Saturday, June 3, 2017

Effective Minimum Advertised Price Policy


Your brand may benefit from the Minimum Advertised Price policy because it:

- Avoids downward pressure on pricing from large retailers.

- Allows for better control of margins.

- Keeps authorized distributors happy.

- Decreases the “showrooming” effect when prospective buyers go to the brick and mortar store just to check out the product, knowing they can get a lower price online.

Are MAPs Legal?

Most business people know that “price fixing” is illegal. However, "price fixing" is illegal, under the Sherman Act, when it is between competitors, not by a single entity. In other words, you cannot agree with your competitors to minimum prices but you can have a “vertical” price fixing that applies to dealers of your own company. The Federal Trade Commission states that:

"Reasonable price, territory, and customer restrictions on dealers are legal. Manufacturer-imposed requirements can benefit consumers by increasing competition among different brands (interbrand competition) even while reducing competition among dealers in the same brand (intrabrand competition). For instance, an agreement between a manufacturer and dealer to set maximum (or "ceiling") prices prevents dealers from charging a non-competitive price. Or an agreement to set minimum (or "floor") prices or to limit territories may encourage dealers to provide a level of service that the manufacturer wants to offer to consumers when they buy the product... If a manufacturer, on its own, adopts a policy regarding a desired level of prices, the law allows the manufacturer to deal only with retailers who agree to that policy. A manufacturer also may stop dealing with a retailer that does not follow its resale price policy. That is, a manufacturer can implement a dealer policy on a "take it or leave it" basis."

The FTC also notes that "[t]hese benefits must be weighed against any reduction in competition from the restrictions." So, while the MAPs are legal, when drafted and implemented correctly, it is important to be wary of the antitrust laws that can still bite a negligent company.

That is why it is important to note that the MAPs are not actual contracts. It is one of the important distinctions from an antitrust scrutiny perspective.

Elements of the Effective MAP

What to include in your MAP?

Purpose. Appeal to your dealers' self-interest, not some pompous mission statement about your company's important "principles" which nobody except you cares about. If you want your MAP to motivate your dealers, state that the purpose of your MAP is to allow your authorized dealers to make profit by cutting out dealers who try to lowball other members of your team.

Consequences of violation. Termination at your sole discretion. You can also have a sort of “three-strike” rule, which is basically termination after a series of warnings.

Price list. You reserve the right to update it, at your sole discretion, when you feel it appropriate. 

Excluded products? Out of season, discontinued, used, etc.

Advertised or actual selling price?  Indicate if the MAP policy includes the actual selling price, or simply the price advertised on different media. Do rebates violate your MAP?

Channels. Does your MAP apply to all or only some channels? 

FAQ section can be helpful.

Does “click for price” or anything similar violate your MAP? What about product bundling? Perhaps, dealers may not bundle your products if the bundling is more than a certain percentage lower than the combined price of both products price?

MAP Enforcement

So, after you have competently drafted your great MAP, how will you know when it is violated Automated price monitoring is the industry's preferred method. A good system will include:

- Automated real-time alerts 

- Historical data, statistics and trends. Info on who is selling your products, reports on your market, dealers, and violation status, detailed sales information on each of the websites carrying your brand

- Screenshots 

- Automated MAP enforcement to send violation notifications at the frequency you select.

- Grey market seller detection to allow you to receive data outside of your authorized dealer network. 

Saturday, April 8, 2017

Как зарегистрировать торговый знак в США (How to Register U.S. Trademark)

Торговая марка может быть словом, фразой, символом, рисунком или комбинацией этих элементов. Не обязательно быть резидентом США, все можно сделать по интернету через сайте Ведомства по патентам и товарным знакам США (U.S. Patent and Trademark Office - USPTO). Регистрация в USPTO закрепляет за собственником эксклюзивные права на торговую марку на всей территории США. Бывает еще регистрация на уровне отдельных штатов, но такая регистрация дает права только на территории этих штатов. Поэтому, в большинстве случаев, лучше сразу регистрировать федеральный знак.

Регистрация ТМ предоставляет следующие преимущества:

- Исключительные права на использование этой марки и на подачу исков о ее защите.
- Является официальным публичным уведомлением о ваших правах.
- Возможность регистрации на таможне (U.S. Customs and Border Protection Service) в целях предотвращения импорта товаров со схожими марками.
- Право на использование значка (R), уведомляющего о том, что марка зарегистрирована.
- Является основанием для упрощенной регистрации идентичных торговых марок в других странах.

Основные особенности в США:

- Необходимо предоставить доказательство использования знака в коммерческих целях ("specimen").  В случае регистрации торговой марки на програмное обеспечение, например, таким доказательством может быть скриншот страницы, на которой оно продается.

