Understanding How Trademarks, Copyrights, and Patents Protect Your Business

Trademark registration separates your business from your competition and makes 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?

Trademarks

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.

Copyright

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 the 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.

Patent

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 typically have one or more patents at some point directed toward the product.

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 inventor-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 open the door of patent protection.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.

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.

A Health Professional’s Guide to Navigating the Disciplinary Process: What to Expect if You Are Facing a Professional Licensing Investigation or Administrative Complaint

Health professionals are committed to caring for patients with expertise, compassion, and integrity. However, in the heavily regulated healthcare field, those professionals can sometimes find themselves navigating not just the medical challenges of their patients but licensing issues of their own as well. Licensing issues can arise unexpectedly, and, when they do, they can cause tremendous stress and uncertainty.

As an attorney with years of experience handling professional licensing matters for health professionals, I have witnessed firsthand how professional licensing investigations and Administrative Complaints can disrupt health professionals’ careers and their ability to provide patient care. Let’s explore how to navigate the disciplinary process in Michigan so that you can know what to expect if you are ever faced with a threat to your license.

Understanding the Disciplinary Process

In Michigan, the disciplinary process for the more than 400,000 licensed health professionals is overseen by the Department of Licensing and Regulatory Affairs (LARA) Bureau of Professional Licensing (BPL). This process is designed to uphold professional standards and protect public health while, at the same time, ensuring fair treatment for health professionals.

While each case is unique, there are some common themes in the types of actions or omissions that give rise to investigations and Administrative Complaints in the healthcare field. Being aware of these can help health professionals take steps to prevent potential issues that can lead to investigations and Administrative Complaints. Some of the most common involve allegations related to negligence, incompetence, professional misconduct, professional boundaries, lack of good moral character, controlled substances, substance use disorder, impairment, misdemeanor and/or felony criminal convictions, advertising, practice outside the scope of a license, documentation and recordkeeping, and Michigan Automated Prescription System (MAPS) reports.

The Initial Filing of a Complaint

Complaints can be filed by just about anyone: current or former patients, supervisors, subordinates, professional colleagues, and even the licensees themselves. These complaints are taken very seriously by the BPL and will be investigated. You may not even know that you are the subject of a complaint until you have been contacted by the BPL as part of its investigation.

The Investigation Phase

The BPL will conduct a thorough investigation once it has received a complaint and will assign one or more investigators (known as “Regulation Agents”) to the professional licensing investigation matter. It is frequently during the investigation phase that licensees first become aware that one or more allegations have been made against them. Unfortunately, many health professionals are unaware that they have the right to have the assistance of an attorney during the investigation phase. These unrepresented health professionals frequently make statements to the investigators without the guidance of an attorney, and I have seen instances where those statements have ultimately been used to provide the foundation for an Administrative Complaint to be filed against them.

At the conclusion of the investigation, an Investigation Report will be forwarded to the Disciplinary Subcommittee (DSC) of the board that governs that particular profession. If one or more violations of Michigan’s Public Health Code have been substantiated, an Administrative Complaint may be authorized. Thankfully, not all professional licensing investigations result in the filing of an Administrative Complaint, which is why having experienced legal representation behind you is so important during the investigation phase.

Responding to an Administrative Complaint

If the BPL issues an Administrative Complaint against you, you must respond in writing within 30 days from the date that you received the Administrative Complaint. Failure to respond in writing within 30 days will result in the Administrative Complaint being forwarded to the DSC for imposition of a sanction without any input from you.

You will be presented with 3 different options. You may (1) request a settlement, (2) request a compliance conference, or (3) request a formal administrative hearing on the merits of the Administrative Complaint.

It is important to prepare a timely and thoughtful response. This is a critical stage where legal representation is critical. A well-prepared Answer to Administrative Complaint can isolate the disputed issues and mitigate the severity of the situation.

The Compliance Conference

If you request a compliance conference, you will have the opportunity to present mitigating information and your side of the story in an informal setting, and an attorney may prepare you for the compliance conference and represent you at the compliance conference. Following the compliance conference, a proposed Consent Order and Stipulation may be prepared to resolve the Administrative Complaint, and it may be revised during the negotiation process that’s sometimes follows the compliance conference. The Administrative Complaint may also be dismissed by the BPL. However, if the Administrative Complaint is not resolved with a Consent Order and Stipulation or dismissed altogether, the matter will proceed to a formal administrative hearing on the merits of the Administrative Complaint.

