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Boston, Massachusetts 02108-3002

Phone: (617) 720-2444
Fax: (617) 720-3693

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Hall and Oates Say “No Can Do” To Use of “Haulin’ Oats” For Granola

Friday, March 06, 2015

By Thomas E. Kenney

Enjoying a rather modest return to the spotlight after spending years in the “where are they now” category, aging pop/soul duo Daryl Hall and John Oates is back to doing what famous people do – suing others.  On Wednesday, Hall and Oates’ partnership, Whole Oats Enterprises, sued a Brooklyn based company, Early Bird Foods & Co., LLC, for trademark infringement based on Early Bird’s use of the name “Haulin’ Oats” in connection with the sale of granola.

While at first blush the lawsuit appears to be another example of a celebrity’s over-inflated ego getting the best of sound legal reasoning – similar to Chubby Checker’s preposterous lawsuit against HP and Palm over the “Chubby Checker” anatomical measuring app. – there is a twist (no pun intended) to the Hall and Oates lawsuit that may add some teeth to the case.

Another party, a woman in Tennessee named Tracey S. Levine, has been using the mark “Haulin’ Oats” since 2012 in connection with the sale and delivery of oatmeal.  Ms. Levine was granted a U.S. Trademark registration for the mark in June of 2013.  In February of 2015, after Early Bird declined Whole Oats’ demand that it cease use of the “Haulin’Oats” name, Whole Oats wisely entered into an agreement with Ms. Levine by which Ms. Levine assigned her “Haulin’ Oats” trademark to Whole Oats, and agreed to pay a royalty to Whole Oats for her continued sale of oatmeal under that mark.  It is not clear whether this arrangement has made Ms. Levine a “Rich Girl.”

Thus, while Whole Oats’ assertion that Early Bird’s use of “Haulin’ Oats” in connection with the sale of granola infringes the DARYL HALL JOHN OATES and HALL & OATES trademarks is spurious at best, Whole Oats does have what appears to be a viable claim that Early Bird is infringing the “Haulin’ Oats” trademark for oatmeal – now owned by Whole Oats.  Assuming the assignment is valid, Whole Oats has a legitimate shot at prevailing in this litigation on that basis.

The moral of this story? Fame fades, but trademark rights don’t have to.  The lawyers at Pierce & Mandell have many years of experience protecting and enforcing trademark rights, and have the skills necessary to help you develop a strategy for maximizing the value of your brand.

Pierce & Mandell Prevails in Federal Trademark Infringement Case - Boston

Wednesday, March 26, 2014

By: Scott M. Zanolli

Pierce & Mandell, P.C. recently obtained a dismissal of a Massachusetts federal court trademark infringement case filed against Pierce & Mandell’s out-of-state client. The complaint alleged that CableSouth of Tennessee used plaintiff Media3 Technologies’ trademark on its website in violation of federal, state, and common-law. CableSouth, a cable and internet provider operating in a limited number of southern states, maintained a website viewable to the public at large that included the alleged use of Media3’s protected mark. However, CableSouth’s website was limited in its interactive capacity, the company did not target Massachusetts customers in any fashion, and CableSouth generally lacked any contact with the Commonwealth of Massachusetts.

Attorneys Robert Pierce, Thomas Kenney, and Scott Zanolli argued that because the website did not target Massachusetts customers, the United States District Court for the District of Massachusetts lacked personal jurisdiction over CableSouth. The Court agreed with the argument and dismissed the case. In its opinion, the Court stated that the operation of a website located outside of the state and viewable by residents of every state is, by itself, insufficient to evidence the contact with Massachusetts necessary to subject the operator of the site to personal jurisdiction here.

