3 Legit Ways to Shield Your Kids From Tax Burdens

By: Jeanie Ahn

In light of recent New York Times reports on President Trump and his family’s alleged attempts to dodge millions in taxes, we here at Yahoo Finance thought: what are some legitimate money moves average people can make to help their kids?

Get ahead of tuition costs

Let’s face it: most Americans aren’t rolling in enough money to be worrying about the best way to pass on hundreds of millions to their children. But if you want to pass on a meaningful financial legacy to your heirs, and you’re not in debt and saving enough for your own retirement, one way to make sure your kids can get ahead is to invest as much as you can into a 529 college savings account.

The beauty of a 529 is that in many states, the contributions you make into a 529 is tax deductible. And anyone, including family and friends, can contribute to it. Not only that, the tax law expanded this year to allow families to tap into their 529 plans (up to $10,000) for enrollment and expenses in elementary through high school, and either public or private school.

Right now our country has a $1.5 trillion student debt problem that isn’t getting better anytime soon as college costs for millennials are 300% times more than their parents paid. Sadly, according to college cost calculators that factor in a 5% annual tuition increase, by the time my 3-year-old daughter goes to college, the average cost for a private college education will be close to $100,000 a year.

Kickstart your child’s retirement savings

According to the Times report, Fred Trump hired his son Donald as a salaried employee to “sidestep gift and inheritance taxes” – but there are other legal tax strategies to benefit from if you’re a parent who owns a business and you’re able to hire your kids. One easy tax-saving investment strategy? Kickstart your child’s retirement savings by opening up a minor-Roth IRA, also known as a custodial Roth IRA.

As long as your child has earned income, you or your child can contribute as much as she has earned to her Roth IRA (up to $5,500 a year) and the earnings grow tax-free. The biggest advantage here is that the funds have so much time to grow, thanks to the power of compound interest. Let’s say you put in $1,000 a year; by the time your child is 65, she’ll have over $2 million saved for retirement. Not a bad idea considering the challenges facing Social Security. And as the parent, you’re in full control of the account until she’s 18 or 21, depending on your state.

“It can eliminate Social Security as a necessity,” says Chris Carosa, author of “From Cradle to Retirement: The Child IRA.” Carosa says setting up your child with an IRA is a good way to teach your kids how beneficial it is to save and invest, and build momentum for them to want to be financially savvy throughout their lifetime.

Another perk to the Roth? Your child can use the funds for more than just retirement. Before age 59½, as long as the account has been funded for five years, they can withdraw up to $10,000 in earnings toward their education or their first home, without paying a tax or penalty.

Gift from the grave

Unless you’re a multimillionaire, most families won’t have to worry about the $11.2 million estate and gift tax limit. Instead, most American families are focused on reducing the income tax burden as they pass on any assets like real estate, says George Metcalfe Jr., an estate-planning attorney at Richman Greer.

So if you own property and want to gift it to your child, you’ll want to wait until you die. This legal tax loophole called “step up in basis” significantly reduces the income tax the beneficiary would have to pay. For example, say you want to gift your child a piece of property that you bought for $100,000 but is now worth $500,000.

If you gift it to your child while you’re alive, he or she will have to pay capital gains taxes on the amount that appreciated from the original cost basis. But when you die, the current tax law states that any stocks, real estate, or other assets you leave to your heirs upon your death will pass on with the fair-market value on the date your beneficiaries inherit the assets. On that half-a-million dollar property, your child won’t have to worry about being taxed on the capital gains, unless income is being generated from that property, says Metcalfe.

Contributing Attorneys

Metcalfe Jr., George L. – Associate

UNITED STATES: Trademark Trial and Appeal Board Cancels Trademark on Scant Evidence of Prior Use

(Originally published in the International Trademark Association – INTABulletin Vol. 73 No. 16)

Contributor: Mark A. Romance
Verifier: Linda Yan Yang

In a precedential decision issued on May 15, 2018, in Kemi Organics, LLC v. Rakesh Gupta (Cancellation No. 92065613), the U.S. Trademark Trial and Appeal Board (the Board) canceled the respondent’s trademark registration holding that the petitioner proved prior use even in the absence of documentary evidence.

