Thursday, January 28, 2010

Who Dat Trademark?

Dear Rich: Recently several small shops here in New Orleans, Louisiana have received cease and desist letters from the NFL regarding either the Fleur de Lis symbol or the Who Dat slogan and the Saints. This has been put on merchandise for years by local merchants and never been challenged before. Because we win now all of a sudden people are breaking the law? Do you know anything about this? Is it copyright infringement or trademark issue and which is it the Gold and Black Fleur de Lis or the words Who Dat? Can you explain this to me? I think with all that this city has gone through the NFL should be ashamed. The Dear Rich Staff is not sure whether NFL Enterprises LLC can feel shame. They're a limited liability corporation, not a person. Oh. wait a second, the Supreme Court reported this week that corporations are people, so maybe we're wrong. 
Anyway, as for your question ... This is a trademark issue and apparently it has been a hot topic in NOLA for the past few weeks. As everybody seems to acknowledge:  (1) the NFL has not registered the 'Who Dat,' mark (although several other companies and individuals are trying for registration or claim to own rights) and (2) the NFL/New Orleans Saints owns two fleur de lis design registrations (No. 3135839 and No. 3210572 -- shown above). Our research indicates that the C&D letters that are going out are for efforts that combine the two elements -  the phrase and fleur de lis. The basis for this claim would be that consumers are confused into believing that this merchandise is associated with the NFL. Certainly, the NFL would be hard pressed to pursue vendors selling only "Who Dat" merchandise. So far we haven't found any lawsuits and we assume some PR-savvy NOLA trademark attorneys will jump on the issue (as so many others have) should it head to court. In any case, for now it appears as if it's a Mexican standoff.
Must See Dept. As readers know the staff here doesn't care about football but we'll make an exception for the best football movie since Burt Reynolds scored in The Longest Yard. 

Wednesday, January 27, 2010

Will My Trademark Graduate to the Principal Register?

ear Rich: My mark has been registered on the Supplemental Register for five years and continuously used during that time. Does it now qualify automatically for registration on the Principal Register? "Automatically" may not be the correct word but you should be able to "graduate" to the Principal Register without much problem. 
Supplemental v. Principal Registers. As you probably know one distinction between the two Registers is that all marks on the Principal Register are considered to be distinctive. Some were born distinctive -- think 'Google' -- while other more descriptive marks-- think 'Lean Cuisine' -- acquired distinctiveness via marketing and continued use (known as "secondary meaning"). When you apply for registration on the Principal Register -- yes, you must apply -- the examiner starts with the presumption that after five years of continued, exclusive use, the mark has acquired secondary meaning and is distinctive. (In legal terms, the five years of use amount to prima facie proof.) However, the Dear Rich Staff notes that despite this presumption, a trademark examiner, if doubtful of your mark's strength, can always require additional proof of distinctiveness. If we were a betting blog, we'd bet that your mark will soon make it on to the Principal Register.

