Vintage Filings Legal Blog

Seventy percent of small businesses anticipate moderate to significant growth in 2009, according to the Small Business Attitudes & Outlook Survey conducted by Constant Contact.  Constant Contact conducted the survey in collaboration with the American Chamber of Commerce Executives (ACCE), SCORE and the Association of Small Business Development Centers (ASBDC), organizations dedicated to the success of small businesses. This first-of-its-kind collaboration ensured broad representation of small business respondents and helped obtain insight into the current attitude of the small business community.

“The results of the survey reveal the optimism and perseverance that so often marks this spirited group of business owners, as well as their adaptability to meet current economic conditions,” said Gail Goodman, CEO and chairman, Constant Contact. “These companies show us all what it takes to succeed in any economic climate. We are grateful to our partners in the survey, which has given us an encouraging glimpse into the minds and attitudes of today’s small businesses.”

Small Businesses Anticipate Growth in 2009

The survey respondents’ generally optimistic outlook on growth is further highlighted by the fact that of those customers that expect to grow moderately or significantly in 2009, 47 percent expect to hire additional employees.

In 2009 do you expect your business to?

If growing significantly or moderately, do you plan on hiring additional employees this year?

Small Businesses Secure Funding in Tight Lending Market

Additionally, of the 15 percent of respondents that sought and secured additional financing in the past 12 months, 69 percent received funding from banks in what is perceived to be a historically tight lending market.

As Costs Increase Small Businesses Look for New Efficiencies

According to the survey, 59 percent of surveyed businesses indicated an increase in the overall cost of doing business over the last 12 months. The top areas affected by increased costs include materials and supplies (65 percent), marketing (49 percent) and taxes (44 percent).

In response, small businesses are cutting back, but are focusing predominantly on overall operating costs (49 percent) and travel and entertainment (37 percent) rather than headcount reductions.

How has your cost of doing business changed in the last 12 months?

In which areas of your business have you seen an increase in costs during the last 12 months?

Have you taken any of the following actions in response to the current economy?

Small Businesses Market Smarter

According to survey results, more than 70 percent of small business respondents felt the biggest challenge in running their businesses was marketing effectively with limited resources. Respondents identified marketing (62 percent) and sales and new business development (50 percent) as the areas in which they need the most help.

Twenty-nine percent of survey respondents indicated they have reduced their spending on marketing, but are taking advantage of less expensive online marketing methods including email marketing. Seventy-four percent of surveyed businesses said they regularly conduct outbound communications; of which 97 percent use email marketing and 68 percent use a website.

Do you conduct outbound communications with your customers on a regular basis?

If yes, what avenue do you use to conduct your outbound communications?

Small Businesses Make Small Steps Toward Social Media

Small businesses that have been in business for 10 or more years find it more difficult to keep up with new technologies (28 percent). Those mature businesses are also more likely to rely on traditional marketing methods such as direct mail. Newer companies (those who have been in business for one to five years) are more likely to use social media tools such as blogs, Facebook and LinkedIn.

How do you feel you are keeping up with technology?

Survey results also indicated that social media tools have begun to penetrate small business’ communications strategies; however, few small businesses use these tools regularly, though many indicate an interest in doing so.

Are you using any of the following online tools to market your product or service?

*Traditional Online Marketing Tools **Social Media Tools

In an order issued June 15^th, Oregon Federal District Court Judge Ancer Haggerty determined that environmental groups failed to show “that all grazing must cease” on allotments in the Malheur National Forest. Reversing a 2008 order that stopped grazing on 100,000 acres of federal forest lands, and denying a request to enjoin grazing on an additional 200,000 acres in 2009, Judge Haggerty determined that ranchers and the Forest Service had demonstrated that grazing would not harm threatened steelhead.

