Disabled Veteran’s Property Tax Exemption Complicates Revocable Trust Planning

Disabled Veterans Tax ExemptionWhat does it mean to “own” something?  Owning something means different things to different people.  Owning something suggests a sense of full control over something.  It also implies being able to enjoy the benefits of it and be responsible for something, together with the consequences or damages to it or by it.  Recently, however, the Court of Appeals in The Joanne L. Evangelista Revocable Trust v City of Farmington Hills, Court of Appeals (Dkt. No. 334263 issued November 14, 2017), examined what it means for a veteran to “own” their home for purposes of a property tax exemption.

Michigan allows a generous 100% property tax exemption for disabled veterans who meet a handful of requirements, including that they “own” their home. Michael Evangelista served in the United States Army during Vietnam and was honorably discharged in 1971.  The Veterans Administration rated Michael 100% disabled. Both Michael and his wife lived at their home in Farmington Hills, Michigan. The legal title to their property was held by his wife’s revocable trust.

The Court in Evangelista reasoned that the disabled veteran’s exemption requires that the property in question be “owned and used as a homestead” by the disabled veteran. A homestead (re: principal residence) must be owned and occupied by an owner. An “owner” is the holder of legal title, or if a land contract is in place, by the most recent land contract vendee/buyer (embracing the concept that an “owner” in this situation is the one who enjoys all of the benefits and is responsible for the burdens of ownership without naked legal title). There was no dispute in this case that the trust, not Michael, held legal title to the property. The Court ruled that because Michael was not an “owner” of the property, he was not entitled to the exemption.

The appeals court also rejected the veteran’s claim that he was an equitable co-owner of the property by virtue of his marriage to his wife (who he contended “owns” the property through her trust). Having conveyed his complete interest in the property to the trust in 1998, and the trustee having the sole ability to convey or dispose of trust property, the appeals court said it was difficult to see what interest the veteran possessed in the property, equitable or otherwise. The appeals court also said that to the extent the State Tax Commission’s Transfer of Ownership Guidelines imply that the ownership requirement can be satisfied by the situation where a disabled veteran holds no legal title and is at most a contingent future beneficiary of the trust that holds title, such an implication is contrary to the plain language of the statute.

Transferring property to a revocable trust has a number of advantages for elderly and disabled couples. For example, as couples age, become ill and unable to properly manage their finances and property, a spouse can remain as trustee or another trustee can be selected to manage and protect their home and other assets. Revocable trusts give couples these benefits as well as the benefit of avoiding probate of the home.

Given the value of the property tax exemption for disabled veterans, they and their advisors should carefully consider how the title to the veteran’s principal residence should be held for estate planning purposes and eligibility to claim Michigan’s generous property tax exemption.


Fraser Trebilcock attorney Paul V. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or pmccord@fraserlawfirm.com.



Teahan, Marlaine

Chair of Fraser Trebilcock’s Trusts and Estates Department, attorney Marlaine C. Teahan is a Fellow of the American College of Trust and Estate Counsel, and is the Chair of the Probate and Estate Planning Section of the State Bar of Michigan. For help with revocable trust planning or to answer any questions regarding this recent case, contact Marlaine  at 517-377-0869 or mteahan@fraserlawfirm.com.

LegalZoom vs. a Lawyer for Protecting Intellectual Property

LegalZoom vs a Lawyer for Protecting Intellectual PropertyYou have already taken a step in the right direction by knowing that you need to protect your invention, brand or other original works with a patent, trademark, or copyright, respectively. But, what are the most cost effective, efficient and proactive steps to take when the time comes to protect your intellectual property? Over the last decade or so, a variety of online legal services have popped up, promoting themselves as easy-to-use and inexpensive when compared to a typical intellectual property attorney.

One of the most common and highly promoted online entities is LegalZoom. It purports that the party seeking protection, typically the owner of the intellectual property, may easily download the necessary paperwork based upon the menu items or checklist items selected within its website. LegalZoom advertises a base starting price of $99 that increases with nearly each selection you make on the website. Your documents are not reviewed by an attorney and you are responsible for completing and filing the items on your own.

With that low of an entry price point, it can be very tempting to “do it yourself” (DIY) instead of hiring a professional intellectual property attorney. As you may suspect – BUYER BEWARE! Costs can and often do increase wildly during the filing process – and there’s no one to help you guarantee that you’re filing the right forms, filling them out correctly, or even meeting the basic requirements of the U.S. Patent and Trademark Office or U.S. Copyright Office. Accordingly, we’ve put together three key things to consider before moving forward with a DIY approach to intellectual property protection.