Tuesday, January 26, 2010

Need Rights to Music for Video

Dear Rich: I am in need of a document but dont know exactly which agreement/form will serve my need. I have a video that needs music put to it and I have found a freelancer to do it. So I need a transfer of rights doc to get him to sign before he works on it so that we can copyright it under our name without ever running into a legal issue. Does a patent, copyright, trademark need to be registered by the original artist before an assignment can be signed? Sorry, we can't answer your question until we finish downloading this album. Amazon is/was offering it for $5.99!!! No video needed for this masterpiece.
Your Question. Right. If someone is commissioned to create a contribution for an audiovisual work (a movie, video, etc.) then that would qualify as a work made for hire under copyright law. And if you want to list your company as the "author," you'll have that option under the work made for hire arrangement. Our employer (insert FTC disclaimer here) sells books that include work made for hire agreements. You can probably fashion one yourself as long as you include the following provision:
Contractor agrees that, for consideration that is acknowledged, any works of authorship commissioned pursuant to this Agreement (the "Works") shall be considered works made for hire as that term is defined under U.S. copyright law. To the extent that any such Work created for Company by Contractor is not a work made for hire belonging to Company, Contractor hereby assigns and transfers to Company all rights Contractor has or may acquire to all such Works. Contractor agrees to sign and deliver to Company, either during or subsequent to the term of this Agreement, such other documents as Company considers desirable to evidence the assignment of copyright.
You'll also need to add some other stuff like an assurance that the material isn't taken from somewhere else, information about payment and other typical contract stuff. The agreement should be signed before the work is completed.
Do you need to register a patent, copyright or trademark before assigning it? Just to be clear, we're only talking about copyrights. No registration is required for the work made for hire agreement or for an assignment of copyright. A registration isn't necessary for assigning a trademark, either. You would need to have acquired a patent before assigning it since patents (unlike copyrights and trademarks) don't exist until the government says, 'Okay!' You can, however, assign a patent application or the underlying technology rights. That's enough blah blah blah for today, the Dear Rich Staff has got to go get melancholy with Frank.

Monday, January 25, 2010

How Do I Copyright My Mobile App?

Dear Rich: How do we copyright an app and do we need a marketing firm to help us once it is developed? Are we locked into Apple once it is published or can we sell it elsewhere as well? Will you send me an answer here or do I have to look on your webpage for your response? We assume you're asking how to file a copyright application since as you should know from following the Dear Rich blog, you get a copyright automatically once you finish your app--even an alpha version. 
Form CO. (BTW, we explain the procedure for registering an app in our new mini manual for app developers.) To file an application, you first need to determine which elements of the app are your original authorship. For example, if you only contributed some text and software code, and you licensed the rest, then you would only claim copyright (and seek registration) for what you created. You indicate that information in Form CO -- the all purpose copyright application -- in the section under 'authorship.' Later, in Section 4A of the form you must list the items for which you are not claiming copyright. 
Pick Your Category. As with any copyright application you must establish what "category" of work you are registering. Most software programs are registered as 'literary works' - an anachronism dating back to the fact that source code is written in letters and numerals. However, if your app is primarily pictures, choose 'visual arts' work, and if it is a graphics-heavy product like a game, choose 'performing arts' work. Don't worry if your app seems to straddle two categories -- just pick the one that seems best.
Do You Need a Marketing Firm? The Dear Rich Staff doesn't know whether you should use a marketing firm. That's not our bailiwick. In any case it sounds expensive
Can You Sell it Elsewhere? We don't see anything in the iPhone Developer Agreement that prohibits your porting from one mobile OS to another. 
Will We Send You the Answer? No, we won't send you the answer so if you were hoping for an email response, it's going to get very Godot-ish waiting by your inbox. Sometimes, if we're not  overwhelmed with managing our Netflix queue, scrutinizing credit card statements (Did we Skype to Czechoslovakia?), and monitoring our TransLink card, we do write back to people

