; the Form I-9.

Assuming she was hired after November 6, 1986, when the Form I-9 came into existence, and the employer has a Form I-9 for her, you need to fully verify her employment authorization.  This may allow an opportunity to run this new information through E-Verify if you are registered.

The government has prepared a helpful resource document related to DACA cases, but which is also applicable to DAPA cases and cases in which you have been advised that a new SSN has been issued.  You will see that the focus is clearly on the objective information presented, not the mystery behind it.

Your focus is on having a properly completed Form I-9 on file. 

If the information presented presents a change to any of the information in Section 1 of the previously completed Form I-9, such as name, date of birth, attestation, or SSN (which is not always required in Section 1), she and you should complete a new Form I-9, using the original date of hire, and attaching it to the previously completed Form I-9.  This applies in either situation, in which only an SSN change has been reported or an EAD has been presented.  Of course, as a part of this process, you must examine and record information from the original document(s) presented to complete Section 2 and, if your policy is to always copy documents presented, to do so.  Employers who participate in E-Verify should verify the new Form I-9 information through E-Verify.

If the information presented requires no change to any information in Section 1 of the previously completed Form I-9, such as if no SSN had been noted and no attestation change is required, you may complete Section 3 of the previously completed Form I-9 if the version used for the previous verification is still valid for use as of the current date.  If Section 3 of the previously completed Form I-9 has already been completed, or if the previously completed Form I-9 is not currently valid for use, you should complete Section 3 of a new Form I-9, being sure to write the employee’s name at the top of Section 2.  Attach any newly completed Form I-9 to the previously completed Form I-9.  This situation does not require or authorize a new E-Verify check.

In all cases, be sure to examine the original documentation.  You must certify that you have done so, and that the documentation appears to be genuine and relates to the employee presenting it.

The employee may choose which documents to present, either List A, or List B and List C.  In only very limited circumstances may you legally suggest to the employee what documentation to present for Form I-9 purposes.  Rather, provide the employee with the List of Acceptable Documents included with the Form I-9 and let the employee choose what to present to you.  An employee who has a “new” SSN may choose to present an EAD as a List A document and is not necessarily required to present an SSN card as a List C document.

  • In all cases, be sure to record the document title, document number, and its expiration date (if any).
  • In all cases, be sure to sign and date the Form I-9 in the appropriate space.
  • Remember to reverify the employee’s documentation by the date the validity period of a List A document expires, except for passports or Lawful Permanent Resident cards.  Never reverify List B documents.

I also suggest that you consider preparing a memo to the file, also to be clipped to the Form I-9, explaining what happened and when, signing and dating that.  This will allow an auditor to consider this, potentially years from now when none of the parties may be available to explain it, to understand exactly why this action took place.

Forms I-9 and related attachments must be retained for at least three years after the date of hire or one year after the date the individual’s employment is terminated, whichever is later.

What to do?

It is important to recognize that an employee’s presentation of the kind of information referenced here is a very serious matter in that employee’s life.  Emotions can be high for that employee, co-workers, representatives, and yes, even you.  Like anything you do in your job, planning for your response to a situation like this, and responding in a manner that can be seen as fair and reasonable can go a long way toward maintaining good employee relations and legal compliance.

If you have any questions about I-9 compliance, please call me or Gregg.

FCC Update: FCC Will “Aggressively” Investigate and Take Action Against Illegal Blockage of Wi-Fi Hot Spots

Posted in Hotels, Wi-Fi hotspots

Any uncertainty regarding the FCC’s position on hotels’ interference with Wi-Fi hot spots was answered yesterday.  In its January 27, 2015 Enforcement Advisory, the FCC spoke directly to the “disturbing trend” of hotels and other commercial establishments that block personal Wi-Fi hot spots.  Colin Andrews, member of our Communications practice team in Washington, D.C., brings us the latest development in Wi-Fi blocking practices.  Thank you, Colin!  – Greg

Yesterday’s Advisory stated that any “willful or malicious” interference with guests’ personal hot spots is a violation of Section 333 of the Communications Act, which prohibits any person from interfering with any radio communications equipment licensed or authorized by the Act.

The FCC’s Advisory expanded upon a recent Consent Decree between the FCC and Marriott International, Inc. which resulted from a complaint to the FCC filed by a Marriott customer.  In the Consent Decree, the FCC concluded that Marriott had deliberately blocked its guest hot spots in order to require guests to pay for the hotel’s Wi-Fi.  Marriott entered into a three-year compliance program and agreed to pay $600,000 to settle the case.  A discussion of the Marriott Consent Decree can be found in our blog’s archives here.

Yesterday’s FCC Advisory is based upon similar complaints received in response to the Marriott settlement.  The Advisory commits the FCC to investigate such complaints “aggressively” and to take appropriate action, including “substantial monetary penalties,” against any violators.   The Advisory also encouraged consumers to file Wi-Fi blocking complaints with the FCC.

In a separate statement, FCC Chairman Tom Wheeler directly targeted both Marriott and the hotel industry by declaring that “consumers must get what they pay for… [and] Marriott’s request seeking the FCC’s blessing to block guests’ use of non-Marriott networks is contrary to this basic principle.”  The FCC Chairman was referring to a still-pending August 25, 2014 Petition for Declaratory Ruling filed by the American Hotel & Lodging Association, Marriott International, Inc. and Ryman Hospitality Properties.  The Petition requested that the FCC “declare that the operation of… authorized equipment by a Wi-Fi operator in managing its network on its premises does not violate [Section 333], even though it may result in ‘interference with or cause interference to’” a guest’s hot spot.

If you have any questions or for more information, please feel free to contact me or Colin.


