December, 2023 | Fraser Blog

Five Stories That Matter in Michigan This Week – December 22, 2023

Reminder: Prevailing Wage Act Being Reinstated in Michigan in 2024

As we prepare for the calendar to turn to 2024, it’s important for businesses to be aware of laws that will take effect in the new year. One is the reinstatement of Michigan’s Prevailing Wage Act (the “Act”), which will require contractors and subcontractors in Michigan to pay the prevailing wage and benefit rates to employees working on most state funded construction projects.

Why it Matters: A prevailing wage law was in effect in Michigan from 1965 until 2018 when the law was repealed. On March 24, 2023, Governor Whitmer signed the Act into law. It will take effect in March of 2024.

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How do you Defend an Amazon Neutral Patent Evaluation?

Amazon’s Neutral Patent Infringement Program (NPE) is Amazon’s version of a quasi-judicial court to resolve patent infringement disputes between sellers. It is akin to an arbitration or mediation overseen by an experienced and vetted patent practitioner. NPE is not a court of law, so any of the rulings are not prejudicial on any platform or marketplace other than Amazon.com. However, it aims to provide a more cost-effective method to resolve patent disputes between sellers.

Why it Matters: The program is initiated once a patent holder submits a complaint to Amazon through Amazon’s seller portal. The accused product is immediately removed from its Amazon listing and the accused infringer is notified. The accused infringer then may negotiate a settlement directly with the rights holder or agree to participate in the NPE program. Learn more from your Fraser Trebilcock attorney.

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Fraser Trebilcock Announces 2024 Board of Directors

The Shareholders of Fraser Trebilcock, one of Michigan’s long-established full-service law firms, have elected Thaddeus E. Morgan as President of the firm. Shareholders H. Kirby Albright and Ryan K. Kauffman were re-elected to the Board of Directors. Mr. Albright will serve as Vice President & Treasurer, and Mr. Kauffman will serve as Secretary.

Why it Matters: When it matters in Michigan, we are the trusted advisor for businesses and individuals requiring planning and consulting services, or facing legal and regulatory challenges, and our capabilities extend to wherever clients require counsel. The annual election of the Board of Directors allows Fraser Trebilcock to continue its tradition of exceptional client service, dedicated community involvement and professional excellence. Read more.

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Michigan Cannabis Exceeds $260 Million in November

Cannabis sales surpassed $260 million in November, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $256,677,143.52, while medical sales came in at $3,808,138.68, totaling $260,485,282.20.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market oversaturation that the industry is contending with.

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Cass County Circuit Court Rules that Growing Cannabis is an “Agricultural Operation” Under Michigan’s General Property Tax Act

HRP Cassopolis, LLC (“HRP”) owns real property located in LaGrange Township, located in Cass County, Michigan. The property, which consists of two parcels, is leased to a cannabis grower and retailer. LaGrange Township’s assessor classified both parcels as “Commercial” under the Michigan General Property Tax Act (“GPTA”). In response to the classification, HRP submitted a petition to the board of review, which denied the petition. HRP then appealed to the State Tax Commission, which also upheld the decision to classify the parcels as commercial. HRP then filed a Claim of Appeal with the Cass County Circuit Court.

Why it Matters: On appeal, the appellee argued that the assessor properly classified the property as commercial because HRP did not establish that growing cannabis is an “agricultural operation” under the GPTA. The GPTA defines an agricultural operation as “growing and harvesting any agricultural, horticultural, or floricultural commodity.” The Circuit Court rejected the appellee’s arguments and ruled in favor of HRP. The court explained that caselaw requires it to give the words in a statute their plain and ordinary meaning, and in this case, according to the court, “cannabis cultivation falls squarely within [GPTA’s] definition of an agricultural operation.”

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Intellectual Property | Andrew Martin
Cannabis Law | Sean Gallagher

How do you defend an Amazon Neutral Patent Evaluation?

What is Amazon’s Patent Infringement Program and how does it work?

The program is initiated once a patent holder submits a complaint to Amazon through Amazon’s seller portal. The accused product is immediately removed from its Amazon listing and the accused infringer is notified. The accused infringer then may negotiate a settlement directly with the rights holder or agree to participate in the NPE program.

A neutral evaluator is assigned to each case to determine whether a particular vendor’s goods violates the patent or patents asserted by the rights holder. Both the rights holder and the accused infringer have the opportunity to argue their cases. Each party may file a brief up to 15 pages along with a $4,000 deposit each. The winner of the process gets their $4,000 deposit refunded.

