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Introduction to Intellectual Property

October 30th, 2014 | Posted by admin in Business Law - (0 Comments)

Introduction to Intellectual Property:

Intellectual property is a commonly misunderstood term that continues to confuse entrepreneurs, businesses, and inventors alike. Intellectual property refers to a ‘product of the intellect’ that has a commercial value and is used to encompass a wide variety of creations, including songs, artworks, mechanical inventions, machines, software, formulas, designs, brand names, etc.

Intellectual property is an umbrella term for all the laws that together determine what the intellectual property is, who owns the intellectual property, and what rights are assigned to that ownership. Once ownership is established, intellectual property law provides the owner with a ‘negative right,’ meaning that it gives the owner the right to prevent others from copying the ‘product of the intellect.’ For example, an author of a poem could prevent someone else from reproducing the poem. Similarly, the inventor of an invention could prevent someone else from copying the invention.

Types of Intellectual Property:

Intellectual property generally consists of four distinct legal categories; Trade Secrets, Copyrights, Trademarks, and Patents. Although there may be some overlap, each is used to protect the rights for different creative endeavors. If cared for properly, intellectual property can be a valuable asset. However, the devil is in the details and without proper care, what would have otherwise been a valuable commodity, can be lost forever.

The Trade Secret:

A trade secret is any commercial information that has a value (i.e., benefits a business commercially) and is maintained in secrecy. Factors that have been used to determine if something qualifies as a trade secret include:

  • (1) the extent to which the information is known outside the particular business entity;
  • (2) the extent to which the information is known by employees and others involved in the business;
  • (3) the measures taken by the business entity to guard the secrecy of the information;
  • (4) the value of the information to the business; and
  • (5) the ease or difficulty with which the information could be properly acquired by others.

Trade secrets are generally used by a company that wants to maintain proprietary information as confidential. This is to be contrasted with copyrights, patents, and trademarks, all of which require public disclosure. Thus, trade secrets require a level of discretion and secrecy that is put in place to prevent the dissemination of the information. In addition to other secrecy measures, using confidentiality and non-disclosure agreements is generally recommended for any information that a business may want to claim as a trade secret.

The Copyright:

A copyright is a form of protection provided to the authors of ‘original works.’ This includes literary, musical, artistic, and certain other intellectual property. Copyrighted works include original soundtracks, web site design, photographs, poster art, computer programs, books, or even this article. The copyright gives the owner several exclusive rights to the work. For example, the copyright gives the owner the exclusive ‘right’ to ‘copy’ or reproduce the work.

In contrast to other intellectual property, a copyright exists from the moment the work is created. While not required, it is often beneficial to place a notice on the work to inform the public that the work is protected by a copyright. Furthermore, in the event that a work carrying a proper notice is infringed upon, courts will not consider an infringer’s argument that the infringement was innocent. An innocent infringement defense may result in a reduction of monetary awards that would otherwise be available to the copyright owner.

The owner of a copyright has not only the right, but also the responsibility to prevent others from copying or reproducing the protected intellectual property. If an infringer can show that the copyright owner knew of infringing activities and delayed in bringing a lawsuit to stop the infringement, the courts may allow the infringement. In other words, if a copyright owner knew someone was using the material for some time and did nothing to protect their rights, the copyright owner is prevented from enforcing the copyright against the current, and possibly other infringers.

A copyright notice should include the symbol ©, the date the work was first created, and the name of the work’s owner. For example, the copyright notice for this article would read, © 2009, Marcus R.

In addition to notice, a copyright owner should consider federally registering the copyright with the Library of Congress. Federal registration of a copyright is voluntary, though highly recommended. Registering the work places the copyright on public record and provides the originator with a certificate of registration. In the event that someone violates the copyright and uses the work without permission, the registered originator should be eligible for monetary awards by the courts. In successful litigation, the courts can award the owner any losses suffered by the infringement and any profits realized by the infringer. Furthermore, if the court finds that infringement was committed willfully, the court, in its discretion, may increase the award for appropriate treble damages.

As a result of the Copyright Term Extension Act of 1998, most works published after January 1, 1978 last for the life of the author plus 70 years. For example, the copyright for Michael Jackson’s Thriller album will now expire in the year 2079. A few exceptions are made for ‘work made for hire’ agreements and anonymous registrations, in which the copyright lasts between 95 and 120 years, depending on the date the work was published. After the expiration of the copyright, the ‘work’ goes into the public domain and is available for anyone’s use.

