This document provides guidance on controlling legal and cultural risks when doing business in the United States. It discusses major legal risks such as commercial liability, intellectual property claims, and employer liability. It also outlines methods for reducing these risks, including selecting an appropriate business structure, obtaining proper insurance, implementing employee training, and carefully drafting agreements. The document concludes with tips for navigating cultural differences when working with American business counterparts.

1. CONTROLLING THE LEGAL
AND CULTURAL RISKS OF
DOING BUSINESS IN THE U.S.
Marc S. Friedman
Dentons US LLP
New York, New York
mfriedman@dentons.com
Phone +001 212 768 6767
June 2014

2. Locations
Month Day Year Dentons US LLP Document reference # 2

3. Offices by list
Month Day Year 3
Optional subhead here
Key Canada United States Europe
Central and
Eastern Europe
Africa Middle East Asia Pacific
l Offices
 Associate offices
 Facilities
u Associate firms
+ Special alliance firms
l Calgary
l Edmonton
l Montréal
l Ottawa
l Toronto
l Vancouver
 Atlanta
 Boston
l Chicago
l Dallas
l Kansas City
l Los Angeles
 Miami
 New Orleans
l New York
l Phoenix
l San Francisco
l Short Hills
l Silicon Valley
l St. Louis
l Washington, DC
l Barcelona
l Berlin
l Brussels
l Frankfurt
l Madrid
l Paris
u Zurich
l Bratislava
l Bucharest
l Budapest
l Istanbul
l Prague
l Warsaw
u Accra
u Algiers
u Bissau
u Bujumbura
l Cairo
u Cape Town
u Casablanca
u Dar Es Salaam
u Johannesburg
u Kampala
u Kigali
+ Lagos
u Luanda
u Lusaka
u Maputo
u Nairobi
u Nouakchott
u Port Louis
u Praia
u São Tomé
u Tripoli
l Abu Dhabi
Amman
u Beirut
l Doha
l Dubai
 Kuwait City
l Manama
l Muscat
Riyadh
l Beijing
l Hong Kong
l Shanghai
l Singapore
United Kingdom Russia and CIS Central Asia
l London
l Milton Keynes
l Kyiv
l Moscow
l St. Petersburg
l Almaty
u Ashgabat
l Baku
l Tashkent
Dentons US LLP Document reference #

4. Why should we come to the U.S.?
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• U.S. is the premier location for new business
investment
• GDP of $16+ trillion - per capita $52,000
• Population of 320,000,000
• Under free trade agreements access to $25 million
more for goods and services produced in the US
• Well-educated citizenry with world's best
university system, and thus availability of highly-
skilled labor

5. More reasons
Month Day Year Dentons US LLP Document reference # 5
• Respect for intellectual property and a strong
enforcement regime
• Most brands not considered truly global without a
U.S. presence
• Stable democracy
• Accessibility of investment that prefers a
domestic presence
• "Businesses operating in small markets in other
countries can become large, dynamic firms in the
United States." U.S. Dept. of Commerce

6. THE BOTTOM LINE?
Month Day Year Dentons US LLP Document reference # 6
• The U.S. can be a very fertile area for expansion of
your business
• There are legal land mines which can be
eliminated or controlled through a careful entry
plan
• There are cultural problems you can encounter if
you are unaware of them
• None of the legal land mines or cultural risks
should prevent your expansion into the U.S.

7. Methods of entry
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• Start your own operation
• Enter into a joint venture with a US partner
• Acquire or merge with a U.S. company
• Each method has its own features and risks
• There are risks and concerns common to all three
methods of entry

8. Major legal risks of doing business in the U.S.
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• Commercial liability
• Personal injury liability
• Regulatory violations
• Employee-related claims
• Intellectual property claims (including patent
infringement claims)
• Losing intellectual property rights
• Data privacy violations

9. Additional legal risks
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• Litigation and other judicial or quasi-judicial
proceedings
• Tax consequences
• Immigration violations
• Transferee (imputed) liability to European entity
• Officer and Director liability