The ruling directly impacts seventeen ranches in Grant County but has ramification on the viability of public lands grazing throughout the West. The Oregon Natural Desert Association, Western Watersheds Project, and the Center for Biological Diversity (ONDA) filed for a preliminary injunction in the ONDA v. Kimball case on April 10, 2009. If the preliminary injunction had been granted, it would have caused significant harm to the livestock industry and the economy of Grant County, according to rancher Ken Holliday.

Judge Haggerty’s ruling provides ranchers a key victory in a case originally filed by ONDA to address claimed deficiencies in a steelhead biological opinion from the National Marine Fisheries Service (NMFS). In the preliminary injunction motion, the ONDA claimed that the Forest Service and NMFS failed to restrict grazing to protect listed steelhead. ONDA based its claims on information it collected using a bank alteration standard.

Attorney for the ranchers, Elizabeth Howard of Dunn Carney, indicated that “the bank alteration standard has little to no relevance to efforts to protect steelhead. Yet, it is being used to harm ranchers that the experts say are maintaining a healthy ecosystem.”

Ranchers became involved in this case in order to force NMFS to fix the bank alteration standard because it was not intended to be used as a method to assess grazing impacts to steelhead. “After testimony from experts at the hearing on June 12^th, it is even more clear that bank alteration is being used incorrectly,” said local rancher Ken Brooks. Ranchers hope that agencies will fix the standard this year.

The U.S. District Court of Northern District of Texas has dismissed a lawsuit against American Traffic Solutions (ATS) claiming that photo enforcement vendors operating in Texas must first obtain a private investigators’ license. In his favorable ruling, Senior U.S. District Judge A. Joe Fish said the plaintiffs, Steven Bell, Alexis Monrreal and Jacqueline Monrreal, failed to state a legal claim because private citizens may not rely on the Texas private investigators licensing law to impose civil liability or to obtain an injunction.

“Our position has always been that this was a frivolous lawsuit and we are very pleased Judge Fish agreed,” said George Hittner, General Counsel and Vice President of Governmental Relations for ATS. “From coast to coast, courts continue to uphold the legality and constitutionality of red-light camera safety programs, negating the habitual and tired claims by opponents.

“The plaintiffs’ lawsuit was an ill-conceived attempt to exonerate those who violated traffic laws by running red lights. We are pleased that the plaintiffs failed in their attempt to prevent municipalities from enforcing the very laws that protect innocent lives. Communities continue to use red-light camera programs throughout the United States because they are a proven, effective public safety tool. This decision merely demonstrates that the best way to avoid paying a fine for violating traffic laws is to obey the law and stop on red,” Hittner concluded.

The federal lawsuit was brought by Texas plaintiffs who violated red-light traffic laws and sought a return of payment for their traffic tickets and an injunction prohibiting ATS from operating a red-light camera system in Texas. The lawsuit claimed photo enforcement vendors operating in Texas must first obtain a private investigators’ license, a claim that the Private Security Bureau of the Texas Department of Public Safety, the state agency statutorily authorized to regulate private investigators’ licenses, denied. ATS worked with outside counsel Haynes and Boone to help secure the decision.

It’s hurricane season, and you might have all the essentials to protect your business if a storm is coming – plywood, tarps, portable generators. But do you have the tools to protect your company’s reputation?

If your business is shut down for days, or even weeks, how will you keep your customers while you get your business up and running again?

“When a hurricane hits, public relations is probably the last thing on the mind of most business people,” says Nicole Gustin, director of crisis communications at Loomis Group, an integrated marketing agency. “Everyone is busy dealing with the aftermath of the storm. But a company’s reputation can quickly take a hit if you aren’t prepared. That’s why you should have a solid crisis communications plan that you can quickly execute in times of disaster.”