Saturday, April 1, 2017

Apple Patent to Turn iPhone into Touchscreen Laptop

On March 23, 2017, Apple has published a patent titled “Electronic Accessory Device.” The device is basically a laptop dock for a cell phone that can be inserted into the trackpad area. Cell phone would provide computing power, graphics, memory and storage for the laptop dock with a touchscreen display. The iPhone would then be used as the trackpad. The laptop dock would include batteries.

The patent also describes similar arrangement for an iPad. The iPad plugs in as the screen rather than the touchpad.

The fact that Apple published this patent does not mean that they are actively developing this product.  Nevertheless, it is interesting to see their vision to make iPhone and iPad more laptop-like.

Wednesday, March 29, 2017

Startup to Upload/Download Brain Data & Compete with AI

I've tested out of both high school and college, although I had to actually do time in a law school. Since early childhood, it has been my dream to just upload the necessary knowledge into my brain by clicking some buttons instead of wasting time in schools. Well, in this day and age, why not? Smart bionic limbs are already a reality, so smart brains using same technology are a very real possibility in the near future.

The PayPal founder and CEO of Tesla, billionaire Elon Musk, has told the Wall Street Journal that his startup company Neuralink is working on a "neural lace" to wirelessly connect human brain to computer in order to compete with artificial intelligence which could otherwise render human race obsolete by making humans unemployed and otherwise irrelevant.  One of the goals of the neural lace is to bring human brain capacity/intelligence to the same level as that of an advanced artificial intelligence.

The neural lace concept first started appearing in the 80's science fiction novels as a brain-computer interface that allows neurons to be programmed. Neural lace technology actually exists now. E.g., prosthetics, or to restore motor control and enable communication for paralyzed patients.  There are over 80bn neurons in the brain. With prosthetics, only about 100 neurons are connected. So, it is feasible that a higher bandwidth interface will connect more. This can revolutionize medicine.

Neuralink is a Delaware-registered company operating in California as a “medical research” firm privately funded by Musk. According to WSJ, leading neuroscientists have been brought in to work on developing the neural lace. The goal is to improve natural intelligence by downloading or uploading thoughts to or from a computer.

Musk believes artificial intelligence poses a risk to humans. At the 2016 Code Conference, Musk stated that humans risk being treated like house pets by artificial intelligence unless neural lace technology exists to compete by adding another human layer to an AI, thus merging biological and digital intelligence.

Tuesday, March 28, 2017

Congress Just Killed Landmark FCC Internet Privacy Rules. What to Do?

Today, Republican-led Congress had its final vote to repeal online privacy rules imposed by the FCC last year. The repeal will become final after President signs it, which he is expected to do, as the White House has already published a statement announcing strong support of the repeal.  This is a big victory for telecoms and a defeat for consumer-protection advocates.

The now-blocked FCC's protections would have required ISPs to ask users for opt-in before sharing your personal data, browsing history, buying habits, location, app usage, etc.  The rules had also required ISPs to strengthen protection for user data against hackers.

The FCC is also precluded from issuing similar rules in the future. With no new FCC rules on the horizon, the ISPs can now sell their users’ information directly to marketers that mine personal data without consumer's consent.  ISPs can normally see all of the sites consumer visits, unless the consumer takes steps to hide data from the ISP, as discussed below.

What can consumers do to protect their privacy? They can find a broadband provider who does not collect personal data or they can hide their browsing history from the ISP. However, switching a broadband provider may not be possible due to the lack of competition in this market. Most Americans only have one or two broadband providers in the area. hiding browsing activity can be done via a Virtual Private Network (VPN).

VPN is sort of a middleman between you and your ISP. When you connect to a VPN, it handles all of your traffic. Your ISP then sees that you connected to a VPN server but the ISP does not see what sites are you visiting after that. VPNs are not a perfect solution. First of all, you need to find a VPN that is certain not to sell your data itself. Second, some companies (e.g. Netflix) try to block VPNs to ensure people are not accessing content that is not licensed in foreign countries and to block hackers.

Monday, March 27, 2017

Bentley Motors Loses Trademark Fight v. Bentley Clothing

A luxury automaker has lost a trademark battle to a small clothing company with the same name. This case illustrates the "use it or lose it" principle of trademark law. That is, if you do not actively use your trademark for the goods or services you registered it for, you can lose the rights to that trademark to someone who uses the TM.

Manchester-based Bentley Clothing company of less than 10 employees has filed to register the "Bentley" trademark with the United Kingdom Intellectual Property Office (“UK IPO”) for clothing and retail services.  Bentley Motors objected to that on the grounds that it had registered that mark for a variety of goods, including bags and jewelry. Bentley Motors argued that, even though it does not have a specific registration for garments, it has used the “Bentley” mark in connection with garments and accessories since 1920. However, the UK IPO trademark hearing officer George W. Salthouse ruled that Bentley Motors failed to provide any evidence of use of the “Bentley” name in connection with garments and the sale of garments. Ferrari, Lamborghini and Aston Martin sell clothing ranges but Bentley Motors does not have a significant reputation as a clothing manufacturer. Therefore, Bentley Clothing was allowed to use the mark "Bentley" for clothing.

