Vintage Filings Legal Blog

The Electronic Payments Association has introduced a new online calculator as a tool for companies to understand how much they can save annually by converting payroll to Direct Deposit rather than paying by check. The calculator was developed by NACHA’s Marketing Management Group (MMG) in consultation with Treasury Alliance.  The calculator can be found on the business section of www.electronicpayments.org.

“Direct Deposit for payroll is simple, safe, smart and green for businesses and consumers,” said Lisa Monroe, Director of Electronic Payment Systems at Evangelical Christian Credit Union and the chairperson of MMG. “This interactive tool shows companies of all sizes - from five to 500,000 employees - how much they can save annually by converting payroll to Direct Deposit or how much they can save by increasing Direct Deposit participation. For instance, a company of 100 employees can save approximately $3,000 per year by converting entirely to Direct Deposit.”

Direct Deposit remains the most widely used type of ACH payment. In 2007, Direct Deposit was used for 5 billion payments in the United States. Direct Deposit is used for payroll, expense and travel reimbursement, pension and annuity payments, interest payments, retirement and mutual fund distributions, Social Security, Veterans and other government benefits, and tax refunds.

“Direct Deposit is perhaps the most popular type of electronic payment,” said Monroe. “Currently, three of four employees who have Direct Deposit available use it, and 97% of those that use it are very satisfied with it.”

The “Direct Deposit Cost Calculator” uses a company’s input and industry averages to determine a “typical” or “average” cost of implementing or increasing Direct Deposit at the company. Companies input the following numbers into the calculator:

• Total number of employees.
• Percentage of salaried employees.
• Current percentage of salaried on Direct Deposit.
• Target percentage of salaried on Direct Deposit.
• Current percentage of hourly on Direct Deposit.
• Target percentage of hourly on Direct Deposit.

Users can also download a spreadsheet version of the calculator that allows companies to replace the industry-averaged information with their own cost information to derive a calculation specific to their company. All data points on the calculator and spreadsheet are sourced on the site. The site also provides a glossary of the various cost elements.

20% of top brand marketers sent additional emails to subscribers after confirming an unsubscribe request, Return Path discovered with its new research study titled Keeping the Subscriber Experience Positive After “Unsubscribe Me.” 11%  of the companies studied emailed subscribers more than 10 days after confirming an unsubscribe request - a violation of the federal CAN-SPAM Act. Marketers risk impacting their overall email reputation with spam complaints if they have a faulty email unsubscribe process, not to mention potential lawsuits.

Return Path, an e-mail deliverability and reputation management company, conducted the study by unsubscribing from the email lists of 45 companies from the retail, consumer goods, travel, and media/entertainment industries. Return Path originally subscribed to these email lists to conduct its Subscriber Experiences study.

“We conducted the Subscriber Experiences and Unsubscribe Experiences studies, because we were concerned that marketers were having issues with two very important points of contact with their email subscribers – at the beginning and the end of the relationship,” said Bonnie Malone, Director of Strategic Services. “Unfortunately, the studies confirmed our concerns. Marketers often fail to optimize the beginning and end of the email marketing cycle, even though this interaction with their customers is a key factor in their email sending reputation. If marketers don’t immediately honor an unsubscribe request, they risk consumers clicking the “Report Spam” button, which ultimately and negatively impacts their email reputation, determining whether or not their emails are delivered to all their subscribers’ inboxes.”

When consumers unsubscribe from email marketing, they could potentially be enticed to remain subscribed but with less frequency. However, the overwhelming majority of marketers studied missed out on keeping consumers subscribed to less frequent mailings. Only two companies out of the 45 studied offered options for subscribers to change the frequency they received email or the ability to opt out of some of the marketers’ emails.

“Marketers work very hard to design compelling email marketing campaigns, but can’t neglect to evaluate the entire email experience for subscribers – including when those customers decide to unsubscribe,” Malone said. “While email marketing may have a small influence compared to the overall digital and traditional marketing campaign reach, email is a very direct, one-to-one interaction with customers and potential customers. Even a single negative email experience can lead to a poor overall brand image for consumers.”

Return Path’s study also revealed that most marketers have not designed their unsubscribe procedures to accommodate consumers who simply want to change their email address – yet remain subscribed. Only 11% of companies allowed subscribers to change their email address on the unsubscribe landing page. When email change of address (ECOA) is not included as part of the unsubscribe process, consumers are forced to manually unsubscribe from one address and resubscribe with a new email address.

“Instead of placing barriers in front of consumers who simply want to change their email address, marketers should make it simple and easy to stay subscribed while changing email addresses,” Malone said.

