By Attorney Edward Jesson
Copyright and trademark are two different areas of the law that often intersect with each other. A trademark can be any word, phrase, design, or combination of these things that identifies a business’s goods or services. A copyright is an original work by an author with at least a minimum level of creativity, such as a book, painting, photograph, or song. A recent lawsuit involving SweetWater Brewing Company brings some of the nuances and risks involved in these areas of the law to light.
SweetWater Brewing has been using a trout image in its trademarked logo since 1996 after it paid a friend of the founders, Mr. Fuss, $500 to draw the trout in question. Mr. Fuss is now claiming he owns a copyright to the drawing of the trout, and that there was an “understanding” between himself and SweetWater that the value of his rights to the copyright would grow as the value of SweetWater and its intellectual property grew. When SweetWater was recently bought by another company, Fuss sued SweetWater, claiming that he was owed $31 million dollars for the value of the trout drawing. SweetWater has, in turn, sued Mr. Fuss in federal court requesting a declaration from the court that SweetWater can continue to use its trademarks moving forwards without interference from Mr. Fuss.
Had Mr. Fuss been an employee of SweetWater when he drew the trout, or had a comprehensive agreement been entered into between Mr. Fuss and SweetWater at the beginning, the current litigation could have been avoided, saving all the parties lots of money and time.
Generally speaking, under copyright law, the author of the original work owns the copyright. An exception to this general rule is where the work is made for hire. Thus, if the work was made by an employee in his or her scope of employment, the employer holds the copyright to the work. However, if the individual creating the work is an independent contractor instead, that independent contractor will own the copyright to the work. Therefore, it is very important that companies dealing with independent contractors have them sign agreements whereby the independent contractor assigns the copyrights to the company who is paying them.
The trout image was created long before SweetWater grew into the company it is today, and that spotlights a reason why planning for these eventualities before they become bigger issues is so important, even when a business is in its startup phase.
Should you need assistance with navigating the sometimes complex law surrounding copyright and trademarks, the attorney at Jesson & Rains will be happy to assist.
By Meg Abney
Cryptocurrencies like Bitcoin have gained popularity with investors for years, and around 16% of Americans now report that they have invested in or traded cryptocurrency (crypto). Most of these cryptocurrencies use decentralized networks based on blockchain technology—essentially a ledger that is enforced by a large network of computers.
However, the decentralization that makes crypto so popular also means that failure to plan for death or incapacity can prevent your loved ones from accessing your digital assets. Taking advantage of the blockchain now shouldn’t mean blocking loved ones from inheritance in the future. Read on for some estate-planning tips to help protect your assets.
What happens to my crypto when I die or become incapacitated?
Like funds in a bank account, cryptocurrency remains wherever it was stored, usually in a digital wallet or with a third-party holder. But unlike a bank account, your executor or agent under a Power of Attorney cannot simply request access to these funds upon your death or incapacity. Instead, you will need a method to provide your executor or agent with your keys and seed phrases. Failure to do so could mean that your loved ones never see these funds.
Can I just leave my crypto in a will?
Yes, but your executor will still need to gain access to it, and remember that your will becomes public record, so you should not include any sensitive information regarding your cryptocurrency. A simple way to communicate this information is by drafting a separate “access plan” that you keep with your will that describes your digital wallets, passwords, keys, and seed phrases.
What is the best way to plan for the future of my crypto?
While everyone’s situation is different, establishing a living trust is one of the best ways to ensure that your digital assets are not lost after your death. Some distinct advantages of establishing a trust for your cryptocurrency include:
With a living trust, you continue to maintain control over your cryptocurrency during your lifetime. After death, your successor trustee administers your trust according to your instructions. Setting up a trust involving cryptocurrency can be complicated, so it is best to consult with an experienced estate planning attorney. Please call Jesson & Rains if you have questions.
By Attorney Edward Jesson
In January of this year, the North Carolina legislature passed some significant changes to North Carolina’s mechanics lien laws that went into effect on March 1, 2022. The main changes to the law make void and unenforceable contractual provisions requiring lien waivers as a condition for progress payments, modify the attorneys’ fee provisions contained in the lien statutes, and affect the design-build contracting process.
