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Moving on up – and out

Some of you may have noticed that our firm has not published a new column in a few weeks now. The reason for this is that we were engaged in a Major Office Move.  You know the kind: anguished over for months, thought about repeatedly at 3 a.m. and again at 6 a.m. and over dinner with your spouse. But our move was inevitable. The firm has grown and along with that, we had outgrown our old office suite in more ways than one. In addition to simply needing much more space, we also wanted to be in offices that better reflected the firm’s character and personality.

This is, technically, our third space in the company’s history and we have been able to learn from our past experiences and plan for the future. For example, we learned that as you add attorneys to your staff, those attorneys tend to schedule meetings with clients and prospective clients. Also, if you have multiple meetings back-to-back and your main lobby is the size of a British phone booth, things will get crowded and look like I-25 prior to T-REX.

Generally speaking, this is not good for business.

While I can’t say that moving a law firm, or any business for that matter, is something I would want to do on a regular basis (particularly when it comes to getting employees packed up and ready to go prior to the movers arriving), businesses can seize the move as a great opportunity to reflect upon where they have been and where they are going.

A few columns ago I talked about the opportunities that spring provides to do some spring cleaning for your business. It was essentially a mini-audit for the business owner to determine if they were covering all the legal details necessary to ensure the vision they have for their company. As we were going through the process of finding new offices, I became aware that the moving process itself forces you to take stock of your company and start thinking about what that company will look like years down the road.

Through the myriad of necessary decisions inherent in moving a business — like office location, size, configuration and the type of building finish and personality — you are organically lead to essentially constructing a strategic plan for the length of the term of your lease.

Where do I want to be located? How many employees do I have now and will have in the future? What does the space say about my company (or does it even matter)? How long do I want the lease to be? What are the main functions of my business and will we be adding any lines of business in the future that might need special accommodations or a special environment?

It’s easy to consider staying put: but if one thing is certain it is the inevitable, change.

It’s easy to think of the headaches of moving, but what if, instead, you and your staff spent the time leading up to the move as a fun exercise of strategic planning, goal setting and visionary pursuits that can revitalize your business and possibly open up opportunities that were not perceived before? What inadvertently happens is that you become more in touch with your company’s mission and can therefore take measure of how successful you are in keeping true to that mission.

Sure: No one necessarily wants to stop and carefully think through the details of a strategic company vision. And the actual act of moving is often painful, much like herding cats.

But a business move can be cathartic. Furthermore, the momentary pain of moving is temporary, yet the fruits of your labor are everlasting – especially if the new space has a great view, like Leyendecker & Lemire, LLC’s new offices. Come see the digs: 5460 S. Quebec St., Suite 330, Centennial, Colo., 80111. We make good coffee.

Clash of the tax and retail titans

Since I counsel a lot of online businesses, including online retailers, I am often asked about the sales tax implications of online sales. Generally speaking, the answer is pretty easy: If you are a Colorado business and sell goods to individuals residing in Colorado, then you have to collect Colorado sales tax and the appropriate county and city taxes from the consumers and remit the sales tax to the appropriate taxing authority.

Technically speaking, Colorado consumers are supposed to report and calculate the value of goods purchased from out-of-state business and pay the state government the appropriate tax. Of course, no one does this, and the state has no way of knowing how much each taxpayer purchases and how much tax is owed.

In an attempt to capture all of these unpaid taxes, the state passed what became known as the Amazon Tax in 2010. The Amazon tax required internet retailers to collect the sales tax from Colorado consumers, or in the alternative, notify each Colorado customer and the State in writing that they owed sales tax on their purchases and provide the customer with a list of all goods purchased by the customer and the amounts spent.

The Amazon Tax poses many issues for large and small online businesses alike. In the case of a large retailer such as Amazon, the task of complying with Colorado’s law is mammoth, due to the enormous volume of transactions the company processes. It would force Amazon to specifically set up unique systems just for Colorado customers.

If every state enacted differing laws concerning the collection of sales tax with differing requirements, it could be a nightmare for large nationwide retailers. Likewise, for smaller online retailers, the Amazon Tax potentially poses a large cost burden in acquiring the systems that would allow the collection of the tax, or complying with the notice requirements.

