Ideas for Businesses and Business Owners Unexpectedly Working From Home Part I

Working from home woman business owner typing and texting.

Well, here we are, at the start of Week 2 of social distancing for Iowa and Minnesota. We are facing restrictions on travel, groups congregating, and operations of businesses. We are advised to stay at least 6 feet away from other people and (say it with me) wash our hands frequently for at least 20 seconds. We are at home with our families and our pets. We have a lot of downtime on our hands—as do our employees.

There is no sugar coating it: this is going to be a very tough time for small and mid-size businesses. Unemployment is up, and sales are down. We recently posted a list of resources for small businesses, including links to a variety of governmental agencies. We will be adding new links and those linked pages will all be updated regularly, so we encourage you to check back regularly. Please also feel free to reach out to us to suggest updates to that list. At the time of this writing, the new Families First Coronavirus Response Act, Public Law No. 116-127, is not yet in effect, and the Department of Labor has not yet provided the details about how it will address the exceptions for businesses with fewer than 50 employees. We will provide information as it becomes available.

While you and your employees are working remotely is a good time to work on some of those long-term projects you’ve been putting off—both personal and business. It may help your business emerge from this crisis in fighting shape. And if you, like so many business owners, have gone online unexpectedly, there are a number of things you may not have had to consider in a brick-and-mortar state that you should start thinking about now. We’ve put together some things to consider working on over the next weeks.

For Businesses Newly Online

If you have never run your business online before, it seems pretty straightforward: build an ecommerce website or move your yoga classes to a Zoom meeting and run with it. But there are a lot of other things to consider when you move online. Here are a few:

  • Sales taxes. If you had only one location and all of your customers came to you before, you needed to pay sales tax only for that location. The calculation changes when your customers are not coming to you. If your business is based in Iowa, look for more information from the Iowa Department of Revenue. If your business is based in Minnesota, look for more information from the Minnesota Department of Revenue. Both states may have special exceptions and updated information as the crisis unfolds, so check regularly for updates. Both states also participate in the Streamlined Sales and Use Tax Agreement, which aims to simplify the sales tax process for online retailers.
  • Website Privacy Policy, Terms of Use, and Terms of Sale. A website’s Privacy Policy explains how the website owner collects and uses data, including personal data, about people who use the website. A website’s Terms of Use are an agreement between the owner of the site and the site’s users. A website’s Terms of Sale are a contract between users who order from the site and the website owner. A Privacy Policy is required by the laws of some states, most notably California, if your website is accessible to users in those states. Terms of Use and Terms of Sale exist to protect the business owner and ensure that both parties know what happens under various circumstances—especially if an item doesn’t arrive, or needs to be returned, a prospect which you may not be relishing at the moment.
  • Liability Waivers. If you are suddenly giving fitness classes online, you have no way of knowing whether the spaces your customers are using are safe. To protect your business, you will want to ensure that your customers understand that they are responsible for ensuring they are using a safe space. If you already have a liability waiver, you may need to update it to reflect the new situation.

If you need assistance with these or any other concerns relating to your unexpected foray into e-commerce, please feel free to contact us.

For Businesses Looking for Things To Do

While it is not for the best of reasons, you and your employees may suddenly have a lot of down time from your regular business work. Especially if you are and/or you have employees scrounging for things to do in the midst of the disruption, this is the perfect time to pursue some of those long-term projects. If you don’t have your own list (or you’ve already worked through it), here are some ideas:

