CyberLaw P.C. - Internet Lawyer, Intellectual Property Law Firm

Recently introduced legislation entitled "The Main Street Fairness Act" seeks to require online retailers to collect sales tax for the benefit of states on most online purchases. Internet Retailer recently examined the bill in some detail. CyberLaw PC attorney Eric Menhart is quoted in the piece, entitled "Online sales tax proposed in Congress." Eric was asked if the recently proposed legislation, introduced by Rep. Bill Delahunt (D, MA) had a decent chance of success: "You need a decent majority of states as members of the SST,” he says. “Until you have that, it will be very difficult to get enough Congressional attention and support for this legislation.”

Eric is the author Taxing the Internet: Analyzing the States’ Plan to Derive Online Sales Revenue. Published in 2007 by the Journal of State Taxation, the article is an in-depth discussion of the legal and political barriers to states’ interest in universally collecting sales taxes on all types of online transactions. Eric also spoke on similar topics at the 2010 Internet Retailer Conference and Exhibition in Chicago, IL.

Everyone wants great value when they spend money. The same is true when it comes to law firms and legal services.

Occasionally, clients have questions about hourly billing and want to know how to keep their costs as low as possible without sacrificing the quality professional services to which they are accustomed. This short article is intended to answer some of those questions and offers tips to clients to assist in keeping their costs as low as possible. Remember, this memo is intended to be general information. The retainer agreement with your attorney or law firm sets out the particular terms of your legal or business services agreement with your lawyer.

Hourly Billing

Lawyers and staff often bill by the amount of time spent working on your legal or business matters. This is called “hourly billing” or “timed billing.” The tasks for which attorneys and staff will bill on an hourly basis are included in your individual retainer agreement. Generally, attorneys and staff will bill at their prevailing hourly rate for any time that they spend working on your matter. The prevailing hourly rate for your matter is usually contained in your retainer agreement with your lawyer.

Usually, attorneys and staff bill their time in 1/10 of an hour increments which computes to billing in six minute increments. Alternatively, your lawyer may bill his or her time in 1/4 of an hour increments, which computes to 15 minute increments. By billing in such small increments, attorneys are able to keep costs as low as possible for the client, while still using an accurate and readable record keeping system.

Hourly billing is fair to both the attorney and the client because the attorney only bills the client for the actual time assisting the client and the client is not billed for more than the reasonable amount of time spent by the attorney or staff member. Every court and bar association in the United States approves of hourly billing as a fair way to record the value of an attorney or staff person’s services for most matters.

Clients, especially clients that are not used to working with an attorney or law firm, occasionally express concern about hourly billing, especially when the client is used to receiving a tangible object, such as a piece of furniture, a new computer, or a new pair of shoes when spending money.

It is important to remember that attorneys and support staff do provide a great deal of value by virtue of performing work necessary to assist you with your legal or business problem. Attorneys are licensed professionals because they spend substantial time learning about the law, maintaining professional integrity and earning experience that can help you achieve the best possible result for your legal or business matter. While you will occasionally receive tangible goods as a result of your attorney’s work, such as a contract, legal pleading, or memorandum, it is also important to understand that advice provided over the phone, via e-mail or in a client meeting is also valuable use of the attorney’s time.

Because an attorney only has his or her time and expertise to “sell,” the attorney must bill for time spent on a matter, even when it may only be a short period of time spent on the matter. This is because any time spent on your matter could have been spent earning fees helping another client or other valuable use of the attorney’s time.

Attorneys are professionally obligated to accurately report their fees and time spent to the client. Attorneys will only bill you for the reasonable time spent on your matter.

Keeping Client Costs Low

Attorneys are always willing to assist their clients in a diligent and professional manner. However, clients can make changes in their behavior that will help to keep their costs low. Here are some general tips for keeping your hourly billing invoices as low as reasonably possible:

Consolidate Questions: Many clients will call their attorney anytime a question comes up. While most attorneys are more than happy to take your calls as their schedules allow, many “quick questions” via phone, e-mail, or personal visit can lead to higher costs for the client, because the attorney needs to divert her attention from one matter to another. Instead, consider writing down any non-emergency questions and call when you have several questions at once. This will allow the attorney to focus on your matter and likely answer the questions more efficiently than if the questions were asked via several separate phone calls or visits.

Communicate via E-Mail: E-mail has several advantages over phone or letters. First, e-mail is easier for the attorney to file and record, which assists the attorney in efficiently answering your present and future questions. Second, the attorney can be sure to have the answer by the time he or she responds, compared to a phone call where the client may catch the attorney when the client’s file is not immediately available to the attorney. Like telephone calls, try to save multiple questions and put them all into one e-mail, so your attorney can answer all your questions at once.