Enter the U.S. Constitution and the commerce clause. The commerce clause is getting a lot of press these days because of “Obamacare,” but it is also intimately connected to online commerce. In this instance, we are concerned with what is called the reverse commerce clause – basically the theory that state laws cannot place an undue burden on interstate commerce (commerce between states).

In March, Federal District Court Judge Robert Blackburn tossed out the law, stating, “I conclude that the veil provided by the words of the act and the regulation is too thin to support the conclusion that the act and the regulations regulate in-state and out-of-state retailers even-handedly,” and that the law and regulations “impose an undue burden on interstate commerce.”

This ruling confirms what scholars and commentators have said for a long time – any sort of taxation on internet sales has to come from a national level. Given the plethora of issues already being debated at the national level, I think online retailers are safe from any additional government involvement – at least for a little while.

A grape by any other name is still a grape…

 

When launching a new company or adding a new product or service, a name must be determined to brand the company, product or service. In the legal field, we refer to brand names and logos identifying a good as a trademark; and brand names and logos referring to services as service marks. However, the term “trademark” is often used generically to refer to either trademarks or service marks.

Hopefully, your chosen trademarks help your company capitalize on the marketing, advertising and goodwill generated by providing a desirable product or service in the marketplace. Trademarks identify your company, its products and services. Those customers who have positive impressions will seek you out and fuel your company’s economic well being — and the trademark helps sell all of that economic vibrancy.

Picking an ideal name or mark is usually hard, but it needn’t and shouldn’t be. There is no perfect name or brand. Rather, the value of the brand is developed over time by providing a quality service or product that cements a favorable association in the mind of the consumer with the trademark.

Would Amazon.com be less successful and prominent today if its name was Gigantous.com? How would a branding expert have critiqued Jeff Bezos’ Amazon moniker?  The expert might have cautioned Bezos that the name was too gender specific and would run the risk of alienating some men: Amazon refers to a mythological nation of warrior women. Perhaps the expert would have been concerned that the term would cause a negative association with the Amazon river and the famous man-eating fish that inhabit it: To most of us the thought of falling into the Amazon river and being devoured by a ravenous school of piranha is not a good one.

Yet Amazon.com is the name of the company and despite the potential negative associations the company has become for many the go-to internet locale for books and all matter of goods. Be honest: When you think about the term, “Amazon,” the association that first pops into your head isn’t warrior women or the South American river. The reality is that if Amazon.com was Gigantous.com instead, it would have made little difference. We would just associate Gigantous.com as the “go-to internet locale for books and all matter of goods.”

The most important consideration in choosing a name is simple: make it unique and different from all others in your company’s field or space. The more unique and different your mark is the better. In most cases, you want to stand out from the competition so that the goodwill derived from your marketing and advertising efforts, your customer service, your unique and superior products and/ or services accrue to you alone and not to the competitor down the street. Some of the best brand names provide no suggestion as to the associated goods and services offered under the brand.

An alien flying in from Mars that has a perfect grasp of the English language but no knowledge of our commerce wouldn’t correctly associate particular goods or services with trademarks like Google, Apple, Xerox, McDonalds and Amazon yet I am certain you would. The values in these trademarks aren’t the names themselves but the goodwill developed over the years. For example, Apple in a few short years through savvy marketing and promotion has convinced all of use to associate the brand with cell phones.

On the other hand ubiquitous trademarks can be extremely problematic especially if the adopter of a largely descriptive mark is a newcomer or smaller market player. Years ago, Homebase was a home improvement store that had a significant presence in Colorado and some other states, but it was no match for the much larger Home Depot. In my part of town, the two stores were located a mere couple of miles apart.  Even though I knew the two apart and favored one over the other, I still had to stop and think when talking to neighbors and friends about where I purchased a new piece of lawn care equipment. And I am certain that more than once I got it wrong. How much of Homebase’s advertising and marketing actually drove confused consumers to Home Depot and how did this confusion ultimately contribute to Homebase’s demise?

Finally and perhaps most important: Your company’s marks should be Google friendly.  Today, a consumer is more likely to consult a search engine to find a company or a particular product instead of the phonebook or even an online directory. If your trademarks are comprised of common descriptive words, chances are your product name may not even pop up on the first page of search results. Ideally, any trademark name you choose should be unique and different enough that when the mark is typed into a search engine relevant information appears prominently on the first page of results.

