Trade Secret

A trade secret is primarily defined by the Uniform Trade Secrets Act (UTSA). Essentially, the trade secret is information such as a formula, pattern, program, method, process, technique, or similar piece of information that produces economic value. However, the information only produces actual or potential economic value because it is not accessible by other parties who could also generate economic value with its use.

Before the UTSA was passed, the use of a secret in trade was an offense under a common law tort known as the Restatement of Torts. Section 757 and 758 of this tort laid out general policies, and the majority of U.S. Courts adopted the trade secret tort. Comment (b) of §757 is still accessed regularly and determines what qualifies as a secret in trade. A secret in trade is recognized depending on the following:

· the amount of information about the secret known outside of the business

· the amount of information known by employees for the business

· the measures taken by the business to protect the information from exposure

· the value of the secret to the business compared to competitors

· the difficulty involved in acquiring the information and duplicating the information

In order to submit a trade secret claim, the information needs to qualify for protection in the first place. Secondly, the party holding the secret needs to prove that they took reasonable steps to keep in the information private. Thirdly, the party holding the secret must prove that the secret was not unlawfully obtained from another party.

There are two cases when a secret in trade is unlawfully obtained. The information was unlawfully obtained through improper means or there is a breach of confidence. For example, if an employee accessed information and sold the information to another company, the second company committed breach of confidence.

It is not illegal to obtain a trade secret if the information is discovered independently, reverse engineering leads to the discovery, or the company holding the secret failed to take proper steps in protecting the secret.

A trade secret does not last for a specific number of years like a patent. The secret in trade continues indefinitely until disclosure of the secret is reached lawfully. An inventor has the choice to choose between a patent and a protection of the secret, but the information cannot by dually protected at the same time.

Obtaining a secret in trade does not always exist as a crime only under tort law. It qualifies as a federal crime in some cases. The crimes becomes a federal crime when it violates the Economic Espionage Act of 1996.

A recent trade secret violation occurred when Kolon Industries stole information about the manufacturing process used by DuPont for Kevlar para-aramind fiber. Kolon is headquartered in South Korea and makes a bullet-proof product called Hercron. Kolon wanted to improve its products, so they targeted former employees that formerly worked for DuPont to receive information on the secrets.

They soon received information about the secret manufacturing process used by DuPont and replicated the process in three years.

Hungry Jack’s

Hungry Jack's

Hungry Jack's is an Australian fast food franchise that was originally under the control of the American fast food franchise Burger King. From 1995 to 2001, the two companies were involved in a prolonged legal dispute that was ultimately decided in favor Hungry Jack's.

Hungry Jack's began business in 1971 as the exclusive franchise of Burger King in Australia. In 1991, the contract between the two businesses was renewed. The contract included a "termination clause" stating that Hungry Jack's was responsible for opening four new franchise locations a year. However, the contract contradicted itself with another clause which stated that as long as Hungry Jack's opened at least two new locations in a year, another year's worth of a "grace period" would be granted.

In 1995, Burger King decided it wanted to take over directly from Hungry Jack's. Though the terms of the contract stated that every franchise location opened had to be approved by Burger King, the company refused to approve the opening of any new locations, making it impossible for Hungry Jack's to live up to the terms of the contract. At this time, Burger King also made use of a Hungry Jack's employee who provided them with information about the company's activities.

In 1996, Burger King claimed that Hungry Jack's had violated the terms of its contract and began directly opening its own franchise locations. In 2001, Hungry Jack's filed suit against Burger King, claiming that they had violated the terms of the contract. The case was heard in the New South Wales Court of Appeal and resolved on June 21, 2001. In its decision, the court considered the termination clause's terms and its contradictions with other parts of the contract. The court ruled that the contract allowed Burger King to arbitrarily impeded and hinder Hungry Jack's, making it impossible for them to honor the contract.

In reviewing the contract, the court considered the question of "good faith." Because the contract in question was not a standard commercial agreement for which precedent concerning good faith had not yet been established, the court had to rule on whether there was an implicit, justifiable reason to assume such a basis for business. Taking into account Burger King's attempts to prevent Hungry Jack's from opening more locations and use of internal information provided by its informant, the court ruled that Burger King's actions were taken with the direct intent of harming Hungry Jack's to allow Burger King to open its own locations.

