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What does it mean to be “FTB Suspended?”

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By: Doug Bend If a legal entity has been “FTB Suspended” it was suspended by the California Franchise Tax Board most likely because the company did not pay its annual franchise tax. There are two potential problems with being FTB Suspended: (i) Someone could register a new entity name as the same name as your entity and… … Read More

By: Doug Bend

If a legal entity has been “FTB Suspended” it was suspended by the California Franchise Tax Board most likely because the company did not pay its annual franchise tax.

There are two potential problems with being FTB Suspended:

(i) Someone could register a new entity name as the same name as your entity and… 

(ii) you might not be provided with any liability protection if a cause of action arises while your entity is suspended.

The best way to lift the suspension is to file a Statement of Information with the California Secretary of State’s Office and to work with a CPA to get your corporation squared away with the California Franchise Tax Board.

You can read more about what it means to be FTB Suspended and how to revive a suspended legal entity here.

Please do not hesitate to contact us if you’d like a recommendation for a CPA or if you have any questions.

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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Protecting Your Art: Considerations for Entity Formation for Theatre Consultants

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By: Brandon Shelton I was sent another great question from our friends in the theatre relating mainly to the benefits and timing of forming an entity around a small voice and speech business.  I like this topic a lot, because there can certainly be some benefits to forming a legal entity with your state, but… Read More

By: Brandon Shelton

I was sent another great question from our friends in the theatre relating mainly to the benefits and timing of forming an entity around a small voice and speech business.  I like this topic a lot, because there can certainly be some benefits to forming a legal entity with your state, but there are plenty of considerations for you to weigh to determine if forming an entity makes sense for your line of work.  The specific question was:

“I’m a voice and speech teacher, and occasionally work as a private coach with folks on accents, vocal ease, etc.  The work comes pretty irregularly, so as of now I just collect my fee and move along.  I’m curious at what point I would want to (or have to) consider a more formal legal structure (sole-proprietor, LLC, etc… not even sure what all the options are!) and what the pros and cons are.”

As an initial matter, it would be good to understand what your options are in terms of actual entities.  There are numerous choices for forming entities, though since we are speaking about an individual person engaged in providing services to clients, I will narrow this discussion to three main entity types geared towards providing consulting services: sole proprietorships, LLCs, and corporations. 

Consulting Explained

Taking a step back, when individuals provide advisory or consulting services, whereby they assist clients in areas of their business or personal lives according to their expertise in a particular field or line of business, it’s fairly common to refer to the business owner as a consultant or advisor.  The difference between the two monikers is not hugely substantive, but many resources basically say that a consultant has a finite task or timeline by which they provide services, and advisors are basically the same thing just with a more indefinite, ongoing timeframe.  So a consultant might be hired for a finite period of two months, or through a particular Irish production for example, whereas an advisor is basically on call for all productions until the parties end their relationship.  Given this practice, it is relatively common to set up a formal entity through which to provide your consulting or advising services.

Sole Proprietorship

A sole proprietorship is technically not a formal entity that is created with your state.  It is more or less in existence as long as you are engaged in providing some services for profit.  In other words, you don’t need to file anything with the state or the federal government to be considered a sole proprietor.  If you are providing voice coaching services at any time, the state and the federal government is basically going to treat you as a sole proprietor.  Given that, there would likely be some requirements for you to report any income you make so that it can be appropriately taxed at either level.

Some individuals like to make the existence of their sole proprietorship a little more professional by giving the business a name and creating business cards and contracts on behalf of the business.  However, technically you are only allowed to do business under a proper name of the business (which initially would just be your name).  To allow your sole proprietorship to have a nice, customer friendly name, it would be a good idea to establish a fictitious business name (or ‘dba’) with the city or county that you live in.  That’s certainly not a requirement, however, as you could simply provide your services under your name as an individual operating as a sole proprietorship, and just make sure you reach out to your CPA to figure out how to report the income you make through your business.

