Legal Updates

HEALTH REFORM: CMS Innovation Center Announces Four Models in Bundled Payments for Care Improvement Initiative

On August 23, 2011, the Centers for Medicare & Medicaid Services (“CMS”) Innovation Center announced a new initiative to encourage health care providers to better coordinate patient care.[1] The Bundled Payments for Care Improvement Initiative (“Bundled Payments Initiative”) seeks to align the financial incentives among hospitals, physicians, and non-physician practitioners through the use of a single negotiated payment for all services provided during an episode of care. The use of a bundled payment is expected to encourage hospitals, doctors, and other specialists to coordinate in treating a patient’s specific condition during a single hospital stay and recovery.

This is one of several new initiatives from the CMS Innovation Center intended to change the existing Medicare payment structure from one that pays for the quantity of care to one that pays for the quality of care. Participation in the Bundled Payments Initiative may serve as a first step for forming partnerships to improve care coordination and encourage participants to move into initiatives aimed at improving population health.

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Practical Reminder: If You Want to Be Able to Toll Your Restrictive Covenants, It’s Best to Say So

Restrictive covenant agreements often contain “tolling” provisions which extend the duration of the covenants by the time of any violation. Sometimes, employers do not include tolling provisions in their restrictive covenant agreements, but nevertheless subsequently request that a court use its discretion to extend the duration of those covenants by the time of a violation anyways. A recent opinion from the United States Court of Appeals for the First Circuit highlights the danger in not including a tolling provision in a restrictive covenant agreement.

In EMC Corporation v. Arturi, __ F.3d __ (1st Cir. Aug. 26, 2011), EMC requested a preliminary injunction prohibiting its former employee from using its confidential information, from competing with EMC, and from soliciting EMC customers. The trial court issued a preliminary injunction prohibiting the disclosure of confidential information. However, the trial court refused to issue an injunction prohibiting the former employee from competing or soliciting EMC’s customers because the one-year time periods in those restrictive covenants had already elapsed and there was no tolling provision to extend them. On appeal, the First Circuit affirmed the trial court’s refusal to extend the non-compete and non-solicit provisions absent a tolling provision. The court explained that under the governing Massachusetts law, “when the period of restraint has expired, even when the delay was substantially caused by the time consumed in legal appeals, specific relief is inappropriate and the injured party is left to his damages remedy.” The First Circuit also specifically pointed out that “EMC could have contracted…for tolling the term of the restriction during litigation, or for a period of restriction to commence upon preliminary finding of breach. But it did not.”

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Immigration Update

By:  Robert S. Groban, Jr.

Many of our hospitality clients are revisiting immigration requirements to see if there are any advantages that they have overlooked. One overlooked advantage is the USCIS’s E-Verify system. Employers know that the IRCA requires them to satisfy the Form I-9 requirements.  Many have found this difficult to implement and have been the targets of worksite enforcement operations by U.S. Immigration and Customs Enforcement (“ICE”) that are costly to defend and often result in significant fines. Traditionally, many hospitality employers have looked at the E-Verify system as something to be avoided due to the time required to learn how to use it and the number of potential employees that the system would prevent them from hiring. 

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Tax Alert: Overview of the proposed American Jobs Act

On Thursday, September 8, President Obama announced his proposal for a tax incentive-based program for creating more jobs — the American Jobs Act. This plan focuses on new and extended reductions in payroll taxes for both employees and employers, along with a separate credit for hiring the unemployed. The 100% write off for certain capital expenditures in effect for 2011 would also be extended through 2012 under this proposal. While no specific provisions were discussed with respect to how these benefits would be paid for, the President indicated that the revenue offsets would include tax increases for higher-income taxpayers and a repeal of other targeted corporate tax breaks.

Payroll taxes

The proposals relating to the reduction of payroll taxes were broad. Last year, a reduction in the employee portion of Social Security taxes from 6.2% to 4.2% was implemented for 2011. The President proposed extending this tax break through 2012, and reducing the employee’s portion even lower, to 3.1%. A similar reduction would likely apply to self-employment taxes.

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Multistate Tax Alert: Invest Ohio: New Ohio tax credit enacted to encourage investment in Ohio

Ohio has enacted an Ohio income tax incentive for investing in certain approved Ohio small business entities where the investor makes the “qualifying investment,” holds the investment for the required holding period, and the approved investee small business entity makes a specified investment or expenditure that is at least as great as the investment made by the investor. The Invest Ohio program is to be administered by the Ohio Department of Development (ODOD) or its successor entity. Prior to making an investment, the investor should ensure that the investee entity is a “small business enterprise” that will be approved by ODOD or its successor entity and should understand the required holding period for such investment.
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Trademark Rights Give Way to Free Competition

Principled decision concerning the scope of 3D trademark protection ensures cheap gas for the consumers

By attorney Peter Henrik Würtz and attorney Louise Ingerslev Andersen

On 14 July 2011, the Court of Justice of the European Union passed a judgment establishing that given certain assumptions, considerations for the consumer and for free competition take precedence over the protection rules concerning trademark rights.

The case deals with the question of whether Viking Gas A/S (Viking Gas) has infringed the exclusive licensee’s, Kosan Gas A/S, formerly BP Gas A/S (Kosan A/S), trademark rights when filling gas into a gas bottle protected as a 3D mark and selling it.

To read the full article, please click here for the PDF.

 

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Sunrise For .xxx Domains Is Now Open

As reported in our recent Knowledge Bytes publication, today marks the beginning of the Sunrise period for the new .xxx domain.   Owners of registered trademarks who are not part of the adult entertainment industry may and should apply to block their registered marks from becoming part of a domain name with the new .xxx generic top level domain.  This Sunrise period is in effect until October 28, 2011.  Different Registrars are charging different amounts for this service, so shop around.

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And then there were three: NLRB member’s term ends, new chair appointed

On August 27, 2011, the third term of former NLRB Chair Wilma Liebman ended.  The expiration of Liebman’s term leaves the Board with only three Members: Mark Gaston Pearce (D), Craig Becker (D), and Brian Hayes (R).

The White House selected Mark Gaston Pearce to replace Liebman as Chair.  Given that the Board’s Chair historically has the same political affiliation as the White House, Pearce was the only logical choice because he is the only fully confirmed Democrat still on the Board.  Becker, the other Democratic appointee, is a recess appointment and his term will expire in December.

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CIPO Approves New Wares and Services Descriptions

The Canadian Intellectual Property Office (CIPO) today announced the approval of over 500 new or changed wares (goods) and services descriptions in its online Wares and Services Manual.   This is the Manual that the CIPO Examiners refer to when reviewing applications for registration of trade-marks under the Trade-marks Act (the Act).   Under Section 30(a) of the Act, an applicant is required to describe its claimed wares and services in ordinary commercial terms.

While certainly not exhaustive of all of the descriptions that an Examiner will consider to be acceptable, if an applicant’s wares and services can fit within the approved descriptions in the Manual, the processing of the application is likely to be much smoother.  

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Ohio Statehouse Update: Week in review — September 2, 2011

1.  Third Frontier Advisory Board discusses focus group findingsThe Ohio Third Frontier Commission and Commission’s Advisory Board met Monday and reviewed the final report from the technology/industry focus group, which outlined recommendations for targeting emerging industries in Ohio. According to the group, these areas include:

  • Advanced materials
  • Business software and enterprise computing
  • Energy storage
  • Fuel cells
  • Health information technology
  • Medical technology
  • Propulsion power management
  • Sensing and automation technologies
  • Situational awareness and surveillance systems
  • Solar photovoltaics
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