Firing their first shot on June 6, 2022, Shosh Yonay and Yuval Yonay, heirs of Ehud Yonay, took aim at Paramount by filing a complaint in Federal Court asserting that the movie Top Gun: Maverick, infringes upon a copyrighted story written by Ehud Yonay (“Story”). Shosh and Yuval claim that in May of 1983, Paramount obtained from Ehud, exclusive motion picture and allied rights – creation of merchandise or a television series – to the Story. Shosh and Yuval assert further that in January of 2018, they notified Paramount of their election to terminate those rights as of January of 2020.

On May 27, 2022, flying high over complaints from Shosh and Yuval and well after the termination date, Paramount released Top Gun: Maverick domestically bringing in over $120,000,000 during its opening weekend. Have Shosh and Yuval found their cash cow??

Do Shosh and Yuval have legal standing?

First, can Shosh and Yuval ‘elect to terminate’ rights in which they did not give? 17 U.S.C. § 203(a)(2)(A-B) states that in the case of any work other than a work made for hire, the exclusive or nonexclusive grant of a transfer or license of copyright or of any right under a copyright, executed by the author on or after January 1, 1978, otherwise than by will, is subject to termination under the following conditions:

[w]here an author is dead, his or her termination interest is owned, and may be exercised, as follows: [t]he widow or widower owns the author’s entire termination interest unless there are any surviving children or grandchildren of the author, in which case the widow or widower owns one-half of the author’s interest and [t]he author’s surviving children, and the surviving children of any dead child of the author, own the author’s entire termination interest unless there is a widow or widower, in which case the ownership of one-half of the author’s interest is divided among them.

This means that Congress provided copyright owners with the ability to recapture their works thus allowing the copyright owner to take actions such as renegotiating an agreement or creating their own works based on the original work.

Here, there is no indication that the work is for hire, the grant does not appear to be by will and allegedly occurred after 1977, plus Shosh is the widow and Yuval is the son of Ehud. It is clear that in this case, as the grant of rights occurred after 1977 and that Shosh and Yuval are widow and son, respectively, of Ehud, that they had the right to terminate the extension of rights to Paramount.

Did Shosh and Yuval provide Paramount with proper notice?

Continue Reading Copyright Claim Soars Over Top Gun: Maverick

Patent SearchA patentability search allows a patent practitioner to assess the likelihood of successfully obtaining a patent with the United States Patent and Trademark Office (“USPTO”). The USPTO may issue a patent to whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, subject to certain conditions and requirements.

A patentability search allows a patent practitioner to better understand the scope of the state of the art, the level of skill of a person in the art, and the potential for obtaining a peiroatent registration that protects the new and useful process, machine, manufacture, or composition of matter.

What does it mean to be “novel” and “non-obvious”?

To be patentable, the new and useful process, machine, manufacture, or composition of matter (“invention”) must be novel and non-obvious. In assessing novelty, a patent practitioner searches and reviews the universe of prior art, such as issued patents, expired patents, patent applications, and other non-patent literature, to determine if the exact invention has already been disclosed. In general, a prior disclosure by a third party is a complete bar to patentability, and a prior disclosure by the inventor is subject to specific timing as set by statute regarding such previous disclosures.

Continue Reading What is a patentability search and why should I have one conducted?

If you have not yet filed your 2021 tax return, the Internal Revenue Service provides a plethora of guidance. Below is a summary of few of the items taxpayers should know before filing:

Cryptocurrency

Did you receive, sell, exchange or buy any virtual currency? All taxpayers filing Form 1040, Form 1040-SR or Form 1040-NR must check one box answering either “Yes” or “No” to the virtual currency question. The question must be answered by all taxpayers, not just taxpayers who engaged in a transaction involving virtual currency in 2021. Click here for more information.

Tax Breaks for Teachers

Teachers or other educators can deduct the unreimbursed cost of books, supplies, computer equipment, software and COVID-19 protective items used in the classroom. For 2022, they will be able to deduct up to $300 of out-of-pocket classroom expenses when they file their federal income tax return next year. If they are married and file a joint return with another eligible educator, the limit rises to $600. Click here for more information. For those teachers and educators filing their 2021 tax returns due in April, the deduction is limited to $250. The limit will rise in $50 increments in future years based on inflation adjustments.

Need more time to file?

Continue Reading Important Reminders as 2022 “Tax Day” Approaches

Mandatory Arbitration of Sexual HarassmentEmployers who use arbitration agreements for employment disputes just had the scope of those agreements narrowed. On March 3, 2022, President Biden signed into law the Forced Arbitration of Sexual Assault and Sexual Harassment Act.