Here are some key crisis communications tips for hurricane season:

• Develop a crisis communications plan. It is critical for all businesses to have a public relations strategy in times of disaster, so you are not scrambling in the moment. Executing the right plan can protect your company’s reputation, and even make it stronger, if your community is affected by a storm.
• Talk to your customers. Know how to reach your customers to tell them if you are open for business, or when you will re-open. In today’s world of social media and blogs, the public expects to receive information instantly. If your competitors are luring people with offers on Twitter, and you are still figuring out how to boot up your computer, you could be losing customers.
• Publicize “good Samaritan” efforts. If you are donating supplies or aid to others in need, show your community that you are a good corporate citizen. Such good will efforts may be remembered for many months to come.
• Prepare now. Don’t wait until a storm is coming, when you are concerned with the physical safety of your building and employees and will have little time to devote to public relations.

Diane von Furstenberg Studio, L.P. and design duo Jennifer Halchuk and Richard Lyle of Mercy of Canada have reached an out-of-court settlement resolving Mercy’s claims that DVF had wrongfully copied original elements from one of Mercy’s jacket designs in a jacket from DVF’s Spring collection. Mercy is recognized as one of Canada’s emerging design houses. As part of the settlement, DVF has agreed to pay Mercy an undisclosed amount in compensation and has agreed not to use the design in the future without Mercy’s prior permission.

When news of the similarities between the two jackets first came to light, Diane von Furstenberg immediately issued a public apology and contacted Jennifer Halchuk and Richard Lyle to resolve the matter. “I greatly appreciate DVF coming forward to resolve this issue in a such a forthright manner and for acknowledging our ownership of the jacket design. We are very pleased to have successfully resolved this dispute in a manner that protects our design,” said Jennifer Halchuk. There are images of the jackets on the National Post website.

Fordham law professor Susan Scafidi, an expert in intellectual property and fashion law, notes that no compensation was required under either current U.S. or Canadian copyright law. She adds, “It takes a great deal of character to admit an error, and even more to accept financial responsibility above and beyond what the law imposes. Diane von Furstenberg obviously believes that the label that bears her name should also reflect her commitment to originality and to ethical design principles.”

As the president of the Council of Fashion Designers of America, Diane von Furstenberg has made it a priority to protect the integrity of fashion design and to condemn the practice of plagiarism within the fashion industry. Over the last 3 years she has championed the Design Piracy Prohibition Act (DPPA), which would create intellectual property protection for fashion designs under U.S. law. “I believe this bill is good for the entire industry as it will elevate design at all levels and nurture the hiring of real design talent,” she said. The DPPA would amend the existing U.S. Copyright Law to include protections for fashion designs. In contrast with the 10 to 25-year term of protection afforded by many other nations, the bill proposes a modest, 3-year term of protection for fashion designs.

“While this is an isolated instance for DVF, it is unfortunate that way too many others intentionally build businesses by stealing the work of other designers,” said Ms. von Furstenberg. “The design process is vulnerable and in need of urgent reform so companies like Mercy can be protected. Now is the time to pass the Design Piracy Prohibition Act, and we must all do a better job teaching the next generation of designers and the thousands of designers who work in industry that copying is wrong.”

A U.S. District Court judge has summarily dismissed a patent-infringement lawsuit against Nintendo brought by Guardian Media Technologies, Ltd. Guardian had alleged that the Wii console infringed on one of its patents (U.S. Patent No. 4,930,158). Judge Manuel Real of the U.S. District Court in Los Angeles entered an order granting Nintendo’s motion for summary judgment of non-infringement on June 8, 2009, less than six months after the lawsuit was filed.

“We are very pleased with the Court’s decision,” said Rick Flamm, Nintendo of America’s senior vice president of Legal and general counsel. “Nintendo vigorously defends patent lawsuits. At the earliest stages of this case, Nintendo convinced the Court to dismiss this case as Guardian’s patent had nothing to do with Nintendo’s products.”

According to a recent survey, small and mid-sized businesses are woefully unprepared for disasters and misled by existing data backup plans.  The 2009 Disaster Recovery & Business Continuity Survey was conducted by Agility Recovery Solutions and Hughes Marketing Group.  More than 700 business owners and executives throughout North America participated. Among the highlights:

Data backup brings a false sense of security.

