Business and Tax Lawyer Blog

A trademark is a name, logo or some marketing device used by a business to identify a product. Words, logos, the shape and/or color of product packaging, the product itself, uniforms, building shapes, telephone, colors, sounds, even scents can be registered as a valid trademark.

Trademarks can be divided into four different types: generic, descriptive, suggestive and arbitrary/coined terms. Generic is really what it say, generic. They are terms that have become common for a product. Generic terms generally cannot be protected. Aspirin is an example of a generic trademark.

Descriptive marks describe some aspect of the product. Descriptive marks are difficult to register because they generally are terms that everyone should be able to freely use. However, if you can prove that the works have a secondary meaning, then you can get the mark registered.

Suggestive marks suggest some aspect of the product itself. They are the most popular marks among business owners but can also weaken the mark itself. Suggestive marks are different from descriptive marks because they generally involve some play on words or require some thought to understand the relationship between the mark and the product.

Arbitrary marks are marks that have no apparent relationship to the product it is being used on. These are the strongest types of marks. KODAK is a perfect example. The word has nothing to do with film although now if you say KODAK, you think film.

Selecting a mark for your business can be very difficult. Ideally, you want a mark that is short, incapable of being misspelled and has meaning. I say incapable of being misspelled because if a misspelling occurs and catches on with the public, it could destroy your mark.

Why registered a mark in the first place? With registration comes ownership. It is absolute proof that you own the mark. Without registration, in order to bring a legal action to protect your mark, you must prove ownership. By registering your mark, there is one less hurdle to prove that your mark is being infringed upon.

Continue reading "General Information on Trademarks" »

Recently, there was a three page lawsuit filed against the Jacksonville Jaguars for copyright and patent infringement. The plaintiff in the lawsuit is claiming that the Jaguars violated his rights in a “Three Point Stands” device. The plaintiff claims that the Jaguars asked him to design a device that can be used to practice kickoffs and field goals and that he was never paid for it. He is claiming $5 million in damages.

Generally, to obtain a patent or copyright, you must file paperwork with the U.S. government to register your idea or expression. A copyright is a grant by the U.S. government of certain exclusive rights with respect to original works of authorship in:

1. Literary works;
2. Musical works;
3. Musical Lyrics;
4. Dramatic works;
5. Choreographic works;
6. Pictorial, and graphic works;
7. Sculptures;
8. Motion pictures;
9. Sound recordings; and
10. Architectural works.

A copyright lasts for the life of the author plus 50 years. If the author is unknown, then the copyright lasts for the lesser of 75 years from publication or 100 years from creation. You do not have to register your copyright with the U.S. government but registration greatly helps in the enforcement of the copyright.

A patent is a grant by the U.S. government allowing the owner to exclude others from making, using and selling an invention within the U.S. It does not give the owner the absolute right to use the invention since use of the invention could cause the owner infringe on another patent. This is usually not the case however.

In reading the complaint, I’m not sure if the copyright claim is a valid claim since the plaintiff is claiming violations in his rights in an invention, not something covered by a copyright. As far as the plaintiff’s patent claim, the plaintiff never claimed ownership in a valid patent that is registered with the USPTO. We shall see what happens with the lawsuit once it is hear by a judge in federal court.

Continue reading "Man Sues Jacksonville Jaguars for Patent and Copyright Infringment" »

My paralegal was reading the news this morning when she came across an article that said that Jay-Z and Beyonce were attempting to trademark their newborn’s name. They named their baby Blue Ivy. When she told me about it, I went and dug a little further to find out exactly what they were trying to trademark.

For those of you who do not know, a trademark in its simplest terms is a name, logo or other device used by a business to identify their product(s). A service mark in its simplest terms, is a name, logo or other device used by a business to identify the services they provide. An example of a trademark is “McDonalds”.

Further, to achieve a trademark or servicemark with the use of someone’s name, they must consent to the use through a signed affidavit.