The Formal Administrative Hearing on the Merits of the Administrative Complaint

If you proceed to a formal administrative hearing on the merits of the Administrative Complaint, it is essential to understand what this entails. The hearing is similar to a bench trial in court with opening statements, closing arguments, the formal testimony of witnesses under oath, and the admission of exhibits. You will have an opportunity to testify and to share your side of the story in a formal setting. The hearing will be held before an Administrative Law Judge (ALJ), but the ALJ cannot make a decision at the hearing. Instead, the ALJ will issue a Proposal for Decision (PFD). Exceptions to the PFD may be filed by the parties, and the PFD is then forwarded to the DSC for its consideration. The DSC will then issue a Final Order.

A merits hearing may be the only way to obtain the result that you need to continue practicing your chosen profession. However, proceeding to a hearing is a decision that should not be made lightly, and careful preparation in collaboration with legal counsel, including the gathering  and analysis of evidence and the preparation of any witnesses, is key.

Summary Suspension

If it has been found that you pose an immediate threat to the public health, safety, or welfare, your Administrative Complaint may be accompanied by a separate document called an Order of Summary Suspension. If you receive an Order of Summary Suspension, you must stop practicing your health profession immediately and cannot practice again until the summary suspension has been dissolved.

There is more than one way to dissolve a summary suspension. If a Petition for Dissolution of Summary Suspension is filed, an emergency hearing will be scheduled before an administrative law judge (ALJ). If the ALJ determines that there is insufficient evidence that you pose an immediate threat to the public health, safety, or welfare that requires a continuation of the summary suspension, the ALJ shall dissolve the summary suspension. A summary suspension can also be dissolved by a Consent Order and Stipulation at the end of the Administrative Complaint resolution process or by a Final Order following a formal hearing on the merits of the Administrative Complaint.

Possible Outcomes and Sanctions

A disciplinary action may conclude with a complete dismissal of the Administrative Complaint against you. However, if one or more violations of the Public Health Code have been substantiated, sanctions must be imposed. License sanctions can vary widely depending on the severity of the Public Health Code violation and, pursuant to MCL 333.16226, may include reprimand, fine, probation, restitution, limitation, suspension, revocation, and even permanent revocation.

The Appeal Process

If you disagree with the Final Order, you may appeal it to the Michigan Court of Appeals. The appeal process is complex and requires a strategic approach. Consider the grounds for appeal carefully and consult with an experienced attorney to evaluate the feasibility and potential benefits of an appeal.

Preventative Measures and Best Practices

When it comes to professional licensing, an ounce of prevention is always better than a pound of cure. Adhering to ethical practices, engaging in continuous professional development, and staying informed about regulatory changes can help prevent complaints. A proactive approach to professional conduct is always your best defense.

Conclusion

Facing a professional licensing investigation or an Administrative Complaint can be a very stressful experience for any health professional, but understanding the process and having an experienced attorney by your side can make a significant difference.

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


Attorney Robert J. AndretzFraser Trebilcock Shareholder Robert J. Andretz is an experienced professional licensing attorney with years of experience successfully defending doctors, nurses, and other licensed health professionals across the state of Michigan in professional licensing matters, including professional licensing investigations and Administrative Complaint matters. You can reach him at 517.377.0854 or randretz@fraserlawfirm.com.

Five Stories That Matter in Michigan This Week – January 26, 2024

  1. Michigan Amendment Imposes Reporting Requirement for Broker-Dealers and Investment Advisers to Report Financial Exploitation of Vulnerable Adults

Effective March 13, 2024, an amendment to the Michigan Uniform Securities Act (new Section 451.2533) will take effect that is intended to protect elder and vulnerable adults from financial exploitation. Among other things, the law requires broker-dealers and state-registered investment advisers to report suspected financial exploitation to a law enforcement agency or adult protective services.

Why it Matters: According to the Michigan Department of Attorney General website, more than 73,000 older adults in Michigan are victims of elder abuse, including financial exploitation.

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  1. The DOL Issues Final Rule Creating New Standard for Classifying Workers as Employees vs. Independent Contractors

On January 9, 2024, the United States Department of Labor released its final rule on worker classification under the Fair Labor Standards Act (FLSA).

Why it Matters: This new rule, effective as of March 11, 2024, signals a return to a standard more likely to classify workers as employees than contractors. Thus, it is more likely that employers will be determined to have misclassified workers as contractors, resulting in liability. Learn more from your Fraser Trebilcock attorney.

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  1. Michigan Federal Judge Dismisses Complaint Against Firm Client

A Michigan federal judge recently dismissed a complaint against the firm’s client represented by attorneys Thaddeus E. Morgan and Ryan K. Kauffman, for lack of subject matter jurisdiction.