Storm-Related Business Loss - What to do When Your Insurer Denies Your Claim, Boston, MA

Thursday, March 14, 2013
By: Dennis M. Lindgren

In an attempt to insulate themselves from the vagaries of unpredictable weather, companies typically (and wisely) carry various types of insurance, including but not limited to, polices to protect against property/building damage, inventory damage, equipment/vehicle damage,  and business interruption. Nevertheless, the best laid plans of even the most prudent company can easily be thwarted by adjusters and carriers that deny claims that pursuant to the terms of the policy, should have been allowed (at least in part).
If your company has incurred damages, and had to pay remediation and repair costs as the result of a severe weather event, or severe weather has caused damages which have resulted in the  interruption of the regular operations of your business, the denial of the business insurance claim can be almost as destructive  as the underlying damage itself.  When this happens, it is important to remember that your insurer does not get the last word on whether a loss is ultimately covered or not.  Your insurance policy is nothing more or less than a contract, and like any contract, its interpretation is a question of law that can be challenged before, and ultimately decided by, a Court of law.  In Massachusetts, Courts often take a pro-insured view of coverage, and in light of M.G.L. 93A (commonly referred to as "the Consumer Protection Act"), insurance carriers can be subject to awards of multiple damages and attorney's fees if they have engaged in unreasonable settlement practices.  In short, carriers can sometimes be persuaded (or forced) to reverse insurance decisions.   An initial consultation with experienced legal counsel is therefore often time and money well spent for an insured.

If you have questions regarding the material discussed above, please contact Dennis Lindgren at (617) 240-0208, or via email at dennis@piercemandell.com.

What is the Architectural Access Board and What Do I Do with its Subpoena?

Friday, February 22, 2013
By: Michael C. Fee

A little known but nonetheless powerful division of the Massachusetts Office of Public Safety is the Massachusetts Architectural Access Board (“AAB”) whose mission it is to enforce regulations designed to make public buildings accessible to, functional for, and safe for use by persons with disabilities.

The regulations, codified in the Code of Massachusetts Regulations as 521 CMR 1.0, were first enacted in 1975 and have been updated continuously ever since.  They constitute comprehensive guidance to property owners, contractors and municipal building inspectors regarding acceptable design and construction methods necessary to provide persons with disabilities full, free and safe use of all public buildings and facilities.  The regulations are recognized as a “specialized code” and are incorporated into the state building code.  They are enforceable by both local building inspectors as well as the AAB.

The AAB’s enabling legislation provides that there shall be no “construction, reconstruction, alteration or remodeling” of any public building except in conformity with its regulations, and the nine-member board meets regularly to hear complaints regarding alleged violations of the regulations, as well as requests for variances.

The procedure for complaints is governed by Mass. Gen. Laws, Chapter 30A, the Administrative Procedures Act.  The AAB has subpoena power and is authorized to issue orders to compel compliance with its regulations, after having given alleged violators notice and an opportunity to be heard.  Mass. Gen. Laws, Chapter 22, § 13A further authorizes the AAB to levy sanctions of up to $1,000.00 per day for continued, willful noncompliance with the board’s orders.

The AAB is also empowered to entertain petitions for variance, and it will grant waivers from strict compliance with the regulations when it would not be technologically unfeasible, or would result in unreasonable cost without a meaningful and commensurate benefit to handicapped individuals.

Our Land Use and Zoning team can provide useful guidance for businesses and individuals seeking to comply with, or obtain waivers from, the regulations of the Architectural Access Board.

The League Championship of Branding

Friday, February 01, 2013
By Thomas E. Kenney

Sunday, of course, is the “Big Game”, or perhaps you prefer the “Professional Football Championship”.  I will not use the term “Super B---“ – I do not want to receive a nasty letter from the NFL’s trademark law firm.  That name is reserved for the use of the league and its “corporate partners”.

Putting aside the legality of the NFL’s “take-no-prisoners” approach to enforcing its trademark rights (Fair Use Doctrine anyone?) lies an important message about the power of brand and branding.  Despite popular misconceptions, the NFL is not really about football – or at least not about football as you and I understand the term.  The NFL is not about tackling or touchdowns, blocking or blitzes.  It is ultimately about one thing and one thing only – delivering viewers for the advertisers that pay the millions that drive the sport.  The competition on the field is merely a vehicle for getting eyeballs in front of tvs every Sunday.  

Sunday’s game, and the seemingly endless pre-game and post-game festivities, represents the league’s grand stage.  Advertisers pay millions per minute to hock their wares to the largest television audience of the year; most of the viewers care not who wins the game and many cannot name a single player on either team.  In fact, on Sunday there will not be a game as much as an event.  The biggest entertainers in the world perform as Americans celebrate from cost-to-coast with chicken wings, nachos and beer.  Many have called on this Sunday to be declared a national holiday so everyone can participate in the party.

