Employment Law in a Social Networking, New Media World

I am quoted in a FOXBusiness small business article on how employers can protect their intellectual property rights in a Facebook/Twitter social networking world:

In an age of way-too-much information and widespread social-networking addiction, businesses are finding it increasingly difficult to protect trade secrets and practices. It’s important to know your rights as an employer and/or as an employee.

If you are neither of the above at the moment, and are instead on the job hunt, you should keep in mind that potential employers have the right to (and will) research your online living activities. In one quick Google search, what might a recruiter learn about you? It’s important to always keep your professional goals in mind when posting personal details on sites that are publicly accessible.

If you pass the test and find yourself employed, you’ll then have to follow company policy regarding Internet activities. Because privacy is often a top concern for employer and employee, companies are adjusting to the new online environment and adopting rules and regulations accordingly to ensure protection.

Anita Campbell, founder and CEO of Smallbiztrends.com, said there’s a major difference between large corporations and small businesses when it comes to social media sites. Large corporations are more likely to block all social media sites, such as Facebook and Twitter, from being accessed on the company network.

However, she said most small businesses do not block these sites at work and, in some cases, require employees to participate in them for company benefits. Jonas M. Grant, a business attorney and expert, said some employers rightfully worry about the disclosure of confidential company information by employees who are either posting on Web sites under their own names or anonymously. But he said employers do have the right to legally prohibit certain social-networking activities involving the business to avoid a slip of an idea or secret.

According to Campbell, small businesses using social media networks can have advantages and disadvantages. Recommending your employees take full advantage of the power of social media for “free” marketing is a definite plus. But allowing employees to have access to social media all day can deter them from actually working, decreasing productivity.

“But the stickier issue is one of inappropriate communications by employees,” Campbell said.

Grant recommends companies have an employee manual and training program in place specifying acceptable workplace use of the Internet in general. He said employers should expressly tell their employees what they can and cannot talk about, especially in an age with constant Internet communication.
“Employers are also wise to have employees sign employee loyalty and confidentiality agreements at the time of hire,” Grant said.

Experts agree that prevention is key for small businesses, and preparing for “what-ifs” is the best protection. Grant said communicating concerns with employees, outlining company rules and restrictions, while implementing appropriate policies and agreements in conjunction with employment law counsel, is the best method of prevention.

What Rights Do Employers, Employees Have in Internet Age? by Hope Holland, FOXBusiness.com, October 22, 2009

Intellectual Property Protection in a Social Networking World

I am quoted in a FOXBusiness small business article on protecting intellectual property rights in a Facebook/Twitter social networking world:

Friend it, follow it or link to it. Brainstorming, would-be entrepreneurs around the world are continuously connecting through social networking sites such as Facebook, Twitter and LinkedIn. But, legal experts warn, users should beware of setting themselves up for Information-Highway robbery.

You can lock the doors on your home and your vehicle. You almost need to rent storage space to store your many login and passwords in today’s Internet age. But, what about your revolutionary ideas for starting your own company or launching a new product line? Do you have any rights when it comes to protecting things you carry in your head?

Yes, the experts say. And they advise that you take them seriously, especially your most basic right for protecting your literally un-touchable valuables.
Remember, you have the right to remain silent.

“If you post a business idea on Twitter, someone could beat you to the punch,” said Jonas M. Grant, a small business lawyer and entertainment intellectual property attorney. “If your idea is what makes your for-profit business special, you should consult with an attorney to see what, if any, protections are available and save the Tweeting for when the business has launched. By posting an idea to a social networking site, you have contributed it to the public domain.”

It seems like a simple concept, but choosing how to protect your ideas can be a difficult and confusing process. Do you need a copyright? A trademark? A patent? What are trade secrets? FOXBusiness.com asked the legal experts to translate the legal jargon regarding intellectual property rights.

Anita Campbell, founder and CEO of Smallbiztrends.com, an online resource for small businesses and entrepreneurs, said if your creation is a book, blog post, artwork, cartoon, software, podcast recording, video, or anything along these lines, than a copyright is right for you. A copyright protects original creative works and the “expression of an idea,” she said. You can simply register for copyright protection with the U.S. Copyright Office.

So, you weren’t born yesterday – and you know better than to Tweet about your idea or write about it on your Facebook page. But what about the people you are including on your launch team? Or, how about if you’d like to discuss your brainchild with any consultants or potential future business partners and/or clients? Can you trust them to keep it off their online world?

The experts say no. If you don’t protect yourself ahead of time, you could wake up to an e-mail announcing the successful launch of your long-time-planned dream company -- and have no legal means to get back what is rightfully yours.

With start-ups predominantly using the cross-globe-reaching Internet and social networking sites to get things moving, Grant said no small business is “too small” to invest in protecting company information. He said this is the reason to have anyone you share your grand plan with sign a non-disclosure agreement (NDA), also known as a confidentiality agreement, confidential disclosure agreement (CDA), proprietary information agreement (PIA), or secrecy agreement. He said to always protect your trade secrets or confidential business information to avoid losing an idea or strategy to another company.

In fact, Grant said small businesses should act like the largest companies in the world, and keep all future business plans secret until all available intellectual property protections are in place and it is time to launch to the public....