Today McKesson Corporation, one of the nation’s largest drug wholesalers, announced it would pay $350 million to consumers and health insurers, who were overcharged for several hundred prescription drugs since 2001. Spector Roseman Kodroff & Willis, PC was co-lead counsel in the class action, representing plaintiffs including the Teamsters Health & Welfare Fund of Philadelphia Vicinity, which provides benefits to more than 24,000 area workers.

Spector Roseman Kodroff & Willis partner, Jeffrey L. Kodroff said, “We have spent our legal careers trying to ensure that consumers get a fair shake by affording them access to the courts to right wrong doings. When people are overcharged for products/services, like they were in this prescription drug scam, they have a right to recoup their losses. We are proud to help and are optimistic that this settlement will have a lasting impact, as we anticipate that there will be a reduction in the future cost of hundreds of drugs.”

The $350 million McKesson settlement will pay back overcharges to class members, including among others the Philadelphia Federation of Teachers Health & Welfare Fund represented by co-counsel Marc Edelson of Edelson & Associates in Doylestown, PA. It provides money to both health insurers and consumers who paid for their medicines at prices based on the average wholesale price, a standard that is used by pharmacies and insurance companies as the basis of prescription payments. The case alleged that, starting in 2001, McKesson conspired with First Data Bank to arbitrarily increase the AWP price on hundreds of drugs by five percent at the expense of consumers and health insurers, who overpaid billions of dollars for prescription drugs.

The McKesson settlement is the second half of the resolution of this litigation. The plaintiffs had previously settled with co-defendant First Data Bank, for valuable injunctive relief. First Data Bank and Medi-Span, another publisher of drug information who was sued separately, have both agreed to pay more than $1,000,000.00 to class members, and, most importantly, to reduce the AWP price on hundreds of drugs within 90 days of the court’s approval, according to Kodroff. The settlements are awaiting final approval by US District Court Judge Patti Saris in Boston.

Exciting news happened this week for everyone in the lending sector. Harland Financial Solutions announced this week the release of Decision Manager, the latest addition to the CreditQuest risk and credit management software suite.  With data capture and advanced automation capabilities, Decision Manager enables rapid decision turnaround to credit requests for business and individual borrowers. The solution further helps lenders make more consistent loan decisions by ensuring that credit applications are screened against detailed, pre-defined credit policies. In many cases, credit applications can be processed and approved immediately during the approval process―without the involvement of senior-level credit managers.

“The recent tough times in the credit markets have made lenders reconsider their processes and heighten their sensitivity to credit quality,” said A.O. “J.R.” Clemons, president of Risk Management and Compliance Solutions for Harland Financial Solutions. “Adding Decision Manager to the CreditQuest suite provides the added functionality lenders need to efficiently manage transactional-type loans, while still monitoring risk. Once new business is on the books, the lender can enjoy the efficiencies that CreditQuest provides for managing the ongoing customer relationship.”

CreditQuest has a solid reputation for both top-down and bottom-up risk management and control. It offers lenders the ability to view the entire portfolio and analyze data for exposure, risk and risk migration, further providing detailed financial analysis for assessing the risk of individual businesses. In addition, it enables lenders to originate and manage mid-market and commercial credit activity to evaluate individual companies and relationship groups, and to support entity and facility risk models.

What typically happens after a patent lawsuit?  I’ve seen literally thousands of patent infringement lawsuits comes across my desk, and it never ceases to amaze me how they ALL seem to have the same result: a licensing agreement. It seems to me that the lawsuits would be able to be avoided entirely if, prior to launching a service, these companies would have hired a solid patent attorney to research if any infringement was taking place.  A recent case study for this process happened this week:

Public Service Enterprise Group (PSEG), an energy company with 2.1 million electric and 1.7 million natural gas customers located throughout New Jersey, headquartered in Newark, N.J., and Ronald A. Katz Technology Licensing, L.P., headquartered in Los Angeles, announced this week the settlement of patent litigation between the parties. As part of the settlement, PSEG has agreed to pay an undisclosed sum for a nonexclusive license under a comprehensive portfolio of patents that Katz owns relating to interactive voice applications.

The nonexclusive license covers services offered by Public Service Enterprise Group in the “Energy and Utility Services” Field of Use, including customer service provided via automated systems and live agents. Other terms of the license were not disclosed.

The patents held by Ronald A. Katz Technology Licensing, L.P. cover a wide range of interactive technology including automated forms of: customer service, prescription refill services, securities trading, merchandising, prepaid services, telephone conferences, registration, home shopping, as well as functions involved in securing information from databases by telephone, interactive cable transactions, and various other uses of toll free and local numbers.

Ronald A. Katz stated, “We welcome Public Service Enterprise Group to the large group of energy and utility companies who have purchased license rights under this portfolio.”

