Business

The CCPA’s Annual Update Requirement

The California Consumer Privacy Act (CCPA), effective since January 1, 2020, has set a new standard for data privacy in the United States. Among its many provisions, one key requirement is the obligation to update privacy policies at least once every 12 months. This mandate is more than a mere formality—it’s a crucial step in ensuring transparency and responsible data management.

The rationale behind this annual update is simple yet significant. The ways in which personal data is collected, used, and shared are constantly changing due to technological advancements and shifts in consumer behavior. By requiring businesses to update their privacy policies annually, the CCPA ensures that consumers are kept informed about the latest practices and technologies that impact their personal information. This not only helps protect consumer rights but also fosters trust between businesses and their customers.

Key Elements to Include in Your Privacy Policy

When updating your privacy policy, it’s essential to reflect any changes in your business operations that could affect data privacy. Here are some critical elements to include to ensure compliance with the CCPA and other emerging privacy regulations:

• Categories of Personal Information Collected: Clearly outline the types of personal information your business collects. This may include identifiers such as names and addresses, commercial information, biometric data, and internet activity. If your business has begun collecting new types of data, ensure these are incorporated into your policy.
• Purpose of Data Collection: Explain the reasons behind your data collection practices and how the information will be used. This transparency is vital in building consumer trust. If new products or services have been introduced, ensure that these purposes are updated in your policy.
• Consumer Rights: Detail the rights consumers have under the CCPA, including the right to know, the right to delete, and the right to opt-out of the sale of their personal information. Any changes in how these rights are facilitated should be clearly communicated.
• Data Sharing Practices: Disclose whether personal information is shared with third parties and, if so, identify the categories of those third parties. Updates should reflect any new partnerships or changes in data-sharing practices.
• Contact Information: Provide clear instructions on how consumers can contact your business to exercise their rights or ask questions about your privacy practices. Ensure that any changes in contact details or procedures are reflected in the policy.
• Jurisdiction and Country Expansions: If your business has expanded into new jurisdictions or countries, or if your user base has become more international, your privacy policy must reflect compliance with all relevant regulations. This is particularly important as different regions have varying privacy laws.

By addressing these elements, your business can mitigate the risks associated with non-compliance and ensure that your privacy policy accurately reflects your current data practices. Taking a proactive approach not only helps in maintaining compliance but also strengthens consumer trust in your brand.

Staying Ahead of Emerging Privacy Laws

While the CCPA is a cornerstone of U.S. data privacy regulation, it is not the only law that businesses must consider. Other states, such as Virginia with its Consumer Data Protection Act (CDPA) and Colorado with its Privacy Act (CPA), have enacted their own privacy laws. Additionally, the European Union’s General Data Protection Regulation (GDPR) continues to influence global privacy standards.

Looking ahead, several new privacy laws are set to come into effect in 2024 and 2025, including the EU’s Digital Services Act (DSA), which imposes new obligations on online platforms and intermediaries. To ensure your privacy policy remains compliant with these evolving regulations, consider the following steps:

• Regular Legal Reviews: Conduct regular reviews of your privacy policy with the assistance of legal experts. This will help you stay informed about new laws and amendments to existing ones, such as the upcoming EU DSA and other state-specific regulations.
• Cross-Jurisdictional Compliance: If your business operates in multiple states or countries, ensure your privacy policy addresses the requirements of all relevant jurisdictions. This may involve creating separate sections for different regions or a comprehensive policy that covers all applicable laws.
• Technological Advancements: Stay informed about technological advancements that may impact data privacy, such as the increasing use of artificial intelligence and machine learning in data processing.

Conclusion

Updating your privacy policy annually is not just a legal obligation under the CCPA—it is a critical practice that demonstrates your commitment to protecting consumer privacy. With new privacy laws emerging, staying informed, and regularly reviewing your privacy practices is more important than ever. Failure to comply can result in severe penalties and damage to your reputation.

As privacy laws continue to develop, businesses must remain proactive in their approach to data protection. An up-to-date privacy policy is essential to safeguarding consumer rights and maintaining the integrity of your business operations. Don’t wait until it’s too late—ensure your privacy policy is compliant and reflects the latest legal requirements.

Contact us today to review your legal documents and stay ahead of the regulatory curve. Let us help you navigate the complexities of data privacy and protect your business from potential risks. Your commitment to privacy starts with a comprehensive and current privacy policy. Reach out now to secure your compliance and build trust with your consumers.

What steps should you take next?

Your initial priority should be promptly retaining experienced legal counsel. Although there are procedural avenues available to challenge the default judgment, demonstrating to the court that you took swift action upon learning of the lawsuit is imperative. Moreover, the intricate legal procedures necessitate the expertise of a qualified attorney to navigate effectively. Notably, in court, corporate defendants are required to be represented by licensed attorneys and cannot proceed without one.