Respond to Questions and Inquiries in a Timely Manner: Your attorney will likely have questions for you throughout his or her work on your legal matter. Just as your attorneys will do for you, it is important that you respond to any requests as quickly as possible. Forcing a lawyer to make several attempts to get in touch with a client increases costs.

Review Materials from Your Attorney Carefully: Your attorney will typically provide copies of the important documents in your matter, such as your retainer agreement, your invoices, and other important documents such as pleadings or contracts. Reviewing your copies carefully costs you nothing and can often assist you in answering your questions without having to contact your attorney.

Remember that you are always free to contact your attorney, whether you have one question or many, and he or she will respond within a reasonable amount of time.

Conclusion

While costs can be controlled to some extent with the tips above, remember that your attorney’s primary interest and duty is in protecting your legal interests. He or she must take all the procedural steps necessary to fully represent you. Implementing the practices recommended in this article allows a client to reduce the costs within his or her control, but you should always be wary of “going too far” and restricting an attorney’s ability to fully represent your legal interests.

CyberLaw P.C. attorney Eric Menhart was recently quoted in a Forbes.com article entitled “Web Sales Tax Looms.” The article discusses the potential for additional sales taxes on online transactions, particularly in light of dwindling state budgets.

Menhart is the author of the article “Taxing the Internet: Analyzing the States’ Plan to Derive Online Sales Revenue,” published in 2007 by the Journal of State Taxation, which was an in depth discussion of the legal and political barriers to states’ interest in universally collecting sales taxes on all types of online transactions.

Not much has happened in the proposed class action lawsuit against Verizon for it’s disabling of the built-in GPS in the Blackberry 8830.

The parties have primarily been engaging in some preliminary procedural matters. The biggest issue so far addressed was whether an arbitration provision in the Customer Agreement could be enforced. The Court issued an order on May 13, 2008 denying Verizon’s attempt to have the case submitted to arbitration. Even Verizon admitted that the arbitration clause would not be enforceable under California law, but Verizon had to make certain procedural arguments to ensure a sufficient record if an appeal were filed.

The trial date for the case has been set for September 14, 2009, approximately fifteen months away as of this writing. While still unlikely to go to trial, the Blackberry 8830 would probably be approaching technology extinction by the time the suit went to trial and any appeal were resolved.

CyberLaw will update continue to update this case as further events transpire.

Technology Review has a nice tool that allows visitors to see the remaining presidential candidates’ positions on various technology issues, including net neutrality, broadband, privacy, stem-cell research, global warning and biofuels. You can also see some of the applicable legislation each introduced or handled in their time in the Senate. Overall, this is a nice resource for “at a glance” analysis of the various candidates’ points of view on emerging technology and some of the resulting political issues that come along with the various technologies.

Attorney Eric Menhart recently commented in two articles in “The Daily Tar Heel,” the newspaper serving the University of North Carolina at Chapel Hill community.

The first article, entitled “Facing Scrutiny,” examines information on social networking sites as it is used to investigate and screen college students. The second article, entitled “Google Puts Chapel Hill Streets on View,” examines the privacy implication of Google Maps’ Street View service.

Working for protection of individual rights, whether for civil rights, privacy rights or IP rights, requires leadership. The holiday is a good opportunity to be reminded that Martin Luther King Jr.’s non-violent style of leadership, which relies on truth, justice, and belief in force of law, is an effective method of resolving disputes and bringing about change in a variety of arenas.

Unfortunately, there have been some blog postings and other communications regarding this firm’s application for the use of the mark “CyberLaw” with the United States Patent and Trademark Office. Because many of these communications are lacking in providing complete and accurate information, the firm issues the following statement.

A blog post issued by EFF’s Corynne McSherry criticizes the firm’s application. “Corynne McSherry is Staff Attorney at EFF, specializing in intellectual property and contract issues.” There are important facts and statements deserving of further review that Ms. McSherry fails to disclose. Virtually all the facts that are relevant to this issue are publicly available.

Ms. McSherry claims the firm is “threatening other lawyers with legal action based on this silly ‘mark.’” First, no legal “threats” have ever been made, to anyone. The firm issued one informal notice to one attorney, Michael Grossman, about a potential dilution of the name of the firm’s blog, CyberLawg™. Mr. Grossman thereafter hired Mr. Martin Schwimmer to represent him. After one e-mail communication that included both Mr. Grossman and Mr. Schwimmer, the previously private discussions were publicly disclosed by either Michael Grossman or Martin Schwimmer.