In reviewing the application filed on January 26th, Jay-Z and Beyonce are attempting to protect the words “Blue Ivy Carter”. They filed in 15 different classes (3, 6, 9, 12, 14, 16, 18, 20, 21, 24, 25, 26, 28, 35 and 41). Classes 35 and 41 are for servicemarks. They are attempting the shotgun approach and filing in classes that contain anything from hair care products to sports accessories to entertainment services. All of the information is readily available on the USPTO’s website at www.uspto.gov. The applicant for the trademark is Beyonce’s Delaware LLC, BGK Trademark Holdings, LLC.

In the articles I’ve reviewed, it seems like Jay-Z and Beyonce are trying to protect their child’s name from being used for profit by other businesses. As soon as they announced the name of their child, several businesses filed for trademarks for “Blue Ivy”. Some “experts” are saying that it is a great idea in order to protect their child’s name. Although it is a good idea to protect their child’s name, I’m not sure if they will be able to actually get the marks registered.

To actually obtain a trademark, you must intend to use the trademark in commerce when you file it and you must eventually show proof of your use in commerce. You may file the initial application with an “intend to use” designation on it so that you have more time to get your products up and going. However, you eventually have to prove use. Although I’m sure they have the money to produce items with “Blue Ivy Carter” all over them, they also have to make them available to the public for purchase. (By the way, it would be several hundred products they would have to produce).

It is possible to buy some time from having to prove use of the trademark but you can only buy so much time from the time you initially file. They may be filing now knowing they will not have any products to prove use and will let the application lapse and then refile and continue to do such over and over.

Continue reading "Jay-Z and Beyonce file Trademark and Servicemark for “Blue Ivy Carter”" »

This weekend more than eighty attendees will participate in Northeast Florida's first "Startup Weekend," an intensive 54-hour three-day event which will help existing businesses, new businesses and "entrepreneurs with big ideas" get a jump start on building and implementing web and mobile business applications.

Everyone is fairly clear about business applications for the web (making your products or services accessible through notebooks or desktop computers), but what is a mobile business application? It is basically the same thing--but accessible on smart phones, iPads, iPhones and other mobile or portable devices. A mobile application could include additional website bookmark capabilities or provide for instant messaging options via a mobile device or provide access to other mobile functions. Web and mobile business applications simply provide businesses another way to connect with their customer base in selling their business product or service. Sales to customers while limiting the need for additional sales personnel or office space and a mechanism to permit businesses to reach a market outside their local community could be critical for the entrepreneur's or new business owner's success in today's business environment. The three-day event will be held at UNF and will engage three groups (with three different types of tickets for the event), including:

"Developer" Participants. This ticket category will include technically trained individuals who can write computer code for a businesses' web based computer applications and mobile applications.

"Designer" Participants. This ticket category includes non-technical people who are essential to the development of the look and the brand elements of a businesses' web based computer applications and mobile applications (including, for example, graphic artists, social media specialists and video specialists).

"Business Support" Participants. This group will include professionals who will support the entrepreneur or business in the development and implementation process (including, for example, financial, legal and marketing professionals and businesses).

The Startup Weekend will be an interactive event. It will kick off with ideas being pitched and teams being formed to consider the top products and services. As the event draws to a close on Sunday evening, ideas will again be pitched--but this time to a panel of judges. The finalists selected by the panel of judges will have the opportunity to win up to $25,000 in prizes.

The Jacksonville Business Journal recently interviewed entrepreneurs and new business owners attending Startup Weekend event (see "City's First Startup Weekend to bring entrepreneurs together") and reported on various mentors and business leaders that would be on hand to guide the participants through the interactive activities that weekend. The January 20, 21 and 22, 2012 Startup Weekend has met with a resoundingly positive response in the Northeast Florida business community as it was officially announced last week that the event was "sold out."

Still, if you are interested in participating in the January event, sponsors are "wait-listing" individuals who want to participate this weekend and are releasing any tickets that become available in the order you go on the list. Even if you are not able to get into the January event, if your name is on the waiting list you will receive communications about upcoming events.