How to defend against an Amazon Patent Infringement Program claim.

A seller who choses to participate in the NPE program may defend against a claim of patent infringement by:

- arguing noninfringement;
- providing evidence that the patent was previously declared invalid or unenforceable by a court, USPTO or ITC; or
- proving the products were on sale one year or more before patent’s effective filing date.

Importantly, patent invalidity is not an available defense for the accused infringer. This is one of the main differences between the federal court system and the NPE program because arguing invalidity is often a large part of a defensive strategy. Interestingly, Amazon will still consider whether the accused products were on sale one year or more before the patent’s effective filing date, which would be grounds for invalidity in the federal courts.

Most likely, an accused infringer will need to argue non-infringement. Patent infringement is a complex concept, therefore before a decision is made whether to participate in the NPE process, a non-infringement analysis should be conducted by a Registered Patent Attorney to determine the likelihood of a successful defense.

Part of a non-infringement strategy will be to argue the most narrow interpretation of the subject patent’s claims. The claims are the only part of a patent that defines the rights granted by the patent. Therefore, arguing for the most limited interpretation of the claims will yield the most limited scope of patent rights.

A patent must be construed in view of the prior art. The claims cannot be read to cover prior art, nor can they be construed to be broader than what was considered during prosecution. While Amazon’s NPE process does not consider invalidity arguments, you can submit prior art to support arguments limiting the scope of the claims. This is a complex and technical argument that should be drafted by a Registered Patent Attorney familiar with claim construction and patent litigation. If you need assistance or have any questions, please contact Andrew G. Martin or your Fraser Trebilcock attorney.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Andrew G. Martin is an experienced registered patent attorney with history working in the automotive, electrical, and agricultural industries. He regularly advises startups and small businesses on the patent and trademark prosecution process, assisting clients from start to finish. You can reach him at 517.377.0834 or at amartin@fraserlawfirm.com.

Five Stories That Matter in Michigan This Week – December 15, 2023

The Effective Date of the Repeal of Michigan’s Right-to-Work Law Will be Sooner Than Expected

The Michigan legislature repealed the state’s right-to-work law earlier this year. The law provided that employees in Michigan could not be forced by union contracts to join or financially support any labor organization as a condition of employment. The effective date of the repeal was anticipated to be March 30, 2024, however it will now likely be effective on February 13, 2024.

Why it Matters: The effective date of the repeal is tied to the end of the Michigan legislature’s legislative session. Because the legislature ended its legislative session early this year, on November 14, 2023, the effective date will come sooner than anticipated.

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CRA Publishes November 2023 Data: Average Price Decreases

Per data released by the Cannabis Regulatory Agency (CRA), the average retail price for adult-use sales of an ounce of cannabis in October was $97.51, a very minimal decrease from $97.62 in October. For the first time, this is an increase to the average price when compared to the year prior, when in November 2022, the average price was $95.12.

Why it Matters: While the prices of cannabis and cannabis-related products continue to decrease and make consumers happy, growers on the other hand are seeing profits decrease resulting in them seeking ways to halt new licenses to be granted in an effort to steady prices. Contact our cannabis law attorneys if you have any questions.

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Qualified Michigan Residents Set to Receive Checks From EITC

It was announced earlier this week that qualified Michigan residents under the state’s expanded Earned Income Tax Credit (EITC) program should start to expect to receive their checks in the mail starting February 13, 2024. It is estimated it will take up to six weeks to distribute payments.

Why it Matters: As we covered earlier this year, the Michigan legislature had passed a bill, which Governor Whitmer signed into law, expanding the state’s Earned Income Tax Credit (EITC). The law retroactively increased the state’s EITC to 30% of the federal credit, where it is estimated to impact over 700,000 low-income workers. Families should receive on average $550.

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Governor Whitmer Signs Bills Permitting State and Tribal Businesses to Engage in Commerce with Each Other

The landscape of the cannabis industry in Michigan continues to evolve as new legislative efforts in Michigan aim to bridge the operational divide between state-licensed cannabis enterprises and tribal cannabis businesses. Two pivotal bills, Senate Bill 179 and Senate Bill 180, were signed by Governor Whitmer on October 19, 2023, creating a collaborative business environment for these formerly siloed entities.

Why it Matters: Prior to the legislation being enacted, state-licensed and tribal cannabis operations in Michigan functioned independently, restrained from mutual commerce and collaboration, including prohibitions on cannabis products being sold between these businesses. The new legislation allows these two distinct parts of the cannabis industry to interact.