The main drawback to a sole proprietorship, whether or not you have established a dba, is that there is no protection against personal liability for claims against your business.  In other words, if you are held liable to a client or a third party, the court could garnish your personal wages, or require you to liquidate your Spiderman comic book collection to pay off any such judgements.  I, for one, would not be happy about that.  For that reason, many individuals choose to form an LLC or corporation with the state in which they live to protect themselves against personal liability.

As a side note, you will also likely need to file for a city business license in the city through which you provide your services, which is true of any business (sole proprietorship or otherwise) that is doing business for longer than a week.  So regardless of which entity you choose, you should at least explore establishing your city business license to ensure you aren’t hit with any fines from your city.

Limited Liability Company

The most common type of entity that we see formed for consulting companies is the limited liability company (LLC).  The LLC has a number of benefits, including protection against personal liability, and a relatively easy to maintain corporate structure.  With respect to the latter benefit, corporations require annual shareholders meetings where you elect the board of directors.  LLCs typically do not have a board of directors (unless they create one), but are rather managed by “managers” who are established immediately and hold their positions until they leave or are replaced by a vote of the members (“members” is simply another word for owners of an LLC).

However, there are definitely some drawbacks to the LLC over the sole proprietorship.  In particular, LLCs must pay annual franchise taxes.  In California, that number is usually $800 a year.  Additionally, if you thought your business might grow into something more than just a one person shop, such that you would like to seek out investors into your company, investors are more likely to invest in a c-corporation due to the flexibility of issuing equity in a corporation.  However, consulting companies rarely bring in outside investment, as they are typically vehicles to provide personal services, and aren’t expected to grow into some giant corporate entity.  In any case, your main consideration would be whether or not the annual franchise tax is financially viable for your business, which would depend on the litigious nature of your clientele, and the amount of business you are bringing in.  If your service is rather docile, and you only make a small amount of annual income through your services, it might not be worth your time and money to create an LLC.  However, if you have a lot of work coming in, and you know your clients to be rather volatile and litigious, then it could be worth it to form the LLC to protect your personal assets from liability.

A side note on “piercing the corporate veil”: the “Business Judgment Rule” is a rule that essentially states that, as long as the managers, directors, and officers are using their business judgment to make decisions and act on behalf of the company, a court will not second guess their decision making, unless it is so divorced from reality that nobody in their right mind would have taken such an action, and will protect them from personal liability.  However, if they do breach that requirement, and use the company improperly, or fail to adhere to essential corporate formalities, then a court might “pierce the corporate veil” and hold them personally liable for claims.

Corporations

Corporations enjoy similar benefits to LLCs, which mainly relate to limitation against personal liability for claims against the company.  Additionally, as touched on above, investors will prefer to invest in a c-corporation due to the greater flexibility in equity.  However, the additional corporate formalities generally make this type of entity less attractive to individuals providing consulting services.  Given that fact, you would again have to weigh whether or not the expense of franchise taxes and additional formalities is worth your time and money.

One Last Wrinkle: S-Corp Elections

Newer tax rules allow both corporations and LLCs to file s-corp elections, which essentially notifies the IRS that you wish for your entity to be treated as a passthrough entity.  As a passthrough entity, certain amounts of your company’s revenue could avoid “double taxation,” where the company pays certain taxes on that income, and then when that income flows to you, you are taxed on the personal income.  This can have significant tax benefits to companies if you are bringing in a certain threshold of profit into your LLC or corporation.  To determine whether or not this is a good idea, you should always consult with a CPA.

Back to the Specific Question

Based on the question asked in this inquiry, it would be a good idea for individuals providing voice and speech coaches to consider if it’s worth their time and money to form an LLC or corporation, and further to consider whether or not they should file an s-election (which again should be at the advice of a CPA).  On the one hand, it could protect such speech and voice coaches from liability if claims are brought against them.  On the other, it can be an investment of time and money that might not be worth it.  If it does sound worth it, feel free to reach out to an attorney and CPA to further evaluate if forming an entity is right for you.

In terms of deciding when you should actually consider forming, it would again be a judgment call.  As the business grows, and/or your personal assets grow, you will likely be more inclined to create some form of legal separation between the two.  However, there’s no hard and fast rule as to when that should be.  To determine if now is the time, it would be a good idea to check in maybe twice a year to ask yourself: (1) How many clients do I currently serve? (2) How much revenue am I bringing in? (3) How litigious are clients in this field generally? (4) How much value has been built into my personal assets? and (5) Have I heard of any horror stories from similarly situated businesses being subjected to lawsuits through their course of business?

Obviously, some businesses will be riskier than others.  For example, on-site construction services probably carry greater risks of physical harm and claims from disgruntled clients than would voice coach consulting services (though feel free to disagree… us theatre folks can be pretty demanding sometimes).  Ultimately, it will be a bit of a judgment call to determine whether or not the risks outweigh the costs. 

Break a leg! (…But only yours… in fact if anyone’s legs are subject to breaking that often, maybe consider forming the LLC…)

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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All the School is a Stage: Music Licensing Tips for Educational Theatre

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By: Brandon Shelton I received an excellent inquiry recently about music licensing for theatrical productions of plays and recitals in school and college productions.  This is such a great topic, because it is probably one of the most relevant, yet least understood areas of law that apply to performance artists.  The question, in a nutshell,… Read More

By: Brandon Shelton

I received an excellent inquiry recently about music licensing for theatrical productions of plays and recitals in school and college productions.  This is such a great topic, because it is probably one of the most relevant, yet least understood areas of law that apply to performance artists.  The question, in a nutshell, was: what are the music licensing requirements of a director/producer of school productions?  To answer that question, it would be helpful to know the extent to which songs are even protectable under US copyright law.  Following that explanation, the intent of this article is to provide guidance regarding the use of music in local educational play productions and recitals.

The Bundle(s) of Sticks

The first step in understanding your obligations in licensing music is to understand what you have to license in the first place.  When I’m stuck in traffic unapologetically blaring No Tears Left to Cry, objectively it would appear that I’m only enjoying one thing: Ariana Grande’s song.  However, there is more there than meets my ears.  What I am listening to is a recording of a song written by someone (which, in the world of pop music, is unfortunately not likely to be the person in the magazine cutout hanging on the wall next to your bed).  That recording in and of itself has its own set of rights that the “author” owns, which you can think of as a bundle of sticks attached to it.  This is because copyright law grants the bundle of sticks to any person who “fixes” a “work of authorship” to any “medium.” Here, the “medium” is the digital sound recording, the “work of authorship” is the song, and it was fixed when Ariana laid down that sweet track.  So, you might think, well, as long as I pay something to Ariana, I should be good!  I wish it were that simple.

Without casting a judgment on who writes what in the world of pop music these days, there is a second medium that someone fixed somewhere: the composition.  As a certified band dork in high school, I assume it was on some coffee stained sheet music somewhere, but if I had to wager a guess, music producers probably have much cooler ways of fixing a composition onto some medium.  Bringing this conversation back to Earth: the point is that there are usually two “works of authorship” you need to consider licensing, depending on what you are relaying to your audience.  One might be a specific sound recording (if you choose to play a specific recording), and the other is the composition of the song itself.

So, What About My Play?

The specific question I received about this licensing issue was: “…when I put on a production that is basically a musical review/recital, what are my legal responsibilities?  I am not putting on a full production, just cherry-picking a song from Shrek, and a song or two from Anastasia, etc.  Should I pay royalties for the use of one song out of context from the show?”

The short answer is: maybe (I bet you thought you were going to get a simple yes or no.  Ha!).  The first question you might ask yourself is: is this a public performance?  One of the sticks in the bundle is the right to publicly perform the work.  It is generally accepted that private performances do not require a license (I know I’d feel pretty violated if ASCAP required there to be a credit card slot in my shower if I sang along to Sunflower), but the line between a private and public performance is not always very clear.  If you are putting on a small production for the singing and viewing pleasure of a few students in your classes, it’s not likely that that production would be considered a public performance, because only the people in your class performing the song are the ones permitted to attend the performance.  It is generally accepted that such performances are considered “for instruction only,” and thus outside the scope of public performances.

But what if you invite parents to the class to see the progress your students have made, or to give one last performance for their parents to hear?  Since this performance starts to creep outside of the “for instruction only” exception, this likely would require a public performance license.

There’s also a second embedded question in there, which is: “What if I only use a little bit of one song?” Copyright law protects the work, even if you only use some of the work, so a license is likely still needed.  There are some folks out there who have had some success in simply sending a request for permission to use a song (or a limited excerpt) in an educational production, especially if it’s for a really limited production run (like a single performance).  However, as a rule of thumb, it would be best to assume you might need to pay for a license.

One Last Wrinkle: Drama or No Drama?

To make things even more complex here, courts and licensing companies alike make a distinction between dramatic and non-dramatic public performances.  According to ASCAP:

As a general rule a dramatic performance usually involves using the work to tell a story or as part of a story or plot.  Thus, when songs are employed as part of a dramatic production – a Broadway musical such as Hamilton or in a ballet such as Twyla Tharp’s “Nine Sinatra Songs”, for example – the performances of the music are dramatic and beyond the scope of an ASCAP license.  In addition, excerpts of musicals accompanied by dialogue, pantomime, dance, stage action, or visual representation of the work from which the music is taken, and incorporating a live or recorded performance of a song into a story or plot – even though the composition was not originally written for a musical play – would also result in a dramatic performance of the song.

By contrast, when a singer sings songs from several Broadway musicals, a medley of songs from one particular play, or a medley of unrelated songs as part of a concert, revue or cabaret show, those are “nondramatic” public performances.

See ASCAP – Common Licensing Terms Defined, available at https://www.ascap.com/help/ascap-licensing/licensing-terms-defined. This distinction is important, because it determines who you can reach out to for permission and licensing.  If it is a dramatic production, then you actually have to reach out directly to the rightsholder.  If it is a non-dramatic production, then it would be sufficient to license the music through the licensing companies, though you can still reach out to the rightsholders for permission to perform the songs.  However, this distinction isn’t always particularly clear, so if you aren’t sure, it would be a good idea to reach out to the rightsholder directly to see what they will require for permission.  Since most licensing companies such as ASCAP and BMI are non-exclusive licensors, you can always reach out to the rightsholders no matter what to seek permission.

Back to the Specific Question

Based on this inquiry, our reader will need permission one way or another.  Since it sounds like the production being put on is more or less a medley of excerpts from songs being sung in a non-dramatic fashion to parents in a final production, it would be sufficient to seek a license for public performance of a composition through a non-exclusive licensing company, such as ASCAP or BMI.  However, if there is some kind of story being told on stage with your students, where the Shrek songs and such have some contribution to the story arc, then you will likely need to reach out to the rightsholders themselves for permission.  In either case, reaching out to the rightsholders would probably be the better option, or at least would be a good idea, since you can compare what the rightsholder asks of you in the way of compensation versus what the non-exclusive licensing companies require.  Below are some helpful links and contacts for those seeking to license performance rights related to Shrek: The Musical and Anastasia.  To reach out directly to the rights holders, try calling the licensing company numbers below for their contact info.

http://broadwaymusicalhome.com/production-rights.htm

https://www.mtishows.com/shrek-the-musical

https://www.mtishows.com/about/contact-us

ASCAP Phone Number: 212-621-6000

BMI Phone Number: 212-586-2000

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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Athlete Trademarks and The Spectrum of Trademark Distinctiveness

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By: Vivek Vaidya The trend in athletes seeking federal trademark protection is rapidly increasing. One recent example is UFC star Ronda Rousey, who filed for various trademarks having to do with the acronym “FTA” (F@#! Them All). The subject matter is getting increasingly unconventional, ranging from athletes’ nicknames such as former Texas A&M quarterback Johnny… Read More

By: Vivek Vaidya

The trend in athletes seeking federal trademark protection is rapidly increasing. One recent example is UFC star Ronda Rousey, who filed for various trademarks having to do with the acronym “FTA” (F@#! Them All). The subject matter is getting increasingly unconventional, ranging from athletes’ nicknames such as former Texas A&M quarterback Johnny Manziel’s “Johnny Football,” acronyms such as Rousey’s “FTA,” and phrases said in interviews like Marshawn Lynch’s infamous statement “I’m just here so I won’t get fined.”

In previous articles, Bend Law Group discussed the “Benefits of Trademark Registration” and “How to Trademark Your Own Name”. While athletes are trademarking their legal names, it is the bizarre nicknames, acronyms, and catchphrases for which they are seeking protection that present interesting questions about trademark distinctiveness. This article discusses the spectrum of trademark distinctiveness to shed light on why some of these marks are being granted, regardless of their unconventionality. In fact, these marks may be receiving protection because of their unconventionality.

Generally speaking, there are two types of trademarks: word marks and design marks. Word marks are things like names, phrases, acronyms such as “ESPN,” and tag lines such as “Just Do It.” Design marks are symbols such as the apple for Apple computers, colors, sounds, scent and product packaging (also protected by trade dress). This article discusses word marks. With respect to the distinctiveness requirement in word marks, there are three general categories: inherently distinctive, not inherently distinctive and generic. Below is a summary of each category:

Inherently Distinctive (receive protection immediately upon use)

  • Arbitrary Marks: Has meaning but the meaning has no relevance to the product or industry (e.g., “Apple” for computers). Highly protectable.
  • Fanciful Marks: A coined word without any meaning (e.g., “Xerox” for copiers). Highly protectable.
  • Suggestive Marks: Suggests something about a product, but indirectly or in an unusual fashion. Here, the consumer must engage in a mental process in order to associate the mark with the description of the product or service (e.g., “Greyhound” for bus travel company). Protectable.

Not Inherently Distinctive (only protectable at the point that they acquire “secondary meaning”)

  • Descriptive Marks: Describe the product or service they identify (e.g., “chewy” for cookies). Not immediately protectable, but may become protectable via “secondary meaning.”
  • Secondary Meaning: arises when the public has been exposed to use of the descriptive mark enough to recognize the mark not just in its descriptive sense, but also as an indication of the source of the product or service.

Generic Marks (not protected; not capable of identifying source)

  • Generic Marks: The common descriptive name of the good or service it is used to identify, or is otherwise viewed as synonymous with the product or service (e.g., “peanuts” or unadorned, realistic likeness of a peanut).

The above spectrum helps to explain why athletes’ unusual word marks such as “FTA,” “I’m just here so I won’t get fined,” and “Johnny Football” are registrable. Acronyms such as “FTA” and phrases such as “I’m just here so I won’t get fined” likely fall under the inherently distinctive category. “FTA” and “I’m just here so I won’t get fined” are arguably arbitrary/fanciful and thus highly protectable marks. “FTA” is just a random phrase that has nothing to do with Ronda Rousey as an athlete. The same can be said for “I’m just here so I won’t get fined,” because that phrase has nothing to do with Lynch’s ability to score touchdowns. At the very least, these marks are suggestive and still protected without having to acquire secondary meaning. This might be an indication that the more random and bizarre the word mark is, the more likely the public figure is to receive federal trademark protection without having to prove secondary meaning. A nickname like “Johnny Football,” however, would likely not qualify as inherently distinctive because the mark is descriptive. The player’s name is Johnny Manziel and he plays football. But even if the mark is not inherently distinctive, and as long as the mark is not generic, it may become registrable by achieving secondary meaning.

In sum, specific requirements must be met under federal trademark law for athletes to secure their unique marks, and it takes someone knowledgeable in the field to navigate this process efficiently. If you have questions about registering your mark, please give us a call at (415) 439-0153, or email us at info@blgtrademarks.com.

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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Business Succession Planning In The Internet Age

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This articles was originally published in Forbes. By: Doug Bend Many business owners build their businesses hoping that they will continue to generate income for their heirs after they pass away. However, businesses often die or lose significant value when the owner dies.  When strategizing how to make sure your business continues to thrive, it… Read More

This articles was originally published in Forbes.

By: Doug Bend

Many business owners build their businesses hoping that they will continue to generate income for their heirs after they pass away. However, businesses often die or lose significant value when the owner dies. 

When strategizing how to make sure your business continues to thrive, it is important to know that if you do nothing, your business already has a default game plan in place. If no additional planning is done, your business is an asset of your estate and will be subject to probate. 

There are four problems with this default game plan. First, it can take years for a court to probate your estate. In the meantime, your business can wither on the vine until the probate has been finalized. Second, if you do not have an estate plan, your heirs can fight over who will inherit the business. Third, whoever inherits the business under defaults in the law (intestate succession) might not be the best person to make sure your business will continue to grow and be successful. Lastly, if you have co-owners, they might not like the heir to your estate and could quickly get into disputes with the new owner that harm the business.

Estate Planning Attorney Megan Yip contributed insights regarding business succession, as our law offices are collaborating to provide the best insights into this emerging issue. There are two legal tools to consider when evaluating your options:

1. Buy-Sell Agreement

A buy-sell agreement is a legal contract between the co-owners of a company that addresses a variety of business-changing events, including when an owner dies. Instead of the deceased owner’s equity being a part of the assets that are distributed during probate, the buy-sell agreement can include an agreed-upon amount that will be paid to the estate in exchange for the business repurchasing the equity. Often, the purchase amount is financed with a life insurance policy on each owner of the business.

2. Proper Estate Planning

Instead of allowing your business to be subject to probate, the business owner can work with an estate planning attorney to have the business be an asset of the owner’s trust. This replaces a probate process that can take years with a more seamless transition from the deceased beneficiary to their heirs.

Whether you choose a buy-sell agreement or to include your business interests strategically in your estate plan, make sure you pay attention to the digital assets that are important to the continued operation of your business. Your business’s digital assets may include client lists and data stored in software systems, primary communication channels like email addresses, intellectual property or creative products, and even revenue streams like online stores or websites.

Here are my top three tips on considering your digital assets.

1. Know the policies that affect your tools. 

Most of our businesses today depend on software for managing client data, communicating with clients and keeping track of productivity. As part of your plan and regular course of business, review your software provider’s policies on what happens if your company needs to name a new point of contact, pay bills in a different way or be transferred to a different company in case the unexpected happens.

2. Balance security with redundancy. 

Many business owners focus on the security and safety of information and digital assets used in their business, and rightly so. A business’s success demands that owners and employees alike keep proprietary information and client information secure. However, that concern for safety needs to be balanced with a sort of redundancy that considers which trusted individual or team of people will have access to digital assets and an understanding of what to do with them if the owner or main management team is unable to tend to business as usual for any reason, including death.

3. Include digital assets in your legal documents.

Don’t just discuss digital assets; include an inventory of digital assets in your buy-sell agreement or estate plan. Get specific about who should get access to digital assets, how and at what juncture in case of emergency. Make a plan to review digital assets on a regular basis with your other assets, and keep in mind that they might change more often than traditional assets.

Making a detailed plan about who should have access and who should not have access to your business’s digital assets in the case of you becoming incapacitated or passing away is an important part of succession planning today. No matter what legal structure you employ to ensure your wishes for the continued success of your business come to fruition, developing a strategy for what should happen to the digital assets your company relies on needs to be a part of the process.

No one likes to think about dying. But taking the time to work on your business succession plan now can help ensure your heirs get the most value possible from the business you spent years of your life building long after you are gone.

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article

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Architectural Design and Copyright Law

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By: Matthew Cox The construction industry is governed by many different bodies of law.  Arguably, contract law lays the unifying foundation for the industry. But other bodies of law still play vital roles in shaping the ever-changing legal landscape.  Intellectual property, and specifically copyright law, is vital to the industry. Just who owns architectural or… Read More

By: Matthew Cox

The construction industry is governed by many different bodies of law.  Arguably, contract law lays the unifying foundation for the industry. But other bodies of law still play vital roles in shaping the ever-changing legal landscape.  Intellectual property, and specifically copyright law, is vital to the industry.

Just who owns architectural or engineering design documents associated with a construction project?  Does the owner who contracted with the design professional for design services own the documents? Or, does the designer, by way of work product created by intellectual means, retain ownership of the plans and specifications?

Design documents are subject to copyright laws in the United States; they fall under the category of “technical drawings,” which includes architectural plans.  Whether or not unique aspects of the design were protected after construction was completed remained a looming question until 1990. Finally, litigation resulting from this issue persuaded legislators to clarify the code.

The straw that broke the camel’s back was a case brought in 1988 by an architect against a homebuilder who allegedly copied the architect’s design after it had already been used to build the home for which the design was initially drawn up.  The homebuilder used the design and constructed an identical home elsewhere. The court found for the builder…. and found no violation of the copyright.

In response, Congress amended the copyright laws to more clearly define architectural work as the design of a building as embodied in any tangible medium of expression, including a building, architectural plans, or drawings.  This tightening of the rule brings in arrangement and composition of elements, but still excludes individual features. Under this rule, the design professional, by law, owns both the design documents, as well as the unique design elements of the structure—but not the individual elements.

Parties are still free to contract how they see fit, so most agreements contain provisions for the owner to retain a limited license for the plans and specifications while the design professional retains ownership of the  documents. The copyright can also be transferred. Issues arise when the design professional has concerns about use of the design in unanticipated ways by the project owner. In this situation, an indemnity agreement holding the design professional harmless and charging the project owner with providing a defense upon suit is an adequate risk management option.  The general rule of thumb has become: the professional designer retains ownership of design documents unless the parties agree otherwise by contract.

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction.  Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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Amazon Brand Registry: Add Trademarks To The Cart

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By: Vivek Vaidya The retail industry has been revolutionized by online marketplaces. Amazon leads the charge, with programs like Amazon Prime making it easier to purchase products online than going to a brick-and-mortar stores. The rise of Amazon has also caused an increase in counterfeiting, trademark infringement and the unauthorized resale of products on the… Read More

By: Vivek Vaidya

The retail industry has been revolutionized by online marketplaces. Amazon leads the charge, with programs like Amazon Prime making it easier to purchase products online than going to a brick-and-mortar stores.
The rise of Amazon has also caused an increase in counterfeiting, trademark infringement and the unauthorized resale of products on the platform. Third parties are selling products using the good will of others, resulting in lost sales and licensing revenue to the true owner of the brand. Previously, the only option for parties who believed their products may be victim to counterfeiting was to prove the infringement to Amazon, instead of the seller bearing the burden of proving that they are not violating the law. There has also been a growing concern with fraudulent complaints by parties who are not the true owner of a brand.

In an effort to streamline the thousands of complaints filed each day, Amazon has launched the Amazon Brand Registry. The Amazon Brand Registry allows brand owners, manufacturers, distributors, and resellers to control its content and marketing materials, including its titles, product descriptions, and product photographs. Most importantly, successful registration with the Registry establishes a brand owner’s valid ownership of a trademark with Amazon and provides an expediated process for causing Amazon to remove unauthorized sale of products bearing its trademarks. It also serves as a deterrent and a defense against fraudulent complaints.

The threshold requirement for joining the Amazon Brand Registry is trademark registration with the United States Patent and Trademark Office (USPTO). Not only can the store name be registered as trademark with the USPTO, but so can the individual products that are being sold, along with any logos and tag lines that are used. Copyrights registered with the U.S. Copyright Office can also be included, allowing copyright owners to efficiently cause the removal of infringing photographs, videos and other content.

If you sell your goods on Amazon, registering your trademarks with the USPTO and then with the Amazon Brand Registry is extremely important in the new retail landscape, and will provide great return on your investment. The process can be complicated, but we’re here to help with the logistics of protecting your intellectual property on Amazon and beyond.

Disclaimer: This article discusses general legal issues and developments. Such materials are for informational purposes only and may not reflect the most current law in your jurisdiction. These informational materials are not intended, and should not be taken, as legal advice on any particular set of facts or circumstances. No reader should act or refrain from acting on the basis of any information presented herein without seeking the advice of counsel in the relevant jurisdiction. Bend Law Group, PC expressly disclaims all liability in respect of any actions taken or not taken based on any contents of this article.

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