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MoFo Tech

A blog dedicated to information, trend spotting & analysis for science- & tech-based companies

When Bosses Can’t Be “Friends”

Modern Technology has increasingly blurred the line between business and personal lives, thanks in large part to social media that can broadcast employees’ views to friends and the public in a heartbeat. Companies are increasingly tempted to move into what may be considered “personal” domains in order to maintain their reputation or control over employees’ time. And that has translated into some serious debates in courtrooms and legislatures over the limits of corporate conduct.

For example, several states have passed laws restricting access to the social media accounts of employees and job applicants. Several federal bills with similar requirements are in the works. Typically, these laws forbid employers from requesting the passwords to personal social media accounts. But some states also forbid employers from attempting to access the non-public sections of these personal accounts.

“Something as simple as asking employees to make their profiles public or a manager sending a ‘friend’ request to an employee may run afoul of the laws in your state,” says Christine Lyon, a Morrison & Foerster partner who focuses on privacy and employment law. “Companies should consider the laws of the state where the employee is physically located.”

Another prevalent question is who “owns” the followers and related materials of an employee’s social media account when the employee leaves the company. Companies want to retain the loyalty of followers developed using company time and resources, while employees believe their following results from their own efforts and influence. One complicating factor: they may have used their personal devices when posting to the account. “Several lawsuits involved cases where it wasn’t clear if the account was for personal or business purposes, and the employee used the account for both,” says John Delaney, leader of Morrison & Foerster’s Social Media practice. Delaney recommends having employees sign a social media policy and structuring it to help prevent legal disputes down the road. For example, employers should outline a process for opening new social media accounts that require sign-off from an administrator, who can influence key decisions such as the account’s name.

Employers should also make sure the policy states that the company’s official social media accounts—those bearing the company’s name—cannot be used for personal business, he adds.

No Billboards, Please

Companies intending to seek funding under the JOBS Act’s crowdfunding provision gained a seeming advantage in September when the SEC removed its ban on the general solicitation or advertising of certain types of private placements. But this may be less promising than it sounds, says Palo Alto-based Morrison & Foerster corporate and securities partner Timothy J. Harris: “There is a strong undercurrent in Silicon Valley that companies showing their wares this way are openly admitting that they cannot raise capital by traditional means that involve the imprimatur of professional venture capital or private equity investors. This may suggest that the company is of questionable appeal or quality.”

General solicitation can also be an uncertain and expensive means to obtain funding. “You can stick your billboard on the highway, but you still have the costly obligation of reasonably verifying that your investors are accredited, among other requirements,” Harris says. And there are potential downsides to inviting strangers to the party and keeping them happy. Adds Harris, “Imagine having numerous high-maintenance investors bugging you for their returns.”

Patent Quality: Shining Through

A New Review Process Shows the Importance of a Good Application

The newly available procedure for challenging patent validity known as inter partes review, or IPR, is forcing patent players to raise their game—from application through litigation.

More than 800 petitions for IPR— many more than the Patent Office itself had expected—have been filed since the process became available in September 2012, according to the USPTO. And while the Patent Trial and Appeals Board issued only one final decision in the first year of IPR, there’s much to be learned from its many rulings on motions so far, says Morrison & Foerster patent attorney Peter Yim.

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Germany’s Magic Portal

Representing about 40 million TV households, Germans now receive virtually all on-demand content by Blu-ray Disc or DVD. Video-on-demand services are set to change that over the next three to five years, says Christoph Wagner, a partner in Morrison & Foerster’s new Berlin office. “Look for dynamic, if not explosive interest in VoD as broadband penetration increases and major players consolidate the presently fragmented on-demand market,” says Wagner, an expert in the TMT (technology, media, and telecommunications) sector, key to Germany’s economy. Continue Reading