10. Controlling the legal risks by formation
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• Selecting the best business structure
(corporation, LLC, other)
• Create a subsidiary, sub-subsidiary or other to
insulate upstream companies from liability
• Place IP in another company with licensing
agreements
• Identify the most suitable state of formation
including from a tax perspective(usually
Delaware)
• Identify where you must qualify to do business
• Obtain necessary licenses and permits

11. Controlling the legal risks through insurance
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• Commercial general liability
• Property and casualty insurance
• Product liability insurance
• Worker's compensation insurance
• Vehicle coverage
• Errors and omissions
• Directors and Officers insurance
• IP infringement insurance
• Agent v. broker

12. Employer liability
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• Possible employee claims
• Sexual harassment or discrimination in hiring, firing and workplace
conditions
• Wrongful termination or denial of benefits
• Can arise under Federal, state and sometimes city laws
• Can result in damages and attorney's fees, punitive damages and
reinstatement
• Federal anti-discrimination statutes (Title VII, Age Discrimination.
Americans with Disabilities, Pregnancy Discrimination), Family
Medical Leave, ERISA, NLRA, OSHA, Employee Polygraph
Protection Act, etc
• Similar state statutes in all states and District of Columbia and
some cities such as New York City
• The risk of liability can be controlled and in some cases eliminated

13. Ways to reduce employer liability
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• Understand the "rules of the road" including
immigration laws
• Employee handbook
• Other workplace rules (including OSHA)
• Sexual harassment training
• Carefully-drafted executive and non-executive
employment agreements, and independent
contractor agreements
• Employer liability insurance

14. Controlling the risks of commercial liability
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• Sales of goods (including software) are covered
by the Uniform Commercial Code (UCC)
• UCC provides contract drafting techniques that
significantly reduce a seller's risk of liability and
damages
• Also may be governed by UN Convention on the
International Sales of Goods (CISG)

15. Controlling the risks of commercial liability
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• Some states (eg. California) have additional laws
including covering services transactions
• May be significantly different than your own
country's laws
• All contracts for goods or services should be
drafted or reviewed by knowledgeable lawyers
• All contracts should be in writing, which is what
Americans expect

16. Protecting your intellectual property
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• Create an IP protection plan, that may include
• Seeking patent protection
• Building an enforceable trade secret program
• Registering copyrights and trademarks
• Confidentiality agreements and inventions agreements
with employees and consultants
• Confidentiality agreements with third parties
• Carefully-drafted IP license agreements

17. Protecting against IP and related claims
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• Obtain a freedom-to-operate opinion
• Obtain trademark clearance opinions
• Take advantage of DMCA provisions
• Understand and comply with U.S. data protection
and privacy laws
• Be prepared to respond to patent infringement
claims asserted by patent trolls
• IP infringement insurance

18. You must determine whether your goods/services are
regulated
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• What regulatory bodies, if any, have jurisdiction
• What are the applicable regulations regarding
importation, labeling, materials, etc?
• Federal Trade Commission, Federal Food and
Drug, ATF, Health and Human Services, Homeland
Security, Consumer Product Safety Commission,
Agriculture, DOD etc.
• State regulatory agencies such as Consumer
Protection Bureau

19. Cultural lighthouses to watch when doing business
in the U.S.
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General tips when doing U.S. business
• Americans have a large and diverse culture with
great freedom of expression - be aware of regional
differences
• Americans have strong opinions and are willing to
voice them
• Americans love humor and sarcasm
• Americans work long hours, two weeks of
vacation and work on vacation

20. More tips
Month Day Year Dentons US LLP Document reference # 20
• Typically business relationships are between
companies and not people
• Not important to develop a personal relationship
for a successful business relationship
• American companies want to get the best deal and
the best service and are driven by the bottom line
• Americans are uncomfortable with silence and fill
in the void with conversation
• Americans ask many questions, often rapid-fire

21. More tips
Month Day Year Dentons US LLP Document reference # 21
• Americans like direct communication - yes means
yes, and no means no
• Do not interrupt someone speaking but if you do
always start with "excuse me"
• Americans believe in written agreements and shy
away from oral agreements
• Use good eye contact in all settings
• Start all encounters with a handshake but if a
close friend a quick, gentle hug or between males
a chest or fist bump.
• Spell all names correctly in writing (eg. Marc
Friedman, not Mark Freedman)