Why it Matters: The complaint alleged that the firm’s client, together with another state bar, illegally conspired to prevent the plaintiff from practicing law in their respective states. However, the Eleventh Amendment prohibits a suit brought in federal court against a state, its agencies and officials, unless the state has waived its sovereign immunity or consented to being sued. The Eleventh Amendment limits federal subject matter jurisdiction, and as a result of the state bar functioning as an extension of the state’s Supreme Court, it is a state agency that possesses Eleventh Amendment immunity. Read more.

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  1. Michigan Cannabis Sales Eclipse $3 Billion in 2023

Michigan cannabis sales total $3,057,161,285.85, via the collection of monthly reports from the Michigan Cannabis Regulatory Agency. This is a 30% increase from 2022, which saw total sales at $2,293,823,890.11.

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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  1. Client Alert: PCORI Fees Due by July 31, 2024!

In Notice 2023-70, the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2023, and before October 1, 2024.

Why it Matters: Notice 2023-70 sets the adjusted applicable dollar amount used to calculate the fee at $3.22. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2023, and before October 1, 2024. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method. Learn more from your Fraser Trebilcock attorney.

Related Practice Groups and Professionals

Labor, Employment & Civil Rights | David Houston
Litigation | Ryan Kauffman
Litigation | Thaddeus Morgan
Cannabis Law | Sean Gallagher
Employee Benefits | Bob Burgee
Employee Benefits | Sharon Goldzweig

The DOL Issues Final Rule Creating New Standard for Classifying Workers as Employees vs. Independent Contractors

On January 9, 2024, the United States Department of Labor (DOL) released its final rule on worker classification under the Fair Labor Standards Act (FLSA). This new rule, effective as of March 11, 2024, signals a return to a standard more likely to classify workers as employees than contractors. Thus, it is more likely that employers will be determined to have misclassified workers as contractors, resulting in liability.

The New Rule: A Deviation From Trump-Era Classification Standards

The final rule, which is consistent with the proposed rule released by the DOL in October 2022, differs significantly from the Trump Administration’s “core factors” test. The Trump-era rule emphasized two primary factors: the nature and degree of control over the work, and the worker’s opportunity for profit or loss. Three other factors—the skill required, the permanence of the relationship, and whether the work is part of an integrated unit of production—were deemed less significant.

The new rule requires a more detailed and comprehensive analysis by establishing the totality-of-the-circumstances economic reality test, a six-factor test giving equal weight to each factor in determining whether a worker is an employee or an independent contractor. The DOL claims that this approach is consistent with how federal courts have evaluated employee vs. independent contractor classification for decades.

The factors outlined in the final rule include:

    1. the worker’s opportunity to share profit or loss,
    2. the investments by the worker and potential employer respectively,
    3. the permanence of the work relationship,
    4. the worker’s or employer’s degree of control over the work,
    5. the integration of the work into the employer’s business, and
    6. the skill and initiative required of the worker.

The final rule also addresses how factors such as scheduling, remote work, and the ability to work for others should be considered under factor four—the control factor—and also provides additional context to other factors as well.

Why This Matters to Michigan Employers

All Michigan employers, as well as employers across the country, who are covered under the FLSA will be impacted by the final rule. Generally speaking, the FLSA applies to employers who have at least two employees and gross $500,000 or more a year. If a worker is classified as an employee as opposed to an independent contractor, then that worker is covered under the FLSA, which sets federal rules for minimum wages and overtime. When the FLSA applies, employers are also required to maintain certain records.An employer who violates the FLSA can be subject to lawsuits, be forced to pay back pay for unpaid overtime, and face fines, among other consequences.

It’s also important for Michigan employers to keep in mind that Michigan has its own standards for independent contractor classification, and the more stringent of the two standards is likely to apply. Currently there is legislation pending in the Michigan legislature that would tighten the definition of “independent contractor” considerably. Under the new bill, an independent contractor is “an individual who performs work” and to whom the following three conditions apply:

    • The individual is free from control and direction of the payer in connection with the performance of the work, both under a contract and in fact.
    • The individual performs work that is outside the usual course of the payer’s business.
    • The individual is engaged in an independently established trade, occupation, or business of the same work performed by the individual for the payer.

The bottom line is that, under federal and state laws, classifying a worker as an employee or independent contractor requires a complex analysis of various factors. And the risks and consequences of misclassifying can be severe.

Businesses and employers should remain diligent in analyzing their workers’ classifications and consult an experienced attorney with any questions. The attorneys at Fraser Trebilcock Davis & Dunlap, PC will continue to monitor these developments and stand ready to guide clients in their compliance with the new regulations set to take effect.