It’s ultimately not really the perfect name or trademark that scores the big recognition; it’s excellent products and services, coupled with strategic advertising, superior experience — all delivered over time.

This column is also available at Colorado Business Magazine.

Who Owns the Copyrights: An important read for any business that uses independant software or website developers

“I paid for it, so I own it, Right?”  – How to avoid costly pitfalls in the world of IP.

The scene is almost identical every time:  a website developer is holding a website he designed for our prospective client hostage because of a dispute.  “I paid for him to design the site, so I own it, Right!” This seems reasonable, as confirmed by normal daily consumer transactions.  I pay you money and you give me whatever I purchased.    In most cases the above concept is an accurate reflection of the law.  However, sometimes the world of Intellectual Property can be counter intuitive.  Mistaken understandings can prove costly and damaging.  Sometimes with IP, especially copyrights, you may have paid for it, but you don’t own it.

Copyrights protect original creative works of authorship.  Some of the more obvious items subject to copyright law are books, photographs, movies and music.  However copyrights can also extend to items such as computer software, website designs and architectural plans.  U.S. copyright law grants the author of a work the exclusive right to reproduce, adapt, publically display and distribute the work.  The Author of a work is generally accepted as the person who originates the work – the programmer, the photographer, the web designer etc.   A business is considered to be the author when one of its employees creates the work or the work is deemed to be a “work made for hire” in a written agreement and the work falls into one a few exceedingly narrow categories that rarely come into play in the creation of software code or websites.  Put bluntly, a business does not automatically own any copyrights to something created for them by an independent contractor or another business.  Put another way, by default the developer owns the rights to the code or website you paid him to develop not your business.  That sound you just heard is reader’s jaws hitting the floor.

So what does the money you spent get you: an implied license to use the work as agreed to by the parties.  In the context of software code, you can continue to use that code in your business; however, you may not have the right to use someone else to modify the code.  This comes up often in the customization of large software packages.  Companies regularly pay hundreds of thousands or even millions for software packages and then hire outside developers to implement and customize the software for the particularities of their use.  Unless a developer assigns the copyrights associated with customized code to the business in writing, the developer will own the rights to the customizations and the business will merely have an implied license to use the customizations.  If the business and the developer have a falling out, the business can rely on its license to continue to use the customizations.  However, issues can arise if the business needs make additional changes to the customized code.  For example, if the business needs to do a fresh install of the software which would wipe out any customization the business might have done, they could lose everything that they paid for.  Another all too common scenario involves the development of websites.  Often developers will offer deep discounts on website development if the client opts to host with the developer.  Usually these hosting rates are greatly above the going market rate.  The dirty little secret is that the developer is only offering a license to use the website to the business as long as they host the site through the developer.  The business gets caught in a catch 22, they either have to continue to pay exorbitant monthly hosting fees, or if they switch hosting services, they will have to get a whole new website.

So how does a business protect itself?  The answer with a well drafted contract.  While work done by an independent contractor is not automatically considered a work for hire, copyrights can be assigned.  However, these assignments must be in writing and signed by the parties.  It isn’t good enough for the developer to simple verbally agree to assign the copyrights.  The assignment of the copyrights should be discussed up front often before or contemporaneous with negotiating price.  Whenever embarking on a project that might involve these sorts of rights for your company, you should consider having an intellectual property attorney review the contract to at the very least make sure that the company is really getting what you believes it is are getting.  Otherwise you could be in for a rude awakening sometime in the future.

By | January 10th, 2012|BUSINESS LAW, COPYRIGHTS, PATENTS|0 Comments

Colorado Copyright Attorney Tips: #1 Secure Your Wireless Router!

