March 2001
Vol. 10, Issue 1
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Tilting The Balance Toward Employers: Workplace Injuries And Substance Abuse

By Robert C. Meyer, Esq.

Under current law, when an injured employee tests positive for alcohol or a controlled substance, employers face a heavy burden of proof. To prevent that employee from becoming eligible for Workers' Compensation benefits, the employer must prove that substance abuse is the proximate cause of the workplace injury. A bill recently passed by the Ohio General Assembly will tilt the balance back in favor of the employer.

HB 122, which is expected to be signed by Governor Taft later this month, places the burden of proof concerning impairment or lack of it on the shoulders of the injured worker. To be eligible for Workers' Compensation benefits, an employee who has a blood alcohol level of .1 percent or who tests positive for certain controlled substances will be required to prove that he or she was not impaired by alcohol or drugs at the time of the injury. The new provisions will take effect 90 days after HB 122 is signed into law by the governor.

Eligibility for "Rebuttable Presumption"
To be eligible for the "rebuttable presumption" afforded by this legislation, employers must notify their workers about these changed requirements. Employees must be informed that the results of a chemical test, or their refusal to take the test, could affect their eligibility for Workers' Compensation benefits. This notification could be placed in the employee handbook or be added to the company accident forms.

For more information about this new law and other Workers' Compensation issues, please contact Robert C. Meyer, Esq., member of the Workers' Compensation Practice Group in Canton, Ohio, bmeyer@bdblaw.com or at 330.491.5227.

State Specific Guidelines Impose Additional Requirements for the Purchase or Sale of a Franchise

By Robert J. Newbold, Esq.

Whether you're interested in purchasing a franchise or in selling one, be aware that federal and state guidelines have imposed additional disclosure requirements which provide for strict compliance and set mandatory penalties for non-compliance.

In 1975, the Midwest Securities Commissioners Association adopted the "Uniform Franchise Offering Circular." This group expanded into a national association that includes the securities law regulators of all of the states in the country. It is currently known as the North American Securities Administrators Association, or NASAA. This group established a format for disclosure that would be uniform throughout the United States. Both state and federal franchise law require the delivery of a Uniform Franchise Offering Circular (UFOC) to every prospective franchisee at the first personal face-to-face meeting. Because NASAA had no regulatory or legislative authority, it was necessary that the Federal Trade Commission (FTC) and specific state authorities adopt and enforce the uniform guidelines. In 1995, the new UFOC-required disclosure format was adopted throughout the United States for all franchisors. The 1995 UFOC format satisfies the FTC Rule disclosure and format requirements. The format of the FTC Rule is not accepted by the franchise registration/disclosure states, however, and therefore the format accepted by franchisors offering franchises in one or more registration/disclosure states is the 1995 UFOC version.

In addition to complying with the UFOC guidelines imposed by the NASAA, the following states require franchise registration with a state agency prior to discussing, advertising or offering a franchise opportunity to a prospective franchisee:

California Hawaii Washington Minnesota Illinois

North Dakota South Dakota New York Indiana Maryland

Rhode Island Virginia

The states of Michigan, Texas and Wisconsin require a limited type of filing, but not registration. Texas, Nebraska and Kentucky allow a one-time filing for exemption from such state requirements, and Utah and Florida permit filing for an exemption on an annual basis. The state-imposed guidelines allow the state examiners to review the document for deficient or additional disclosures, which must be incorporated into the UFOC document.

To streamline the franchise registration process, the NASAA has recently released an application for a coordinated review that will allow a franchisor who is filing applications in two or more participating states to file in a "lead state." All of the franchise registration states listed above, except California, are participating in the coordinated review process.

Franchisors who offer franchises for sale in states requiring additional disclosures without obtaining legal registration and approval are subject to civil and criminal penalties and rescission rights. In addition, these franchisors may be permanently barred from future sales.

Robert Newbold, Esq. is a member of the Business Practice Group practicing in Franchise Law. For more information contact Rob at rnewbold@bdblaw.com or 330.491.5258.

Vendor's License Renewal Fees Are Eliminated

By Andrew S. Perry, Esq.

Among recent tax law changes made by Ohio's Legislature is the elimination of the vendor's license renewal fee. Under the former law, the annual renewal fee was $40 for transient vendors and $10 for all others. In late 2000, amongst many operational sales and use tax law changes, these requirements were eliminated. Other sales tax changes include:

• An allowance for business owners to transfer vendor's licenses to other locations within the same county;
• An extension for businesses to provide evidence of sales and use tax exceptions or exemptions from sixty (60) days to one hundred twenty (120) days;
• Permission for taxpayers with over $60,000 of sales tax liability in calendar year 2000 to make payment by electronic funds transfer;
• Imposition of discretionary penalties rather than mandatory ones; and
• Extension of assessment appeals from thirty (30) days to sixty (60) days.

Andrew Perry, Esq. is a member of the Tax & Employee Benefits Practice Group. For more information on the changes listed above and sales tax in general, contact Andrew at aperry@bdblaw.com or 330.330.258.6479.

Predictability Wins Over the Doctrine of Equivalents

By Louis F. Wagner. Esq.

The threat of a patent suit has historically made the business community nervous, and with good reason: These suits are costly and have led to unpredictable outcomes. While the expenses associated with patent litigation have not changed, the outcome is now more predictable than a roll of the dice.