FB Launches a Tool to Contact Officials

Today, Facebook announced a new tool, Town Hall, which enables users to follow and contact their elected representatives. including county board commissioners, mayor, state reps, senators, governor and even the vice president and president. The "contact" feature varies depending on what information is disclosed on an official’s page.

The feature is also integrated into the News Feed: after a user has liked or commented on a representative’s FB post, a new post may appear prompting to “Contact Your Representative.” Facebook will also include local election reminders at the top of News Feed.

To access Town Hall from a desktop, look under the "Explore" section of your News Feed. To access from a mobile phone, look in the menu section of the Facebook app.

(image from Mark Zuckerberg's FB post)

Friday, March 17, 2017

China & EU to End Anonymity of Bitcoin. Its Price Drops.

It has been a tough week for bitcoin. Chinese central bank, EU's top law enforcement agencies and legislators are deliberating to end anonymity of virtual currencies. As a result,  bitcoin price dropped significantly.


The Chinese central bank, People’s Bank of China (PBoC), is currently circulating new guidelines which, if enacted, would require domestic bitcoin exchanges to identify users and report suspicious trading activities to authorities.  Zhou Xuedong, director of PBoC’s Business Administration division, recently suggested creation of blacklists against exchanges that do not follow PBoC’s directives. China's “big three” exchanges (Huobi, OKCoin and BTCC) halted bitcoin and litecoin withdrawals while undergoing upgrade of anti-money laundering systems. The PBoC now awaits feedback on its proposed guidelines from the exchanges.


On Monday, EU's top law enforcement agencies have released a joint report stating that encryption, loss of location and lack of cohesive legislation on digital currencies make it difficult to "follow the money" while fighting cybercrime.

Thursday, March 16, 2017

Delaware Initiative to Permit Blockchain Corporate Shares

The Corporate Council of the Corporation Law Section of the Delaware State Bar Association has proposed amendments to the Delaware General Corporation Law (DGCL) to allow corporations to issue "Distributed Ledger Shares." It's a new innovative method of recording corporate share ownership by using the same technology that supports the virtual currency Bitcoin.

These amendments are a part of the Delaware Blockchain Initiative, the program supported by the Delaware Governor to accommodate blockchain businesses. Distributed ledger is a blockchain-based share registration. It's when each network user maintains a complete copy of the ledger (hence, the ledger is "distributed").  All users collectively participate in recording and validating the transactions. A major benefit to this method over traditional ledger is that the former does not require a clearinghouse intermediary to settle transactions. That's why the distributed ledger can be cheaper, faster and more efficient.  It cuts out the middleman.

Bitcoin was the first major application of blockchain technology. However, that technology can be applied to record and validate pretty much any digital asset, such as securities, commodities, property titles, derivatives, etc.

Tuesday, March 14, 2017

Europol vs. Virtual Currencies

On Monday, Europol, EU's top police agency, and Eurojust, cross-border anti-organized crime agency, released a joint paper stating that the growing use of digital currencies is impeding law enforcement efforts.  Both agencies claim that encryption, loss of location, lack of cohesive legislation on digital currencies make it difficult to "follow the money" while fighting cybercrime. This comes at a time when Members of the European Parliament are deliberating new legislation to end the anonymity of cryptocurrency and allow “competent authorities... to monitor the use of virtual currencies.”

The law enforcement agencies elaborated on the following factors:

Encryption. "The growing use of encryption by criminals to protect their communications or stored data... [is] leading to loss of critical intelligence and evidence... The widening criminal use of decentralised virtual currencies... effectively prevent law enforcement to ‘follow the money’ and significantly complicate the possibilities for asset recovery and the prevention of fraudulent transactions. The lack of (minimum) standards for due diligence and Know-Your-Customer for such services and the non-application of existing regulations compound to the problem."

Loss of location. "Recent trends such as the increasing criminal use of encryption, anonymisation tools, virtual currencies and the Darknets have led to a situation where law enforcement may no longer (reasonably) establish the physical location of the perpetrator, the criminal infrastructure or electronic evidence. In these situations, it is often unclear which country has jurisdiction and what legal framework regulates the (real time) collection of evidence."

Differences in legislation. "Despite the existence of international legislative instruments, differences in domestic legal frameworks... prove to be a serious impediment to international criminal investigation and prosecution of cybercrime. This is partly due to an incomplete transposition of international instruments to domestic legislation."

Lack of case law. "Case law (jurisprudence) can be a valuable tool to compensate for a lack of specific legislation, but unfortunately little case law exists with regard to new developments (eg virtual currencies, anonymization tools and various technology-driven criminal modi operandi)."