Mr. Katz is the named inventor on a large number of patents primarily in the fields of telecommunications and computing. He also formed Telecredit, Inc., the nation’s first on-line real time credit and check cashing authorization system, and was awarded a patent as co-inventor of that technology.

If you are in the reselling industry, it is no secret that we are entering challenging economic times.  However with the right strategy, you can be positioned better than any of your competitors.  Arrow Enterprise Computing Solutions recently offered the following tips to resellers in managing their business, particularly in difficult macroeconomic conditions:

1. Do not depend on product reselling as your only source of profit. Have other sources of profit generation that supports your businesses. Successful value–added resellers must add additional value to supplier offerings to ensure a predictable and profitable revenue flow.  “If I create my own service offering outside of the products, then I’m in a situation that I’m having a solutions discussion with customers, focusing on a particular methodology or service offering that I’ve designed,” said Mike Strohl, president of Concord, Calif.–based Entisys Solutions Inc. and Agile 360, a division of Entisys. “It’s a lot easier to sell products and services that way.”
2. Know your customers’ total information technology spend and be aware of how the solution fits into the end–user’s environment with a view to fully “clothing” the sale. For example, is there opportunity for additional software, accessories, printers or personal computers? Ask questions to ensure that you are maximizing your selling opportunity.  “Knowing the total IT spend is important, but you should also know and understand your customer’s budget cycle and get into that process,” said Strohl. “There is extreme power in being a part of that process. You know all their projects, what they can spend and where their money comes from.”
3. Focus on solving business problems for your customer – not just selling them product. Anyone can do that, and solutions automatically sell more product, and are less price sensitive.  “Compliance regulations such as HIPAA (the Health Insurance Portability and Accountability Act), the Sarbanes–Oxley Act and others are driving purchases around security solutions,” said Jim Steinlage, president of Kansas City–based Choice Solutions LLC. “I’m also seeing increased interest in solutions that offer opportunities to work remotely.”
4. Leverage the resources of your value–added distributor. You are simply increasing your cost structure and making yourself less competitive if you don’t take advantage of your distributor’s resources and hire your own team.  “Nettitude has worked with the DNS group of Arrow ECS for a number of years. We are able to tap into the specific product knowledge of Arrow ECS’ technical team and partner with their sales and marketing resources to deliver targeted campaigns and drive sales,” said Martin Watts, sales manager for Nettitude, a security reseller based in the United Kingdom. “This close relationship has contributed to a 25 percent revenue growth year–over–year in security products delivered by Nettitude.”
5. “Focus on solutions that have a short-term return on investment,” offered Steinlage. “IT decision-makers aren’t into solutions with a two-year ROI right now. They are much more into the solutions with ROI of a year or less.”
6. Add as much service as possible. If a project requires skills you don’t have, partner with your distributor or even another value–added reseller if necessary, but don’t just leave the customer looking for someone to address their needs. It invites competition into your accounts.  “The smart VARs are the ones that know their own skill set – that can identify what they’re experts in – and find other partners with other products and solution lines that complement their offerings,” said Strohl. “There is more in that than what just seems obvious.”
7. Identify new customers. VARs must engage in marketing activities to find new customers. Without new customers, VARs cannot grow, and without growth they will fail.
8. “New customers are indeed the lifeblood of a business,” said Dan Lowery, president of St. Louis-based Lowery Systems Inc. “Each year, we try to leverage the resources of Arrow ECS, such as its MPower program for the midmarket, or new service areas from IBM to identify new customers. The intent is to get new names, and grow with them. By using resources that are available to us through Arrow ECS and IBM, the cost to us is greatly reduced.”
9. Leverage supplier programs that protect margins. Supplier deal registration programs are critical tools for VARs to demonstrate and protect their value.  “I pay a dividend to train one person to track all certifications, rebates and sales promotion incentive fees,” said Lowery. “By utilizing market development funds from various sources, we are often able to put on a first-class event at minimal cost.”
10. FOCUS! You can’t be all things to all people. Know your value proposition, be able to articulate it and make sure your business is organized around it. It’s never been more critical for VARs to have a value proposition and be able to deliver it. Communicate your value to suppliers and ensure your distributors are supporting that effort.
11. “Know thy pipeline,” said Andy Bryant, president of Arrow ECS. “You really have to get underneath the pipeline and ask, ‘is this project going to go or not?’”

A question is get very often is: what exactly are EDGAR Filings?  Well, I thought that one way to explain what these types of filings are would be to give you a brief history of how they came to be.  The government actually began developing an electronic disclosure system back in 1983. By the fall of 1984, a pilot system was opened for volunteers filing with both the Division of Corporation Finance and the Division of Investment Management. On July 15, 1992, the operational EDGAR system was made available to those filers, still on a voluntary basis.