Once legal representation is secured, your attorney should provide tailored guidance specific to your case. Typically, they will enter an appearance on behalf of your company in the lawsuit and promptly file a motion seeking to set aside the default judgment, as permitted under the Federal Rules of Civil Procedure.

District courts have discretion to set aside final default judgments on various grounds:

• A common basis is demonstrating “mistake, inadvertence, surprise, or excusable neglect.” Often, companies default not out of willful disregard but due to administrative errors, such as misplacing summonses or oversight by responsible employees. Providing evidence to the district court explaining the circumstances and requesting the default judgment be vacated is essential. Establishing that the default resulted from a genuine oversight, prompt action was taken upon discovery, and the plaintiff would not suffer undue harm from reversing the judgment is crucial.

• Another common basis is failure to receive proper service. If your company never received proper service of the summons, it is imperative to raise this issue as it violates fundamental due process rights.

• Other grounds for setting aside default judgments include the discovery of new evidence, as well as demonstrating fraud, misrepresentation, or misconduct by the opposing party. However, these grounds are more challenging to establish. 

• In cases where the plaintiff's complaint lacks sufficient factual allegations to support the default judgment, this deficiency can also be raised. Although a default may occur due to failure to respond, the district court cannot issue a judgment unless the plaintiff's pleadings adequately support it.

• This is not an exhaustive list. It is important to note that, upon motion of the defaulting party, Courts can set aside a default judgment for “any other reason that justifies relief.”

Ultimately, if the district court declines to set aside the default judgment, you may consider challenging this decision through an appeal. However, the feasibility of this recourse depends on the potential liability at stake and whether the district court erred in its decision-making.

Escaping a default judgment post-issuance is challenging, emphasizing the importance of responding to lawsuits before the deadline. Nevertheless, if your company discovers the lawsuit after a default judgment has been entered, acting promptly by engaging competent legal representation and presenting your case for setting aside the default judgment remains the most viable option.

Intellectual property rights showcase a startup’s value, ability to dominate the market, and stand strong in times of adversity. Specifically, with trademarks and patents, startups are 10 times more likely to secure funding from investors and about 3 times more likely to have favorable odds when exiting as evidenced by a study from the European Union Intellectual Property Office (EUIPO). Accordingly, the acquisition of IP rights, for startups are fiscally essential in providing a durable foundation and may be correlated with the increase in filing in Trademarks from 28% to 72 and Patents from 10% to 44% from the initial seed stage to later funding stages. There are two key reasons why these IP protections incentivize investors to engage with startups.

Branding in Market Domination and Innovation   

First, IP protections are perceived as unique signatures connecting startups with a strong brand identity. This is significant to investors for three key reasons. First, IP protections demonstrate a sense of identity to investors for a startup’s potential recognition in the marketplace. Second, investors view IP protections as vital pieces to the construction of a valuable portfolio because they can provide tangible capital in future business dealings. Third, IP protections demonstrate to investors the startup is protected against infringement. 

A Mark of Innovation Signaling Potential Leadership in the Marketplace, Longevity, and Liquidity During Times of Change

Second, IP protections, demonstrate a startup’s innovative nature. This is significant for investors for three key reasons. First, IP protections, especially patents, showcase a startup’s innovative qualities signal and demonstrate to investors the startup is unique and has strong technical capabilities. Second, IP protections, demonstrate to investors startups can establish dominance in the market because IP protections reduce competition by preventing the use of the startup’s mark. Third, IP protections signal to investors they are safe to invest because the startup could liquidate its assets for sale in unpredictable times of change.

Conclusion 

With IP protections, investors are incentivized to fund your startup, leading it to have the ability to achieve fiscal success and dominance in the global marketplace. If you are interested in the potential to achieve fiscal success, recognition, and financial support from investors, please reach out to Lloyd & Mousill, a team of visionaries, who will protect your vision and future goals. 

Why Conduct Trademark Searches?

The journey of getting a trademark registration for your brand seems straightforward—think of a name, design a unique logo or phrase, file a trademark application, and voila, your brand is protected. However, this simplified timeline overlooks the potential minefield of intellectual property rights that could send your business into costly legal battles and damage your brand's integrity. Conducting thorough trademark searches before filing can help you avoid these risks by ensuring your proposed trademark isn't infringing on existing rights. This due diligence is not just a precaution; it's an essential step in building a resilient brand identity.

The Pitfalls of Neglecting Trademark Searches

One of the primary reasons trademark applications are rejected by the US Patent and Trademark Office is because they are too similar to an already registered trademark. Identifying any similar trademarks before submitting your application can save your business time and money by ensuring your trademark does not infringe on the rights of another business.

