Register Your Drone Now!

If you’re like me – and by that I mean a photography enthusiast who gets spammed by every retailer of camera stuff out there – you’ll have noticed that the market for civilian drones has really taken off this year. If you haven’t seen these things yet, they’re the small helicopters, usually with cameras mounted, that many photographers and videographers are now using to capture stunning aerial footage and annoy visitors at monuments and tourist attractions.

Unfortunately they have also featured prominently in such recent news gems as “Kentucky Man Shoots Low Flying Drone With a Shotgun,” “Drone Just Barely Misses Austrian Skier” and “Close Calls Between Drones and Planes on the Rise.” Unfortunately, problems are to be expected, since there is no sort of training requirement to buy or use a drone recreationally, but now the inevitable legal backlash is here in the form of new federal regulations.

The one that most concerns most recreational users is registration. All drone owners in the US must register with the FAA and mark their drones with their registration number. Starting February 19th, any unregistered drone use could result in a very stiff fine.

The FAA operates a drone registration web site, and charges $5 per three years. Anybody registering before January 20th will receive a refund of the $5 fee. Registration is per user, not per drone. If you have more than one drone, you only need to go through the registration once and receive a registration number that you can put on all of your drones. If you don’t have a drone but plan to get one, register now to save the $5.

This applies only to drones that weight 250 grams or more, so the smallest toy helicopters do not require registration. It also applies to recreational use only. Commercial users have a more complex registration process and require certifications for the user.

Links:

FAA Drone Registration Web Site
Kentucky Man Shoots Low Flying Drone With a Shotgun
Drone Just Barely Misses Austrian Skier
Close Calls Between Drones and Planes on the Rise

The Alice Corp case: What is it?

It’s hard to read an article about patents these days without a reference to Alice Corp. v. CLS Bank. When the Supreme Court’s opinion in the case came down it was not really surprising to anybody who had been paying attention, but it is important and (even though it’s several months old) not actually that well understood, so here is a short explanation.

What Alice Corp., the patent holder, had done was to patent a system in which an intermediary company, helps parties to a transaction manage their risks by holding up a transaction and not completing it until after confirming that each party has provided the resources that satisfy the obligations, using a computer to log the details of the transaction and compare the requirements to the resources provided by each party.

This is, in essence, escrow. It is a concept is nearly as old as banking itself, making it unpatentable for lack of novelty, and it is also unpatentable because it is a mere concept. The Court’s holding focuses on the second reason why escrow is unpatentable, but the point here is that if a party tried to patent escrow it should fail. What Alice did was to add a computer to the process. That actually worked at first, because it initially did result in a patent issuing, back in the good old days when you could patent toast and playing with cats with a laser pointer – the 1990s. But adding “use a computer” to otherwise unpatentable subject matter does not result in patentable subject matter, so in 2014 the Court ruled that the patents were invalid.

Somehow, this outcome seems to have surprised some observers. It should not have. The Alice case follows on Bilski v. Kappos, a 2010 case that did the same thing to a party that had patented investment hedging, plus a computer.

There are two takeaways here:

  1. You can’t patent an abstract concept. Escrow and hedging are too abstract to be considered “inventions”.
  2. You can’t transform ineligible subject matter into eligible subject matter by adding a computer.

Note: As usual, this is not legal advice, but merely education and commentary. If you have any questions on a matter related to patent eligibility, please consult an intellectual property attorney.

A trademarks overview, through beer goggles

I started writing this post a couple of months ago, as a commentary on trademarks and the craft beer industry, but something was lacking and I didn’t publish. Now I have a focus for the piece that’s more relevant than “beer labels as an excuse to explain trademarks.”

This week I saw a fascinating (by a lawyer’s definition of the word) news item: Lagunitas sued Sierra Nevada for trademark infringement. The case, which only lasted a few days before it was dropped, was based on the manner in which Sierra Nevada’s use of the letters I, P and A. Lagunitas was not claiming trademark rights in those letters – in fact, their trademark filing specifically disclaims ownership of the term “IPA” except in the filed logo design – but in the style in which they were rendered: large type, all caps, in a serif font with an overlap in the kerning.

lagunitas    sierra

The labels in question.

