Let’s face it, there is a social media outlet for just about anything these days. We have Facebook for keeping in touch with our friends, Twitter for micro blogging, and Linkedin to make professional connections, just to name a few. Oh, and we have Instagram…to let everyone know what we’re eating. 

Love it or hate it, people everywhere are using Instagram, the popular network for personal picture taking, to take pictures of, well, everything. Add some lo-fi filters, some gritty effects, and Instagram gives the budding smartphone photographer the tools he needs to showcase his work to the world. One of the most popular subjects tends to be the obligatory shot of whatever the poster is eating for dinner. (#nomnomnom)

While it may seem innocent enough, one poster’s dinner actually got him and his girlfriend arrested. Now, the picture is part of the evidence being used in a case for identity theft.

The South Florida paper, The Sun Sentinel, reported on May 10th that two South Florida Identity Thieves,Troy Maye and Tiwanna Thomason, were arrested by the FBI with a little help from Instagram. It was reported that the two were out to dinner at a Morton’s Steakhouse in January where they were set to exchange a flash drive containing thousands of stolen identities with an undercover FBI informant. 

Then, Troy posted this picture to his Instagram Account, and the rest was history:

(photo source: The Sun Sentinel, May 10th 2013)

While it may not seem like anything out of the ordinary to you (and you may tend to filter these types of pictures out in your own feeds), the FBI saw this as an incredible piece of evidence to an otherwise difficult-to-solve case. The FBI scanned the flash drive obtained by the informant and found hidden files that led them to Troy’s name. A quick internet search later, and they found the instagrammed Morton’s Steak picture on the same date as the meetup with the informant in January. Now, the couple (who pled guilty to identity theft) might face over a decade in jail. Pretty tricky stuff, huh?

It’s really not as difficult as you might think.

The internet is saturated with personal information from a variety of sources. In the past, it used to take a lot of work to gain information about someone you met on the street. Today, all you need is a name or identifying feature of that person, and Google can usually find the rest. This can not only lead to an arrest (like the story I’m talking about today), but it can also lead to the theft of someone’s identity. With that in mind, you may want to reconsider some of the things you share with others…or in the very least be mindful of the privacy settings you have set in place. After all, the whole world, quite literally, can learn more than you ever wanted them to know about you.

Nowadays, hackers and ID thieves don’t need fancy code cracking or hacking technology to get into your accounts. All it takes is a little creativity and access to search engines, and they could gain access to your information faster than you might think. This concept, known generally as “social engineering,” has become a cruel reality now that people can share information at the click of a button (or the snap of a steak picture). The internet may be an exciting outlet for all users to express themselves, but at the same time the tendency to overshare creates a huge security risk.

Let’s try something out: Take a minute to do a Google search of your name. Are you surprised by what pops up? Depending on the types of social media you use and the privacy settings you specify, virtually anyone can find your pictures, your likes, dislikes, your beloved pet chinchilla “Bernadette,” your friends, and even your physical location (for those of you who use apps like Facebook Places or Foursquare). While you may not feel concerned that the world has access to this information, consider this: this info could be a target for identity theft, could cause you to lose your job, wind up as evidence in a court case, or may even put your home at risk for being robbed (afterall, if you say you’re in Downtown Pittsburgh today with your friends Tom and Julia, you are also implying that you’re not home!). All of these occurrences listed above, unfortunately, have happened to people, and the trend seems to continue.

Readers: as a privacy geek, I urge you to be careful with the things you share on the internet. I know it’s tempting to take a picture of that delicious chicken marsala you’re eating, or to talk about your cat “Fluffy” every day…but often times, when we least expect it, these things can be ammunition for people who have the potential to cause great damage. Think before you type. Ask yourself: is this post really important?

Identity theft is a very serious problem that needs to be dealt with immediately. If you suspect that your identity has been stolen, or that someone has intruded on your privacy, it is important to contact an attorney who can help right away.

(Andy Warhol, circa 1977 photo source: wikimedia commons)

This Sunday, May 12th, marks Mother’s Day in the States. Some will celebrate Mom with trips back home, meals, presents, flowers and surprises. For others, it will be a day of remembrance. No matter how you celebrate, it’s a day to say thanks. 

