Gibbons P.C. - Intellectual Property Advice for Inventors/ · 2019. 1. 16. · effective counsel;...

12 COMMERCE • www.commercemagnj.com

FINDING HIDDEN VALUE

modern furniture is extremely popular because of its simple lines and angular shape. The pieces are built well and many are timeless.

Q. What about your predictions for future trends in collectibles?

A. What’s really going to be hot in the future are thingsthat are handmade in limited numbers. Right now, we aresuch a throwaway society. It’s hard to imagine something that

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C OMMERCE ASKED LEGAL EXPERTS TO RECOMMEND best practices for protecting the intellectual property of inventors and entrepreneurs.

Here are their insights.

Archer & Greiner P.C.By Gregory J. Winsky, Esq.

Building out inventory, packaging and evenWIP for tangible products is expensive; beforebuilding or branding your hardware or hard-

good products, a little diligence to avoid patent and/or trademark infringement can go a long way. Consider free-dom-to-operate patent searches and trademark clearancesearches to avoid trashing branded goods.

IntellectualProperty Advice for Inventors/Entrepreneurs

THE QUEST FOR MAXIMUM profitability is an all-encompassingjourney, from finding new mar-

kets, products, services and customers tolooking within a company to identifywaste or missed opportunities. Sinceaccounting firms are uniquely suited tofinding hidden value in their clients’businesses, COMMERCE asked for somerecent success stories.

EisnerAmper LLPBy Jay Weinstein, CPA, NJ Managing Partner

EisnerAmper LLP’sBankruptcy and

Restructuring Group recently assisted inthe disposition of assets for one of ourclients that buys remnants and judge-ments from liquidating estates. The busi-ness is a bit speculative since the futurevalue is often unknown. In this case, ourclient acquired a shell company and theremaining assets (Internet properties) ofa liquidated company. We identified athird party who recognized that therewas a vibrant secondary market forthese newly acquired Internet addresses.The third party then brokered a dealwith various buyers. The result: a wind-fall profit of hundreds of thousands ofdollars for our client. At EisnerAmper,we recognize that meeting client needs

may mean tapping into a wider pool ofresources. This is a prime example ofhaving a strong business network alongwith the will to help a client find thehidden value in their transaction.

Friedman LLP By Frederick R. Berk, CPA,Co-Managing Partner

At Friedman LLP, we’vefound hidden value in the

simple strategy of brainstorming withour clients to help empower their deci-sion-making. An example is a retail clientlocated in Manhattan. A few years ago,the business was not performing at the

COMPILED BY MILES Z. EPSTEINEDITOR, COMMERCE

Finding Hidden Value in New Jersey Companies

Thinking outside thebox can turn missedopportunities into

cash flow.

Mike Wolfe's clients include interior designers, art directors, photographers and collectors.



is going to be collectible 50 years from now because of howmuch we mass produce. If you’ve got a guy that is makingsomething specific in limited numbers, that item is what isgoing to be hot. I am not talking about art. I am talkingabout something that is functional in your daily life. It can be a chair, table, clock or radio. Those are the things that are going to be collectible.



Cole Schotz P.C.By David M. Kohane, Esq., Chair, IP Dept.

One critical issue is responding to use of one’s trademark by competitors and consumers.The proliferation of social media formats means

burgeoning opportunities to applaud or condemn products,and this has changed the culture of discussion. Aggressivecounterattacks often backfire. Companies should assess bothlegal and public relations consequences before acting.

Connell Foley LLPBy Marc D. Haefner, Esq., Partner, IP Group

Inventors should pay attention to “fluidity”—the seamless transformation of ideas into reality.In this day of ever-evolving 3-D printers

and powerful computingdevices everywhere, it isincreasingly difficult toprotect intellectual prop-erty from illegal copying.Now, more than ever,inventors need to take allmeasures possible to pro-tect their IP.




level it needed to, as sales volume wastrending in the wrong direction. Withour input, the client decided it was timeto liquidate. Since the client owned thereal estate where the business operated,rather than sell the asset, they decided toinvest with the goal of creating a partial-ly tax deferred cash flow stream, whichwe helped structure. We introduced theclient to one of our real estate developer

clients, and from there, they entered intoa joint venture, developed the propertyinto a multi-story residential apartmentbuilding, and the rest is history. Today,our two clients still own and operate thebuilding. The strategy was to empowerthe client using our personal relation-ships and in depth knowledge of theirgoals to add value to their vision and toultimately help them succeed.