And there lies the secret genius of the NFL.  Sunday’s game/event will be huge success – whether the game itself is competitive or decided by halftime.  The advertisements have been sold, the record viewership all but guaranteed, the league’s coffers once again bursting at the seams.  Don’t let the scoreboard fool you – the real winner on Sunday will be the NFL; thanks more to its relentless protection of its brand than anything that happens on the field.  

If you are interested in maximizing the value and power of your brand, please contact the Intellectual Property Law team at Pierce & Mandell. We work with our business clients to develop, screen, protect and enforce their intellectual property rights.

Annual Certification of Taxable Exemptions - Changes in the Process

Wednesday, January 16, 2013
By: Kate Auerbach

The Annual List of Corporations Subject to Taxation in Massachusetts (the “List”) is used to determine which entities or corporations are entitled to certain types of local property tax exemptions.  In the past, any entity seeking to be included on the List had to file a one time application and, once granted, the classification and tax exemptions remained in place indefinitely unless revoked.   However, the recently enacted directive 12-5, New Massachusetts Requirements for Manufacturing Corporations to Obtain Local Property Tax Exemptions on Machinery, alters the process.

All personal property owned by Massachusetts and non-Massachusetts residents and business located in Massachusetts is taxable unless specifically exempted by law.  There are numerous exemptions depending on the ownership entity or use of the property.  All corporations are specifically exempt from tax for all personal property that is not machinery or a network of poles, underground conduits, wires and pipes.  Thereafter, corporations are generally classified into three categories, each with a different set of specific exemptions for all or certain categories of machinery.

First, corporations classified as manufacturing are not taxable on any machinery. The corporation must appear as a designated manufacturing corporation on the list to receive the exemption.  Additional exemptions may be available for research and development corporations in communities that adopt the local option enabled G.L. c. 59, §5, cl. 16(3). A classified R&D corporation is entitled to the same exemptions as a classified manufacturing corporation, but only in the communities that have accepted the local option.

Second, utility, insurance, and financial institution corporations are are taxable only on machinery used in manufacture or supply and distribution of water.  Utility, insurance and financial institution corporations are exempt from taxation on all other machinery.

Business corporations, the third category, are taxable on machinery, except that machinery that is the corporation's stock in trade, or is directly used in laundering and dry cleaning, refrigeration of goods and air-conditioning of premises, or a selling, purchasing, accounting or administrative function, is exempt.  

A corporation formed solely to obtain a property tax benefit, that is not in business to earn a profit utilizing the labor of employees, is not entitled to the business corporation exemptions.  Conversely, a partnership, association, trust, limited liability company or other legal entity that is not incorporated, but is treated as a corporation for federal income tax purposes, either under federal default rules or by election, is treated as a business corporation for purposes of local property taxation and exemption, with the exception of an unincorporated homeowners association, utility, financial institution or insurance company.

With the emergence of Directive 12-5, now, an annual certification will be required through the Department of Revenue website, instead of the one-time filing.  Effective January 1, 2013, any entity seeking to be included on the List must file an Annual Certification of Entity Tax Status through the Webfile for Business website by April 1st of the calendar year for which the inclusion on the List is sought.  A failure to electronically file the certification by April 1st may result in the entity not appearing on the List, and consequently, the entity may lose the local property tax benefits entitled to entities that are properly included on the List.

Any entity that is treated as a disregarded entity or a partnership or is otherwise not treated as a corporation for federal income tax purposes (other than a QStub) is not entitled to appear on the List, and is not entitled to tax exemptions afforded to corporations under G.L. c. 59, §5, cl. 16 (2 & 3).  Further, any such entity that previously appeared on the List will be removed.   Entities that are treated as corporations for federal income tax purposes may file and be included on the List.

The business lawyers at Pierce & Mandell  can assist large and small businesses in navigating the new regulations. Contact us.