Andy Warhol, arguably one of the most famous and influential people to come out of the Steel City, credited much of his artistic inspiration, drive and skill to his mother. When Andy was young, he became sick with a rare childhood disease that left him home and bed-ridden for several weeks. The story goes that his mother, Julia Warhola, an accomplished artist, taught Andy how to draw…and Andy’s lifelong interest in the arts ensued. Today, Andy continues to be an influence in modern pop art. Even after his death in 1987, he is still considered one of the most highly recognized artists of all time, ranked in the history books amongst other timeless artistic legends. It’s amazing how a mother’s love and compassion could inspire someone to go on to accomplish so much during his lifetime.  

When I think of Warhol and all his endless arrays of Brillo soap pad boxes, Campbell’s Soup cans, and famous neon-colored photographs and silk screens, my mind instantly starts swimming with copyrights and trademarks. (Blame the IP nerd in me…but I think it’s a great way to tie this all in with the spirit of this blog.) I’m sure many people are wondering: how could Andy get away with all that? Wasn’t it infringement? Aren’t there copyrights and trademarks protecting the subjects of his artwork? 

The short answer is: sure. Copyrights and trademarks do exist and do attach to much of the things Andy made famous. There are certain legal concepts like “fair use” under copyright law, different aspects of trademark law, and the First Amendment freedoms of speech and expression that allowed Andy to turn these everyday objects and photos into works of art. That doesn’t mean that Andy went his whole career without ever facing a lawsuit. On the contrary, Warhol’s work was so intertwined with pop-culture, copyright, and trademark that he did face a lot of legal opposition. 

While there were many people who applauded Warhol’s use of their trademarks or photographs in his work, there were droves of people who were upset with Warhol for the use of their artwork, photographs, and other materials without any sort of monetary contribution or royalties. Most recently, The Velvet Underground, a band who was managed and promoted by Warhol, underwent a heated IP battle with Andy’s estate over the image of a banana Andy had created for the band during his lifetime. 

If you are an artist, please know that a claim of “fair use” is never a surefire defense to your work. It’s a concept that needs to be weighed by the courts based on a number of factors.  Plus, your art may fall into IP classifications beyond copyright (like trademarks or other similar areas of the law that often get confused with copyright). We’ll get into fair use more extensively at a later time, but just know this: If you ever face a situation where you are sued over your artwork, you should always contact a lawyer. They can help you explore your options and help protect your rights. Afterall, even Andy Warhol himself needed legal help!

On a lighter note, it’s the weekend! And, no matter how you do it, make sure you pay tribute to Mom this Sunday. If you’re in the Greater Pittsburgh Area? Consider taking her to the Warhol Museum. It’s a real treat for art enthusiasts and IP nerds alike! 

There’s a new rumor brewing on Facebook…and, unfortunately, it wont help you save your pictures and other uploads from the clutches of Mark Zuckerberg. In fact, it’s not even valid law!

In case you missed it: A chain wall post went viral this week that promised full copyright protection to anyone who copy-and-pasted the following text on their wall: 

Too good to be true, right? As nice as it sounds, copying and pasting a grammatically and legally muddled wall post *won’t* beef up your copyright protections. So, before you fall for this newest facebook faux pas, let’s see what this popular chain post is all about. The following analysis of this new post should help you separate the fact from the fiction. 

Copyright Confusion:

Fiction:

In response to the new Facebook guidelines, I hereby declare that my copyright is attached to all of my personal details, illustrations, comics, paintings, photos and videos, maps, etc. (as a result of the Berner Convention). 

Fact:

This fake wall post deals heavily in what it claims is “copyright law.” For those of you just joining us at PghCyberlaw (or for anyone looking for a refresher), I posted a Law101 article on Copyrights that teaches you the basics of Copyright law. It’s well worth a read.

As long as the artistic expression is your own original work, a copyright automatically attaches as soon as you create it. There’s no need to “hereby declare” that your rights are reserved for the copyright to attach, and there’s no need to register your copyright unless you want to assert your rights in court.