Chapter 22B of the North Carolina General Statutes, titled “Contracts Against Public Policy,” has been amended to include a new Section 22B-5, which provides that requiring someone to submit a waiver or release of lien as a condition to receiving progress payments under a construction agreement or design professional agreement are void and unenforceable unless limited to the progress payments actually received in exchange for the lien waiver. In other words, broad blanket lien waivers in exchange for progress payments are now unenforceable unless the lien waiver is specifically drafted and narrow enough in scope to only apply to the money actually being received by the party applying for payment.
The attorneys’ fee section of the mechanics lien statutes has been updated to specify the method that the court or arbitrator must use to determine which party is the “prevailing party” in circumstances where attorneys’ fees may be at issue. Instead of the Plaintiff in a lawsuit having to obtain a judgment of at least 50% of the amount it claimed, which was the case prior to March 1, the court or arbitrator will look to the party whose monetary position at the beginning of the trial is closest to the amount of the final judgment or arbitration award. The new statute also specifically allows the court or arbitrator to look at several factors, including the economic circumstances of the parties or whether one party unreasonably exercised its superior bargaining power (e.g., a very wealthy general contractor working with a relatively small subcontractor). This process, while a big change to the existing law, should have the effect of giving much more certainty when evaluating whether the court or arbitrator is likely to grant attorney’s fees when it comes time to try a case.
The changes to the design-build process only appear, at this time, to affect the design-build process as it applies to State funded projects. The changes include adding statutory definitions for “design builder,” “design professional,” “first-tier subcontractor,” “licensed contractor,” “licensed subcontractor,” “unlicensed subcontractor,” “costs of the subcontractor work,” “general conditions,” and “key personnel.” The changes also now require design builders responding to requests for proposals from the government to select their project team by one of two methods that are outlined in the new law. Furthermore, the law makes some changes specific to the bidding process for publicly funded bridging contracts and makes it clear that the requests for proposals public notice provisions require the owner to provide a list of general conditions for which the design builder needs to provide a fixed fee in its response to the proposal. This is not an exhaustive list of the changes that have been made, but given the nature and number of changes to the public design-build process, it is important to carefully review these new requirements prior to bidding on publicly funded design build projects.
These new laws will have a significant impact on many contracts used in North Carolina, litigation over attorneys’ fees in lien claims, and those design-builders engaged in the public bidding process. Should you require assistance with any of these changes, please do not hesitate to call Jesson & Rains.
By Associate Attorney Danielle Nodar
Marketing your business has extended beyond websites and social media, with many businesses choosing to reach their customers directly via text messages. While this form of marketing is a great way to communicate promotions, offers, or new products to your customers, businesses must adhere to text message privacy laws or risk incurring hefty penalties. For example, a violation of the Telephone Consumer Protection Act (TCPA) can result in a fine of $500 to $1,500 per violation, which can add up quickly if multiple messages are being sent to multiple consumers.
Electronic communications, including phone calls, e-mails, and text messages, are regulated in the United States under two federal privacy laws: The TCPA and the CAN-SPAM Act. The TCPA is the primary telemarketing law in the US and prohibits calls and text messages to cell phones unless the consumer has provided express written consent. Express written consent must be related to receiving promotional text messages--not just being contacted by the company. For example, having a customer provide their phone number to set up an account or as part of a transaction does not constitute consent to receiving future promotional messages.
Another law businesses must comply with when engaging in text message marketing is the CAN-SPAM Act. This is the primary text messaging spam prevention law in the US. Just like TCPA, a business needs a customer’s consent before sending commercial text messages. The commercial text messages must clearly disclose that it is an advertisement and provide an easy, clear way to opt-out of receiving future messages. When a consumer opts-out of a text message campaign, the business must honor the request within 10 days. CAN-SPAM Act does not apply to existing relationships or transactions, such as order or delivery confirmation texts. However, if the main content of a message is commercial, the CAN-SPAM Act will apply, even the message also includes other transactional information.
In order to comply with these two laws, businesses must ensure that they have a compliant procedure for obtaining written consent from a consumer prior to them receiving promotional text messages. Some options include keyword texting, where a customer will text a keyword from their phone to join, an online form or website pop up that allows a visitor to opt into the program, or a paper form. Businesses should also keep records of a customer’s consent, including when they consented and if they opted out.