Buyer Beware: Specific Promises May Trump Conflicting Boilerplate Exclusions

Tuesday, December 18, 2012

In practice sale documents one thing is certain: precision matters.  In a recent case, In re Quincy Medical Center, Inc.1, the Massachusetts Bankruptcy Court rejected a boilerplate provision in an Asset Purchase Agreement (“APA”) explicitly denying rights to third party beneficiaries in favor of a more precise, albeit conflicting, provision bestowing benefits upon a third party class.

This case involved the sale of corporate assets by Quincy Medical Center, Inc. (“Quincy Medical Center”) to Steward Family Hospital, Inc. (“Steward”), and the issue litigated was whether physician leadership, employed by Quincy Medical Center at the time that the transaction closed, had rights under the APA despite a boilerplate clause specifically denying third party rights.  The physicians alleged that they were beneficiaries of the APA and entitled to continued employment with Steward after the closing, or severance pay enumerated under and agreed to in the APA.  A provision reflecting an agreement to provide for continued employment for certain other Quincy Medical Center employees was present in the APA and mutually agreed upon by the parties.  Steward asserted, however, that the litigating physicians had no rights under the APA and no standing to sue or seek compensation due to the general provision denying third party rights under the agreement.   

When negotiating a deal, great amounts of time are invested in fine tuning the term sheet and negotiating the detailed provisions that comprise the APA and various other documents.  Once the substance is complete, a “Miscellaneous” section is tacked often constitutes rote afterthought.  It usually contains common and customary boilerplate provisions, some of which are critically important, and others not.  For example, while gender, number and caption provisions often find their home in the Miscellaneous section, so do provisions governing successors and assigns, limitations on covenants, and exclusion of third party beneficiaries.  It is this last provision that was obviated in the In re Quincy Medical Center, Inc., case in light of a more specific, conflicting provision benefiting a third party class.

In what appears to be a matter of first impression in Massachusetts, the Central Division of the United States Bankruptcy Court in Massachusetts held that a more specific clause conferring rights upon a third party beneficiary class trumps a more general clause explicitly excluding rights derived from the contract for third party beneficiaries.  In arriving at this conclusion, the court relied upon the well-established tenet of contract interpretation that “the more specific clause prevails over the more general one.” In re Quincy, 479 B.R. at 233, citing Lawson v. F.D.I.C., 3 F.3d 11, 17 (1st Cir. 1993); Lembo v. Waters, 1 Mass. App. Ct. 227, 233 (1973). 

The provisions in conflict were housed in the APA entered into by Quincy Medical Center and Steward, and included (1) the more specific provision stating that “[U]pon Purchaser’s termination of the employment or engagement of any employees or consultants of [Quincy Medical Center] at or following the [c]losing, [Steward] shall be liable to any such persons for severance or retention pay or any other payments otherwise due them as employees or consultants for [Steward][.]”; and (2) a more general provision containing “a standard no-third-party-beneficiaries clause.” In re Quincy, 479 B.R. at 232-233.

In reasoning that the more specific provision defeated the general one, the court relied on an Ohio case addressing a similar issue of law and an analogous fact pattern.  Specifically, in Lapping v. HM Health Services, Inc., 2005 WL 407588 (Ohio App. 11 Dist. Feb 18, 2005), the court reasoned that a third party physician who maintained privileges with the selling hospital was an intended beneficiary of an APA between the hospital and the purchasing health system.  In that APA, the purchaser represented and warranted that physicians with current privileges at the hospital who applied for privileges with the purchaser would be granted the same clinical privileges that they held with seller prior to the closing of the transaction.  The Ohio Court reasoned that the parties intended to create third party rights for a certain class of physicians and, consequently, that intent trumped the exclusion of rights for third party beneficiaries. 

It is important to note that the APA at issue in Lapping contained critical exception language for the third-party exclusion (“[e]xcept as otherwise expressly provided herein”), which bolstered the court’s finding.  The In re Quincy Medical Center, Inc., decision equates to an expansion of the holding in Lapping and signals a warning to transacting parties, buyers in particular, to beware of conflicting specific provisions and general boilerplate provisions in transactional documents.  Relying on In re Quincy Medical Center, Inc., the courts are likely to hold the more specific provisions prevail over the more general provisions.    

1In re Quincy Med. Ctr., Inc., 479 B.R. 229 (Bankr. D. Mass. 2012).

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