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

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

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

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?

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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Beware of Copyright Trolls

Have you ever copied a photograph from a website thinking that the photograph was free to use?  You may have thought this because the photograph did not contain a watermark or copyright notice. Maybe the photograph claimed that it was “royalty free,” and you assumed that meant it was free to use for no charge.  Or, perhaps you were aware that using the photograph was not authorized, but you figured it would never be discovered. These are common mistakes that can prove to be costly.

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States Rush to Pass Economic Nexus Legislation

Following the Supreme Court’s June 2018 decision in South Dakota v. Wayfair, states have acted quickly to enact economic nexus laws to require remote sellers to pay sales tax.  “Economic nexus” is the power of a state to compel remote sellers to pay sales tax on their transactions with purchasers in the state.  As of October 1, 2019, economic nexus laws have gone into effect in all states with a statewide sales tax, except Missouri and Florida. States are using economic nexus laws to compel remote sellers, or sellers with no physical presence in the state, to collect sales tax if the seller’s economic activity in the state reaches a pre-determined threshold. Previous laws required the seller to have a physical presence within the state, such as a brick-and-mortar store, office, or warehouse.

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New Rule Requires U.S. Counsel to Represent Foreign Trademark Applicants and Registrants

The U.S. Patent and Trademark Office (USPTO) issued a new rule that requires foreign trademark applicants and registrants to be represented by an attorney licensed in the United States. Under the U.S. counsel rule, codified at 37 C.F.R. § 2.11(a), any trademark applicant or registrant domiciled outside of the United States must retain U.S. counsel to file any document before the USPTO.  This rule change is an effort to combat the unauthorized practice of law as well as the use of fake or suspicious specimens. The rule change was prompted by the USPTO’s examination of foreign trademark applications. In some cases, foreign applicants filed hundreds of trademark applications in their own names.  After reviewing those applications, the USPTO discovered that those applications were, in fact, filed by foreign practitioners.

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New Proposed Fair Labor Standards Act Overtime Rules

The Department of Labor (DOL) finalized its proposed rules for overtime eligibility. As some may recall, the DOL attempted to issue new overtime rules back in 2015, but those overtime rules were enjoined by a federal district court in 2016. Below is a summary of the final 2019 overtime rules:

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Nonprofits and Taxable Parking Expenses

Navigating the Possibility of Incurring UBTI

Nonprofit organizations that provide employee parking benefits may be surprised to learn that they may be subject to incur unrelated business taxable income (UBTI). In addition, organizations with no UBTI may now be required to file form 990-T.   

The Tax Cuts and Jobs Act (Act) amended Section 274 of the Internal Revenue Code (IRC) to disallow for-profit employers from deducting certain expenses related to transportation fringe benefits provided to their employees. The Act added IRC Section 512(a)(7) to what constitutes UBTI for nonprofits and other tax-exempt entities. The Act states that tax-exempt entities are required to increase their UBTI by expenses related to transportation fringe benefits provided to their employees. The transportation fringe benefits subject to this tax include expenses associated with:

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Receipting Donations

Don’t be complacent.

Each year tax-exempt organizations in the United States receive hundreds of millions of dollars in donations.  Donors contributing to 501(c)(3) organizations are able to deduct their own contributions from their taxes, subject to IRS limitations.  Recently, a higher standard deduction has been put in place through the Tax Cuts and Jobs Act.  This will likely diminish the number of taxpayers and donors who itemize their deductions, making it tempting for charities to assume that receipting donations is no longer important.  However, charities should continue to exercise care in receipting donations for the benefit of the donor. Continue reading “Receipting Donations”