Protecting Your Company From Patent Trolls

from Brett Lee Shelton, licensed Family Business Lawyer™

The term “patent troll” has entered the corporate vernacular thanks in large part to the ongoing “smartphone patent wars” as well as the increasing number of companies that have begun to take a stand in fighting the malicious behavior of entities that exist solely for filing frivolous patent litigation.

According to a White House report released earlier this year, patent trolls are defined as:

“Companies that do not make products, but buy up or own patents and sue businesses they claim are infringing on those rights in order to collect licensing fees.”

In the words of President Obama, these entities “don’t actually produce anything themselves,” but instead develop a business model “to essentially leverage and hijack somebody else’s idea and see if they can extort some money out of them.”

The government believes that patent trolls are a drain on the American economy that requires legislative action to level the playing field for innovators.  But waiting for Congress to act is no way to protect your company from patent trolls.

Here are three ways you can take action now:

Prevention.  You can search for patents and trademarks online so you do not introduce anything to the market that already has a patent or trademark.

IP Insurance.  Frivolous patent infringement suits have become so common that some insurance companies offer policies to help protect businesses from patent litigation.

Legal help. If you receive notification of a patent lawsuit or a letter demanding payment, consult a business attorney before you do anything.  An attorney can also work with you to ensure your patents, trademarks and copyrights are current and identify any areas of concern for management.

If you are interested in learning more about business asset protection strategies, call us today at 303-255-3588 to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.  Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive that fee.

10 Tips for Charitable Giving This Holiday Season

from Brett Lee Shelton, licensed Family Business Lawyer™

According to a recent Forbes article, Americans donated more than $316 billion to charity last year – and most of that came from individuals.  Holidays are a traditional time of giving, and not just because we like to get in those year-end tax deductions!

Forbes provided 10 tips for getting the most out of your charitable giving this year:

1.  Be sure to itemize. The IRS requires that you itemize your charitable deductions each year on your 1040 so be sure to keep careful records.

2.  Get a receipt. If you are giving property, be sure you get a written receipt from the organization and that it lists the items you have donated.  If you are giving cash you need a receipt as well – either from the charity or a cancelled check or credit card receipt that includes the name of the charity.

3.  Choose wisely. Not every charity is recognized by the IRS as an exempt organization.  You can check by name at the IRS Exempt Organizations Select Check website.

4.  Remember payroll deductions.  If you give via a payroll deduction, your employer should furnish you with a record of your annual deduction.

5.  Deduct value of incentives. If you receive something in exchange for your donation – even a coffee mug or a t-shirt – you are required to deduct the value of that item from the value of your donation.

6.  Consider giving appreciated assets. You can receive a double benefit if you donate an appreciated asset like stock or real estate.  If you have owned the asset for at least a year, you can deduct the fair market value and avoid paying any capital gains tax.

7.  Understand what you can deduct.  If you provide services to a charitable organization, you can deduct things like mileage or supplies, but you cannot deduct your time.

8.  Document gift value.  Non-cash items need to be documented in terms of the item’s condition in order to assess a fair market value.  If your donation is worth more than $500, the IRS requires a written appraisal for fair market value.

9.  Be aware of limits. Many people are not aware that there are limits on charitable contributions, which are tied to your adjusted gross income (AGI).  If you give more than 20 percent of your AGI, then you may run up against these limits, which vary according to the gift (cash, non-cash items, appreciated assets).

10.  Give by year-end. You will only receive deductions for those items or cash you give during the calendar year, so be sure you make your donation by Dec. 31.  If you gift via check or credit card, you will receive the deduction as long as they are recorded by Dec. 31 – even if you don’t pay the credit card or the check isn’t cashed until 2014.

If you would like more information about protecting your assets, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but because this planning is so important, I’ve made space for the next two people who mention this article to have a complete planning session at no charge. Call 303-255-3588 today and mention this article.

How to Protect Your Intellectual Property

from Brett Lee Shelton, licensed Family Business Lawyer™

Beyond the products or services you offer, your company has intellectual property that needs to be rigorously protected.  Too often, business owners and entrepreneurs neglect to put the proper safeguards in place, which can lead to big legal expenses down the road.

Here are 6 costly IP mistakes you need to avoid to protect your brand:

1.  Choosing the wrong name. Whether it’s the name of a company or a product, you need to do some research before settling on a name and spending money marketing it.  First, run a simple search on Google.  Then go deeper by searching the U.S. Patent and Trademark office website.

