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Small Business Advertisement Regulations

What is the FTC?

The FTC (Federal Trade Commission) is the United States highest form of business regulation. The primary focus of the FTC is to protect consumers first and foremost, as well as maintain competition and try to prevent monopolies. The FTC focuses on both large corporations as well as small businesses.

How does it regulate businesses?

When focusing on small businesses, the FTC heavily relies on determining if an advertisement is deceptive. Something is deceptive if it is something that can specifically mislead a consumer that is acting reasonably. Another large factor is if the deceptive claims are material, meaning it is important to a consumer’s decision to buy or use a product.

An ad is proven to be deceptive by the FTC in multiple ways. They first consider the advertisement in all its context, and how said advertisement would be interpreted by a consumer. The FTC also looks at express claims, which is claims made directly in the ad, such as that a product can help cure something. An implied claim is one that is made indirectly or alluded to, such as saying a product can aid in the healing of what is causing the pain. Both express and implied claims must have proof before running the advertisement.

When the FTC is looking into claims, there are certain things that a business must provide in defense of their ads. One of these is having a reasonable basis for a claim that is objective evidence. If an ad claims something such as “2 out of 3 doctors confirm this”, then there must be evidence of that to back it up. If the claim is nonspecific, the FTC generally will look towards experts to support the claim. One thing that cannot be used as a basis is customer support for the product and their approval of its uses.

While the FTC is the top form of regulation that must be adhered to, there are other regulatory forces that must be adhered to with small businesses. This includes closely following state statutes as well as local ones that may affect your business or that of your competitors. The Better Business Bureau is often very reliable and resourceful in terms of local business disputes. The FTC often makes attempts to fight any fraudulent claims that try to prey on entrepreneurs.

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Trademark vs Service Mark Which One Should I Use?

When starting a business, it can be confusing whether something should be marked with a trademark or a service mark. Both trademarks and service marks offer legal protection, if handled correctly.

Trademarks are used to protect companies that are involved with the creation of products. Companies that create goods would want to use a trademark to legally protect their logos or other images attached to their goods.

Service marks protect companies that provide services. Companies that provide services would want to use a service mark to legally protect the images and logos attached to to their services.

When applying for trade or service marks, it is important to submit the logo in the exact form you plan to use it in. Legal protections only extend to the exact image or logo registered as a trade or service mark.

Before filing for a trade or service mark on USPTO, it is important to investigate other companies. Make sure the content you are filing a trade or service mark for differs from the logos of other companies. Logos that are too similar to trademarked property belonging to other companies will most likely get rejected (research can be done on both a state and federal level).
There are three commonly used trademark symbols: (™), (SM), and the letter ®  in a circle. Companies that want to avoid the fees attached to applying for a trade or service mark can put the ™ or (SM) symbol in their logo until they are able to apply for a legal trade or service mark. The protections attached to the trademark and service mark symbols are limited, but limited protections are better than nothing. If another company has a legally trademarked logo that is similar to a unmarked logo or a logo with the trade or service mark symbol, the limited protections do not apply. If you do register your trademark you would use the ® to receive the full protections for the trademark.

To learn more about Trademarks and Service Marks please check back later this week on LawDecoder.com to see the release of our newest product.

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Longer Lines, Coming to an Airport Near You

If you think the lines at airport baggage checks are unbearably long, I have some bad news for you. TSA announced stronger security measures that require domestic US travelers to separate all electronics larger than a cell phone in bins for X-ray screening. This excludes TSA Pre-Check lanes. So far, TSA has implemented the rule in only 10 airports, but is planning on expanding it to the rest of America in the following months.

The announcement of this new program should not come as a surprise. Just last March, former Homeland Security Secretary John Kelly, and current White House Chief of Staff, implemented a new set of security measures for US-bound travelers from 10 airports in the Middle East and North Africa. Airlines from these airports have been barred from allowing passengers to bring their laptops and any other large electronic devices into the cabin. While this “laptop ban” has caused the 325,000 passengers a day who arrive in the US major some major headaches, Secretary Kelly is convinced that “it is time that we raise the global baseline of aviation security. We cannot play aviation whack-a-mole with each new threat.”