The petitioner, Kemi Organics, LLC (Kemi), filed an action to cancel a registration issued to the respondent for the mark KEMI OYL for cosmetics and other uses in International Class 3. The parties stipulated to resolve the case using the summary judgment model of the Board’s Accelerated Case Resolution Procedures and that the evidence would be presented by affidavit and exhibits thereto. They also agreed for purposes of the case that there would be a likelihood of confusion between the parties’ marks. Thus, the main issue to be resolved would be whether the petitioner proved use of its mark in the United States prior to the respondent’s use of his mark.

The petitioner’s evidence included affidavits of its president, its lawyer, and two distributors of hair and skin care products. Documentary evidence included only two magazine advertisements from 1996 and one from 1999 showing a KEMI OYL product, a copy of an image of the KEMI OYL label found using a Google search, canceled trademark registrations, and an abandoned application for a trademark registration.

The Board held that the canceled registrations were evidence that the registrations were issued but were not evidence of “use” of the marks. Similarly, the Board held that the advertisements showed only that products bearing the KEMI OYL marks were being advertised; they did not show “use” of the mark, and the product label did not show use prior to the respondent’s use of the mark. Thus, according to the Board, the documentary evidence did not support evidence of prior use, leaving only the uncorroborated affidavits of Kemi’s resident and distributors as evidence of prior use.

However, the Board held that although the evidence was “sparse,” in considering evidence of prior use, the Board had to “look at the evidence as a whole, as if each piece of evidence were part of a puzzle which, when fitted together, establishes prior use.” Quoting West Fla. Seafood Inc. v. Jet Rests. Inc., 31 F.3d 1122 (Fed. Cir. 1994). Holding that the president’s affidavit was “far from being a model of clarity or completeness,” and “not accompanied by the type or quantity of documentary evidence that one would expect to be readily available to show the use of the mark,” his testimony was not contradicted, and the record provided no basis to disregard or discount his testimony. Further, the Board held that the third-party distributor witnesses corroborated the president’s testimony on prior use. In the absence of any contrary testimony, fruits of discovery or documentary evidence establishing non-use of the KEMI Oyl mark, the petitioner’s evidence of prior use was unrebutted.

The respondent also argued that the petitioner’s evidence failed to show “continuous” use of the mark. However, the Board held that continuous use is not required. Rather, Section 2(d) of the Trademark Act, 15 U.S.C. Section 1052(d), which authorizes the Board to cancel a registered mark, limits the analysis to whether the mark was “previously used” not “continuously” used.

This decision shows that testimony of prior use can be sufficient to support cancellation even in the absence of documentary support for the testimony.

Although every effort has been made to verify the accuracy of items in the INTA Bulletin, readers are urged to check independently on matters of specific concern or interest. Law & Practice updates are published without comment from INTA except where it has taken an official position.

Contributing Attorneys

Romance, Mark A. – Shareholder

Guide for Young Lawyers Going to Trail in Civil Cases

You just received the order advising that your first civil trial will take place in a few months.   Settlement in the case is impossible and this one is really going to trial.  While the idea of going to trial seemed exciting and glamorous before, now that it is really going to happen, the fantasy quickly fades and reality sets in.  Never fear, you can do a great job for your client as long as you work hard, stay organized and prepare.

Review Trial Techniques.  There are many traditional “textbooks” that include generic tips for trial preparation and can refresh your memory from law school on fundamental trial techniques such as developing themes, opening statement, witness examination and closing argument.  Winning at Trial by D. Shane Read and Fundamentals of Trial Techniques by Thomas A. Mauet cover virtually all the technique and strategy issues you will need in an easy to read format.  Take the time to read at least one trial technique book.

In addition to sharpening your techniques, here are some additional tips to help you get organized and prepare your case for trial.

Get Organized.  Make a list of tasks to be done before trial to help you stay organized.   Your list should include major things like court deadlines, a list of additional motions to be filed, witness outlines, and jury instructions, among others. You can use your trial order to guide you.  But you should also include practical items that will make trial easier such as creating a list of supplies you will need during trial, scheduling lunch ahead of time and having courier services available. Identify the team member assigned to each task, include deadlines and review the list regularly to make sure nothing is forgotten.

Double Check Everything.  In federal court, and in many state courts, the parties have certain disclosure requirements, and there are consequences for failing to meet them.  You should double check that you have met your obligations to disclose witnesses and trial exhibits.  In federal court, parties have a continuing obligation to update their Rule 26 Initial Disclosures and discovery responses.  Review your client’s written discovery responses once discovery is finalized, and update them if necessary.  Check your disclosures to make sure that all documents you intend to use at trial and all trial witnesses have been disclosed.  Many courts will exclude exhibits or witnesses not properly and timely disclosed.