Corynne McSherry then “presumes,” without any factual basis, that this firm has other firms in its “sights.” Unsurprisingly, Ms. McSherry shows no evidence for this comment because there is absolutely no factual ground for such a statement.

Ms. McSherry goes on to state: “an IP lawyer should know that courts (and trademark examiners . . .) don't look kindly on efforts to abuse trademark law to control everyday language.”

This statement is misleading for a myriad of reasons. First, the suggestion that the application is an “attempt to control everyday language,” is overbroad and inaccurate. As in most trademark applications, the firm’s application is for only one “class” of protection. In this case the class is #45, defined by the USPTO as “services rendered by lawyers to individuals, groups of individuals, organizations and enterprises.” Services that fall outside that class would be wholly unaffected. Ms. McSherry’s concern that “Stanford's Center for Internet and Society, with its Cyberlaw Clinic” or “Berkman's Center for Internet and Society” would somehow be affected is simply false. Those academic organizations clearly do not fall within the class of goods for which CyberLaw PC applied for trademark protection.

Finally, Corynne McSherry’s statement that “trademark examiners . . . don't look kindly” on such applications is easily dispelled with recent history. Not only has the USPTO previously granted rights in the term “CyberLaw,” it has done so as recently as 1996. The mark was granted to Attorney Jonathan Rosenoer of Greenbrae, California in 1996. Mr. Rosenoer let his protection expire in 2000. All such information is publicly available to Ms. McSherry or anyone else at the USPTO web site.

While the firm appreciates free speech, it also believes that speech that ignores relevant facts is not appropriate, particularly when such statements are harmful to professional reputation. The firm stands by its application, which was lawfully filed with the USPTO, seeks to protect only those services that this firm provides, and which seeks protection of a term that the USPTO itself has previously found to be protectable.

Verizon Wireless has been named in a class action lawsuit alleging that the wireless giant wrongfully and unfairly deceived purchasers of BlackBerry model 8830 smartphones. The suit alleges that Verizon intentionally disabled the devices' free, built-in global positioning systems (GPS) then offered a proprietary Verizon fee-for-service GPS. You can see a copy of the complaint here.

While there are many that argue that the free market should decide this issue, the suit has merit. First, the facts do not indicate that Verizon sufficiently advertised the distinction between the built-in GPS and the pay-for-service GPS. In addition, the Verizon GPS service was not fully implemented on the 8830 when the phones were initially available on the Verizon network. Finally, there have been reports on Internet message boards that Verizon customer service initially reported the GPS disabling as a “bug” when the firm had intended to disable the freely provided GPS version all along.

The issue is not whether Verizon has the right to disable hardware features; they unquestionably do have such rights. The problem is the fashion in which the features were advertised. If a feature on an open market piece of hardware is modified to a consumer’s detriment, the modifier must make the announcement of the modification loud and clear to allow the consumer to make an informed decision. Verizon did not make such announcements and consumers received a phone less valuable than that which could have been purchased on the open market.

The suit will likely resolve when Verizon offers minimal concessions to its 8830 users, but Verizon could have avoided this type of publicity by modifying its marketing practices.

A civil rights group has achieved class status in a suit that alleges that Target’s website is inaccessible to the blind, in violation of the Americans With Disabilities Act.

The plaintiffs fault Target for not adopting technology used by other companies to make Web sites accessible to the blind. The technology allows reading software to vocalize invisible code embedded in computer graphics and describe content on a Web page.

Bottom Line: Civil rights suits alleging inaccessibility to certain technology are often criticized for failing to allow market forces to take effect. This argument suggests if one company’s website is not accessible, those that cannot access it can “vote with their pocketbooks” by using other resources. Plaintiffs in such actions often argue that some disabilities are not substantial enough to be worth the additional time and effort required of the enterprise to make the changes, thus requiring the ADA and similar law. While the merits have not yet been decided, the plaintiffs were successful in convincing the judge that class status was appropriate for this action.

OpenOffice.org recently announced that IBM will be joining the open source project to collaborate on the development of OpenOffice software. IBM will make initial code contributions that it has been developing as part of its Lotus Notes product, including accessibility enhancements, and will be making ongoing contributions to the feature richness and code quality of OpenOffice.org. IBM will also leverage OpenOffice.org technology in its products.