  • Adjust to the times. If your business’s organizing documents require any kind of in-person meeting without exceptions, it’s time to amend those. If you haven’t figured out what video chat software is most compatible with your business model (either free or paid), it’s time to find it. If you haven’t figured out how to work from home with the kids present, or if you have policies in place that make it unreasonably difficult for your employees to do so, it’s time to adjust those.
  • Get organized. Complete the filing. Make sure your electronic records are all in order. If you don’t have a system for managing customers, develop one or find a vendor who supplies one. If you’ve been thinking you’re outgrowing the capabilities of a software program or a vendor you rely on, take some time to do the research and determine what vendor offers the best solution for your business and implement it. If you aren’t there yet but might get there relatively soon, familiarize yourself with the marketplace so you’ll be ready for the transition later.
  • Get ahead. If you have a blog, create some evergreen content (content that will be timely no matter what is going on in the world). If you are a website designer, create some new templates to have ready to go for customers when they are ready to buy. Now is a good time to do any kind of preparatory work that you normally try to get ahead on in the slow times.
  • Take stock of your template agreements. I’ll soon write a post on the neglected Force Majeure clause that everyone is talking about now, but for the moment, this is a great time to evaluate the form contracts you have been using. How have they been working for your business? Do they cover everything that they should? Is there a situation that comes up frequently that isn’t included? Do they match the way your business actually operates? That last one can be a big problem if you just grabbed a form from the internet or if you simply haven’t updated your contracts in several years.
  • Work on legal compliance issues. Sometimes, compliance matters can fall by the wayside, or a new law with a lot of requirements can be too overwhelming to address before it goes into effect. Sometimes, smaller businesses rely on their small size to hope that no regulators will notice their non-compliance. Now is a good time to address the General Data Protection Regulation in the European Economic Area or the California Consumer Privacy Protection Act if you haven’t already.
  • Develop or revisit your trade secret protection regime. A trade secret is a type of intellectual property that creates value for its owner because it is secret. Trade secret protection is used to protect information and/or ideas that: 1) have actual or potential economic value if they are kept secret; 2) cannot be easily ascertained by others who are using proper means; 3) are minimally novel; and 4) are the subject of reasonable efforts to maintain them as secret. A trade secret must be protected in a way that is reasonable under the circumstances—it has to be secret enough to stay hidden, but revealed enough to be useful. Trade secrets should be protected with physical, procedural, and technological means. If you have never created a systematic method of protecting your trade secrets, or if you have but haven’t re-evaluated your method recently, now is a good time to do so.
  • Consider protecting other intellectual property. Registering copyright with the U.S. Copyright Office is not difficult, but is time-consuming. If you aren’t sure how to go about it, we offer copyright registration training remotely, and we’ll get you set up to register your own copyrights going forward. If you already know how to do it, and you suddenly have a lot of free time, now is a pretty good time to get things moving. Registering trademarks with the U.S. Patent and Trademark Office generally takes a little more work and benefits from assistance from an attorney. You can learn more about the benefits of trademark registration from this blog post.

This post is plenty long, so we will stop here; Part II will include suggestions for businesses facing changes, for people contemplating starting a new business, and for helping you to help your business.

If you would like help with any of the legal issues we’ve mentioned above, or any other legal issues, remember, we’re open and able to help with legal issues businesses are facing in this public health crisis. We offer telephone and video chat consultations, including free initial 30-minute consultations. We are also able to work with businesses facing financial hardships at this time. Please feel free to contact us to discuss your business’s options.

Updating Your Outdated Terms of Use

You just looked at your business website’s Terms of Use and Privacy Policy (I’ll use the word Terms to refer to both of them together) for the first time in ages and realized that they have been in place since the Clinton Administration. It’s time for an update. What do you need to consider?

Don’t copy and paste. Terms should be tailored to your website. Your site will need different terms depending on whether you accept posts from users, how you want users to be able to use the site, what kinds of information you collect from users, whether you wish to allow sharing, and more. If you merely find a website similar to your own and copy its Terms, you risk creating Terms that you do not wish to bind your users, let alone your business.

Follow any requirements for your industry. If you are in an industry that is subject to regulations, you should make sure that your site’s Terms allow you to follow those regulations. For example, some industries are required to keep certain records about customer interactions for a certain amount of time. Make sure that your Terms disclose that you are keeping those records, and for how long.

The FTC regulates privacy policies. The Federal Trade Commission has been very aggressive about enforcement of privacy policies for the past few years, and it updates its regulations fairly regularly. Make sure your attorney looks at the latest regulations in drafting your Privacy Policy.

State laws. If your website is aimed at residents of more than one state, make sure you are complying with the laws of every state you are doing business in. California has generally been the most aggressive state in terms of legal regulation of website Terms.

Consider your timing. Pinterest has recently become a very popular site. If you want to, for example, update your Terms to allow you to share your users’ content via Pinterest, you will have to choose your timing carefully. If your current Terms do not grant the license needed for such sharing, you will need to make sure that your users are bound by your updated Terms before you add a “Pin It!” button or other means of sharing to your site. Otherwise, you may be risking a law suit for facilitating the violation of your users’ copyrights.

Inform your users of the update—email them if you can. It has become more and more common for websites to provide some notice before changes to their Terms go into effect. One might even say it is swiftly becoming a standard practice in the industry, especially for social sites. Facebook has a Site Governance Page where users can learn about and weigh in on changes before they are made. Pinterest gave its users more than two weeks’ notice, both by email and by notice on the Pinterest website, that it was going to make changes to its Terms of Service (and still makes the old terms available on the site in case users want to know how they have changed). Google gave users more than a month to review the changes it made to the Terms for its many services, informing them via pop-up when they visited a Google site as well as via email. If at all possible, you should take similar steps to inform your users of your changes. You don’t want your business to be left behind, if for no other reason than your users will expect this level of service.