2. Not being specific. Using a simple descriptive name will likely not do you any good in having it be associated with your company and will be almost impossible to trademark.  When it comes to trademark law, there are levels of distinction that apply, and not every name is approved for trademark.  Have your IP attorney conduct a search for obvious conflicts.

3.  Assuming that since you own the domain, you also own the name. Just because there is a available does not mean that the name is available for use.  Before you invest a lot in a website, make sure there are no other companies that have trademarked the name or you could likely be on the receiving end of a cease and desist letter.

4.  Getting a logo on the cheap.  Hiring a friend of a friend to design your logo with no written agreement in place on copyright ownership is a mistake many startups make.  Even if you are just spending a couple hundred dollars for a logo design, have a written agreement with the designer that assigns the copyright on the design to you.

5.  Assuming every idea needs a patent. When you file for a patent, your idea is exposed to the public.  If your invention has a short shelf life, will be difficult to reverse-engineer or can be maintained as a secret, you may want to treat it as a trade secret instead.  Your IP attorney can provide you with the proper guidance to help you make the right decision.

6.  Neglecting copyrights. Copyrights are inexpensive and easy to file and can provide additional IP protection, but are often overlooked.  Copyrights need to be highly specific, but can be used to protect designs, drawings and even computer code.

If you’re a small or mid-size business owner, call us today at 303-255-3588 to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.  Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive that fee.

3 Steps to Maximize Profits When Selling Your Company

from Brett Lee Shelton, licensed Family Business Lawyer™

If you are planning to sell your company now or sometime in the future, a recent article advises that there are 3 strategies you should use to get as much cash out of your hard work in building the business as possible:

Pre-sale planning.  Look for opportunities to increase the sale price of your company.  The first step is having a current valuation of the business as well as financial statements prepared that accurately portray the value of the company.  Consider reading the book “Built to Sell” by John Warrilow and taking the assessment at his site by the same name,

Pre-sale tax planning.  Examine your company’s tax situation and that of your family as well prior to any sale, then look for ways to minimize any taxes that could result.  For example, you may want to restructure any assets not used in the business to be sold apart from the company or use them for other purposes.  You should also look into the use of trusts to freeze the value of the business so that when it is sold, estate taxes will be less.  If you are so inclined, charitable trusts can be used to eliminate capital gains taxes.  And, you will want to consider, of course, whether you are selling assets or stock, which have different tax impacts.

Negotiate skillfully. All the planning you have done prior to the sale of your company will help you be a more skillful negotiator.  Take the time to understand the motivations of the buyers, which can provide excellent insight you can use to your advantage when negotiating the highest possible price for your company.

Taking these three steps will help you position yourself to get the best price for your business and help you increase your family wealth.

If you’re a small or mid-size business owner and considering selling your business or want to ensure it’s prepared well for sale, call us today at 303-255-3588 to schedule your comprehensive LIFT™ (legal, insurance, financial and tax) Foundation Audit.  Normally, this session is $1,250, but if you mention this article and we still have room on our calendar this month, we will waive that fee.

So You’ve Been Named the Trustee of a Trust…Now What?

from Brett Lee Shelton, licensed Family Business Lawyer™

Many of you who have been asked by a family member of close friend to serve as the trustee of a trust are honored that the trust owner feels confident in relying on their good judgment to undertake this important responsibility.  And it’s very likely you have no idea what you have just said yes to take on.

Being a trustee means that you are responsible for all oversight and direction of the assets of the Trust.  As a Trustee, you have what is known as a fiduciary duty to the beneficiaries of that trust.  There are laws you must abide by in administering the trust, in addition to the terms of the trust that set out your duties as trustee.

A trustee’s duties include, but are not limited to:

  • Administering the trust according to its terms
  • Communicating with beneficiaries about the various activities of the trust
  • Investing and managing trust assets in a prudent manner
  • Accounting for and paying any taxes or fees
  • Distributing assets to beneficiaries as outlined in the trust
  • Making an accounting of trust assets, liabilities, receipts and disbursements to beneficiaries.

As a Trustee, you may find yourself involved with the probate process at some point and have to go into Court to marshal assets. If some of the assets of the estate were not properly transferred into the trust, this process can be overwhelming, especially if you do not have prior experience in this area.

Thankfully, with a good lawyer on board, you do not have to navigate this process alone. Engaging experienced legal help is always the best option for trustees, with the trust being responsible for any fees incurred for legal services.

If you would like some guidance on trust administration or planning for smooth administration of an estate, call our office today to schedule a time for us to sit down and talk. We normally charge $750 for a Family Wealth Planning Session, but if you are one of the next two people who mention this article, we will waive our planning session fee. Call 303-255-3588 today and mention this article.