Friday, January 22, 2010

Software Sales, Seller's Permits, and Sales tax

Dear Rich: I sell my apps exclusively through the Apple App Store and I'm planning to branch out and sell another program as a downloadable for Mac. Do I have to get a seller's permit and collect sales tax? You won't need a seller's permit for the App Store; you may need it for downloadable software. Read on (and check out our new app developer's guide.)
What's a Seller's Permit? A seller's permit, also called a 'resale permit,' authorizes you to make sales and collect sales tax from customers within your state. Since Apple is selling the apps to consumers, they would be responsible for collecting the sales tax if it were due. It's a different story if you are (a) selling downloads directly, (b) selling your apps on media devices such as CDs, or (c) you are selling application services. 
State Sales Tax Rules. In most states that collect sales tax, it's for tangible goods--items you can touch, such as jewelry, CDs, clothing, or food. Downloadable software and media has traditionally been off limits for sales tax. However, that may be changing as states have begun to realize the large tax revenues that are being lost. Reportedly, Alabama, Arizona, Colorado, Hawaii, Idaho, Indiana, Kentucky, Louisiana, Maine, New Mexico, South Dakota, Texas, Utah, Washington, and West Virginia now tax media downloads. Some of these states, like Kentucky and Washington, distinguish amongst downloaded materials - for example, taxing downloaded movies, music and eBooks, but not taxing downloadable software. The distinction apparently hinges on whether the download is traditional media or whether it's designed to perform a task--for example to clean up your registry. 
California Rules. One example is the California's sales tax rules (Regulation 1502) that state that:
"The sale or lease of a prewritten program is not a taxable transaction if the program is transferred by remote telecommunications from the seller's place of business, to or through the purchaser's computer and the purchaser does not obtain possession of any tangible personal property, such as storage media, in the transaction." 
In other words, without a physical object being transferred, no tax is due. On the other hand, if you convert your apps for sale as disk-based software, or you sell a guidebook to accompany your apps, that direct sale would be subject to sales tax because it involves physical goods. 
And if that weren't enough ... Also, a few states also tax services, so if you render application services you may have to collect tax on your invoices. (For example, all services are subject to sales tax in Hawaii, New Mexico and South Dakota.) The bottom line is that every state's list of exempt transactions is different, and states have different rules about when and how you must submit the tax. If you're caught doing business without a permit, you could be subject to a number of penalties--such as having to pay the sales tax you should have collected from your customers, along with a fine. You can find information on seller's permit requirements at the website of your state's tax agency. For a list of links to these agencies, go to the IRS website, choose "Business," then "Small Business/Self-Employed," then "State Links." Or, choose your state's link at the list of tax agencies provided at the website of the federal Small Business Administration. By the way, if you do have to pay sales taxes, there are, of course, several helpful iPhone apps for calculating it.
Whew ... was that long enough?  The Dear Rich Staff is exhausted!
Oh ... the movie. It's our favorite movie about a tax auditor?

Thursday, January 21, 2010

Can Husband and Wife Developers Be a Sole Proprietorship?

It's AppDev Week!! 
Dear Rich: My wife and I create applications together. Do we have to file a partnership tax return or can we file as a sole proprietorship? Whoa! The Dear Rich Staff usually doesn't do tax questions but since this is AppDev week here goes ...  (and check out our new app developer's guide.)
One Approach. According to this IRS directive, spouses that co-own and run a  business in a community property state (Arizona, California, Idaho, Nevada, New Mexico, Texas, Washington, and Wisconsin) can operate as a sole proprietorship (or "disregarded entity") and report their business income as part of their joint tax return (which has several obvious benefits) or they can operate as a partnership and file a K-1 partnership return. Couples in non-community property states, see below.
And here's another IRS bulletin. According to this IRS directive, if spouses co-own and run a business in a non-community property state, they must operate as a partnership and file a K-1 partnership return (unless they choose to be treated as a "qualified joint venture.") In all states, if one spouse owns the business and the other works for it, the business is a sole proprietorship, and the owner will have to declare the spouse as an employee or independent contractor. If the spouse occasionally volunteers to help the business without pay, you won't have to declare the spouse as an employee or independent contractor. 
Spousal Inspiration. By the way, did you know one of the biggest software companies was founded by husband and wife nerds. Some other couples we love who created stuff together -- Roy Rogers &  Dale EvansJohn Cassavetes & Gena RowlandsLouis Prima & Keely Smith, Ashford & SimpsonCharles & Ray Eames, and Masters & Johnson.

Wednesday, January 20, 2010

What's My Liability for Errors in My App?