In order to federally copyright a work, the piece must be filed with the Library of Congress. Having a professional register your copyright will cost around $200 in attorney’s fees (not including a filing fee of $30). Or, you can do it yourself for only the filing fee. Go to www.copyright.gov for more information.

The Trademark:

Another common form of intellectual property is a trademark or service mark, which operate as source identifiers.

A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product. The terms ‘trademark’ and ‘mark’ are commonly used to refer to both trademarks and service marks. In short, a trademark is a brand name. Created to distinguish different companies, products or services, a trademark or service mark provides protection from unauthorized use of a ™mark. A ‘mark’ is defined as a word, a phrase, a name, a symbol, a look or device that is used to indicate the source of a product or service. Typical things that are trademarked are company names, product names, logos, and slogans.

There are three levels of trademarks: (1) common law (2) state level and (3) federal level. A common law trademark is created when a distinctive ‘mark’ is used in commerce for a sufficient amount of time to create a ‘secondary meaning’ (when the trade or consumer has come to identify the specific mark with a company’s products or services). For example, if a shoe company sells shoes to local residents and those residents recognize that companies name as the shoe company in that geographic area, the name of that company will likely have a common law trademark. Common law trademarks provide only minimal protection limited to the geographic area in which the mark is used, such as stopping a competitor who enters your area with the same or confusingly similar mark. However, a common law trademark povides no protection against someone in another area (such as another city) using the same mark.

A state level trademark protects an owner from the unauthorized use of the protected mark in a specific state only.

Alternatively, federal level trademark registration usually supersedes state level registration, and provides far more legal protection than state level trademarks. To qualify for a federal trademark, the business must operate in interstate commerce or be planning to do so. ‘Interstate commerce’ involves sending the goods across state lines with the mark displayed on the goods (a web site used to sell the ‘marked’ goods to another state would qualify). With services, ‘interstate commerce’ involves offering or rendering a service to those in another state.

As with copyrights, federal registration of a trademark is not required. However, federal registration provides several advantages, including providing notice to the public that someone owns the mark, and the exclusive right to use the mark in all states.

Once federally registered, a trademark owner has not only the right, but also the responsibility to stop competitors and other infringers from using any mark that is identical (or confusingly similar) to their trademark. For example, a trademark owner who does not actively pursue each and every infringement on their registered trademark is in jeopardy of losing any rights associated with the intellectual property. In many cases, a trademark owner who fails to enforce their mark faces having the mark declared public domain. Alternatively, with proper ‘use’ and enforcement, the mark could last forever.

In certain circumstances, the courts have awarded the trademark owner all of the infringer’s profits that were made using the mark. And, in some seriously egregious situations, the courts have been known to award the trademark owner up to three times the infringer’s profits.

Before selecting a company, product name, or even a web site address, it is advised to verify whether or not someone else already owns the rights to that name. If the name is a registered trademark, the outcome could be terrifying. The infringing business may not only be forced to stop using the name after investing in signage and materials, but worse yet, the owner could drag the infringing business into court in another state, at the infringing business’ expense, and sue for losses and attorney’s fees.

To avoid such consequences, it is highly recommended that a professional trademark search be done prior to investing any time or resources into a particular name. A trademark search generally costs around $300, and having an attorney register the mark with the United States Patent and Trademark Office (USPTO) costs between $200 and $300 in attorney’s fees (not including a USPTO filing fee of $375). Additional information regarding trademarks can be found at www.uspto.gov.

The Patent:

In many cases, one of the most valuable assets a company can have is a patent or patent portfolio. A patent is the grant issued by the United States Patent and Trademark Office (USPTO), to the inventor of intellectual property rights for an idea or invention. The right conferred by the patent grant is, in the language of the statute and of the grant itself, – the right to exclude others from making, using, offering for sale, or selling – the protected invention in the United States, or ‘importing’ the invention into the United States. Note: a patent does not grant the right to make, use, sell, etc., the invention or idea, but the right to exclude others from making, using, selling, etc., the invention or idea.

The two types of patents that are most often applied for are the design patent and utility patent. A design patent is granted to anyone who invents a new, original, or ornamental design for an article of manufacture. In other words, a design patent protects the actual physical design of a product but NOT the functionality of the product. Instead, only the ornamentation of the product itself is protected.