22. More tips
Month Day Year Dentons US LLP Document reference # 22
• Be on time and if more than 5 minutes late call
• Be aware of the religious Sabbath before
requesting a meeting on Saturday or Sunday
• Be sure to meet all deadlines. If not, advise the
other party well in advance
• Meetings generally informal and relaxed but
serious. Be prepared to start after a quick
exchange of greetings
• All attendees should make some contribution or
else they may be viewed as irrelevant

23. Tips for business meetings
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• In major cities, business suit and tie for men and
business suits for women. Less formal in smaller
cities or rural areas.
• Fair to ask ahead about dress code
• Polished shoes, clean and well-pressed clothes
• Do not keep looking and using smartphone unless
specific to the meeting, and if so explain
• If comfortable, ask you be called by your first
name (eg. "Please call me Marc")
• Give all speakers the chance to finish expressing
their thoughts

24. Tips for business meeting conversation
Month Day Year Dentons US LLP Document reference # 24
• Topics that are acceptable include job-related
information, sports, travel, food, music, movies
books
• Topics that may be unacceptable include religion,
politics, controversy (eg. Gay marriage, abortion,
gun control, Obama, Tea Party, Putin, etc.)
• Men especially use sports metaphors which if
necessary you should ask for an explanation (eg.
Rounding third base, curveball, full-court press,
balk, ice, four corners)
• Ask about idioms (eg. "Let's go the whole 9
yards", "according to Hoyle" etc.)

25. Patent Troll Infringement Claims
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26. What is a patent troll?
Month Day Year Dentons US LLP Document reference # 26
• A patent troll typically is a company funded by investors that
acquires portfolios of patents in order to make claims of
infringement against large and small companies to collect license
fees
• A patent troll is an entity that tries to make a great deal of money
from a patent or patents it did not invent, never practiced and has
no intention to practice.
• A patent troll may also be known as an NPE (non-practicing
entity) or PAE (patent assertion entity)
• Best known patent trolls: Acacia, Tessera, Rambus, Wisconsin
Alumni Research Foundation, Interdigital, Rockstar, Round Rock
and Intellectual Ventures
• In 2013, patent trolls filed 67% of all patent infringement cases, up
from 19% in 2006, 23% in 2007, 25% in 2008, 27% in 2009, 29% in
2010 and 45% in 2011 and 62% in 2012. Top 10 filers were patent
trolls

27. Top 10 ways to protect against patent troll claims
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• Early assessment - develop litigation and settlement
strategy at outset, and how to respond to a claim letter
• Engage experienced counsel with a reputation for
success and experience defending troll claims
• Be appropriately and economically aggressive -- early
dispositive motions, declaratory judgment suits
(including by vendors), IPRs
• Leverage Joint Defense Groups -- knowledge,
resources, creativity
• Invalidate the Patent -- use post-grant review, such as
IPR, PGR, CBM, or reexamination

28. Top 10 ways to protect against patent troll claims
(con't)
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• Avoid Infringement - stop arguable infringement,
design around patent
• Understand the Patent Troll, its motivation and its
economics
• Discredit the Patent Troll and/or the Inventor
• Minimize damages - apportionment, isolate value
to "footprint" of invention, royalty stacking
• Don't be afraid to try the right case to a jury

29. Should we be afraid of patent trolls?
Month Day Year Dentons US LLP Document reference # 29
• Patent Troll Claims Are Risks to be
Controlled, Not Reasons to Refrain from
Expanding to the US

30. The Bottom Line?
Month Day Year Dentons US LLP Document reference # 30
The United States offers broad and rich business
opportunities for European companies. While doing
business in the United States carries legal risks,
many of those risks of doing business can be
significantly controlled and many other risks of
doing business can be completely eliminated
through careful planning and execution.
"An ounce of prevention is worth a pound of cure!"
Benjamin Franklin

31. Thank you
Marc S. Friedman
Dentons US LLP
1221 Avenue of the Americas
New York, New York
USA 10022
© 2013 Dentons
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