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iPscaling

Scaling your company’s iP or iPscaling is how innovative or creative businesses build value.

The “Concertina” principle shows business owners the way to build business value fast and efficiently.

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CARES Act Small Business Loans

The CARES Act establishes a new $349 billion Paycheck Protection Program. The Program will provide much-needed relief to millions of small businesses so they can sustain their businesses and keep their workers employed.
“This unprecedented public-private partnership is going to assist small businesses with accessing capital quickly. Our goal is to position lenders as the single point-of-contact for small businesses – the application, loan processing, and disbursement of funds will all be administered at the community level,” said Administrator Carranza. “Speed is the operative word; applications for the emergency capital can begin as early as this week, with lenders using their own systems and processes to make these loans. We remain committed to supporting our nation’s more than 30 million small businesses and their employees, so that they can continue to be the fuel for our nation’s economic engine.”
“This legislation provides small business job retention loans to provide eight weeks of payroll and certain overhead to keep workers employed,” said Secretary Mnuchin. “Treasury and the Small Business Administration expect to have this program up and running by April 3rd so that businesses can go to a participating SBA 7(a) lender, bank, or credit union, apply for a loan, and be approved on the same day. The loans will be forgiven as long as the funds are used to keep employees on the payroll and for certain other expenses.”
The new loan program will help small businesses with their payroll and other business operating expenses. It will provide critical capital to businesses without collateral requirements, personal guarantees, or SBA fees – all with a 100% guarantee from SBA. All loan payments will be deferred for six months. Most importantly, the SBA will forgive the portion of the loan proceeds that are used to cover the first eight weeks of payroll costs, rent, utilities, and mortgage interest.

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CoVID 19 Assistance

ALERT: Small Businesses Need to Take Action
Coronavirus Aid, Relief and Economic Security (CARES) Act
This Act was signed into law yesterday and takes effect in 15 days. It has requirement and help for small businesses. What kind of help? Would $10,000 help? What if it was not a loan but a grant for making payroll (if you keep your employees employeed through June 30 and pay interest through June 30)?

There is $350 billion for 100% federally-guaranteed small business loans and loan forgiveness packed into the Act, and It all goes into to effect two weeks from today. Right now, www.SBA.gov doesn’t seem to have any details. But here’s a run down…

Paycheck Protection Program (PPP)
Small businesses, nonprofits and veteran’s organizations with under 500 employees are eligible. Self-employed individuals and independent contractors are also eligible.

The maximum loan amount is $10 million through December 31, 2020, with the size of the loan tied to the average monthly payroll for 2.5 months. Loans can be used to cover payroll, benefits, mortgage, rent and utilities. Retroactive start date — February 15, 2020 — incentivizes companies to rehire staff that have been laid off.

Businesses with more than one physical location that employ no more than 500 employees per physical location in certain specified industries are eligible. Franchisees are eligible (food service at least).

LOAN FORGIVENESS
Businesses are eligible for loan forgiveness equal to the amount spent during an 8-week period after the origination date of the loan on payroll costs, most interest payments on mortgages, rent or utility bills. Amounts forgiven may not exceed the principal amount of the loan and eligible payroll costs do not include compensation above $100,000 in wages. Forgiveness on a covered loan is equal to the sum of payroll costs incurred during the covered 8-week period compared to the previous year or time period.

Economic Injury Disaster Loans

(Emergency declaration must be made for a designated area before loans become available. These are already in place and can be found at SBA.gov.)

Tax Credits and Incentives

Refundable credits and adjustments are available for employers affected by COVID-19. Deferral allows companies to defer payment on their 2020 Social Security payroll taxes to future years with no penalty. Half will be due at the end of 2021, and the remaining half in 2022.

Employee Retention Tax Credit
Employers who have been hit with at least a 50% loss in gross receipts compared to the same quarter last year are eligible. Allows companies that maintain their payroll to receive a 50% credit on wages of up to $10,000 per employee. Companies with 100 or fewer employees could obtain a 50% credit on all wages paid. This is a refundable tax credit.

Tax Credit for Emergency Paid Sick & Family Leave
Employers reimbursed through a refundable tax credit that counts against employers’ payroll tax. Submit emergency paid sick and family leave expenses as part of their estimated quarterly tax payments. If employer’s costs more than offset their tax liability, they will get a refund from the IRS.

Modifications for Net Operating Losses
This relaxes limitations on use of losses for tax purposes. Allows for net operating losses arising in a tax year beginning in 2018, 2019 or 2020 to be carried back five years.

New Mandatory Sick Leave and Emergency Family Leave Requirements

Through December 31, 2020, employers have to pay for sick leave and family leave, although employers with less than 50 employees might be exempted.