In order to protect the functional operation of a product, or how it works, the inventor must apply for a utility patent through the USPTO. A utility patent is granted to anyone who invents or discovers any new and useful product, or any new and useful improvement of an existing product.

The scary truth, however, is while something may be patentable; certain actions of an unwary inventor can make it almost impossible to do so. Under current patent law, an inventor is given up to 1 year to file a patent application from the time they: (1) offer to sell the invention or product; (2) describe or disclose the invention in a printed publication; or (3) publicly use the invention. (Warning: most foreign countries do not even provide the inventor with the 1-year window).

In other words, if an inventor who has not filed a patent application offers to sell the invention in a commercial transaction, describes the invention in any publicly available publication or web site, or uses the invention in the public, the patent may be declined and the invention declared public domain. When in the public domain, the invention is useable by anyone without recourse.

Such was the case with Wil Schock of Creep Crafters. Wil had spent approximately 10 years developing a fog-chilling system using easily obtainable ice cubes. In addition to his time, Wil spent thousands of dollars in research and development of the product. With the excitement of having invented this new fog-chilling machine, Wil published an article on his web site and in a publication that described how to make the device. Because Wil did not file a patent application on the fog machine within the appropriate one-year window, he is now barred from being allowed to patent the invention, losing what could have been a valuable asset to his company.

Fortunately for Wil, he later developed several improvements to the original fog machine to perfect the product. This time, Wil learned from his past and filed a patent application on the improvements within the allotted time. Now, instead of giving his invention freely to the public, Wil has added a valuable asset to his company through a patent application.

When and if issued as a patent, Wil can prevent anyone, including competitors, from selling or even using a product based on his invention (in the country that issues the patent). In other words, should a competitor copy Wil’s product, Wil could use the patent in a court of law to force a competitor to stop selling the product. And upon finding for the patent owner, the court will award the patent owner a sufficient amount of money to adequately compensate for the infringement, with interest and costs as fixed by the court. Losses can be measured as a royalty fee, lost profits, or in some cases, the profits of the infringer. Furthermore, if the infringement was done knowingly, the court may increase the monetary award by up to three times the amount found or assessed. Having a patent can provide a significant amount of protection and value to a company.

Filing for patent protection is not cheap. A design patent typically costs between $1,000 and $2,000 in attorney’s fees (not including USPTO fees which start at $230). A utility patent is much more complex and costs significantly more. Based on the complexity of the invention and other factors, a utility patent often costs between $5,000 and $10,000 in attorney’s fees (not including USPTO fees which start at $545). For additional information related to patents, go to www.uspto.gov.

Your ideas are valuable, and as the originator, creator or inventor, you have every right to protect your assets as a form of intellectual property. If you have a great idea or invention, you should file a patent application prior to selling, disclosing, describing or displaying the product or invention (function or design). You should also ensure that the name you choose for a product or business is not already protected by someone else’s trademark. Otherwise, you may take the chance of being sued for all profits collected under the infringed name. Once you have done a search and made sure that your name can be trademarked, apply for federal registration of the mark as soon as possible to keep someone else from causing confusion in the market. Register your original music, attraction storyline, web site and other copyrightable creations with the Library of Congress for additional protection from infringers.

Author: Marcus R. Contact Legal Grind for more information.

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Basic Procedure in a Criminal Case

October 23rd, 2014 | Posted by admin in Criminal Law - (0 Comments)

TOM HAS A LARGE AMOUNT OF ILLEGAL DRUGS. THE POLICE SEARCH HIS APARTMENT AS A RESULT OF INFORMATION FROM A RELIABLE SOURCE.

Below is a summary of the steps that may be used in the felony prosecution of his case. (Misdemeanors are treated differently.) Note: The states differ in the details described. Some steps may be eliminated, changed, added, et cetera.

Step: ARREST
What Happens: Tom is taken into custody by the police or other citizen. This means he loses his person freedom (the right to come and go as he pleases). He is under the jurisdiction of the court.

Tom’s Rights and Their Constitutional Sources: Before questioning him police must inform Tom of his rights, the ‘Miranda rights,’ which include:

  • the right to have a lawyer present
  • the right to remain silent (not answer any questions)
  • the right to know that anything he says or does may be used against him in court.

