San Jose Business Lawyers Blog

For many new and existing businesses, their intellectual property (IP) may be by far their most valuable asset. Intellectual property can include literary works, software code, processes, formulas, manufacturing specifications, marketing plans, or designs.  In some cases, a company’s ideas may literally be their only asset – consider, for example, an individual with the idea for the next smartphone app that will be downloaded by hundreds of millions of people. She, and any company that she forms to develop that app, have the asset of that idea before even a single line of code is written. Of course, it is only natural to want to protect that asset from misappropriation by other parties. In many cases, the best way to achieve this goal is to use a non-disclosure agreement (NDA) with any other parties with whom the idea may be discussed.

What is a Non-Disclosure Agreement?

Fundamentally, NDA agreements are contracts between two or more parties that outline information that they wish to share with each other but not with other parties. There are two main types of NDA agreements, which are:

  • One-Way NDAs – Also known as a “unilateral non-disclosure agreement,” this type of NDA restricts one party from disclosing information to another third party.
  • Mutual NDAs – This type of non-disclosure agreement, which may also be called a “bilateral non-disclosure agreement,” is often used when two parties need to disclose confidential information to each other in order to be able to work together. They restrict both parties from disclosing certain information to others.

Sticking with our app-developing entrepreneur, let us further imagine that she has a degree in marketing and does not know the first thing about developing a smartphone app. In order to bring this app to market, then, she must hire a company or partner up with someone else who has that expertise. In order to do so, however, she needs to disclose certain information about the app that would potentially allow another party to take the idea and develop it themselves. In these cases, a NDA agreement can operate to prohibit any party with whom she discusses her idea from disclosing its details to others. NDAs can be used to protect a variety of information that may be valuable to your business. Among the most common include:

·         Manufacturing processes

·         Business strategies

·         Software

·         Machines and devices

·         Designs

·         Formula

·         Business models

·         Sales contacts

·         Recipes

·         Artistic or literary works

 

Contact a Silicon Valley business lawyer today to discuss your legal matter

Businesses that are seeking to protect their intellectual property from misappropriation should discuss their circumstances with an lawyer as soon as possible. Call the Structure Law Group today at (408) 441-7500 to schedule a consultation with one of our San Jose business lawyers.

Commercial real estate transactions can be lucrative investments, however there may also be high risk due to the amount of money that is generally at stake. The following are some examples of legal issues that sometimes arise during the sale or purchase of commercial property.

realestate transactions

 

  1. Accurate property valuation

When you are shopping for a product, it is often relatively easy to compare the price and quality to another similar product. However, pieces of real estate are often unique with no exact comparison based on size, age, use, and/or state of the building or land, making accurate valuation significantly more challenging. In addition, any current income stream or potential for future income associated with commercial property should also be a factor in determining a fair and reasonable price. Utilizing an experienced commercial appraiser can assist both buyers and sellers with determination of value.

 

  1. Due diligence

Just like any type of business transaction, commercial real estate transactions require considerable investigation. This allows a buyer to know exactly what is involved in the transaction and sheds light on any potential problems with their intended use. For example, you want to make sure that the zoning for the property allows your intended use, title of the property will identify liens, and easements, and identifying the property corners will assist in identifying possible encroachments.  Hiring an experienced attorney will assist you in avoiding costly errors.

 

  1. Assumption of liability

Prior to purchasing a piece of commercial real estate, you will want to make sure you are not assuming liability for any violations of law that may exist. For example, if you buy the property and then later find out that environmental hazards exist, you will be liable for eliminating the hazard whether or not you or the previous owner actually caused it. Such liability may be expensive and the potential for it should be examined prior to closing a sale.

 

  1. Evaluation of financial risk

Real estate can be a great investment for your business, though such purchases can also tie up a significant amount of liquid assets for a lengthy period of time. If you have difficulty filling vacancies or collecting rent from tenants, you may not be able to make your required payments to your financing company. Additionally, if you decide to sell the property due to financial struggles, it may take some time especially if the market is down. All of these long-term risks should be evaluated before you close any type of commercial real estate transaction.

 

Commercial real estate transactions can be very complicated and the above are only some examples of legal issues that must be addressed. If you are considering purchasing or selling commercial real estate, you should discuss your situation with an experienced real estate attorney at the Structure Law Group, LLP as soon as possible. Call us at  408-441-7500 for help today.

There are pros and cons to including an arbitration clause as part of your contractual agreements. Arbitration is a popular and can be effective forum for settling disputes between individuals, businesses, in real estate contracts and in employment settings under the right circumstances. There are two types or arbitration clauses:  non-binding and binding.

 

Non-Binding Arbitration

In non-binding arbitration, the arbitrator makes a decision to determine which party is liable and then suggests possible compensation for damages. Neither party is obligated to follow through with these guidelines.