Dear Rich: I've created an app that uses mass transit timetables. Since people rely on these to get to work and things like that I'm a little concerned about whether I will run into problems if there are errors in my app? What's the story on that? If an app provides incorrect information the developer is not likely to be liable to the consumer --- at least not under typical product liability theories. Although there haven't been any cases involving apps, we can analogize to the publishing industry, For example in one case, a book identified poisonous mushrooms as being safe to eat; in another case a map provided incorrect directions; in another case, a person was injured as a result of incorrect published information about enema procedures; and in another case, a woman became pregnant despite following published contraception procedures. In all of these cases, the producers of the information were not liable to the consumer. That's because published information is not considered a "product" for liability purposes. In addition, Apple's Terms of Service make it difficult for a disgruntled commuter to seek redress ("YOU EXPRESSLY AGREE THAT YOUR USE OF, OR INABILITY TO USE, THE SERVICE IS AT YOUR SOLE RISK.") That is not to say you can't be sued over these issues. It just means that you're unlikely to be liable for damages. Of course having incorrect information will torpedo your App Store ratings and your company's credibility (and check out our new app developer's guide).

Apps We Love Dept. The Dear Rich Staff hasn't located any incorrect information in our favorite mass transit app -- iBart -- which lets us know whether we should sprint from the Ferry Building to Embarcadero station. Well ... it used to let us know. One of our New Year's Resolutions is to never again (no,no) run for a bus (or Bay Area Rapid Transit).

Tuesday, January 19, 2010

Can I Break My Noncompete?

Dear Rich: I'm quitting my job as an SQL developer to strike out on my own doing mobile apps for the Android. The software I did for my employer doesn't have anything to do with the apps I'm working on. A lot of my apps are variations on old arcade games. Do I need to be concerned if I signed a noncompete agreement with my employer? We couldn't say without reading your agreement and knowing which state's law applies. (These states restrict or prohibit noncompetes -- Alabama, California, Colorado, Florida, Louisiana, Montana, Nevada, North Dakota, Oklahoma, Oregon, South Dakota and Texas). Under a standard noncompete you agree not to compete with your former employer for a period of time. If your mobile app business is competitive -- more information needed -- you may be in violation of the noncompete. Here's how some  people fight it. 
Why Skee Ball? The Dear Rich Staff hasn't bought this app yet, but we look at it longingly. What's holding us back is the disconnect between the memory of skee ball on the Long Beach boardwalk and the idea that we're experiencing something similar flicking our finger. We'll figure it out.

Friday, January 15, 2010

Producers Say No! Can We Use Old Footage?

Dear Rich: We were told by the producers of a local television station that a now defunct television program that hasn't aired for over ten years is no longer available for licensing to filmmakers because there isn't enough money in it and they do not have the staff to locate, edit and make available the footage. We actually have the footage taken from a SVHS master and want to include the show along with their on-screen talent (host and interviewer). We have permission from the host to use his likeness but have been unable to secure a license from the producers. What can we do? That depends. If someone refuses to give you permission to use copyrighted material, you can't -- with a few exceptions -- compel them to license the material. You can of course run the risk of using the material without permission under the theory that copying and performing a short snippet is a fair use because you are using the footage for purposes of commentary or criticism. The Dear Rich Staff found one example where the makers of a movie biography of Muhammad Ali used 41 seconds from a boxing match film in their biography. A court considered it a fair use. This site talks about the case and other video cases, as well.

Wednesday, January 13, 2010

Using Audience Reaction Shots

Dear Rich: What are the rules of use for the inclusion of "reaction shots" from an audience listening to a concert? Keeping in mind the camera is in plain sight and often the audience is notified by the performers during the show that they are being recorded for possible use in a documentary or other subject about the performers and or venue. The short answer is that you can probably use it since the audience members were aware of the camera's presence and purpose. In other words, their consent would be implied. You can shore up your situation at the next concert by posting information about the recording (and its subsequent use) prominently at the entrance. That provides audience members with a way to avoid the issue before the concert starts. 
You may wonder -- why would anyone want to avoid being photographed at a concert? According to the Dear Rich Staff's research, some reasons why an audience member may want to avoid being photographed at a concert include:  (1) the audience member told his boss he couldn't work the night shift because he was sick and then was seen screaming in support of Black Sabbath, (2) the audience member told her boyfriend she was busy that night and then was observed making out with another guy at the Taylor Swift show, or (3) a teenage audience member told his Mom he was attending a church special but instead attended a Pantera-Megadeth double bill.