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Patentable vs. Infringing: What’s the Difference?

The patent system is intended to spur innovation, incentivize inventors, and protect against infringement. One of the big challenges innovators face in this realm is understanding patentability and what constitutes infringement.

Why it Matters: The distinction between what is patentable and what is infringing is defined by the scope of the patent claims. For instance, a new invention that improves upon a patented product may still be patentable even though the envisioned product itself may infringe on the patented claims. On the other hand, a product that is not patentable may also infringe granted patents. Learn more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Cannabis Law | Sean Gallagher
Intellectual Property | Andrew Martin

Five Stories That Matter in Michigan This Week – December 8, 2023

Governor Whitmer Signs Executive Order for State Vehicles to be Zero-Emission by 2040

On Tuesday, Governor Whitmer signed an executive directive mandating the state government to convert its fleet of cars and trucks to zero-emission vehicles by 2040.

Why it Matters: In a statement accompanying the directive, Governor Whitmer stated that the transition would reduce air pollution, help boost demand for Michigan-made electric vehicles, and lower fuel costs. The directive comes on the heels of Governor Whitmer signing legislation that will impose a new 100% clean energy standard for utilities to hit by 2040.

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Patentable vs. Infringing: What’s the Difference?

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Michigan Supreme Court Hears Arguments on Minimum Wage

Earlier this week, the Michigan Supreme Court heard arguments on whether the “adopt-and-amend” actions on two ballot initiatives from 2018 that alter the state’s minimum wage and paid sick leave requirements were constitutional.

Why it Matters: The Michigan Supreme Court is anticipated to make a decision in 2024. If the Supreme Court upholds the adopt-and-amend process that the Court of Appeals deemed constitutional, then employers will operate under the current minimum wage and paid sick leave requirements. However, if the process is found unconstitutional and the Supreme Court overrules the lower court’s decision, then it would reinstate the original 2018 initiatives on minimum wage and paid sick leave requirements.

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Ohio Senate Passes Bill Altering Legal Cannabis Program

On Wednesday, the Ohio Senate voted on a proposal that would alter the state’s legal cannabis program, after voters passed Issue 2 in November, allowing the sale of recreational cannabis to adults 21 years or older.

Why it Matters: The bill now moves onto the House, and if it passes, the Governor has indicated he will sign it. Some of the proposed changes include reducing the number of homegrown plants allowed to 6 (from 12), increasing the tax on sales from 10% to 15%, allowing medicinal shops to sell to recreational users, and altering the way tax revenue would be spent, allocating funds to different programs.

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Michigan Cannabis Sales in Third Quarter Nearly $75 Million More than Second Quarter

Michigan cannabis sales totaled $827,737,257.25 in the third quarter of 2023, a nearly $75 million increase from the second quarter in which sales totaled $752,770,513.25.

Why it Matters: Marijuana sales remain strong in Michigan, particularly for recreational use. However, there still are significant concerns about profitability and market oversaturation that the industry is contending with.

Related Practice Groups and Professionals

Energy, Utilities & Telecommunication | Sean Gallagher
Intellectual Property | Andrew Martin
Labor, Employment & Civil Rights | David Houston
Cannabis Law | Sean Gallagher

Patentable vs. Infringing: What’s the Difference?

Criteria for Patentability

Patentability requires consideration of three key criteria: novelty, non-obviousness, and usefulness (or utility). The requirement of utility is a de minimus requirement and is met if any use can be had from the claimed invention. To be patentable, an invention must be novel meaning it cannot be part of the existing body of knowledge known as “prior art.” It must also be non-obvious meaning it cannot be an obvious extension of existing technologies or solutions when viewed by a person of ordinary skill in the art.

The scope of patentable material is wide, encompassing everything from new chemical compounds to software methods, and from mechanical devices to biotechnological processes. However, there are limitations. For instance, abstract ideas, natural phenomena, and artistic creations are in the public domain and are ineligible subject matter.

Patent Infringement

Patent infringement occurs when an individual or entity makes, uses, sells, or imports a patented invention without permission from the patent holder. While this may sound straightforward, it’s not; determining infringement is often a complex matter requiring detailed legal analysis.

There are several forms of infringement to be aware of:

- Direct Infringement: The infringing product or process directly falls under the scope of the patented claims. The doctrine of equivalents is also direct infringement in which a product or process contain elements identical or equivalent to each claim element of the patented invention.
- Indirect Infringement: Where a third party contributes to or induces others to infringe.