As a result, the court ruled in favor of Hungry Jack's and ordered that Burger King pay roughly 71 million in Australian dollars. Burger King appealed the decision but was not successful in this attempt. The case is considered in the Australian legal system for introducing "good faith" as a measure of determining the merits of two parties' actions when involved in a contractual dispute. The case is often cited as a precedent in such cases.

Competition

How the Law Handles Competition between Businesses

In business, competition between sellers within an open marketplace is beneficial for both businesses and consumers. Competition not only keeps prices lower and raises quality, but it also provides more choices and more reason to be innovative. In order to maintain this sense of competition between sellers, the Federal Trade Commission enforces the antitrust laws.

These laws were first created in response to many companies who concealed their business practices using trusts in the late 19th century, which threatened the free market.

· The Sherman Act (1890)

o Created to prevent potential cartels or monopolies that could be detrimental to having competition in a free market

o The act does not allow companies to artificially raise the price

· The Federal Trade Commission Act (1914)

o Created the Federal Trade Commission which now regulates large corporations and stops them from having unfair trading practices

· The Clayton Act (1914)

o Prevents certain practices that could harm competition in free market, such as price discrimination or having an individual being a director on two companies in competition with each other.

While the anti-trust laws are applicable to most organizations, there are certain types that are exempt from the anti-trust laws, such as labor unions banks, and agricultural cooperatives.

The Federal Trade Commission still continues to monitor large corporations to ensure that no business practices occur that may harm the free market and healthy competition. The Federal trade Commission Monitors the following activities:

· Mergers

o While mergers can allow firms to operate more smoothly, mergers result in fewer options and possibly higher consumers.

· Agreements Among Competitors

o Businesses cannot conspire to raise prices, hinder other businesses from operating, or raising prices

o The Federal Trade Commission pays close attention to potential artificial price fixing

· Manufacturers and Product Dealers

o There are some agreements, for example a car with a brand of tires that are acceptable, but others can be illegal if they restrict competition without providing customer benefits.

· Monopolies

o By excluding other companies or impairing their ability to compete, it can hurt the consumer by allowing them to control prices.

· Other Anticompetitive Actions

By regulating major corporations, a free market can exist and competition is possible between sellers. However, there can be downsides to competition in the free market. It can potentially lead to increased costs and if waste if companies repeat ideas without innovation. In certain circumstances, competition is inefficient and a natural monopoly flourishes.

Charities

Charities and the Law

A charity is a non-profit organization that works to benefit the public or accomplish some form of philanthropy.

Charities can be either public or private foundations. When a charity (even if foreign) qualifies under the Internal Revenue code Section 501(c)(3), which makes them exempt from taxes, they are considered to be a private foundation. A private charity receives the majority of its funds from one source, such as a family, individual or a corporation.

If the charity does not qualify to be a private foundation, it is considered to be a public foundation, and also classifies under Section 508(b) or 509(a). In a public charity, the majority of funding comes from the government, private foundations, or individuals.

For a charity to have 501(c)(3) status, it must be organized and run exclusively for the reasons described in the code, in this case purely for charity. The organization cannot benefit any private interests and none of the earnings should benefit any one private individual shareholder. Because of this status, a charity can get tax-deductible contributions.

A charity is limited in its ability to conduct legislative and political activities, such as lobbying. Under 501(c)(3) code, a charity must do the following:

• Restrict lobbying to a very small part of the charity’s activities

• Refrain from taking part in any candidates during political campaigns on any level of government

• Not let any earnings benefit one individual or private shareholder

• Refrain from operating for the benefit of one private interest or for the purpose of any trade or business that is not related to the exempt purpose

• Refrain from illegal activities

The most common 501(c)(3) charities promote:

• Fighting community deterioration

• Preventing juvenile delinquency

• Eliminating discrimination and prejudice

• Constructing or maintaining public monuments, buildings, or works

• Advancing science or education

• Advancing religion

• Securing civil and human rights through the law

• Helping the underprivileged, the distressed, or the poor

A charity that is under 501©(3) must follow two disclosure rules placed by the federal tax law. A donor must receive from the charity a written acknowledgement for any individual contribution that is at least $250 in order for the donor to claim a federal contribution on a federal income tax return. Second, a charity must give a written disclosure to a donor who pays $75 or more as a combination of contribution and payment for a service or good.

Business Letter

Writing a Proper Business Letter

A business letter is written differently from most letters due to its use of formal language. Instead of showing creativity using evocative language, a business letter uses more succinct language, while stressing accuracy and specificity.