While the “illustrations, comics, paintings, photos and videos” mentioned in the fake post may be protected by copyright, “all of [your] personal details” are definitely not protected. Personal details are never eligible for copyright protection because they are facts. Facts lack the artistic creativity that copyright strives to protect.

Fiction:

 For commercial use of the above my written consent is needed at all times!

(Anyone reading this can copy this text and paste it on their Facebook Wall. This will place them under protection of copyright laws. By the present communiqué, I notify Facebook that it is strictly forbidden to disclose, copy, distribute, disseminate, or take any other action against me on the basis of this profile and/or its contents. The aforementioned prohibited actions also apply to employees, students, agents and/or any staff under Facebook’s direction or control. 

Fact:

A copyright is much more complex than it appears to be on the surface. With each copyright comes the following bundle of rights:

As copyright owner, you have the ability to sell or license each individual right (or combination of rights) to other people. This is usually done through a contract agreement called a license. You also have the ability to keep all the rights to yourself, if you so choose. 

So, as a copyright owner, is a contract-like disclaimer on your Facebook wall enough to stop Mark Zuckerberg, “his employees, students, agents, and/or any staff under Facebook’s control” from using your content? No. Not even close. Your bundle of rights was signed away to Facebook years ago. You own the rights to everything eligible for copyright protection, but Facebook has the right to use that content without your written permission. You can write as many restrictions “under the present communiqué” (say what?!)as you’d like, but it wouldn’t change your relationship with Facebook.

You agreed to Facebook’s copyright policies when you entered your personal information years ago and clicked “Sign Up.”  At a lengthy 11 PAGES of teeny-tiny font, it’s not surprising if you decided to skip the small talk and go right for the account. 

While we generally just gloss through TOS’s and Privacy Policies and click “I agree” or “Sign Up”. I think this wall post trick is a lesson learned: always read the fine print…even if it’s 11 pages long. Like most terms of service, this is non-negotiable and subject to change as Facebook sees fit. If you don’t like what Facebook is doing with your information, the only way to avoid it is to close your account and walk away. You are not entitled to own a Facebook account, and you aren’t expected to stay if you disagree with its policies.

What Does Facebook Do With Your Copyrights?

Facebook makes it clear in its Terms of Service Page what it will do with your content and information that you post on the website.

Here’s an excerpt about what it does with your Intellectual Property (Full text here):

 
2. Sharing Your Content and Information

You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings. In addition:

1. For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.

By signing up for Facebook, you automatically agreed to allow Facebook and all of its “employees, students, agents and/or any staff under Facebook’s direction or control”  to use your posts for free…worldwide…for whatever it wants to use it for. You do own your content, but it comes with a price: you agree Facebook can use it for free.

As I said earlier, these terms are non-negotiable. There is nothing you can do to change this policy unless you delete your content or cancel your account. If your friends and family love the content you’re trying to protect and they pass it on? You need to have them get rid of it, too, or Facebook still has the power to use it. 

How Can Facebook Get Away With Its TOS?

Facebook has one billion active members. If Facebook took just 1 second of its time to negotiate contract rights with the current user body, it would take it 31 years to complete. It is a MASSIVE amount of people…and it’s growing every day.

Online companies like Facebook need a uniform way to account for its users, and it does it with the terms and conditions of its website. While it may be the most popular social networking company to date, you are not required to do business with Facebook. If you want to do business with someone else, it is completely your choice. 

Posts, Privacy, and Present Policy

Fiction

The content of this profile is private and confidential information

Fact

Sorry, guys. The truth is that the things you post on Facebook are generally considered public information. As a privacy supporter myself, I’d like to say that was different. (I’ll be back with a more in-depth social media privacy post sometime soon!)

Privacy is an implicit right in US law. This right to privacy ends as soon as a person gives his consent to publicly publish facts about his private life. If you’re voluntarily posting your name, your address, your dogs favorite ridiculous outfit, etc, it’s generally considered public information. Privacy law is greatly unsettled with respect to social media. As we push forward in this “Web 2.0” structure of interactive internet usage, we can expect more and more privacy battles to emerge. 