These new security measurements for US-bound travelers from overseas may also include an increase in K-9 units, greater security presence, or the use of new electronic monitoring devices. Unfortunately the Department of Homeland Security (DHS) has not been specific with what these new security measures are; their favorite term is “enhanced screening,” which could not be more vague. The goal is to establish a global standard, but according to a senior DHS official, the security changes will vary from airport to airport, and it will be the responsibility of the airlines to specify what the rules are to travelers.

The DHS has remained unclear about the state of security for inbound flights, as well as the future of airport security in the United States. As of right now, people will have to get used to longer TSA checks for domestic flights; the number of items that we will have to unpack then pack has increased. But what about flights that leave the United States? Will people on outbound flights be able to bring laptops and any other large electronic devices with them into the flight cabin?

While the specifics are unclear, there is no doubt that whatever DHS decides will be the official security plan, millions of domestic and international travelers will be affected. But for now, do unto your fellow domestic travelers as you would have them do unto you: keep your large electronics together so that you can quickly get through security. Don’t waste time. Otherwise, the already infamous American airport is on track to becoming an even more hellish place.

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courthouse painting lawdecoder

How to Become a Lawyer for Only $6,000

John Marshall, the fourth Chief Justice of the Supreme Court of the United States, and Mike Ross, a leading character from USA’s hit legal show, Suits, are more alike than some may believe. Although Marshall has been dead for almost 200 years, and Ross is merely a fictional Hollywood creation, they share a unique, and very legitimate, path to the practice of law: lawyers are not required to attend law school.

Instead of securing a JD degree, aspiring lawyers in California, Virginia, Vermont, and Washington can serve for a practicing attorney and judge as an apprentice, take the bar exam, and become 100% eligible to practice law. How is that possible? This unconventional and largely unknown shortcut to the professional legal world has been around since colonial America. Shortly after Great Britain created the 13 colonies, lawyers were sent to North America from England, where these professionals gained expertise through an apprenticeship program called the Inns of Court. Most simply, this system allowed people to practice law if they just connected with a working lawyer for mentorship and training.

This process eventually evolved into another type of apprentice system in New York by the 1730s. All American lawyers had to not only finish a seven-year clerkship, but also pass a state-administered bar exam for full eligibility; students either enrolled in college to pass the exam or relied on self-study. While people found this combination of self-study for the bar exam and apprenticeship to be very rigorous, it took the next 140 years to change the system to what it is today.

The American Bar Association (ABA) was founded in 1878. This organization did not agree with the self-study aspect, and fought for a system that promoted a uniform code of ethics. They believed that in order to establish an impartial institution, national standards needed to exist. The ABA tirelessly campaigned the idea that every state should only allow law school students to take the bar exam.

The ABA was successful in most states, but California, Virginia, Vermont, and Washington slipped through the cracks. As a result, they are the only states that consider apprenticeships as the minimum requirement for taking the bar exam. The benefits of this shortcut are obvious: apprentices do not have to take out hundreds of thousands of dollars worth of loans to afford law school, nor do they have to spend years working a lucrative job to pay off their enormous debt. Additionally, apprenticeships are active-learning opportunities and allows people to see how law operates in the real world, not just learn in a classroom setting.

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*Top five law schools, according to U.S. News’ Best Law Schools Ranking 2017

There are some drawbacks too. The most prestigious law firms only recruit from top-tier schools, leaving those who took the apprenticeship route with a limited number of career choices. Partly due to the efforts of the ABA, modern society has turned into a degree-obsessed environment that no longer accepts the oldest path to practicing law. Even some of the states that allow apprenticeships to replace law schools, such as California, purposefully hide information about this alternative method, making it difficult to find out about apprenticeship programs. Christina Oatfield, an undergraduate from Berkeley, found out about an apprenticeship under California’s Law Office Study Program after she received her undergraduate degree. She said, “The state bar doesn’t advertise this program really well… There is info on their website, but you really have to search for it to find it.”