Protect Your Business Ideas From Information-Highway Robbery by Hope Holland, FOXBusiness.com, October 22, 2009

Home Loan Modification Advance Fees Now Illegal in California

As of October 11, 2009, advance fees for home loan modification services are illegal in California, even if charged by licensed attorneys. For more information, see California Department of Real Estate Announcement [PDF]

Following up with some prior BAN presenters (Loco-X and Motus)

It's always fun to watch these new companies as they grow and mature. Since we see them so early at BAN, I usually feel pretty paternal and can't help but root them on as they strive for success.

With that in mind, I thought it would be fun to update you all on some of our prior presenters and what they are up to now.

Loco-X (parent and owner of Locomx.com) principals David Scilabro and Greg Brock came down last quarter as the first of (hopefully) many syndicated deals from our sister angel groups in the state. Specifically, Loco-X came from Huntsville as a part of their tour of the state's angel groups. Since that time Loco-X has almost finished there current capital raise, including some of our BAN members, (apparently they are open for about two more weeks) all while working hard to grow their core business and it looks like it is paying off. Dave says Loco-X is ahead of schedule this year and is planning, in about two weeks, to move into their new 50,000 square foot facility in preparation for launching a sister site before Thanksgiving.

Another fairly recent BAN presenter, Motus Motorcycles (www.motusmotorcycles.com), publicly announced a partnership with Pratt & Miller Engineering "to develop a revolutionary sport touring motorcycle." An announcement which has already garnered international attention from the likes of Motorcyclenews.com in their September Issue. (Click link).

Not bad for a couple of little startups from Alabama and I can't wait to see where they go from here.

Tax Increases Expected by 2011

Higher Taxes Are Coming. Are You Prepared? Wall Street Journal, September 13, 2009:

As the recession and bailout have pushed this year's federal budget deficit to an unheard-of $1.6 trillion, an unpleasant reality has dawned: Taxes are going up. The only questions are when, how much, and for whom?

The answers depend on the shifting sands of wealth politics and the scope of health-care revision. "But everybody thinks that by 2011 tax rates will be higher, at least for those with higher incomes," says Thomas Ochsenschlager, a tax official at the American Institute of Certified Public Accountants.

This certainty turns traditional tax-planning logic upside-down. Taxpayers have long been advised to defer taxes as long as possible, especially by making contributions to tax-sheltered IRAs and 401(k)s or holding assets for years in order to postpone realizing gains.

Now taxpayers should reconsider this rule. The current top capital-gains rate of 15% on most assets is the lowest in living memory and the Obama administration has proposed raising it to 20%. Another proposal might tack on a 4.5% surtax for the wealthiest taxpayers. So it may make sense to realize long-term gains now, says Robert Gordon, who advises clients on sophisticated tax matters at Twenty-First Securities in New York....

See also: Barack Obama's Tax Policies

Birmingham Angel Network Selects 5 for Presentation Pool

Last week the Birmingham Angel Network had our 3rd Quarter screening meeting along with this months Birmingham Entrepreneur meeting.

It was a big crowd at innovation depot that came to hear Roddy McKinney speak about how he grew Satellites Unlimited into a major player in the TV market and no one was dissappointed. Mr. McKinney has a great charm and wit that was on full display, along with a deep knowledge of sales and how to grow a business.

Following the speech, we had a great group (including several new members) stay to evaluate the business plans. After over an hour of review, we finally voted to accept a slate of five companies into the presentation pool including:

1. The Manning Group, LLC
2. Facilitaire, Inc.
3. Strawfire, LLC
4. AlwaysHD, Inc., and
5. Innovative Products, LLC DBA Tattoo Armor, LLC.

Those companies will be assigned mentors and we look forward to following their growth and hearing more about them at future meetings.

There were a couple of other companies that we decided to call and work with a bit in hopes that they can resubmit or maybe participate in an open offer in the future.

Finally, we had some updates on previous presenters and look forward to following their progress in the future, which we hope to formalize with a "Company update" section of our BAN newsletter.

As always, if you would like to become a member, please feel free to fill out an application and forward it on to any of our board members.

2010 Southeast Venture Conference - Feb 24-25, 2010

Join the 2010 Southeast Venture Conference in hosting some of the most dynamic high-growth companies in the Southeast, Feb 24-25, 2010 at the Ritz Carlton in Tysons Corner, Virginia.

The Fourth Annual Southeast Venture Conference will feature market relevant investor and executive panels, exclusive networking opportunities, featured speakers and dozens of the region's top private technology firms presenting to a national audience of venture capitalists, investment bankers and private equity investors.

The Southeast Venture Conference highlights both early stage and later stage investment opportunities from: Alabama, Florida, Georgia, Maryland, Mississippi, North Carolina, South Carolina, Tennessee, Virginia and Washington DC.

The sold-out 2007, 2008 and 2009 SEVC’s held in Research Triangle Park, NC, Tysons Corner, VA and Atlanta, Georgia respectively featured over $80 billion in private equity investment capital represented in attendance.

Click here to see a sampling of some of the 2009 investor attendees.

Who Attends the SEVC? Close to 1000 of the region’s leading Entrepreneurs and High Growth Company Executives (from Startups to Pre-IPO), National Venture Capitalists and Private Equity Professionals, M&A facilitators and other leading professionals serving the high growth technology community.