91.1 F
San Fernando
Thursday, Mar 28, 2024

Trademark Infringement, Discretionary Bonus Plans

Question: We recently discovered that a company secured a web page using the trademarked name of a division of our company. They appear to be taking advertising revenue from our competitors and displaying it on the site. Beyond that, they are not selling any goods or services. Although the site URL is registered to them, this is damaging our business. What options to we have? Answer: The conduct you describe amounts to trademark infringement. You have several choices. The quickest and cheapest route is to engage counsel to send the offending company a cease-and-desist letter notifying them of the infringement and demanding that they stop using the domain name. Your counsel might further consider including a demand in the letter that they transfer the domain name to your company — the trademark holder (and perhaps even include a nominal fee the cost of the domain name registration). If this does not resolve the issue, there are two ways to proceed. Your company may file a trademark infringement action in federal court, which is a time consuming and expensive process. The other option, and the one that is preferable from my standpoint, is for your company to use an Alternative Dispute Resolution (“ADR”) process designed specifically for website domain disputes offered by World Intellectual Property Organization (“WIPO”). The WIPO process is fast (generally less than 60 days), and far less expensive than full-blown litigation or even other ADR options. When one registers a gTLD domain name (a “gTLD” is a generic top-level domain that ends in .com, .net, .org, etc.), the standard Terms and Conditions provide that the registrant agrees to submit to dispute resolution processes under the Uniform Domain Name Dispute Resolution Policy (“UDRP”). WIPO administrates cases under UDRP. If you are interested in learning more about this process, I invite you to visit www. wipo.int. Q: My company is currently under investigation by the Department of Labor regarding certain alleged wage and hour violations. The Department of Labor is responding to complaints received by certain ex-employees. My question is whether I, as a corporate officer, have personal exposure should the Department of Labor find violations. A: You can breathe easy. The current law in California is that individual owners, officers, and managers of companies are not personally liable for Labor Code violations arising from failure to pay earned wages, including accrued vacation. This issue was recently addressed in a case captioned Bradstreet v. Wong (decided April 16, 2008) by the California Appellate Court. The court, for a number of reasons beyond the scope of this limited discussion, applied the common-law definition of “employer”, which includes the company (not the individual owners themselves). Notwithstanding the foregoing, you should be diligent and proactive in addressing and correcting any true Labor Code violations while the problem is still manageable. Q: Can we offer a discretionary bonus plan to certain executives based on a percentage of net profits? A: Without carefully reviewing your proposed plan, I cannot opine as to whether your particular plan comports with applicable state and federal laws; however, as a general rule, the California Supreme Court affirmed that incentive bonus plans based on company-wide net profits are legal so long as they are otherwise properly drafted and implemented. Prior to the California Supreme Court ruling last year in Prachasaisoradej v. Ralphs Grocery Company, Inc., the answer to your question was much less clear. In Prachasaisoradej, filed as a class action, plaintiffs claimed that Ralphs’ plan unlawfully enabled the employer to deduct certain operating costs (e.g., costs of workers compensation, loss prevention, shrinkage, and the like) from employee wages, contrary to the California Labor Code. However, in reversing the Appellate Court, the California Supreme Court found that since the bonus plan was paid in addition to employees’ regular wages, and was not built around individual performance but rather store-wide performance, the bonus plan constituted a lawful incentive program rather than a scheme to illegally deduct operating expenses from employee wages. Nevertheless, this area is fraught with landmines for the unwary. Prior to finalizing and implementing any such plan, be sure to retain the services of qualified experts in this field. This column contains general information and under no circumstances constitutes legal advice. This information is not provided in the context of an attorney-client relationship and nothing herein creates an attorney-client relationship. Readers should not act upon this general information without first seeking professional advice. Ira Rosenblatt is a business and corporate lawyer and a co-founder and Director of Stone, Rosenblatt & Cha, a business law firm in Warner Center. Rosenblatt has earned Martindale-Hubbell’s highest rating (“AV”) for legal ability and ethics and is listed in Martindale-Hubbell’s National Bar Register of Pre-eminent Lawyers. He can be reached at [email protected].

Featured Articles

Related Articles