He Wants to Avoid Paying Taxes for Band

Dear Rich: I just purchased your book online called "Music Law: How to Run Your Band's Business." I Paid For Rush Order As I Need Advice Before Friday And Not Sure My Book Will Arrive On Time So I Took The Chance Of Writing To You With Fingers Crossed You Read This And May Have An Answer For Me. My Husband Is A Professional Musician And Tours A Few Times A Year. When He Is Home He Just Plays Gigs Around Town In Different Bands And Plays At Church Every Week. He Does Not Have A Trademarked Or Serious Band Or Anything Like That Himself. He Usually Just Plays With Other Bands When He Gets Off Tour And They Pay Him By Check. They Give Him A 1099 At The End Of The Year If He Makes Over $600 With Them. My Husband Is Set Up As A "Section C" For His Taxes. My Husband Has Never Booked A Band And Does Not Really Know Anything About Signing Band Contracts For Club/Venues. A Club Just Approached Him To Play And Put A New Band Together For His Club. My Husband Is Supposed To Go To The Club On Friday And Sign A Contract. They Want Him To Play At The Club About 2 Times A Month. The Pay Is $800 Per Band And They Only Pay By Check To The Person Who Signs The Contract. I Am Very Nervous About My Husband Signing And What He Is Opening Himself Up To In Relation To Taxes At The End Of The Year. If He Signs The Contract He Will Be Responsible For The Entire Band Taxes For That Year-Correct? (If They Play 2 X Month For 1 Year That Will Be $19,200 Total Band Taxable Income.......$3,840 Per Individual Band Member). How Can He Book Gigs And Protect Himself And Not Get Stuck With Paying All The Taxes For The Entire Band And What Are His Options? Since you're in a hurry and we're in a hurry, we didn't bother to uncapitalize your question but we are curious about this grammatical aberration. Not to be rude, but what's up? If using all caps in email is like shouting, is this less than shouting but still intended to convey a sense of urgency? Curious as many are, but FYI, it makes it a bit tiring to read.
Right, you had a question (and you're in a hurry). Your husband should take the gig and take the payment. You won't have any problem with your taxes because your husband can deduct all of the payments he makes to the other band members (on his Schedule C). After that, he would only have to pay taxes on the remainder (which should be his payment). If he pays the other individual musicians more than $600 in a year, he must issue 1099s. That's not hard to do (we've done it ourselves and you can even automate the process online).  The Music Law book explains all this and you'll have plenty of time to read it before tax time.

How to Do A Quick Trademark Search

Registering Copyright for Quarterly Online Magazine

Dear Rich: I’m the editor of a magazine that migrated about five years ago from quarterly print publication to online. Initially, we updated the web site on a quarterly basis, but eventually increased posting frequency and now post content virtually every day. We still archive all content accumulated during a particular quarter by that quarter, however, and would like to continue doing so. I need information on filing for copyright registration for a “quarterly” online magazine that posts new content "virtually every day.” Any suggestions? Here at Dear Rich headquarters we like to provide clarity and a sense of reassurance in our answers. Unfortunately your question deals with some murky waters ... group copyright registrations and online publications. Partially, that's because there has been some uncertainty expressed in recent cases as to what group registrations actually protect -- the collection or the individual units of content. Then, there's the fact that the Copyright Office still hasn't taken a position as to whether an online work is published or unpublished (a fact that also affects your registration).
So what's the answer? First, you need to sort out who produced the content -- you, employees, or freelancers? If you or your employees created the works, then you are the copyright owner. If you own copyright in all content, you can register that content by following the guidelines in Circular 66. You should register the journal on a periodic basis -- perhaps timed to major article releases. (There's a saying among patent lawyers: register early and register often and that would apply to your quarterly magazine.) If you're revising the online work, and the revisions are published on separate days, the only for-sure guaranteed protection for the content is that each version of the online work must be registered individually, with a separate application and filing fee (unless it qualifies under one of the two registration exceptions set forth in Copyright Circular 66). That can get expensive at $35 per application  but in a CYA world, that's the only surefire guarantee of claiming statutory rights. Make sure to list the titles of all articles in the journal. If you don't claim copyright in individual articles, you may wish to claim the collection of articles -- not necessarily the content -- and you should consider serial registration as explained in Circular 62B. If freelancers created the articles, you don't own copyright in the individual articles unless there is an agreement in place. (If a freelancer owns copyright the freelancer should register his or her article using either the eCo system or Form CO.) Whew!
Just in case you weren't aware. Copyright registration is not essential for claiming copyright. You get that automatically. But if you want to claim statutory damages or you want a shot at attorney fees, registering the work prior to infringement is essential.