Communicate with your client and your witnesses.  After you outline your trial preparation game plan, make sure you speak with your client to discuss what to expect at trial.  Topics should include when and where the trial will take place, and what you will need from the client before and at trial.  Determine who your client representative will be at trial, and speak with that person about what to expect.  Likewise, let your witnesses know about the timing and location of trial, when they can be expected to testify, and schedule times to meet with them to help prepare them for their testimony.  For witnesses who will not voluntarily appear to testify at trial, make sure you have your subpoenas properly issued and timely served.

Visit the courtroom. Visit the courtroom to identify practical or technical issues, and to get comfortable with the size and layout of the room.  Some courtrooms have the latest technology, while others have none.  Make sure that the equipment you intend to use is compatible with the court’s system, and importantly, make sure you know how to use the technology available and have addressed any other practical issues.   Determine whether permission is required to bring equipment into the courtroom, as most federal courts require an order to be entered before trial.  You will also want to determine which counsel table is yours for trial and ensure that you have enough space for your team, equipment and documents.  If possible, introduce yourself to the court staff and court reporter.  The court staff members are an essential [the word “critical” appears already in several places] part of the trial process, and you should get to know them and allow them to know you.  There may be points in time when they can provide critical help or avoid embarrassment.  Most court personnel will know the judge’s preferences and procedures and provide valuable insight into your courtroom.

Talk to other attorneys. Find lawyers who have conducted trials before your judge and ask them what you need to know about your judge’s preferences.  This information can be invaluable to help you avoid pitfalls and allow you to impress the judge with your knowledge of the process.

Master the facts.  Re-read all depositions, pleadings and, exhibits. [The cases and rulings are addressed in the “law” section below] There is no substitute for mastering the facts.  Keep in mind that the complaint and answer establish the burden of proof at trial.  You need to master the allegations and know what evidence supports those allegations to know how the case will be proven at trial.

Master the procedure.  Read the rules of civil procedure and the court’s local rules and standing orders pertaining to trial and know them inside and out.  Identify any potential issues and conduct research needed to interpret the procedural issues.  Where necessary, prepare a trial brief to hand to the judge if the issue arises during trial.  Take a copy of the rules to trial and have it handy.

Anticipate evidentiary Issues.  You should master the rules of evidence before trial.  Read the rules again so they are fresh.  Anticipate objections and be prepared to address them.  Motions in limine can address significant evidentiary issues, but sometimes you may not want to alert your opponent in advance that you have a concern. If the issue is significant, prepare a short memo in advance of trial that you can use as a roadmap for your oral argument when the issue arises during trial.  This trial brief should include legal citations and be presented to the judge during argument on the issue.

Jury instructions – Master the substantive law.  It takes significant time and strategy to prepare jury instructions (or proposed findings of fact and conclusions of law in non-jury cases).  Become a master of the law and prepare jury instructions or proposed findings of fact and conclusions of law well in advance of trial in order to clarify [you use the same phrase below] what you have to prove at trial.  While the deadlines to submit jury instructions may be on the eve of trial, do not wait until the last minute.  Instead, prepare the instructions early and use them as a guide for your trial preparation.

Anticipate appellate issues – know how to preserve error for appeal – In most jurisdictions, failure to raise an issue or an objection during trial constitutes a waiver of the issue on appeal.  You should familiarize yourself with the appellate law in your jurisdiction so that if an issue arises, you will know how to preserve it in the event of an appeal.  In significant cases, you may want to consider having the client hire an appellate attorney to sit with you during trial to guide you on preservation issues.  The most common appellate preservation issues arise during voir dire, exhibit admission, motions for directed verdict and challenges to expert witnesses. Usually you will need to object on the record and specifically ask for relief, such as a curative instruction, striking of testimony or even a mistrial, in order to preserve the error.  Look for a bar article in your jurisdiction to be your guide.