These rights are based on the following Amendments:

  • Fifth Amendment guarantees that a Defendant cannot be forced to be a witness against himself.
  • Sixth Amendment: Defendant’s right to an attorney’s presence in criminal cases.

Step: BOOKING
What Happens: Tom’s name and the nature o the alleged crime are recorded in the police ledger (book)

Step: BAIL HEARING
What Happens: Tom applies for bail. Bail is money or property paid or pledged to the court to assure that he will appear for trial. If bail is granted, Tom is free to leave until his next hearing date. Tom may be released without bail’ORO’Released on his Own Recognizance’if the judge believes his promise to appear at trial, or for other reasons. If bail is denied or if Tom can’t pay the amount, he may wait in jail until his next court date. Bail may be denied if the court believes Tom is unlikely to appear for trial or for other reasons.

Tom’s Rights and Their Constitutional Sources:

  • Eight Amendment. Excessive bail cannot be required.
  • Article 1, Section 9, of the Constitution. Tom has the right to apply for a writ of habeas corpus if he believes he is being held unjustly.

Step: PRELIMINARY HEARING before a judge or magistrate.
What Happens: Used in some jurisdiction. The judge or magistrate decides whether to send the case to the grand jury, to charge Tom with the crime, or to release him.

Step: GRAND JURY
What Happens: This is a group of twenty three citizens who meet to investigate and decide whether to accuse Tom of a crime. The grand jury hears only the evidence the prosecution presents. Tom does not have to appear. If there is enough evidence, the grand jury may issue an indictment, which is a formal written accusation. (Also called a true bill.) If not, a no bill is issued, the charges are dropped, and Tom is released. Following an indictment, if the Defendant is not in custody, he may be arrested at this time.

Tom’s Rights and Their Constitutional Sources:

  • Fifth Amendment: A grand jury indictment is guaranteed in all serious felonies. The purpose of indictments is to prevent the government from bringing a Defendant to trial without enough evidence.

Step: ARRAIGNMENT before a judge
What Happens: Tom appears before a judge, who advises him of the grand jury charge(s). Tom may plead guilty or not guilty. If he pleads not guilty, he can again apply for bail.
Tom’s Rights and Their Constitutional Sources:

  • Sixth Amendment: In all criminal cases, the accused has the right to know the accusation against him.
  • Eighth Amendment applies again (see above). Article I, Section 9, habeas corpus applies (see above).

Step: DISCOVERY
What Happens: Tom and his lawyer may seek information from the prosecution about the case against him. He may ask for:

  • Bill of Particulars (stating the time, place, and manner/means of the alleged crime).
  • list of witnesses.
  • grand jury minutes.
  • statements made by witnesses.
  • tangible evidence. In this case, the drugs.
  • Tom may file motions, such as
  • Motion for further particulars
  • Motion to suppress evidence illegally obtained
  • Motion to dismiss the case

In some jurisdictions there is some reciprocity for discovery by the prosecution.

Tom’s Rights and Their Constitutional Sources:

  • Fourth Amendment: Searches and seizures are to be conducted with a search warrant upon a showing of probably cause. (There are some exceptions.) If a search/seizure is illegal, the evidence obtained from it cannot be used. This is the ‘fruit-of-the-poisonous tree’ doctrine.

Step: PLEA BARGAINING
What Happens: Tom and the prosecution may (in some cases) negotiate a settlement of the case. Tom may plead guilty to the crime charged or to a lesser crime. His attorney and the prosecution may agree on a disposition (settlement) of the case. This may involve jail, a fine, restitution, and/or community service. The court may, but is not required to, accept the agreed-upon disposition.

Step: TRIAL
What Happens: This a the court proceeding to decide if Tom is guilty or not guilty of the charges against him. The prosecution may present testimony, documents, and tangible evidence. Tom may question (cross-examine) witnesses against him. He may call witnesses in his favor. He decides whether to testify.

Tom’s Rights and Their Constitutional Sources:

  • Sixth Amendment. Right to a speedy and public trial. If the trial is not held soon, Tom may file for a writ of habeas corpus.
  • Sixth Amendment. Tom has the right to an impartial jury.
  • Sixth Amendment. Tom has the right to call witnesses.
  • Sixth Amendment. Tom has the right to call witnesses for and against him. He can subpoena (order them to appear).
  • Fifth Amendment. Tom has the right to remain silent. His refusal to testify (‘taking the Fifth’) cannot be used as evidence against him. Tom has the right to be presumed innocent until proven guilty.

