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Thinking Offensively and Defensively About a Trademark Portfolio

November 30, 2023

by Kent J. Schmidt, Breanne Wernars, and Sarah Robertson

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A prudent step in avoiding litigation claims is securing protection for trademarks and other distinctive marks from the time of a company’s initial launch through its maturation and expansion. How can companies effectively manage their trademark portfolios and think about cross-border implications as the business expands to new markets? In this SharkCast episode, Dorsey Partner/Podcast Host Kent Schmidt, Dorsey Partner Sarah Robertson, and Dorsey Associate Breanne Wernars provide practical insights on trademark protection best practices.
 

This podcast is not legal advice and does not establish an attorney-client relationship or create any duty of Dorsey & Whitney LLP or those appearing in this podcast to anyone. Although we try to assure that the content of this podcast is accurate, comprehensive, and reflects current legal developments, we do not warrant or guarantee those things. The opinions expressed in this podcast are the opinions of those appearing in the podcast only and not those of Dorsey & Whitney. This podcast is considered attorney advertising under the applicable rules of certain states.

Transcript

Voiceover

Welcome to another episode of the SharkCast on litigation risks management, where we explore why businesses are so frequently sued, and how to mitigate and navigate the dangers lurking in these risky waters. Join us now as we welcome our host Kent Schmidt, Litigation Partner at the law firm of Dorsey & Whitney.

Schmidt

Thanks for joining us today on SharkCast. I’m pleased to be joined in this episode of SharkCast by Sarah Robertson and Breanne Wernars. One of the things that makes life full and interesting is meeting new friends while also maintaining friendships with those you have known for decades. And such is the case with SharkCast, including today. I’ve known and worked with Sarah Robertson for many years, and Breanne Wernars and I have only known each other a short time. But I want to welcome you both, friends, both new and longstanding to this episode of SharkCast, glad that you’re here.

Wernars

Thank you, excited to be here.

Robertson

Yeah, thank you, Kent, we’re excited to be here.

Schmidt

Sarah and Breanne both have practices that include trademark advice. Sarah is based in our New York office of Dorsey, and Breanne is based out of our Denver office. I thought it would be a good idea to gather the two of these friends to talk about trademark protection. Now there’s a fair amount of trademark litigation, including in the news, and we see these claims being discussed on a regular basis. We know enough to know that trademark litigation is a real litigation risk, but let’s dig into some of the details of this area of law, which I think illustrates perhaps as best as any type of litigation risk, the oft-repeated adage that an ounce of prevention is worth a pound of cure. That certainly is the case when it comes to trademark protection, and avoiding trademark litigation, isn’t it?

Robertson

Yes it is Kent, and our observation over the years is that brand names are often based on emotions, similar to naming your first or second child, and that from inception there’s not always forethought into trademarks as being an important business asset, and consideration of mundane things like availability, or inherent strength, which are some concepts that we’ll get into a bit later during this podcast. But the treating a trademark as an important business asset can really go a long way to mitigating risk, and to building a strong brand and business asset.

Schmidt

Well I just finished an audio book of Elon Musk, the new autobiography by Walter Isaacson. I just finished it yesterday, so of course fresh on my mind when we’re talking about trademark protection and what you say these instinctive, perhaps even emotional decisions to name something is of course Elon Musk’s recent renaming of Twitter to the name X, and we see that in the news. Do you have any comments on that litigation that is going on right now?

Wernars

As a little background, Elon Musk obviously is trying to rebrand Twitter to X. The registry is a little bit cluttered, so there’s people now trying to trademark Twitter because they claim it’s abandoned. So it’s a really interesting kind of host of different questions going on, but it’ll be interesting to see how it comes out. We have a trademark blog, which I’ll do a little plug for called The TMCA, which has a really good, in-depth post about this, if anyone’s interested in learning more.

Schmidt

And I’m sure they’ll be more posts on this as the story unfolds, as they say on the news. So today I’d like to focus on some more fundamental concepts, those are some high-stakes litigation, but let’s start with some pretty basic concepts of trademark protection, what we would call the basic blocking and tackling of both U.S. and international trademark protection. Sarah, let’s start with you since you have a few decades of experience in this area. Based on your experience in trademark work, what is the best guiding principal that you have for companies regarding their approach to trademark?

Robertson

I think my best guiding principal is to give some thought and make some investment in trademarks from the outset. As I mentioned before, sometimes brand names are picked emotionally, and they are also often picked at a time when a business is just getting off the ground and growing. And for budgetary or other reasons, brands are often pushed to the side in terms of an investment to ensure that they are available for use given the existing business landscape out there that they are not the same or confusingly similar to somebody else’s brand. And two, that they have appropriate inherit strength so that you have a strong brand to build upon. And we’ll get into that a bit later more. But thinking about and putting some time and investment to clearing a brand and making a good selection from the outset can go a long way later.

Schmidt

Speaking of basics, before we get too far into this, let’s make sure we level set with respect to what trademarks are. I guess that’s perhaps the most basic question of them all. So, Breanne, why don’t we begin with you to make sure our listeners have a general understanding of what is encompassed.

Wernars

Yeah, I think that’s a great place to start. So I think most people think of a trademark sort of as a word or a slogan or maybe a design element. And it can be a lot more. You most commonly see them as that kind of thing. But, broadly, a trademark is one of those things, and it acts as a source identifier for a good or service. And then it’s a way to kind of differentiate yourself from your competition. So, this has this mark on it, I know it must come from this company, this group. So examples; there’s a classic wordmark, like we’ve talked about, Twitter is a wordmark for social media services and the Twitter bird would be like a design mark which also would serve the same function. You can have sounds that are trademarked, which I think is interesting. So, the NBC chimes, McDonald’s I’m lovin’ it, the ice-cream truck jingle that everyone knows is trademarked. You can have colors that are trademarked. So UPS’s shade of brown. Another carrier couldn’t use that shade of brown. Barbie pink, which is a hot topic this year, everyone loves Barbie. And then lastly is smells. So Playdough was one I thought was pretty interesting. Everyone would know Playdough when they smell it. It’s been deemed to be such a source identifier that it’s trademarked. So those are kind of the main ones that are available. There’s also one called trade dress, which is a little bit more complicated. So it’s the overall kind of image, appearance, look, feel of a product or service. So it could be like the shape of a product. The Goldfish cracker is trade dressed. Distinct part of a product. So the red tab on Levis jeans. Or the look and feel of a store, so the Apple store, right, has a very distinct you know when you’re in an Apple store. So there’s different considerations of those. Some are harder to register or protect than others, but that’s kind of the overall basics I guess, at this point.

Schmidt

What about things that we might instinctively think are trademarks, or adjacent to trademarks, that have been ruled to be not trademarks? So maybe define just a little more in a negative way for us.

Wernars

Yeah, sure. So I think for those who may be or not IP people, there’s synonymously people will just use patents, trademarks, copyrights kind of interchangeable, and they’re pretty distinct areas of law. So something with utility or an invention would be a patent, it wouldn’t be protectable as a trademark. There’s a way that leads into trade dress where the USPTO will reject your application if something has function. Right? They’ll say no, that should be patented instead of trademarked. Then a lot of creative works, so your song, your movie, your books, your artwork. There’s some overlap, but again, that would fall more under copyright registration, and Sarah may have some more specific examples she’s seen, things maybe she’s tried to get through and hasn’t been able to.

Schmidt

Right. Well, that’s a good idea. Sarah, let’s draw on your experience in the trenches in trademark protections. Do you have any examples of attempts to try to trademark something or, perhaps the opposite, that someone assumed that something was not subject to trademark protection, and they really should have taken steps?

Robertson

Yeah, sure Kent. So, just for, in terms of your first question and to pick up on what Breanne was referring to, so certain types of aspects of your business, including product shapes can have source-identifying significance. It can function as brands, as trademarks, and be valuable brands and trademarks, but you generally have to fight to get that protection. The battle is establishing that the consuming public actually associates that shape or color or store layout with you as a business, that you are the source of it, and that can be established in a number of ways. But we’ve seen lengthy submissions, for example by Apple, about its store layouts or its product shape referring to things like sales volume, advertising levels, surveys of consumers, so certain types of protection can be gained, but you really need to prove that the public views these product aspects as having trademark significance. To answer your second question, I think there are many types of trademarks that are overlooked by businesses. Slogans is one that comes up. I think they are often descriptive and/or viewed as non-trademarks. So the risk attached to that is that they are often not searched or cleared, and so can become the subject of a trademark claim. But, the other aspect of them is they can really gain a lot of traction with the public and have longevity where they become valuable assets, and so giving some attention to them and protecting them in appropriate ways is important. So those are a couple of examples.

