Scratching a Niche
Exiling Corrupt Practices
Fredrikson & Byron
Years practicing: 22
Clients: U.S. companies doing business in foreign countries
Why I do this: “I enjoy criminal and regulatory defense because what I do deeply matters to my clients. I help guide them through the most challenging experiences of their lives.”
Dulce Foster, a shareholder at the Fredrikson & Byron law firm in Minneapolis, got her first taste of the Foreign Corrupt Practices Act (FCPA) when, as a midlevel associate, a case that her supervisor couldn’t take landed on her desk. Under the FCPA, it is unlawful for people from American companies to pay officials working for foreign governments in order to secure or retain business. The law covers bribery and corruption activities, which can result in fines from the U.S. Department of Justice.
Foster’s first FCPA case involved a Chinese distributor for her client, a small Minnesota-based medical device company. The distributor was paying Chinese doctors to buy the company’s products. Most Chinese hospitals are state-owned, so their employees are considered foreign officials under the FCPA.
“We found evidence of [the payments] looking through e-mails and documents,” Foster says. Some e-mails sent by the Chinese distributor to an American coworker actually said, “How much of a kickback should I pay?”, proving that employees of the medical device company were aware of the issue.
Foster went to China to interview the distributor, accompanied by a translator. “We spent the first half of the week being obstructed and stonewalled by the lawyer for the distributor,” Foster says. But finally, the distributor’s lawyer said he would talk.
“Ultimately, the [client] company ended up self-reporting to the Department of Justice,” Foster says. “There was a deferred prosecution agreement and a large penalty that the company paid.” She adds that now the medical device company has one of the best FCPA compliance policies around.
In addition to investigating suspected FCPA violations—some of which are reported anonymously by employees on fraud hotlines set up by her client companies—Foster works on preventing problems. Part of her practice includes reviewing FCPA compliance plans and implementing internal controls. Foster also trains employees on the law. She uses slideshows and “what-if” scenarios to help employees understand how to react to complaints and stay compliant.
Her services are also called upon occasionally for mergers and acquisitions. “I do due diligence with the acquisition target to assess whether or not the target has FCPA violations,” she says.
The investigative work involves digging through documents, e-mails, and accounting records. Foster looks for warning signs that include repeated transactions in whole dollar amounts; unusual payment patterns, such as a big uptick in money flowing through the petty cash account; or payments that don’t have proper documentation, such as travel expense reports without accompanying receipts.
Increased global trade has brought bribery issues to the fore. “There have been cultures of corruption for millennia,” Foster says. “It’s just the way business is done and always has been done in certain parts of the world.”
But there is also more enforcement now. A report by Trace International, a Maryland-based nonprofit that provides anti-bribery research, found that the U.S. more than doubled its formal foreign anti-bribery enforcement activity between 2009 and 2010. Foster’s services are in greater demand than ever.
Winemaking for Fun and Profit
Merchant & Gould
Years practicing: 30
Clients: Voss of Norway, Louis Roederer Champagne, Fiat, Loro Piana
Proud moment: “I was given honorary knighthood by the Ordre des Coteaux de Champagne. When a client is appreciative of your investment, your knowledge, your passion for their business to the extent that they sponsor you to be a chevalier [knight], that’s pretty cool!”
Jack Clifford’s office is lined with bottles of wine, water, and specialty beverages, all representing his clients’ intellectual property. It’s his working library, and “it’s very helpful to have the specimens,” he says. In his practice at Merchant & Gould, an intellectual property law firm in Minneapolis, Clifford helps beverage companies defend the names and appearance of their products and packaging.
In one case, Clifford represented Louis Roederer, the French Champagne maker that produces Cristal, against a company making a sparkling wine marketed as “Cristalino.” The wine came in a bottle with a gold label and typeface that looked suspiciously like that of Cristal. A U.S. district court decision put restrictions on how the company could use its Cristalino name (so consumers wouldn’t confuse it with Cristal) and said the label color must not be a gold or a pink-hued copper, like Cristal’s.
After practicing in the beverage niche for a few years, Clifford became interested in winemaking as a hobby. “What I found is that having outside interests, having outside knowledge, is immensely beneficial in building a practice,” he says. “I can talk to the lawyers for these winemakers about fermentation, and I know enough to ask them about the weather in France. Winemaking has helped me talk to wine clients.”