Goldstein Lieberman &Company LLCBy Phillip E. Goldstein, CPA,Co-Founder, ManagingPartner

One of our manufacturing clients builttheir business by providing a certaininternational business machine companywith UPS (uninterruptable powersource) devices for their mainframe com-puters. When changing technologybrought about the demise

of the mainframe computer model,there was no longer a demand for thesedevices. Their sole client pulled the plugand as a result our client was left in thedark. Goldstein Lieberman & Companystepped in as consultants to find newsources for their product. We discoveredvast and largely untapped markets—such as hospitals, high-tech manufactur-ing plants, airlines and more. Thesecompanies could ill afford the poweroutages that then were fairly common-place. Our client had to move quickly to retool their devices to fill a new and seemingly endless demand. Goodaccounting and business advice madethe difference—diversify to avoiddepending upon a single source of revenue. Today, our client has changedproduction to fulfill increased demandfor its devices. They have expanded their production capabilities and createda consistent, dependable and impressivebottom line.

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Mike Wolfe owns Antique Archaeology, a specialty shop that sells antiques,vintage items and more in sleepy Le Claire, Iowa, and Nashville, Tennessee.





Genova BurnsBy Kathleen Barnett Einhorn, Esq., Director, IP Law Practice Group

Three issues of particular concern to inventorsand exclusive dealers are: (1) education and

effective counsel; (2) preliminary protections—non-disclosureagreements, trade secret protection and other tools are criti-cal to prevent stealing of ideas or inventions; and (3) thinkglobal—domestic IP protections may not be adequate to prevent international infringement.

Gibbons P.C.By Christopher H. Strate, Esq., Director, IP Dept.

Many times, it is important to establish apatent portfolio that creates barriers to entry. A business

that simply pursues apatent that covers its prod-uct can be vulnerable to a design-around. Investingin and building a patentportfolio can help a busi-ness preserve its exclusivityfor many years.




Hunter Group CPA LLCBy Kevin J. Hansen, CPA,Co-Managing Director

A client expressed frus-tration that, while sales

were good, the company was cash poorand simply not generating the profits hefelt were warranted. We suggested ananalysis of their financials might be use-ful. In addition to their annual audit,our additional analysis would tracktrends, review their performance andhopefully uncover areas in need ofimprovement. We added analysis fromproprietary data we accessed from otherbusinesses with similar NAICS identitieslocated throughout the United States tosee how they fared to similar companiesin their industry. As a result, the ownerrealized that, while profitable, the com-pany was burdened by both inventoryand cash flow issues that were impact-ing their performance. To make matters

worse, they were grossly underchargingcustomers for certain labor-intensiveservices compared to their industrypeers. By changing their purchasingmethods, raising some pricing and hiringa third-party collections company, theclient successfully reduced costs,reclaimed capital and reaped greateryear-end profits. They also increasedtheir production capacity with these

improvements; vitally important, as theirsales were increasing rapidly. Needlessto say, it was a breakthrough momentfor them that they will not soon forget.Now our analysis is part of their annualmanagement retreat.

Sobel & Co., LLCBy Alan D. Sobel, CPA,CGMA, Managing Member

If “what you see is whatyou get” was the mantra of

progressive entrepreneurs, growth andinnovation would certainly be stagnant.Thank goodness it is not. You see, it’snot always what’s right in front of youthat makes the most sense in creatingthe highest and best use of your busi-ness model. This was the case severalyears ago when a client of our firmwanted to diversify his business interestsand was looking toward real estate toaccomplish his goals. After a meeting


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Mike Wolfe travels more than 60,000 miles each year in search of “rusty gold,” old items from the past that can be brought back to life and restored to their former glory.



Q. Why do some collectables lose popularity and drop in price?

A. A lot of things that used to be popular have fallen offthe grid because of the ages of the people who collectedthose things. For example, the prices for jukeboxes and slotmachines have gone down. This is because the people whoremembered them and had those memories in their mind…they are getting older and not buying.



Lerner, David, Littenberg, Krumholz & Mentlik, LLP By Jonathan A. David, Esq., Partner

The biggest concern should be avoiding a patent lawsuit from a company who may have a patent covering the item. A “right-to-

use” study by a patent attorney experienced in due diligencewill help locate relevant patents to avoid or design around.

Lindabury, McCormick, Estabrook & Cooper, P.C.By Robert W. Anderson, Esq., Shareholder

Inventors often put such effort into develop-ing a quality product that they end up short-changing on efforts to develop a quality brand-

ing strategy that makes their product stand out in the mar-ketplace (and on ensuring they have secured the exclusiveintellectual property rights to the key elements of thatbranding).