Prepare witness outlines, not questions.  Experienced lawyers often prepare outlines of areas of questions for witnesses rather than a series of prepared questions.  Remember, you are telling a story, which is most effectively presented through a conversation with your witnesses.  Reading exact questions prevents you from presenting a conversational tone with your witness.  The same is true with cross-examination.  Your outline should identify the issues in reasonable detail, but allow you to be flexible and adjust your questions based on the witness’s answers.  There are certainly specific questions on direct that you must ask precisely to establish a fact, or to set up impeachment questions on cross-examination, but those are the exceptions and not the rule.

Prepare for impeachment. Be prepared to impeach adverse witnesses with their prior testimony.  Ideally, you will have a trial consultant available to quickly present a video clip to show the witness’s prior inconsistent testimony.  In the absence of the video clip option, be ready to confront the witness with the page and line from her prior testimony for a proper impeachment.

Use of Demonstrative Aids.  Judges and jurors expect a visual presentation, even in business cases.  Your demonstrative aids should be used during opening, with witness examinations and during closing, to tell your story in a visual way that supports your case.  Your presentation must be flawless though, as judges and jurors will not forgive technical glitches.  Know how to use the equipment, or have a consultant on your team to handle that part of the presentation.  You should rehearse your use of the equipment.  Ask the judge for permission to test your equipment in the courtroom for best preparation.

Prepare closing argument ahead of time.  Your closing argument should cite the evidence and law that supports your theme and the merits of your case.  Do not wait until trial begins to prepare your closing argument.  Prepare an outline before trial begins that cites exhibits and testimony you expect will be admitted at trial, and modify your closing during trial as the evidence evolves.  If you wait until you are at trial to prepare your closing it will look unprepared and patched together.  Plan ahead for a smooth and seamless closing by referring to the evidence you know will be admitted.  It is much easier to edit your closing during trial than it is to create it for the first time.

Watch and Listen.  Watch the jurors and judge’s facial expressions during trial, and listen to the message being sent by judge and jury.  Often-times a judge will ask questions or make rulings that indicate what she thinks is important and whether she wants to hear more from the party who may be winning the argument.  Listen to the questions and comments to gauge what is important to the judge and when she wants to hear from you.   Often the judge does not need (or want) to hear from the winner.  Be alert and try to read what the judge is really asking before deciding whether an argument or question is really necessary.

Learning from trial textbooks is critical to preparing for trial, but be practical in your approach and be prepared for the unexpected.  Ask for help from those who have been through trial.  There is no substitute for experience.

Mark A. Romance is a shareholder in Richman Greer, P.A. in Miami, Flo

Contributing Attorneys

Romance, Mark A. – Shareholder

Letter: Why Judicial Elections Matter

By Town-Crier Letters Editor

Living in a 24-hour news cycle can be exhausting. Especially so in an election year when we are inundated with ads for people who want to be our next senator, representative or governor. What often gets lost among the “noise” of those high-profile, partisan elections are the election of judges. Why should you be concerned with judicial elections? For a very simple reason: a judge may be the most important person you meet on one of the worst days of your life.

Your congressman can’t put you in jail, take away your children or order you to pay alimony. Neither can the governor. But think about the direct impact a judge can have on your life, or that of a friend or family member. A judge can decide during divorce how much you have to pay your former spouse and how often you get to see your children. During a criminal case, the judge makes sure your rights are protected, and if you are guilty, decides your sentence. In civil cases, the judge decides many of the merits of your case and instructs the jury on the law. In probate cases, a judge may decide how much you inherit or who gets your stuff when you die.

You owe it to yourself and your community to walk into the voting booth as an informed voter and cast an educated vote in the judicial races.

Because of limitations on judicial campaign communications, people know very little about the judges they elect. Judicial candidates cannot tell you what they think. They can’t tell you how they will rule on particular issues. They can’t say things like they are “tough on crime” or they “support law enforcement.” This is the likely reason that nearly 30 percent of those who cast ballots in the high-profile elections that appear at the top of the ballot fail to vote in the judicial contests, which usually appear at the bottom of the ballot. Judicial elections also take place during the August primaries, when there is historically lower turnout, so fewer people are voting when it comes to electing judges. This lower turnout magnifies the importance of each vote and demonstrates why it is critically important that you vote in the judicial races.

One good source of information is the Judicial Candidates’ Voluntary Self-Disclosure Statement located on the Florida Bar’s web site. You should review the candidates’ history of community service, disciplinary records and see where they rank in the judicial polls. Perhaps the best source of information about judicial candidates comes from the lawyers who appear before the incumbent judges or who practice with the lawyers seeking election. Reach out to your attorney friends and get their informed opinions on the candidates’ relevant experience and knowledge of the law, their temperament, and their ability to rule in a fair and impartial manner. These are the qualities that make a good judge.