Step: VERDICT
What Happens: The decision by the judge or jury. This may be a finding of guilty or not guilty. If a jury cannot reach a verdict, this is called a ‘hung jury.’ If Tom is acquitted (found not guilty), he is released.

Tom’s Rights and Their Constitutional Sources:

  • Fifth Amendment guarantees that Tom cannot be retried for the same crime if he is found not guilty. This is the right against ‘double jeopardy.’
  • Note: After a ‘hung jury,’ he may be retried.

Step: SENTENCING
What Happens: If Tom is found guilty, he will be sentenced by the judge according to the state’s penal code.

Tom’s Rights and Their Constitutional Sources:

  • Eighth Amendment guarantees that punishment cannot be ‘cruel and unusual.’

Step: APPEAL
What Happens: Tom may appeal a guilty verdict. The prosecution may not appeal a not-guilty verdict.

Tom’s Rights and Their Constitutional Sources:

  • Fifth Amendment guarantee against double jeopardy (see above).

 

from: Legal Grind Press first release:

The Little Law Book is an adaptation of LEGALESE by Miriam Kurtzig Freedman (Dell 1990). The book is written for legal description and thus should not be relied upon in the execution of legal decisions. Since laws vary from State to State, we urge you to contact a legal professional in your own State.

Read the online book in the Law Library.

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WHO

Who are the players? Note: Some terms have a masculine and feminine form:

MALE FEMALE

testator testatrix

administrator administratrix

executor executrix

heir heiress

Testator, testatrix: The person making the will.

Decedent: A person who has died. The people inheriting property under a will or through intestacy are called by various terms:

Beneficiary: A person or organization entitled to receive property from a will (or from a trust or insurance policy).

Heir, heiress: A person or institution who will inherit – either because he is named in the will or because he is entitled to inherit from the decedent by law.

Issue: Descendants, children, grandchildren, et cetera.

Next of kin: The people closest to the decedent in blood relationship. Also, people who will receive property because of their relationship (under the laws of intestacy). The people who have various functions under a will or through intestacy include the following:

Administrator/administratrix: Someone named by a court to manage the estate of a decedent who dies without leaving a will.

Custodian: A general term. Anyone who has charge (custody) of property, papers, or persons (such as minor children). Sometimes called a conservator.

Executor/executrix: A person named in a will to manage the decedent’s estate. Also called a personal representative.

Guardian: A person named in the will or by the court to care for a minor child or a person who has been decreed by a court to be not competent to care for himself. Sometimes also manages property. These persons serve with or without bond.

Bond: A guarantee to pay money to persons damaged or hurt by the failure of the person in position of trust, such as a trustee, executor, administrator, or guardian, to carry out his legal and ethical duty. Bonds are written by bonding or surety companies. Their cost is based on the value of the estate.

WHAT

Will: The document, signed by the testator and witnessed according to law where the testator is domiciled, which explains how he wishes to have property distributed after death, who should care for minor children, et cetera. To be valid a will must be written and executed (signed/witnessed/completed) according to the law of the testator’s domicile. Also called the last will and testament, if you care to get fancy!

Estate: All property-real and personal-that a person owns when he dies.

Gift: Property given in a will. There are two types of gifts.

  • 1. Devise: Real property; that is, real estate, including land, house, the barn by the old millstream. It includes whatever is attached to the land.
  • 2. Legacy or bequest: Personal property. All property other than land, including money, cars, paintings, insurance policies, jewelry, et cetera. Thus, the furnace is a devise; but the space heater is a bequest or legacy.

Dower and curtesy: The common law right (by state or common law) that a surviving spouse has to receive or enjoy and use real property. This is the right to a “life estate.” The spouse gets (or has the right to use for life) a portion of the decedent’s estate if provisions were not made in the will or if the survivor chooses to take or elect against the will. Dower refers to the widow’s right, curtesy to the widower’s. Lovely old terms, aren’t they? These rights have been abolished or changed in most states.

Elect against the will: All states allow a surviving spouse to ignore the provisions made for him in the will (if any) and choose instead the financial allocation provided in the state’s statutes. Usually, these give him one half or one third of the estate.

Inherit: To receive property from a decedent either through a will or through intestacy.

Disinherit: A testator can intentionally omit a legal heir who would normally have a right to inherit, such as a child. Children can be disinherited in most states, but spouses cannot.

