Telecommunications Law- NJ Superior Court Issues Opinion on Services Provided by Verizon

April 9, 2017 · Posted in Business Law Blog 

It is not often that the Appellate Division of the Superior Court of New Jersey issues an opinion of interest in Telecommunications Law. Last week it did so. As one of the few firms in New Jersey that practices Telecommunications Law, we like to keep our clients up to date.

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What is Intellectual Property?

December 30, 2015 · Posted in Blog, Business Law Blog 

Even other lawyers have a difficult time understanding what exactly intellectual property law covers. There are three main categories that fall under the umbrella of intellectual property: patents, copyrights, and trademarks. Trade secrets are also encompassed within the area of intellectual property.

While there are specific sets of laws enacted by Congress for each of these three categories of intellectual property, patents and copyrights are a little more special because the origin of both comes from Article 1, Section 8, Clause 8 of the Constitution, which promotes “the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Protection for a patent is a little different than anything else. Unlike copyright and trademark, which give the filer the exclusive right to use the copyright or trademark in a certain way or geographical location, a patent gives the filer the exclusive right to exclude anyone else from using the invention. The three types of patents are design, utility, and plant patents. They term of a patent is twenty (20) years. Read More »

Telecommunications Provider Bankruptcy

October 28, 2014 · Posted in Business Law Blog 

Implications for Customers

When a telecommunications provider files for bankruptcy, customers that rely on the provider for their telecommunications infrastructure face significant risks.  For example, when NorVergence, a Newark-based company, filed for Chapter 7 bankruptcy in 2004, the filing left NorVergence’s customers – about 10,000 clients throughout the country, most of which were small businesses – facing abrupt service interruptions.

Dozens of telecommunication providers have gone bankrupt in this manner, leaving their customers without service and scrambling to find new carriers.  It typically takes five to ten business days to reconnect to a new service provider.  During that time, businesses are left without service.  This often has a devastating effect on businesses, especially those that rely heavily on phones and internet to communicate with customers.

This article address several questions raised by a telecommunications provider’s bankruptcy filing, including: whether or not customers should worry about service outages;  whether customers should cancel existing contracts with the provider; whether existing or prospective customers should sign new contracts with the provider; and whether customers should take any actions to protect their service.

Service Outages

Many people assume that a liquidated provider has to provide sufficient warning to its customers before service is stopped.  This is simply not true.  Instead, concern for protecting the provider from further loss often takes precedence over providing customers with adequate warning.

Court ordered shut-offs can happen with little to no warning to customers.  When they occur, businesses lose everything related to that service, including: telephone lines, call forwarding, and answering services.  Moreover, service outages can arise regardless of whether your provider has filed a Chapter 7 or Chapter 11 bankruptcy.  Chapter 11 bankruptcies are  designed to allow the company the opportunity to reorganize its debt and to try to re-emerge as a healthy organization.  Most Chapter 11 bankruptcies, however, are not successful.  When they are not successful, the provider will file for Chapter 7 bankruptcy and liquidate, causing abrupt interruptions in service.

Even if service outages do not occur as a result of a Chapter 11 bankruptcy, the quality of service may decrease.  For example, during restructuring customers may experience slower response times for problem resolution.  Additionally, prices may increase as a result of restructuring.

Cancelling Your Contract

If a customer’s telecommunications provider has filed for either a Chapter 7 or Chapter 11 bankruptcy, or if a customer anticipates their service provider filing for either type of bankruptcy, action should be taken now to review the contract, understand legal rights and limitations, and assess risks and costs.  Customers should begin by reviewing their contract to understand the circumstances under which they may terminate the contract for cause.  If the contract contains language that address the financial viability of the carrier or specifically states that a Chapter 11 filling is grounds for termination, then the customer may be able to end the contract.

If the contract does not contain such a clause, then the provider’s bankruptcy filing, by itself, would most likely not constitute cause for most customers to end their contracts.  However, other grounds for contract termination might exist.  For example, a  major service interruption would provide cause for existing customers to cancel their contracts with their telecom provider and switch to another carrier.

Mitigating Risk

If a provider has filed for either a Chapter 7 or Chapter 11 bankruptcy or if a customer anticipates their provider filing for either type of bankruptcy, the most important thing a customer can do is develop a comprehensive plan to mitigate risk.  The best way to mitigate the risk of a service interruption or decrease in service quality is to diversify services.  This can be done by moving all or a portion a business’s services to another carrier.

In order to determine whether diversification is appropriate, customers should evaluate their business to determine whether or not they have services that are especially vulnerable to service interruptions.   The answer to this question depends on what services (i.e., voice or data services) the business relies on to run day-to-day operations.  Once a business has determined its actual risks and requirements for diversification, they should contact alternate carriers to begin the process of negotiating an alternate agreement.

If your telecommunications provider has filed for either a Chapter 7 or Chapter 11 bankruptcy, or if you anticipate your service provider filing for either type of bankruptcy, contact us today at 732-741-4448.  Randolph H. Wolf will review your contract and help you to understand your legal limitations.

Charging Rent in Excess of a Rental Control Ordinance: Violation of the New Jersey Consumer Fraud Act

February 24, 2014 · Posted in Blog, Business Law Blog 

Randolph H. Wolf recently represented a client who lived in a rent-controlled building in New Jersey.  The client entered into a lease with his landlord in 1996.  The initial monthly rent was $765.00.  Each year thereafter, the client renewed his lease with the landlord and, with each renewal, the landlord increased the monthly rent.  The client recently discovered that these increases in rent violated the Red Bank Rent Control Ordinance and retained Randolph H. Wolf to recover the excess rent payments.  Based upon the legal rent calculation provided under the ordinance, the client had overpaid rent in the amount of approximately $50,000.00.

Randolph H. Wolf brought suit against the landlord not only for the excess rent payments, but also for violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 et seq.  This is because if a landlord increases a tenant’s rent in violation of the local rent control ordinance, the landlord can be found to have violated the New Jersey Consumer Fraud Act.  This can have very costly consequences, including the awarding of treble (or triple) damages to the tenant along with attorney’s fees and costs.  Thus, Randolph Wolf brought suit for treble damages in excess of $150,000.00 as well as attorney’s fees and costs. Read More »

Indemnification Clauses in Construction Contracts in New Jersey and Their Enforceability

February 5, 2014 · Posted in Blog, Business Law Blog 

Indemnification clauses are common in many types of contracts. They shift, or allocate, risk or loss from one party to another. Construction contracts often involve various contracts and agreements that are entered into between the owner, architect/engineer, contractor, and the subcontractor. These agreements usually contain indemnification clauses. When a loss or injury takes place, an analysis of the various indemnifications provisions will determine which party was contractually bound to bear the risk of loss.

It is important to understand that not all indemnification provisions will be upheld by a court. Historically, indemnification provisions are not favored by courts. If a court finds that the language in an indemnification provision is unclear and capable of two meanings, it will often construe the provision in the manner that is less favorable to the party seeking indemnification. Additionally, if a court finds that the terms of the indemnification provision are unfair, it will label the clause null and void as against public policy. Thus, if you are a design professional, an owner, or a contractor/subcontractor – and you wish to shift the risk of loss to another party – it is vital that you have an attorney review the contract to ensure that: (1) its language is clear and unequivocal; and (2) the clause does not violate public policy. Moreover, if you are the party agreeing to indemnify another party, it is vital to have an attorney review the contract to ensure that the agreement says what want it to say and is not over-broad. Read More »

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