It has been said that we get the government and the leaders that we deserve, not necessarily the best ones. This applies equally to our judges. Educate yourself before you enter the voting booth and make sure to cast a ballot that ensures we elect the people most qualified to serve as judges.

Michael J. Napoleone, Wellington

Contributing Attorneys

Napoleone, Michael J. – Shareholder

Plaintiff’s Testimony Too Incredible to Defeat Summary Judgment

By Amy Mattson

A court may make credibility determinations on a summary judgment motion where the facts alleged are so contradictory as to be inexplicable in light of evidence in the record, according to the U.S. District Court for the District of Connecticut. In Gill v. Teva Respiratory, LLC, the court granted the defendants’ motions for summary judgment, reasoning that the plaintiff, in relying exclusively on her own testimony, failed to rebut the defendants’ evidence or correct discrepancies in the record. Although the U.S. Court of Appeals for the Second Circuit has previously held that a credibility determination is warranted where a plaintiff relies on incomplete and contradictory testimony, some ABA Section of Litigationleaders believe this case may spur courts and practitioners to alter their methodology.

Evidentiary Record Undermines the Plaintiff’s Testimony
The plaintiff sued the maker and the retailer of her asthma inhaler after breathing in a thumb tack that became lodged inside the device. The plaintiff claimed she had stored the inhaler in her car’s glove compartment and had aspirated the tack after using the product, which had been in its original packaging. Doctors removed a tack from her lungs several days later.

In support of their motion for summary judgment, the manufacturer submitted evidence of its production processes, which reflected that a tack could not have been introduced into the inhaler while in its control. The retailer relied upon the plaintiff’s admission in her deposition testimony that the inhaler was in its original packaging prior to use, maintaining it could not have tampered with the device. Both defendants also relied upon the plaintiff’s medical records which reflected the plaintiff had kept the inhaler in her purse, its cap had become dislodged, and her children had inserted a push pin into its mouthpiece.

The plaintiff did not provide any evidence to carry her burden in opposing summary judgment. When deposed, the plaintiff admitted she did not know how the tack got into her inhaler and could not explain the statements in her medical records. Nor could she explain why the dosage counter indicated the inhaler had been sprayed thirty-four times when she had not used the inhaler since the incident. The plaintiff also conducted no discovery and did not submit a statement of material facts as required by local rules.

Court Makes Rare Credibility Determination on Summary Judgment
The court deemed the defendants’ facts to be true and granted the defendants’ motions for summary judgment on the grounds there was no genuine issue of material fact. Though the court acknowledged that its role generally did not encompass making credibility determinations, it relied upon the Second Circuit’s decision in Rojas v. Roman Catholic Dioceses of Rochester in concluding that where “the facts alleged are so contradictory that doubt is cast upon their plausibility, the court may pierce the veil of the complaint’s factual allegations and dismiss the claim.” The district court further reasoned that to hold otherwise would “license the mendacious to seek windfalls in the litigation lottery.”

In this case, the district court specifically criticized the plaintiff’s inability to explain the contradiction between the medical records, which indicated the inhaler was uncapped in her purse and accessible to her children, and her own declaration that it was unopened in her vehicle’s glove compartment. The court also noted the discrepancy between evidence that the inhaler’s dosage count reflected thirty-four uses and the plaintiff’s testimony that she had used the inhaler once.

Finding the plaintiff’s account unworthy of belief, the court ultimately rested on the plaintiff’s repeated admissions that she did not know how the thumbtack got into the inhaler. Because of these disavowals, it concluded the plaintiff was “in no position to claim or prove at trial that the defendants were responsible or liable.”

A One-Time Result or a Slippery Slope?
Although ABA Section of Litigation leaders concede that the plaintiff’s case was out of the ordinary, they are divided as to the decision’s broader impact. “It is rare to find a credibility determination about a relatively discrete fact at the summary judgment stage,” explains Paula M. Bagger, Boston, MA, vice-chair of the Section of Litigation’s Commercial & Business Litigation Committee. “Was the inhaler package open or closed? When courts start to make these determinations, they head down a slippery slope. What is considered a bright line rule becomes a little murkier,” she says.