Schmidt

So it sounds like one mistake that many companies make in this area is getting trademark protection or something that is just their basic trademark, but not realizing that there are opportunities to gain trademark protection for all sorts of other things far as beyond that. Well, with that let’s turn to some pragmatic steps appropriate to consider in the formative stage of a company or brand new venture. How should a U.S. business approach deciding how they’re going to obtain trademark protection?

Wernars

Yeah so, Sarah touched on it a little bit in the, one of your prior questions about how we kind of have two buckets of strength, per se, for a trademark. There’s the inherit strength and then the relative strength. So, inherit strength, we’re referring to the, and I’m speaking more so about word marks in this scenario, the strength of the words themselves. So on one end of the spectrum you have generic marks. This is like me calling my banana brand bananas. That’s the word for it, so it wouldn’t be fair to allow me to trademark bananas for bananas. You’re stifling competition. Other banana growers should be able to use the word bananas to describe their product. This is not protectable, a generic word. An example in real life of this is aspirin, was once a trademark, is now generic. I don’t even know the medical term behind aspirin. I just know it as aspirin. And then you have a little bit farther down the spectrum. You have what are called descriptive marks, which are sometime protectable. Sarah talked a little bit about showing that consumers recognize it as a source-identifier. So something like hot and spicy for hot sauce would be descriptive. It’s not the word for hot sauce, but it’s describing hot sauce. Again, these can be difficult to register unless you’re able to show all those things Sarah talked about earlier. An example of this is Holiday Inn. It’s an inn you go to on holidays, but they’ve been able to show that people know Holiday Inn as a brand. They don’t think of it as describing hotels more generally. And then you have kind of the middle of the spectrum. This is where you get to the USPTO would register a suggestive mark is what it’s called, and this is , there’s kind of some amount of thought that needs to go into it. So it’s not outright describing something, but there’s a short jump figuring out what the product is. Netflix is an example of this, right, the internet and movies, “flix”. You know, registerable marks because it’s not outright describing it. There’s some creativity there. Another example is Coppertone. You use it and you get a copper tone to your skin. The second strongest type is arbitrary marks. So this is when you use a real word, but something that isn’t at all related to that word. The best example that we’ve been using is Apple. Right? It’s a real word, but computers has nothing to do with computers. This can be a powerful tool for creating distinctions between yourself and other brands. And then finally, for inherit strengths the strongest type is fanciful marks. And this is a completely made up word. So an example of this is Kodak, Adidas. It’s a completely made up word that someone invented. Although, I guess other people could’ve invented it at the same time. That’d be bad luck, but could happen. These are the strongest because I’m using a mark I invented. The likelihood of another using this mark or being confused is relatively lower ‘cause it came from my imagination. That’s kind of the spectrum in inherit, and then we’ll talk about the relative strengths.

Robertson

Just pulling back from what Breanne said, thinking about whether your mark has any meaning for your business at the outset can be helpful in building a strong brand. If it has little to no meaning, it can be a stronger brand out of the gate. If it has some meaning for what you’re doing, it’s possible to build up strength, but it may take more effort and time to do that.

Schmidt

So, a lot of strategy and thought goes into selecting the mark because that’s going to determine your legal protections going forward. I imagine that this involves a lot of discussion with the creative folks, the marketing folks to sort of get their feel, try things on, and then see how strong it would be right out of the gate. Is that a fair statement?

Robertson

Yeah, that’s a fair statement. Just in terms of a risk analysis, if your mark has some descriptive aspects to it, it can increase the likelihood of third parties bumping up against you, and by that I mean complaining about your mark or obligating you to pursue other marks that are similar. So it can increase litigation risks and it can also increase enforcement costs. And I think these aspects could be more closely considered from inception. I think this is an issue that isn’t given enough thought sometimes when marks are selected.

Schmidt

So let’s move to the next step in the process, now that we have our brand. What is the next step in the process?

Wernars

Next step would be clearance searching your mark. So if you have what you think is a strong mark, right, we just talked about, I made up a word for a mark. Sometimes good minds think alike, unfortunately. There’s a chance Kent had thought of the exact same mark and is using it for the exact same goods. The chances are lower, which is why it’s great to have an inherently strong mark, but it’s not possible. So we do clearance searching to kind of see what’s out there in the field, and this is where the relative strength of the mark would come in. If there’s a lot of people using this mark, we would identify that as an infringement risk. We would look at the registry. Do you have a chance of getting this registered or is there someone blocking it? What are possible avenues, you should consider a new mark, that type of thing. There’s two degrees sort of clearance searching. Preliminary searching, which is something that most people would do in house, and it’s looking through the internet, it’s looking through trademark registries, which someone could do on but again there is a lot of nuances, things you maybe wouldn’t consider similar right off the bat. But as practitioners, we would know actually the PTO considers those goods or services similar. You’re gonna have a hard time registering it. And then there’s full clearance searching, which we would use and outside business who uses their high-tech computers and scours the internet and scours the registry and gives you back hundreds of hits normally, and then we would go through and pick through it. But a good tool to kind of assess fully what’s out there so you know before you’re investing all this time and money in a brand when maybe someone else is already using it and you have a high risk of getting a claim filed against you, or a cease and assist letter, what have you. So there’s some benefits as well, legal benefits to these full clearance searches that I think Sarah can talk about a bit more. But it’s a good way to have peace of mind before you’re launching into advertising your brand to the world, spending all this money when there could be risks out there you haven’t identified.

Schmidt

And it sounds like one of the things you’re doing here is not just doing your due diligence, but you’re laying the groundwork in the event that there is either offensive or defensive trademark litigation down the road. Sarah, can you talk just a little bit about how clearance opinions can be used in litigation and trademark litigation perhaps years later?

Robertson

Yes, and I will, just to pick up on what Breanne was talking about, the litmus test in the trademark world is likelihood of confusion, and that is what the standard is for an infringement claim and other types, as well as trademark office refusals. And so when these trademark clearance searches are run, we are giving and assessment of risk level with a view to the likelihood of confusion standard. And so at the end of a full search we can give a client, effectively peg the risk level and attached from a likelihood of confusion matter about their ability to go forward. And we can also comment on things like inherit strengths as well. Sometimes industry meaning for unique specialized meaning come to light in a search as well. That is the assessment that comes out of conducting a full search. The primary benefit to a client to getting outside council to commission a full search and render an opinion is that it can help insulate a client against a allegation and also the heightened damages associated with a intentional infringement claim. That is a deliberate riding on the coat tails of somebody else trying to benefit from their established goodwill. And so a legal opinion can have that helpful benefit later to show that you adopted the mark in good faith without a view of copying somebody else. So that’s an important benefit. And in the grand scheme of things, a relatively low cost to one, get the opinion of counsel in an accurate snapshot, and two, to help, again, so in the event of a later dispute.

Schmidt

Well that resonates with me. Listeners of this podcast here again and again, take steps now, think about litigation that might be down the road. So a word of caution and a word of preventive medicine is always a good way to approach these things. Let’s turn to the next step in the process. We talked about selecting the brand, we’ve talked about doing a lot of searches, different levels of searches, obtaining opinion, but the third step in the process as I understand it is the registration decision. When should companies or a brand owner consider registering a mark, and what are the advantages to doing so?

Robertson

So, there are several benefits to applying to register, and Breanne and I will touch on some of them in the interest of time. But I will talk about, and Breanne will cover some of the legal presumptions, but applying to register as a procedural matter enters your mark as part of a public database that can be visible to the public and visible in trademark searches. So it can be a helpful way to put people on notice of your claim of rights to a particular brand and can deter others from selecting something the same or similar in the future. And so the public notice aspects shouldn’t be discounted. As a technical matter, trademark applications can be filed before the mark is put into use or commercialized applied to a product. And it can help create certain rights that date back to the filing date of the application versus the date of actual use. In a more simpler way, it can give you a bit of a leg up by getting your mark on file for that reason as a legal matter.

Wernars

To sort of piggyback off your last point there, Sarah, I think it’s a good point as to why just simply Google searching is often not enough. You can file these trademark registrations on an intent to use basis, and these applicants have rights in this mark. It’s not gonna show up on Google, they’re not using it. You’d have to search the registry to find these. So I think that’s just a nuanced point to bring up that relates back to our last question. But in terms of federal registrations, in a legal proceeding, it’s evidence of your ownership in the mark. So having this trademark registration, you don’t have to prove it in a way you would with a common law trademark claim. So I own this mark, here’s how I’ve been using it, I’ve been using it in these places, it’s just prima facie evidence that you own this mark, which can be really helpful, save a lot of time, save a lot of legal cost and whatnot. So that’s one of, a huge benefit. So legal presumption to kind of make proving your rights easier.