As the name of the Act implies, the new law prohibits employers from requiring that sexual harassment and sexual assault claims be arbitrated as part of a mandatory arbitration agreement of employment claims. The new law also overrides any terms of employment agreements that prohibit class actions for sexual harassment or sexual assault claims.

Finally, the law will have an immediate impact because it applies retroactively. This means that it invalidates any current arbitration agreement that an employee has signed to the extent that the claim is for sexual harassment or sexual assault. The only exception is for cases that are already pending or completed in arbitration.

Continue Reading New Law Prohibits Mandatory Arbitration of Sexual Harassment and Sexual Assault Claims

Bareboat CharterIn Florida, we are lucky to have a year-round boating season. However, with so many boats here in Southwest Florida, boat owners often look for ways to maximize their boats’ usage and, of course, their profitability. Boat owners can maximize profitability and limit liability by renting their boats under bareboat charter arrangements.

What is a Bareboat Charter?

A bareboat charter is a vessel that is leased by the owner to another person (a “charterer”) for a period of time without captain and crew. The person leasing the vessel is then responsible for the entire vessel’s operation and any captain and crewing requirements. For a valid bareboat charter, the vessel owner must completely relinquish “possession, command, and navigation” of the vessel.

Elements of a valid Bareboat Charter:

  1. The charterer must have the option of selecting and paying crew, although the owner may require general levels of proficiency for the crew that is retained based on federal statutes;
  2. The master/crew are paid by the charterer;
  3. All food, fuel, and stores are provided by the charterer;
  4. Insurance is obtained by the charterer;
  5. The charterer is responsible for the safe navigation of the vessel;
  6. The charterer may discharge, for cause, the master or any crew member without referral to the owner;
  7. The vessel is surveyed upon its delivery and return.

What are the benefits of a Bareboat Charter?

Continue Reading Bareboat Charters: Things to Consider

COVID LawIn response to the U.S. Supreme Court’s recent ruling that stopped OSHA from enforcing its mandatory COVID vaccination Rule for large employers, OSHA announced on January 25, 2022, that it is withdrawing the Rule. OSHA introduced the Rule as an emergency temporary rule in October 2021. The Rule applied to all employers nationwide with 100 or more employees, with only extremely limited exceptions. It was set to go into effect in December 2021, but a federal judge issued a nationwide injunction prohibiting OSHA from implementing the Emergency Rule.

After procedural moves resulted in the Sixth Circuit Court of Appeals being assigned the case, a three-judge panel in late December 2021 lifted the injunction. That opened the door for OSHA to begin implementation of the Rule in early January 2022, with enforcement to begin in February 2022.

Instead, the U.S. Supreme Court heard the matter on an expedited basis, taking oral arguments on January 7, 2022. The following week, the Court reinstated the injunction and blocked OSHA from implementing the Rule while the matter was being decided on its merits in the courts. Taking its cue from the Supreme Court’s written decision reinstating the injunction, OSHA apparently concluded that its argument was unlikely to prevail before the lower courts. Hence the withdrawal of the Rule, effective Wednesday, January 26.

What’s next

Continue Reading OSHA COVID Rule for Large Employers Withdrawn

Tax TimeWelcome to 2022 tax season! As the vast majority of businesses, small and large, were affected by the COVID-19 pandemic, many companies received support through the Paycheck Protection Program. However, there were many question marks with the Paycheck Protection Program, such as the timing of forgiveness and if eligible expenses are deductible for federal income tax purposes.

Timing of PPP loan forgiveness

As we all know, the Paycheck Protection Program (“PPP”) was created to assist businesses in paying their employees’ paychecks. If the funds received from PPP were used for qualified expenses, the amount of the loan was forgiven. Recently, the IRS released guidance on the timing of PPP Loan forgiveness. With some business owners not receiving their forgiveness letter in 2021, the question arose when the PPP loan will be forgiven for tax-exempt income purposes.

The IRS stated that taxpayers may treat such income as received or accrued when either:

  • expenses eligible for forgiveness are paid or incurred;
  • an application for PPP loan forgiveness is filed; or
  • PPP loan forgiveness is granted.

Thus, a taxpayer who submitted their application for forgiveness in 2021, but has not been granted forgiveness in the 2021 tax year, may choose the date of the forgiveness application, the date the forgiveness is granted, or the when eligible expenses are paid or incurred.

Expenses paid with 2020 PPP loans

Continue Reading How does receiving a PPP Loan impact filing my company’s taxes?

Henderson Franklin’s legal team returns to Sanibel Harbour Resort & Spa on Friday, February 25, 2022 with a new twist. The main room will offer the firm’s most popular workshop, HR Law & Solutions.