The safest way to keep your information protected is to keep it unpublished. Think twice before posting anything, no matter how trivial. As an added bonus: this protects you from dangerous tactics hackers use to break into your account (hint: it’s easier than you think!).

Legal Misstatements and Mix-Ups

Fiction

The violation of my privacy is punished by law (UCC 1 1-308-308 1-103 and the Rome Statute). 

Fact

This is where things really start to get weird. The UCC mentioned here is the Universal Commercial Code. It’s an extension of contract law that deals specifically with merchants and people who purchase tangible goods. For the law students and lawyers in the house, I’m sure just mentioning the acronym “UCC” will send you into some pretty unpleasant flashbacks…but I digress. 

The UCC has absolutely nothing to do with your privacy. You can read every page of that gigantic code book and never hit a stitch of privacy law. The same thing goes for intellectual property. Since the UCC specifically deals with tangible goods, intellectual property (an intangible property right) does not apply. 

Even weirder is this mention of the “Rome Statute”. I admit, even I had to do some research to see what in the world it was referring to.  The Rome Statute of the International Criminal Court is a treaty that establishes an international venue and permission for the International Criminal Court to investigate and prosecute genocide, crimes against humanity, war crimes, and crimes of aggression. This is HARDLY the case for intellectual property infringement or privacy law. It doesn’t even come close!

Fiction

Facebook is now an open capital entity. All members are recommended to publish a notice like this, or if you prefer, you may copy and paste this version. If you do not publish a statement at least once, you will be tacitly allowing the use of elements such as your photos as well as the information contained in your profile status updates

Fact

It’s true that in May, 2012, Facebook went public. This has nothing to do with your privacy or your IP rights, and (as I mentioned before) publishing a statement like this one—even at least once—won’t do anything. The controlling document here is Facebook’s Terms of Service. Anything outside of this, no matter how legitimate it may look, will not protect you.

Some Takeaways:

• The entire viral post is fake.
• The only way to guarantee the protections this fake post promised is to either delete your account or refrain from posting content.
• Always read the fine print to understand what sites are doing with your information. 
• If you want to keep your intellectual property and personal privacy protected, think before you post anything.
• If you ever find yourself writing a contract, please don’t use the term: “The present communiqué” . It’s not real…not even in legalese. ;) 
• Read the things you post before you post them. If you don’t understand a law…look it up! It’s public information and easy to find!

I hope you enjoyed this post and that it helped you understand the newest Facebook faux pas. Be sure to follow our many media feeds to keep current with the latest internet law news!

It’s Official! On Thursday, October 25, Governor Tom Corbett signed a bill that recognizes Benefit Corporations (also known as B-Corps) as a new type of corporate entity in Pennsylvania. Pennsylvania joins the ranks with a number of other trailblazing states, making it the 12th in the nation to support this exciting new community-minded corporate structure. The bill officially becomes law in 90 days. 

We at Elliott & Davis, PC are thrilled to hear this exciting news. As the very first law firm to launch a successful B-Corp Certified company in Pittsburgh, we strongly believe that B-Corps are the wave of the future. We have extensive experience in this emerging field of law, and we are prepared to help PA Entrepreneurs pave the way with this exciting new corporate structure. 

Interested in starting a B-Corp? Want Learn More? Read On for a Few Fun Facts:

________                                      

________                                     

• people
• planet
• profit

• For non-profits, B-Corps allow a company to retain its mission statement and its desire to help the community while also promoting sustainability and longevity through proper funding. 
• Conversely, for-profits may use their business to help the community and the environment without worrying about a shareholder-driven bottom line.

In the long run, B-Corps promote the well-being of any structure by bringing the best of both worlds together. 

________                                     

http://www.pghstartup.com

Be a Part of Something Big. Contact Us to Start Your B-Corp Today!

Do you remember a time when people would make the news for stealing a company’s copyrighted material? One of my most vivid memories growing up was watching the TV, only to see that someone—an ordinary person! A GRANDMOTHER for crying out loud!—was being sued for thousands of dollars after “stealing” a record company’s music using (the then pirate-friendly) Napster. 