• 94% of companies have formal data backup plans.
• While 75% of companies say they can have their employees back to work within days of a disaster, only:
  • 28% have access to alternative office space.
  • 41% have access to mobile office space.
  • 54% could acquire temporary office equipment.
  • 57% have access to power generators.

Small and medium-sized businesses are woefully unprepared for disasters.

• 90% of smaller companies (<100 employees) surveyed spend less than one day per month maintaining their continuity plans.
• One in five (22%) spend no time maintaining their plans.
• Comparatively, 20% of larger companies (>100 employees) spend more than 10 days per month on their continuity plans.

Responses indicate a difference between saying the “right thing” and taking action.

• Gaining C-level buy-in is a challenge. Regardless of business size, survey results show many companies have difficulties getting C-level executives to embrace the importance of continuity planning.
• Although 67% of respondents feel an effective business continuity plan is paramount to company success, only 53% think their company’s management team feels the same way.

“A data backup plan is not the same as a disaster recovery plan,” said Bob Boyd, chief executive of Agility Recovery. “The best data in the world is useless if you can’t make use of it. Businesses must take measures to ensure employees can return to work immediately after a disaster. Without alternate plans, you’re business will pay the ultimate price.”

Forbes today released results of its “Ad Effectiveness Survey,” conducted among senior marketing executives during February and March 2009 to better understand their behaviors and beliefs regarding digital marketing, and to forecast where the major areas of growth – and weakness – will be over the next six months.

Among the study highlights, when it comes to influencing brand perception, the most effective tactics were site sponsorships and pay-per-impression programs on digital publications. Ad networks and pay-per-click-search were identified as the least effective tactics. For garnering conversions, search engine optimization (SEO), pay-per-click and e-mail tactics were seen as the top three most effective tools, while ad networks, video ads and “other” tactics were cited as least effective.

“Ad network spending is all about demand fulfillment while direct-to-publisher display is much aligned with the traditional advertising goals of demand creation,” said Forbes.com President and CEO Jim Spanfeller. “It is interesting to see the shift of dollars toward demand creation as we see signs of life in the economy.”

Marketers are measuring success as follows:

• 82% say they are using conversions or sales data
• 55% use registrations
• 51% use click-throughs
• 51% use impressions
• 39% use search rank
• 31% use brand perception
• 16% use customer feedback
• 14% use reach to target

When respondents were asked about their expected changes in digital media tactic allocation over the next six months:

• Overall respondents plan to allocate a higher percentage of their digital media dollars to viral marketing (42%) and SEO (40%), while 53% stated they would spend less on Ad networks.
• Behavioral Targeting was the tactic to see the least change (57% plan to allocate the same).
• Among $1MM+ Digital spenders, Viral Marketing (54%) and SEO (50%) will also see expected increase allocations, with Ad networks seeing the highest percentage of expected decreases at 52%.

“It’s amazing that less than one-third of marketers are using brand perception metrics, despite the fact that the digital world makes brand perception research readily available and measurable,” added Spanfeller. “Additionally, the need to build a trusted relationship with customers as part of an overall marketing strategy may in turn increase the need for contextual ad environments that align the advertiser’s message with trusted, branded media.”

LegalCloud has announced that they have joined the Solution Partner Network with Rackspace Hosting. The relationship is designed to bring secure, reliable cloud computing to the international law firm community. By leveraging Rackspace’s global data centers and leadership in managed hosting, and LegalCloud’s focus and expertise in legal technology, international law firms now have a cost effective and efficient way to utilize hosting services.

“International law firms demand the highest standards of security, reliability and redundancy when it comes to critical data and systems. Working with Rackspace was an obvious choice of hosting provider for us in launching LegalCloud,” Commented Mark Hadfield – CEO LegalCloud. “Their multiple, first class data centers around the globe, combined with Fanatical Support, provides our customers with the confidence of knowing their systems will be securely available in multiple redundant locations at compelling value.”