New Emergency Paid Sick Leave Requirements

Employers with fewer than 500 employees must provide 2 weeks of emergency paid sick leave for employees. Full-time employees must be compensated for 80 hours. Part-time employees must be compensated for their typical number of hours worked. What’s covered? Complying with quarantine related to CoVID 19 (100% of pay). Diagnosis or preventive care for CoVID 19 (100% of pay). Care for sick family member (two-thirds pay)
Care for child whose school is closed (two-thirds pay).

Who Pays for the Emergency Leave?
Employers initially front the cost of emergency leave, but will be fully reimbursed by the federal government within three months. Reimbursement covers both the wages paid and the employer’s contribution to employee health insurance premiums during the period of leave. Employers are reimbursed by a refundable tax credit that counts against employers’ payroll tax. Employers submit emergency paid sick leave expenses as part of their estimated quarterly tax payments. If employer’s costs more than offset their tax liability, the employer gets a refund from the IRS. New Emergency Paid Family Leave Requirements*
Employers with fewer than 500 employees must provide 12 weeks of (unpaid in part) job-protected leave for employees who have been on the job for at least 30 days.

The Department of Labor may issue exemptions for employers with less than 50 employees. This is TBD.

Details:

The first 10 work days (2 weeks) are unpaid. Then, 10 weeks of paid leave (up to $10.000?). Eligible employees may elect or may be required to overlap the initial two weeks of unpaid leave with two weeks of other paid leave they have available. Employers will pay no less than two-thirds of an employee’s usual pay. Family leave assistance is capped at $10,000 per employee.

What’s covered?
Care for child in the event of a school closure or their childcare provider is unavailable due to COVID-19.

Who Pays for the Emergency Paid Family Leave?
Employers initially front the cost of emergency paid sick leave but will be fully reimbursed by the federal government within three months.
Reimbursement covers both wages paid and employer’s contribution to employee health insurance premiums during the period of leave.
Employers reimbursed through a refundable tax credit that counts against employers’ payroll tax, which all employers pay regardless of non-profit/for-profit status. Employers submit emergency paid family leave expenses as part of their estimated quarterly tax payments. If employer’s costs are more than offset by their tax liability, the employer gets a refund from the IRS.

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copyright

Copyright Fees To Increase March 2oth!

If you’ve been “thinking” of protecting your copyrights through registration with the Copyright Office, but putting it off, then NOW is the time. Why?

The Copyright Office has announced a MASSIVE fee increase, up to 55% for some types of registrations. This will go into effect on March 20th! But I’ve got you covered…  30% Off the iPscaling Creative Copyright Workshop!

Watch This Video!

Get everything you need:

  • All-In-One Work Made For Hire

  •  Copyright Registration Training

  • One-On-One Momentum Call

  • Bonus: Copyright Application Tool

I have a special offer until March 19th for the first 100 applicants. Just use the coupon code "FINALLY30off" to purchase instant access to my iPscaling Creative Copyright Workshop, and you'll get 30% off on all of this:

  • Step-by-step instructions on setting up your account with the copyright office.
  • Step-by-step instructions for registering your first copyright.
  • Training to understand copyright ownership. (Avoid the mistake many business owners make.)
  • Download & customize your all-in-one work made for hire agreement.
  • Training on how to use your all-in-one work made for hire agreement.
  • An introduction to copyright law and the benefits of registration.
  • Learn additional considerations for more complex registrations.
  • BONUS: Get free access to our copyright organizational tool.  (Available Soon.)
  • BONUS: Receive free training on our copyright organizational tool. (Available Soon.)

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patent

Can I Patent This?

Yes you can!

That’s what the board said in ex parte Linden.

Examiners are challenging claims of patents that are patentable as being directed to “ineligible subject matter” under section 101 of the patent law. This means that the claims are not patentable, but only due to the invention being directed improperly to some “abstract idea” rather than some practical application. (This stems from the difficulty in applying the Supreme Court’s logic in its “Alice” decision, which has left many inventors and patent professionals, alike, seemingly lost in patent Wonderland.)

The board disagreed with the Examiner’s reasoning for rejecting claims as ineligible in ex parte Linden. So, this case is instructive for showing software that is patent eligible.

Since no claims recited any mathematical concept, the Examiner was mistaken to base a rejection of the claims on an algorithm being recited in the specification. At least one mathematical concept must be recited in the claims to even go there.

Also, while it’s possible for transcription to be performed by a human, the board found the claims directed to a specific implementation that could not be performed in the human mind. The board pointed to the limitations in the claims including the steps of normalizing an input file, generating a jitter set of audio files, generating a set of spectrogram frames, obtaining predicted character probabilities from a trained neural network, and decoding a transcription of the input audio using the predicted character probability outputs. These steps are directed to a machine, not the human mind.