Legacy: general, specific, and residuary gifts of personal property (bequests) in a will. A general legacy gives a specified amount of money, but its source is unspecified. “I give one thousand dollars to Andrew.” A specific legacy gives a designated property. “I give the antique diamond to Kate”; or “all stock in Corporation X to Kenneth”; or “all moneys in First National Bank to Aaron.” A residuary legacy is all the bequests remaining after other legacies have been distributed. “I give all that remains to Jonah.”

WHERE

Domicile: The place where a person has his principal home. The will is probated where the person lived when he died. That’s where the will is written.

WHEN

There are two relevant time periods: before death and after death.

1.  Before death

  • Mental capacity: The will is written when the testator is of “sound mind”; that is, he knows what document he is signing and what he is giving away. His decisions are made without fraud or undue influence from someone who may inherit from him. All wills are revocable and changeable before the testator’s death. He may add to a will as often as he wishes, since a will does not become effective until death. However, following the proper procedures must make all changes. Again, check local law.
  • Codicil: An amendment to a will. It is a separate legal document that changes an existing will and must be signed and witnessed just like the original will.
  • Revocation: The cancellation of an instrument, such as a will, before it becomes effective.

2. After death

  • Probate: Establishing the validity of the will, either by witnesses or by a self-proving will. Also, probate is the process by which an executor or administrator is appointed, estate taxes and debts are paid, the estate is collected, heirs are identified, and, finally, the estate is distributed.
  • Proving a will: A legal action to determine if a will is valid and authentic and may be probated. Also may be called a “will contest.”
  • Self-proving will: A will that avoids the above contest. Having witnesses, at the time the will is written, sign affidavits before a notary attesting to the fact that they witnessed the will signing, does this. On this matter, as on all others in the field, each state has its own very specific statutes that must be followed. Common ways to avoid property going through probate: placing property in joint tenancy, giving gifts before death, and creating trusts. This book does not detail these terms.

WHY

You write a will in order to be testate: to die with a valid will. In this way the testator/testatrix decides how the estate is to be distributed. Otherwise you die intestate.

To be intestate: To die without a valid will. In case of intestacy the estate is distributed according to state law, generally to close family members, next of kin. State officials appoint a guardian for young children. A sample common order of intestacy: spouse, children, parents, siblings, nieces and nephews, and other next of kin.

Escheat: If a person dies without a will and has no relatives who qualify to inherit, the property escheats to the state. It goes to the state! It does not go to a lifelong companion or best friend or favorite charity. Doesn’t this word sounds like what it means!

Death tax, inheritance tax, transfer tax, estate tax: All mean approximately the same thing; a tax levied by state and federal governments on the decedent’s property, above a certain amount. *UPDATE!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!For example, after 1987 the federal estate tax exemption is six hundred thousand dollars. That is, no taxes are paid on the first six hundred thousand dollars of an estate. Taxes and exemption amounts differ from state to state, of course.

HOW

Intent: A very important legal concept in this area of the law as well as many others. If a dispute develops about the will, the court will attempt to determine the decedent’s intention when he wrote the will in order to carry out those wishes. The critical question will be: What did the decedent intend to do? As you can imagine, this is not easy to determine if a will is ambiguous.

 

 

from: Legal Grind Press first release:

The Little Law Book is an adaptation of LEGALESE by Miriam Kurtzig Freedman (Dell 1990). The book is written for legal description and thus should not be relied upon in the execution of legal decisions. Since laws vary from State to State, we urge you to contact a legal professional in your own State.

Read the online book in the Law Library.

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I know how it must feel…you are drowning in debt and feel like you have nowhere to turn. You are struggling with how to pay your bills, put food on the table and just survive. You start looking into options to deal with your massive struggle and you whittle yourself down to a few options. One promises near perfect success with pennies on the dollar being paid to your creditors who are happy as can be to accept this deal. The other appears to be a scary and expensive court battle where you will be forced to publicly admit defeat and be shamed for struggling.

Well – only one of the above descriptions really fits the bill.

How Debt Settlement Really Works

Debt settlement by its very nature is a voluntary agreement between you and the creditor where they agree to accept less than is owed to satisfy your debt. Sounds great! The problem is it doesn’t generally work this way and to get any discount on a bill with a creditor varies widely and depends on many factors like how old the debt is, how much is owed, your income and expenses and even time of month.