This is a major boon for the OpenOffice project. Already a relatively full featured software package, the clout of IBM creates instant credibility for the open source project. While IBM’s contributions to the code will be welcome, the biggest benefit to OpenOffice is IBM’s plan to leverage some of the OpenOffice technology in its applications. If IBM employs substantial portions of OpenOffice in its business applications it would accelerate the adoption of OpenOffice for business and industry that is still heavily controlled by Microsoft.

The greatest threat to Microsoft is IBM’s adoption of the .odf format, which stands for “open document format.” ODF is designed to be read and modified the same way by a variety of word processing packages. Microsoft has strongly opposed the adoption of open formats, instead offering “modified” open formats, which would still be effectively controlled by Microsoft.

Bottom Line: The agreement between OpenOffice and IBM appears to be a classic win-win. If IBM substantially integrates OpenOffice standards in its products it would represent a major shift on the productivity software landscape and be a very real threat to Microsoft Office’s dominance.

CyberLaw's principal attorney, Eric Menhart, recently had an article published in the Journal of State Taxation. The article, entitled Taxing the Internet: Analyzing the States’ Plan to Derive Online Sales Revenue, explores the barriers that the states of the nation face in taxing Internet transactions. The synopsis of the article is as follows:

"On a typical day, millions of consumers engage in online transactions as varied as purchasing books to downloading music to printing out movie tickets. In addition to being a convenient way to order and compare prices, online sales have another benefit to consumers: most are tax-free.

This fact is not lost upon the states of the nation, which heavily rely on sales and use taxes for a vast majority of their annual income. Local “brick-and-mortar” merchants are also against tax-free Internet transactions because of the substantial competitive disadvantage it imposes on their businesses. Taxing Internet transactions, however, is not as simple as passing legislation in each of the 50 states. States have to overcome significant legal roadblocks imposed by the Constitution, Congress and the federal judiciary if the goal of deriving income from most online transactions is to become a reality.

While there is significant room for discussion regarding the appropriateness of taxing Internet transactions at all, the paper primarily considers the views of states and local merchants: sales taxes on the Internet are important for state revenue and maintaining competitive balance for traditional merchants. Given this assumption, the paper examines the problem of the present state of the tax law from the states’ point of view. Next, it defines and considers the differences between sales and use taxes and explores the current state of law governing Internet taxes. Third, the paper discusses the states’ current and ongoing efforts to collect taxes from Internet transactions. Finally, it proposes suggestions aimed at allowing states to achieve the goal of requiring merchants to collect sales taxes on online transactions."

A recent 9^th Circuit decision has held that a software manufacturer was practicing law without a license. The matter, entitled Frankfort Digital Services v. Kistler (In re: Reynoso), involved a manufacturer of software for bankruptcy that advertised the software as able to determine the appropriate schedules and bankruptcy exemptions based on information provided by the user.

The court found that the software and the corresponding website promised that the software was an “expert system” and the results were similar to services provided by “top notch bankruptcy attorneys.” Furthermore, the software provided more than clerical service. The software chose the appropriate exemptions, arranged the user’s information and even provided legal citation as support for the various claims. Taken together, the court found that the advertising and software qualified as unauthorized practice of law.

Bottom Line: While the court was careful to limit its opinion to the facts of the case at bar, this opinion calls into question the legality of many popular software packages. Similar programs such as TurboTax and TaxCut are routinely used by taxpayers to determine which forms to file with the IRS. Other programs allow a user to create simple wills and contracts. While the Court was careful to avoid including other programs in its analysis, manufacturers of legal software would be wise to take this case seriously.

A combination of Yahoo, Slate, and the Huffington Post will present joint online-only primary presidential debates this fall for candidates from both parties. There will be one debate for Republican hopefuls and one debate for Democrats. The candidates will participate remotely from any location they choose and attendees to the online debate will be able to ask questions of the candidates.

The real story here is the online community’s attempt to more fully inject itself into the political process. While bloggers and other independent sources of opinion are far from being obsolete in the political world, they are limited in their scope and power to those who choose to read such sources. To this point in time, online publishers have been further limited by the lack of collective strength that could be used to mandate that candidates pay more attention to their blogs, podcasts, and other alternative media.

Attracting candidates to an online event is the online political world’s attempt at a coming out party. It provides a newsworthy event, attracts the actual newsmaker (as opposed to commentators) and provides a platform for the online community to expose itself to a “traditional media” community that is not otherwise paying attention.

Bottom Line: This is the online world’s obvious first step towards apparent parity with other media outlets in coverage of major political events. A successful implementation of the event will create substantial credibility for future events, including an eventual debate between each party’s nominees in the heart of the election calendar. A failed event will be equally detrimental to the online world’s influence on the general public.

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