Royalty or Equity for Copyrighted Character

Dear Rich: I am being asked to work as creative director for a new entertainment company that is just starting. The plan is that this company will have one principal entertainment property that hinges on a main character (a cartoon), with the goal of creating a desirable licensable image and personality (via online episodes and games, and eventually consumer goods). That will hopefully lead to startup funding. I am currently collaborating directly (without compensation) with the founder of the company to co-create this character by providing art and writing. I will eventually be the principal individual in charge of directing her image, voice, and evolution and once the company is funded, I will be offered to join as an employee with full-time salary as part of the employment package. I am also being offered a percentage of equity in the company. The founder's goal is to sell the company (in the internet/Silicon Valley tradition) once the revenue from licenses, etc. is established. The founder and I have discussed the possibility of future royalties as an incentive but we don't have a good idea as to a standard for this. A big concern for the founder (and shareholders) is burdening the sale of the company with an ongoing commitment by the acquiring party to pay an individual (or individuals, in the event the founder also has an interest in a royalty stake) in perpetuity. This sounds non-standard for what we know of the internet industry. But perhaps it is not that unusual and we are just unfamiliar? Sometimes the Dear Rich staff imagines what life would have been like if we (not Peyo) had created the Smurfs -- the licensing possibilities, the interaction with our adorable blue friends, and most important, knowing that we're leaving behind a lovable legacy. We're not saying we'd be happier or more fulfilled -- there's a limit to the satisfaction provided by licensed characters, and we imagine there's also considerable stress -- but things would definitely be different if we surrounded ourselves with Smurfdom.
Right, you had a question. You're kind of in the position of a pre-Smurf Peyo. We admire your business planning and strategizing (as General Eisenhower said, "plans are useless; planning is indispensable") but what you should keep in mind is that while you proceed, legal decisions are being made without you knowing about it. For example, if you and someone else are creating a copyrightable character, then you're both co-authors of that character (once created) under copyright law. No paperwork is required for that to occur. As co-authors, either one of you can license the character provided the other co-author is reimbursed. If you've already created the character, you'll need to deal with (and acknowledge) that fact. Sometimes, this is accomplished by assigning your rights to the venture and once you assign your rights, that's it. You won't be able to get those rights back for 35 years. Alternatively, if you're hired as an employee, and you create the work after becoming an employee, the company will own whatever you create. So, if you haven't created the character then you should probably work out the paperwork before beginning ... so you're not playing catch-up later. At the same, if you and the founder are currently contributing to the business and planning to share in the revenues and you haven't 'created' a company, then you're operating as a partnership, with all of the legal obligations that entails.
What paperwork do you need? It's all about how you will be compensated. Maybe equity -- stock ownership of the business -- will be sufficient. If you acquire stock and the company is sold, you'll probably receive a payment for your shares and that will be likely be that. You're unlikely to receive income from any post-sale revenues (unless that's a condition of the sale of the business). If you're receiving a royalty for your copyright interest, that would continue after a sale because the new owners would have to assume the royalty obligations.
Do acquiring businesses want to assume royalty obligations? As a general rule most companies like to pay once for a business and not to have continuing payment obligations. On the other hand, many acquiring businesses -- music, movie, toy, publishing, and photograph companies --- assume royalty obligations as standard operating procedure. It's no big deal. We believe that if your property is a serious revenue-generator, royalty obligations won't stand in the way of a sale. And we wouldn't worry about a new owner having to pay in perpetuity. When it comes to acquisitions, anything can be worked out if the parties are willing.
Next steps. Document everything. If someone makes you an offer, save the document or email. If you agree to something, put that in writing. If you're in the midst of creating the character or storylines, keep track of who contributed what. Situations like yours are often sorted out after the fact and documentation is essential. If possible, avoid creating your work until the paperwork is in order. That's because if the character is created and becomes a hit, the company will be in a better financial position to challenge your legal rights. That's why the time to get everything right is before creation of the character.