Now imagine a worst-case-scenario where you launch a brand, invest in marketing, and establish a customer base only to receive a cease-and-desist letter for unintentional trademark infringement. The consequences can range from rebranding to compensation for damages—a scenario that could be financially and reputationally catastrophic. Thorough trademark searches act as a shield, protecting your venture from such threats.

Utilizing the Right Resources for Trademark Searches

If you can’t hire an experienced trademark attorney, you need to protect yourself by searching for similar trademarks yourself.  The effectiveness of your trademark search hinges on the resources you utilize. While many free tools offer basic search capabilities, they may not provide the comprehensive coverage necessary to uncover all potential conflicts. In your search, narrow your focus to trademarks that are confusingly similar to yours when used with goods and services that are the same as or related to yours. Here are some resources recommended for a thorough investigation:

1. United States Patent and Trademark Office (USPTO) Database: The USPTO's online database is a starting point for any trademark search. It allows you to search registered trademarks and pending applications, offering a glimpse into potential conflicts within the U.S.

2. Trademark Official Gazette (TMOG): The TMOG is a weekly publication by the USPTO that features all trademarks that received approval for registration in the USPTO database.

3. International Trademark Databases: If your business plans to expand globally, searching international databases like WIPO's Global Brand Database, the European Union Intellectual Property Office (EUIPO) database, TMview, and Madrid Monitor is crucial.

4. The Internet: Common law rights are established once a business begins utilizing a trademark in intrastate commerce associated with specific goods or services. These rights are confined to the state  in which the trademark is used but can affect the rights provided by your trademark registration if another party’s common-law use predates the use supporting your application. Searching the internet for potential uses of your trademark or a similar trademark can prevent infringement of common law rights. 

5. Specialized Search Services: For a more thorough investigation, consider using specialized search services. These services can provide detailed reports on potential conflicts, including similarities in sound, appearance, and commercial impression, which might not be apparent through a basic search.  Be aware though, these commercial search services provide broad results, and many of the trademarks listed may actually not be a bar to your mark.  An experienced trademark attorney can help you parse the results.

Crafting a Legally Sound Trademark Strategy

A well-conducted trademark search is the foundation upon which a legally sound trademark strategy is built. This strategy should consider the distinctiveness of your trademark, potential market expansions, and the evolving landscape of intellectual property rights. Engaging with legal professionals who specialize in trademark law can provide valuable insights and guidance through this complex process. Lloyd & Mousilli and our unparalleled team of legal professionals with years of experience and deep expertise in trademark law stand ready to ensure your trademark is protected and legally complaint.

What is the USPTO's expedited review process?

The process of obtaining a trademark from the United States Patent and Trademark Office (USPTO) can be complex and time-consuming. For applicants looking for a faster review process, the USPTO offers an expedited review option for trademark applications. It typically takes about 2 to 3 months from the time of filing (as opposed to the standard 8-12 months) to the issuance of a trademark registration, assuming there are no significant issues or objections.

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Eligibility requirements for expedited review

To take advantage of the expedited review process offered by the USPTO for trademark applications, you'll need to meet certain eligibility requirements. Generally, the expedited review option is available for applicants who can demonstrate a genuine need for expedited consideration. This may include situations where there is an imminent risk of trademark infringement or a need to enforce rights in court.

Additionally, applicants must meet other general requirements for registration, such as providing a complete and accurate application, meeting all statutory requirements, and paying the appropriate fees.

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How to apply for expedited review

In order to request an expedited examination for your application, you need to submit a Petition to Make Special to the USPTO after filing your application but before the commencement of the initial examination process. Your petition should include:

1. A comprehensive statement outlining the reasons why your application warrants special consideration.
2. Supporting facts indicating potential trademark infringement, legal disputes, or the necessity of U.S. registration to secure a foreign trademark.
3. Evidence demonstrating potential losses the applicant may incur if the application is not expedited.

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Things to consider before filing a petition to expedite your trademark

Deciding whether to file a Petition to Make Special should involve careful consideration and informed judgment. Points you should first consider include, but are not limited to:

• Financial resources necessary to cover the cost of the Petition
• Whether or not your evidence and circumstances justify expedited processing
• Whether or not there is ongoing litigation related to your trademark
• How long your trademark has been in use

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If you are unsure of your eligibility or need assistance with filing, Lloyd & Mousilli can advise you on the best course of action.

The Future is Uncertain

Equity, or ownership, is a company’s most expensive and most valuable asset. When splitting ownership, it is important to keep in mind that no one knows what the future may hold. You might expect that if you and your partner have equal ownership, that your work, time, or financial contributions will be equal. The reality, however, could be very different. You may end up bearing more of the workload than your co-founder and still have the same equity split. As the startup grows, each of your commitments and life priorities may change and your share of the equity split or your partners’ may no longer be representative of each of your contributions to the company. 