If you are thinking of using text message marketing for your business, please call Jesson & Rains to learn more about how to properly start a texting campaign and best practices for protecting your business!
By Attorney Kelly Jesson & Meg Abney
Most people are aware that 529 plans are a way to intelligently save for minor’s education with pre-tax dollars. We use the word “minor” because money can be set aside for any beneficiary, not just your child, to use on education. This article contains more details on these accounts so you can determine whether these plans are right for you.
What can 529 funds be spent on?
What can 529 funds not be spent on?
Can a 529 plan affect the ability to get financial aid/needs-based scholarships?
Yes. If the student or parent owns the 529 plan, on the FAFSA form, it counts as an asset. If a grandparent owns the 529 plan, it is not reported on the first year, but if money from the plan is used to pay for the student’s education, it must be reported as “untaxed income to the student” which may affect the ability to get aid in future years.
What happens if the beneficiary does not need the money?
When money is contributed to a 529 Plan, the account owner retains control of the money in the account, even when the beneficiary is no longer a minor. There is no expiration date on the account, and there is no age limit by which funds must be withdrawn. Withdrawals for non-authorized expenses are penalized and taxed, similar to early withdrawals from a retirement account. 529 plans cannot have multiple beneficiaries at the same time, but they can be split into two in the event you want to make distributions to more than one beneficiary.
If the account owner dies, who decides what happens to the account how the funds are to be spent?
It depends on the terms of the particular 529 plan. Sometimes the terms of a 529 plan will provide that the beneficiary becomes the new owner of the account upon the owner's death. However, this is not common practice.
Usually, the enrollment application for a 529 plan asks the owner to name a successor owner. This person becomes the new owner and even has the ability to change the account's beneficiary and make nonqualified withdrawals. For more control, it is better to name a trustee as the successor owner since the actions of the trustee are bound by the terms of the trust.
If no successor is listed, and the account holder dies, the former owner’s executor will become the new account holder. The executor will usually have the same powers over the account as the original owner.
By Associate Attorney Danielle Nodar
The No Surprise Act, a new law establishing protections for consumers against surprise medical billing, became effective on January 1, 2022. This law protects individuals covered by insurance from receiving surprise medical bills when receiving certain kinds of medical services, particularly emergency services, at an out-of-network facility or from out-of-network providers working at an in-network facility. Before this law became effective, an insured patient receiving care from an out-of-network provider or at an out-of-network facility may have been responsible for the balance of the bill not covered by their insurance, which could result in a patient being responsible for hundreds or thousands of dollars in “balance” or “surprise” bills. This applied even if a patient went to an in-network facility but unknowingly received care from an out-of-network provider, like an anesthesiologist or radiologist.
The No Surprise Act protects consumers from these surprise medical bills by banning surprise bills for most emergency services, even if they were received at an out-of-network facility, banning surprise billing for certain non-emergency services provided by out-of-network providers in an in-network facility, and requiring insurance to cover out-of-network claims and apply in-network rates. The law’s main aim is to protect insured consumers who may unknowingly receive out-of-network treatment.
The No Surprise Act also provides consumer protections to uninsured patients or those who choose to pay for their care out of pocket by requiring most providers to provide a good faith estimate of how much your care will cost before you receive treatment. Also, if there is a dispute over the amount payable, patients no longer serve as the middleman, as the Act establishes a negotiation and arbitration procedure between the insurance carrier and out-of-network provider.
The No Surprise Act does not apply if the patient gives prior written consent to waive their rights under the Act and be billed more for out-of-network providers. This waiver exception does not apply in an emergency situation. Consent must be voluntarily given, and the notice must clearly explain the rights the patient is waiving. Otherwise, a provider can refuse care if consent is denied.
As this law is still new, there are still many aspects that have not been clarified, such as how the law is enforced and applied to different providers. For example, some medical communities have concerns with providing a good faith estimate prior to treatment as it may be difficult due to a lack of diagnosis or may serve as a deterrent to care for certain patients, such as those seeking mental health treatment. However, medical providers impacted by the law still have a duty to comply with its requirements, particularly with regard to notices of a patient’s rights under the law, waivers and consent to balance billing, and good faith estimates. If you think your practice may be impacted by this law, please feel free to contact Jesson & Rains.
Subscribe to our newsletter.