Attorney Jennifer Mozwecz was recently interviewed by the Associated of Certified E-Discovery Specialists (ACEDS) regarding the Second Circuit’s holding in the Microsoft v. United States case which prevented the FBI from securing emails of customers stored on Microsoft servers exclusively located in Ireland.
The court in the Microsoft v. United States case held that the U.S. government cannot compel companies, specifically Microsoft in this case, to turn over customer emails stored on servers outside of the United States using a search warrant issued by the FBI. The court elaborated that Section 2703(a) of the Stored Communications Act (“SCA”) does not apply extraterritorially, and the fact that the information sought by the government was stored exclusively in, and would be taken from, Dublin, Ireland. The Court determined that the SCA could not possibly have contemplated extraterritorial application, being that it was drafted in 1986 prior to any fathom of cloud computing, especially as it exists today.
The decision does not mean that there are no avenues by which the government could have obtained the information it sought, merely that a warrant issued pursuant to the provisions of the SCA was not the proper mechanism to do so. The Court specifically addressed the government’s argument that “warrant” and “subpoena” were meant to be interchangeable in the statute, but the Court found this argument to be unpersuasive. The government could use civil subpoenas by way of the Mutual Legal Assistance Treaty in place with Ireland (the U.S. has a MLAT in place with every European Union Member State) to secure the information it seeks, however such processes are often time-consuming.
The interview also touched on Jennifer’s previous interview with ACEDS regarding the EU-US Safe Harbor provisions, which have subsequently broken down and been replaced by the EU-US Privacy Shield Agreement. One of the main reasons behind the breakdown of the Safe Harbor was the lack of ability for EU citizens to access the American legal system to redress wrongdoings and wrongful disclosure of their information. The holding in the Microsoft decision and the new Privacy Shield Agreement demonstrate steps on the part of the court and Congress to impose stronger obligations on US companies to protect the information of EU citizens.
Jennifer also recently returned from Montreal where she presented a panel on the issue of data security and the applicable laws of the U.S., the E.U. and the E.U. individual member states at the American Bar Association Section of International Law annual meeting.
We are pleased to announce that Jennifer Mozwecz’s article entitled “U.S. and E.U. Regulatory Conflict and Cloud Data Protection” was selected as the feature article for the Fall 2014 Newsletter of the American Bar Association’s Committee on Privacy, E-Commerce, and Data Security! A copy of the newsletter can be found here, as well as on the Committee’s website:
All of us can recognize a trademark when we see one: the golden arches of McDonald’s, the red background and distinct white lettering on a Coca-Cola can, etc., but few people understand what a trademark is and why they exist.
Although they are valuable to the owner, trademarks and the corresponding body of law exist to protect you as the consumer. Trademarks are images, words, or phrases that are meant to signify that a certain product or service is associated with a certain entity (the owner of the trademark). When the law says that one company cannot use another’s trademark, it is ensuring that when you buy a product or service bearing the “™” or ‘®” belonging to a certain company, you are protected in the knowledge that the quality of the product or service you expect from that company will, in fact, be present.
The benefit of owning a trademark to a company lies in building its brand, creating a recognizable image or catch phrase that customers will associate with the company, and creating goodwill with the consumer by adhering to a level of quality that the mark will signify to customers.
A main reason business owners form a corporation or limited liability company (LLC) is because they hear that there is “limited liability.” Most business owners interpret this to mean that whether they are a shareholder in a corporation or a member in an LLC that they will not be personally liable for any business debts if creditors come knocking on the door. Although a corporation or an LLC is a separate legal entity, sometimes courts will hold owners, shareholders, and members personally liable for business debts, and this is called “piercing the corporate veil.” This means creditors can go after the owners’ home, bank account, investments, and other assets to satisfy the corporate debt. Owners, shareholders, and members can follow steps to attempt to avoid this situation.
Owners, shareholders, and members should follow this non-exhaustive list of tips to minimize their risk of being personally liable in order to protect their personal assets:
Follow the necessary formalities required of the type of business entity you have formed. This includes drafting the appropriate documents that demonstrate and regulate ownership and the functioning of the business entity, holding annual or more regular meetings, and keeping accounting and other records for a minimum of seven years.
DO NOT “comingle” business accounts or assets with personal ones. Most issues with comingling funds arise when a business owner uses the business account to pay his or her personal debts, or vice versa. Avoid depositing payments made to the company into your personal account, and use business accounts to pay only business debts and expenses
Ensure that there is adequate capitalization for the business. Make a reasonable initial investment in the business entity so that it is adequately capitalized for its intended purposes and document incoming capital.
Publicize the status of your business entity. This means ensuring that you use the appropriate letter designations on business cards, invoices, bank accounts, and other documentation that you use to advertise or conduct your business.
Ensure the company does not conduct wrongful, illegal, or fraudulent behavior. While this is certainly the most common-sense piece of advice, there are activities you may not think would fall into this category that courts in Illinois have. Avoid recklessly borrowing and losing money, making business deals knowing the business couldn’t pay the invoices, or otherwise acted recklessly or dishonestly.
Please remember, this is a non-exhaustive list and other steps can be taken to protect your personal assets and maintain your limited liability status. Keep an eye out for our next issue where we discuss how an LLC has advantages over a corporation in several areas.