Researching Trademark and Patent Needs

It can take hours to fully research which materials you need based upon the property you are trying to protect. This type of process is not typical for people outside of the legal profession, and although some websites will provide you with the documents they feel you need, the system is not foolproof. One key consideration when comparing LegalZoom vs. a lawyer is that an intellectual property attorney will know exactly what steps need to be completed for your specific situation, no matter how simple or complex.

It is important to note that the “complexities” do not lie solely in filling out the paperwork or checking the correct boxes on the LegalZoom website. Trademarks, for example, should broadly and accurately cover the goods and services that a company currently makes or plans to make within the next five years. Too often, trademark applications are prepared with a narrow or inaccurate scope regarding the goods and services of the company. This may result in less than intended coverage, which in turn may require that additional trademark applications be filed. Or worse, it may leave the door open for a competitor to usurp your mark for goods and services that should have been covered in your trademark application.

As for patent applications, it may seem like straightforward process to write up a description of your invention, add a few images to support your description, and file it using LegalZoom. However, the chance of a DIY patent application making it through the examination phase at the U.S. Patent and Trademark Office is virtually zero. On the off chance that the examination process is navigated successfully, the odds of that DIY patent actually becoming a valuable, enforceable asset are even closer to zero. Patents are documents that live for 20 years, they must be addressed to a variety of audiences, they must be written for a person of ordinary skill in the art, which is legalese that a DIY software program cannot explain, they must flow from general to specific, they should not contain absolute terms or non-working examples that could invalidate the patent, and they must include well drafted patent claims.

Patent claims are the heart and soul of a patent application. They provide the legal boundaries that define your invention, which means, if properly drafted, they provide a protected space that keeps competitors from designing around your invention.

Filing the Correct Paperwork

After you have found the documents you think you need to file, you now need to complete the proper paperwork. Each document needs to be completed correctly, and will be closely scrutinized upon receipt by the U.S. Patent and Trademark Office or US. Copyright Office. If there is ANY discrepancy, your request will be denied – often without any opportunity to remedy the alleged defects. If you are still so inclined, you will then need to repeat the process, including obtaining and completing the proper paperwork and paying more fees. An experienced intellectual property lawyer will guide you through the entire process, handle all the necessary paperwork and communication with the respective Office, and help you obtain strong and broad coverage for your intellectual property.

Potential Intellectual Property Liability in the Future

Assuming that you overcome the odds to have your patent or trademark application filed, examined and approved, the work is still not finished. A competitor may move to cancel your trademark or invalidate your patent, among many other tactics. At that time, having the correct items and a legal professional who knows your business is more critical than ever. In these stressful circumstances, it is much more beneficial to have an IP attorney who understands your business and product fully and one who can assist you from the beginning to avoid many potential pitfalls down the road. When considering a DIY entity such as LegalZoom, you should be extremely careful not to be taken in by the attractive entry costs because, in the end, you always get what you pay for. Your IP attorney will be able to counsel you about and through the process all while ensuring you are set up to succeed.

Although it may seem like a substantial cost savings in the beginning, your business and its intellectual property assets are too important to rely on the lowest bidder. If you’re considering LegalZoom vs. a lawyer, contact our attorneys now and we will provide you with an initial consultation to help you understand the importance of strong IP assets and how we can help your business be successful from its early beginnings to many years of successful growth.


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A Look at The Senate Tax Reform Bill

Fraser Trebilcock continues to monitor the tax reform plans moving through the House and Senate.  As we mentioned in our last post, the various proposals are a bit of a moving target and are in at state of flux. On November 9, the Senate Finance Committee released its “policy highlights” outlining their goals for tax reform.  The Senate framework has many proposals which are similar to the House bill released on November 2, but it also has a number of significant differences. On November 13, the Senate Finance Committee began its markup of its version of the Tax Cuts and Jobs Act, a summary of which was released last Friday and summarized below. Members of the senate Finance Committee have thus far filed 355 amendments.

Meanwhile the House Ways and Means Committee voted out its markup which makes a number of changes to the House Bill originally introduced.  The House Rules Committee is scheduled to meet on Wednesday, November 15, on that version of the House Bill approved by the Ways and Means Committee.  A floor vote is expected on Thursday, November 16.