However, some of Clifford’s clients offer beverages other than wine. Voss of Norway sells water in a distinctive cylindrical bottle. “It has a look and cachet and style,” Clifford says. “And that look seems to be popular with folks who don’t want to make their own look.” He’s written numerous letters to Voss’s imitators—including Lands’ End, owned by Sears Holdings Corporation—asking them to cease trademark-infringing activities. Lands’ End was selling a glass water bottle similar to the Voss bottle. Voss sought damages, an end to the sale of the bottles, and the destruction of existing bottles. The case has been settled; though the terms of the settlement are confidential, Clifford does say that the Lands’ End bottles were not destroyed.
Many of his clients have a contract service that looks out for imitators globally by checking other country’s trademark offices, and Clifford is called when the service runs across a red flag. But he also does a lot of research using social media. It’s much easier now to see if a beverage company is violating his clients’ intellectual property. “You find out a lot of information quickly, and at no out-of-pocket cost, by looking at someone’s social media, their Web page, their Facebook page,” Clifford says. “In the old days, five years ago, it was much harder to find out what someone else was doing. Today, the process of investigating potential infringement starts with the computer.”
Clifford’s job also includes keeping clients’ portfolio of registrations up to date as their brands evolve. “What sometimes happens is clients change the way they are using [trade]marks, and you want to keep their registrations current,” Clifford says, such as when companies update their logos to keep them looking fresh.
Gaming for Legal Purposes
Fish & Richardson
Years practicing: 10
Clients: Atari, Take-Two Interactive, Ubisoft
Proud moment: “What’s more gratifying is when you spend two months working with a client on a game … then you go to the store, and I’m walking with my kids, and I see the game on the store shelf. I worked on that!”
Even if the last video game you played was Pac-Man on an arcade machine, you probably know that the content of video games has become increasingly realistic. Loaded with sophisticated animation, product placement, and celebrity references, and set in real places, video games increasingly need copyrights and licensing permissions. For about 10 years, Joel Leviton, a principal at Minneapolis intellectual property law firm Fish & Richardson, has advised video game makers both on protecting their own copyrights and using third-party copyrighted content in their games.
For instance, one client’s game takes place in Las Vegas and incorporates images of landmarks, certain retailers, and buildings that are synonymous with the city. Leviton analyzed the game to decide which trademarks and copyrighted materials are depicted, “and whether such uses, in our view, constitute permissible uses or whether we believe a license is appropriate,” he says. The permissible-use decision is affected by how often or how prominently the images appear. When his assessment shows that the intellectual property holder might successfully sue for infringement, a license is needed.
Leviton also helps clients with naming video games or levels within games. Clients do preliminary trademark searches to make sure no existing game has the name they want. “But when things get questionable, when it’s hard to see whether something is permissible or not, that’s when we tend to get involved,” Leviton says.
Leviton is available to his clients around the clock. Clients’ questions come up as they are writing and coding the game, and they need answers quickly. “They want to do something in the game. They know it’s questionable, so they . . . want a risk assessment from me,” he says.
Many questions are related to right of publicity—an individual’s right to own commercial use of his or her own identity, likeness, photograph, name, voice, et cetera. So, for example, if dialogue between two characters in a video game scene includes a celebrity’s name, Leviton needs to know how many times the name is said and the context in which it comes up. The client also sends him a screenshot. “You need to see it. You need to understand the context to make these calls because a lot of these uses, whether they are permissible, depend to some degree where they are in the game,” he says. “If they want to do something on the packaging of the game, that’s a different analysis than if they want to do something buried in the game that only the most elite players are going to get to.” Leviton says courts have decided that the content of video games is protected under the First Amendment and considered expressive speech as opposed to commercial speech.
More companies are monitoring video games to see if their intellectual property is being used. “[There is] definitely an increase in plaintiffs looking to video game companies for some piece of the action,” Leviton says. “Some of these claims are legitimate. Most of them are probably reaching and really not very legitimate,” he says. One company, a weapons manufacturer whose IP claims, Leviton says, expired years ago, wanted a video game maker to pay a licensing fee for the images of weapons used in a game.