Robertson

You know, registration is optional, but when you don’t register, Breanne referred to common law, and that just means an unregistered mark. In the case of an unregistered mark, your rights are just, extend to where you have been commercializing it. And in the event of a dispute or litigation you need to really prove through stale of invoices or other forms of proof, just how far geographically your trademark rights reach. And so a federal trademark application can help short circuit some of that.

Schmidt

As a trial lawyer, I’m thinking one or two exhibits at trial versus experts and a whole stack of evidentiary exhibits that are gonna be offered. So it’s music to my ears in terms of putting on a case. Well, let’s move this conversation to an international context. We’ve been talking about trademark protection with the assumption that it’s a U.S. company with business in the U.S. But often, of course, that is not the case in our shrinking world. What are some of the considerations for brand owners in seeking to expand outside the U.S. and ensure that they’re not caught flat-footed in the trademark area?

Robertson

Yeah, it’s an important question, Kent, and you know, the basic concept which often gets forgotten or lost is that trademark rights, brand, rights to brands are territorial in nature. And so if you have an established brand in the U.S., it doesn’t necessarily mean that you have rights to the brands in other countries or jurisdictions. And so international securing of rights and expansion considerations are important to think about at the outset as well. This can involve, generally, applying to register not only in the U.S. but in other key countries or jurisdictions where expansion is likely. We see more often that we would like to, foreign individuals or entities monitoring the U.S. register and filing applications abroad in countries such as China to gain rights ahead of the real mark owner in the hopes of securing your payment or receiving other benefit to being an impediment to a business seeking to legitimately protect their rights in that country. One concept I’ll mention, which is also important, is that certain countries are what we call first to use countries. The business that is out there first in the market is the one that gains rights. Other countries are what we call first to file countries. Many Asian countries are first to file, for example. And so that means it’s really a race to the register, and if somebody gets on file ahead of you it can create real impediments. So giving thought to international filings and expansion early on can really help avoid conflict later. And we’ve seen the issue come up, including places as close as Canada, where there’s been big PR splashes, strong brands that assume that the path would be clear for them in other countries, that there’s public announcements about their intent to enter a country, and then finding that there’s a conflict from either a good faith adopter of the mark or a bad faith one that they have to navigate in order to follow through on their launch plans, which can be both expensive and can lead to litigation.

Schmidt

So it sounds like a common theme is emerging here. The word to the wise is down the road, think down the road to future trademark litigation, and also think down the road with respect to whether you’re gonna be going international, what markets you may be going into shortly that you need to think ahead and take action.

Robertson

Businesses shouldn’t assume just because they have their U.S. rights shored up that this will open the door to them in other countries, I think is the takeaway there.

Schmidt

What are the things that brand owners should think about to affirmatively protect their trademarks on a going forward basis?

Robertson

There’s a number of ways they can do that, and Breanna and I will touch on some of those. Policing both the trademark register for new applications, and new marketplace uses can be very effective in maintaining strong rights and ensuring that confusingly similar marks don’t emerge in your field. And there are a few ways to go about doing that, practically. Breanne, do you want to mention a few of them for our audience?

Wernars

Yeah, sure. So watch services is the number one thing I would say we recommend whatever mark you set up to be watched. You can do it globally to see, like Sarah said, if a squatter has filed for your exact mark in a different jurisdiction. You can get in there within the opposition period or monitor it to see if it becomes published, that kind of a thing. And I think it’s important because some jurisdictions in the U.S., you file an application and it’s examined in relation to third-party marks that exist on the registry. Other jurisdictions just do it based on the inherent registerability. They don’t look at the third-party marks. So it would be hard to know if other people are filing these marks if you’re not getting alerted to that fact by offices because they’re not looking for it. So it’s a really good tool, and I would say a relatively inexpensive way to make sure you know what’s going on in relation to your marks all around the world in jurisdictions maybe you want to expand into. It can give insight into whether that’s gonna be difficult, whether there’s people claiming to be you out there that you just wouldn’t know of. So that’s one way. And then we also do that as well with domains. So, you know, we see phishing schemes more often than we’d like, and you can set up watches for domain names to see if someone’s using it as a way to sell services or goods, or they’re using it as emails, right? It’s a dead website, so that’s another really helpful tool that I’ve seen and can help just kind of give peace of mind, while also proactively taking some action.

Schmidt

So what I’m taking from all of this is that a company can engage in all the right steps and processes at the outset, but thereafter, through oversight and neglect can really work itself into a very undesirable position on trademark protection. Is that is that a fair statement?

Robertson

Yes, that’s absolutely right. And so beyond the efforts and attention given in selecting a brand, clearing a brand and hopefully registering a brand, actively protecting that brand throughout its life cycle is also a very important step in terms of maintaining brand value. And I think one thing we want to mention, which I always think is a helpful visual, is that when you select and adopt a mark, we often have the visual of sort of drawing a circle in the sand, and ideally you draw that circle as broadly as you can, and there should be, the value of your asset should ideally increase the larger that circle is. But the enforcement activities help to keep others from encroaching on your circle and keep it your boundary as broad as possible. That’s a helpful analogy.

Schmidt

So in my experience, one of the first indications that a company has a trademark issue is when they receive a demand letter. Sometimes it’s a legitimate letter from someone that’s actually using the mark, and sometimes it’s a bit of a shakedown, and one never knows perhaps at the beginning how serious this is. Do you have any practical thoughts on an approach to dealing with demand letters involving trademark allegations?

Robertson

When a demand letter comes in, and we never like to see them come in, but that the, a full search at the outset can actually give you confidence in responding to that demand letter because you have a sense, one, ideally you’d already know about this third party that comes under the woodwork, and two, it would give you a sense of their overall legitimacy or validity of the arguments that they’re making, given what you saw in a full search, and, for example, they may be overly aggressive or overreaching, they may be already coexisting with other marks. So, that a search can help a lot with responding to a demand letter. In an ideal world, the third party that emerges isn’t a surprise to you, because you’ve already canvassed the landscape. So that can be a tool in responding into demand letters. So we do assess those for validity of the arguments, knowing that some third parties do try to overreach in terms of what they should otherwise be entitled to by way of trademark rights.

Schmidt

Well, that’s about all the time we have to discuss trademarks and strategies and trademark protection. We’re now at the point in our show that we like to learn a bit more about our guests as individuals. So I’d like to ask you both the question of hobbies and skills. What skill or hobby do you think it would be enjoyable to learn in the long range, say in the next 5 to 10 years, if you can carve out some spare time to tackle learning something new or engaging in a new hobby just for the sheer joy of taking on the challenge?

Wernars

Yeah, I can go first. I have had a guitar in my bedroom for, I don’t want to say how many years, and I still have not learned how to play it. So I would like to put that to use and make it, you know, a better investment than it currently is sitting in the corner of my bedroom. But I would say I’d really like to learn the guitar. It seems like maybe an achievable thing if I actually set my mind to it, so I’ll go with that.

Schmidt

Well, Breanne, I’ll make a note to check with you in a year or two to see if….

Wernars

Oh no.

Schmidt

…you’ve started doing that, then.

Wernars

Okay.

Schmidt

How about you, Sarah? Is it musical or something else?

Robertson

Well, this may be sort of a boring answer, but it’s a, it’s a, it’s a legitimate one, and part of it is motivated by trying to keep up with my 10-year-old daughter. But I think as new media emerges and the way that contents consume, it’s not only impacting how Breanne and I are running our practices in the ways that our clients are attaching their brands to new and evolving online ways, but I think the way in which we consume our entertainment and content online is sort of fascinating to me and I’m trying to keep up with it. This is anything from AI to the amazing success of online disseminators of content on social media platforms. I find it very fascinating and I’m consuming content that way personally, but also find it very interesting in terms of how our clients are marketing and establishing a presence out there in the world.

Schmidt

Well, you’re exactly right, Sarah. Just keeping abreast of the phenomenal changes taking place in technology could be a full time job, and it’s a, it’s a challenge to maintain your practice and your other responsibilities and know exactly what’s going on and what would be beneficial to be able to use. So I, it definitely, that resonates with. Well, that’s about all the time we have for today. Thanks both for being here. Turning back to the topic of trademarks, what’s the one takeaway each of you would like to leave with our listeners?

Robertson

So how a company treats its intellectual property and observes the limits of other’s rights in brand adoption has a direct impact on the likelihood and outcome of litigation.

Wernars

Enforcing and protecting your trademarks is only getting more important in today’s digital age because everyone knows what everyone else is doing in a way which wasn’t true 15 to 20 years ago.

