Our Insights

Nonprofits and the Fair Use Defense

Posted on under Articles, Copyright and Trademark, Intellectual Property, Nonprofits.

It is a common misconception that nonprofit organizations have special rights to use copyrighted works without permission. This misconception arises from the first fair use factor, which considers “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” As explained below, “nonprofit educational purposes” is very narrowly defined. Even if a use is actually included in “nonprofit educational purpose” the use may not qualify as a fair use if the other fair use factors weigh against fair use. While the law does not generally grant nonprofit organizations the right to use copyrighted works as a fair use, the U.S. Copyright Act does grant several statutory exemptions in limited situations.

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Brexit Changes European Trademark Registration Strategies

Posted on under Articles, Copyright and Trademark, Intellectual Property.

With the United Kingdom’s withdrawal from the European Union becoming official on January 31, 2020, trademark owners should evaluate their trademark registration strategies to ensure their marks remain protected throughout Europe. While the U.K. was a member of the E.U., trademark owners were able to protect their marks in the U.K. and all other E.U. member states with a single, European-Union trademark registration. The U.K.’s withdrawal will not bring any immediate changes to the trademark registration process, as E.U. trademark registrations will continue to be valid in the U.K. until the end of the transition period on December 31, 2020.

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Accepting Donations of Crypto Currency

Posted on under Articles, Business, Nonprofits.

More frequently, nonprofit development officers and fundraisers are asked by prospective donors about whether their organization will accept donations of “Crypto Currency”, or other types of virtual currency.[i] The most commonly known form of Crypto Currency is Bitcoin, however, there are many other types of Crypto Currency that can be bought, traded, and sold.

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COVID-19: Family and Medical Leave Legislation

Posted on under Articles, Business, Employment, Taxes.

On Wednesday, March 18^th, the President signed into law the Families First Coronavirus Response Act (FFCR). The FFCR applies to all employers with 500 or fewer employees and contains three primary sections related to employers: Emergency Family and Medical Leave Act Expansion; Emergency Paid Sick Leave Act; and Tax Credits for Paid Sick and Paid Family and Medical Leave. The FFCR is slated to take effect April 2, 2020 and will expire on December 31, 2020.

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Illinois Employment Law for 2020

Posted on under Articles, Business, Employment.

2019 was a busy year for the Illinois legislature with respect to state employment law changes. Below is a summary of the most important pieces of legislation affecting employers in 2020:

Amendments to the Equal Pay Act of 2003

Made effective on September 29, 2019, the intent of the legislation is to address pay disparity between men and women. As amended, the Equal Pay Act prevents employers from:

Requesting or requiring that an applicant disclose wage or salary history as a condition of employment;
Requesting or requiring a wage or salary history as a condition of being considered for employment, as a condition of being interviewed, as a condition of an offer of employment, or as a condition of an offer of employment or an offer of compensation;
Screening job applicants based on their current or prior wages or salary histories, including benefits or other compensation, by requiring that the wage or salary history of an applicant satisfy minimum or maximum criteria; or
Seeking the wage or salary history, including benefits or other compensation, of a job applicant from any current or former employer.

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Year-End Federal Tax Changes Benefiting NonProfits

Posted on under Articles, Nonprofits, Taxes.

On December 20, 2019, the President signed, “The Further Consolidated Appropriations Act” (H.R. 1865), which contained the “Taxpayer Certainty and Disaster Tax Relief Act of 2019” (“Act”). The Act contains two important changes to federal tax laws affecting nonprofits: (1) repeal of the parking tax and (2) reduction in the private foundation excise tax.

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Supreme Court to Hear “Not-So-Generic” Case Regarding Generic Trademarks

Posted on under Articles, Copyright and Trademark, Intellectual Property.

UPDATE: In an 8-1 decision, the Court found in favor of Booking.com and held that its trademark was entitled to registration (Patent and Trademark Office v. Booking.com B. V.). The Court reasoned that since one entity can own an Internet domain name at the same time that a domain name can serve a source-indicating function to the general public. The Court rejected the USPTO’s categorical rule against registration of a generic word following by a “.com” or other top-level domain name. Writing for the majority, Justice Ginsburg explained that the controlling test “depends on whether consumers in fact perceive that term as the name of a class or, instead, as a term capable of distinguishing among members of the class.”

The U.S. Supreme Court will hear a case that could have profound implications for owners of generic marks. In United States Patent and Trademark Office v. Booking.com B.V., the U.S. Supreme Court will decide if adding the term “.com” to a generic word creates a protectable trademark for an online business. This case arose when the U.S. Patent and Trademark Office (USPTO) refused registration of “Booking.com” as a trademark for an online travel website. The USPTO determined that the word “Booking” was generic for hotel reservation services. Adding the top-level domain “.com” to the generic word, the USPTO reasoned, did not create a distinctive mark because top-level domains do not ordinarily serve a source-indicating function.

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Supreme Court to Decide Epic 10-Year Copyright Infringement Case

Posted on under Articles, Computer & Internet, Copyright and Trademark, Intellectual Property.

UPDATE: In a 6-2 decision, the U.S. Supreme Court found in favor of Google, holding that Google’s use of the Java API qualified as a fair use. The opinion is available here.

The “copyright lawsuit of the decade” is finally coming to a conclusion, as the U.S. Supreme Court granted certiorari to Google LLC v. Oracle America, Inc. The Court’s decision is immensely important to the computer software industry since the Court will decide if a software application programming interface (API) is protected by copyright. The Court may, for the first time in 25 years, address the copyright fair use doctrine by deciding if use of an API is a fair use. This case has a long and convoluted history, but it started in 2010 when Oracle sued Google, alleging that Google committed patent and copyright infringement by using Java application programming interface declarations in its Android platform. The patent claims were resolved, leaving the copyright infringement claim. After several rounds of decisions, the U.S. Court of Appeals for the Federal Circuit held that APIs were protected by copyright and that Google’s use of them did not constitute fair use. Google appealed to the Supreme Court seeking reversal of those decisions.

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IRS Grants The Salt Lake Tribune Tax-Exempt Status

Posted on under Articles, Business, Nonprofits.

In an interesting new development, the IRS granted 501(c)(3) tax-exempt status to a major daily newspaper. On November 3, 2019, the Salt Lake Tribune announced that it had incorporated as a non-profit corporation, re-structured its operations, and obtained IRS recognition of its 501(c)(3) status. Tax-exempt practitioners have speculated for years that a daily newspaper could, in theory, qualify for tax-exempt status under Section 501(c)(3). However, the Salt Lake Tribune’s announcement was the first time that a major daily newspaper is known to have succeeded in obtaining recognition of 501(c)(3) tax-exempt status. Granting tax-exempt status to this daily newspaper means that the IRS has now officially recognized news-reporting as an exempt purpose.

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Where to Incorporate?

Posted on under Articles, Business, Churches and Religious Organizations, Nonprofits.

An early decision founders of new non-profit organizations must make is where to incorporate. A U.S. charitable, religious, or educational organization has its choice of incorporating in any of the 50 states as well as the District of Columbia. With this many choices, founders may ask if it is advantageous to incorporate in one state over another. When it comes to for-profit companies, it is common for them to incorporate or organize in Delaware due to tax or regulatory issues. We recently ran across an article advising non-profits to incorporate in Delaware. We thought it would be helpful to address if non-profits derive any advantage from incorporating in Delaware or another state in particular.

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