Generally a debt settlement company works by telling you to stop paying all your debts and pay them instead. They will then keep your money safe in an account that they will later draw from to settle your debts with creditors. For the privilege of doing this these companies often charge high fees – the last agreement like this I reviewed charged their client $25,000 to settle the debts.

These companies can have some success and they are not all bad, but many are. The biggest factor to keep in mind about debt settlement is that it is a voluntary agreement. The creditor does not have to accept your settlement offer or even respond – fact is, many companies have policies against negotiating with debt settlement companies. The other factor to analyze carefully is that if a debt is settled, the creditor will most likely issue a Form 1099 for the balance of the debt forgiven or cancelled. This will be reported to the IRS as income to you and it could affect your tax liability—sometimes significantly.

How Bankruptcy Really Works

Bankruptcy is a legal proceeding where legal documents are filed with the bankruptcy court. The entire process is supervised by a federal judge and trustee – oh and of course your attorney. Your attorney will be with you the entire way to make sure nothing goes wrong, or to help you fix it if it does. At the end of the proceedings your debts are “discharged” which tells your creditors that you are no legally obligated to pay them. Your case is monitored by a bankruptcy judge and the court’s orders can be enforced through various means.

The cost of a bankruptcy is typically much cheaper than debt settlement. In southern California, Chapter 7 cases range from $1,200 to $2,000 (more if they are complex) and Chapter 13 cases typically cost $4,000 or less (more if they are complex) – definitely less than almost every debt settlement agreement.

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Law words can be obscure because lawyers often use common words in very specific ways. When a lawyer moves,” he doesn’t take his furniture. A judge who “renders a decision” is not rendering fat, as a cook does, or rendering a drawing, as an architect does. When a lawyer “examines” you, he’s not checking you out as a doctor would, and when a judge “charges the jury,” he’s not buying something with plastic! And even though quash sounds like squash, it’s not. So here goes: some common verbs as used by lawyers, judges, and you, when you’re involved with them in court.

The witness may:

Testify: In court (or administrative hearing or deposition or other judicial or quasi-judicial settings), you don’t “speak” or “answer”! You testify: that is, you answer questions under oath; you give testimony (evidence) to the court.

Oath: A pledge to tell the truth. For those who refuse to take an oath, an affirmation will do. It affirms (states) that the person will tell the truth. Perjury, the crime of lying under oath, is taken very seriously by judges and is a felony.

Depose: Answer questions under oath before a trial, transcribed by a court reporter. This testimony creates a document, called the deposition; the witness is the deponent.

  • “The witness was deposed a month before trial at the lawyer’s office.” Depositions are part of pretrial discovery. Watch this! If you are a deponent, be sure your testimony at trial is consistent with your testimony at the deposition. If it’s not, it raises many troubling questions: Might it be perjury? An honest mistake? Is the witness believable (credible)? When was he telling the truth?–now? then? never?

Remain silent: Refuse to testify. A witness who may incriminate himself has the right to remain silent. This usually means the defendant (D) in a criminal proceeding or someone who may be charged with a crime because of the testimony.

  • The theory is: The D is innocent till proven guilty, and it is the government’s job to convict him. He cannot be forced to help the government’s case against him, i.e., incriminate himself.
  • Note: Only a witness who may incriminate himself has this privilege. Others, such as those with immunity (an exemption from prosecution in exchange for the witness’s testimony) may not assert the privilege against self-incrimination. If such a witness refuses to testify, he may be cited for contempt. The court may punish a witness for disobeying the court or impairing the dignity of the court.

Other verbs. The lawyer(s) or litigant pro se (representing himself without a lawyer) may:

Move: Ask the court for something through a motion. The lawyer (for his client) then is called the movant, the moving party. “I move that∑”. There are many types of motions. For example, a motion to change venue, a motion to quash, a motion to suppress evidence. Lawyers will tell you that the way these motions are dealt with by the court before the trial even begins often make or break their case. Motions are a vital part of what goes on in courts. Lots of motions keep lots of lawyers very busy!

Object: Protest: The lawyer may argue against specific testimony or procedures. “I object!”

Depose: Same word as above. Here, the lawyer takes the deposition from the witness. “The lawyer deposed the witness.”

Examine: Ask questions. There are two forms of examination: direct examination and cross-examination.