Nilan Johnson Lewis, PA
Years practicing: 20
Clients: USF Holland, Martin Brower, Performance Food Group
Why I do this: “I’ve learned that [trucking] companies are excellent companies that take safety very seriously. And these drivers are professional drivers, and they’re very careful and they are always trying to do the right thing.”
When Sheila Kerwin gets a call from a trucking-company client saying one of its drivers has been in an accident, she jumps in her car and goes to the accident site. A shareholder at the Minneapolis-based Nilan Johnson Lewis, PA, law firm, Kerwin is on call 24-7, and she’ll typically get to a site within an hour of the accident, if it takes place in the Twin Cities area.
If the accident happens on a freeway, traffic quickly becomes snarled, so Kerwin must find alternate routes. She’s even had to jump fences to get to some accident scenes. “Typically, what I do is try to go find the state trooper who is in charge of the investigation and let him know I represent the trucking company,” Kerwin says. “The main goal for me is to get in touch with the driver right away and talk with him.” This allows her to find out what happened and advise him during this crucial period. Of course, because these are serious situations that may involve injuries, damaged vehicles, and debris in a chaotic atmosphere, Kerwin defers to the needs of authorities on the scene.
“It’s important to get an accident reconstructionist there right away and start gathering and capturing the evidence,” Kerwin says. The reconstructionist takes photographs and video of the vehicle and markings on the road are noted. “The earlier you can get on the scene, the more likely you are to have a stronger defense to your case,” she says.
With accident site data and information from the truck’s onboard computer, Kerwin will work with the reconstruction experts, who typically are retired state troopers. Together, they will work to determine the cause of the collision and contributing factors in the accident, including the role of the driver and other vehicles, and the condition of the roadway and environmental factors. With the data, Kerwin’s team generates a three-dimensional computer model of how the vehicle moved during the accident. Kerwin says these models and animations make effective exhibits for trials.
Kerwin started her career as a product liability litigator, representing companies in catastrophic injury and death litigation suits. These cases required a high level of scientific and engineering knowledge, as she worked to understand the cause of accidents involving her client’s products and employees. Moving into trucking cases more than 10 years ago was a natural progression, given her experiences in accident reconstruction.
Kerwin spends some time during litigation educating jurors about trucking companies; she says the industry is burdened with negative stereotypes. “Out in the world, many people don’t like trucking companies, they don’t like truckers,” Kerwin says. “I’ve learned that these companies are excellent companies that take safety very seriously.”
Lommen Abdo, PA
Years practicing: 28
Clients: Jonny Lang, The Blenders, Lipps, Inc.
Proud moment: Starting in 2013, some artists who recorded songs on January 1, 1978, may be able to terminate their transfer of copyright and secure the copyrights back from record companies, according to federal law. “We have distinguished ourselves by filing the first notice of the termination of such transfer upon Universal Records on behalf of ‘Funkytown’,” the iconic song by Minneapolis band Lipps, Inc., Abdo says. The song’s author, Steven Greenberg, would have full control over how the song is used—and the fees for its use. Hall & Oates and Kool & the Gang are also seeking Abdo’s guidance with this issue.
Ken Abdo, vice president of the Lommen Abdo law firm in Minneapolis, sees his main role as general counsel for entertainment businesses that are run by artists. “For instance, I see myself as general counsel for [Minnesota-born blues musician] Jonny Lang. I assist him in any legal matter that he might have, and sometimes it doesn’t involve entertainment. He can still seek my counsel first,” Abdo says. He’s also general counsel for the entertainment estate of Bill Haley of Bill Haley and His Comets and other prominent musicians.
Abdo oversees an entertainment law team of 11 attorneys, which includes five full-time lawyers, and six that provide periodic litigation, estate planning, corporate law, and other services. And he can claim some hands-on experience in the industry: He toured the Midwest with a college band while still in high school. (He was the drummer.) “It allowed me to see what it was like to be a working rock-and-roll musician,” he says.
That experience came in handy as he built his practice. “I didn’t really go into law with the idea that I would be an entertainment lawyer,” he says. “As a part of my general practice, I would always seek to work with entertainers. Many of [them] were my age that I knew.”