The number of people who have chosen apprenticeship over law school since 1996 to 2014 is 1,142. Within that small group, only 305 have passed the bar exam. When comparing the pass rates of apprentices and of those who attend ABA-approved law schools (71.1%), apprenticeships seems like a lot of work for a relatively small return. Bar exam pass rates for apprentices are usually pretty low, as they range from 18% to 33%, but they are tied with the pass rates of those who attend non ABA-approved law schools (26.7%) and are not too far behind those of students from law schools outside the US (34.6%). These stats show that a classic law education never guarantees a successful bar exam!

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Law school is not for everyone. Some need a traditional classroom setting and structure, while others prefer hands-on work experience to learn the skills they need in the real world. While the practice of law is not entirely accepting of this unconventional path to taking the bar exam, it must be comforting to know that there is a cheaper and more vocational route for the John Marshalls and Mike Rosses in this world.

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The Problem with E-Signatures

Throughout elementary school, I remember I had ten different versions of my signature. Some were decorated with smiley faces, others had giant swirls at the end of each letter, and the remaining versions just had a single letter with intricate circles surrounding it. All of them were terrible and overwhelmingly complicated, but each one I was able to claim as my own and share with restaurants and shops as a form of identification. It was also fun to dramatically scribble on a piece of paper.

I have since grown out of that phase and now only use one boring signature, mostly because I don’t have enough time to craft an intricate design whenever I need to sign along a dotted line. The rest of the world has also adopted the same attitude of rushing through things, especially now that society uses “e-signatures” to consent to an official document, whether that is a marriage license or a credit card receipt.

The concept of “digital signatures” was first introduced in 1869, when it became legally accepted to send signatures via telegraph. It wasn’t until the 1980s when the topic of copied signatures resurfaced; during the rise of the fax machine, courts declared faxed signed documents to be valid. Finally in the year 2000, President Bill Clinton signed into law the Electronic Signatures in Global and National Commerce Act (also known as the E-Sign Act). This law “… allows the use of electronic records to satisfy any statute, regulation, or rule of law requiring that such information be provided in writing, if the consumer has affirmatively consented to such use and has not withdrawn such consent.” In other words, electronic signatures are legally binding.

The E-Sign Act prompted many programs to come up with their own e-signature features, such as DocuSign and CoSign. Thanks to these tools, companies can save millions of dollars because people no longer have to spend money on FedEx deliveries and printing supplies to ship a document and have it signed. All they have to do is send an email. E-signatures also save time!

The rules governing electronic signatures vary from country to country; one type of document that accepts electronic signature in one country may not be the case for another. In the United States, “the E-Sign Act and most state laws exclude real property transfers, wills and some legally required notices to consumers.” On the other hand, the EU has two different types of electronic signatures. One is for basic transactions (which cannot be denied legal effect solely based on their electronic form) and the other is for more advanced agreements (these electronic signatures include unique identification measures to make sure the signer is the correct individual and to validate the certificate).

The convenience of electronic signatures in the United States also comes at a price, of course. If official documents that are not handled through e-signature vendors like DocuSign and CoSign, can be signed digitally, and therefore, remotely, how can people verify that the right people signed the documents? In the Adams v. Superior Court of Orange County (2010) court case, Lynn Adams applied to work for Quicksilver and was told that she had to pass an online background check in order to complete her hiring process. When she received a link from a Quicksilver employee to the online background check form, she found that her name was filled out next to the statement, “By typing my name, I fully understand the above Notice and Authorization.” Adams testified that she did not sign the document, and the people who had access to the link were the ones who had done it. The court found that there wasn’t enough proof to say that Adams signed the document, and sided in Adams’s favor.

Adams won the case, but the decision fails to address some of the concerns the case raised. What happens to contracts and documents that are being signed without the intended signer’s’ knowledge? If a random person can potentially sign any document for anyone, are those documents no longer valid? And if an electronic signature does not necessarily belong to any one person, what will stop people from pulling out from an agreement they no longer want to be a part of by dishonestly arguing that they did not sign the document in the first place?

While people are more efficient by using electronic signatures, there are risks that may cost companies and individuals even more time and money than they are saving. DocuSign and other e-signature vendors that provide extra security are solutions to this problem, but they are not enough. Without any universal measure for authentication, our signature no longer belongs to us alone, but rather to everyone who knows our name. Until the US adopts a more secure option, like the EU’s authentication requirements for advanced agreements, e-signatures will never be the ideal option.