Now, I can’t say whether Lagunitas would have won if the lawsuit had played out to the end. To some people, their complaint might look silly, and whether any consumers would confuse the Sierra Nevada beer for a Lagunitas product is an open question, but cases have been won with less (and lost with more).

Some background

Trademark law deals with words and images that consumers associate with brands and vendors of products. The ultimate goal of trademark law is to prevent confusion. A consumer should be able to look at a product or package and know what company sold it, so that if the consumer wants, for example, Pepsi brand cola, he can buy a bottle labeled Pepsi Cola and be confident that he’s getting the real Pepsi product. If anybody could label an inferior soda “Pepsi Cola” and sell it, the consumer who pays for a preferred product but gets a knockoff would be harmed, while the Pepsi company would also be harmed because on the one hand it’s lost out on business it rightfully earned, and on the other, the consumer’s opinion of Pepsi’s product would be lowered. Similarly, if a company could buy a truckload of expired adjunct lager, stick Weihenstephaner labels on it and pass it off on unsuspecting consumers, they’ve have some very unhappy consumers on their hands as well as a cease and desist letter in strongly worded German.

Trademark protection only extends so far. “Cola” and “Beer” are not protectable words. Neither are generic words for styles, such as “Stout” and “IPA” – which is why Lagunitas objected to the style and size Sierra Nevada’s font rather than the letters IPA themselves. If I had a product called Lynn’s Best Adjunct Lager and another company launched Lynn’s Best Oatmeal Stout, I would be be right to complain. But if I tried to sue a competitor for introducing Cantabrigian Lager I wouldn’t have a Starbucks’ chance in Florence of success.

Branding is about community support now

What I find interesting about the Lagunitas case is that it was not anything Sierra Nevada did or said that caused Lagunitas to drop the complaint, but rather a public reaction against Lagunitas. We craft beer drinkers see ourselves as a community. We don’t just buy the products: we go to festivals, make special trips to wait in line to meet a brewer and try a new beer, and advocate for products we like because we want to see a successful, happy craft beer community that fosters small companies with interesting new products. I do it myself all the time.* Craft brewers get a lot of good will and free publicity this way, much of it deserved, but it also means that when they act like the competing corporations that they often are and employ tactics typical to the arena of corporate competition – such as trademark enforcement – the community-member customers have a negative reaction to the party that is seen as disrupting the peace of the community.

But craft beer, which has traditionally been viewed as small business, is now becoming big business. According to the Colorado-based Brewer’s Association, in 2013 craft beers had a US market share worth $14.3 billion, a 20% year-to-year growth. Sierra Nevada and Lagunitas are both in the top 5 US craft breweries by production, each producing the equivalent of several hundred million bottles of beer per year. Those are big business numbers, so it’s no surprise that trademark enforcement – usually considered a big-business practice – is gaining traction in the craft beer market.

The problem, as I see it

For a company to capture a share of that market and make some money it needs to establish a brand name and be recognized and appreciated by consumers. That means trademarks. Establishing a trademark means taking something that was once free from the public sphere and claiming it as one’s own. If I had a brand called Lynn’s Best Lager and established trademark rights in that name, it would necessarily follow that if I wanted to keep my brand ownership meaningful I would have to act against any other brewery that tried to market a Lynn’s Best Lager – or anything similar enough to cause confusion, such as Lynne’s Most Fabulous Porter.

Suppose my distant cousin Loretta launched Loretta Lynn’s Coal Mine Best Dark Lager. Now we’ve got a gray area on our hands. Is that too close to my brand name? Is it going to cause confusion among consumers or diminish the value of my brand, and if I think it is, what should I do about it? There’s no one right answer to those question – they’re all judgment calls.