Continue reading "Entrepreneurs and Local Businesses Sell Out Northeast Florida's First "Startup Weekend"" »

While practicing law in northeast Florida, Wood, Atter & Wolf is often contacted for business advice regarding forming, operating and dissolving corporate entities, partnerships and limited partnerships by businesses operating outside of Florida – from just across the Florida border or, due to the reach of the internet, by businesses located many states away. Matters involving the creation or dissolution of businesses “created” within another state are often referred to attorneys located in the business’ home state. Why is this? It is because a business entity is considered a “creature” of the state in which it is created–with its governance, creation, operational restrictions and dissolution established and governed by the rules of that state. A Florida Corporation operates under the rules established by the Florida legislature. Further, as the establishment of partnerships is an area fully given to the states, each state and the District of Columbia has its own statutes and common law principles that govern partnerships, both their establishment and dissolution.

The formation and operation of Florida partnerships is governed by Chapter 620, Florida Statutes. The Florida Revised Uniformed Limited Partnership Act was enacted in 1986. In 1995, the Florida Legislature completely rewrote Florida partnership law and repealed numerous sections of the Uniform Partnership Act. The Florida Legislature also adopted the Revised Uniform Partnership Act, as well as authorized limited liability partnerships. As of January 1, 1998, the Revised Uniform Partnership Act governs all Florida Partnerships.

Dissolution under the Revised Uniform Partnership Act: Pursuant to the Revised Uniform Partnership Act, a partnership is dissolved and its business must be "wound up" upon the occurrence of certain events:

1. Withdrawal of a partner other than a dissociated partner;

2. Express will of all the partners;

3. The occurrence of a specified event or expiration of the term or completion of the particular undertaking set forth in the partnership agreement;

4. Expiration of 90 days after a partner's dissociation by death, wrongful dissociation or as otherwise set forth under applicable Florida Statutes (unless the majority of the remaining partners, including rightfully dissociated partners, agree to continue the partnership business);

5. The occurrence of an event making it unlawful to continue the partnership, unless the illegality is cured within 90 days after notice to the partnership and the cure is effective retroactive to the date of the event; or

6. A judicial determination that the economic purpose of the partnership is frustrated, it is not reasonably practical to carry on the business of the partnership or that it is equitable to wind up the partnership business.

Continue reading "Dissolving a Partnership" »

A recent Florida Intellectual Property lawsuit provides clear warning to business owners – check trade names and logos out before sinking time and money into building a brand name for your business. The trademark infringement lawsuit was brought by a Florida business, The Wigglebutt Inn, against Indiana-based Wigglebutt Doghouse.

Prior to filing suit, Florida-based Wigglebutt Inn advised Wigglebutt Doghouse of the existence of its registered trademark – registered with the USPTO June 1, 2010 in connection with dog boarding and dog care. The Florida operation had begun operations in September 2009. The Cease and Desist letter provided the “Doghouse” 14 days in which to stop using “Wigglebutt” or other similar names. As the “Doghouse” failed to comply with The Wigglebutt Inn’s demand, the “Inn” filed a lawsuit against the “Doghouse” in U.S. District Court in Fort Myers, Florida, for violations of Federal trademark laws and Florida law.

The Wigglebutt Doghouse was incorporated in May of 2010, nine months after the Florida operation opened for business. The Doghouse filed legal papers to do business in the State of Indiana on September 29, 2010, three months after The Wigglebutt Inn secured its Federal Registration for the name. The “Doghouse” then spent over a year building their business under the name Wigglebutt Doghouse. They now face the necessity of defending their right to use that name – expending money and time in the effort. Further, if they are unsuccessful, they could be prevented from continued use of the name and, more importantly, could be required to turn over branded products, packaging and print materials to The Wigglebutt Inn for destruction and to turn over profits earned under the Wigglebutt name.

So what is the “moral” of this story? Before you launch your new business, service or product, make sure that the name has not been registered with the USPTO and is not already in use in commerce. Run a Google search; contact an intellectual property attorney for a check of USPTO registrations. Check for State registrations – both trademark and fictitious names. Check the corporate records in your state to see if the name is currently in use. Preliminary research and due diligence will save you time and money in the long run.