The Senate anticipating to vote on their version as early as the week following Thanksgiving. After that, it is expected that the bills will head to a marathon conference in the first two weeks of December with at vote in both houses by the third week of December with final legislation being presented to the President’s signature by Christmas.  Below is a summary of the Senate Bill, with the differences noted between the completing bills noted appropriately.

Individual Provision

  • New individual income tax rates. The Senate plan provides a reformed tax rate structure of 6 rates verse the 4 in the House Bill. The Senate plan maintains the 10% bracket and provides a 38.5% bracket for high-income earners.
  • Standard deduction increased. The Senate plan would increase the standard deduction to $24,000 for joint returns and surviving spouses, $18,000 for single parents, and $12,000 for individuals. This is up from $12,700, $9,300, and $6,350 under current law.
  • Child tax credit. The Senate plan would expand the child tax credit from $1,000 to $1,650 and substantially lift existing caps.
  • State and local tax deduction. The Senate plan would repeal in full the deduction for State and local taxes. The House plan, in contrast, retains the state and local property tax deduction up to $10,000.
  • Retained credits & deductions. The Senate plan retains many current law provisions that have been potentially targeted for repeal in the House bill, including:
    • the child and dependent care credit;
    • the adoption credit (although this has been restored);
    • the deduction for charitable contributions;
    • the deduction for medical expenses;
    • the enhanced standard deduction for the blind and elderly;
    • provisions that provide “education relief for graduate students”;
    • the home mortgage interest deduction, preserved for existing mortgages and maintained for newly purchased homes up to $1 million;
    • the earned income tax credit; and
    • retirement savings programs including 401(k)s and IRAs.
  • Alternative minimum tax. Like the House plan, the Senate plan proposes to repeal the Alternative Minimum Tax.
  • Estate tax. Unlike the House bill, the estate tax itself would not be repealed but instead, the current exemption would be doubled.

Business Provisions

  • New corporate tax rate. The Senate plan would permanently lower the corporate tax rate to 20%. However, unlike the House bill, this reduction reportedly wouldn’t go into effect until 2019.
  • Deduction for pass-through businesses. The Senate plan would establish a “simple and easy-to-administer deduction for pass-through businesses of all sizes.”
  • Expensing. The Senate plan would allow for full and immediate expensing of new equipment. Unlike the House bill, which generally allowed for full expensing for five years, this provision would be permanent.
  • Enhanced cash accounting. Under the Senate plan, more businesses would be allowed to use the cash-basis accounting method.
  • Retained credits and deductions. The Senate plan would retain many current law provisions that have been potentially targeted for repeal, including:
    • the low-income housing credit;
    • the research and development credit; and
    • the interest deduction for “Main Street employers.”

International Provisions

  • Shift to territorial system. The Senate plan would eliminate the current “worldwide” system of U.S. taxation and change to a territorial system.
  • Repatriation. The Senate plan would eliminate the “lock-out effect” by making it “simpler and less onerous for American multinationals to bring foreign earnings back to America.”

Also yesterday the House Ways and Means Committee reported out it’s Bill after amendments. The changes bring the cost of the legislation down to the $1.5 trillion revenue loss that was agreed to in the budget. Among the key changes are:

Individual Provisions

  • New rate for certain small business income. The original Bill contained a new 25% maximum rate on business income of individuals who are active partners or S corporation shareholders. This provision has now been eliminated.  The amended Bill now provides a new a 9% tax rate, in lieu of the ordinary 12% tax rate, for the first $75,000 ($37,500 for single filers and $56,250 for heads of household filers) in net business taxable income of an active owner or shareholder earning less than $150,000 in taxable income ($75,00 for single filers and $112,500 for heads of household filers) through a pass-through business, such as an LLC or S corporation. This new 9% rate is to be phased in over five years.
  • Restores and preserves the adoption credit.
  • Moving expenses deduction for service members. The amended Bill preserves the above-the-line deduction for moving expenses of a member of the Armed Forces on active duty.
  • Certain rollover from 529 plans. Rollovers between qualified tuition programs and ABLE programs (ABLE Accounts, which are tax-advantaged savings accounts for individuals with disabilities and their families). This new provision would allow rollovers from section 529 plans to ABLE programs.