Schmidt

Thank you both for being here. I’ve enjoyed this discussion and I’m sure it’s gonna be useful to our listeners. That’s all the time we have for today. Thank you for listening. I’m indebted, as always, to the extraordinary team at Dorsey for making this podcast and episode possible. For more resources on this and other litigation risk, go to litigationrisk.com where more information can be found including a book on managing litigation risk written by yours truly. Until next time my friends, this is yet another reminder that there are a lot of sharks swimming out there in the murky waters, so swim safely.

Voiceover

This podcast is not legal advice and does not establish an attorney-client relationship or create any duty of Dorsey & Whitney LLP for those appearing in this podcast to anyone. Although we try to assure that the content of this podcast is accurate, comprehensive, and reflects current legal developments, we do not warrant or guarantee those things. The opinions expressed in this podcast are the opinions of those appearing in the podcast only, and not those of Dorsey & Whitney. This podcast is considered attorney advertising under the applicable rules of certain states.

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Patent Partners Al Araiza and Lena Petrovic Join Dorsey in Palo Alto

Patent partners Al Araiza and Lena Petrovic have joined Dorsey & Whitney LLP in Palo Alto, the international law firm announced today. Al Araiza works with clients to develop and implement patent strategies that align with corporate objectives, supporting growth initiatives, financing efforts, and successful exits, including initial public offerings and acquisitions. He advises on building, managing, and optimizing patent portfolios across a broad range of emerging and frontier technologies, with depth in wireless communications, artificial intelligence, and energy innovation. Before practicing law, Al gained engineering experience in the defense industry, working on energy system modeling and communications circuitry design. He also conducted biomedical research, with findings published in peer-reviewed journals. He has been recognized in the IAM Patent 1000 for his work advising clients on patent strategy and portfolio development. Al received his J.D. from Duke University School of Law, his M.E. in Biomedical Engineering from Tulane University, and his B.S. in Electrical Engineering from UCLA. Lena Petrovic works across the software and hardware industries to develop clear, well-supported patent applications. She guides clients through the prosecution process and advises on global trademark and copyright matters, including licensing and portfolio management. Lena regularly supports clients developing technologies such as artificial intelligence and machine learning, fintech, cryptography, interactive and immersive experiences, and digital media, and works with companies in entertainment, gaming, and sports. Before practicing law, Lena spent a decade at Pixar, where she contributed to major films including The Incredibles, Ratatouille, WALL‑E, and Brave. Lena received her J.D. from Santa Clara University School of Law, her M.S. in Computer Science from Princeton University, and her B.S. from California Institute of Technology. “Al and Lena bring a practical, technical, and business-focused approach informed by extensive experience working with technology companies, startups, and investors,” said Gina Cornelio, Patent Practice Group Co-Leader. “We are thrilled to welcome them to the Patent team and our growing Palo Alto office.” “Dorsey’s Patent practice is dedicated to understanding each client's business deeply, tailoring patent strategies that directly advance their goals,” said Al Araiza. “We are proud to join this outstanding team and look forward to driving success for our clients.”

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37 Dorsey Attorneys Named 2026 Top Lawyers by Minnesota Monthly

Minnesota Monthly has recognized 37 Dorsey attorneys across 27 practice areas as 2026 Top Lawyers in Minnesota. Honorees are selected through a peer nomination process and a curated survey of practicing attorneys in Minnesota, who identify leading lawyers across a range of practice areas. Administrative / Regulatory Law Jennifer Coates Antitrust Law Michael Lindsay Banking & Financial Service Law Peter Nelson Copyright Law  Jeffrey Cadwell Corporate Law  Robert Hensley Robert Rosenbaum Criminal Defense: White-Collar  Beth Forsythe Edward Magarian RJ Zayed Health Care Law  Claire Topp Immigration Law  J. Mike Sevilla Insurance Law  Daniel Brown Intellectual Property and Patent Law  Stuart Hemphill International Trade Law  Jonathan Van Horn Labor and Employment Law  Edward Magarian Ryan Mick Melissa Raphan Land Use & Zoning  Jay Lindgren Marcus Mollison Litigation – Antitrust  Michael Lindsay F. Matthew Ralph Jaime Stilson Litigation – Commercial  Michael Lindsay Litigation – Construction  Eric Ruzicka Litigation – Intellectual Property  Peter Lancaster RJ Zayed Litigation – Labor Employment Benefits  Ryan Mick Melissa Raphan Litigation – Trusts and Estates  William J. Berens Theresa Bevilacqua Bridget Logstrom Koci Mass Tort Litigation / Class Actions  James K. Langdon Mergers & Acquisitions Law  Keith Ahlgren Rachel Benedict Brian Burke Morgan Helme John Jorgenson Brian Moore Robert Rosenbaum Jonathan Van Horn Bri Whiting Municipal Law Jay Lindgren Nonprofit/Charities Law Claire Topp Securities / Capital Markets Law Cam Hoang Robert Rosenbaum Securities Regulation Theresa Bevilacqua James K. Langdon Tax Law William J. Berens Trusts and Estates Jennifer Ede Bridget Logstrom Koci Sonny Miller Kiley Petty Henry

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Real Estate Attorney Alexis Olsen Joins Dorsey in Phoenix

Attorney Alexis Olsen has joined Dorsey & Whitney LLP as Of Counsel in the Real Estate group in Phoenix, the law firm announced today. Alexis focuses her practice on large-scale residential, mixed-use, and multi-asset development projects as well as multi-state commercial leasing transactions. She guides clients through sophisticated acquisitions, dispositions, leasing, entity structuring, investment strategies, and due diligence matters. She has structured co-investment arrangements that drive capital deployment into housing subdivisions nationwide and has represented both landlords and tenants in commercial leasing transactions involving office, retail, industrial, and specialty-use properties, including cannabis dispensaries. Alexis received her J.D. from Sandra Day O’Connor College of Law and her B.A. from the University of Arizona. Alexis comes to Dorsey from Squire Patton Boggs. “Alexis strengthens Dorsey’s real estate capabilities at a time when Phoenix remains one of the fastest-growing and most dynamic real estate markets in the country,” said Scott Jenkins, Dorsey’s Phoenix office head. “Her addition further enhances our deep bench of 12 real estate attorneys in Phoenix and reflects our continued investment in serving clients throughout Arizona and supporting their real estate transactions and objectives across the country. We are thrilled to welcome Alexis to Dorsey.” “Joining a firm with such a deep bench of experienced attorneys in the Phoenix office, especially in the Real Estate group, presents an exciting opportunity not just for my own professional growth, but for the clients we service,” said Alexis Olsen. “I look forward to building on this strong foundation, growing our national practice, and delivering top-tier service to our clients.”

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Litigation Privilege Does Not Automatically Protect Communications with Funders: The Commercial Court Clarifies the Limits of Privilege in the Context of Litigation Funding