I guess I’m really dating myself here, but the point is: Copyrights are Big Business. A single copyright can be worth thousands, if not millions, of dollars to a person or a company.But, how do they work?! Who owns a copyright? Why would someone ever want to sue Jane Doe for taking an itty-bitty music file? Am I next in line to be sued? There are lots of things to be answered about copyright…but we need to have a strong basis in what copyright is before we can get into the juicy details of enforcing them.

Today’s installment of Law 101: ©onquering ©opyright aims to take a step back and teach you basics of copyright law. By learning the basics of copyright first, we will create a valuable and helpful foundation for understanding more difficult and often highly debated topics later. Let’s jump right in, shall we?

Copyright: Just a Big, Ol’ Bundle of Sticks

A copyright is a form of intellectual property that attaches to different types of artistic expression. While a lot of people (including myself, pre-law school) would consider a copyright to be a single form of legal protection, the best way to visualize a copyright is as a bundle of rights that are granted to the copyright’s creator. As my copyrights professors would say: “Think of a Copyright as a bundle of sticks.” Upon hearing that statement, it was my natural inclination to laugh it off…”bundle of sticks…why not a bundle of something cooler…like a bundle of velociraptors…” (Of which, I began to doodle…but I digress). Seriously, though, their “bundle of sticks” visualization ended up being a trick that not only got me through copyrights class, but also a lot of my other property classes. And here, in all of its brightly-colored glory, I present to you the following:

A Copyright is Just a Big Ol’ Bundle of (Multicolored) Sticks.

When you create a copyright, the US Government’s Copyright Office hands you, the creator, a beautiful bouquet of rights that look something like this:

With every copyright you own, you simultaneously have:

• the right to reproduce the copyrighted work
• the right to prepare derivative works
• the right to distribute copies of the copyrighted work
• the right to publicly perform the copyrighted work; and
• the right to publicly display the work

Just like flowers in a bouquet…or sticks in a bundle…or [insert cool object] in [equally cool grouping here], you have the ability to hand off each individual right (or rights) to other people. You also have the ability to keep all the rights to yourself, if you so choose. The world is your oyst…err…bundle of multicolored sticks!

For example: Let’s say you created an epic story that follows the life of a young boy, turned wizard, who encounters a number of obstacles in his new world of magic. That book would have a valid copyright associated with the story, among other things (trust me on this for now, we’ll get into what material is covered under copyright shortly).

You, as the book’s author, have the ability to sell or license any of the sticks in your bundle of rights to other people or companies. Want to make copies of the book and distribute it for consumption by the masses? License the rights to make copies and distribute the book to a publisher. Want to translate the book into multiple languages or make a movie based on the writing? License the right to make derivative works. And so on, and so forth. Or, keep the rights to yourself. As the copyright owner, you choose.

Obviously, not every person or company will be happy with a license agreement…and, in fact, they may only be interested in purchasing the entire bundle of rights from you. These are things that are determined when you actually start negotiations for the rights to your copyrighted work. Just do me a favor when you do, and get yourself a lawyer who can help you negotiate for the best deal. 

What Does a Copyright Protect?

Now that we know that copyright is a bundle of rights, it’s important to understand what types of material those rights cover.

You may not realize this, but you have created a stockpile of copyrights in your lifetime. When a stroke of creative genius strikes, a copyright is not far in tow. Your photographs, your drawings, your music compositions and recordings, your movies, and other creations are all subject to the protections that US Copyright Law provides. Pretty cool, huh?

According to current Copyright Law:

Copyright protection subsists […] in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device…

In plain English: Copyright attaches to original, artistic expression in any fixed, tangible medium. So long as you jot those literary musings down, record that beautiful music you composed, or print out or store those photos you took, you have something that is copyrightable in the eyes of the law. These things are all copyrightable, so long as these displays of artistic expression are your own. Sorry, folks, you can’t free-ride off of someone else’s creation and expect to get copyright protection! (But, we’ll save that for another day when we talk about infringement…)

I Have Some Great Ideas! Those lyrics to my next love ballad and storyline to my next great novel are swimming around in my head somewhere…Are These Copyrightable too?!

