Tesla Motors co-founder and CEO Elon Musk recently did something that would make most business owners shudder. He opened up his patents to the world in the name of better electric cars for all.
As you’ll recall, Tesla produces high-end, sleek electric cars and holds hundreds of patents for cutting-edge electric vehicle technology. But in a recent blog post on the Tesla website, Musk shared his philosophy about hoping to bring an open-source mindset to his industry.
“Tesla Motors was created to accelerate the advent of sustainable transport,” he wrote. “If we clear a path to the creation of compelling electric vehicles, but then lay intellectual property landmines behind us to inhibit others, we are acting in a manner contrary to that goal. Tesla will not initiate patent lawsuits against anyone who, in good faith, wants to use our technology.”
The news was picked up by dozens of media outlets and the societal impact was felt on social media with thousands of mentions from users discussing the development. “The auto industry has taken a cue from Silicon Valley and goes open source,” tweeted Los Angeles magazine. “HATS OFF TO ELON MUSK,” said another Twitter user.
While Musk had originally been hesitant to release production details at all so as not to invite threats from the major car manufacturers—“At Tesla… we felt compelled to create patents out of concern that the big car companies would copy our technology and then use their massive manufacturing, sales and marketing power to overwhelm Tesla.”—it seems as if this move to open up patents is practically a challenge to automakers.
In one swift move, Tesla has solidified its position in the electric vehicle space while challenging Detroit and Japan and any other car city to show him what they’ve got.
And for consumers, that’s going to be worth plugging in to.
Summer is in full swing and for a lot of companies and universities, it’s intern season.
The value of an internship has long been lauded as the best way for a student or recent graduate to learn more about a particular industry and take a job out for a test drive. But some companies are taking it too far.
A recent class action lawsuit against Warner Music Group (WMG) alleges the company forced 3,000 interns to work 50-hour-weeks with no pay and no college credit. The key issue is not just the lack of any sort of compensation, it’s the allegation that interns were doing the same things as paid employees—a big “no no” when working with interns.
Despite the above scenario, however, hosting an internship program at your business can be beneficial to both the intern and your team—as long as certain rules are followed, and especially if the program is unpaid.
Rule #1: Tailor the program around the intern and his/her education, not necessarily your business.
“The company must ask whether the internship is similar to an educational experience… The closer the internship is to an educational setting, the more it benefits the intern—and the more likely the interns may go unpaid,” writes Kailee M. Goold, a labor and employee relations attorney in Ohio.
Rule #2: Don’t look at the internship program as an extension of your workforce; that’s not the point.
“If the company would have hired additional employees or required existing staff to work additional hours had the interns not performed the work, then the interns will likely be viewed as employees and will be entitled to compensation,” Goold continues.
WMG is not the first group to find itself in hot water with interns. In 2013, media giant Conde Nast shut down its internship program due a lawsuit alleging the company paid its interns less than $1 an hour. A more serious intern-related event took place last year when a 21-year-old Bank of America intern died after working extremely long hours for days at a time.
If your business currently runs an unpaid internship program, or is thinking of starting one, make sure you know the rules of the road. If anything, it may be easier to pay your eager new team members up front rather than risk getting a $450,000 bill in the future.
You would think that such an exquisite work would have been legally protected by its author in every way possible. Especially considering that Lee is the daughter of a lawyer and the book is about the law.
However, intellectual property law is more forward looking and requires protecting now what might not seem profitable at the time. Lee was not anticipating the multiples of millions in revenue that her story would generate.
However, in 2013 Lee sued Monroe County Heritage Museum alleging trademark infringement of her work among other allegations. Lee had not given permission for the museum to use her name nor anything else dealing with her novel. The Museum’s website address was www.killamockingbird.com and they have since changed it to www.monroecountymuseum.org.