In Uber London Ltd & Ors v Garry White & Ors; Mishcon de Reya LLP [2026] EWHC 1610 (Comm), the Commercial Court held that documents created to help a funder decide whether to invest in a claim will not ordinarily attract litigation privilege. This means that information a firm gathers while acting for a funder can later fall within the control of the claimants it goes on to represent in the same matter. Background The Claimants (a claim group of over 10,000 individual London black cab drivers and the assignee of two former minicab operators) alleged that the Defendants (three companies in the Uber group) obtained and retained their private hire operator's licence through an unlawful means conspiracy alleged to involve fraud. Because the claims were issued outside the ordinary six-year limitation period, the Claimants relied on section 32 of the Limitation Act 1980, contending they could not, with reasonable diligence, have discovered the fraud before June 2018. A preliminary issue trial was listed to determine the question of whether the Claimants discovered, or could have discovered with reasonable diligence, the alleged fraud and/or deliberate concealment only after June 2018. The Claimants were represented by Mishcon de Reya ("MdR"). However, before MdR’s engagement with the individual drivers had begun, in late 2017 it was engaged by the litigation funder Harbour to investigate the merits and value of the potential claim. During that stage, MdR corresponded extensively with Harbour and with the Licensed Taxi Drivers' Association ("LTDA"), a black cab drivers' trade association. MdR was not formally engaged by the Claimants until October 2018 onwards. Once the proceedings had started, the Defendants sought disclosure of communications exchanged between MdR and Harbour before the engagement of MdR by the Claimants (the "Harbour Communications"). This included correspondence between MdR and Harbour, communications with the LTDA, and documents held on MdR's file opened in Harbour's name in connection with the potential claim. The Claimants resisted disclosure on four grounds: (i) that the documents were not relevant; (ii) on the grounds of litigation privilege; (iii) that the documents were outside their control; and (iv) that disclosure occurring so close to trial would be disproportionate. Judgment (i) Were the Harbour Communications relevant to the preliminary issue? The Court held that the Harbour Communications were likely to contain relevant material, on two bases. First, where the Claimants or the LTDA had communicated directly with MdR, that material could shed light on individual Claimants' actual knowledge of the alleged facts. Secondly, what MdR and Harbour had discovered during their investigation could inform the question of what a Claimant could reasonably have discovered at the time (even though the Defendants accepted that MdR's knowledge could not simply be imputed to the Claimants). (ii) Were the Harbour Communications protected by litigation privilege? As set out in the classic cases of Three Rivers (No. 6) [2005] 1 AC 610 and WH Holding Ltd v E20 Stadium LLP [2018] EWCA Civ 2652, communications between parties or their solicitors and third parties for the purpose of obtaining information or advice in connection with existing or contemplated litigation are privileged when the following conditions are satisfied: Litigation must be in progress or in reasonable contemplation. The communications must have been made for the sole or dominant purpose of conducting litigation. The litigation must be adversarial, not investigative or inquisitorial. The Court rejected the Claimant’s claim to be able to withhold the Harbour Communications on the basis of litigation privilege. The Court confirmed that litigation privilege protects only communications created for the dominant purpose of conducting litigation. The Court found that Harbour had instructed MdR so that Harbour could decide whether to fund the proceedings. As such, the dominant purpose of the communications was in relation to funding, not the conduct of litigation. This was distinguished from the situation where an individual litigant who takes its own funding decision. In that situation, the decision whether to fund and the decision whether to litigate are one and the same, made by the person who will actually be the claimant, and so it forms a part of that person's conduct of their own litigation. In contrast, a third-party funder's commercial decision whether to fund someone else's claim is not necessarily part of conducting that litigation. The fact that litigation privilege can, in principle, be claimed by a non-party funder (as recognised in the case of Al Sadeq v Dechert [2024] EWCA 28) did not assist Harbour, since there was no evidence it intended to play any role in the litigation itself beyond funding it. Communications between Harbour and MdR did remain capable of attracting another kind of privilege: legal advice privilege, because of the solicitor-client relationship between Harbour and MdR. But communications with third parties such as the LTDA were not automatically protected in the same way. (iii) Were the Harbour Communications within the Claimants' control? The Court also rejected the argument that the Harbour Communications sat outside the Claimants' control because they belonged to Harbour and not the Claimants. The Court’s reasoning was that once the individual Claimant drivers became MdR's clients, MdR also owed them a duty to disclose material information. That included information that MdR had originally acquired while acting for Harbour. As held in the case of Hilton v Barker Booth & Eastwood (a firm) [2005] 1 WLR 567, a solicitor owing duties to two clients cannot simply prefer one over the other, and it was unrealistic to suppose MdR would investigate the same claims for Harbour, then represent the Claimants, while disregarding everything it had already learned. The obvious commercial expectation was that this earlier work would be used to advance the Claimants' case. MdR sought to rely on a confidentiality clause in a 2024 retainer agreement between it and RGL Management Ltd (a claims management company acting on behalf of the Claimants) to argue that it was relieved of any duty to disclose information obtained while acting for other clients. The provision stated that MdR may "have acted for persons in the same or similar sector as yours and by agreeing to the terms of this letter you agree that will have no duty to disclose to you any confidential information that we have obtained, or might in the future obtain, from acting for such persons or which is derived from any other source". The Court rejected this on several grounds. Claimants who had already become MdR's clients had an existing right to information in the Harbour Communications where it was relevant to their claims before the 2024 retainer agreement. If they were to surrender that right, it would have required their informed consent (also required under the SRA Code of Conduct). The Court found no evidence that such informed consent had been given. The terms had simply been made available to the Claimants through a portal, with no indication that Claimants understood they were giving up existing rights to relevant information. The Court found that even if the terms had been contractually binding, that would not have amounted to informed consent. In addition, the wording of the clause was not sufficiently clear to show that the Claimants had agreed to waive access to this information. (iv) Was disclosure reasonable, proportionate, and necessary at this stage? The Claimants argued that it was neither reasonable nor proportionate for disclosure to be given at such a late stage (approximately two weeks before the start of the preliminary issue trial) and that it was not necessary for the just disposal of the proceedings. The Court rejected this, but it drew a distinction between two categories of documents within the Harbour Communications: Documents bearing on the actual knowledge of the individual drivers, including communications with the LTDA, were not privileged, likely straightforward to review, and directly relevant to the preliminary issue. Their disclosure was ordered as reasonable, proportionate, and necessary. Documents reflecting only MdR's or Harbour's own assessment of the merits were of more marginal, indirect relevance and largely likely to fall under legal advice privilege. A review to isolate the smaller pool of non-privileged material in this category would be time-consuming for limited benefit, so this was excluded from the order. Key Points to Note The judgment is an important reminder of several practical points: However closely a funder is involved in evaluating a claim's merits, litigation privilege will only apply to communications where the sole or dominant purpose of the communication is the conduct of litigation, not the funder's own decision on whether to finance it. Unless that communication separately attracts legal advice privilege, it may need to be disclosed. The same considerations apply to other communications. For example, in RBS Rights Litigation [2017] 1 WLR 3539 the argument that an After the Event (ATE) policy was subject to litigation privilege was rejected on a similar basis. Whilst in this case, there was no dispute as to whether litigation was in contemplation, it is important to note that litigation privilege will not automatically apply to the investigative stages of a claim, i.e. before litigation is in contemplation. Even where litigation is reasonably contemplated, the dominant purpose test must still be satisfied. Material created primarily for fact-finding, risk assessment, or other investigative purposes will not attract litigation privilege unless those activities are actually undertaken for the dominant purpose of conducting the litigation. (See The Director of the Serious Fraud Office v Eurasian Natural Resources Corporation Ltd [2017] EWHC 1017 (QB)). When engaging a law firm, clients should ensure that they understand whether the firm has previously obtained information about their claim while acting for another party (for example, a funder or another interested party) and how that information will be handled. Any restrictions on the firm’s ability to share relevant information with the client should be explained clearly at the outset, including what information may be withheld and why. If this decision raises questions about your own funding arrangements, disclosure strategy, or privilege position, please get in touch with our Commercial Litigation team.

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The Long-Awaited Public Infrastructure Financing Solution for Development in Arizona

