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Washington DC Attorney Eric Menhart Quoted on Online Sales Tax

 

Recently introduced legislation entitled “The Main Street Fairness Act” seeks to require online retailers to collect sales tax for the benefit of states on most online purchases. Internet Retailer recently examined the bill in some detail. CyberLaw PC attorney Eric Menhart is quoted in the piece, entitled “Online sales tax proposed in Congress.” Eric was asked if the recently proposed legislation, introduced by Rep. Bill Delahunt (D, MA) had a decent chance of success: “You need a decent majority of states as members of the SST,” he says. “Until you have that, it will be very difficult to get enough Congressional attention and support for this legislation.”

 

Eric is the author Taxing the Internet: Analyzing the States’ Plan to Derive Online Sales Revenue. Published in 2007 by the Journal of State Taxation, the article is an in-depth discussion of the legal and political barriers to states’ interest in universally collecting sales taxes on all types of online transactions. Eric also spoke on similar topics at the 2010 Internet Retailer Conference and Exhibition in Chicago, IL.

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A Potential New Defense Under UDRP

 

The recent UDRP decision concerning “razorbacks.com” caught my eye due to a relatively comprehensive panel discussion on the issue of laches (pronounced: ˈla-chəz) under the UDRP.

Laches in law is a defense that calls into question the complaining party’s good faith in bringing its complaint in a untimely manner. A defendant asserting laches argues that a plaintiff that delays in asserting its claims, to the detriment of the defendant, should not be entitled to recover on its claims.

In “razorbacks.com” the Panel noted that “a majority of the Panel (Messrs. Badgley and Brown) is prepared to acknowledge the possible applicability, in appropriate and limited circumstances, of laches in a case under the Policy.”

The Panel supported their decision in several ways. First, the Panel notes that Rule 15(a) of the UDRP provides that “a panel shall decide a complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

The Panel also addressed previous decisions addressing and dismissing a laches defense under the Policy. First, the Panel addressed whether laches fell within the “‘catchall’ language of Rule 15(a) because, strictly speaking, it is a principle of equity and not law.” Panelists Badgley and Brown disagreed, noting that in many jurisdictions, the “sharp line between law and equity has been blurred if not effaced.” Panelists Badgley and Brown also found that concerns about intense factual inquiry in laches analysis “might be no more difficult than disposition of other questions that routinely come before UDRP panelists.”

In the end, the majority of the Panel did not decide the “case on the basis of a laches defense,” but whether “characterized as laches or not, the considerable delay on the part of Complainant in bringing the Complaint militates against its success in this proceeding.” The Panel went on to deny the relief sought by Complainant.

While the Panel chose their words carefully, the implication seems clear: UDRP respondents that have a colorable laches defense would be wise to raise it in their responses under the Policy. The Panel seems to be inviting laches defenses in the hopes that the issue will become more salient in the minds of other panelists. While there is no guarantee that future panelists will agree with the razorbacks.com Panel, this decision has unquestionably presented an open invitation for future laches defenses under the UDRP.

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Eric Menhart Helps Win TCPA Appeal

 

A recent decision by the District of Columbia Court of Appeals addressed whether a private right of action under the Telephone Consumer Protection Act (TCPA) required a separate act of enabling legislation. The Court found that private causes of action may be brought in the Washington D.C. Superior Court under the Act without the need for enabling legislation. CyberLaw PC attorney Eric Menhart was on the brief for the prevailing appellant. Read the full text of the opinion: Portuguese American Leadership Council of the United States, Inc. v. Investors’ Alert, Inc. No. 04-CV-1187 (D.C. 2008).

In its decision, the Court finds that the TCPA provides that a “person or entity may, if otherwise permitted by the laws or rules of court of a State, bring in an appropriate court of that State . . . an action based on a violation” of the Act. The trial court interpreted the “if otherwise permitted” language in the TCPA to mean that before a private right of action can be exercised, a state must “opt in” through enabling legislation that allows the lawsuits to proceed.

The opinion notes that the language “if otherwise permitted by the laws or rules of court of a state” in the TCPA appears to refer to the neutral general jurisdictional and procedural laws and rules governing each state’s court system. Second, the Court notes that rulings by the Federal Communications Commission support the view that no enabling legislation is necessary. Third, the D.C. Court of Appeals finds that a majority of state courts hold that enabling legislation is unnecessary to make the TCPA’s private action provision enforceable in state courts. Finally, the court refers to the legislative history of the TCPA to further support its ruling.