Over the past year or two , Leyendecker & Lemire has seen a huge rise in potential clients coming to us regarding lawsuits regarding illegal downloading of movies.  In the past two years there have been several prominent lawsuits filed against thousands of alleged infringers.  In fact,  a company called the US Copyright Group (“USCG”) has built a business of approaching independent film makers (usually films that have won OSCARS®) to allow USCG to enforce the rights on the film makers behalf.  I suspect there is a sharing agreement based on whatever USCG is able to collect from potential infringers.  Anyway, USCG files lawsuits with thousands of “John Doe” defendants, which are placeholders for people that have certain IP addresses that illegally download the movie through bit torrent sites.  USCG then subpoenas the ISP and gets the individuals identity.  Once they have the identity, they send a demand letter to the individual requesting thousands of dollars or the individual will be served in the lawsuit and face an award up to $150,000.00.  The two main movies we see this for is the Hurt Locker and Far Cry.  While some recent developments have potentially limited companies like USCG’s ability to sue thousands of defendants from various states in one lawsuit, there is still may be a threat that they could file against large groups of people in the state that they reside and this issue will be one that will continue into the near future.

There are usually two different categories the individuals that receive these notices 1) those that intentionally downloaded the materials and 2) those that have no earthly idea how they are involved in the situation.  The latter group is composed of parents with children, people with roommates and those with unsecured wireless routers.  Unfortunately these potentially innocent people are now unwittingly part of a mass shakedown that leverages the legal system.  In my opinion USCG’s business model strategically prices its “settlements” at a point that is a pretty big hit for the alleged infringer, but cheap enough that it doesn’t make economic sense to fight it in court.  Therefore, it makes economic sense for individuals to fork over thousands of dollars even if they haven’t done anything wrong.  This is especially true in the case of an unsecured wireless broadband router.  Many people don’t realize that when they purchase a wireless broadband router that its default configuration is set to have the security features disabled.  Therefore, anyone that receives the wireless signal can log on and surf the web using your broadband connection – your next door neighbor, the person that live above or below you in an apartment complex or someone sitting in their car outside your residence with a smart phone or laptop.  Moreover, your IP address is associated with everything that the individual does while they are on-line.  Furthermore, since the demand letters often come more than 4 months after the movie was downloaded, figuring out who did it can often be hard as most consumer routers do not keep their audit logs for long, so any evidence that could help prove your innocence and get you out of the suit quickly is likely to be long gone.  Therefore you are left with the choice to either pay the settlement or pay even more in legal fees to defend the suit.  A much scarier scenario is if the 3rd party is utilizing your IP address to attempt to hack networks or download child pornography.  In that case you could have law enforcement knocking at your door.

So the big takeaway:  Be sure to enable the security features of your wireless broadband router.  If you don’t know how, find someone trustworthy to help you out.  Otherwise you could be headed for a whole host of legal problems.

By | October 14th, 2011|BUSINESS LAW, COPYRIGHTS|0 Comments

Denver Patent Lawyer to Appear on Tom Martino Radio Show to Discuss the Patent Reform Act.

On Wednesday, September 14th 2011 from 10am-12pm on KHOW (630 on the AM dial), I will be appearing on the Tom Martino show to discuss with him changes in the patent laws as a result of the Leahy-Smith America Invents Act that will be signed into law any day now.

Please tune in if you have the chance or if you are reading this after the fact listen or download the podcast at http://www.khow.com/cc-common/podcast/single_page.html?podcast=fullshow_martino.

Peter Lemire will be joining us as well and as is the case anytime we appear on the Tom Martino show, calls from inventors, artists, entrepreneurs and other creative types are welcome with questions on anything related to Intellectual Property Law including copyrights, trademarks and trade secrets in addition to patents.

By | September 13th, 2011|COPYRIGHTS, FIRM NEWS, GENERAL INTEREST, PATENTS, TRADEMARKS|0 Comments

Denver Copyright Attorney Discusses How You May Not Be Infringing Someone’s Copyright But Still Violating Copyright Law.

Over the years, Leyendecker & Lemire has represented numerous photographers.   One of the more frequent issues we discuss is the subject of photo credits.  While near and dear to the hearts of photographers, the topic of photo credits is not generally much of a legal issue.  This is mainly due to the fact that the issue of infringement has nothing to do with the issue of whether proper credit for the photograph was given.  In the past, I have had to explain to photographers that since the3rd party’s use of their image was not infringing (for one reason or another), there was not much we could do if the 3rd party left off the photo credit.  However, due to a recent decision from the influential 3rd Circuit, the next photographer that walks through my door might be a bit happier with the news I share with them.