It took 169 pages of opinion, concurrences and dissents, but the U.S. Court of Appeals for the Federal Circuit has significantly narrowed a key patent doctrine and given the business community much greater assurance of the limits of a patent's reach. More than twelve years ago, Festo sued Shoketsu for patent infringement concerning magnetically coupled rodless cylinders used in conveying systems. The outcome of the case was important to the litigants, but the real significance of the case lay in the implications of the decision. The court said that patent applicants who, during the give-and-take of the application process, amend and narrow their claims in order to step around prior art technology, no longer have any doctrine of equivalents associated with the amended elements of those claims.

The majority opinion for the en banc court was by Judge Alvin A. Schall, who wrote that "no range of equivalents is available" for amended claim elements. He said that after 20 years of allowing a "flexible range" of allowable changes, it had proven to be "virtually impossible to predict ... where the line of surrender is drawn."

The implication for patent practitioners is clear. After Festo, attorneys must come in with realistic claims as filed and seek allowances without amendment. This point was vividly brought home in a recent oral argument at the Court of Appeals for the Federal Circuit involving the doctrine of equivalents in a patent litigation, where I was defending a client against a charge of infringement. The three-judge panel listened to oral argument and affirmed our District Court victory within three days.

Donald A. Antrim, Shareholder
Health Law Practice Group - Columbus Office
Donald counsels corporate clients and individuals regarding health care issues, including hospitals and health systems, ambulatory service centers, nursing facilities and individual and group medical practices.

Tod T. Morrow, Shareholder
Employment Law and Workers' Compensation Practice Groups - Canton Office
Tod represents employers in all areas of employment law, with an emphasis on defending employers in discrimination, wrongful discharge, intentional tort, OSHA, VSSR, and workers' compensation cases.

Health Law Practice Group
David Woodburn, Eric Simon, Don Antrim and Thomas Hess will present on May 10 at the annual Ohio Health Care Association annual convention in Columbus, Ohio. Topics include the estate planning process, structuring contracts, and a litigation update. To register online visit the OHCA website at www.ohca.org.

Exploring Hospital/Physician Relationships in Ohio will be the topic of a Lorman Seminar presented by Ted Ward, Pat Reymann and Jeff Royer on April 25, 2001. To register online visit the Lorman website at www.lorman.com.

Mark Frasure (Canton, Ohio) spoke at the Belmont County Medical Association seminar sponsored by the Ohio State Medical Association.

Thomas Hess (Columbus, Ohio) recently presented at an Ohio Health Care Association seminar on Advanced Directives and Criminal Background Checks.

Business Law Practice Group
Rob Malone (Akron, Ohio) will be a co-presenter on May 21 for the Akron Regional Development Board Training Institute. The topic is Preparing a Business for Sale. To register online visit the ARDB website at www.ardb.org.

Terry Vincent and Ted Ward (Cleveland, Ohio) presented Choosing the Best Business Entity at a Sterling Educational Services Seminar.

Tax Law Practice Group
Steve Dimengo (Akron, Ohio) presented Sales and Use Tax: A Beginners Basic Course in Ohio at a Lorman Educational Services seminar. He will also speak on Sales and Use Tax in Ohio on June 8, 2001 in Independence, Ohio and on June 15 in Akron. To register online visit the Lorman website at www.lorman.com.

Trusts & Estates Law Practice Group
Ron Allan and Ray Krall (Akron, Ohio) will speak on April 24, 2001 at a seminar for Philanthropic Fund Trustees sponsored by the Jewish Community Board of Akron. Their topics will be Fiduciary Responsibilities and Planned Giving Strategies. To register call 330.869.2424. The Cleveland Estate Planning Council heard Ray's presentation on Charitable Lead Annuity Trusts.

Jeff Halm (Canton, Ohio) recently presented Estate Planning Strategies at the Canton Christian Home. He also spoke to the American Express Advisors on Sophisticated Estate Planning Techniques. The employees of Fidelity Commerce Mortgage heard his presentation on Basic Estate Planning Ideas. His topic at the David Noyes & Company seminar was Estate Planning Strategies.

Mergers & Acquisitions Practice Group
Rob Malone (Akron, Ohio) participated as a panelist for the International Angel Investors Institute of Ohio. The topic was Investigating Opportunities: Due Diligence Part I Analyzing Risk and Return.

Employment Law Practice Group
Vince Tersigni (Akron, Ohio) will present an Employment Law Update at a CLE seminar for the Akron Bar Association on April 27, 2001. To register call Jackie Mell at 330.253.5007. He also provided an Employment Law Update to the Philadelphia chapter of the Society for Human Resource Management and spoke to the Malone College Management Program on Emerging Law Issues For Managers.

Jim Kurek and Vince Tersigni (Akron, Ohio) recently conducted a seminar on Employment Law Issues for Lorman Educational Services.

Litigation Practice Group
Peter Cahoon (Akron, Ohio) will speak at the orientation luncheons for new attorneys hosted by the Akron Bar Association on May 15 and 23, 2001.

If you are interested in having a speaker from BDB make a presentation to your organization, please contact: Cheryl Warren, Director of Client Relations and Marketing 800.686.2825 ext. 546 or cwarren@bdblaw.com


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