Binding Arbitration

Binding arbitration is the opposite. The decision-maker hands down a ruling of liability and also assigns penalties. An arbitration clause can be binding in most contracts but California allows for the clause to be ignored if all parties agree to the change. Here are the advantages and disadvantages of having an arbitration clause.

3 Pros of Having an Arbitration Clause

  1. Saves Money

Arbitration is usually much cheaper than going to court and may be a viable option to save money. If the dispute continues to litigation, costly fees associated with depositions, uncovering evidence and pre-trial meetings follow.

  1. Speed of Decision

A case in litigation can take many months or years to conclude while having an arbitration clause may resolve the dispute much faster, usually averaging 475 days.  Arbitration has more relaxed rules of pleading and evidence in comparison to litigation rules.

  1. Confidentiality

Arbitrations can be held in private are subject to rules concerning confidentiality, so the parties that especially prize privacy are not exposed to public scrutiny.  Despite the fact that proceedings may be transcribed, arbitrations have no “public record.”

3 Cons of Having an Arbitration Clause

  1. Only One Decision-Maker

While litigation usually leaves the final decision to a panel of jurors, arbitration has only one arbitrator (who can be hand-picked) who passes down a decision of liability. Without an impartial jury vote, your case may be treated unfairly or receive a fraction of the required attention.  There is rarely a right to appeal if a mistake is made.  Further, arbitrators can make decisions on what they perceive to be fair, rather than what the law directs.

  1. Can Become Costly

The process of discovery is becoming more prevalent in arbitration, which not only lengthens the time of arbitration, but also the cost.   Unlike traditional court proceedings, wherein judges are compensated by the state, parties to an arbitration must pay the arbitrators out of their own pockets.  Many arbitrators charge hundreds of dollars per hour.

  1. Possibility of Unnecessary Claims

Arbitration may be taken less seriously than a lawsuit in court so some parties may treat it more like mediation. Necessary or frivolous disputes may not be weeded out through procedural processes normally applicable in court.

Having an arbitration clause can save time and money, but it may also be biased or lack the necessary procedural filters of litigation. An experienced attorney can help you navigate the legal system and determine if this is the right choice for you.

About Structure Law Group, LLP

Structure Law Group is a San Jose based law firm that serves its clients’ business, employment and real estate needs, including but not limited to business formations, debt and equity investments, employment agreements, commercial leasing and purchases, commercial contracts and related litigation.

The possibility of a hostile takeover is a very real concern for many publicly traded companies. A hostile takeover can occur in a number of ways, but one of the most common is purchasing enough stock on the open market to obtain a controlling majority. The main characteristic that defines a corporate takeover as “hostile” is the fact that the transaction is opposed by the target companies’ management.

Corporation Corkboard Word Concept with great terms such as business, public, articles and more.

In many cases, a shareholder rights plan, often referred to as a “poison pill,” is an extremely effective tool to prevent hostile takeovers of publicly traded corporations. Basically, these plans trigger rights for existing shareholders that, when exercised, make the potential transaction much less attractive for a potential buyer. As a result, potentially hostile acquiring parties are then economically incentivized to negotiate with the target company’s board of directors, strengthening the target’s bargaining position.

While there are many potential types of shareholders rights plans, two of the most common are “flip in” and “flip-over” plans, which are detailed below.

“Flip-in” shareholder rights plans

In this type of plan, existing shareholders of a company are able to purchase addition shares of stock at a discount but does not offer the acquiring party the same opportunity. As a result, the value of the shares that were purchased are by the acquiring party are diluted due to the market being flooded by new shares, as well as providing the existing shareholder with immediate profit due to the difference in the discounted and market value of the shares purchased.

“Flip-over” shareholder rights plans

On the other hand, a flip-over plan allows existing shareholders to purchase the shares purchased by the acquiring party at a discount. When exercised, this type of right causes dilution and devaluation of the acquiring party’s shares.

In order to be effective and legally enforceable, a shareholder rights plan must be properly drafted, structured, adopted, and exercised. For this reason, any company considering protecting itself from hostile takeovers by using a shareholder rights plan should consult with an attorney familiar with them.

Contact a San Jose business lawyer today to schedule a consultation

In many cases, an effective and enforceable shareholder rights plan can help ensure that a company is able to strengthen its position when approached by a potential buyer as well as defend itself from hostile takeover attempts. As a result, any business that is considering going public should discuss the implementation of any plan with an experienced San Jose business attorney. To discuss your options with one of our lawyers, please call the Structure Law Group today at 408-441-7500.

In 1967, President Lyndon B. Johnson signed an historic law into effect prohibiting employment bias on the grounds of age: The Age Discrimination in Employment Act (ADEA). This act gives certain labor protections to workers over age 40. But do you know how this law affects employment at your company? Here is an overview of the ADEA and some key information to know.