Continue reading "Trademarks and Trade names - Why Businesses Should Check Name Availability" »

A cornerstone of Trademark Law is the obligation of the owner of a Mark to defend against the Mark’s unapproved usage by others. The primary Federal Statute covering Trademark matters is referred to as the Lanham Act which begins at 15 U.S. Code Section 1051. A Trademark can be a word, symbol or phrase used to identify a specific product. Marks registered in connection with services are referred to as Service Marks, but the Lanham Act treats both Trademarks and Service Marks (“Marks”) similarly. Registration of your Mark will provide nationwide notice that your Mark is owned by you and that you are permitted to bring action to protect that Mark in Federal Court –in addition to preventing usage by the adverse party you may also claim (and may recover) treble damages and attorney’s fees.

Once registered with the US Patent and Trademark Office, it is possible to lose the benefits of registration of the Mark. This loss can occur based on abandonment of the Mark by the Owner (i.e., where use is discontinued by the Owner with no intent to resume use), improper assignment or licensing of the Mark (i.e., where the Owner grants another the right to use the Mark, but fails to ensure quality control or to supervise appropriate usage of the Mark) or “generality” (i.e., where Marks that were originally distinctively aligned with a product become so “general” over time that the unique relationship is lost). Companies seeking to protect their Marks may bring infringement or dilution claims against unauthorized users of their Marks or names/designs substantially similar to their registered Marks.

An interesting Trademark battle over these legal principals is underway now between Chick-fil-A and Vermont Artist Bo Muller Moore. Chick-fil-A has used the slogan “Eat Mor Chiken” in ad campaigns for over 16 years and, as a result, when most motorists see a billboard with two black and white cows and the phrase “Eat Mor Chiken” – they start looking for a Chick-fil-A at the next exit. Fast forward to 2006 and you will find Vermont based artist Mr. Muller-Moore printing t-shirts that say “Eat More Kale.” There are differences, of course – think spelling challenged cows versus spelling champion vegetarians. The unlikelihood of product confusion (white meat and green leafy stuff) is clear. However, remember that the Mark protection issue facing Chick-fil-A is the need to preserve the “unique” relationship in the public’s mind between the phrase “Eat Mor Chiken” and the restaurant’s products. Failure to police the Mark could be the first step down a slippery slope toward the USPTO determining that the phrase is, in fact, too general to deserve protection.

Chick-fil-A has acknowledged the entrepreneurial spirit of the artist and small businesses in America; noting proudly that all of their franchises are owned and operated by local business owners. However, they state that they must continue their opposition to “Eat More Kale” in order to “legally protect and defend our ‘Eat Mor Chiken’ Trademarks.”

IF you would like to read more about the Chick-fil-A Trademark action, see
Chick-fil-A picks a bone with kale eater over alleged trademark violation and Chick-fil-A says it will fight Vt. man for slogan. If you have questions about filing for a Mark or protecting a registered Trademark or Service Mark, call an intellectual property or business lawyer at Wood, Atter & Wolf, P.A., with offices in northeast Florida.

A recent article in the TheStreet, an internet magazine focused on the world of investment, finance and business, reported that IBM would be expanding its “cloud offerings for business users” through the purchase of DemandTec in the first quarter of 2012. This follows news in early December regarding SAP’s purchase of SuccessFactors and Oracle’s October purchase of RightNow. The article noted the trend toward acquiring cloud-based marketing pricing and analytics companies, reporting that “Cloud based businesses and analytic abilities are becoming increasing important to IT services and software giants as consumers and businesses make more Smartphone-based decisions using mobile networks.” To read more about those trends see IBM Pays More Than SAP and Oracle for Cloud Growth (Update 1).