Business Provisions

  • Limitation on lowered corporate tax rate. The original House bill provided for lower corporate tax rates. This amendment lowers the 80% dividends received deduction to 65% and the 70% dividends received deduction to 50%, and thus preserves the higher current law effective tax rates on income from such dividends.
  • Easing of limit on reduction of business interest. Under the original House Bill, every business was to be subject to a disallowance of a deduction for net interest expense in excess of 30% of the business’s adjusted taxable income. That provision has been eased for taxpayers that paid or accrued interest on “floor plan financing indebtedness”.
  • Modification of treatment of S corporation conversions into C corporations. This new provision provides that distributions from an “eligible terminated S corporation” would be treated as paid from its accumulated adjustments account and from its earnings and profits on a pro-rata basis.
  • Amortization of certain research and experimentation expenditures. The amended Bill provides that certain research or experimental expenditures are required to be capitalized and amortized over a 5-year period (15 years in the case of expenditures attributable to research conducted outside the U.S.).
  • Preserves the current rules regarding nonqualified deferred compensation. The original House Bill tightened up rules regarding nonqualified deferred compensation. The Bill reported out yesterday strikes this provision, so that the current-law tax treatment of nonqualified deferred compensation is preserved.
  • Change in the treatment of restricted stock units. The House bill, would have given certain employees of nonpublic companies who receive stock options or restricted stock, an election to defer income recognition for up to five years. As amended, restricted stock units are not eligible section 83 treatment except as provided in new section 83(i).

Fraser Trebilcock attorney Paul V. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or pmccord@fraserlawfirm.com.

House Tax Reform Bill: A Look at How It Breaks Down

UPDATE: (November 14, 2017) A Look at The Senate Tax Reform Bill


On November 2, 2017, House Ways and Means Committee introduced the much anticipated House Tax Reform Bill – The Tax Cuts and Jobs Act. The bill is 429 pages, so it will take some time to completely digest and analyze all of the provisions. The scope of the proposed changes is very broad and the task is more difficult as various provisions are a moving target, since the House Ways and Means Committee’s markup began Monday, November 6th. The Senate Finance Committee, the Senate counterpart to the House Ways and Means Committee, is expected to release its version of the tax bill the week of Nov. 13th. The Administration has expressed its desire to sign tax legislation by Christmas.

If the Bill becomes law, it will mark the most significant change to the Tax Code in over 30 years. The bill generally would apply to taxable years beginning after December 31, 2017. Here is an overview of key provisions:

Business Provisions

  • Corporate tax rate. Lowers the corporate tax rate to 20% – down from 35%
  • Pass-through rate. Sets a top 25% rate for owners who are active participants in pass-through businesses such as sole-proprietorships, S corporations and partnerships. The plan includes complicated guardrails that limit people from turning what would otherwise be wage income taxed at up to 39.6% into business income taxed at a lower rate (presumptively set at 30% — 0% for service-related businesses) of their business income.
  • Immediate expensing of business investment. Allows businesses to immediately write off the full cost of new equipment instead of depreciating it over a number of years.
  • Net Operating Losses. Establishes an indefinite carryforward (and no carryback) for net operating losses (“NOL”) but also caps the NOL deduction at an amount equal to 90% of taxable income (as computed without the NOL deduction).
  • LITC. Retains the low-income housing tax credit.
  • R&D. Preserves the Research & Development Tax Credit.
  • Interest deduction. Limits the business interest expense deduction, capping it at 30% of earnings before interest, taxes, depreciation and amortization, which is a measure of cash flow. Real estate firms and small businesses would be exempt from that limit.
  • Limits executive compensation deduction. Publicly traded businesses would lose the ability to deduct certain executive compensation above $1 million, which they can now do for performance-based pay.
  • Nonqualified Deferred Compensation. Nonqualified deferred compensation, stock options, and stock appreciation rights would be subject to immediate taxation upon “vesting,” which (in many cases) might also be triggered more quickly.
  • Limits like-kind exchanges. Limits §1031 like-kind property exchanges to real propert
  • Repeals the following:
    • Corporate Alternative Minimum Tax
    • Entertainment expense and certain fringe benefits deductions
    • Technical terminations of partnerships
    • New market tax credit
    • Exclusion from income of §118 contributions to capital

International Provisions

  • Repatriation tax rate. Creates a one-time 12% tax on offshore earnings held as cash or cash equivalents and a 5% tax on noncash assets, payable over up to eight years, whether or not the earnings are repatriated.
  • Controlled Foreign Corporations. Creates a new 10% tax on US companies’ high-profit foreign subsidiaries, calculated on a global basis.
  • Territorial Tax System. Establishes territorial taxation with a 100% exemption for domestic corporations on dividends from certain foreign subsidiaries.