Tuesday, January 12, 2010

Restaurant Celebrity Photos

Dear Rich: If you snap a photo with a celebrity in your place of business can you then use that photo in a documentary to show that the business attracts celebrity patrons? We don't have a written release from the celebrities. The short answer is, "yes," assuming you have the photographer's permission. You should not use the photos in ads for the restaurant -- that is, implying the celebrity endorses the restaurant -- and you probably shouldn't use the celeb photos in ads for the documentary, either. But if you're using them within the documentary simply to show that the celebrity ate at the restaurant--and the celebrity was aware the photo was being taken (no hidden cameras)  -- there shouldn't be a problem. 
Some celebrities that the Dear Rich Staff has seen while eating in restaurants: James Mason (yes, we're old), Charles Nelson Reilly, Patti Smith, and Tom Cruise (when he was still married to Mimi Rogers -- although she wasn't eating with him which is too bad since we're big Mimi Rogers fans).   

Monday, January 11, 2010

Can we use "No Soup For You"

Dear Rich: I work for a law firm that advertises on BART. We're preparing some new ads and we want to use the phrase NO SOUP FOR YOU (which you may recognize from a series of Seinfeld episodes). Our research shows that there are no live registrations at the USPTO for the phrase. We found a domain name using the phrase, "," which appears to be a Gainesville, Florida local restaurant web-guide. And according to the Dear Rich blog, copyright laws disfavor protection for short phrases. Are we correct to conclude that we're safe to use this phrase in our ads as long as we don't use it in connection with Seinfeld images. Absent any other Seinfeld connection in the ad, you should be good to go. Nobody appears to be exploiting "No Soup for You," as a trademark for legal services (and it's hard to imagine that anyone would). As you indicated, applications were made for restaurant services but both applicants never filed a statement of use indicating that they were actually using the mark. You are correct as to short phrase protection as well. It's possible that the Seinfeld creators could object under principles of unfair competition, arguing that your use confuses consumers as to Seinfeld's association with the law firm--a long shot that seems extremely unlikely. 
Bonus Question: Can 'Soup Nazi' be registered? Some readers may wonder if the fictional source of the phrase -- the infamous 'Soup Nazi,' can be registered as trademark. The answer is no. The USPTO won't register marks with the word 'Nazi' unless it is a historical reference that requires the term such as "VICTIMS OF NAZI PERSECUTION RESTITUTION TRUST." Otherwise, "NAZI" marks are rejected under Section 2(a) as being immoral or scandalous. 
Disclaimer: The Dear Rich Staff is flattered that a law firm is asking us for advice, however we must provide our special law firm disclaimer: (1) we don't carry malpractice insurance (and we hope you do), (2) answering your question doesn't create an attorney-attorney relationship, and (3) nothing we tell you is confidential (even if we say it is). 

Thursday, January 7, 2010

Using One Liners from Email List

Dear Rich: I edit an annual photography book, sold to raise money for charity, which accepts photos from members of an email list. We have a "click-wrap" agreement for the photo upload system. But the book also includes a few pages featuring a compilation of the wittiest quips that have appeared on the mailing list over the past year. I get the quotations either directly from the emails that go out on the list server or through third-party web sites that archive all the content that appears on the mailing list. Are there any copyright issues I should be aware of in taking one-line quotations like this? The short answer is that you're probably fine. Most short statements are hard to protect under copyright for various reasons we've mentioned before in our blog. So you're generally good to go when you take a one-liner from an online source. Issues are more likely to arise if you take several one-liners from a single source, or if your one-liners are actually three or four-liners. 
What about attribution? The Dear Rich Staff could go either way on this one so you can make the call. For many people attribution is a validating experience; others may prefer anonymity. Also, we probably don't need to say it -- but we can't help ourselves since we're in the legal business -- you probably want to avoid defamatory or privacy-invading one-liners. In the future, you can consider adding a "permission statement" to your mailing list terms and conditions, indicating that some statements may be included in the annual photo book. 