Every developer who has taken raw Arizona ground to a finished project knows the largest upfront cost other than the land price is almost always the cost to install the public infrastructure. Water, sewer, stormwater, streets, dry utilities, and the fiber backbone all have to be in the ground before a single lot closes or a building opens. That capital is deployed early and generates no return for years. For decades the standard workaround has been the Community Facilities District (CFD). That tool has grown materially harder to use, for reasons cited below, and House Bill 2999, signed in June 2026 and now codified as Chapter 40 of Title 48, is Arizona's response. Some Background I have spent a good part of my career on the other side of this problem. In the 1990s and early 2000s I served as general counsel of SunCor Development Company, one of Arizona's most active master-planned community developers, where we used Community Facilities Districts to finance hundreds of millions of dollars of major infrastructure across Arizona in cities such as Goodyear, Phoenix, Tempe, Litchfield Park, and Prescott Valley. For its time the CFD was an effective structure, and a great deal of what is now on the ground in those communities was financed with this tool. Unfortunately, CFDs have over time become considerably harder to use. Successive legislative amendments have layered on tax-rate ceilings, homebuyer disclosure obligations, and added procedural steps. Another drag on the use of CFDs is that formation of them runs through the municipality, where approval can turn as much on local politics as on the merits of a project. Developers now routinely are asked to absorb delay and uncertainty that a project's economics cannot support, which is a large part of why Arizona has fallen behind Colorado, Texas, and Utah in getting infrastructure financed. A better tool was needed, and Chapter 40 is it. How a SAID Improves on a CFD A State Affordability Infrastructure District (SAID) keeps what worked about the CFD: tax-exempt, property-secured, non-recourse infrastructure financing — while shedding much of what made the CFD cumbersome. Its principal advantages over a traditional CFD: Administrative formation. A SAID is formed by the Arizona Finance Authority against fixed statutory criteria, through a yes-or-no compliance review on a sixty-day clock, rather than through the discretionary approval of a city council or a board of supervisors. Insulation from municipal politics. Because formation is a state-level compliance determination, a meritorious project is far less exposed to local political headwinds than it is under the CFD process. Landowner control of the board. A SAID is governed by a board of the landowners — appointed at formation, then elected on an acreage basis. In a typical municipal CFD, the city council sits as the district board; here, the developer controls governance. Advance funding of impact fees. A SAID can use bond proceeds to advance-pay municipal development impact fees, unlike CFDs, removing one of the largest upfront cash burdens in a project. A uniform, statewide process. The criteria are the same regardless of jurisdiction, replacing the municipality-by-municipality variation that has made CFD outcomes hard to predict. Flexible boundaries. A district may include noncontiguous parcels in the same county within five miles of one another, which fits phased and multi-tract development. Capped cost and a fixed timeline. Authority fees to form a district are capped at $15,000, and a complete petition must be acted on within sixty days. The full range of bonds. A SAID may issue general obligation, special assessment, revenue, and refunding bonds, secured solely by district property and creating no obligation for any other taxpayer. What is a SAID A SAID is a special taxing district that the owners of a development form to finance public infrastructure with tax-exempt bonds: general obligation bonds, special assessment bonds, and revenue bonds. The bonds are secured only by the property inside the district and are repaid over the long term, with terms up to 30 years. They do not affect the credit of the city, the county, or the State, and they create no obligation for any taxpayer outside the district. In practical terms, a SAID lets you finance horizontal infrastructure over the life of the asset instead of writing the check at the front end. The maximum ad valorem rate securing general obligation bonds is capped by statute at $5.00 per $100 of net assessed limited property valuation, with a limited step-up to cover a debt-service shortfall. SAIDs Work for Commercial as Well as Residential Development The SAID bill drew most of its press as a housing-affordability measure, and it appears to be a strong one. It is the first Arizona district statute to let bond proceeds advance-fund municipal development impact fees, which pulls one of the largest upfront cash burdens off a homebuilder's pro forma. But the statute's eligible infrastructure categories apply with equal force to commercial, industrial, and mixed-use projects. An industrial or logistics project can finance roads, rail crossings, sidings, and grade separations. A life-sciences or technology campus can finance its water, sewer, roads, and broadband the same way a subdivision can. Read Chapter 40 as a general-purpose infrastructure finance platform, not a subdivision-only device. How Formation Works A SAID is formed administratively by the Arizona Finance Authority. The Authority reviews the petition for compliance with the statute; it is a yes-or-no review against fixed criteria, not a discretionary negotiation with a city council or a board of supervisors, and it runs on a sixty-day clock once a complete petition is filed. Formation requires the written consent of 100% of the landowners in the proposed district and an engineer's certification that public infrastructure costs will exceed $5 million. The district may include noncontiguous parcels so long as they lie in the same county and within five miles of the district's other property, which accommodates phased and multi-tract development; if any part of the district sits inside a municipality, the whole district must stay within that municipality's limits or planning area. The Authority's fees to form a district are capped at $15,000. Issuing bonds requires a district election. Governance Simplified A SAID is run by a three-member board. The initial directors are named in the petition; after that, directors are elected by the landowners on an acreage basis as ownership diversifies. Board service runs with ownership; a director must either hold fee title inside the district or be an individual designated by a fee-title owner; and corporations, partnerships, and other entities may hold that ownership, vote as owners, and designate the individual who serves. A district has no power of eminent domain and no zoning authority, and directors may not be officials or employees of the municipality in which the district sits. What a SAID Does Not Do It finances; it does not entitle. Zoning, platting, rezonings, use permits, and the specialized approvals a manufacturing or life-sciences facility may need all remain with the local jurisdiction and proceed on their own track. The financing and entitlement timelines should be coordinated with formation of the SAID, but they are separate processes. Two substantive limits are worth flagging at the planning stage. First, electric power is largely outside the tool: the statutory definition of public infrastructure does not reach power generation or transmission, and broader energy infrastructure was removed from the bill during the Senate amendments. A power-intensive user should not assume a SAID will carry its electrical load. Second, where water, sewer, or wastewater facilities fall within a regulated utility's certificated service territory, the district cannot build or own them without the utility's written consent and must convey them to the utility upon completion. Our Take For most master-planned residential work, and for a wide range of commercial and industrial development, a SAID will be the most efficient infrastructure-financing structure Arizona has offered. The right time to evaluate it is early in the acquisition and pre-development process, while the capital stack, the development agreement, and the entitlement strategy are still being set. Once the district's boundaries, general plan, and financing parameters are set, it is cumbersome at best to bring those into conformance later. Our Dorsey team has begun advising our developer clients on SAID formation on residential, commercial, and industrial projects statewide. If you would like us to assess whether a SAID fits a project you are working on, please reach out.

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Alaska HB 126: What Changes for Alaska Native Corporations, Proxy Filings, and Annual Reports

Alaska House Bill 126 (HB 126), sponsored by Representative Neal Foster and passed by the 34th Alaska Legislature, is now law. The bill changes which Alaska Native Corporations (ANCs) must file proxy and annual report materials with the State of Alaska, and makes it easier to reinstate certain dissolved Village Corporations. For many smaller Village Corporations, the practical result is less public disclosure. For shareholders, advisors, and the public, it means some financial information that used to be available through the State will no longer be readily obtained. This eUpdate explains what HB 126 does in plain terms, walks through the practical trade-offs, and answers common questions. 1. What HB 126 Changes The old rule Under prior law (Alaska Statutes Sec. 45.55.139), an Alaska Native Corporation had to file its annual report, proxies, and proxy statements with the Alaska Division of Banking and Securities (the Division) if it had more than $1 million in assets and 500 or more shareholders on its current rolls. A filing ANC was also required to follow the Division’s proxy rules (3 AAC 08.305 through .365), which require specific disclosures such as top 5 executive compensation, and related-party transactions. Because these filings are treated as public records, they gave non-shareholders, including the public and the press, visibility into ANC financial information that is not filed with the SEC. The new rule HB 126 changes how the 500-shareholder test is measured. Now, the asset test is removed, and the shareholder count is based on how many shareholders the corporation originally enrolled when it was formed under the Alaska Native Claims Settlement Act (ANCSA), not how many it has today. As shares have passed down through families over the decades, some Village Corporations that started with fewer than 500 shareholders now have more than 500 recordholders. Under the old current-count test, when those corporations had crossed the threshold, they had to file. Under the new original-enrollment test, they do not. Who is affected Village Corporations that originally enrolled fewer than 500 shareholders are the main beneficiaries. They no longer have to file proxy and annual report materials with the Division or follow the Division’s proxy regulations at 3 AAC 08.305 through .365. Two groups must continue to file as before: all twelve ANCSA Regional Corporations, each of which enrolled more than 500 shareholders at creation, and all Village Corporations that originally enrolled 500 or more shareholders. As reported by the Alaska Beacon, when the bill was under consideration, the Division identified 59 corporations then filing, expected at least seven village corporations to become exempt, and was reviewing roughly 30 more. 2. Practical Analysis HB 126 reduces a real compliance burden for smaller Village Corporations, which now need not spend time and money on State filings. In coming years, the exempt Village Corporations may experience benefits associated with less public disclosure and less regulation. But at the same time, less public disclosure carries trade-offs. Benchmarking will become harder Publicly-filed proxy statements and annual reports have long served as a reference set. Shareholders, corporations, advisors, and counsel use them to compare governance practices, compensation, and financial results across similarly-situated ANCs. Since fewer of these materials will be filed publicly, there will be fewer comparable documents available, which will make benchmarking and market-checking more difficult for like-sized ANCs over time. Executive compensation transparency may be reduced The Division’s proxy rules require disclosure of the compensation of ANC’s top five most highly compensated individuals (3 AAC 08.345(b)(2)), related-party transactions above $20,000 (3 AAC 08.345(b)(3)), and audited financial statements and management’s discussion and analysis (3 AAC 08.365). When a corporation is no longer required to file these disclosures publicly, it becomes harder for shareholders and others to obtain the information, to understand how compensation is set for their corporate leadership, and how it compares across corporations of similar size and complexity. Transparency may matter more as ANCs grow Some ANCs have grown into large, complex enterprises with substantial revenue and many subsidiaries, even with fewer than 500 shareholders. For an ANC with a broad and dispersed shareholder base, public materials can be an important way for shareholders and other stakeholders to understand governance, compensation, and performance across ANCs. Reduced disclosure may carry more practical weight in those settings than for a small corporation whose shareholders are closely connected to the business. The ANCSA annual report obligation continues It is important not to overstate what HB 126 does. HB 126 changes the state filing proxy requirements. It does not remove the separate obligation under ANCSA itself. That obligation comes from ANCSA at 43 U.S.C. Sec. 1625(c), which requires a Native Corporation that would otherwise be subject to the Securities Exchange Act of 1934 to prepare and transmit to its shareholders an annual report containing substantially the information a company subject to that Act would include. Similarly, ANCs that solicit proxies for an annual meeting are still required to furnish shareholders with those proxy materials under general Alaska corporate law. However, ANCs are now no longer required to transmit proxy statements to the State. ANCs’ reporting obligations to their shareholders are unaffected by HB 126. Any corporation newly exempt from state filing still owes its shareholders a detailed annual report and a proxy statement, even though that report is no longer routed through the State and made public. Reinstatement of dissolved Village Corporations Separately, HB 126 amends AS 10.06.960(k) to remove the prior deadline (previously December 31, 2020) for reinstating an involuntarily dissolved Native Village Corporation. A dissolved Village Corporation may now apply to be reinstated under AS 10.06.633(e) at any time. Reinstatement still runs through the commissioner under AS 10.06.633(e). In general, that means the ANC must apply, cure the neglect or delinquency that led to dissolution, and pay the amounts owed, and the corporation’s name must be available or be changed to one that is. Once reinstated, the corporation and its shareholders are restored to the rights, privileges, liabilities, and obligations they would have had as if the dissolution had never occurred, and corporate and shareholder actions taken during the dissolution are treated as valid. If the previously-used corporate name is no longer available, the board alone may amend the articles to adopt a new name (without the necessity for shareholder approval). 3. Frequently Asked Questions What does HB 126 do? It changes how Alaska measures the 500-shareholder test that decides which ANCs must file proxy and annual report materials with the state. It removes the asset test, and it counts shareholders based on original enrollment rather than the current rolls. It also removes the deadline for reinstating an involuntarily dissolved Native Village Corporation. Which ANCs are affected? Village Corporations that originally enrolled fewer than 500 shareholders, because they may no longer need to file with the Division. Regional Corporations and Village Corporations that originally enrolled 500 or more shareholders must continue to file as before. Does HB 126 eliminate all reporting obligations? No. It changes the state filing requirement under AS 45.55.139, but it does not remove the separate ANCSA obligation (43 U.S.C. Sec. 1625(c)) to provide shareholders with an annual report, and general corporate law still calls for a proxy statement when the ANC solicits proxies. Corporations that remain subject to state filing requirements must also continue to comply with the Division's rules. We think we are now exempt. What should our ANC board and management consider? Confirm your ANC’s original enrollment number and whether your corporation falls below the new threshold. Watch for communications from the State on this topic as they proceed with their research. If your ANC is now exempt, decide how your corporation will meet its continuing ANCSA obligation to shareholders, review proxy and annual meeting materials and timelines, and consider what to communicate to shareholders about any change in how they will receive information. It is worth documenting the basis for any exemption. What should ANC shareholders watch for? Shareholders should watch for how and when they will continue to receive annual report and proxy statement information directly from their ANC, since some material that used to be available through the State’s online website will no longer be publicly filed. If something is unclear, shareholders can ask their ANC how it intends to meet its ANCSA reporting obligations. How Dorsey Can Help HB 126 lightens the State filing load for smaller Village Corporations, but it also raises practical questions: confirming who is exempt, meeting continuing ANCSA obligations to shareholders, keeping proxy and annual meeting processes on track, and maintaining benchmarking when public materials become less available. These are exactly the kinds of judgment calls that benefit from early planning. Dorsey’s attorneys work closely with Alaska Native Corporations and related stakeholders. If you have questions about HB 126, ANC governance, proxy filings, annual reports, disclosure obligations, or shareholder communications, please contact your Dorsey attorney, including the authors of this eUpdate.