Tax-Exempt Entities

  • Sports stadium financing. Eliminates tax-exempt bond treatment for professional stadiums.
  • Executive Compensation. Establishes 20% excise tax on compensation paid in excess of $1 million to an executive of a tax-exempt organization.
  • Excise tax on private college endowments. Imposes a 1.4% excise tax on net investment income of private colleges and universities if the aggregate fair market value of assets is at least $100,000 per student.
  • Permissible political activity. Establishes rule that churches and religious organizations will not lose exempt status or be deemed to have intervened in any political campaign on behalf of a candidate as a result of the content of any sermon, teaching or presentation.

Individual Provisions

  • Reduces the number of individual tax rates as follows:
    • 12%: Applies to incomes from $0 up to $45,000 for individuals and $90,000 for couples.
    • 25%: Applies to incomes up to $200,000 for individuals and $260,000 for couples.
    • 35%: Applies to incomes up to $500,000 for individuals and $1 million for couples.
    • For single parents that are heads of households, the thresholds would be the midpoint between individuals and joint filers, except for the highest bracket which would still kick in at $500,000.
    • 39.6%: Applies to incomes over $500,000 for individuals and couples making more than $1 million a year.
  • A larger standard deduction. The standard deduction for all taxes would increase to $12,000 for individuals (up from $6,350) and $24,000 for couples (up from $12,700). The benefit is offset, however, since the Bill eliminates the personal exemption and various secondary deductions.
  • Expands child tax credit. The Bill proposes to increase the child tax credit to $1,600, up from $1,000, for any child under 17. But the Bill also limits the refundability of this credit. The $600 increase in the credit is, however, not refundable. Further, the Bill will let more people claim the child tax credit. The income level where the credit starts to be phased out is increased to $115,000 for single parents, up from $75,000 today, and to $230,000 for married parents, up from $110,000.
  • Creates two new family credits. The Bill would create two different $300 tax credits.
  • Credit for non-child dependents. Credit for nonchild dependents — for instance, any son or daughter over 17 whom you are supporting, an ailing elderly mother or an adult child with a disability. The credit is equal to $300 per individual.
  • Spousal Credit. A $300 credit for each spouse if they file jointly (or, in the case of single parents, the head of household).

These credits are in effect only for 5 years and would not be refundable.

  • Charitable contributions. The Bill continues the deduction for charitable contributions.
  • Retains the earned income tax credit. Provides tax relief for low-income Americans.
  • No changes to 401(k) plans. Retains retirement savings options such as 401(k)s and IRAs.
  • No repeal of Affordable Care Act’s individual mandate.
  • Limits the home-mortgage interest deduction. Retains the home mortgage interest deduction for existing mortgages but limits the home mortgage interest deduction for newly purchased homes for mortgages up $500,000.
  • SALT Deduction. Limits the state and local tax deduction to local property taxes up to $10,000 but eliminates the deduction for state income and sales taxes.
  • Patents and inventions. Adds patents and inventions to the list of assets that are not treated as capital assets.
  • Eliminates personal exemptions. The Bill eliminates the personal exemption of $4,050 for you, your spouse and each of your dependents.
  • Removes most personal itemized deductions. The only deduction preserved explicitly is for charitable gifts and edited home-mortgage interest and SALT deductions. Eliminated itemized deductions include:
    • Student-loan-interest deduction.
    • Medical expense deduction.
    • Moving expense deduction.
    • Alimony payments.
  • Repeals the adoption tax credit. Repeals the tax credit for adoption.
  • Eliminates the exclusion for dependent care assistance accounts. Some employers provide parents the opportunity to save up to $5,000 of their income in a dependent care flexible spending account. That money is excluded from the parent’s taxable income. The Bill would repeal that exclusion.
  • Removes the deductions for MSA’s. Deductions for contributions to Medical Savings Accounts (“MSAs”) and exclusion from income for contributions of employers to MSAs are eliminated under the Bill.
  • Repeals the estate tax. Under current law, the threshold for the tax, which applies only to estates with greater than $5.6 million in assets during 2018, would double to over $10 million. Then, the tax would be phased out after six years.