Distinguishing Between Patentable and Infringing

The distinction between what is patentable and what is infringing is defined by the scope of the patent claims. For instance, a new invention that improves upon a patented product may still be patentable even though the envisioned product itself may infringe on the patented claims. On the other hand, a product that is not patentable may also infringe granted patents.

Legal Consequences and Remedies

The consequences for infringing on a patent can be severe, ranging from monetary damages to injunctive relief.

- Monetary Damages: Courts can award significant damages to the patent holder, often based on the what the court determines to be a “reasonable royalty” but may also consider profits lost due to the infringement. In cases of willful infringement, these damages can be trebled.
- Injunctive Relief: In some cases, courts may issue an injunction to prevent further infringement. This can halt the production or sale of the infringing product, having a substantial impact on the infringer’s business.
- Legal Costs: The cost of litigation in patent cases can be substantial, adding another layer of consequence for the infringer.

Given the stakes involved in patent infringement, it’s crucial for companies and individuals to take proactive steps to avoid it, including consulting with experienced legal counsel.

Conclusion

Understanding the difference between patentable inventions and infringing actions is critical in our innovation-driven economy. By grasping the distinctions, you can harness the power of intellectual property while avoiding the pitfalls of infringement.

If you or your business is interested in intellectual property services, such as drafting patent applications, conducting freedom to operate opinions, analyzing patentability, or determining infringement risks, contact Andrew G. Martin or your Fraser Trebilcock attorney.

This alert serves as a general summary and does not constitute legal guidance. Please contact us with any specific questions.

Five Stories That Matter in Michigan This Week – December 1, 2023

Michigan Overhauls K-12 Evaluation Process

Governor Whitmer signed two bills into law (SB 395 & SB 396) on November 22, 2023, transforming the evaluation methods for teachers and school administrators in K-12 education.

Why it Matters: This new legislation substantially alters how teachers are evaluated, including streamlining rating categories, adjusting the evaluation criteria to prioritize teacher performance, and requiring educator participation in creating evaluation instruments.

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Governor Whitmer Signs Package of Clean Energy Bills

Earlier this week, Governor Whitmer signed a package of clean energy bills, including one that would require companies to make 100% of their energy through renewables such as solar and wind by 2040, and also seeks to reduce energy waste, among other objectives.

Why it Matters: Clean energy legislation is a major priority for Michigan Democrats but is opposed by Republicans and has received pushback from many business groups, who argue the legislation would increase energy costs.

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Cannabis Consumption Lounges Set for Detroit

The City of Detroit back in August announced its second round of recreational cannabis licenses, which included licenses for consumptions lounges. These lounges would be a place for adults 21 years or older to meet and safely consume cannabis that was legally purchased elsewhere.

Why it Matters: For some residents in Detroit, these consumption lounges can be the only safe and legal spot to consume cannabis. It is important to understand the rules and regulations tied to these lounges to ensure compliance.

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Michigan Minimum Wage Set for Increase for 2024

Michigan’s minimum wage is set to increase on January 1, 2024, per the Improved Workforce Opportunity Wage Act of 2018 which establishes the annual schedule of increases. The minimum hourly wage will increase to $10.33 per hour; the 85% rate for minors aged 16 and 17 will increase to $8.78 per hour; the tipped employee rate of hourly pay increases to $3.93 per hour; and the training wage of $4.25 per hour for newly hired employees ages 16 to 19 for their first 90 days of employment remains unchanged.

Why it Matters: As we approach the new year, t’s important to be aware of new laws, and changes to existing laws, that are set to take effect as of January 1, 2024. Contact us with any questions.

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Streamline Corporate Transparency Act Reporting with a FinCEN Identifier

The Financial Crimes Enforcement Network (FinCEN), announced and elaborated on the use and availability of FinCEN identifiers. Under this new guidance, FinCEN identifiers may be crucial for business owners, particularly for those managing multiple entities.

Why it Matters: A FinCEN identifier is a unique number assigned by FinCEN to individuals and reporting companies, streamlining the reporting process under the CTA. Businesses will need to be prepared come 2024 for the new reporting requirements. Learn more from your Fraser Trebilcock attorneys.

Related Practice Groups and Professionals

Energy, Utilities & Telecommunication | Sean Gallagher
Cannabis Law | Sean Gallagher
Labor, Employment & Civil Rights | David Houston
Business & Tax | Robert Burgee