Updating your Terms requires some consideration, but can be a painless process with the proper planning.

Star Trek v. Axanar: Copyright Infringement or Permissible Fan Work?

Star Trek vs Axanar: CBS and Paramount sue Axanar Productions
Star Trek vs Axanar: CBS and Paramount sue Axanar Productions

If you are a Star Trek fan, know a Star Trek fan, or are merely vaguely aware that you need to be very careful about whether you call Star Trek fans “trekkies” or “trekkers,” you are probably aware of the Axanar project and the litigation surrounding it.

For those who spend slightly less of their time contemplating the wonders that Gene Roddenberry created than I do, here is the nickel summary: In 1966, the television show Star Trek first aired. It was cancelled after three seasons but went on to gain popularity in syndication. From these humble beginnings, the property has ultimately expanded into multiple spinoff television series, movies, books, websites, merchandising, and pretty well any kind of copyrightable work you can think of. In terms of the depth and breadth of the copyrighted properties and the fictional geography, it can only properly be called a “universe.” Today, there are two companies that own the copyright rights to Star Trek, CBS and Paramount. CBS owns the television rights and Paramount owns the movie rights, though according to Axanar Productions’ attorneys, this may not be the full picture due to the ways in which the copyright ownership has changed hands over time. CBS and Paramount have, according to numerous news articles, allowed fans to make short films, written fictional works, elaborate and accurate costumes, and other tributes, all without pursuing legal action against the fans. Corroborating this claim is the fact that Paramount lists Star Trek fan sites on its official website for the Star Trek movies. CBS and Paramount could have taken legal action against these fan uses at any time because these fan works are derivative works, meaning copyrightable works that are based on another copyrighted work. Only the owner of a copyright has the right to create or authorize creation of derivative works of the original copyrighted material; if anyone else creates a derivative work, that constitutes copyright infringement.

But Axanar, unlike many fan films before it, has drawn legal action from CBS and Paramount. Theories on why Axanar is different range from timing (CBS has just announced another new Star Trek television show to begin airing in 2017, and Paramount has the next reboot movie coming out in summer 2016) to money (the crowdfunded Axanar raised an unprecedented $1 million for production online) to quality (Axanar is using professionals to make the film, while most prior fan films did not) to sour grapes (the studios fear that Axanar will be more popular than the reboot movies, which many fans felt failed to capture the spirit of Star Trek). The Axanar Productions legal team has taken the strategy of insisting that the plaintiff explain in great detail exactly which copyrights have been violated and exactly which plaintiff owns which copyrights. They are asking, essentially, that CBS and Paramount give the exact coordinates of the conflict within the Star Trek universe. The disconnect is that CBS and Paramount are contending that Axanar Productions is in essence violating (almost) the entire universe all at once. And such insistence on a detailed list of the exact elements that have been violated (which the amended complaint does provide) gives the appearance of being the refuge of an infringer that knows it has been caught and has no solid grounds for defense.

One concept I have seen repeatedly throughout news articles and fan website discussions is that CBS and Paramount have always been fine with fan works as long as they didn’t make any money–and that a lack of profits is a defense to infringement. The Axanar creators themselves have repeated this idea and are fighting hard in the court of public opinion to turn the fan community to their side. Both Prelude to Axanar, a 20-minute trailer to the new movie, and Axanar itself will be released to the public for free (assuming the movie ever does get released). This does not, however, mean that the movie is not a for-profit enterprise in any sense that would matter for a legal defense of Axanar. The professional production staff, producers, and others are certainly being paid, regardless of whether the money comes from donations to a Kickstarter campaign or from purchase of tickets, electronic files, or DVDs. This is also not a real legal test for whether a work is infringing. It is part of the legal test for the fair use defense to infringement, but it is only part of the test. Axanar likely wouldn’t make it past the first question in a fair use analysis, specifically whether the purpose of the use is “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.” Even if it did, there is a serious question about whether it would harm the market for the copyrighted works, another of the elements of the fair use test. The fact that fans have posited that Axanar better captures the spirit of the original Star Trek than the reboot movies certainly adds weight to CBS and Paramount’s position on that question.