So, what is Cloud computing? Some describe the Cloud as “virtual servers” available over the internet. Some describe the Cloud as any server outside of your local area network’s firewall. Cloud computing arises when you are going to provide for your business’ computing needs via the internet through a subscription-based or on pay-per-use basis or on a third party contract basis. Not only are you going to access your “virtual servers” via the Cloud, but you may also receive access to full service IT applications, data storage, software, data security, business analytics specific to your industry, real-time access to Vendors, digital access to your customers and assorted sales tools. The available software products are expanding rapidly as mid-sized to large IT and software companies line up to “cash in” on the growing Smartphone and Tablet appetite of consumers.

So how can doing business in the Cloud positively impact your business? Do some research within your industry and with other business owners you trust to find out what your options may be. Contact various Cloud service providers and ask how they can support and improve your business model. Ask how each Provider’s product can increase your business’ capability or customer access without investing in costly new infrastructure, staffing or equipment. Ask what type of customer support they will provide in training your staff and maintaining your system. Ask what type of “downtime” you may be facing and how they will minimize the risk of downtime. Ask about server security and where the data will be stored – is there redundancy in data storage to prevent loss in the event of a natural disaster impacting the Cloud or your own business. Ask what happens when your contract with the Cloud provider ends or is terminated early.

Running a business takes a lot of energy and often we can become imbedded in the way we have done business in the past. However, most business owners have a wealth of knowledge in the people surrounding them - - take the time to check out what your competitors are offering with regard to accessibility via the internet. Ask your sales and service people if they think there are better ways to do business using internet based tools. Ask your accounts receivable and accounts payable people if they have seen internet tools used by other companies that could be beneficial to your own business. Ask your staff members and interns to brainstorm how internet based tools could grow your business, reduce costs or offer better services or products.

When you are ready to launch into the Clouds, review your contractual obligations and provider warranties carefully. If you have questions or would like legal assistance in reviewing the documentation, contact a Florida business lawyer with Wood, Atter & Wolf, P.A.

In June 2011, Major League Baseball's Los Angeles Dodgers filed Chapter 11 Bankruptcy. The Chapter 11 protections will permit the Dodgers to continue to operate as a business, but protect its cash and assets while taking a look at how its existing obligations and contracts can be modified to allow the business to continue in a financially viable manner. While in Chapter 11, the team can continue to make payroll, sign players, pay contracts and compete as a team. As with other debtors in Chapter 11, the Bankruptcy Court seeks to balance the effort to maximize the value of the bankruptcy estate for the benefit of the Dodgers' creditors and the effort to arrive at a plan by which the Dodgers' business can continue to operate. Unlike other businesses in Chapter 11, the Bankruptcy Court is dealing with Major League Baseball's oversight of each baseball franchise’s business activity.

A major asset of the team that has come under scrutiny by the Bankruptcy Court is the Dodgers' media rights. The existing media rights contract is with Fox Sports and that contract called for a scheduled renegotiation over a 45 day period in October and November 2012. The Dodger Franchise, looking at a sale of all or part of the team as a part of its reorganization plan, has taken the position that to get the greatest value for such media rights, any media rights sale (of television rights to future games) should occur in connection with the sale of the team -- and not be delayed until 2012.

Fox Sports has objected to the change in its contract right to bid on media rights to the future games - arguing that their original renegotiation period was exclusive and confidential, while the proposed sale process under the supervision of the Bankruptcy Court would permit any purchaser of the Franchise to accept or reject any media rights extension negotiated by Fox Sports and the current ownership group. There is some thought that this would permit alternate bidders to see the details of the Fox Sports negotiated extension of rights and then aggressively bid against Fox.

On December 8, 2011 U.S. Bankruptcy Judge Kevin Gross approved the Franchise's plan to bundle the sale of the team with the sale of future media rights to games starting in 2014. Fox Sports is considering an appeal of the ruling.

All business owners should be aware of the potential impact of a bankruptcy filing by their business suppliers and customers. During the pendency of your supplier's or your customer's bankruptcy action, the Bankruptcy Court can "step into the shoes of" your parts provider, your distribution vendor, your best customer. As a result, you should consider adding specific language addressing the impact of their potential bankruptcy to your standard agreements with customers, vendors and suppliers - addressing your rights in the event of their default under the contract, or in the event of their stated insolvency or their intent to file bankruptcy.