In short…NO. Sorry! Copyrights—and, well, Intellectual Property in general—can never protect an “idea” you have stored in your head. To gain any intellectual property protection, you need to get those ideas out of your head and into something that is tangible. Otherwise, how will we know what you’re trying to protect? 

In the case of copyright law:

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.

So, get to work. Write it down, take those pictures, record those songs. If someone does it first? As the old saying goes: “You snooze, you lose.”

Bu..But…The Thing I’m Making Isn’t Artistic At All! It’s Completely Different! Now What?

Even if the things you create are not subject to copyright protection, don’t worry! All hope is not lost! There are different types of intellectual property that correspond with the ways you express your ideas. What you create will determine which type of intellectual property applies and the corresponding procedure you need to follow in order to receive protection. Don’t forget: aside from copyrights, you also have trademarks, patents and trade secrets to choose from!

I Have Copyrightable Material…Cool. Do I Need to Say any Magic Words to get Copyright Protection for it?

It’s really easy: all you need to do is tap your heels together three times, turn in a circle twice and yell “COPYRIGHT!!” as loud as you can.

I’ll wait here while you do that…

….WAIT!

Before you leap out of your chair and scare the person sitting next to you, I’ll let you in on a little secret: You Already Have a Copyright! It’s been with you since you put that pen to the page, that guitar up to the microphone, made that last brush stroke on that canvas and snapped the picture with your camera. As the original owner of that fixed, tangible artistic work? You own the rights to it. You automatically have that theoretical bundle of rights. 

If I Have a Copyright for my Work Already…Why Should I Register with the Copyright Office?

Having a copyright for your original work doesn’t automatically give you the ability to walk into a courtroom tomorrow and sue someone who used your work against your wishes. In order to enforce a copyright, or in other words, in order to sue someone for the improper use of your copyright, you need to register your work with the US Copyright Office first. 

Registering with the US Copyright Office gives notice to the US Government (and to the entire population of the United States) that your work exists. Think of it as a giant flag marking your territory. Once registration is completed, anyone who crosses into your marked territory without permission may be legally stopped from doing so.

Registration is relatively easy and inexpensive to do, and it can be worth its weight in gold—depending on what the copyright holder is looking to protect. The Copyright Office is now tech-savvy, and allows people to register works online. After filling out the online form, the author is required to send a physical, non-returnable copy of the work to the copyright office. The most interesting thing about this process is that your registered copyrights end up HERE:

…and if that’s not exciting, I don’t know what is!

Let’s get real here: It would be an expensive venture to register every creation you ever make. A wise solution to that problem is to think about registering the works that could potentially attract infringers in the future (think: quality over quantity). In any case, speaking to an IP Lawyer can help you sort out all of the questions you could ever have about deciding to register a copyright. Not only that, but they’ll register the copyright for you! 

A NOTE ABOUT REGISTRATION: It’s important to note here that registration only grants you protection nationally. If you are hoping to protect your work from people outside the US, you are going to need to check into each country’s individual laws and policies. It’s a long and difficult process if you wanted to do that…but, hey, that’s what lawyers are for. We read and translate the legalese so you don’t have to!

How Long Does My Copyright Last?

Over the past few decades, the protections associated with a copyright have changed considerably. Generally, for works created after January 1, 1978, a copyright lasts for the life of the author + 70 years. If you created something before 1978, there are other rules that need to be followed (for anyone interested, these rules can be found here). Additionally, there are other rules and time restrictions for anonymous works, pseudonymous works and works for hire (which we’ll discuss in the future). After this time period runs, the work is placed into the public domain where it can be enjoyed by the masses without any legal restrictions. 

Closing Thoughts on Copyright

Now that you know the basics of copyright, we can move on to bigger and more problematic topics in this area of the law. In the future, we’ll be able to discuss infringement, fair use, works for hire, and a bunch of other topics that all build off of these basic building blocks of copyright. 

In the meantime, some takeaways for anyone reading this lesson should be:

• BE ORIGINAL: If you want the Copyright protection, you need to make sure your work is fresh and creative! Think outside the box!
• PUT IT DOWN ON PAPER: Ideas just won’t do! Make sure you turn those ideas into things we can see and experience!
• REGISTER! REGISTER! REGISTER! If you create something that you think has real potential, don’t just sit there: register it with the US Copyright Office! 
• HIRE AN IP LAWYER: These are trained professionals who can help you sort out all of your intellectual property needs. If Copyright doesn’t fit your creation, some other type of intellectual property might instead.