Another defense of Axanar Productions that I have seen often is that CBS and Paramount have never sued before, so they should be barred from suing now. Legally speaking, this would be a defense for Axanar Productions in a trademark case, but it is not a defense in a copyright case like the one CBS and Paramount have filed. Trademark owners must police their trademarks to ensure that the marks do not become so diluted that they no longer serve as source identifiers; copyright owners have no such obligation and are perfectly free to pick and choose which infringers to take action against. This means that the fan theory that the money is the motivation may be at least a partial explanation: why bother pursuing an infringer who has no money? Hiring big-name litigation lawyers is quite expensive, and if you win an infringement case, the other side must pay your attorneys’ fees. If the other side has no money, you’re out your attorneys’ fees.

The other major defense of Axanar Productions I have seen is that CBS and Paramount have slapped fans in the face by bringing this lawsuit. The fan community is the lifeblood of Star Trek, the thinking goes, and for CBS and Paramount to bring a suit without so much as sending a cease and desist letter will only alienate fans. While I do understand this sentiment, and I enjoyed Prelude to Axanar as much as the next fan, I also appreciate that CBS and Paramount are businesses. They have a bottom line to consider, and when fans are saying things like “this captures the spirit of Star Trek better than the reboot movies!” that shows that Axanar is realistically a threat to their bottom line. Should they have explored a license agreement first? Maybe. But they also don’t want to encourage the “it’s better to beg forgiveness than to ask permission” approach from fan works. In addition, Axanar Productions is able to do things that older fan works have not: technology has been changing in ways that make fan works a realistic threat to the market for canon/copyright-owner-created works. CBS and Paramount may be navigating the changing landscape badly, but they are hardly alone in needing to find ways to deal with the changes.

What do you think? Are there other alternatives CBS and Paramount should have explored? Can fan films coexist with canon works without hurting the market for canon works? Will you stop watching new Star Trek because of the lawsuit?

Pinterest for Employers

Pinterest for Business

I was recently interviewed for the Society for Human Resource Management article “Pinterest Might Facilitate Copyright Infringement.” Below for your viewing pleasure is the entire text of the email-based interview with Workplace Law Content Manager Allen Smith.

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What special copyright issues arise in using Pinterest and how should employees be trained to comply with copyright laws when they are pinning content on Pinterest in a work-related capacity?

Pinterest raises more or less the same copyright issues as any other website, but it has gotten more media attention than others. In general, no one should ever place any content on the web that he or she does not own or have a license (permission) to place on the web. Employees should be aware of what intellectual property their employer owns, any of which may be posted on the employer’s behalf (in compliance with any other laws and workplace policies, of course), and what intellectual property may be subject to licenses which limit the employer’s (and by extension the employee’s) right to post. Otherwise, content located on the web is generally off-limits; making material public does not abrogate any copyright rights. Exceptions include content that is in the public domain (there are several online databases of public domain works—in general, a work published prior to 1923 will be in the public domain); content that is explicitly licensed for pinning; content that falls under fair use exceptions to copyright; and content that is subject to a Creative Commons license (though be careful with that one, as work-related uses may not qualify for some Creative Commons licenses).

Employees should be trained to look for key phrases in website Terms of Use indicating that it is safe to use content on Pinterest (a handy shortcut: if a site owner who clearly owns or licenses the content has placed a “Pin It!” button on the site, pinning should be fine; Etsy is a good example). In addition, a Pinterest account holder that pins its own content has granted a license to Pinterest, so that the content can be re-pinned by other users. The tricky part can be determining whether content was pinned by the rights owner since Pinterest does not have a corollary to the Twitter Verified Account badge.

Could you provide examples of how employees might use Pinterest for work purposes?

I have seen some companies doing wonderful things with Pinterest, primarily retailers. Random House Books has an account and pins not only its own books (brilliant given that “Books Worth Reading” is one of the default pinboards), but also interesting book- and reading-related images. Home Depot has become very involved in the home decor suggestions boards and re-pins content in addition to posting its own proprietary photos, which of course gets people thinking about ways they could improve their homes using Home Depot products. Service professionals can use Pinterest as well; one of my favorite accounts belongs to a style consultant, Sasha Westin, who uses Pinterest to gather suggested wardrobes for people, such as “Men’s Relaxed Professional,” complete with links for purchasing each item.

If employees are using their personal Pinterest accounts to promote their employer, they should be aware of FTC blogger regulations, which require disclosing that relationship.