The Complaint states in part, “The Museum seeks to profit from the unauthorized use of the protected names and trademarks of ‘Harper Lee’ and ‘To Kill A Mockingbird.’ It is a substantial business that generated over $500,000 in revenue for 2011, the last year for which figures are available. … The Museum has steadfastly ignored Ms. Lee’s demands that it cease and desist from its illegal action. The Museum has even attempted to block Ms. Lee’s federal registration of her trademark in TO KILL A MOCKINGBIRD. Ms. Lee has no choice but to seek relief in this court.”
Based on the Complaint, it appears that Lee had state protection for “books” with the registered mark TO KILL A MOCKINGBIRD. However, that protection was not federal and did not extend to other merchandise. While Lee may not have wanted to profit from selling merchandise with her novel’s success, apparently the Museum did.
Some of the items being sold by the Museum included: aprons, t-shirts, fleece vests, tote bags, hand towels, soaps, magnets, wine bags, key chains and more. The list is quite lengthy. At one time, the Museum even sold a cookbook based on the name of one of the characters in the book. Only after a cease-and-desist demand was it taken off the market.
According to a recent Associated Press article, the case has settled, but the terms remain confidential. If you consider yourself a creative, an entrepreneur or a business owner, then take note. Protect your work and anticipate future value in your intellectual property now.
If you’re heading into summer thinking that while you’ve enjoyed them, you’ve had your fill of weddings for a while, don’t be surprised if you receive an invite to a divorce party.
Getting married is usually more of a happy occasion than a divorce, but many people are celebrating the freedom that now awaits them and looking forward to starting a new chapter in their lives. The divorce party is on the rise. It might be part of a larger trend where Americans are generally celebrating more, according to an article in The Wall Street Journal.
Event Planner Richard O’Malley was interviewed for that article and described a $25,000.00 party that he planned for a client. He said that while she did wear white, it was not her wedding gown. There was a band, a cocktail reception and a formal dinner. Instead of her father giving her away, he walked down an aisle and took her back. Doing even more to undo the wedding, the woman who had caught her bridal bouquet, threw it back to her.
While we normally think of Las Vegas as a place where people elope, it’s now also a prime location for divorce parties. There is even a musical at Bally’s called Divorce Party Las Vegas. According to their Facebook page, their run ends soon, but they may return and hope to bring the show to more cities across the country, because “what happens in Vegas, doesn’t always stay in Vegas.”
If you’d like to take a look at some of the divorce cakes that people have created, there is a Pinterest page that you can see as well. But look at your own discretion. There is a fair amount of swearing and a surprising number of beheadings. But they are just cakes. At least there is a sweet ending.
Once a nonprofit has the incorporated paperwork for the state (CA) and are working on the 501(c)(3) forms, at what point may they start taking donations and what information needs to be on the receipts for donors (private or corporate) to receive a tax deduction?
The best practice is to wait until you have your letter of nonprofit status from the IRS before you start accepting donations. The reason for that is if you accept donations before your status is official, you cannot tell donors that their contributions are tax-deductible. If you are granted tax-exempt status later on, the donations will be retroactively tax-deductible, but if 501(c)(3) status is never received, your donors may suffer adverse consequences.
If you have to start raising funds before you are incorporated and officially designated a nonprofit by the IRS, you might want to consider a fiscal sponsor that can receive contributions for you. A fiscal sponsor is simply another nonprofit that is willing to handle your donations for you.
Attorney Bryan Fears answers your legal questions for free on our Facebook page every Wednesday at 2 p.m. PT.
I can’t pay any more of my credit card bills and need to file bankruptcy. I need help. They can’t take away my SSI, can they? My SSI is direct deposited in my bank.
Thank you, Sir.
They can’t attach that income to pay credit card debts under federal law. However, don’t let the income sit in your bank account for too long. I believe the federal law passed in 2011 requires the banks to protect this income for 2 months or something like that, but if it sits in there for too long, someone could perhaps get to it.
Only a few things like child support, spousal support, and some federal taxes can be taken out of SSI payments.
Good luck, Stormy Storms.