While licensing related to the use of his clients’ names and likenesses is a big portion of what Abdo does, new digital music platforms are the game changer in his niche. “I can say confidently that not since Edison created the phonograph in 1887 have things changed so dramatically in the music business,” Abdo says. “The music business is morphing away from an economic model based on buying music to own it.” Compact discs and all physical recordings are going the way of the dodo, and streaming services, such as Spotify and Rhapsody are gaining traction. Record companies are no longer providing records—unexplored territory for entertainment lawyers. Abdo helps clients negotiate copyrights regarding the new digital platforms.
He’s closely watching the outcome of a lawsuit brought by rapper Eminem against his record label that will decide whether a song download is a royalty-paying event or a license of music. (Abdo is not involved in the suit.) “If it’s a royalty-paying event, that means the record company would pay the artist the traditional artist royalties, which is generally under 20 percent of a formula,” he says. “However, if it’s a license—as in iTunes licenses the song—then that would require the record company to pay the artist 50 percent of the revenues that the record company gets paid for issuing that license. It’s a big financial spread.” Eminem’s team argues that a song download requires that iTunes license the song. If the case is decided in his favor, artists with contracts written before digital downloads became popular stand to benefit.
Creatives Serving Creatives
A one-stop legal shop for marketers and advertising agencies.
John Pickerill, chair of Fredrikson & Byron’s advertising, marketing, and trademark practice and a former advertising executive, says his group of eight attorneys—former ad professionals, marketers, and other creative types—are what make the practice stand out. “Our focus on creativity isn’t just lip service,” Pickerill says. “We hire people who are creative to work in this area of law.
“Creative people and marketers tend to approach things from a different perspective than bankers, real estate investors, and most lawyers,” he adds. “Marketers deal in gray areas of balancing risk under tight deadlines, so I think it would be difficult to provide user-friendly legal service in this area without having some background in the creative world. I generally know what marketers need, how fast they need it, and how to fit within tight ad budgets.”
The group provides a range of legal services, including false advertising analysis, trademark and copyright protection and enforcement, Federal Trade Commission and Federal Drug Administration regulation clearance, and sweepstakes and promotions structures and rules.
Pickerill says Fredrikson has invested heavily in infrastructure for the practice. For instance, his team has access to a library dedicated to advertising law and trademark issues. Participation in industry associations, such as the National Advertising Review Board and local Advertising Federation, keeps them abreast of trends affecting their clients.
“Midwest businesses would have to go somewhere like New York, L.A., or Washington, D.C., and pay coastal prices, to find what Fredrikson offers,” Pickerill says.
Science and engineering expertise gets Meagher & Geer into the thick of it.
Attorneys in Minneapolis law firm Meagher & Geer’s product-liability and catastrophic-loss practices deal with cases that are perhaps a bit more dramatic than those of their intellectual property and estate planning peers. “When a chemical lab blows up in Louisiana, we get called in,” says Russ Melton, an attorney in the practice. “We have all the certifications to be able to wear the space suits. We have all the experts we need from across the country, and we go in and identify what happened.”
The lawyers in these practice areas are expected to get and maintain certifications in hazardous waste operations, U.S. Federal Emergency Management Administration national incident command system, fire and explosion investigation, odor investigation, and many others. Such certifications allow attorneys to work on site immediately after an accident or product failure to conduct forensic exams, working alongside first responders and government authorities. The team works on cases across many sectors, from industrial and commercial property loss to cases involving transportation, agribusiness, and oceans, rivers, and lakes.
The work also requires an education in the sciences. In Meagher & Geer’s product liability group, most of the more than 20 attorneys have backgrounds in such disciplines as mechanical, civil, electrical, biomechanical, and nuclear engineering. “The great thing about engineers is that they’re good at problem solving,” Melton says.
To get attorneys up to speed once they join Meagher & Geer, all new associates must complete a two- to three-year apprenticeship, which includes getting the necessary certifications. Then they can assist with, say, information gathering in the field or do onsite lab inspections.
Melton’s colleague Nisha Taneja has a degree in chemical engineering and work experience in process controls. She says her background helps her communicate with the engineers in client companies. For instance, she inspired confidence in an oil refinery cleaning-services client by asking the right questions. “They were very happy and surprised to be speaking to somebody who could understand their engineering background and all of the work that they actually do, rather than their having to start at a very basic level to explain every little detail,” Taneja says.