The Examiner’s argument that the claims recited “organizing human activity” was rejected by the board, also, because these steps have nothing to do with human activity.

The board sided with the Applicant that “…the claims of the current application include specific features that were specifically designed to achieve an improved technological result…” providing “…improvements to that technical field.”

Thus, the boards decision provides a blueprint for overcoming hasty rejections of claims that fail to provide any logical reason that specific limitations of claims are patent ineligible. Too often, Examiners seem to be rejecting claims on flimsy accusations of patent ineligibility. More board decisions like ex parte Linden will be needed to correct this common practice, which persists, notwithstanding the patent office’s revised guidance issued in October 2019.

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trademark

Trademark Filing Change

The US Patent & Trademark Office announced that it will delay the effective date of its mandatory electronic filing rule change from December 21, 2019 to February 15, 2020.

Under this change, trademark applicants and registrants will be required to file their trademark applications and documents concerning trademark applications and registrations online using the USPTO’s Trademark Electronic Application System (TEAS). 

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Uncategorized

Google v Oracle

BREAKING: Supreme Court of the United States agrees to take up precedent setting case on copyrightability of software.

I don’t expect a ground breaking change in what the courts consider copyrightable, but this case does raise interesting legal issues.

The issues arise out of a brouhaha between Oracle and Google over Google’s rewrite of a JAVA-like operating system for Android devices that adopted the same API structure and calls as used in the JAVA programming language.

The Court of Appeals for the Federal Circuit, the “IP appeals court”, overturned lower court decisions that would have dismissed the case for no copyright infringement or found “fair use” by Google of the API structure and names.

It is black letter law that short names cannot be copyrighted.

Its also black letter law that facts cannot be copyrighted.

In fact, except for software, copyright only protects “original creative expression” and the content is not protected.

How a person expresses an idea is protected by copyright not the idea, itself. But how a person expresses themselves in source code is not really the issue, unless lines of code are actually copied.

17 U.S. Code §?102 (b) of the Copyright Act states: “In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.” Software is just another type of “original work of authorship”. So, copyright doesn’t extend to the process or method.

For the most part, Google rewrote the source code for its operating system, expressing it in a different way. So, there doesn’t seem to be any significant actual copying by Google of any “original work of authorship.” Google chose to keep the functional API structure and call names substantially the same as Oracle’s JAVA API, but these calls to the code are a structurally functional process used to access Google’s operating system. It did this to make it easier for JAVA programmers to program for its Android operating system.

This is where it gets interesting.

Copyright’s protection of creative authorship is not an ideal protection for software, which gains its value from the functional procedures, processes, systems, methods of operation, and concepts — not from the expression of these. The real creativity in software is not how the source code is expressed but how it functions, the logic.

There’s nothing inherently creative about the expression of an API, which is utilitarian in nature. Nobody reads an API for enjoyment or to learn something, other than how to program a device to do something with the library of calls provided by the operating system.

Now, here’s the rub. It’s patent law that is intended to provide protection for a new, nonobvious and useful “…procedure, process, system, method of operation…” — not copyright. But the courts have been invalidating software patents for all types of “abstract ideas” and “algorithmic methods”. So, large swaths of software applications are no longer considered patentable subject matter.

If the functionality and utilitarian aspects of software are held to be unprotected by both copyright and patent law, this leaves trade secret law as the last vestige of protection for software. However, trade secrets only protect against misappropriation, not reverse engineering or independent redevelopment.

Many programmers embrace open source and might consider it to be just fine that companies can’t protect software using intellectual property rights. They see the benefits of reusing code and technological efficiency as a benefit to society and don’t see any significant benefit to keeping programs proprietary.

In fact, the Electronic Frontier Foundation (EFF), which declares itself the “leading nonprofit organization defending civil liberties in the digital world”, is celebrating the decision by the supreme court to reconsider the decision made by the Court of Appeals for the Federal Circuit.” The Supreme Court now has an opportunity to reverse the damage done by the Federal Circuit,” declare authors Michael Barclay and Katharine Trendacosta in an article posted to the EFF website.

They point out that the U.S. Solicitor General in the Obama administration opposed review by the supreme court and disparage the reasoning used in its briefs opposing review.

However, relying solely on trade secret law to keep software proprietary, ironically, could make it much harder to disseminate technology benefits. Programmers could be subject to egregiously restrictive covenants in employment and consulting agreements.

Let’s wait and see how the supremes deal with the issue. Proprietary software serves a purpose, allowing companies to invest and recoup some of their investment in large software development projects.

The term of 95 years under the Copyright Act is not at all reasonable for software. Even the 20 years from filing provided for patents seems long. Maybe it’s time to develop a new type of IP, with a shorter term, which provides protection for programmers without unduly burdensome repercussion on innovation in the technological arts.