For more information about the Dodgers Bankruptcy see Judge approves Dodgers media rights sale. To discuss how to how to protect your business through contractual protections, contact a business lawyer at Wood, Atter & Wolf, with offices in Jacksonville and Ponte Vedra Beach, Florida.

So you've taken a great idea, formed a plan, created a blueprint for how to get the attention of your customers and acquired the appropriate amount of start-up funding. Now you face your next big decision - what type of business organization is best for you? Possible organization structuring can include partnerships, corporations, sole proprietorships and limited liability companies. There are key differences between these structures that can impact your business' management, your taxes and your day-to-day operations.

Sole Proprietorship:
A Sole Proprietor is, basically, you. You may elect to operate your business under your own name or under a descriptive "new" name. The descriptive new name can be linked to you by the filing of a Fictitious Business name with Florida's Secretary of State. While the Sole Proprietorship structure is the simplest and least bureaucratic form under which to operate a business, it fails to protect your personal individual assets from litigation/claims by unhappy business customers, vendors or guests or from the debts of the business.

Partnerships:
A "partnership" is typically an agreement between two or more people to finance and operate a business. The "creation" document is generally referred to as a Partnership Agreement. Partnerships, unlike sole proprietorships, are a legally separate entity from the partners themselves. Contractual obligations are made with the entity, not the individual partners. Taxation does not occur at the entity level, but rather is passed through to the partners. With regard to liability for claims by unhappy business customers, vendors or guests, or claims against you for business debts, the partnership structure does not protect the partners from personal liability for the obligations and debts of the business. The partners share responsibility and authority regarding operating the business. However, partners have the flexibility to define their relationship among one another and are permitted to split the ownership and profits of the partnership in the way they desire. Partners can also share equity interests - ownership interest in the partnership, which helps in building capital. As partnerships are based on a shared ownership concept, the actions of one partner can bind the whole partnership.

Corporations:
Florida corporations are created under Florida law and basic "creation" documents generally include the Articles of Incorporation and the Bylaws. The basic attributes of a corporation and what distinguishes a corporation from other business organizations include: (1) limited liability of the corporation's directors, officers and managers and (2) a corporation's potential for perpetual existence (the corporation exists independent of the lifetimes of its directors, officers, etc.). The corporation can initiate a legal suit, as well as be sued. The corporation may also have the status as a separate tax payer. Many of these attributes are considered advantages of this form of business organization. However, the multiple levels of management (shareholders, directors and officers) will present certain administrative requirements for you in operating the business.

Limited Liability Companies:
The basic "creation" documents for a Florida Limited Liability Company (or "LLC") will include the Articles of Incorporation and the Operating Agreement. The management structure of the entity is designated in the Operating Agreement. The owners of the LLC are called members. Liability of members of the LLC is generally limited to each member's investment in the LLC. An exception to that protection from personal liability can arise in the event an individual member engages in unlawful actions in relation to a claim against the LLC.

If you are thinking about starting a business, contact Wood, Atter & Wolf, P.A., to speak with a business attorney and discuss the advantages and disadvantages of the various business organizations.

A recent CBS News story featured the negative impact of “big bank” credit scoring procedures on business owners. We would expect this to be a feel-good piece on how small businesses play a leading role in job creation. It told how Lisa Whiting, a Wisconsin entrepreneur, started a business using her personal savings, credit cards and a County loan program that was available for businesses hiring special needs workers. Through hard work and careful business management, Ms. Whiting was able to grow the business and by 2009, she had 36 employees. Orders were rolling in and Ms. Whiting went to the bank to secure a loan to buy the additional equipment to enable the growth to continue – believing that she would be increasing her staff to 50 workers by the end of 2012. That’s when she hit a brick wall. Ms. Whiting discovered that her Credit Score had dropped from 809 to 544 and that her “big bank” was not willing to lend her the money.