However, not all Section leaders agree the decision has resonance. “Practitioners should take note of the fact that the court emphasized this was a rare and extraordinary matter. I don’t foresee this extending to many other circumstances,” opines Michael S. LeBoff, Newport Beach, CA, cochair of the Section’s Commercial & Business Litigation Committee.

Ultimately, the ruling may be a teachable moment. “This is a cautionary tale for plaintiffs,” states Mark A. Romance, Miami, FL, member of the Section’s Commercial & Business Litigation’s Practice Points Subcommittee. “You need to have evidence in the record that supports your theory of the case beyond your client’s own testimony,” he advises.

Contributing Attorneys

Romance, Mark A. – Shareholder

Seismic Shift in the Power Struggle Between Management and Workers Signals Opportunity for Employers

By Adam M. Myron

In a 5-4 decision, the United States Supreme Court ruled this week that the Federal Arbitration Act (FAA) requires enforcement of agreements in which employees waive their rights to class and other forms of collective relief in court in favor of individual arbitration.  The high court’s ruling in Epic Systems Corp. v. Lewis, No. 16-285, and two related cases, upends a decades-long relative balance of power between management and workers ensured by the National Labor Relations Act and other federal laws.  The decision will undoubtedly have far-reaching consequences throughout the United States, where, according to a recent study published by the Economic Policy Institute, roughly 60 million people are subject to employment agreements requiring mandatory arbitration of disputes.

Employers that want to protect themselves from class and collective action by groups of employees would do well to ensure that they have tightly-drafted employment agreements requiring individual arbitration in the event of a dispute.  Employers that already have mandatory arbitration agreements with employees should consider having their existing agreements reviewed by legal counsel to determine if the terms can be redrafted to take advantage of one of the key implications of the Supreme Court’s ruling: employers can require, as a condition of employment, that employees agree to arbitrate disputes and waive relief in the courts.  In the past, some employers included “opt-out” provisions in their arbitration agreements whereby employees had the ability to maintain their right to class and collective relief in the courts and nevertheless retain their jobs.  Such provisions arguably protected employers from claims their arbitration agreements violated federal law.  With the Supreme Court’s decision in Epic Systems, however, employers may be relieved from the need to include such opt-out provisions in their arbitration agreements.

Regardless of your feelings about the central issues in the debate, the Epic Systems decision, lauded by management and derided by workers, will have broad-sweeping effects for years to come.

t your participation in them is and remains voluntary. The only information at risk is that which you put at risk.

United States: Trademark Trial and Appeal Board Accepts Misfiled Expert Disclosures as Timely Filed

(Originally published in the International Trademark Association)

By Mark A. Romance

On February 26, 2018, the Trademark Trial and Appeal Board (TTAB or Board) issued a precedential decision in Monster Energy Co. v. William J. Martin (Cancellation No. 92064649), holding that a misfiled expert disclosure was timely filed in the correct case and allowing the expert to testify. The decision highlights the Board’s authority to correct its docket and adjust deadlines to permit experts to testify when mistakes occur in filing.

Petitioner Monster Energy Company filed its expert disclosure on July 5, the deadline to file expert disclosures in the proceeding. Although the notice was served on Respondent William J. Martin, Petitioner’s counsel accidentally filed the notice in an unrelated proceeding. The next day, Petitioner’s counsel realized its mistake and called the TTAB to advise it of the incorrect filing. The following day, July 7, the Board entered the notice in the correct file and assigned it a filing date of July 5, the date it was originally submitted in the wrong file.

Weeks later, on the eve of the close of discovery, Respondent moved to strike the expert disclosure and to preclude the expert from testifying at trial. Respondent argued that the disclosure was untimely because it was not placed into the correct case file until July 7, two days after the deadline. He contended that because of the late disclosure he was precluded from timely completing discovery on the expert witness.

The TTAB held that the notice was timely even though it was filed in the wrong proceeding, reasoning that    the Trademark Rules provide it with the authority to “address and resolve an obvious clerical or typographical error in a filing that conflicts with the clear intent of the filing party at the time the party submitted the filing.” It also noted that “an obvious typographical error” should not derail the discovery process. Citing precedent, the Board also held that an untimely expert witness disclosure is not a ground to exclude the noticed testimony of the witness. It further held that Respondent was not precluded from initiating discovery concerning the late-disclosed expert witness because Trademark Rule 2.120(a)(2)(iii) affords the Board wide latitude to manage a proceeding following disclosure of an expert. The TTAB concluded that it may grant additional time under this wide latitude to complete discovery of the disclosed expert.