Founders also have different ideas about the types of contributions they will be making, and this vision changes over time as the company grows. Some may envision taking an active role in daily operations and management, while others want to handle marketing, and some may prefer a more passive style of investment. It is important that the split in ownership be reflective of these styles. It takes time to understand these differences and how to work with them, and most startup founders do not have that degree of familiarity with each other, thus making a 50/50 ownership split a risk. Startup founders that negotiate longer are more likely to decide on an unequal split, as they have been able to discover and address important differences in their expected contribution levels.

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Higher Chance of Splitting Faster

Another risk with a hasty 50/50 ownership split is that it can lead to your startup falling apart fast. Compared to founders who took the time to establish a well thought and calculated equity split, those who neglected to have this discussion and chose to split equally shut down their companies significantly faster due to a fallout amongst the founders. This also applies to startup founders who are related to each other- they are more likely to spend less time negotiating equity, and in turn are also more likely to share equally and end up splitting faster. The consequences and tension of an ill established ownership split can be devastating for a startup. 

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More Difficulty Bringing in Investors

A major consequence of implementing an equal ownership split is that it makes bringing in investors a lot more difficult- equal splits are sometimes seen as a sign of bigger issues within the startup. Investors tend to pay attention to the way co-founders divide ownership because it tells a lot about their experience level and engagement within the company. They may find an equal split to be impractical, and see it as an inability to negotiate seriously within and outside the company. Teams who quickly establish an equal ownership structure may face significant difficulty in raising their first round of financing, either in reduced ability to raise or in lower average valuations.

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Stalemates on Key Issues

An equal ownership split between startup founders means that both partners have equal control and voting power. This inevitably leads to deadlocks and an inability to move forward on key issues, which at best could end up stalling the business. These stalemates can easily be avoided by having one founder maintain majority control, even through an almost-even split. This ensures one founder has majority voting power when it comes to important business decisions. Startup founders need to be able to compromise and negotiate for the good of the company.

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Conclusion

Making these decisions can be overwhelming. Lloyd & Mousilli can help you implement the right ownership split for your startup. Our firm has the experience necessary to set your company up for success.

Scope and Applicability

The Texas Privacy Law aims to protect the privacy rights of individuals residing in Texas. It applies to businesses that collect, process, store, or disclose personal information of Texas residents, regardless of the business's physical location. This broad applicability underscores the commitment of the state to safeguarding personal data and ensures that both local and global organizations must comply with the law.

Consumer Rights and Control

One of the notable aspects of the Texas Privacy Law is the emphasis on consumer rights and control over personal information. The law grants Texas residents the right to know what personal information businesses collect and how it is used, as well as the right to access and delete their personal data. This increased transparency empowers individuals to make informed decisions about their privacy and exercise greater control over their personal information.

Consent and Opt-Out Mechanisms

The law introduces stricter consent requirements for businesses, mandating that they obtain affirmative consent from consumers before collecting or processing their personal data. It also strengthens opt-out mechanisms, enabling individuals to easily withdraw their consent for data processing at any time. These provisions reinforce the principle of consent as a cornerstone of privacy and give individuals more agency in determining how their personal information is managed.

Data Breach Notification

To ensure timely and effective responses to data breaches, the Texas Privacy Law establishes stringent requirements for data breach notification. Businesses are now required to promptly notify affected individuals in the event of a breach that poses a significant risk of harm, allowing them to act appropriately to protect themselves from potential harm resulting from the breach. The law also imposes reporting obligations on businesses, mandating them to inform the Texas Attorney General of certain breaches.

Compliance and Penalties

To enforce compliance, the Texas Privacy Law provides the state Attorney General with authority to investigate and enforce violations. Non-compliant businesses may face substantial penalties, including fines and injunctive relief. Compliance with the law necessitates the implementation of robust privacy practices, including privacy policies, data protection measures, and mechanisms for addressing consumer inquiries and requests.

Conclusion‍

The introduction of the new Texas Privacy Law marks a significant step forward in enhancing privacy rights and data protection for residents of the Lone Star State. By granting individuals greater control over their personal information and imposing obligations on businesses to ensure transparency and accountability, the law aligns Texas with the global privacy movement. Companies operating or having customers in Texas  must now prioritize privacy compliance to maintain consumer trust, avoid penalties, and demonstrate their commitment to protecting personal data.

While the implementation of the Texas Privacy Law may require businesses to adjust their data handling processes, it serves as a reminder that privacy is not just a legal obligation but a fundamental right that deserves respect and protection in the digital age. By embracing these privacy-enhancing measures, organizations can foster a culture of trust, establish a competitive advantage, and contribute to a more privacy-conscious society. If you need a review of your existing privacy compliance, please reach out to Lloyd & Mousilli to help.