This source of the jubilation is a decision that was handed down by the 3rd Circuit Court of Appeals, which decided that even when republishers’ use of a photo is deemed to be “fair use” (and therefore not infringing), the republisher swill still be liable to the copyright holder if they also fail to republish the photo credit information that appeared in the original photograph.

This liability stems from an interesting application of the anti-circumvention provisions of the Digital Millennium Copyright Act (DMCA).  These provisions, which prohibit anyone from intentionally removing or altering any “copyright management information”, were originally intended to prevent people from hacking CD’s DVD’s, or other digital measures to prevent the copying of digital content.   Copyright management information is broadly defined in the statute and includes “information conveyed in connection with copies … of a work …, including in digital form, … [t]he name of, and other identifying information about, the author of a work”.   While the republication of a photograph might not be what the drafters had intended when writing the anti-circumvention provisions, one can see how the republication of a news article on the internet would qualify as a violation of the statue. If the threat of monetary damages isn’t enough (they range from a minimum of $2,500.00 to $25,000.00 per violation); the DMCA also has criminal provisions if the violation is intentional and made for commercial gain.

So what is the lesson to all of you bloggers and people republishing content on the web or otherwise? Do not remove photo credits, even if your use of the photo is covered under fair use* If the rest of the circuits follow suit, it is likely you will be liable for civil damages and potentially could be branded a criminal.  The underlying case is pretty entertaining as it involves some New Jersey radio shock jocks and contains claims for defamation after the defendants made a bad situation worse by belittling and ridiculing the photographer.

*Prior to determining if you qualify for the fair use defense you should seek the advice of a qualified attorney).

By | September 6th, 2011|BUSINESS LAW, COPYRIGHTS|0 Comments

Colorado Intellectual Property Attorney Talks About Intellectual Property in 6 Minutes

Check out the first entry in our new video tutorial series concerning intellectual property.  Please provide feedback so that we can make the series even better.

By | November 1st, 2010|COPYRIGHTS, PATENTS, TRADEMARKS|0 Comments

50 Cent Copyright suit dismissed

Originally Posted 10/30/06

Well, as an update to a post we had a little bit back – it appears that 50 Cent no longer has to defend claims of copyright infringement. As you may recall, 50 was sued by (Lil Joe Wein Music, a company owned by Luther Campbell’s (of 2 live crew fame) former attorney and holder of rights to several of Campbell’s songs. They claimed that 50’s song “In Da Club” infringed on Campbell’s “It’s Your Birthday”. The material in question is the line in 50’s song “Go shorty, it’s your birthday” as opposed to “Go Shelia, it’s your birthday”.

Miami Federal District Court Judge Paul C. Huck, dismissed the claims against 50, stating that the phrase in question was “common, unoriginal, no copyrightable element of the plaintiff’s song.” Additionally, Judge Huck noted that absent the one phrase that the songs didn’t share any other similarities and that the line in question only represented 11 seconds of a 3 minute song. As a matter of law, the judge ruled that no reasonable jury could conclude that the songs were confusingly similar.

Of course this could all be appealed so we will wait and see what the folks at Lil’ Joe Wein decide to do.

By | October 14th, 2008|COPYRIGHTS|0 Comments

50 Cent Sued for Copyright Infringment

Originally Posted 1/24/06 

Rapper 50 Cent is the latest5 artist to be sued for copyright infringement. Lil’ Joe Wein Music, filed suit against 50 Cent in Miami federal district court claiming parts of 50’s “In DA Club” which appeared on the “Get Rich or Die Trying” infringe on former 2 Live Crew member Luther Campbell’s 1994 hit “It’s your Birthday”. Additionally, the lawsuit contends that Campbell’s song “I like it, I love it” can also be found on 50’s 2003 DVD “50 Cent- The New Bread” and it appears form the allegations contained in the lawsuit that permission or royalties were never properly paid to Campbell. The copyrights to “It’s your Birthday” and “I like it, I love it” are owned by Lil’ Joe Wein Music, which is apparently owned by Campbell’s former attorney. We’ll see how this one plays out, it looks to be an interesting case – including the story on how Campbell gave up the copyrights to his songs.

By | October 14th, 2008|COPYRIGHTS|0 Comments