Norris McLaughlin & Marcus, P.A.By Danielle DeFilippis, Esq., Partner

While protection for traditional trademarksand copyrights is vitally important, the product’strade dress should not be forgotten by the



with real estate professionals, I pointedout how the return on investment inreal estate, while good, was not nearlyas good as the ROI from the brokerdealer our client operated. Interestingly,the broker dealer model also had a lotless financial risk. I explored with ourclient how he could create scalabilitywith his investment philosophy by creat-ing a hedge fund and together we eval-uated the pros and cons. As a result oflooking at a different way to leveragehis business model, a hedge fund wascreated which now generates three tofour times the income of the brokerdealer for our client.

WeiserMazars LLPBy Michael Coletti, CPA,Partner

We take a holisticapproach in reviewing the

business goals, both near-and long-term,

looking for ways to add value throughour services. As part of this review, we typically identify hidden value infederal, state and local tax incentivessuch as research and development credits, cost segregation studies (whichinclude accelerating depreciation), as well as international incentives forexporting U.S. products. If applicable to the business, all of these items canadd immediate and significant cash flow to the bottom line, which can then be reinvested for growth. On the shareholder side, we review the valuation of the business—which istypically their largest asset—and deter-mine the most efficient tax structure,considering their exit options. It is our belief that understanding the priorities and pairing them with theright tax incentives, strategies and structures consistently reveals hiddenvalue and makes for a long, rewardingrelationship. n


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Mike Wolfe’s firstfive picks includeda 1960s banana

seat bicycle, an oldcigar box, a box of comic books, an old monstermodel set andsome plastic toy soldiers.





inventor. Non-functional elements of a product’s trade dresssuch as shape, color, design and layout can also distinguishyour product, and emphasis on these elements should bemade in marketing efforts.

NPZ Law Group, P.C.By David H. Nachman. Esq., Managing Attorney

Our firm is often called upon to prepare visa applications and petitions for IP staff thatcan assist pharmaceutical companies and/or

law firms to understand the nuances of complex processesand/or products that need to be protected. This staffingrequirement is the key intellectual property issue that we encounter.

Wilentz, Goldman & Spitzer, P.A.By Brett R. Harris, Esq., Shareholder

In preparing new product launches, the lineoften blurs between marketing plans and theunderlying goods. Before clients become finan-

cially and emotionally invested in a product name, we recom-mend screening to assess potential trademark registrationwith the United States Patent and Trademark Office and the risk of exposure to infringement claims. n


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Mike Wolfe (left) andthe other stars ofAmerican Pickers,Frank Fritz and

Danielle Colby, are fan favorites and have their own

businesses outside of the hit show.

THE RESULTS of last month’sAssembly elec-

tions proves onething—money mat-

ters. The Democrats picked up four seats,bringing their total to 52 versus theRepublicans with 28. By some accounts,the Democrats outspent Republicans bya 3-1 margin. Approximately $20 millionwas spent statewide, with the majorityof the money being allocated in two or three districts.Spending by interest groups was up

as well, and leading the way was theNew Jersey Education Association with

$3.7 million. So what was the moneyused for? The majority of it was put to work to “get the word out” to winover voters using lawn signs, phonecalls, television and radio commercials,and old-fashioned ground operations(i.e. door-knocking).So was it effective? Not from the

perspective of getting people to thepolls; sadly, voter turnout was the lowest in New Jersey’s history, at 21 percent. When only two out of 10 residents feel compelled to vote, thensomething is obviously amiss. Would the election results be different if more people voted?

Maybe, but when $20 million is spentjust to convince two out of 10 residentsto vote, the return on that investment is less than spectacular. Talking aboutmoney’s influence on politics is a realis-tic measure of how to win votes.As such, CIANJ continues to support

pro-business candidates through itspolitical action committee—the PrivateEnterprise Political Action Committee(PENPAC)—and this continues to paydividends, as most of the candidates supported by PENPAC won re-election.We look forward to working with theseleaders to strengthen our economy and protect New Jersey’s businesses. n

LEGISLATIVE UPDATE

BY ANTHONY RUSSOEVP, GOVERNMENT AFFAIRS & COMMUNICATIONS

Money Matters inBallot Box Battles

An increase in thestate’s gas tax, and

paid sick leave are twoissues that are likely tocause Democrats andRepublicans to squareoff for a fight in 2016.

Gibbons P.C. - Intellectual Property Advice for Inventors/ · 2019. 1. 16. · effective counsel;...

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