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Facts Not Copyrighted

A recent Florida case is a good example for teaching what copyright protects and doesn’t ptotect. Netflix was sued by the author of a memoire in Vallejo v. Narcos Productions LLC.

The court dismissed the case, because Netflix did not infringe Vallejo’s copyrighted work. While there was copying of some facts from the work, these facts do not belong to Vallejo.

According to the decision, in one alleged instance of copying “…the only similarities between these two scenes are the blindfold, caressing with a gun, and Plaintiff/Velez is aroused.”

How these facts are portrayed in the fictionalized version presented in the Narcos series is substantially different than the description in the memoir.

“These facts are not protectable. The idea of a sex scene involving a gun is not protectable…. There is no dialogue that has been copied, the settings are different, the feel of the scenes are different, and how the scenes play out are different.”

Copyright cannot be used to prevent others from disclosing facts, even if the only place that those facts are found is in one copyrighted work. Once the facts are known, anyone may retell the facts, so long as the reteller does so in their own way and own words, without copying the way that the original author expressed those facts in the original work.

The fictionalized retelling of a story that uses a few original facts from a copyrighted work but tells a different story in a different way is not copyright infringement.

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Food & Beverage IP

Trademarks & Trade Secrets are great ways to build value in the food & beverage industry. Why?

Any company that sells (ultimately) to consumers needs a brand, because a good brand builds loyalty. Brand loyalty means that your customers will pay more for your branded product than for a generic.

But what about trade secrets? Most food and beverage companies won’t file patents, even if the product is technically patentable. As it turns out, the subjective nature of taste and mouth feel for food and beverage products depends not only on ingredients but also on the preparation, i.e. processing steps. Scale up can be a trick, also. This lends itself to trade secrets.

Coca-cola’s formula for its cola beverage is a well known trade secret. The formula was first reduced to writing in 1919 and is locked behind a reinforced steel door in a vault with palm scanner and numeric code access required. The company takes measures to prevent most employees from learning the entire formula by departmentalizing and managing vendors that under obligation of confidentiality. Only two executives know the entire formula, which includes the specifications for the water used in the process. (Different water sources taste different.) In order to successfully litigate a trade secret infringement case, a company must show that it has taken reasonable measures to protect the trade secret from public disclosure. Coca-cola has managed to keep its secrets for a century.

Kentucky Fried Chicken has a secret recipe for its fried chicken. Aunt Claudia wrote down a recipe for fried chicken that was discovered by Joe Ledington, a descendant of Colonel Sanders, in a scrap book. It is only trade secret infringement if the trade secret is “misappropriated” by someone. In this case, Joe wasn’t under any obligation to keep the family recipe secret. However, commercial recipes are seldom the same as a family recipe. Scaling up a recipe to a commercial process usually requires changes to a family recipe. It’s not as simple as simply making a bigger batch. At least two different suppliers make portions of the recipe, which prevent suppliers from knowing the entire recipe. These suppliers are sworn to secrecy in nondisclosure agreements. So, the “secret recipe” is still secret and is locked up in at least two safe deposit boxes to keep it both safe and secure.

McDonald’s has a “special sauce” that is prepared only for its Big Mac. Unfortunately, it was once reported that McDonald’s lost the recipe for its secret sauce, and for a few years its recipe changed, until the recipe was recovered from a vendor that had a copy of the original recipe. Then, McDonald’s made a video public that showed how to make its special sauce. A secret loses the ability to be protected if the secret is disclosed publicly. Therefore, the “special sauce” is no longer a secret sauce, because McDonald’s did not take reasonable measures to protect the secret from public disclosure. Once secrecy is lost, a trade secret is lost forever. On the other hand, so long as the secrecy is protected, trade secret rights never expire. McDonald’s loss of its trade secret is probably not significant, because the value of its “special sauce” has been transferred to its brand.

If you have information that derives economic value from being kept secret and make reasonable efforts to maintains its secrecy, then you have a trade secret. Trade secrets can give you a competitive edge. If use the value of your trade secret to build value in your brand, then even if your trade secret is discovered, later, by reverse engineering or dumb luck, it won’t matter. The value of your company will be greater than it otherwise would have been. For that reason, trade secrets are valuable intellectual property. Don’t ignore them.

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Important Change To Trademark Filing

On the 26th of October, users will no longer be permitted to electronically file marks without first registering for an account with the US Patent and Trademark Office (USPTO). Access to the Trademark Electronic Application System (TEAS) will only be available to users with a USPTO.gov account and two-step authentication. To find out more and sign up for an account go to www.uspto.gov/about-us/news-updates/teas-login-requirement.

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