Just thinking about that former employee who solicited your customers just days after he quit, is infuriating. Maybe that former employee opened his own shop a few blocks away, providing the same exact services as your own. All you can think about are the months of training and mentoring you gave to that former employee who is now a competitor. Once he finally got to that point where he was useful, he quits to start his own shop.
In most cases, the employer doesn’t take this lying down and neither will you. So, you look to that employment contract the former employee signed before his first day. You read that section prohibiting him from competing with your company for two years after he leaves and that other section where he agrees not to solicit your customers. Based upon a straight forward reading of this employment agreement, It appears that this disloyal former employee is in violation of your agreement so a court of law will righteously enter an order compelling this traitor to close his business and stop soliciting your customers.
Unfortunately for many business owners who invest time and money into their employees, nothing is ever that easy. A new ruling from the Illinois Appellate Court of the First District held that a nonsolicitation and noncompete agreement is not be enforceable until two years of continuous employment. In the case of Fifield v. Premier Dealer Services, Inc., the First District held that a noncompete and nonsolicitation agreement was not enforceable against an at-will employee that worked less than two months. The Court further stated that such an agreement requires that the employee work at least two continuous years for the employer as consideration before the agreement is enforceable. The Appellate Court has now created an additional requirement to meet before any employer in its jurisdiction decides to sue that former employee under a noncompete agreement.
There are several factors to consider before filing a lawsuit against a former employee, and this new appellate court case adds another one. As always, each case is unique and there are facts to consider that are not addressed in this Fiflied opinion. For instance, are other forms of consideration besides continuous employment sufficient? What about a signing bonus? It’s also important to note that this case is an Appellate Court decision from the First District, so other district courts are not required to follow its ruling.
However, any lawyer worth his salt seeking to invalidate a noncomepte or nonsoliciation agreement, will look to the Fifield court’s analysis for assistance regardless of which district has jurisdiction over its case.
When starting a new company, oftentimes the first question to decide is what type of company entity you will form as. The choices are many and can be confusing, but ultimately all types of entities serve the goal of protecting the company’s owners from personal liability for the company’s debts or actions.
Several of the most common types of business entities you may form under Illinois law are corporations, limited liability companies, limited liability partnerships, and sole proprietorships. An attorney can explain the differences among these various entities, as well as the legal requirements they must comply with to ensure the business owners are as insulated from liability as possible.
A business entity is viewed by the law as a person would be. It is able to enter contracts, pay taxes, sue and be sued. How an owner of the business signs agreements on behalf of the company can be a factor in determining whether that owner is personally liable on the document. Failure to abide by legal requirements of the particular business entity could even mean that the business owner is personally liable in the event the company is sued or goes into debt.
Proper research and planning is crucial prior to going into business, and an experienced attorney can help guide you through the process.
Under Illinois law, there is a cause of action that exists which allows a plaintiff to bring a lawsuit to recover for losses in situations where there was no contractual agreement between the parties: unjust enrichment.
Similar to a breach of contract claim, a claim for unjust enrichment seeks to restore a plaintiff for the losses that were incurred as a result of the defendant’s unjust retention of plaintiff’s property and/or money. For example, if you paid someone for goods or services that were never delivered, or you turned valuable property over to another person with the understanding it would be used for a certain purpose or you would be paid.
Oftentimes, parties who execute transactions of substantial value without the consult of an attorney may think they are forming a valid contract, but a court of law may determine otherwise. Pleading a second count for unjust enrichment may protect a plaintiff from this decision by a court.
Welcome to the first issue of the SRM newsletter. In this issue we will provide some background information on the firm, as well as some basic legal information in the practice areas in which we work.
Our main practice areas are focused primarily on intellectual property, corporate law, real estate, and civil and personal injury litigation. We have helped numerous clients with everything from starting a business to patenting an invention.
We offer initial consultations on legal matters at no charge, and due to our small size, we are able to be flexible on billing options depending on the nature of the work and to better serve our clients.
Prior to starting the firm, Adnan Shams graduated from DePaul University with a Bachelor of Arts in Computer Science and went on to graduate from DePaul University College of Law. In addition to being a licensed Illinois attorney, Adnan is also a registered patent attorney with the United States Patent and Trademark Office.
Prior to starting the firm, Adam Rodriguez graduated from Bucknell University with a Bachelor of Arts degree in Literature and went on to graduate from the University of Iowa College of Law.
Prior to starting the firm, Jennifer Mozwecz graduated from the University of Illinois Urbana-Champaign with a Bachelor of Science in Computer Engineering and went on to graduate from DePaul University College of Law. In addition to being a licensed Illinois attorney, Jennifer is also a registered patent attorney with the United States Patent and Trademark Office.
The firm’s office is located in downtown Chicago, Illinois at the intersection of Wabash Avenue and Wacker Drive. However, we have represented clients across the country and have litigated cases in Cook County and its surrounding counties including but not limited to DuPage, Will, and McHenry Counties.
On behalf of the firm, we appreciate the opportunity to represent and advise you in your legal needs. Please enjoy our first newsletter and feel free to contact us with any questions or for further information on representation.