Discrimination 6-5-15

 

What is the Age Discrimination in Employment Act?

The ADEA specifies that any time an employer makes a decision about personnel, whether hiring, determining pay, firing, or considering position changes, it cannot factor age into the final decision.  Decision makers are not allowed to establish preferred ages in any step of the hiring process.  It’s important to note asking for a candidate’s birth date on an application however, is not illegal.

ADEA Protects Disadvantaged Demographics

Congress found older citizens are at a disadvantage in the job market after losing a long-time job. The Act is meant to give workers a boost after age 40, allowing them more work opportunities.  The ADEA additionally prevents terminations or layoffs based on age as the displacement of older workers.

ADEA Limits

The ADEA applies to employment agencies, every business with more than 20 workers, federal positions, and many labor organizations. It doesn’t protect elected officials, those in the military, and workers who are self- employed, such as independent contractors.

The Age Discrimination Act helps prevent unfair labor treatment of workers over age 40. If you have any questions on how the ADEA impacts the employment initiatives at your company, Structure Law Group’s experienced attorneys would be happy to help. Contact us today at 408-441-7500.

 

About Structure Law Group, LLP

Structure Law Group is a San Jose based law firm that serves its clients’ business, employment and real estate needs, including but not limited to business formations, debt and equity investments, employment agreements, commercial leasing and purchases, commercial contracts and related litigation.

Historically, only general or limited partnerships were used for investing in real estate, but over the past decade, forming a Limited Liability Company (an “LLC”) has become a more popular choice for real estate investors. An LLC formed for real estate investment purposes is not very different from a regular limited liability company, and the steps for formation are very similar. Here are 4 benefits of using an LLC instead of a partnership or a corporation for real estate.

LLC - Purchaseing REal Estate

 

 

 

 

 

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California law imposes fiduciary duties upon the officers and directors of a corporation which requires them to conduct themselves in a certain way with regard to the corporation and its shareholders. A fiduciary duty is the highest duty that the law can require and it requires those upon whom the duty is imposed to act only in the interest of the party to whom the duty is owed. The fiduciary duties of officers and directors of a corporation have been codified in California Corporations Code § 309(a), which reads:

“A director shall perform the duties of a director, including duties as a member of any committee of the board upon which the director may Integrity word cloud concept with honesty trust related tagsserve, in good faith, in a manner such director believes to be in the best interests of the corporation and its shareholders and with such care, including reasonable inquiry, as an ordinarily prudent person in a attorney like position would use under similar circumstances.”

 

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Landlords and tenants may come head-to-head in property disputes when an occupant breaks the rules of an their lease agreement. Knowing how to navigate a potential breach of lease is important for landlords when dealing with tenant issues.

Tearing contract

What is Breach of Lease?

A real estate lease is a contract that outlines the landlord and tenant’s responsibilities regarding the occupancy of the property. Tenants are obligated to follow the rules of a lease agreement or the landlord has just cause to terminate the lease and evict them. A breach of lease is when activities occur that violate the terms of the lease agreement. Here are 3 tips for landlords experiencing issues with tenants. Continue Reading

Large companies frequently have corporate employee handbooks that are updated on an annual basis to reflect changes in employment laws or company policies. However, many small business owners with few employees may not see the need in having such a handbook that formally sets out employment policies and rules. While it is true that simply speaking to employees about your policies may be easier and more time-efficient than developing an official handbook, there are several reasons why it is worth taking the time and energy to do so.

employee handbook

Assistance in developing your policies

Many new business owners have not taken the time to sit down and formulate official policies when it comes to employees. Owners may be tempted to “wing it” when it comes to worker management and develop rules along the way. This can be risky, however, and can lead to disputes if there are not rules set in stone. Developing a handbook will make it necessary for you to sit down and decide what types of policies you want for your employees. This can ensure that your policies are applied fairly and evenly from the start to all workers. Continue Reading

Many business owners rely on ideas, formulas, inventions, and other types of intellectual property (IP) in order to make a profit. In fact, IP can be one of the most valuable assets of a company. Your specific product, brand, and other identifiers are often the components that define you and set your business apart from others. Therefore, protecting your IP is extremely important to the success of your venture. In order to prevent others from misappropriating your valued intellectual property, you always want to obtain formal legal protections.

trade secret

There are many options for protecting your IP, and choosing the right one may be confusing for business owners who are not familiar with the relevant laws. Many business owners receive denials for their applications for patents, trademarks, and copyrights and do not know what their options are from there. Fortunately, an experienced business attorney can help you achieve trade secret status for your IP, which may actually be more beneficial than other protections in several ways. Continue Reading