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Memphis Business & Commercial Law Blog

Who can own a copyright?

Tennessee residents may wish to know what rights are granted by copyright law and who can own those rights. Depending on the particular employment situation or agreement, either a creator or their employer could own a copyright.

Copyrights are a valuable type of intellectual property for both individuals and businesses. Ownership of a copyright grants them several exclusive rights regarding the copyrighted work. These include the right to reproduce the work, distribute copies or perform the work publicly, and to create derivative works based on that work. While the creator of the work is generally the owner of that copyright, there are many instances in which the owner is not the creator.

Microsoft files lawsuit for alleged breach of licensing agreement

Tennessee readers might be interested to hear that, after a dispute with Samsung, Microsoft has taken steps to have the discussion resolved in federal court. In documents filed with the U.S. District Court for the Southern District of New York, Microsoft suggested that Samsung was in breach of a contract involving the payment on royalties for every device running the Android operating system that the phone company sells. Such licensing agreements provide a lot of profit for Microsoft, which receives an estimated $5 to $15 for every Android device sold by every company who manufactures them.

The lawsuit claims that Samsung had been late on licensing payments in fall 2013 and has threatened not to pay the royalties. The companies have reportedly been involved with extensive negotiations with each other in an effort to settle the dispute, but they were unable to reach a resolution due to a disagreement regarding the terms of the contract in question, according to Microsoft's deputy general counsel and corporate vice president.

Business plans need to be reviewed and updated periodically

From time to time, Tennessee companies need to review and revise their business plans. Although it may not be necessary to update the entire plan, portions may need to be updated due to changes in the market or the success or failure of certain business activities. This task should be easier to perform than the creation of a new business plan because the business now has some actual operating history that can be used in lieu of the original plan's proforma projections.

Business plans should be viewed as living documents that mirror the changes occurring within a company. Because plans almost always contain projections, they should be modified whenever actual conditions vary significantly from projections. If for example, a competitor lowers the price of a competing product, this may require a change in strategy or a revision of projections.

Trademarks are an important part of company recognition

As most Tennessee business owners know, trademarks are an important part of a company's image. It is a trademark that draws consumer attention and recognition. The decision to purchase one product over another, even when they are similar, is driven by loyalty and comfort with a particular brand. It may be said that sales are linked on many levels to a company's trademark.

Search engine optimization is an important tool for driving sales, and a trademark is one of the first things a consumer will enter in the search. As the search term is used more frequently, the rank of the company's site increases with a corresponding increase in the site's popularity. Brand name recognition is an important part of sales. The average customer trusts a particular brand over another because they have used it favorably in the past. Using brand recognition to drive sales is a proven effective tactic. By using only a single word or design, a company may provide the customer with an abundance of information.

Important intellectual property considerations

A Tennessee business's intellectual property is invaluable, especially for a company that is just starting out. It is important for entrepreneurs to understand the basics of intellectual property and how to protect their ideas and products.

One important step is to have carefully worded contracts that make it clear that when independent contractors make goods or perform services for a company that the contractors are not owners. Without the explicit understanding that what is produced belongs to the business misunderstandings and lawsuits can occur.

WordLogic sues Swiftkey over theft of intellectual property

Tennessee smartphone users may be interested to know that SwiftKey has been sued by WordLogic over allegations that it violated one of its patents and used that technology to create many of its own applications. The suit was filed in the U.S. District Court for the Western District of Washington. While SwiftKey is one of the most recognizable producers of predictive keyboard apps, WordLogic says it has been selling or licensing its predictive text technology since 2001.

While the company claimed that it had been in negotiations to license its technology to SwiftKey, those talks broke down and SwiftKey used the technology anyway. In 2012 and 2013, the SwiftKey keyboard app was one of the most downloaded apps on Google Play, which is a marketplace where users can download apps for their Android devices.

Choosing the proper structure for a Tennessee business

One of the most important decisions that a new business owner has to make is what form of entity to use. While it may be more expensive and require more time to comply with state laws, a corporation offers superior asset protection for the owner of the business.

This is because a corporation is legally considered to be a separate entity from the owner of the company. Like a person, the corporate entity can be taxed and legal action may be taken against it. The corporation must file its own tax return and keep detailed records about its operations. It must also open a bank account that is separate from its owner, and details about the company's finances may need to be made public.

Considerations for the timing of trademark filing

Tennessee business owners and individuals considering starting businesses sometimes wonder about the timing of trademark and other intellectual property filings. It is often a good idea to begin the trademark application process as early as possible. Many companies file the application at the same time that they file the company's organizing documents. There is at least one reason, though, that it may make sense to begin even sooner than that.

Typically, a comprehensive trademark and name search will be performed when the trademark application is begun. Using databases maintained by state and local agencies and the U.S. Patent and Trademark Office, the proposed mark is compared with existing marks from all over the country. If there is a conflict with an existing trademark, company owners can consider a name change. If the company's organizing documents have already been filed, a trademark conflict may cause undue stress and expense.

Redskins trademarks canceled by Trademark Trial and Appeal Board

Tennessee business owners interesting in protecting their intellectual property may be interested in a story about the cancellation of federal trademark registrations owned by one NFL football team. Though some fear that this could have a negative effect on the team's intellectual property rights, others believe that they still have protection against competitors.

In June, six trademark registrations, including those for the Washington Redskins football team, were canceled by the Trademark Trial and Appeal Board. All of the trademarks contained the term "Redskins," which parties opposed to the trademarks argued is a racial slur against Native Americans. This move by the TTAB removes the official registration of the marks, but one attorney argues that the effect of the cancellations is being overstated by the media.

Intellectual property valuable from the start

Tennessee entrepreneurs who are considering selling a startup company may want to review the intellectual property that is associated with the business to make sure they are not selling more than they have built into the selling price. Even if the idea of selling the company is not a consideration, pretending that a sale is the ultimate goal may help to keep startups out of trouble during organization and early contracting stages. Often, intellectual property is equated with patents, but trade secrets, copyrights and trademarks are also considered intellectual property and have value to the person who owns or is acquiring a business.

A brand name is also intellectual property and should be chosen and researched carefully. An unintended brand name infringement may be a costly lesson for a young company in terms of both legal expense and time. Another often-overlooked type of intellectual property is the plans an entrepreneur has for developing and growing the company product or service.

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