And..that’s it! Catch you next time when we explore the exciting world of Trademarks!

INTRODUCTION

When I was younger, I heard the term “Intellectual Property” and honestly had no idea what to think. Sure, I’d acknowledge the © symbol slapped on the inside of a book, a ® next to a logo on a shirt and even a “Patent Pending” or “Patent No. ….” on some everyday objects…but I never knew what significance they had or why they were there in the first place. It wasn’t until I slid past my undergraduate degree and into law school when I finally learned what everything meant…and the result was eye opening.

Looking back as a technologist and freelance developer, I wish I was armed with some sense of IP was. With even the smallest understanding, I feel that I could have observed better business practices and protected the work I created a bit more efficiently.

Readers: I created this multi-part Intellectual Property Primer series to give you a glimpse into the vast (and often complicated) world of Intellectual Property. I’ve broken things up into a few distinct categories to make things easy to read and understand:

• Conquering Copyright
• Translating Trademarks
• Patent Prowess

Keep checking back each week (or subscribe to one of our many social media feeds) for each installment of this exciting new series!

The JOBS Act is one of the newest laws that — among other things— aims to help entrepreneurs raise capital for their companies. Now that there’s a boom in crowdfunding websites like Kickstarter and RocketHub, the SEC is weighing in on how they will regulate this new source of capital.

Nick Miller, Esq. (pictured, left), our securities attorney here at Elliott & Davis, wrote a recent blog article that discusses the JOBS Act. For anyone who is an entrepreneur or owns their own business, this article is especially helpful. Below is his article: 

The JOBS Act—IS THIS PORRIDGE JUST RIGHT?

The story of Goldilocks and the three Bears may be the best suited to use as an analogy to the recently passed JOBS act.

Let’s face it…bears are not animals you want to fool with.  They are large, ferocious, territorial beasts with a long history of ravaging those sophomoric enough to attempt to meddle with them. 

Regulation of the financial industry should be approached in just the same manner as the aforementioned animals…carefully. Very rarely is that done, though, leading to either overregulation (the porridge is too cold) or under regulation (the porridge is too hot).  Is the porridge just right with the passage of the JOBS Act?  If the general investing public is analogous to Goldilocks (being that she had no business in the bears’ house) and the bears’ house is analogous to the private placement arena, are we in fact throwing Goldilocks to the bears?

On April 5, 2012 President Obama signed the Jobs Act, as passed by Congress on March 27, 2012, into law.  The Act is also known by its much longer title as the Jumpstart Our Business Start-ups Act. The passing of the act has gained significant attention from the business world, and rightfully so. This act, for better or worse, may change the investment landscape as our nation has known it since the Great Depression.

The Act aims to help entrepreneurs raise capital with fewer roadblocks. It has ambitious goals that include more transparency in the business world, more employment opportunities, and an increase in business and technological innovations.

The JOBS Act has one particular weapon in its arsenal that it plans on utilizing in order to achieve these goals: Crowdfunding. Crowdfunding is a recent phenomenon, which has only been widely used for a little over a year now (at least as far as I know).  It has become “hip,” and “trendy,” in some circles due to its use to primarily fund artistic projects.  Basically, sites such as kickstarter.com and rockethub.org allow people to make small contributions to businesses and projects that they may be interested in seeing come to fruition.  Often, those providing the funds receive some sort of gift in exchange for the money, but could not receive equity as an exchange.   The JOBS Act is an attempt to legalize the online exchange of capital for equity and is an attempt to allow investors who don’t meet the criteria of being an accredited investor to gain ownership in private ventures. 

The passage of the JOBS act will also allow private companies to advertise their securities to the general public, which had previously violated Federal and State securities laws. This solicitation will only be able to take place between companies and investors through online intermediary funding portals, which are basically the equivalent of “middleman websites”.   Think of this as Match.com for companies and investors.