On February 23, 1993, the Commission issued four releases adopting rules, on an interim basis, that required filers to file electronically, by direct transmission, diskette, or magnetic tape, most documents processed by the Divisions of Corporation Finance and Investment Management.

After completing the phase-in of a statutorily mandated significant test group in December 1993, the Commission refrained from further phase-in of EDGAR filers while the staff evaluated EDGAR’s performance during a six-month test period, which ran from January 1, 1994 to June 30, 1994. The evaluation resulted in a positive assessment of the EDGAR system, based on data gathered from within the Commission as well as from the filers and other members of the public. Consequently, the staff recommended that the Commission proceed with full implementation of mandated electronic filing.

3M and Illinois Tool Works Inc. (ITW) have finally come to a mutual settlement concerning issues in patent infringement litigation brought by 3M in June 2006 in the U.S. District Court for the District of Minnesota relating to 3M’s patent covering its paint preparation system products.

So what does 3M do?  They are a recognized leader in research and development, 3M produces thousands of products for dozens of diverse markets. 3M’s core strength is applying its more than 40 distinct technology platforms – often in combination – to a wide array of customer needs. With $24 billion in sales, 3M employs 79,000 people worldwide and has operations in more than 60 countries. For more information, visit www.3M.com.

Under the terms of the agreement, the specifics of which are confidential, ITW has acknowledged the validity and enforceability of 3M’s patent rights and has taken a license under 3M patents. In addition, the parties have entered into a supply agreement under which 3M will supply a portion of ITW’s DeKups system in the future.

I’ve found that the best way to be the best is to study the best.  And one company in particular is consistently winning patent lawsuit is the General Patent Corporation who has won yet another victory in its campaign to enforce a portfolio of “smart connector” patents owned by its subsidiary, Acticon Technologies LLC (Acticon). GPC announced today that Acticon has settled its patent infringement lawsuit against L-3 Communications Ilex Systems, Inc. (L-3).

Acticon brought a patent infringement suit against L-3 in the U.S.D.C. for the Southern District of NY (Civil File No. 08 CIV 3698), in which Acticon alleged that L-3 infringed two of Acticon’s patents by selling PCMCIA form-factor Secure Fax Cards. L-3 Communications Corporation of San Diego, Cal. ultimately agreed to settle.

“We are happy to have settled with L-3,” said Paul Lerner, Sr. Vice President and General Counsel for GPC, “and we can now focus our attention on our other lawsuits.”

GPC has successfully represented Acticon in 26 lawsuits and one hundred fifty-one licensing transactions related to these patents.

As with prior downturns, today’s challenging financial environment may produce the world’s next great technology companies, says Jerry Yang, CEO and Co-Founder of Yahoo. Yang shared his remarks with more than 800 Utah executives at the Utah Technology Council’s (UTC) 10^th Annual Hall of Fame celebration event. Yang addressed the record group of UTC members and guests at the Grand America Hotel in Salt Lake City on October 24, Friday night.

Yang noted that Yahoo was one of the groundbreaking companies that was actually conceived and founded because of the needs people had during a period of economic downturn. He co-founded Yahoo with David Filo in January of 1994 as a means of helping provide organization and structure to the information people wanted to find on the Internet.

Likewise, the extreme downturn in 2000-2001, coupled with the tragedy of September 11, spawned a time period in which many thought the tech and Internet industries were dead. Instead, another round of brilliant companies including Google was born.

Yang noted that the United States is a unique environment that has been essential to much of the technology innovation that exists today, and he acknowledged Utah in particular:

“The energy, the excitement and the innovation that exists in the state of Utah is spectacular,” he said. “The people of Utah have a spirit about them that is perhaps unmatched, and is absolutely vital to the spectrum of life science and technology companies that make up this region’s ‘Silicon Slopes.’”

Yang noted that he is pleased that to the best of his estimates, there are some 1.5 million Yahoo subscribers in Utah, which would mean that Yahoo provides services to approximately 60 percent of the state’s population of 2.5 million.

At the event, UTC CEO Richard R. Nelson noted the great milestones and progress the technology industries have experienced and also that UTC has experienced over the past decade since the first Hall of Fame event. From an inaugural group of 150 attendees, the 2008 Hall of Fame Celebration welcomed more than 800 people at this week’s event. Likewise, the number of technology companies in Utah has risen dramatically, from several hundred companies in 1999 to more than 5,200 today. Following the keynote address, the UTC formally inducted Dr. Theodore H. Stanley and H. Raymond Bingham to its 10th Hall of Fame, which honors individuals with ties to Utah who have made key contributions to the technology and life science industries.

“We are extremely honored to recognize these two gentlemen for their outstanding achievements and for the impact they’ve made on technology that is relevant throughout the world,” Nelson said.