How did this happen? Ms Whiting had used several credit cards as part of her start-up funding. She had an on-time payment history, but stayed near her borrowing limit on those cards. This raises a red flag that can negatively impact a Credit Score. During the financial crisis, her bank had (with no warning) dropped the limit on some of her cards. This credit limit drop raised a red-flag that negatively impacted her Credit Score. The resulting drop in her Credit Score raised a red flag that caused the bank to again lower her credit limit - which of course again negatively impacted her Credit Score. And it was as a result of her low Credit Score, that she was refused the loan to expand the business.

CBS News asked Marilyn Landis, the CEO of Basic Business Concepts to explain the big bank’s actions. She noted that Banks had always viewed loan “risks” as a way of anticipating where they could be faced with a loan default. This used to be done with local bank officers, but big banks had eventually turned the risk review process into a math formula and in recent years had turned the process over to a computer. The computer-based approval process moved more quickly “without people” and was considered more efficient. When the financial crisis hit, bankers jumped to cut back on the bank’s credit risk. If a business or person fit the computer’s profile of a credit risk, the bank moved automatically to reign in their credit so the bank would reduce its default exposure.

Ms. Landis suggested that a person’s best recourse may be to “look for lenders where they are going to be looking at the individual again, getting the people back involved, and letting the computers be in the second position.” This worked in the case of Ms. Whiting. She was able to secure loans for her business expansion from a local bank. Thanks to the intervention of CBS News in covering her story, she was also able to secure credit from her “big bank” as well.

The moral of this story? Constantly watch your businesses’ Credit Scores and consider aligning your business with a local bank as well. For more on this story see Credit crunch for job creaters and if you have questions about expanding your business, contact a business lawyer at Wood, Atter and Wolf, P.A. with offices in Jacksonville and Ponte Vedra Beach, Florida.

Business owners planning their holiday parties should be aware of Florida laws that could expose the business to liability. You may have heard about the Dram Shop Laws in the past. These are laws that were developed during the era of the temperance movement in the US. The laws were primarily created to reduce public drunkenness in local bars and focused on making the sellers of liquor liable for injuries resulting from liquor sales to minors and clearly inebriated adults. Over the years, the Dram Shop laws expanded in scope to also cover restaurants and entertainment venues, reaching virtually every business where the sale of liquor was a part of the business' services.

Florida Statute 768.125 addresses the State’s statutory rule – that a person who “sells or furnishes alcoholic beverages to a person of lawful drinking age“ will not be liable for damage caused by that person’s intoxication unless the drink was (i) “willfully and knowingly” sold to a minor or (ii) “knowingly sold to a person habitually addicted to the use of any and all alcoholic beverages.” That language might seem to provide business owners some protection from liability – offering a more rigid test than merely furnishing alcohol to a person that is clearly intoxicated. Florida case law, however, has been chipping away at that protection.

One case is particularly important to the “business social host” planning business entertainment opportunities for staff and clients. The 1993 case of Carroll Air Systems v Greenbaum involved a business party with traveling sales staff and customers – the sales people at a 3-day event were encouraged to purchase drinks for Clients (to be reimbursed by the sales person as a business expense). While many staff members stayed at the party location overnight, One employee elected to drive home and was observed to be inebriated prior to leaving. After being involved in a fatal car crash, the Employer was found liable for compensatory and punitive damages because (i) the employee was acting in the scope of his duties at the party and (ii) the employer knew or should have known that the employee was inebriated when leaving the party.

For the business owner, this is a clear warning – not only as to client/staff events, but also as to employee holiday parties and other social gatherings where staff is expected to attend based on their position as an employee. Best practices are to limit the amount of liquor at functions and monitor the condition of employees during the evening – cutting off liquor if appropriate or providing a taxi or overnight accommodations to staff members who should not drive home. To read more about liquor liability at the holidays, see Do hosts have liability for holiday party guests? or to discuss your specific business risk issue with a lawyer, contact an Attorney with Wood, Atter & Wolf P.A. with offices in Jacksonville and Ponte Vedra Beach, Florida.