Direct examine: Ask questions of his own witness. The purpose is to present evidence favorable to the lawyer’s client.

Cross-examine: Ask questions of a witness brought to court (“called”) by the other side. The purpose is to discredit or clarify evidence to make it more favorable to the lawyer’s client.

Impeach the witness: During cross-examination a lawyer may attempt to prove that the witness is not credible (a liar?) and should not be believed. This is called impeaching the witness.

Rest his case: Tell the court (the judge) that he’s presented all his evidence and wants to end his presentation. He’s finished…

Rebut: Surprise! You thought it was all over, didn’t you? Not so fast! The lawyer may present evidence to disprove facts presented by the other side in some situations even after she rests. This happens especially if the other side presents facts that could not have been anticipated–surprises.

During the trial, the judge may:

Quash: Vacate, annul, make void. A motion to quash testimony, if approved, gets rid of it. “Motion to quash is granted.” So the testimony is excluded or removed from the record.

Sustain: Approve, grant. “The judge granted – sustained – the plaintiff’s (P’s) motion.” Yeah!

Deny: Refuse to grant. For example, “The judge denied the motion to quash.” So the (damaging?) evidence comes in.

Order: Direct, tell a party or the parties to do something during the course of the trial. For example, an order to show cause or a temporary restraining orders (TRO).

  • There are lots of orders, which generally are not part of the final judgment. They are interlocutory: i.e., provisional, temporary, et cetera.

Rule: Make a decision on a legal question during the trial.

Overrule: Another word for deny.

Adjourn: Say good night, Judge! The judge may postpone the trial till the next day, next week, whenever.

At the end of a trial by jury the judge may:

Charge the jury: This occurs at the end of a jury trial. The charge is the judge’s instructions to the jury, telling the members of the jury which laws to apply to their verdict, which burden of proof must be met, and so on.

Sequester the jury: (Actually, a judge can do this both during and after the trial.) Separate the jury members from their normal routines, often by having them stay in a hotel during the trial or during their deliberations.

The jury may:

Deliberate: In the jury room. Discuss, consider, argue, and ponder among them. Decide which witness to believe; which, if any, is not credible.

Request clarification: Ask the judge for more information, to see documents, to get clarification, et cetera.

Return a verdict: Make a decision. In criminal cases the verdict must be unanimous. In civil cases it depends on the state, the law that applies, the court, and so on.

Not reach a verdict: Become deadlocked, unable to decide for one side or the other. This is called a “hung jury.” in such a case often a new trial may begin, and we go back to square one!

  • Note: To hold a new trial in the case of a hung jury, even in a criminal case, is not double jeopardy.

After the trial without a jury the court (one or more judges) may:

Render an opinion: Write, deliver the judgment (decision).

Affirm: Decide – by an appellate court – that the lower court’s decision in a particular case is right and should stand.

Reverse: Opposite of affirm. Set aside the lower court’s decision. The appellate court’s decisions to vacate, annul, or change the lower court’s decision in the same case. In this way our laws change; new laws and precedents are created.

Vacate: Cancel, annul. Another word for reverse.

Remand: Send back. An appellate court’s decision to send a case back to the lower court where it was heard first, either for a new trial or for changes, as ordered by the appellate court.

Hold: Decide, declare, state. The important sentence or sentences in a decision that decide the case and can be used as precedent for other cases. Remember the Declaration of Independence? “We hold these truths . . .” Same word. “We hold that…” Lawyers read cases for the holdings.

Overrule: Annul, reverse, reject. An appellate court’s ruling in a case that is directly opposite an earlier decision by a lower court in that jurisdiction. The second case may involve different parties, but the question of law may be the same as in the earlier case. Once a case is overruled, it no longer serves as precedence in that jurisdiction. Thus, too, do our laws evolve and change. A famous overruling was Brown v. Board of Education, a 1954 case that found “separate but equal” schools inherently unequal (and a violation of the Constitution). This case overruled the 1896 case, Plessy v. Ferguson, which upheld laws permitting separate but equal facilities. Those laws were called “Jim Crow” laws.

from: Legal Grind Press first release:

The Little Law Book is an adaptation of LEGALESE by Miriam Kurtzig Freedman (Dell 1990). The book is written for legal description and thus should not be relied upon in the execution of legal decisions. Since laws vary from State to State, we urge you to contact a legal professional in your own State.

Read the online book in the Law Library.

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