The ruling brings D.C. to the same result that all other reviewing states have reached: allowing a private right of action under the Telephone Consumer Protection Act.

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Understanding Attorney Hourly Billing and Tips for Saving Money

 

Everyone wants great value when they spend money. The same is true when it comes to law firms and legal services.

Occasionally, clients have questions about hourly billing and want to know how to keep their costs as low as possible without sacrificing the quality professional services to which they are accustomed. This short article is intended to answer some of those questions and offers tips to clients to assist in keeping their costs as low as possible. Remember, this memo is intended to be general information. The retainer agreement with your attorney or law firm sets out the particular terms of your legal or business services agreement with your lawyer.

Hourly Billing

Lawyers and staff often bill by the amount of time spent working on your legal or business matters. This is called “hourly billing” or “timed billing.” The tasks for which attorneys and staff will bill on an hourly basis are included in your individual retainer agreement. Generally, attorneys and staff will bill at their prevailing hourly rate for any time that they spend working on your matter. The prevailing hourly rate for your matter is usually contained in your retainer agreement with your lawyer.

Usually, attorneys and staff bill their time in 1/10 of an hour increments which computes to billing in six minute increments. Alternatively, your lawyer may bill his or her time in 1/4 of an hour increments, which computes to 15 minute increments. By billing in such small increments, attorneys are able to keep costs as low as possible for the client, while still using an accurate and readable record keeping system.

Hourly billing is fair to both the attorney and the client because the attorney only bills the client for the actual time assisting the client and the client is not billed for more than the reasonable amount of time spent by the attorney or staff member. Every court and bar association in the United States approves of hourly billing as a fair way to record the value of an attorney or staff person’s services for most matters.

Clients, especially clients that are not used to working with an attorney or law firm, occasionally express concern about hourly billing, especially when the client is used to receiving a tangible object, such as a piece of furniture, a new computer, or a new pair of shoes when spending money.

It is important to remember that attorneys and support staff do provide a great deal of value by virtue of performing work necessary to assist you with your legal or business problem. Attorneys are licensed professionals because they spend substantial time learning about the law, maintaining professional integrity and earning experience that can help you achieve the best possible result for your legal or business matter. While you will occasionally receive tangible goods as a result of your attorney’s work, such as a contract, legal pleading, or memorandum, it is also important to understand that advice provided over the phone, via e-mail or in a client meeting is also valuable use of the attorney’s time.

Because an attorney only has his or her time and expertise to “sell,” the attorney must bill for time spent on a matter, even when it may only be a short period of time spent on the matter. This is because any time spent on your matter could have been spent earning fees helping another client or other valuable use of the attorney’s time.

Attorneys are professionally obligated to accurately report their fees and time spent to the client. Attorneys will only bill you for the reasonable time spent on your matter.

Keeping Client Costs Low

Attorneys are always willing to assist their clients in a diligent and professional manner. However, clients can make changes in their behavior that will help to keep their costs low. Here are some general tips for keeping your hourly billing invoices as low as reasonably possible:

Consolidate Questions: Many clients will call their attorney anytime a question comes up. While most attorneys are more than happy to take your calls as their schedules allow, many “quick questions” via phone, e-mail, or personal visit can lead to higher costs for the client, because the attorney needs to divert her attention from one matter to another. Instead, consider writing down any non-emergency questions and call when you have several questions at once. This will allow the attorney to focus on your matter and likely answer the questions more efficiently than if the questions were asked via several separate phone calls or visits.

Communicate via E-Mail: E-mail has several advantages over phone or letters. First, e-mail is easier for the attorney to file and record, which assists the attorney in efficiently answering your present and future questions. Second, the attorney can be sure to have the answer by the time he or she responds, compared to a phone call where the client may catch the attorney when the client’s file is not immediately available to the attorney. Like telephone calls, try to save multiple questions and put them all into one e-mail, so your attorney can answer all your questions at once.

Respond to Questions and Inquiries in a Timely Manner: Your attorney will likely have questions for you throughout his or her work on your legal matter. Just as your attorneys will do for you, it is important that you respond to any requests as quickly as possible. Forcing a lawyer to make several attempts to get in touch with a client increases costs.