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State Affordability Infrastructure Districts (SAIDs) — A Financing Tool for Taiwanese Investment in Arizona Science and Technology Parks

If you have developed a facility inside one of Taiwan's science or technology parks, you are accustomed to the one-stop-shop of government planning the park and delivering the roads, water, power, and other infrastructure before your building is even constructed. In the United States, including Arizona, land development generally does not work that way. In Arizona, the cost of infrastructure such as water, sewer, stormwater, roads, power, and the digital backbone, typically falls on the private landowner and is incurred up front before operations generate revenue to offset that cost. For a company entering the Arizona market, this is often the largest and earliest capital burden of the entire project. Arizona recently created a tool that provides a more cost-effective way for landowners and developer to finance some of that infrastructure. House Bill 2999, signed into law June 2026 and codified at Chapter 40 of Title 48 of the Arizona Revised Statutes, establishes the creation of a State Affordability Infrastructure District (SAID). How a SAID Works Landowners are now able to use a SAID to finance public infrastructure such as water, sewer, stormwater, roads, parking, lighting, communications, rail sidings and signalization, and similar improvements, through tax-exempt bonds. The bonds are repaid over up to 30 years and secured solely by the property within the SAID. No city, county, or state credit is pledged, and no obligation falls on other taxpayers, and therefore no city, county, or state approval other than from the Arizona Finance Authority (AFA). In effect, a SAID lets you spread the cost of horizontal infrastructure over the life of the asset instead of funding it entirely at the outset. And tax-exempt bonds often offer a lower interest rate than taxable or other types of financing. How a SAID is Formed A SAID is formed upon the filing of a petition with the AFA. The petition must include the finance plan, general plan, estimated costs, maximum tax rate, appraisal, bond counsel certificate, consultant list, petitioner experience, legal description, title report, and other materials. While the landowner is required to provide notice to the local governing jurisdiction, local governing jurisdiction does not have the right to approve or deny. The petition is reviewed administratively by the AFA through a standards-based process. For an inbound investor without long-standing local relationships, an objective, criteria-driven process is a meaningful advantage to the overt political process associated with other financing districts in Arizona. Formation requirements. A SAID requires consent from 100% of landowners within the proposed district; public infrastructure costs must exceed $5 million (easily met at any real scale); the district property must all be in the same county and need not be contiguous provided that noncontiguous property is located within five miles of the district's other property; and the board is initially appointed by the forming owners of the SAID district, later transitioning to election as ownership diversifies. Actual bond issuance requires an election of the SAID property owners. Ownership and corporate structure. Consent rights and board seats run with title. If you hold the Arizona land through a U.S. blocker beneath your Taiwan parent, the standard model for Taiwanese/Arizona real estate and operating investment, the U.S. property-holding entity, rather than it’s corporate parent, is the landowner of record for the district. Before formation, our Dorsey team will confirm that you have the proper corporate structure and board mechanics to be compliant.  Board composition has no citizenship or residency requirement. This is a common concern for foreign investors, and the statute answers it cleanly. Under A.R.S. § 48-7004, a director must either hold fee title to real property in the district or be an individual designated or appointed by a fee-title owner. Corporations, partnerships, and other business entities are expressly permitted to be those owners, to vote as owners, and to designate an individual to serve. There is no requirement that a director be a U.S. citizen or resident. So your U.S. property-holding entity, as landowner of record, can appoint whichever of your principals you choose, including a Taiwan-based individual, as the three-member board.  Power infrastructure limitation. The enacted definition of "public infrastructure" in A.R.S. § 48-7001 does not include electrical power generation or transmission. The reference to electrical facilities appears only as components of lighting and traffic-control systems, and the Legislature removed broader energy infrastructure from the definition during the Senate amendments. A SAID will likely not finance the high-load power infrastructure required for semiconductor fabrication, data storage, or heavy manufacturing.  Water infrastructure within a current utility CC&N. Where water, sewer, or wastewater facilities fall within a regulated utility's certificated service territory, the SAID cannot build or own them without the utility's written consent and must convey them to the utility on completion. Entitlements and zoning: The determination of entitlements, zoning, and other land use permitting, as well as construction permitting for a technology or manufacturing facilities remain with the local jurisdiction and run on a separate track. Our Dorsey team will help you coordinate the financing and entitlement timelines together. Our Dorsey team works regularly with Taiwanese and other Asia-Pacific companies entering the Arizona market. If a SAID fits your project, we can structure it for your cross-border ownership.