By replicating data and systems to LegalCloud, clients are able to reduce capital and operating expenses associated with redundant collocation facilities, become technically agile with the ability to scale services up and down on-demand while maintaining powerful infrastructure for primary or business continuity purposes. LegalCloud is not accessible from the public Internet. It is a secure, globally redundant, virtual data center which provides law firms with unprecedented control, agility, and cost advantages over traditional private data centers or collocation facilities.

“LegalCloud brings industry focus and expertise to Rackspace’s efforts in meeting the specific needs of major law firms, an important customer segment for us,” said Jim Lewandowski – SVP Worldwide Sales, Rackspace. “Cloud computing represents an area of increasing innovation for Rackspace as well as being our fastest growing division, and we’re excited to work with LegalCloud, who is a great example of a partner driven solution that matches our commitment to growth in the Enterprise segment through Fanatical Support and customer value.”

Created in consultation with leading CIO’s, LegalCloud offers business continuity services, replication of data and systems, unlimited storage, snapshots recovery points and other features through Rackspace Hosting which are designed specifically to meet the needs of the legal industry. All features are delivered as low cost, managed services reducing the overhead associated with owning and running private infrastructure in a collocation facility.

Many large companies recognize the importance of social media tools but lack the vision on how to use them in conjunction with long-term initiatives and measure their effectiveness, according to a survey conducted by Vignette Corporation in partnership with the Marketing Leadership Roundtable and the Corporate Executive Board.

The survey collected almost 200 responses from companies with median revenue of $333 million. Fifty percent of the respondents work at companies that have 1,000 employees or more and 62 percent come from B2B organizations.

Overview

“Social media today is like the Web was in the 90s – everyone knows they need to use it but they aren’t sure how,” commented Gerardo Dada, senior director of product marketing for Vignette. “As a result, very few companies have a strategy in place, including guidelines, processes and metrics, to succeed long term. The interest and resources are there, but on a tactical level only.”

The Importance of Social Media

In a relatively short amount of time, social media has transformed how businesses operate and companies are eager to experiment. Fifty-five percent of those surveyed said that Web 2.0 priorities are more important than or as important as traditional priorities. However, only 14 percent have two or more years of experience with using social media and 40 percent of those surveyed have no social media process or strategy in place.

Companies are pumping up their budgets when it comes to social media. Seventy-one percent of those surveyed will increase social media investments in 2009 and the average increase in the investment is 40 percent.

Why the uptick in spending at a time when budgets are being cut? According to Dada, companies understand that the Web is the most important channel for customer engagement and that it can be used to increase revenue and save money. With these thoughts in mind, social media has exponential potential as an effective marketing tool with a real impact on the bottom line.

“Companies hear the buzz and they see what their competitors and peers are accomplishing,” said Dada. “More importantly, customers and prospects expect companies to adopt social media tools. The days of one-way communications are gone. Social media is changing the way companies and people interact.”

The Use of Social Media

According to the survey, a majority of social media activities focus on increasing awareness, engagement and lead generation.

Key drivers for social media efforts include:

• 75% – Marketing communications and branding
• 67% – Marketing and/or product marketing
• 56% – Customer relations
• 35% – Support
• 38% – Community and involvement
• 14% – Other (knowledge management, recruitment, research and sales enablement)

It is not surprising that marketing departments are leading the majority of Web 2.0 initiatives (69%), with IT (12%), HR and PR (11%) close behind.

The Effectiveness of Social Media

Social media budgets are expanding, but that doesn’t mean organizations are seeing real results, according to the survey. Only 12 percent of those polled rated their Web 2.0 initiatives as effective. Dada notes that this is a testament to the lack of maturity of enterprise social media use.

“Companies feel that social media tools should be a part of their marketing and branding initiatives, but are still unsure about how to use them and how to measure effectiveness,” stated Dada. “With the enterprise adoption of social media so new, how do companies know how to develop a successful Web 2.0 approach? There’s going to be a learning curve.”