Fraser Trebilcock attorney Paul V. McCord has more than 20 years of tax litigation experience, including serving as a clerk on the U.S. Tax Court and as a judge of the Michigan Tax Tribunal. Paul has represented clients before the IRS, Michigan Department of Treasury, other state revenue departments and local units of government. He can be contacted at 517.377.0861 or pmccord@fraserlawfirm.com.

How Trademarks, Copyrights, and Patents Protect your Business

Trademark registration separate your business from your competition and make you unique.Your intellectual assets are some of the most powerful resources your business has. These assets separate your business from your competition and make you unique – as long as they are protected. Trademarks, copyrights, and patents are methods of protecting your intangibles while publicly providing notice to other businesses or individuals to avoid copying or infringing on your intellectual property rights. But when do you need these protections? How do you get them? And what are they for?


What is a trademark?

Trademarks are exclusive legal protections for names, logos, sounds, and even colors as applied to a category of goods or services. Federally registered trademarks may not be used by others without your permission. Trademark owners do have a legal obligation to police their marks and provide notice to anyone that may be inadvertently or willfully using the mark without permission. Trademarks can be renewed indefinitely as long as the owner can show proof that the mark has been continually used in commerce.

What is a trademark for?

Trademarks operate to distinguish your business, build consumer goodwill and solidify your reputation as a source for the goods or services. In most cases, a trademark is a distinctive word, phrase, logo or design that is associated with or applied to a category of goods or services. Trademarks should not be merely descriptive of the goods or services and generic terms are expressly banned from trademark protection (e.g., such as the term “Supermarket” as applied to a grocery store).

Trademarks must not be confusingly similar to another company’s mark otherwise the U.S. Trademark Office will reject the mark or the opposing owner may proactively move to cancel your mark. For example, the Nike name and Swoosh logo are federally registered trademarks. Trademarks may often be referred to as service marks when applied solely to services such as the NBC tri-tone sound or United Airline’s “Fly the Friendly Skies” slogan. If you are in the business of providing goods or services, then it is strongly recommended that you consult with an intellectual property lawyer to get the best protection in a timely manner.

How do I get a trademark?

For the most part, trademark rights vest upon usage of the mark in interstate commerce (e.g., across state lines). When you select a distinctive mark for your business, you are legally considered the owner of an unregistered trademark under common law trademark law (i.e., limited protections vis-à-vis a federally registered trademark). During this initial use and while your trademark application is being examined by the U.S. Trademark Office, you may use the ™ symbol to provide public notice that you are claiming ownership rights in the mark. The ™ symbol does not have any legal significance and is simply used as a public notification tool. Your ability to halt an infringing action, obtain an injunction or obtain money damages is limited when the mark is an unregistered trademark. Therefore, it is strongly recommended that you take the necessary steps to federally register your trademark with the U.S. Patent and Trademark Office. Once registered, you may use the ® symbol and be entitled to a full range of legal protections for your mark.

When should I get a trademark?

If you are consistently using a non-generic name, logo, or other symbol, you already have an unregistered trademark. This shows your customers that it is yours. To prevent another company from using the goodwill associated with your business – or, worse, tainting your business reputation with low-quality products – you should register your mark with the U.S. Patent and Trademark Office as soon as you have finalized the word, phrase, logo and/or design.


What is copyright?

Copyright is the exclusive legal protection that covers an original work of authorship. Copyrights vest upon creation of the work, which means placing the work onto a tangible medium (e.g., applying paint to a canvas or words to a screenplay). Stated otherwise, a copyrighted work must be more than an idea – the idea of painting a scenic mountain is not protectable until one applies the paint to the canvas. A copyright owner holds to right to prevent others from copying, reproducing, displaying or making derivative works unless they expressly provide their permission for such use. A derivative work, for example, would be making a movie based on a book. Copyright protections are not indefinite; most protections last the length of the author’s life plus 70 years. For example, the author of the book Dracula died in 1912, so the copyright protection ended in 1982 and the work entered the public domain, which means it can be freely reproduced and distributed by anyone.

What is copyright for?

Original works are copyrightable materials. “Original” simply means that there must be some modicum of creativity that distinguishes the work from others. Books and e-books, magazine or newspaper articles, software, paintings, music, plays, some websites, and movies, among other things fall under purview of copyright protection. Historical and scientific facts, recipes, ideas, domain names, surnames, inventions, methods, and events are examples where copyright protection would not be appropriate; although some of these things may be protected under trademark or patent law.

How do I copyright my work?