Attorney Joe Escalante answers your legal questions for free on our Facebook page every Tuesday and Friday at 10 a.m. PT.
Walking into a business, can I just take a picture of something and use it on my website or do I need to speak to the owner first? (I know the deal with faces.)
Yes and no. They might have a posted policy preventing that. Is the policy enforceable in court? Maybe, maybe not. It depends on many other factors. In general, without any posted policy or warning, the store is open to the public and you, so you could use the picture for certain things.
What would be their damages is the question. It’s all stuff visible to any member of the public at all times that the store is open, so what difference does it make if you show it to them?
However, if you took a picture of copyrighted things and exploited them in a way that harmed the copyright’s value, you could be liable for infringement. Like if you took a picture of original art and charged people to look at those pictures on your site, that’s infringement.
Attorney Joe Escalante answers your legal questions for free on our Facebook page every Tuesday and Friday at 10 a.m. PT.
It’s Innovation Month here at LegalZoom and we’re exploring a range of themes around the concept of innovation.
When it comes to finding money to launch a great product or idea, gone are the days of begging for money from traditional sources. While banks, friends and family still provide support to many fledgling businesses, some individuals and small organizations are harnessing crowdfunding to make their dreams a reality.
You’ve probably heard of Kickstarter or Indiegogo or RocketHub. These sites allow innovators to start a campaign for their idea and ask for funding from anyone out there who might be interested. In exchange, the contributor may get a limited-release gift, a credit in the production or even the first generation version of the product. The “Veronica Mars” movie started as a listing on Kickstarter, and just this month LeVar Burton raised $1 million in one day to bring back the hit TV series “Reading Rainbow.”
This exchange of money for access is called rewards-style crowdfunding. According to a 2013 report, the global “we” has raised $2.7 billion for more than a million passion projects. It’s clear that the people are out there and they’re willing to put their money where their, uh, keyboard is.
A second type of mass fund collection system is called equity crowdfunding. More than two years ago, President Obama signed into law the JOBS Act (short for Jumpstart Our Business Startups), which allows anyone to become an official investor in “emerging growth” companies. Equity crowdfunding takes the best part of a platform like Kickstarter—the broad reach and individual contributions—and combines it with a stake in the businesses. Contributors are no longer just fans of the idea; they are now more deeply invested in the product’s success—and potential profits.
The JOBS Act is currently under review by the U.S. Securities and Exchange Commission but is widely expected to pass later this year. Once approved, it would allow companies to sell up to $50 million in shares and list up to 1,000 shareholders.
With the ease of collecting seed capital in this way come certain challenges that some analysts fear might be cumbersome for extremely small organizations. Part of the JOBS Act calls for the release of financial reporting and documents, including early stage business plans and equity compensation plans. However, as one analyst mused, putting up your business for equity crowdfunding could validate key parts of the business and its measures of success on a broader scale.
Equity crowdfunding eases some of the restrictions around raising capital as it is currently done and could be a boom for smaller start-ups without access to large networks of investors or venture capital firms. In an industry hell-bent on disrupting other industries, it’s almost as if Silicon Valley has found a way to disrupt its own way of doing business.
Are you working on a great idea and want to make sure you cover your bases on the legal side? Celebrate Innovation with us and save 10% on select intellectual property protection services.
Have you ever looked in your closet and wished you had an electronic Twitter Dress? Me neither. But it does exist—a black chiffon evening gown that lights up with animations and Tweets. CuteCircuit fashion house launched its wearable technology in 2004 and has been leading the way in combining haute couture, smart textiles and micro-electronics ever since.
An article in Metropolis says, “According to Futuresource Consulting, the wearable tech industry reached $8 billion in sales last year and is expected to more than double that figure by 2017. Since 2009, the U.S. Patent and Trademark Office have seen a steady rise in design and utility patent applications.”
So maybe your first piece of wearable tech won’t be a Twitter Dress, but there are other new inventions that are just as intriguing. Many of us have seen new technology that you can wear like smart watches or Google Glass, but there are other new inventions that are just as intriguing.