Bringing it all together: With the large and increasing number of beer brands and names – I recently read that in a recent year the federal office that approves beer labels had received 29,500 applications in a 12 month period – it is almost inevitable that there will be an increasing number of conflicts. The branding space is getting crowded with word plays, puns on words like hops and rye, caricatures of barley plants and hops cones. While there are some brilliant creative minds at work on these names and labels there are many overlaps in the information the label must convey, only so many label shapes and sizes, and only so many truly unique designs being made each year.

As the number of brands and amount of money at stake continues to grow, we’re going to see more trademark conflicts. Eventually, something’s gotta give. My prediction: there will be a stabilization as on the one hand breweries become more careful about avoiding conflicts, and on the other they come to understand that going after the small stuff, such as the font size of an IPA label, is likely to be counterproductive.

Note

This post is editorial commentary only, not legal advice. Please do not rely on it (or, frankly, anything you read on the Internet) in your legal decision making, but speak with a lawyer instead. Please email andrew@andrewlynnlaw.com or use the contact forms on this site with any questions.

* Off-topic plug: just last month I stumbled on a promising new one called Hermit Thrush when I chanced to look up a hill in Brattleboro, which turned out to be run by a couple of friendly bearded guys making genre-benders with yeast they’d harvested from the air in different places where they’d traveled. That there are people out there doing things like that and finding success is one of the reasons I love being a small business lawyer.

Rental law: What fees a landlord may charge, and what to do with the funds.

In the past few weeks I’ve seen a surprising number – at least half a dozen – of instances of Massachusetts landlords violating state law by either charging a prohibited fee, or failing to correctly account for a tenant’s security deposit. The rules here are firm but straightforward, so here is a short overview that I hope will prove informative to landlords and tenants alike.

As usual, this overview applies in Massachusetts only, and is for educational purposes, not legal advise. If you have any questions or want to know how the law would apply in any particular situation, please contact me directly at andrew@andrewlynnlaw.com or through one of the contact forms on this site.

Fees a landlord may charge

First: While processing a prospective tenant’s application, a landlord or a landlord’s agent may require a credit check, and may charge a reasonable fee to cover that expense. Even if the applicant’s real estate agent has already run a credit check, the landlord is not required to accept it and may require an additional check.

Second: Once an application is accepted, upon execution of a lease a landlord may charge:

  1. First month’s rent.
  2. Last month’s rent.
  3. A reasonable fee to cover the actual cost of keys and changing locks.
  4. A security deposit, which may not be more than one month’s rent.

Third: Each month the landlord may require payment of rent, except of course the first and last months if those rents have already been paid.

That’s it!

No other fees or deposits are allowed. There is no “rental deposit” permitted under Massachusetts law, nor is there a “pet deposit”. There is no facility fee, and fees for parking or gym use may only be charged if those are optional services that the tenant is free to not accept. If the landlord wants the tenant to pay for any of these things, they must be rolled into the monthly rent. Don’t try to get too clever on this either. For example, doubling the first or last month’s rent to cover extra expenses doesn’t work. The rent must be the same each month, with a few exceptions (such as offering free months as an incentive to sign a multiyear lease, which is something that some larger buildings have offered lately).

What to do with the funds

Note: This information is not complete: for example, the explanations of paperwork a landlord gives a tenant are an outline only, because the law includes redundancies and specific required language that would make this post excessively long.

  1. The landlord may keep the first month’s rent.
  2. The landlord must give the tenant a receipt for the last month’s rent and must deposit that rent in an interest-bearing account. The landlord must keep an accounting of the interest earned, and at the end of the lease (or the end of each year of the lease, if the lease is for more than one year) must send the interest to the tenant.
  3. The landlord must use the lock and key fee, if any, to pay for locks and keys.
  4. The landlord must deposit the security deposit into a separate, segregated, interest-bearing account, and provide the tenant a receipt. Again, the interest will go to the tenant.

Security deposit rules

The security deposit is only for repairing damage caused by the tenant, so if the landlord charges one the tenant must be given a statement of the initial condition of the apartment – and the tenant may also give the landlord a list of any damage that is present at the start of the lease, to avoid being charged for it later. If the landlord uses security deposit funds to pay for any repairs, the landlord must keep records of the work done and the amount paid.