This decision shows that the Trademark Rules provide the Board with the flexibility to correct administrative errors and to adjust schedules in order to allow parties a full and fair opportunity to introduce expert testimony and to conduct discovery on those witnesses.

Mr. Romance is a member of the INTA Bulletin Law & Practice – North America Subcommittee. 

Contributing Attorneys

Romance, Mark A. – Shareholder

Privacy in the Golden Age of Social Media

By Michael J. Napoleone

Think way back to your life before Facebook (or LinkedIn, Instagram, or Twitter, or whatever is your social media platform of choice). When you would occasionally – or never – have contact with people you knew from high school or college, or even people who live in your community, but with whom you don’t come into contact often. Think about all your family and friends who live far away, and who you might hear from at birthdays and holidays (if you were lucky, you’d get a picture of their kids or – the Holy Grail – a thoughtfully composed letter filling you in on the details of the life they have been living over the past year).

Fast forward to today. On a daily or hourly basis, you have shared conversations, photos, thoughts, prayers, memes (my God, the memes), videos and even live streamed moments with “friends” all over the world. And it cost you NOTHING (except the hours of your life that is now consumed by Facebook and other social media outlets) – it was all FREE.

What did you agree to in exchange for access to this transformational communication platform? Some of your privacy – but not all. Only that which you were willing to share and post on each platform. Admit it, you had a vague idea that there were some “terms of service” that you ignored and rapidly agreed to on your way to setting up your account.

Odds are great that you are out zero dollars because the information you voluntarily shared was either hacked or shared with others (including shadowy countries or corporations with ill motives). Someone may have made up a fake account and tricked your friends into communicating with “you” – but no real damage was done. Maybe you were surprised at some pop-up advertisements that knew what you might be interested in based upon your own shared likes and browsing history. Maybe you were exposed to fake news or an ad or fake account created by a Russian agent who wanted to influence your vote in the last election.

Is it Facebook’s fault that you read a story or viewed a meme or engaged with someone you don’t really know and were misled? Did you just take what you read at face value? Did you fact check? Did you have a discussion with a real person that you know (either online or in person) to discuss it? Did you have any level of intellectual curiosity that inspired you to dig deeper? Probably not.

Before we plunge headlong into regulation (or over regulation) of social media sites, or making them pay-to-play sites, consider that your participation in them is and remains voluntary. The only information at risk is that which you put at risk.

The 2018 Partnership Audit Rules: Why all Partnership (and LLC) Agreements Should Be Amended

By George L. Metcalfe, Jr.

On January 1, 2018, the new partnership audit rules took effect on all business entities taxed as partnerships. For purposes of this update, partnerships and partners include limited liability companies (LLCs) taxed as partnerships for federal tax purposes and their members treated as partners for federal income tax purposes. The new partnership audit rules make substantial changes to the TEFRA regime, and will effect virtually every partnership agreement in place prior to January 1, 2018. The most significant change brought by the new audit rules is the designated partnership representative. The new audit rules require every partnership to designate a partnership representative on its federal income tax return for each tax year beginning after December 31, 2017.

Under the new audit rules, the designated partnership representative will receive all notices and communications involving federal income tax audits and most importantly, the partners will have no right to participate in the audit. Since the new audit rules vest exclusive authority for partnership audits and partnership tax litigation communications, actions, representation, and elections in the partnership representative, partnership agreements should be revised to address and consider this new reality.

First, and foremost, at a minimum, the partnership agreement should include who will serve as designated partnership representative, as well as, provide internal partnership procedures and rules for resignations and removals of the partnership representative. Generally, once the partnership representative is designated, the designation remains in effect until: (1) a valid resignation, (2) a valid revocation; or (3) an IRS determination of no valid appointment. It is important to note that there doesn’t appear to be any requirement in the Code or the proposed regulations that the partnership representative consent to, or even be informed of, the appointment, although the IRS might determine it is not a valid determination under those facts.