Light Therapy Glasses
For people who live in colder climates, fall and winter can be particularly difficult. Not just because of snow and ice, but shorter days and less light make some people moody and tired. Seasonal affective disorder or SAD is often treated with light therapy where patients sit in front of a light box, according to the Mayo Clinic. Drexel University announced that a student has created a prototype for light therapy glasses that would shine the light directly into the eyes. Patients would be able to walk around during treatments and not be required to sit.
Smart Fabric Belly Band
Also at Drexel University, researchers are working on maternity wear. Using computerized knitting software, a belly band garment was designed using a special yarn and RFID technology that can monitor uterine contractions and fetal heart rates. The belly band “could be used to monitor high-risk pregnancies, women near their due dates or as a quick, noninvasive procedure during a routine check-up[.]”
First Sign Smart Hair Clip
Picked by Wearable Technologies as its Gadget of the Month for May 2014 is a personal security system. First Sign did research and found that impacts to the head happen more often in violent crimes. They created a smart hair clip, so that more people would be helped. “The clip contains a gyroscope and an accelerometer,that detect physical assault like slapping, punching, or aggressive movements the second it happens. Immediately, the microphone in the clip starts recording, and the First Sign mobile app uses Bluetooth to access your smartphone’s GPS, camera and microphone to begin gathering of evidence.”
Sesame Ring Smart Transit Pass
Boston commuters can now ride the MBTA, the local subway and bus system, a little easier. They can look stylish wearing a Sesame Ring and not miss their train while looking for their CharlieCard or ticket. Boston Magazine reports that MIT students came up with the idea and now the company Ring Theory has shipped out the first batch of rings to customers. The rings are made on a 3D printer and are custom made to the buyer’s specifications. Each ring has the CharlieCard’s RFID chip inside and can be used the same way.
“The benefits of running barefoot have long been supported by scientific research.”
“Get in shape without setting foot in a gym.”
“Training without shoes allows you to run faster and farther with fewer injuries.”
Do any of the above statements sound familiar? They should, because huge footwear manufacturers spent millions promoting their special shoe as an amazing product that would magically provide the above benefits/meet the above claims. Unfortunately for them, the Federal Trade Commission disagrees.
As recently as last month, a class action lawsuit against shoemaker Vibram USA, creator of FiveFingers running shoes, was settled to the tune of $3.75 million. You may have come across this odd looking line of shoes sometime in the last few years; it features glove-like coverings for toes and, at the time of launch, promised a healthy and improved running experience. Some seventy million Americans purchased a pair in hopes of fewer injuries, stronger muscles and better posture—and not just from Vibram, but from competing shoe companies marketing their own version of a more “natural” running shoe. Vibram settled the lawsuit and will provide refunds to anyone who had previously purchased a pair of the minimalist shoes.
Vibram USA isn’t the only company to face the FTC over products benefits that may or may not have been true. In 2013, Skechers had to pay out a $40 million settlement for false claims around its Shape-Up shoe line. Turned out one couldn’t really get in shape solely by putting on a new pair of shoes. While Skechers still sells the shoe line on its website, it has added the following statement in the description: “Decreases in weight or body fat and increases in muscle strength or toning have not been clinically shown.”
The footwear companies’ missteps (sorry, couldn’t resist) sheds light on truth in advertising and misleading consumers with false claims. It has been known to happen at corporations across industries, but is there a lesson here for small business owners as well? We think so. It’s crucial to be honest with your customers—both existing and potential—about what your product can and can’t do. You may not expect the FTC or FDA to question your advertising as a small business, but as your reach and profits increase, so does the scrutiny.
Take a second look next time you read a product claim or company tagline you like; does it seem like it’s saying something without saying much at all? That’s probably intentional as the marketing copy has been written with a legal eye. And for any business owner looking to grow, it’s a vital skill to pick up.