Tuesday, January 5, 2010

My Partner Stole My Idea ... or Did She?

Dear Rich: In 2003 I had a small company (controlling interest) with 2 lesser partners. At that time I had an idea and applied for a provisional patent. I included one of the partner's names as well since she worked with me on it but the idea was mine. Nevertheless, I was willing to share. When it came time to do the non-provisional patent the following year, she claimed she did not have any money to contribute for lawyer fees and since I had already severed our business relationship anyway, I dropped the patent idea and just went ahead and made the item and put it into my showroom collections to show customers. I told her it was OK with me if she also wanted to sell the item herself. I just recently discovered that she has somehow patented the item (and has added an assignee.) In PR material she touts herself as "the inventor of" and even won a design award last year. Is it legal to obtain a patent that was a collaboration, especially after a provisional patent had been filed with both names? After the item has already been shown to prospective clients? I have well-documented photos of the original prototypes I had made in China as well as photos from the company showroom that very clearly show the item. (The original computer date signatures are on the files and are a full 2 years before her patent was filed.) Do I have any legal recourse? That seems like fraud to me. What about the assignee? Whoa ... that's a lot of information. You may have a legal basis to pursue your ex-partner, but some things are unclear. For example, did you examine the patent that was issued to be sure that it was for the same invention that you sought to protect with your provisional patent application? If your ex is claiming something different, there may be no reason to list you. On the other hand, if you are an inventor -- you contributed to at least one of the claims--then your name should have been included in the patent application. If the patent is valid, it could be corrected to include you, and your ex should account to you for any income under the assignment (although patent law is a little odd about when co-inventors must account to each other). 
And don't forget the confusing 'one-year' rule. If the invention was offered for sale more than one year before your ex-partner's patent application was filed, then the patent should not have been issued and it doesn't matter who is listed as inventor (unless your partner is claiming priority on the basis of the provisional patent application and filed within one year of that filing date). If the patent should not have been issued and the USPTO made an error, the Dear Rich Staff believes you should talk to a patent attorney about starting a proceeding at the USPTO to invalidate the patent.

Monday, January 4, 2010

Will Online Registration Services Steal My Trademark?

Dear Rich: I would like to register a trademark, but how can I be sure that someone from the site won't steal my business idea? Are online registration services trustworthy? Aside from Nolo's trademark registration service (Insert FTC Disclaimer here), we cannot attest to other online site's trustworthiness (although they would have difficulty staying in business if they ripped off customers). In any case, as helpful as these services may be, you can probably bypass them and file directly at the USPTO website without much hassle. The Dear Rich Staff believes that you can trust the USPTO (and if you have doubts about trusting government agencies, you're best off not going into business at all). Some other things to keep in mind:
  • Unless your business idea consists solely of the name or logo (we're talking "Pet Rock"), there's not much to be "stolen" from a trademark registration. In any case, within days of your application filing, the information in the application will appear at the USPTO website where the public can see it. 
  • Business success requires more than trademark creativity. Even if your trademark application discloses a very creative trademark/product combination, it's rare that a creative trademark, by itself, guarantees success. You need marketable products and services, and usually, you must invest lots of effort and money into marketing those goods and services in order to popularize the mark.
  • Use it or lose it. Finally, in case you're unaware, the Dear Rich Staff advises that you won't acquire a federal registration unless you use the mark in commerce. (And if you're already using it in commerce, then the public would already be aware of your business idea.)