The High-touch Legal Services® Blog…for Startups!

© 2009-2019 Dana H. Shultz, Attorney at Law

Orphan Works: Copyright Victims that Never will Be Adopted

Logo of the US Copyright Office, symbolizing orphan works

This post is about a frustration in U.S. copyright law: orphan works.

Suppose that you are willing to pay for a license to reproduce a copyrighted work, but you have no way to contact the owner of the copyright. You may not even be able to identify who the owner is. (See Copyright Office Circular 22, How to Investigate the Copyright Status of a Work.) (more…)

Stock is Great – but Don’t Give It Away Too Quickly!

Most startups and early-stage companies have limited cash. As a result, they often are eager to use stock as a major component of? compensation. They need to make sure, however, that personnel stick around long enough to make the contributions for which they are being compensated.

In some instances, the corporation creates a tax-qualified incentive stock option plan. Employees are granted options to purchase stock, and they do not have to pay any tax on the stock (actually, on profits from their sale of the stock) until they exercise the option (purchase the stock, presumably, at a low price) and, later, sell the stock. (Tax law is less favorable to independent contractors.)

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Visa Basics for Foreign Entrepreneurs Coming to the U.S.

Seal of the US Citizenship and Immigration Services, from wich a work visa may be obtained

Non-immigrant foreign entrepreneurs who want to start businesses in the U.S. often – and rightly – have visa-related concerns. A typical question: “What kind of visa do I need to start my business?”

This post provides a brief answer to that question.

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WSJ: VCs to Resume Funding Startups in 2010

In an article published today (After Dry Year, Start-Ups Are Poised to Get Cash), the Wall Street Journal reported that venture capitalists will resume funding startups in 2010.

The major reasons for this development:

  • During much of 2009, VCs were hoarding cash to protect their existing companies. With the economy and the stock market stabilizing, VCs are returning to investment mode.
  • Whereas initial public offerings were almost nonexistent this year, investment bankers see IPOs returning in 2010.

Some additional points made in the article:

  • During 2009, the vast majority of the (modest) VC investment that did occur was in information technology or health care.
  • For 2010, VCs are looking for opportunities in social networking, mobile technology, health-care technology, and clean technology.

Related posts:

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

“High-touch Legal Services” Receives Federal Service Mark Registration

Last week, the U.S. Patent and Trademark Office confirmed that the service mark “High-touch Legal Services” has received Registration No. 3,726,914. The registration pertains both to legal services and to blogs that feature the law and legal matters.

The mark is on the Supplemental Register, rather than the Principal Register, because “high-touch” is descriptive of the services that I provide but has not yet acquired secondary meaning. With this registration, I have the right to use the ? symbol and to bar use of confusingly similar marks. (more…)

Season’s Greetings to All of My Clients, Colleagues and Friends

Wishing You Joy this Holiday Season & Success in the New Year

Wishing You Joy this Holiday Season & Success in the New Year

Copyright Infringement: Public Announcement was Barking up the Wrong Tree

In Bridgeport Music v. UMG Recordings, the United States Court of Appeals for the Sixth Circuit held that the song “D.O.G in Me” by Public Announcement willfully infringed Bridgeport’s copyright in the 1982 song “Atomic Dog” by George Clinton.

What intrigues me is that the finding of infringement was based the substantial similarity of only a limited amount of the lyrics: Use of the phrase ?Bow wow wow, yippie yo, yippie yea?, repetition of the word ?dog? in a low tone of voice at regular intervals, and the sound of rhythmic panting.

The court rejected UMG’s assertion of a fair use defense, noting, in particular, that although the substantial similarity pertained to relatively small elements of ?Atomic Dog?, they were the most distinctive and recognizable elements of the song.

What this case teaches us: Using even a small portion of someone’s copyrighted work can constitute infringement if that portion is sufficiently distinctive and recognizable.

This blog does not provide legal advice and does not create an attorney-client relationship. If you need legal advice, please contact an attorney directly.

Need Funding? WSJ Offers Tips to Gain Credibility

In a November 30 article (“Trust Me”), the Wall Street Journal offers tips to entrepreneurs who want to gain credibility in the eyes of potential funding sources.

Based on a study of key individuals at 28 entrepreneurial ventures, the article asserts that “the most successful founders were masters at making symbolic gestures that signaled stability and credibility” in four vital areas:

  1. Personal CredibilityExample: Revealing personal details that strike a chord with listeners
  2. The Company’s ProfessionalismExample: Thoughtfully prepared web page and business cards
  3. The Track RecordExample: Showing a prototype or a controlled product demonstration
  4. Emphasizing and Building Ties Example: Being associated with prestigious stakeholders

Takeaway: In a tough, competitive economic environment – especially if you are an entrepreneur without a track record – sending a message of credibility is just as important as having a great? product, a large market, and the right management team.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

Foreign Company Alert: Obtaining an EIN may be your Biggest Challenge in the U.S.

Logo of the Internal Revenue Service, which issues EIN (Employer Identification Number)When a foreign company wants to start up in the U.S., it usually creates a separate corporation here so U.S. obligations and liabilities will not flow back to the overseas parent. The U.S. corporation needs a federal Employer Identification Number (EIN) – at the very least, to open a bank account, even if the corporation will have no employees in the U.S. In a recent post on its website (Use of Nominees in the EIN Application Process), the Internal Revenue Service recently made it more difficult for foreign companies to obtain an EIN.

To obtain an EIN, the corporation typically provides the social security number (SSN) of a “principal officer”. In the past, the IRS was rather vague as to what this term meant, stating that it referred to a “president, vice president, or other principal officer”. So, for example, if the corporation’s overseas president did not have an SSN because s/he never worked in the U.S., the corporation could temporarily appoint as vice president an individual who has an SSN, which the corporation then would use to apply for an EIN.

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