How are the copyright issues that arise when using Pinterest similar to copyright challenges employees face with other forms of social media that’s used in their work?

As noted, they are really very much the same. No one should post content on any site that he or she does not own or have a license to use. The difference between posting a link to an article on Facebook and posting it on Pinterest, though, is that on Facebook a thumbnail of any photo accompanying the article appears (which has been pretty well, but not definitively, established as fair use), but on Pinterest the full image appears and is uploaded to the Pinterest servers. Pinterest also has a more visual focus, which encourages people to post infringing material such as the work of photographers or painters.

Is pinning content owned by others any different from a legal standpoint from retweeting content on Twitter, and if so, how?

Yes. When someone posts something to Twitter, one of two things is happening: either it is original content, which that person has granted a license to Twitter to use (and that use includes retweeting by other users), or it is not original content. Content that is not original generally must be paraphrased or be a brief introduction to linked content. Linking does not infringe on copyright, and Twitter’s 140-character limit is short enough that it would be difficult to infringe any Twitter-external content. Pinterest has no such limitations.

Are many employees oblivious to the copyright concerns that may exist in their work-related use of Pinterest and, if so, what kind of training might employers provide?

I can’t speak to employees in particular, but much of the general population has developed an ethic about sharing that is not sensitive to the rights of copyright holders. This ethic extends to personal and professional use of social media, including Pinterest. Employers should ensure that their employees are aware that when it comes to copyright, creation, not possession, is 9/10ths of the law. Employees using Pinterest in a work-related capacity should always consider the source, whether the source owns the copyrighted material, and whether the source has given the employer a right to use the copyrighted material. For employers who may be cost-sensitive, the Copyright Office maintains a series of easy-to-understand Circulars, which explain much of what an average person needs to know about copyright. Circular 1 contains the fundamentals. The Copyright Office, however, does not give information about what to look for in a license.

There are also social media certifications becoming available for employees whose routine duties involve social media; the one I am familiar with, from the National Institute for Social Media, should be coming out this fall and will be accredited. (Disclosure: I am chair of the Industry Advisory Committee for NISM, so I wrote the portions of the exam dealing with legal questions. I do not benefit financially from my relationship with NISM.)

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How Do I Get a Copyright?

Intellectual Property - Copyright

I have had several people ask me recently how they can get a copyright in their works. There is good news: contrary to some rumors, you don’t have to do anything to get a copyright! If your work is copyrightable, copyright exists in that work at the moment of creation. But what kinds of works are copyrightable?

Copyright protects original works of authorship fixed in a tangible medium of expression. This means that if you have created something, it needs to be original to be eligible for copyright protection. Originality in copyright law means that a work has to both be independently created and have a minimum degree of creativity. If it lacks either of these factors, it is not eligible for copyright; courts have held that works like databases are not eligible for copyright protection because they lack the requisite creativity. A work must also be fixed to be eligible for copyright protection. If a particular creative work was not recorded in any way, it is not protected by copyright—legally, it has not yet been created. Merely fixed in memory does not count; the fixation must occur in a tangible medium of expression such that it is possible to reproduce it—this means that 1’s and 0’s on a hard drive do count as fixation, as ephemeral as they may seem at first blush.

So if copyright exists at the moment of creation, what do people mean when they say they “have a copyright” or “want to get a copyright”? In the United States, they are generally referring to copyright registration, the process of entering a creative work into the U.S. Copyright Office’s database of copyrighted works. Registration offers several benefits to copyright holders, including:

  • Establishing a public record of the copyright claim.
  • Allowing copyright holders to file infringement suits in court.
  • Owners of a registration can collect statutory damages and attorneys’ fees in a court action, if the registration is made within three months after publication of a work or prior to an infringement. Otherwise, the owner of the unregistered copyrighted work must prove actual damages in order to collect in court.
  • Registration establishes prima facie evidence (that is, evidence that will be accepted as establishing facts unless the other side can present evidence showing that it is not true) of the validity of the copyright and any facts stated in the registration certificate, if the registration is made within five years of publication.
  • Once a work is registered, the owner of a copyright can record the work with the U.S. Customs and Border Protection Service for protection against importation of infringing copies.

Because of the many benefits of protection, many copyright holders choose to register their copyrighted works. The Copyright Office has different rules and procedures for registration of different types of works, all of which are outlined on the Copyright Office website.

Interested in registering your copyrightable works but unsure how to go about it? The Law Office of Kelcey Patrick-Ferree offers copyright registration training and copyright registration services. Contact me for more detail.