The write an effective business letter, it is important to assume that the receiver of the letter will not have much time and will want to quickly understand the point of the message. Depending on the context, the writing style can be more casual, such as what would be found in an email correspondence or more formal, such as what would be found in a contract. The writing style of a business letter relies on the circumstances and it is important to use the correct amount of formality.

Parts of a Business Letter

Most business letters can be broken down to the following sections:

• Sender’s address

o If the address is not already in the leader head, include one line above the date at the top of the letter.

o Only write the street, city, and zip code.

• Date

o The date is the date that the letter was written or completed.

o Write the month, day, and year 2” from the top of the page either in the center or left justified.

o It should be written in American date format if addressed to an American company.

• Inside address

o This is to a specific individual and his or her business address.

o The address is left justified and one line underneath the sender’s address or the left.

• Salutation

o This is the name within the inside address with the personal title.

o Use a personal title, full name, colon and a blank line after the salutation.

o The personal title can be omitted if gender is unknown.

• Body

o The body should be in paragraph format that are left justified and single spaced.

o There should be a blank line between paragraphs.

• Closing

o The closing is at one line after the final body paragraph and has the same horizontal point as the date. The first word should be capitalized and four spaces should be left between the closing and the sender’s name.

• Enclosures

o Enclosures should be indicated by typing “enclosure” a line after the closing.

o Documents can be listed optionally, particularly if there are multiple documents.

• Typist initials

o The typist of the document usually initials the document, but if it was written by the sender, initials are omitted.

Other tips for writing a good business letter

• It is acceptable to use first person pronouns, but make sure to use “we” when representing the company.

• Avoid using a passive voice in order to maintain clarity in the business letter.

• Be concise but still consider the tone of the letter in order to avoid being blunt.

How to Conduct Market Research

Market research is the evaluation and study of business marketing which helps those businesses identify strengths and weaknesses in their marketing strategies. Market research is important for all companies, large and small, and can range from complicated studies that cost millions of dollars to simple questionnaires sent to clients of a small business. Either way, market research is important for any company in understanding whether they are receiving a return on their advertisement investments and how to best use marketing tools to accomplish their goals.

How to conduct Market Research

1. Identify how Marketing Research can help your business

Marketing research can help any business understand if their advertisements are reaching clients and whether the message is being relayed. This can be extremely important information that will tell you if your marketing strategies are working as you had planned. Marketing can cost a business a lot of money and any inefficiencies in the marketing plan can lead to losses and hurt business.

2. Determine how to budget for Market Research

Market research can be very expensive, especially when seeking the help of outside consultants and firms that specialize in it. While large companies often must use market research firms, such as the Nielsen Company or IAG, there are cost effective methods that are also available. Asking clients about how they heard about your company, sending simple questionnaires, or simply seeing how many people respond to direct marketing are all cheap and simple ways of getting an idea of how your marketing plan is working.

3. Creating your Market Research plan

Once you have determined how you can budget for market research, you need to come up with a plan for obtaining the information. Start by writing your market positions and goals. Next, you will need to define what you will accomplish within a specific time period. You will then have to write a list of your target markets and the specific segmentations or niche areas you want to cover.

Then you will have to list the appropriate marketing channels, which are how you will specifically market to each of your target markets and what mediums you will use. These can include targeted mailing materials, television or radio media, or internet marketing. Finally, you should plan on how you will adapt to your competitors response.

4. Effectuating your Market Research

After establishing your plan, you will need to gather all of the information and make sense of it. Market research does not always result in completely straightforward information, so be prepared to analyze seemingly conflicting information. You may find that certain marketing strategies work for some clients but not all. Remember, market research is not the end result, but rather the means of changing your marketing strategy for the better.

How to adapt Marketing Research to your specific business

Market research can cover a host of different types of marketing plans, but you will need to find which type of market research best fits your business. Costs will be one of the most important factors in determine your level of research that you need. It is important that the costs of the research do not outweigh the benefits you receive from the information, so make sure that you fully understand what you are getting for what you are paying. Also keep in mind the type of marketing you have conducted, as your research will need to mirror the sources and forms of information that is needed.