Food Services Biz Wants Same Name as Clothing Store

Dear Rich: We want to open a catering/restaurant business and we have a name that we love, but there is a store (clothing/home furnishings store) in San Francisco that has the same name. We obviously don't want to step on anyone toes. What do you you think? While our staff was preparing this answer we overhead a conversation between two commuters about Fritos. Apparently Fritos brand original corn chips are a good item to take camping (or in an emergency kit) because there's so much oil in the chips that you can use a few to start a camp fire. Who knew? Apparently everybody.
Right, you had a question. As a general rule, your trademark gives you rights for your class of products or services, or for products or services which you are likely to expand into. (The rationale behind all this is that consumers are not likely to be confused between different types of businesses.) So, you're fine to use the same name for your food services business even if another company is using it for its clothing store.  It's true that some clothing stores offer food services -- we use to love eating lunch at Espirit -- and it's true that home furnishings stores may offer food, too -- people seem to covet IKEA's Swedish meatballs. But as a general rule, that type of expansion is rare and usually limited to large chain stores. So always stay away from marks that are famous and owned by conglomerate type-entities.
The bigger picture. Nowadays, it's often not just local businesses that one has to be concerned about. If you're competing on the web, or hoping to expand your business beyond San Francisco, you'll need to check out national uses of the name. We checked your proposed name in the USPTO database and a Florida company has registered it for bar and restaurant services. That doesn't mean you can't use it locally -- the Florida trademark owner may never even learn of your use or care -- but it could become an issue and you might have to change your name if sued (particularly if you can't afford to defend the lawsuit). You could probably avoid those hassles by personalizing the name. For example, let's say you wanted to use PATIO and someone in another state had registered it for food services. You'd probably be okay calling your business, Maggie's Patio or Patio & Potatoes (the Dear Rich staff dreams of a potato-only cuisine). In other words, it's all about distinguishing your name from the competition. That should also make it easier for you to stop others in the event somebody wants to copy your name.

What Version Do You Deposit for Software App Copyright?

Dear Rich: We have a popular app that's gone through several versions and is available for Apple and Android platforms. We've never copyrighted the app and now we're trying to do it. We started with the electronic registration but we're confused. Do we register the current version of the program or the first version. The Dear Rich staff is feeling kind of strange these days and we're not sure whether it's world events, Liz Taylor's departure, the behavior of the tides and moon, Charlie Sheen's trademark activity, or all of the above. In any case your question triggered memories from back in the 80s when we worked for a software company that developed networking software. And one day the company's developer hooked up the software in our office and somebody in another office sent us our first message from their computer and it was just like one of those "Come here Mr. Watson" moments.
Right, you had a question. If you're concerned about infringement, you should register both the first version and the most recent version, and you should probably do the same for all platforms. Yes, it's true that you get copyright automatically once you create a work. But in reality, the copyright is not so automatic when you want to sue someone. That's because you have to file a registration before filing your suit. When completing the application, the Copyright Office rules require that you (1) list the first date of publication, (2) that you acknowledge any preexisting material that you incorporate in your version, and (3) that you deposit the best edition of the first publication. Those three criteria can cause confusion. That's because software programs (like video games and websites) go through a series of substantial changes after they're first offered to the public.
Date of first publication; preexisting material. The Copyright Office wants you to provide the date of first publication for your software program. But if you're offering a series of version, each constitutes a separate "first" publication. For example, there's a first publication for your iPod version, your iPad version, your iPod 2.0 version, your Android 3.0 version, etc. And whenever you register your work you can claim only what is new over the previous version. As a result, you must file a series of registrations as described here.
Depositing the best edition. Consider the software developer who no longer had the first published version of his source code from 1990. In order to deposit the first published version, he reconstructed it by removing all of the code he'd added since the program was first created. Not good enough said a court who claimed that reconstructions of code would not suffice. Therefore, we hope you have maintained copies of the source code for each version and you can furnish it according to these requirements. P.S. For more exciting legal info on apps, check out our O'Reilly Mini eGuide.

Burma Shave signs and copyright

Dear Rich: I'm an author writing and self-publishing a book of fiction. I would like to use an old Burma-Shave slogan, circa 1935, in my text. Burma-Shave was originally owned by Clinton Odell, sold to Phillip Morris in 1963 and then to American Safety Razor Company in 1997. The company is now in bankruptcy proceedings. It's an 18 word slogan: “Don’t pass cars/ On curve or hill/ If the cops don’t get you/ The morticians will/ Burma-Shave.”  The short answer: use it and don't worry. Burma Shave's use of sequential signs ended in 1963, coincidentally, the year in copyright history after which published works no longer required renewal. Putting aside issues as to whether posting the signs amounted to "publication," it's unlikely that signs like the one you want to use were registered and renewed. So, they're most likely public domain. In addition, the signs are arguably a short phrase, which is usually not protectible, and your use appears to be a fair use, anyway, since the incorporation in your novel would mostly likely be transformative.  Even if we're wrong about all of the preceding (sounds like a lawyer, now!), the party that acquires the Burma Shave rights in bankruptcy will probably not care about your use. In summary, "Our answer/Might seem way too long/But it's copyright/Not copy wrong."