Review Materials from Your Attorney Carefully: Your attorney will typically provide copies of the important documents in your matter, such as your retainer agreement, your invoices, and other important documents such as pleadings or contracts. Reviewing your copies carefully costs you nothing and can often assist you in answering your questions without having to contact your attorney.

Remember that you are always free to contact your attorney, whether you have one question or many, and he or she will respond within a reasonable amount of time.

Conclusion

While costs can be controlled to some extent with the tips above, remember that your attorney’s primary interest and duty is in protecting your legal interests. He or she must take all the procedural steps necessary to fully represent you. Implementing the practices recommended in this article allows a client to reduce the costs within his or her control, but you should always be wary of “going too far” and restricting an attorney’s ability to fully represent your legal interests.

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Menhart Quoted on Internet Taxation

 



CyberLaw P.C. attorney Eric Menhart was recently quoted in a Forbes.com article entitled “Web Sales Tax Looms.” The article discusses the potential for additional sales taxes on online transactions, particularly in light of dwindling state budgets.

Menhart is the author of the article “Taxing the Internet: Analyzing the States’ Plan to Derive Online Sales Revenue,” published in 2007 by the Journal of State Taxation, which was an in depth discussion of the legal and political barriers to states’ interest in universally collecting sales taxes on all types of online transactions.

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Google Withdraws from Deal with Yahoo

 

In a move that should surprise no one, Google and Yahoo have “officially” abandoned their proposed Internet advertising partnership.

The proposal was laughable from the start, but the two firms took the public stance that the arrangement could somehow have been “pro-competition.” Antitrust regulators were having none of it. As it became clear that the proposal would not simply slide past regulators Google and Yahoo have likely determined that the façade was no longer worth the trouble and legal fees.

As previously noted, it seems unlikely that either party truly thought this would pass antitrust muster. There were potential latent benefits to each, however, which may have led to the proposal’s birth.

While there was little question the proposal had little chance of success, one might wonder if the Obama victory just hours before the firms’ announcement played a role. There was little hope that an Obama administration would be more willing to allow the deal than the outgoing Bush administration. The election may have been the final proverbial straw on the back of this failed-from-the-start alliance.

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Google Delays Deal with Yahoo

 


The joint advertising deal between Google and Yahoo, previously discussed in CyberLawg, is being delayed as the U.S. Department of Justice Antitrust Division continues its review.

Both Yahoo and Google have correctly taken the “we’re happy to help and comply” public line. Still, there is no question that an antitrust review that needs more time is not good news for the potential bedfellows. The Google CEO’s previous suggestion that Google and Yahoo would move forward before the DOJ even completed its review looks pretty silly at this point.

Another concern: the Executive Branch will have a new leader come January. Regardless of the winner of the presidential election, it is hard to imagine that it will lead to an administration more likely to pass on comprehensive review than the current administration.

Of course, there is some question as to whether Google and Yahoo ever thought this would truly work or if they were both just looking to cool down the speculation that Yahoo would be acquired by Microsoft or another third party. Even in a circumstance where DOJ does block the deal both online ad firms do receive some benefit by maintaining their status quo as the two dominant online advertising firms even while the review is pending.

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Political Domain Name Infringement and Law

 

As this election year heats up candidates in all types of political races are trying to reach likely voters at their doors, on their telephones and on the Internet. In this race for voters you might guess that a candidate’s domain name plays an important role in sharing his or her message with likely voters. What if a candidate’s domain name is already taken by a third party? What if a candidate’s name has already been taken by their opponent? Many of today’s candidates, finally recognizing the importance of a strong Internet presence in races for political office, are facing the reality of this intellectual property concern.

First, candidates may find that an “innocent” third party already has their preferred domain name. A classic example of this was the site “kerryedwards.com” in the 2004 United States presidential election. Kerry Edwards is the name of an individual, who had registered the site for his own personal website. Of course, “Kerry” and “Edwards” were also the two last names of the Democratic presidential candidate, John Kerry, and his vice presidential running mate, John Edwards. While the Kerry political campaign reportedly inquired about the name, Mr. Kerry Edwards declined to sell. Because Mr. Kerry Edwards was using the name for his personal use the Kerry campaign had no legal grounds to obtain the name (whether it would have been a wise political choice is another story entirely).