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


Attorney David J. HoustonFraser Trebilcock Shareholder Dave Houston has over 40 years of experience representing employers in planning, counseling, and litigating virtually all employment claims and disputes including labor relations (NLRB and MERC), wage and overtime, and employment discrimination, and negotiation of union contracts. He has authored numerous publications regarding employment issues. You can reach him at 517.377.0855 or dhouston@fraserlawfirm.com.

Five Stories That Matter in Michigan This Week – January 19, 2024

  1. New Michigan Law Mandates Compulsory Arbitration for Higher Education Police Officers

Michigan’s law regarding compulsory arbitration of public labor disputed has been amended to include higher education institution police officers. The change takes effect on January 22, 2024.

Why it Matters: Higher education institutions should assess the impact the new law may have on their workforce.

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  1. Fraser Trebilcock Welcomes Phyllis Dahl to the Firm

We are pleased to announce the hiring of Phyllis Dahl as the firm’s new Office Manager.

Why it Matters: Ms. Dahl has over three decades of experience in the legal industry, having worked at two private law firms before joining Fraser Trebilcock. She has a bachelor’s degree in public administration from Central Michigan University. Read more.

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  1. Client Alert: PCORI Fees Due by July 31, 2024!

In Notice 2023-70, the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2023, and before October 1, 2024.

Why it Matters: Notice 2023-70 sets the adjusted applicable dollar amount used to calculate the fee at $3.22. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2023, and before October 1, 2024. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method. Learn more from your Fraser Trebilcock attorney.

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  1. Michigan Cannabis Pulls in Nearly $280 Million in December

Cannabis sales are just below $280 million in December, via the monthly report from the Michigan Cannabis Regulatory Agency. Michigan adult-use sales came in at $276,732,645.94, while medical sales came in at $3,177,042.62, totaling $279,909,688.56.

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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  1. CRA Publishes December 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 December was $95.08, a small decrease from $97.51 in November. For the second time, this is an increase to the average price when compared to the year prior, when in December 2022, the average price was $90.68.

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.

Related Practice Groups and Professionals

Higher Education | Ryan Kauffman
Phyllis Dahl
Employee Benefits | Bob Burgee
Employee Benefits | Sharon Goldzweig
Cannabis Law | Sean Gallagher

Client Alert: PCORI Fees Due by July 31, 2024!

In Notice 2023-70, the Internal Revenue Service set forth the PCORI amount imposed on insured and self-funded health plans for policy and plan years that end on or after October 1, 2023, and before October 1, 2024.

Background

The Patient-Centered Outcomes Research Institute (PCORI) fee is used to partially fund the Patient-Centered Outcomes Research Institute which was implemented as part of the Patient Protection and Affordable Care Act.

The PCORI fees were originally set to expire for plan years ending before October 1, 2019. However, on December 20, 2019, the Further Consolidated Appropriations Act was enacted and extended the fee to plan years ending before October 1, 2029.

The fee is calculated by using the average number of lives covered under a plan and the applicable dollar amount for that plan year. Code section 4375 imposes the fee on issuers of specified health insurance policies. Code section 4376 imposed the fee on plan sponsors of applicable self-insured health plans. This Client Alert focuses on the latter.

Adjusted Applicable Dollar Amount

Notice 2023-70 sets the adjusted applicable dollar amount used to calculate the fee at $3.22. Specifically, this fee is imposed per average number of covered lives for plan years that end on or after October 1, 2023, and before October 1, 2024. For self-funded plans, the average number of covered lives is calculated by one of three methods: (1) the actual count method; (2) the snapshot method; or (3) the Form 5500 method.

Deadline and How to Report

The PCORI fee is due by July 31, 2024, and must be reported on Form 720.

Instructions are found here (see Part II, pages 8-9).

The Form 720 itself is found here (see Part II, page 2).

Form 720, as well as the attached Form 720-V to submit payment, must be used to report and pay the requisite PCORI fee to the IRS. While Form 720 is used for other purposes to report excise taxes on a quarterly basis, for purposes of this PCORI fee, it is only used annually and is due by July 31st of each relevant year.

As previously advised, plan sponsors of applicable self-funded health plans are liable for this fee imposed by Code section 4376. Insurers of specified health insurance policies are also responsible for this fee.

