Sunday, March 09, 2014

Brett Kimberlin's Alleged Highjacking of The National Bloggers Club: I Have Serious Doubts That It Is True

I have been doing some research on Brett Kimberlin's alleged takeover of the National Bloggers Club, Inc, a Texas corporation.

I have grave doubts about the veracity of Kimberlin's claims.

There are two issues in this case.  One is the Texas Franchise tax; if it is not paid, a corporation can lose its active status and be denied the right to transact business in Texas.  The other issue is the organization's name.  I have seen no indication that the corporation loses the right to its corporate name if it fails to pay the state franchise tax.  Therefore, I doubt that Brett Kimberlin has obtained the legal right to use the name of the National Bloggers Club in Texas.

What forms did Kimberlin file and what fees did he pay to obtain the right to the Texas corporate name, "National Bloggers Club?"  I'd really like to know.

In order to do business as a Texas corporation, you have to jump through some hoops.  You have to submit Articles of Incorporation, issue stock, and elect a Board of Directors.  Did Kimberlin do that?  I doubt it.

Further, you can apply for a corporate name, but a preliminary approval of such a name isn't final.  The Texas Secretary of State website says this about corporate names:
  1. How do I determine whether the name I have chosen for my entity will be accepted for filing by the secretary of state?

    Under section 5.053 of the BOC, a filing entity cannot have a name that is the same as or deceptively similar to a filing entity, foreign filing entity, name reservation, or name registration filed with the secretary of state. Furthermore, a filing entity cannot have a name that is similar to an existing name on file with the secretary of state unless the existing entity consents in writing to the use of the similar name.
    Texas Administrative Code, title 1, part 4, chapter 79, subchapter C sets out the rules for determining whether names are the same, deceptively similar, or similar. If you wish the secretary of state to provide a preliminary determination on name availability, you may call (512) 463-5555, dial 7-1-1 for relay services, or e-mail your name inquiry to Corporations SectionA final determination cannot be made until the document is received and processed by the secretary of state. Do not make financial expenditures or execute documents based on a preliminary clearance. Also note that the preclearance of a name or the issuance of a certificate of formation under a name does not authorize the use of a name in violation of another person’s rights to the name. See Trademark FAQs for more information.
Until such time as Brett Kimberlin supplies documentation of Texas's approval of his use of the name "National Bloggers Club, Inc" I shall have grave doubts that he is telling the truth.  It seems to me that Brett Kimberlin and Bill Schmalfeldt may be in violation of copyright or trademark law, i.e. using someone else's trademark without permission, in a clear effort to disrupt existing business relationships.  I am no attorney, but that surely sounds actionable to me.

HOWEVER, I stand by my call for Ali Akbar's resignation.   Failure to file and pay franchise taxes timely does more than cause a corporation to lose its active standing.  It also removes the corporate shield for liability, exposing its directors to personal liability in the event of a lawsuit.  That is serious enough to call for Akbar's removal.


Alex Brant-Zawadzki said...

Kimberlin et al. claimed NBC in forfeiture. They didn't use the same name, they actually claimed the organization itself. It's not like they're trying to create a new entity with the same name.

Stogie Chomper said...

They cannot claim the organization itself. There is no Texas law that allows such a thing. Kimberlin is setting himself up for a major lawsuit for copyright violation.