It is hoped that the JOBS act will allow private companies to diversify their funding while providing general access to what was formerly believed and viewed to be an “old boys’ network” compromised of the wealthy elite. The JOBS Act may also give entrepreneurs more control over the financial direction of their companies.

The JOBS Act is by far one of the most drastic changes to the United States securities laws in recent years as it relaxes the Regulation D requirements for registering a company’s securities with the United States Securities Exchange Commission.

The SEC will most likely take its time with providing the regulations that will flesh out the JOBS Act Skeleton.  The SEC typically has 270 days to enact the regulations needed for the proper implementation of any law.  However, they are often given a lot of lead-way with extensions to that time period. For instance, the SEC hasn’t even gotten around to finishing the regulations on the Dodd-Frank Act.  Remember that one?  It was supposed to strengthen consumer protection, rein in complex financial products and head off more bank bailouts and was signed into law in mid-2010.

So, without properly knowing the impact of Dodd-Frank, was it proper to pass more sweeping regulatory changes?  The JOBS Act could potentially expose investors used to some loss with publicly traded investments to the entire loss of their investments with Private Investments. Outside of Enron, total loss in an investment is nearly unheard of on the public market (penny stocks not included).  Moreover, the SEC has a hard enough time flushing out investment schemes as is. What’s going to happen when we use the Internet to allow unscrupulous individuals access to the general investing public?

So is the JOBS Act just right?  In a perfect world everything will go as intended, businesses will be happy with a new way to raise capital and investors will be happy with their new investment opportunities.  Unfortunately this is not a perfect world. As such, there will most likely be companies and individuals who fraudulently represent themselves leading to otherwise avoidable losses through Crowdfunding. 

 In my opinion, the JOBS Act will likely be great for investment recovery attorneys and will result in plenty of opportunities for Goldilocks to get an “education,” on why you should stay away from bears.

If you have any questions or if you would like to contact Attorney Miller directly, you can write to him at nick@elliott-davis.com. 

When you click the “like” button on Facebook, are you exercising your First Amendment right to free speech? The latest ruling from a Virginia district court says no…and now Facebook frequenters may need to reconsider the things they do or say online.

In a case decided last month, two police officers working in a Virginia Sheriff’s office were fired after they “liked” the Facebook status of the Sheriff’s political opponent. When the fired employees sued the Sheriff and claimed their First Amendment right to free speech, the Court said “liking” did not reach the threshold of Constitutionally protected speech while commenting did. In its opinion, the Court stated:

“It is the Court’s conclusion that merely “liking” a Facebook page is insufficient speech to merit constitutional protection. In cases where courts have found that constitutional speech protections extend to Facebook posts, actual statements existed within the record.”

The First Amendment, gives us the freedom of speech, press, religion, assembly and petition. Although it is a mere 45 words from start to finish, it is a complicated and highly debated subject area in the law. Before any First Amendment analysis may begin, it must first be determined if the communication in question is recognized as a form of “speech.” If a communication does not qualify as “speech,” then the First Amendment does not apply, and any analysis under the First Amendment is irrelevant.

So, what types of communications rise to the level of constitutionally recognized speech? The First Amendment traditionally recognizes both written and verbal statements as forms of speech. In more modern Supreme Court interpretations, First Amendment protection also extends to conduct so long as there is a likelihood that an audience would understand the particular message being conveyed within that conduct. For example, flag burning and wearing armbands to protest a war are both actions that convey enough of a message to warrant First Amendment protection.

Because “liking” merely requires the click of a mouse, the Court was not convinced that this action rose to the level of a form of speech that should be protected under the First Amendment. While the Court quoted a number of cases involving Facebook and constitutionally protected speech, these cases all involved situations where commenting took place. To the Court, a written online statement as opposed to a user-generated action was the fine line between First Amendment protection and exclusion.

Applied to a digital setting, where do our actions start to take on a form of expression that may be understood by others? Are written comments and remarks really the only way we are protected online? Is “liking” understood to carry any other meaning besides a knee-jerk reaction to the things people post on Facebook? The ruling left many people and advocacy groups hungry for more details. We will likely see many of these questions answered as this case goes on appeal and more cases like this reach the courtroom.