To be eligible to serve as the designated partnership representative, the representative must have a substantial presence in the United States and the capacity to serve. For purposes of the new audit rules, substantial presence in the United States means a U.S. street address, a telephone number, availability during normal business hours, and a U.S. taxpayer identification number. The new rules provide that capacity to act can terminate upon death of the representative, a court order determining the representative’s incapacity to act and serve, a court order enjoining the person from acting, incarceration, liquidation or dissolution of the entity, or an IRS determination of incapacity to act.

One of the most important reasons every partnership should revisit their agreements and operating documents is to plan for the anomaly of a partnership representative who has resigned or been removed under the terms of the partnership agreement but has not resigned or been removed for purposes of the new audit rules effective resignation. If a partnership agreement is silent on the terms and responsibilities for the partnership representative, the IRS has the authority to designate one for the partnership. If a designated partnership representative is ever removed by the terms of the partnership agreement, one should provide duties for such representative to file the necessary documentation for the IRS to recognize such a change.

Also, partnership agreements should provide and consider the authority, restrictions, obligations, duties, and standard of care owed by the partnership representative to the partnership and to the partners. Since the partnership representative role was created by the changes to the audit rules, there is a high chance that the agreement is silent on the role and duties of such representative. The partnership stands susceptible to miscommunication and potential derivative lawsuits emanating from such miscommunication without a clear understanding of the partnership representative’s duties to the other partners in the agreement. As a matter of precaution, partnership agreements should at a minimum address the partnership representative’s role and standard of care owed to the partnership.

If the agreement is going to consider the authority, obligations, and responsibility of the designated partnership representative to the partners, the agreement should also provide for the obligations and responsibilities owed to the partnership representative, because the decisions that will be made by the partnership representative will have a lasting effect on the partnership and all of the partners. In the event of an audit, the partnership representative will require the full cooperation of the individual partners in meeting the compliance demands and requests from the IRS. Any potential problems with the cooperation of one partner and the partnership representative with an audit taking place will likely result in higher costs and fees to all partners. It is important for the partnership agreement to be clear that the other partners not serving as partnership representative have a duty to assist and comply with partnership representative’s requests during the audit process.

Finally, partnership agreements should also consider the partnership representative’s authority to incur audit and litigation costs and fees on behalf of the partnership. Partnership agreements should consider the compensation that the partnership representative will receive for the services rendered during an audit and potentially litigation with the IRS. If a partnership agreement is silent on these issues, partnerships will have to resort to a facts and circumstances analysis as to what constitutes reasonable compensation, litigation costs, and other expenses that could have been addressed in an agreement.

The role of the designated partnership representative in the new partnership audit rules has created a clear and present need for the reevaluation of all partnership agreements that do not effectively address such changes. To avoid any miscommunication or disputes among the partners regarding future audits or litigation, partners in the partnership should reevaluate their agreements to address the new perceived problems that could occur and miscommunications that could potentially threaten the business of the partnership. Accordingly, without delineated rules or a concise plan of action for such events in the partnership agreement, the partnership will be left vulnerable to unnecessary uncertainties that could affect the relationships between the partners and the partnerships overall business dealings.

Practical Gun Laws Are Not Heresy

By Alan G. Greer

Gun regulation is common sense, not heresy. In Florida and nationally, we register and regulate dangerous instrumentalities, such as cars and planes, because their improper use kills and maims tens of thousands annually.

So why not guns?

Using motor vehicles as an illustration, state and federal laws dictate how fast and under what conditions they can be driven.

For example, it is illegal to operate one under the influence of drugs or alcohols.

Each driver must have a government issued driver’s license obtained after passing both a written and live performance exam. And you must be of an appropriate age to drive.

Each motor vehicle and its owner must be registered and have a license tag that can be traced.

And most vehicles must have seat belts. The result is that such common sense laws have massively reduced our national highway death tolls.

No one can argue that guns are not equally dangerous instrumentalities.

Based on the most recent numbers, gun deaths exceeded motor vehicle deaths in 21 states and almost equaled them in the rest.

Nationally, roughly 35,000 people are killed in each category annually.

The owners of the 265 million or so firearms in U.S. civilian hands do not object to having to obey motor vehicle laws or being licensed to drive them.

There is no reason why they should object to equally common-sense gun regulations.

The 27-word Second Amendment the NRA clings to so desperately is predicated on “a well-regulated militia being necessary to the security of a free state …”

All we are calling for is the implementation of the “well-regulated” clause of that short amendment, which they wish to ignore.

It will save countless lives.




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