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February 2012

News Roundup 2012 Week Nine: Copyright, Shareholder Activism, Acquisitions, Insider Trading

by Kyle Hulten on February 29, 2012

Intellectual Property

Copyright Infringer Receives Nearly 5 Years in Prison
James Baxter, of Wichita, Texas, was sentenced to 57 months in federal prison for violating federal copyright law. From 2006 to 2007 he sold “backup” copies of Adobe products such as Photoshop and Illustrator on various websites that he owned and operated. Baxter is the seventh man from one Wichita piracy ring to be convicted of software copyright violations. Altogether the… Read the rest

Venture Capital Survey: Overall Investment and Deal Size Up in 2011

by Kyle Hulten on February 27, 2012

Today Fenwick & West released the results from their fourth quarter 2011 venture capital survey. Overall, the survey painted a positive picture of the venture capital landscape. Up rounds outnumbered down rounds by more than 4 to 1. This was the tenth quarter in a row that down rounds were exceeded by up rounds. Overall, venture investment was significantly higher in 2011 than 2010, and the average deal size increased in 2011. More venture capital was raised in 2011 than in 2012, although there were fewer funds raising money.… Read the rest

Seattle Basketball Back in the News— Seattle Business Owners to Benefit?

by gavin.n.johnson on February 24, 2012

2008 was a tough year for Seattle. In addition to the financial crisis, Seattle area sports fans and Seattle business owners had the added indignity of losing the Seattle SuperSonics. However, Seattle basketball is back in the news and this could mean more business for Seattle construction companies and a boost in profits for Seattle business owners. As avid sports fans, we were pleased to hear the proposal for the new arena. We are also excited about the potential benefits to local business owners and the Seattle… Read the rest

Why do Venture Capitalists Prefer to Invest in Corporations?

by gavin.n.johnson on February 23, 2012

With the rise in formation of limited liability companies (LLC), why do venture capitalists (VC) still prefer to invest in corporations? This is a common question within the startup community. With so many choices—partnership, LLC, S corporation (S corp), C corporation (C corp), etc.—it can be a challenging task to pin down exactly what form of legal entity to choose for your new business. However, if your business plan is dependent on seeking VC funding, your entity choice can be narrowed down… Read the rest

News Roundup 2012 Week Eight: Suppliers, Distributors & Disputes; Privacy Policies & Mobile Apps; CAN-SPAM, etc.

by Kyle Hulten on February 22, 2012

Suppliers & Distributors & Disputes

Amazon Pulls More Than 4,000 e-Books from Online Marketplace
In a dispute over e-Book discounts, Amazon has decided to stop offering e-Books published by Independent Publishers Group in its online marketplace. IPG is the nation’s second largest independent publisher, and has refused to come to terms with Amazon in a dispute over a contract renewal. The problem for IPG is that Amazon’s Kindle accounts for 60% of all e-book sales. If they don’t give in to Amazon’s demands, they lose out on a majority of the market. IPG has told its publishers… Read the rest

How Will Washington Distilleries Adapt to Privatized Liquor Sales: Direct Distribution or Third-Party Distributors?

by gavin.n.johnson on February 21, 2012

November’s passage of Initiative 1183—which will shut down the state liquor stores on May 31 and privatize liquor sales— has opened the door to a new era of liquor distribution in Washington State. Since November, many distillers have been concerned about how they would continue to get their products in the hands of customers. Starting March 1, distillers can sell liquor directly to restaurants, bars and nightclubs. On June 1, distillers can distribute to supermarkets and other retailers.

At inVigor Law Group we started thinking about the different approaches… Read the rest

Three Startup Costs Business Owners Often Overlook

by Guest Blogger on February 20, 2012

Today’s guest blog is written by Danielle Rodabaugh, the chief editor of SuretyBonds.com, an online surety bond company. As a part of the company’s educational outreach program, Danielle writes articles that outline the legal implications surety bonds could have on business owners and their lawyers. In today’s article she discusses costs associated with licensing and registering businesses, surety bonds, and background checks.

When preparing to start a new enterprise, business owners have a myriad of legal concerns that compete for their constant attention. At times they might struggle to keep track of every single business law and… Read the rest

Key Term Sheet Provisions: Registration Rights

by Kyle Hulten on February 17, 2012

Today, we’re continuing our series on key term sheet provisions by discussing registration rights.

What Are Registration Rights?
Before you understand registration rights, you should familiarize yourself with registration statements. Form S-1 is the registration statement companies file with the SEC to become a publicly traded company. If you want to see what a completed S-1 looks like, you can check out Facebook’s registration statement here.

Registration rights define the rights of investors to cause the company to file a registration… Read the rest

LLC Operating Agreement series: Exit Strategies and Provisions

by gavin.n.johnson on February 16, 2012

Aside from choosing what entity to form your business as, one of the most important considerations in the early stages of forming a company is the exit strategy. Ironic as it may sound, deciding how to get out of the business in the beginning will save you and your business partners time and money down the road. As we’ve discussed throughout our series on LLC Operating Agreements, there is a lot of flexibility when deciding what provisions to include in your operating agreement. It’s no different when… Read the rest

News Roundup 2012 Week 7: Mergers & Acquisitions, Trademarks, Insider Trading, Regional News

by Kyle Hulten on February 15, 2012

Mergers & Acquisitions

Kellogg, Not Diamond Foods, to Acquire Proctor & Gamble’s Pringles Brand
Kellogg is acquiring Proctor & Gamble’s Pringles brand after a deal with Diamond Foods fell through. Diamond Foods had been poised to acquire Pringles for $2.695 billion. However, that deal crumbled apart after Diamond Foods announced that the last two years of financial statements will need to be restated. Proctor & Gamble is the big winner here, as Kellogg is actually… Read the rest