Sometimes, there are more legitimate infringement issues. In Montana, for example, both major political parties have taken turns at registering the names of an opposing candidate. Candidates who are victims of the practice routinely accuse the respective registrants of infringement. Registrants of the names proclaim that their actions are protected under free speech laws.

Some state legislatures, undoubtedly containing some politicians that were victimized by the practice, have offered legislation seeking to combat the practice. At this time only California has passed such legislation into law. The California Political Cyberfraud Abatement Act defines “political cyberfraud” as:

 

A knowing and willful act concerning a political Web site that is committed with the intent to deny a person access to a political Web site, deny a person the opportunity to register a domain name for a political Web site, or cause a person reasonably to believe that a political Web site has been posted by a person other than the person who posted the Web site, and would cause a reasonable person, after reading the Web site, to believe the site actually represents the views of the proponent or opponent of a ballot measure.


Effectively, California’s law seeks to provide trademark protection to political candidates, at least to the extent that the site refers to the candidate’s political campaign.

The intersection (or clash) of free speech and intellectual property rights as protected by this law suggests that it is only a matter of time before it is challenged as unconstitutional by a domain registrant. When the time comes, a potential challenger will have a good chance of invalidating the law. Courts have historically been uneasy to limit speech when it comes to matters as open as a campaign for public office.

In the meantime, potential political candidates should always do the simple thing: register your most important domain names before you even consider entering the political arena.

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Auctions to Determine New Top Domain Applicants

 

Given that ICANN recently voted to expand the possibilities for gTLDs, the oversight organization must now deal with the logistics of selecting and assigning administrators for each of the soon to be available gTLDs.

One issue is the possibility that two potential organizations may want to be responsible for allocating the same gTLD. For example, perhaps Group A, a non-profit group, wants “.money” for purposes of identifying sites concentrating on proper personal financial management. Group B, a financial services firm, wants “.money” for identifying financial advisors, stockbrokers and other finance professionals. ICANN’s solution for such a quandary: auctions.

ICANN has determined that, assuming all other things are equal, the competing parties will determine the winner of the coveted extension by auction. This is a method that has been used by new extensions in recent years to determine ownership of particular domains. For example, the “.mobi” extension famously auctioned off several of its “premium names,” as opposed to opening them up in a “landrush” public registration format.

The primary problem with an auction is the concern that our fictitious “Group A” would not have the financial means to compete with “Group B” for our example ".money" gTLD. ICANN attempts to resolve this problem by implementing a system of handicaps. These handicaps would favor for example, “community-based bidders whose community is located primarily in [the] least-developed countries.”

Are these procedures enough to ensure fairness? More than likely, they will be more than enough, because it is quite unlikely that there will be many disputes at all. One can imagine certain gTLDs, like “.sex,” may be disputed, but the chances are good that there will be no need for auction handicaps when the proposed gTLDs are propounded by for-profit industries. Even if the auction process is not particularly favored by all interested parties there is peace is knowing that there will be few, if any, auctions implemented in practice

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Copyright Protection for Open Source Software

 

The first federal court review of open source software licenses was recently undertaken by the U.S. Court of Appeals for the Federal Circuit. The decision, Jacobsen v. Katzer, No. 2008-1001, slip op. (Fed. Cir. Aug. 13, 2008), is important because it finds that infringers of open source licenses are subject to Copyright laws, as opposed to only being in breach of contract for a violation of an open source license.

The court determined that the “conditions” of the open source license were violated when the Defendant removed some of the license notices and other non-critical portions of the software. This was different from the “covenants” that are violated under a contract analysis.

Why does it matter? Remedies for breaching a contract are generally more limited, usually to the economic losses of a contractor. Violations of federal copyright laws, however, provide for more substantial remedies. Such remedies include statutory damages, infringer profits obtained as a result of the breach and other damages that would be more substantial than the aggrieved party’s economic loss.

This result is important, perhaps critical, to the open source movement. Had the court concluded that violations of open source licenses were simply breaches of contract violators would use open source software with virtually no liability concern. The reason? Open source copyright holders would virtually never be able to show “classic” economic loss, because their software is generally provided for free.

While a boon for open source authors, the opinion does create a problem for business and industry that may have taken liberties with open source licenses in the past. While always a good idea, now is a sensible time for IT departments to do an audit of its software licensing, both as to open source and more traditional (closed source) software packages to ensure compliance.

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Attorney Eric Menhart has been seen in: