Are we losing our rights to unregistered copyrights?

There's a myspace interview circulating that talks about the Orphan Works Act of 2008, which is now before the House of Representatives. There's some broad conversation that we're losing our ability to defend common law (they mean unregistered) copyrights and that everyone will have to register every work that they create in order to be able to claim copyright in their work. Quite a few people are up in arms about this.

Ok, before anyone gets their knickers in a knot, I took a look at the bill... I believe that their assesment of what you will own and not own is incorrect.

What the proposed act says is that if, after a diligent search, a person (who under the current law would be considered an infringer) cannot find the rightful owner of a copyright that they may file a notice of use with the Copyright Office and, giving as much attribution as they can find, they may use the copyrighted work for any purpose, including commercial ones.

Congress also proposes making a database for graphic, pictoral and sculptural work to enable those copyright holders to be found by potential infringers. They don't specify whether there would be a charge for entering your work in the database though...

However, if you were to find that your work was being infringed, you can bring an action against the infringer (they're looking at a dispute arbitration system for smaller businesses and copyright holders to make it less of a burden on the rightful copyright holder) and they have to pay you for the use of your copyrighted work.

True, the law would certainly be a pain for copyright holders. But to me, all that this means for most copyrighted works is that you have to make sure that you put copyright notice on all of your work and make sure you can be easily found from the information that you include.

If you want to take a look at the Orphan Works Act of 2008 (H.R. 5889), you can find it here. By the way, this bill has been kicking around for several years in different forms. For whatever it's worth, it has never passed.

If it really bugs you, as my mom would say when we would tell her that something was unfair, "Write your Congressman". In that vein, if you want to prevent the bill from passing, take a look at who sponsored the bill and make sure they're not re-elected in the fall....

How to choose the right form for your online business

I've been reading a lot on the discussion boards and I've noticed a lot of confusion about what form your business should take. So I thought I'd post this to see if I can help.

You want to set up your online business and you're wondering where to start. There are so many choices, you've heard from your brother that you need an S-Corporation, you've heard from someone else that you should just work as a sole proprietorship, and what the heck is an LLC?What in the world is everyone talking about?

Well, you first need to understand that not everyone wants to file as a company, corporation or partnership for their business. If you don't file, you will be classified as a sole proprietorship. If you want to be a sole proprietorship, generally, if you're not using your own name for your business, you should file a DBA with the Secretary of State and you're ready to go. Though this might be a good point to mention that you should always (with any business form) check with your county or city to make sure that you don't need a business license to operate a business in your location...

So that sounds easy. Why doesn't everyone do it? There's a really simple answer to that. Because it offers you NO liability protection at all. If you're sued and the person suing you wins their suit, or your business goes bankrupt and you owe your vendors money, you're on the hook. They can attach your personal bank accounts, your assets and, in most locations, even your home to satisfy their judgement.

So, what do people do to protect themselves? They form companies or corporations. There are three basic types, the C-Corporation, the S-Corporation and the Limited Liability Company ("LLC"). Generally, small businesses take one of two forms, either an S-Corp or an LLC for the flow through taxation (in an S-Corp or LLC, you only get taxed once on the proceeds of your company, in a C-Corp, you get taxed at the corporate level and again at the personal level for any money withdrawn).

Filing for an LLC or S-Corp creates a separate entity that runs your business. It allows you to protect your personal assets from your business failures (i.e., bankruptcy or lawsuits).The difference between the two is relatively insignificant (there are some tax differences, but not much that affects businesses that are starting out, which I'll address in another post at a later date). The most common reason that people choose an LLC over an S-Corp is that, frankly, it's cheaper to file and more flexible.

I hope this answers some of the questions that you might have about business forms. If you have more questions, feel free to contact me directly through the contact form at www.ebusinesslawgroup.com

Child Protection Law Overturned

COPA (the Child Online Protection Act) which was enacted in 1998, criminalized posting content that was considered to be "harmful to minors" for "commercial purposes" without age verification procedures (i.e., credit card age verification) was overturned today as violative of the First Amendment by the Third U.S. Circuit Court of Appeals. The Third Circuit upheld the ruling of the lower court finding that COPA was an unreasonable burden on free speech. You can find the text of the decision here:

http://www.ca3.uscourts.gov/opinarch/072539p.pdf

In pertinent part, the court stated:

"It is apparent that COPA, like the Communications Decency Act before it, 'effectively suppresses a large amount of speech that adults have a constitutional right to receive and to address to one another,' Reno, 521 U.S. at 874, 117 S.Ct. at 2346, and thus is overbroad. For this reason, COPA violates the First Amendment...."

The courts decided that the statute was overbroad and had a "chilling effect" on free speech. The statute does not have a narrow definition of "harmful to minors" and, as such, on its face would require that any content not suitable for a very small child would have to be placed behind a firewall. There are certainly less restrictive ways (such as filters) to keep minors from truly harmful content.

The court stated, "Unlike COPA, filters permit adults to determine if and when they want to use them and do not subject speakers to criminal or civil penalties...."

So what does this mean for you if you have adult content on your site? Essentially nothing yet.

It is likely that the government will appeal the ruling to either a full panel of the Third Circuit or to the Supreme Court. Even if this law was struck down as being unconstitutional, Congress will, undoubtedly, relegislate the issue immediately. The best advice for adult content sites is to keep your age verification system in place and continue to keep minors off of your site.

What's the difference between trademark, copyright and patent?

I've noticed over the last week or so of participating in discussions on various discussion forums that business owners seem to be really confused about what they need to do to protect their intellectual property. The biggest problem that people seem to have is that they don't understand the difference between copyright, trademark and patent.

I can't possibly go into every nuance here (maybe in later posts), but I want to give just some basic information about each:

Patents
First off, I would NEVER suggest trying this one on your own. You need to find a qualified patent attorney to help you through the process.

There are two types of patents, utility and design. A utility patents are for processes, machines, products or improvements to any of these. Design patents cover the ornamental design of a product. For your invention to be patentable, it must be novel and a non-obvious invention.

The advantage of a patent is it doesn't have to be something that you've actually reduced to a physical form. The idea is enough. For example, you have an idea for how an existing product can be improved that is novel and non-obvious. You don't have to take the product and actually make the modification to get a patent.

Patents last for 20 years from the date of registration.

Copyright
A copyright protects any "original work of authorship" (inlcuding sound recordings, graphic work, etc.) that is either published in a "fixed form" or registered with the copyright office as an unpublished work. It's not necessary to have a lawyer to register at the Copyright Office for you (though sometimes it makes it easier for you) and, if you do it online, it costs $35.

You don't need to register your copyright to have it be valid. As soon as it's fixed in a tangible medium, it's copyrighted. But you should make sure that you post notice that your work is copyrighted by using the year, the (c) symbol and the name of the copyright holder. However, if you want to enforce the copyright, you need to file it with the Copyright Office.

Copyright lasts for the life of the creator plus 70 years.

The following cannot be copyrighted:

"Titles, names, short phrases, and slogans; familiar symbols or designs; mere variations of typographic ornamentation, lettering, or coloring; mere listings of ingredients or contents

Ideas, procedures, methods, systems, processes, concepts, principles, discoveries, or devices, as distinguished from a description, explanation, or illustration

Works consisting entirely of information that is common property and containing no original authorship (for example: standard calendars, height and weight charts, tape measures and rulers, and lists or tables taken from public documents or other common sources)." - US Copyright Office.

Trademark
A trademark is a "word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others." (USPTO). They also don't need to be registered in order to have rights, but do need to be registered in order to pursue an infringer in Federal Court.

You can use the TM or SM mark whether or not your mark is registered, but you can only use the (R) mark once registration has occurred.

There is no requirement that says that you have to register your mark with an attorney, but there are recent decisions by the TTAB (which I will probably discuss in my next blog post) that can cost you in a big way if your mark is registered incorrectly. I would recommend using an attorney who is familiar with the latest rulings in order to make sure you are well protected.


I hope that this helps in your quest to protect your intellectual property.

Welcome!

Welcome to the Blog of Burgess. It is the accompanying blog to the ebusinesslawgroup.com website. As such, this blog will be dedicated to commentary and discussion of issues affecting e-businesses. Sometimes, we'll talk about pertinent news; sometimes it'll just be my commentary on general issues.

I'm always happy to accept suggestions if there's a topic that you'd like me to talk about. You can contact me here.

Talk to you soon!