Using Marketing Software

Marketing software is the available computer programs that allows you to bring certain marketing strategies with the internet. Marketing software can be used in numerous ways, including e-mail marketing, on-line surveys, event registration, and on-line sweepstakes. Most marketing software use legitimate forms of advertising, however you must always be aware of illegal or unethical software that use e-mail bombing, spamming, or even spy-ware. You do not want your business name attached to such forms of adversing, as it will create a negative image for your clients.

How to use Marketing Software in your plan

1. Identify your business strengths and your client base

Before determining how you will use marketing software and what type of software you should purchase, you must identify what products and services you want to bring to your clients attention. You must also consider your client base. Ask yourself, do your clients spend their time on computers checking their email or do they spend the majority of their work time disconnected? Should you try to reach your clients at their personal email or while they are not working, or should you only contact them while they are on the job?

2. Consider your budget

All different types of marketing software is available for businesses however their costs can vary greatly depending on how technical they are. Of course, the better quality marketing software will cost significantly more than the less technical versions. The most basic email programs may cost you a few hundred dollars a month while the more technical software can cost tens of thousands of dollars per month. You must determine your available marketing budget before you can even consider developing your marketing plan using marketing software.

3. Develop your marketing plan while considering what Marketing Software is appropriate

The marketing software that you choose must fit in with your entire marketing plans for your business. Marketing software should not define your overall plan, instead you should work the marketing software into an overall marketing plan. Make sure you understand what your chosen marketing software can do and what it cannot accomplish. Many marketing software companies will tailor their software to your needs, so you may need to work with these companies to develop custom marketing software for your business.

4. Monitoring your Marketing Software

Once your overall marketing plan is in place and your chosen marketing software is being utilized, you must monitor how successful the software is. Many types of marketing software will provide you with data about your marketing, so it is important that you use this data in determining whether the software is working as you had planned or if you need to change it. Working with marketing software companies is one of the best ways to ensure that the software is working as efficiently as possible, however this may not be a possibility for small businesses that do not have the budget to do so.

Equipment Financing FAQS

Businesses in need of flexibility
may turn to equipment financing to acquire the implements necessary to run
their enterprise effectively. After
accepting business equipment financing, the liquidity afforded by the
arrangement will enable the business to pursue other functions vital to the
success of their business.

Why should I pursue business equipment financing?

As equipment for businesses is
generally a capital investment, many businesses will view equipment financing
as a means of having the equipment pay for itself. Although this is less cost-effective than
purchasing the equipment outright, small businesses will not always have
sufficient cash flow to justify buying expensive or vital equipment
outright. The liquidity afforded by
equipment financing typically will outweigh the potential drawbacks from paying
interest on equipment financing.

Some business financing providers
will even consider software a type of equipment and will agree to finance that
as well. For many businesses,
specialized software necessary to the operation of the company will cost
thousands of dollars, putting them in the exact situation as businesses that
need equipment financing on tangible equipment that produces the products sold
by the business.

What are the conditions of business equipment financing?

During a business equipment
financing arrangement, the equipment is technically owned by the leasing
company. This means that the financing
is a form of secured debt and failure to meet this debt obligation will enable
the leasing company to retake possession of the item. Continued payment will give the lessor the
right of use to the financed asset and usually leases to own the item eventually. These provisions must be made in advance with
the business equipment financing organization, to ensure the fairness of the
agreement, especially if the lessor intends to own the equipment at the end of
financing.

How will the business equipment financing arrangement work?

Depending on the financing
organization chosen, there may or may not be upfront costs or application
fees. The upfront costs may be a
provision that requires some advance payment, such as the first and last
monthly payments that would be paid made in advance.

Expect to be offered a variety of
payment plans, from the conventional monthly payment plan to seasonal,
graduated, deferred or annual payments.
Each of these plans will have its own merits and only the business
requiring the equipment financing will be able to make the best judgment on which
plan offers the optimal level of flexibility for the business. For instance, a business that anticipates
high startup costs and slow cash flow may choose equipment financing with
graduated payments, making low payments at first and eventually making higher
payments. Businesses that have income
that varies through the year, such as seasonal businesses may opt for a
seasonal/skip payment option will allow some payments to be skipped, in
exchange for higher payments made during seasonal peak times.

What equipment can be financed?

Virtually any equipment
imaginable can be financed, depending on the equipment financing firm. This will include all items from medical
equipment to 18 wheel freight trucks.
The firm will have different conditions for lease, depending on the
equipment, such as credit checks or minimum experience using said equipment.