As noted above, copyrights vest upon creation of the work, even if it isn’t published. Similar to trademark law, it can be difficult to enforce your copyright if the work is not registered with the U.S. Copyright Office. In most cases, a copyright application entails a downloadable form, a fee, and a copy of the work submitted to the U.S. Copyright Office. The review process takes about four months to possibly one year. Registering your work with the U.S. Copyright Office is definitely a good idea and it is recommended that you have an intellectual property attorney at least do a cursory review of your copyright application prior to submission. If your work is plagiarized, improperly displayed or illicitly distributed then having a registered copyright will strengthen your position in the event you decide to take legal action and file an infringement lawsuit.


What is a patent?

A patent is a legal monopoly for protecting a utilitarian device, system, machine, composition or process. A patent owner has the right to prevent others from making, using, selling or importing a protected invention for a limited time. Utility patents have a term of 20 years and design patents have a term of 14 years from the date of filing.

What is a patent for?

Design patents protect the aesthetic or ornamental, non-functional aspects of a utilitarian object. Utility patents protect useful devices, systems, machines, processes, and compositions of matter that, upon examination by the U.S. Patent and Trademark Office, are verifiably shown to be new and non-obvious. Almost any product, from Tupperware to iPhones to Vicodin, can be (and often are) patented.

How do I get a patent?

The initial process for obtaining a patent is to prepare and file a patent application with the U.S. Patent and Trademark Office. It is important to realize that a patent is powerful asset that must be written with a variety of audiences in mind (e.g., inventor, investor, licensor, patent examiner, judge, jury, etc.) while meeting a plethora of complex and sometimes arcane rules of the U.S. Patent and Trademark Office. Once a patent application has been filed, a patent examiner will perform a patentability search and determine whether the patent application meets the various standards such as novelty and non-obviousness. The patent owner may publicly assert that the invention is “patent pending” as soon as the U.S. Patent and Trademark Office provides a filing receipt, which typically takes a few minutes if the patent application is filed electronically. The U.S. Patent and Trademark Office has a stated goal of examining a patent application and providing a final disposition within about 36 months, but it is not uncommon for the examination process to take longer. If the patent application successfully makes it through the examination process, the U.S. Patent and Trademark Office will grant an official patent number and the owner will then have a legally enforceable asset.

When should I file a patent?

The U.S. is a “first-to-file” system, so it is imperative that an inventor keep the details of their invention confidential until a patent application has been filed. Also, timing is of the essence to prevent a competitor from winning the race to the Patent Office. The basic requirement to prepare and file a patent application is that the inventor must be able to describe, in sufficient detail, how to make and use the invention to one of “ordinary skill in the art,” which typically means a person versed in the industry to which the invention pertains. For example, technical and industry terms may not need to be defined if such terms are commonly known among those skilled in the art. Further, a prototype of the invention is not necessary nor does the U.S. Patent and Trademark Office required an inventor to perform a patentability search before filing. As soon as you have the aforementioned information, you should contact a registered patent attorney or agent to begin the process. Remember, confidentiality and timely filing are two primary keys to obtaining patent protection for your invention. In view of the complexities of the patent process, retaining an intellectual property lawyer is a vital step to obtaining strong patent protection in an efficient and timely manner.

Whether you are seeking trademark, patent or copyright protection, make sure to document the process carefully, and seek legal advice. The wrong protection or a badly conducted filing can make you vulnerable to legal loopholes or unnecessary rejections from the U.S. Patent and Trademark Office. With the right intellectual property protections in place, your business will be able to thrive and grow while keeping your competition at arms length.


Business Legal Compliance Checklist

A critical overview of laws and regulations governing businesses of all sizes.

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Are your U.S. Savings Bonds Still Earning Interest?

Bonds increasing in value

Many U.S. Saving Bonds no longer earn interest. It may be time to cash them in and start making money again. It’s important to find out how much your bonds are worth, and when they will stop earning interest. In addition to checking a bond’s maturity date, it is also very important to carefully review the designated owner of your bonds. Has the owner died? Is the owner a trustee of a trust that was terminated? Should you name a beneficiary on your bonds to avoid probate? Information and many of these questions are answered at www.savingsbonds.gov; or, call us for help with the trickier aspects of managing your U.S. Savings Bonds.


For further information on this and related matters, contact attorney Marlaine C. Teahan, chair of Fraser Trebilcock’s Trusts and Estates Department. Marlaine can be reached at 517.377.0869 or mteahan@fraserlawfirm.com.