The Bitter Truth: Lagunitas Tastes the Complexity of Trademark Infringement Suits

Posted in Brands and Trademarks

Ruth Walters, member of our Hospitality, Travel and Tourism practice team, focuses on hospitality operations, general intellectual property and technology transactions.  In today’s post, she describes how trademark infringement suits can be tricky at best and the various factors to consider before filing suit.  Thank you for today’s post, Ruth! – Greg

Lagunitas Brewing Company filed a federal trademark infringement lawsuit against rival Sierra Nevada Brewing Company. A mere day or so later, Lagunitas dropped it. In addition to providing some writers the opportunity to make awesome (see above), or groan-worthy puns, the situation is an interesting example of how legal justification and the money to sue are not the only ingredients to consider when policing a brand.

In its complaint, Lagunitas alleged that the label for Sierra Nevada’s new Hop Hunter IPA infringed a family of trademarks owned by Lagunitas representing its own IPA labels. In particular, Lagunitas alleged that the large block letter style in the center of the label used by Sierra Nevada plus the prominence of the term IPA was likely to create consumer confusion as to the affiliation of Sierra Nevada with Lagunitas with regard to this particular beer. Pictures of the labels can be found here or here, for example.  It’s possible Lagunitas would have won the suit, but as soon as the public got wind of what was brewing, trouble began fermenting and Lagunita’s founder tweeted that he was dropping it.

This subreddit post and comments provide some interesting discussion of past, similar lawsuits and the tone is generally negative or mocking (and also contains some NSFW words). While the craft brew industry has been exploding since the 70s, it seems from the backlash against Lagunitas that at least some of its members and consumers believe the industry should behave like a small artisan’s guild where mutual adoration of the product and commitment to the craft make legal disputes like this as unseemly as bar brawls.

The reality, of course, is that craft breweries are facing increasing competition in the marketplace and must fight ever harder to distinguish themselves from their competitors. This means working harder and harder to choose distinct brands and to protect them.  Every trademark attorney, including this one, hammers into the heads of his or her clients that a failure to police trademarks can result in a loss of rights, so it is always important to watch the marketplace (and trademark registries) for potential infringers.

And yet, deciding whether to proceed with a demand letter or lawsuit is always risky and not just because litigation costs money and is uncertain. Non-legal considerations, like customers’ perception of the brand and its market position, public relations issues and other very fuzzy (fizzy?) factors might influence a trademark (or copyright) owner to let matters lie or even help them come up with more creative solutions to the issue.  Like Linden Lab did back in 2007 when Darren Barefoot made a parody of their MMORPG Second Life (here’s an archived copy of GetAFirstLife.com, with the link inviting a cease and desist letter at the bottom and some content about bodily functions).  A legal parody using other’s trademarks and copyrighted material is difficult to achieve; this all could have gone a very different way.

None of this is to say that Lagunitas’ suit was frivolous and merely intended to intimidate Sierra Nevada or the rest of the industry, or to do else that might be called “brand name bullying,” nor that what is perceived as bullying is, in fact, bullying and not protection of one’s property. It is simply to point out that the benefit of taking legal action in intellectual property matters, even with perfect justification, may pale in comparison to how taking that action may be perceived by the folks on whom the business’ existence relies—its customers.

If you have any questions or for more information regarding trademarks, please feel free to contact me or Ruth, directly.

US Trademark Office Reduces Fees in 2015!

Posted in Brands and Trademarks, Hotels

Do you need to register or renew your trademark?  Claire Hawkins, Chair of our Intellectual Property Practice group and member of our Hospitality, Travel and Tourism practice team, shares the good news of reduced application fees being offered by the US Trademark Office in 2015.  Thank you for today’s post, Claire! – Greg  

If you’ve waited until 2015 to register or renew your trademark, you are in luck: this year it will be $50 cheaper to file a trademark application and $100 less expensive to renew a trademark registration with the US Trademark Office, which is great news for all hospitality businesses looking to build, refine, or maintain their US trademark portfolios.

In the December 16, 2014 issue of the Federal Register, the PTO issued Final Rules reducing fees for trademark applications and renewals. The purpose of the new rules is to increase end-to-end electronic processing, to encourage electronic communications, and promote efficiency. The changes go into effect on January 17, 2015.

According to the PTO the reduction is possible due to efficiencies that have allowed the PTO to create an operating reserve and that the revised fee structure maintains a reserve sufficient to manage operations and address long-term investments. The changes will also help to continue with an appropriate and sustainable funding model; support strategic objectives relating to online filing, electronic file management, and workflow; and improve efficiency for operations and customers.

The fee reductions are applicable if a trademark application or renewal for the Principal or Supplemental Register is filed using the Trademark Electronic Application System (“TEAS”). In addition, applicants must authorize email communication and file specified documents electronically throughout the application process. Failure to fulfill the requirements under the new rules will subject the applicant to an additional processing fee of $50.00 per class.

The fee changes are as follows:

  • $275.00 per class, a $50.00 reduction, for filing a new trademark application using the standard TEAS application form. This option will be known as TEAS Reduced Fee (“TEAS RF”).
  • $225.00 per class, a $50.00 reduction, for filing a new TEAS Plus trademark application. A TEAS Plus application is one in which the goods/services description comes directly from the PTO’s Acceptable Identification of Goods and Services Manual.
  • $300.00 per class, a $100.00 reduction, for the renewal of a trademark registration.

As expected, the public comments to the proposed changes supported the fee reductions. The changes are seen as good news for small businesses and individuals who saw the fees as a barrier to trademark registration. In addition, two commenters suggested increasing fees for filing paper applications; however, the PTO advised that there are no current plans to increase any filing fee.

If you have questions about trademarks or any other intellectual property, please contact me or Claire.