Network Marketing For Your Business

Network marketing is a method of developing client contact by using other agents and individuals to meet with clients and represent you. Network marketing is used in many different businesses, but is most often found in businesses that are selling products or services that are of a very personal nature. Insurance and financial services are two good examples of products that people tend to purchase through friends and family.

How to use Network Marketing for your business

1. Identify if Network Marketing is right for you

Not all businesses can benefit from network marketing so it is important to identify if your business can before seeking to use it. What type of product or service do you provide? Do your clients seek to use you because they trust you and your company on a personal level, or are they only concerned with price and efficiency. Network marketing can help businesses who rely on reputation and trust.

2. Determine if you can budget for Network Marketing

Different types of network marketing can have different costs, but you should be aware that it will be necessary. Many network marketing plans call for hiring employees or representatives that seek to sell your product to friends and family within their personal network. They then are given a commission for the business that they bring in. Other plans call for full time salaried employees who work their contacts into continuing business relationships.

3. Establish your Network Marketing plan

Once you have determined that your business can benefit from network marketing, you must develop a plan for putting it into place. Search out qualified individuals who will represent your business and who have relationships with companies. Determine how many representatives you will need, what they will be selling, and how they will be compensated. It may be a good idea to slowly use network marketing instead of jumping into a large plan. Trial and error will show you how network marketing can work without committing you to a large network marketing plan.

4. Put your Network Marketing plan into effect

Taking all of the above steps into account, you next have your representatives go into the community and try to get new clients for you. You should see a spike in new clients while your representative works their contacts and brings them to your business. Eventually though, you must plan for your representative’s contacts to run out. It is at this point that you must have planned for either eliminating this representative or moving them to try to bring in new clients or sell a different product.

How to adapt your Network Marketing

Marketing as a whole has been greatly affected by new technology and better sources of communication. Now, clients all over the world can be exposed to your marketing. Keep this in mind while adopting any network marketing strategies or changing existing plans. Network marketers can use these sources of contact for bringing you clients within their networks. Representatives of your company may have vast networks of contacts, through online communities, social media, or other exposure to people around the world.

Loan Amortization Schedule

A loan amortization schedule is a useful tool to determine the amount left on a loan and the interest that will be paid. Through the use of a loan amortization schedule tool, one will be able to determine the date of repayment, monthly principal and interest owed and the sum of all payments that will be made to the lender. Although it is not particularly difficult for an individual to generate a loan amortization schedule, tools exist to guide borrowers through the steps of making a loan amortization schedule to help determine their future finances.

What is the definition of amortization?

The term amortization refers to the amount of the monthly payment made on a loan that decreases the principal owed. You use a loan amortization schedule to determine how much the portion of the monthly payment that is not allocated to pay interest will decrease the principal amount owned.

How do I calculate a loan amortization schedule?

First, gather the following information (sample numbers included)

Loan Amount = $50,000

Loan term = 10 years

Interest rate = 12%

Amortization rates = monthly

Loan amortization can be calculated manually sometimes, but generally speaking, it is a better idea to use software or resources that are programmed to give accurate results on loan amortization schedules.

Using an online loan amortization calculator, we find that the initial payment made is $717.35. $500 is paid in interest, with the remainder paid toward reducing the principal. Looking at the loan amortization schedule, we see that assuming the repayment began in January 2012, by Jan 2015, $406.37 is being paid in interest and $310.98 is paid toward the principal. Only about $10,000 of the principal will be repaid that that point. Toward the end of the loan amortization schedule, which ends on December of 2021, we see that more of the principal is repaid with each payment, while the share of the payment that is used to cover interest, declines, coinciding with the slowly reducing principal amount.

What are the issues with a loan amortization schedule?

A loan amortization schedule assumes that payments will remain exactly the same throughout the repayment of the loan. Especially in arrangements with adjustable interest rates or lacking “balloon payments,” monthly payments can vary. The lack of balloon payments allowed for more of the principal to be repaid early, thus reducing the interest that will be owed. Use a loan amortization schedule as a benchmark to estimate how much a loan will cost and only use it as a guide if the loan is fixed and you know that you will not able to repay it early. Payments may vary slightly due to rounding on the part of the lender although these discrepancies are usually adjusted at the end of the year.

As with all blended payment arrangements, interest will dominate the repayment at first and principal repayment will overtake interest repayment a bit of time after repayment has begun. A loan amortization schedule can help you visualize when that will occur, which can be valuable information.