Any security deposit funds not used to pay for repairs must be refunded to the tenant within 30 days of end of lease. That’s a firm requirement. Landlords: Don’t use security deposits to pay for cleaning, or for regular maintenance and upkeep, or to make up for any unpaid rent! If there is unpaid rent, feel free to write the tenant a bill but send the security deposit back anyway. If the tenant says “I don’t want to write a check, you can just keep my deposit instead,” you reply “Sorry but no, I can’t do that.”

Stay out of trouble

A majority of the landlord-tenant disputes I see relate to violations of these rules. Follow them strictly, and you will avoid a lot of expensive, time- and resource-consuming trouble.

The Massachusetts retainage law update is now in effect

A reminder to all of you with construction projects in progress or planned in the short term.

Note: This article is for your information only. It is not legal advice. This information applies only to projects in Massachusetts. If you have specific questions, please send me a message at Andrew@AndrewLynnLaw.com or call 617-702-4045.

The new Massachusetts law on subcontractor retainage the I wrote about earlier is in effect, as of November 6th. Some of the key points:

Caps on retainage: Total retainage is now capped at 5% of the payment due. There are also specific caps for specific deficiencies, of example 2.5% of the contract value for incomplete document deliverables.

Payment timing: There are new timing requirements. For example, retainage most now be invoiced within 60 days following substantial completion, payable within 30 days of invoice receipt, with an allowance of 7 days per level of subcontract.

Substantial completion timing: The prime contractor must give notice of substantial completion within 14 days of actually achieving the substantial completion milestones.

Punchiest timing: The owner must submit the punchiest to the prime contractor(s) within 14 days of acceptance of substantial completion. The prime must provide the punchiest to its subcontractors within 21 days of acceptance of substantial completion.

Remember that these new requirements are statutory, so update your contracts.

Simple estate planning for any age

If you’re like me – too young to be planning retirement – “estate planning” sounds like something grandparents do. That’s true, to a certain point. For most of us, nursing home expenses and estate taxes shouldn’t mean much to us. But there are some simple, inexpensive moves we can make right now that have  lot of potential upside. If you’re married or have kids, own a home or a business, or even if it’s just you, you can make sure that you, your family and your interests are protected.

  1. What happens if you become disabled? This can happen to anybody, at any age, through no fault of their own. Instead of leaving it to chance, or occasionally the courts, a power of attorney, medical proxy and statement of intent, all written in advance, let you decide in advance what happens and who you trust to make important decisions.
  2. What happens to your assets if you get hit by a bus? A simple will, clearly written and consistent with the latest state laws, lets you make those decisions and saves your relatives a lot of time and expense. (Massachusetts overhauled the laws two years ago and a lot of out-of-date forms are floating around.)
  3. Is your home correctly titled? If you own a home, or if you’re planning on buying one, Massachusetts has some simple steps you can take to protect your home from lawsuits.

These simple estate plans only require a few documents and one or two meetings, and the flat fee pricing is affordable. Contact Andrew at Andrew@AndrewLynnLaw.com or 617-702-4045, or use the contact form below, to find out more or to get started.

This web site is attorney advertising. Prior results do not guarantee a similar outcome. Accepting Massachusetts clients only.

Architects and designers: Enforcing payment using mechanic’s liens

Today on ArchitectureLaw.net:

A Massachusetts law passed in 2010 allows architects and design professionals to use mechanic’s liens – traditionally the domain of contractors and building material suppliers – to enforce payment. It’s one straightforward way to gain leverage if you have a delinquent payment dispute, but there are deadlines and the requirements include a written contract. Know your rights so that you do not lose access to this valuable tool.

Read the article here: “Mechanic’s Liens for Architects” and contact me at Andrew@AndrewLynnLaw.com for more information on mechanic’s liens and any other questions you have on law and contracts for design professions.