News

Dorsey Partner Melissa Raphan Elected a Fellow of the College of Labor & Employment Lawyers

International law firm Dorsey & Whitney LLP is pleased to announce that Partner Melissa Raphan has been elected a Fellow of the College of Labor & Employment Lawyers (CLEL) as part of its 2026 class. “Melissa’s election to this prestigious fellowship comes as no surprise to those of us who have had the privilege of working with her,” says Peter Nelson, Dorsey’s Managing Partner.  “She is an exceptional employment lawyer, a trusted advisor, and a leader whose impact extends far beyond her matters. Clients rely on her deep knowledge, strategic counsel, and ability to navigate complex workplace disputes and sensitive employment matters with both confidence and compassion. She has helped shape our firm, strengthen our profession, and opened doors for countless others through her commitment to mentorship and diversity. We are incredibly proud of her accomplishments and delighted to see her receive this recognition.” CLEL is a nonprofit professional association that honors the nation’s leading attorneys in the field of labor and employment law. Originally established to recognize excellence in the profession, CLEL has evolved into a respected intellectual and practical resource for the legal community and its many audiences. Its mission centers on recognizing individuals who have made significant contributions to the field, fostering the exchange of knowledge and delivering value to academia, government, the judiciary, and the broader public. Election as a fellow represents the highest level of peer acknowledgment, reflecting sustained achievement, integrity, and a commitment to advancing the profession. Melissa’s career reflects CLEL’s mission. She has been recognized both regionally and nationally for her advocacy, leadership, and achievements both inside and outside of the courtroom. Her employment litigation experience spans class actions, collective actions, and high-stakes individual disputes in state and federal courts, as well as arbitration forums including the American Arbitration Association and the Financial Industry Regulatory Authority (FINRA). She is also a trusted advisor on a full range of workplace issues, from hiring and performance management to sensitive terminations and organizational change. She brings decades of experience representing clients across the financial services, healthcare, food and agriculture, and energy sectors. Melissa will be formally inducted during CLEL’s installation ceremony held in conjunction with the American Bar Association’s Labor & Employment Law Conference in Washington, D.C., on November 7.

Insights

Proposed CMS Rule Ramps Up Potential Medicare Fraud Administrative Remedies

On July 6, 2026, the Centers for Medicare & Medicaid Services (“CMS”) proposed a rule that would expand its administrative remedies to combat potential fraud. The proposed rule is the latest in a round of administrative actions that signal CMS’s intent to aggressively pursue allegations of Medicare and Medicaid fraud and heighten the risk of fraud enforcement against even well-intentioned Medicare and Medicaid providers and suppliers. The proposed rule includes several changes to regulations that govern Medicare billing privileges. Providers and suppliers should be aware that these changes dramatically expand the flexibility afforded to CMS in enrollment and revocation actions, potentially leading to harsh consequences for ministerial and administrative errors. If finalized, moreover, the proposed rule could have material implications for providers and suppliers facing threatened revocation, including heightened risk of overpayment liability and increased hurdles to challenging revocations and denials of enrollment. Added Flexibility to Existing Revocation Grounds CMS has proposed to remove a number of factors that the regulations list as relevant to a determination of whether a provider has engaged in “abuse of billing privileges.” While acknowledging that the inclusion of these factors in the regulations was permissive (requiring consideration only where “as appropriate or applicable”), CMS stated that it must be afforded “the maximum flexibility to address all possible . . . scenarios without the rigid constraints of our existing factors.” CMS provided little guidance as to the outer bounds of what conduct could constitute an “abuse of privileges” that merits revocation of Medicare billing privileges. Instead, CMS noted that a “pattern of practice” of abuse of billing privileges might be established “by a simple finding that several of a provider’s claims do not meet Medicare requirements.” Similarly, CMS has proposed to expand the regulatory provision that permits revocation of enrollment if a provider certifies as “true” false or misleading information in Medicare enrollment application or renewal forms to include any scenario in which a provider submits “false or misleading information on or associated with any CMS Medicare enrollment-related form,” including materials submitted to Medicare contractors. CMS stated that it interprets this expanded rule to include anything related to Medicare enrollment, and not only those submissions that are “intended to gain or maintain Medicare enrollment.” If finalized, the proposed rule would add significant flexibility to CMS’s ability to pursue revocation of a provider’s enrollment. While CMS has assured providers that it would “invoke [the revised regulations]. . . only when legitimately warranted under the facts and circumstances and not as a matter of course,” such expanded flexibility threatens unpredictability in the event of even administrative or ministerial errors in submissions and claims. These changes would, moreover, make it more difficult for providers to challenge a revocation action. Expanded Revocation Grounds In addition to adding flexibility to existing grounds for revocation, CMS’s proposed rule adds to and expands CMS’s already broad authority to revoke provider and supplier enrollment. Such proposed changes include adding the following grounds for revocation: Denial of Enrollment Application. Where CMS could previously revoke a provider’s other enrollments if one enrollment is revoked, CMS would also be able to revoke a provider’s existing enrollments if an application for enrollment submitted by the provider is denied. High-Risk Enrollments. CMS would be able to revoke enrollment if it determines the provider or supplier (including owning/managing employees or organizations) poses a high risk of fraud, waste, or abuse due to “. . . an affiliation under [42 C.F.R.] § 424.519” or “the provider’s or supplier’s location within a limited geographic area that has an excessive number of providers and suppliers.” Certain Misdemeanor Convictions. CMS would be able to revoke enrollment if a provider or supplier—or its owners, managing employees, managing organizations, officers, or directors—are convicted of a “misdemeanor related to sexual assault or financial misconduct within the past 10 years that CMS deems detrimental to the best interests of the Medicare program and its beneficiaries.” Ownership Changes (HHA, Hospice, DMEPOS). CMS would have broad authority to revoke enrollment of home health agencies, hospices, and DMEPOS suppliers who do not comply with the regulations governing provider changes of ownership. These proposed, expanded grounds for revocation are notably broad, and CMS provides only limited guidance as to what conduct might result in revocation under these grounds. As with the proposed expansion of existing grounds for revocation, the open-ended nature of these proposed grounds for revocation may make it more difficult for providers and suppliers to challenge revocation actions. Expanded Grounds to Deny Medicare Enrollment As with revocations, CMS proposes to expand the grounds under which a provider’s application to enroll in Medicare can be denied. These expanded and additional grounds include many of the grounds added for revocations, but also include: Medicare Debt or Payment Suspension. CMS proposes expanding the ground to deny enrollment based on Medicare debt or payment suspension to include a provider or supplier’s “managing employee, managing organization, or individual or entity with any other form of business or financial relationship with the provider or supplier[.]” Significantly, this expansive definition (called an “associated party” under the proposed regulation) currently contains no material limitations, meaning almost any person or entity with whom an applicant does business could create denial liability. Sharing Locations with Denied/Revoked Providers or Suppliers. CMS would have authority to deny applications where a “provider’s or supplier’s practice location is in the same suite or office as another provider or supplier whose Medicare enrollment has been revoked or denied.” Hospices with Distant Medical Directors or Administrators. CMS would have discretion to deny hospice applications if the hospice’s medical director or administrator serves “multiple other hospices” or practices/is located “at such a distance (for example, in a different state) from the enrolling hospice that the medical director cannot realistically perform all medical director functions,” with a similar provision for administrators. In addition, CMS proposes applications denied for “other program termination or suspension,” may be applied to the provider or supplier in its own name or NPI or that of its owners, managing employees, or managing organization regardless of whether any appeals are pending. Retroactive Revocation CMS proposed to restructure and expand the regulatory grounds for retroactive revocation of billing privileges. Currently, Medicare regulations provide that revocations are, by default, prospective in nature: effective 30 days after CMS or the CMS contractor mails notice to the provider. Under certain circumstances, the regulations provide for revocations to be retroactive, such as when a provider is convicted of a felony, the date a professional license is suspended, revoked, or surrendered, or when a provider submits a false certification in their enrollment application. CMS has proposed to reframe the rule so as to default to retroactive revocation of billing privileges. CMS expressed concern that providers may collect payment from Medicare while remaining so non-compliant with enrollment requirements as to merit revocation. To address this concern, CMS proposed that all revocations be retroactive to the date of determined non-compliance.[1] As a result, providers suspected of misconduct or non-compliance are likely to face claims of retroactive overpayments in addition to the immediate concern no longer receiving Medicare payments while their enrollment is revoked. Reapplication Bar CMS’s proposed rule expands the grounds from which a provider may be prohibited from seeking reapplication as a Medicare provider. Under current regulations, CMS may prohibit prospective providers from enrolling in Medicare for up to 10 years if its enrollment application is denied because the applicant submitted false or misleading information in its application. Under the proposed rule, CMS will have the discretion to prohibit a provider from enrolling in Medicare if their enrollment application is denied for any reason. Conclusion As a part of the federal government’s increasingly aggressive push to combat real or perceived healthcare fraud, the proposed rule both broadens CMS’s authority to revoke and deny Medicare enrollment and raises the stakes for revocation and denial. What the proposed rule does not share is how CMS plans to exercise this expanded discretion: as a result, the proposed rule, if enacted, increases the unpredictability and potential ramifications of even technical noncompliance with CMS rules. As a result, Medicare providers should keep a close eye on potential revisions to these rules and their potential implementation and consider proactively evaluating their compliance under CMS standards. [1] In the proposed rule, CMS identifies, with respect to each ground for revocation, what it will consider to be the effective date of revocation.