New for 2022, attendees will have the option to attend breakout sessions focusing on niche corporate matters and contracts, family businesses, startups and how to make informed real estate decisions. Click here to download the brochure.

Topics and speakers

General Session #1, Lingering Effects of COVID on Florida Employers, presented by Scott Atwood, Esq.

From business shutdowns and PPP loans to vaccinations, COVID has presented unique challenges to Florida businesses. Henderson Franklin’s employment group chair Scott Atwood will address the multi-faceted employment issues that employers may face, including: current obligations over masks and mandatory vaccinations; how to deal with possible long-term disability claims and leave issues arising from COVID; increased union activity; and the pros and cons of a remote/hybrid workforce.

General Session #2, Saving a Buck can Cost you a Million. Update on Recent Employment Cases and Mistakes that Employers Keep Making, presented by Scott Atwood, Esq. and Robert Shearman, Esq.

Continue Reading Registration is Open: Southwest Florida Legal Summit

COVID LawAfter a protracted battle in the Courts, on January 13, 2022, the U.S Supreme Court effectively ended the Biden Administration’s efforts to mandate widespread COVID vaccinations for large employers. That day, the Court issued a stay of an OSHA emergency temporary regulation that required all employers nationwide that had 100 or more employees, regardless of industry, to implement a mandatory vaccination policy for their employees and verify that the employees were vaccinated.

The practical effect is that there will be no federal mandatory vaccination requirements for employers except for employers in the healthcare industry who receive Medicare/Medicaid funds.

What does this mean for health care providers?

healthcareFor those health care providers who receive Medicare/Medicaid funds, a 5-4 majority of the Supreme Court upheld (by refusing to issue a stay) a separate regulation that requires mandatory vaccinations for employees in that industry by February 28, 2022. Conservative Justices Roberts and Cavanaugh sided with the liberal Justices. They found that the rule was more focused since it was limited to the more traditionally regulated health care industry and thus was not the same expansive use of agency authority. Moreover, the limitation of the rule to providers that received federal funds was deemed relevant because the courts have been more relaxed in enforcing rules that basically are a condition of receipt of the government money.

Finally, there is some question whether some states (such as Florida) who generally enforce these regulations will enforce the rule. Politics, however, deem it unlikely that the Biden administration would give up enforcement if certain states don’t enforce the rule. In such cases, Florida health care providers should be cautious when making a decision to ignore the new rule.

The OSHA “Stay” Explained

Continue Reading What does the Supreme Court’s Order rejecting the OSHA Rule mean for employers?

new businessWhat if I were to tell you, you could be both an LLC and an S-corporation and still be considered one single business entity?

An S-corporation is not a state law entity designation, similar to a Florida corporation or a Florida limited liability company. However, an S-corporation is merely a federal income tax classification made on a specific Internal Revenue Service form (Form 2553). Thus, one can form a Florida limited liability company (“LLC”) and elect to be an S-corporation for federal income tax purposes with the Internal Revenue Service (“IRS”).

Who is eligible to make the election?

Generally, the entity wishing to make the election needs to be a domestic corporation or an LLC. However, certain types of businesses are ineligible to make the election, such as insurance companies or financial institutions. In addition, the entity must have eligible shareholders, meaning the owners of the entity must meet specific requirements of the Tax Code.

Who can be an eligible shareholder?

shareholderAn eligible shareholder can be an individual (other than non-resident alien), estates, certain trusts, certain qualified retirement trusts, or charitable organizations. More specifically:

  • So long as the individual is not a non-resident alien, individuals are eligible S-corporation shareholders. Individuals may co-own an S-corporation with other individuals, such as husband and wife, as joint tenants by the entirety.
  • If an individual shareholder declares bankruptcy, the bankruptcy estate is a permissible S-corporation shareholder. If an individual shareholder passes away, their estate is an eligible S-corporation shareholder, as well.
  • Testamentary Trusts. These trusts become effective upon the death of a shareholder and hence become eligible to be an S-corporation shareholder.
  • Voting Trusts. Shareholders may create these trusts to temporarily transfer their shares to the trustee to combine their voting power. Voting trusts are eligible to be S-corporation shareholders.
  • Qualified Subchapter S Trust (“QSST”). A QSST is an eligible S-Corporation shareholder if it meets specific rigid requirements.
  • Small Business Trust (“ESBT”). An ESBT is a trust for beneficiaries that are all eligible s-corporation shareholders that acquired their trust interest by lifetime gifts or upon the death of an owner. These are more flexible trusts than the QSST described above.

Coming back to the opening question of an LLC or an S-corporation, so long as the individuals forming the LLC are eligible shareholders described above, the LLC can make the election treated as an S-corporation.

When to make the election?

Continue Reading Should I start my new business as an LLC or S-Corporation?