    • For plan years ending on or after October 1, 2019 and before October 1, 2020, the fee is $2.54 per covered life.
    • For plan years ending on or after October 1, 2020 and before October 1, 2021, the fee is $2.66 per covered life.
    • For plan years ending on or after October 1, 2021 and before October 1, 2022, the fee is $2.79 per covered life.
    • For plan years ending on or after October 1, 2022 and before October 1, 2023, the fee is $3.00 per covered life.
    • For plan years ending on or after October 1, 2023 and before October 1, 2024, the fee is $3.22 per covered life.

Again, the fee is due no later than July 31 of the year following the last day of the plan year.

As mentioned above, there are specific calculation methods used to configure the number of covered lives and special rules may apply depending on the type of plan being reported. While generally all covered lives are counted, that is not the case for all plans. For example, HRAs and health FSAs that are not excepted from reporting only must count the covered participants and not the spouses and dependents. The Form 720 instructions do not outline these rules.

More information about calculating and reporting the fees can be found here.

Questions and answers about the PCORI fee and the extension may be found here.

As you are aware, the law and guidance are continually evolving. Please check with your Fraser Trebilcock attorney for the most recent updates.

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


Robert D. Burgee is an attorney at Fraser Trebilcock with over a decade of experience counseling clients with a focus on corporate structures and compliance, licensing, contracts, regulatory compliance, mergers and acquisitions, and a host of other matters related to the operation of small and medium-sized businesses and non-profits. You can reach him at 517.377.0848 or at bburgee@fraserlawfirm.com.


Attorney Sharon GoldzweigSharon Goldzweig is Of Counsel at Fraser Trebilcock, specializing in matters pertaining to employee health and welfare benefits. In a field where the laws are constantly changing, Sharon is constantly looking out for anything that might involve her clients including changes to ERISA and other federal laws. She can be reached at sgoldzweig@fraserlawfirm.com, or at 718.808.5140.

Five Stories That Matter in Michigan This Week – January 12, 2024

  1. Cannabis Regulatory Agency Announces $1 Million Social Equity Grant Program

Michigan’s Cannabis Regulatory Agency (CRA) announced a $1 million grant program to applicants who have a recreational marijuana license, have eligible Social Equity Program participants, and participate in the CRA’s “Social Equity All-Star Program.”

Why it Matters: The program is intended to encourage participation in the industry by people from communities that have been disproportionately impacted by marijuana prohibition and enforcement.

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  1. Fraser Trebilcock Welcomes Danielle Lofton to the Firm

We are pleased to announce the hiring of attorney Danielle Lofton who will work primarily in the firm’s Lansing office, focusing her practice on insurance defense.

Why it Matters: Ms. Lofton represents clients with personal injury claims including no-fault cases for several years. She has routinely secured early dismissals through successful motions and negotiated favorable settlements for her clients. Learn more.

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  1. Department of Labor Issues New Rule on Independent Contractors

This week, the US Department of Labor issued a new rule modifying its analysis for determining whether a worker is an employee, or an independent contractor under the Fair Labor Standards Act. The final rule is effective on March 11, 2024.

Why it Matters: We previously reported on the Department of Labor publishing a Notice of Proposed Rulemaking regarding classification of employee or independent contractor under the FLSA. Under this final rule effective on March 11, 2024, it will provide clearer guidance for employers and how they determine their workers’ classifications, and further protect employees from misclassification.

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  1. Fraser Trebilcock Attorney Andrew J. Moore Elected to Board of Directors of Catholic Bar Association

We are pleased to announce that attorney ​Andrew J. Moore has been elected to the Board of Directors for the Catholic Bar Association, a national bar association with members in all 50 states. “I am honored to be elected to the Board of Directors, and I look forward to continuing the mission of the Catholic Bar Association,” said Andrew Moore.

Why it Matters: Andrew focuses his practice on general litigation matters, insurance defense, estate and trust administration, real estate transactions, family law, and criminal defense. His experience covers a range of practice areas, from out of court matters such as assisting clients in estate planning and business and tax matters to representing clients at trial in insurance, divorce, and criminal defense proceedings. He also serves on the Board of Directors of the Lansing Catholic Lawyers Guild. Read more.

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  1. Independent Citizens Redistricting Commission Required to Redraw Seven House Districts

A three-judge panel ordered this week that the Independent Citizens Redistricting Commission redraw seven state House districts by February 2nd, after it was ruled unconstitutional.

Why it Matters: Last year, a group of voters sued the Independent Citizens Redistricting Commission alleging that the Commission had violated the federal Voting Rights Act by drawing maps that impacted black voters’ opportunity to elect their preferred candidates.

Related Practice Groups and Professionals

Cannabis Law | Sean Gallagher
Insurance Law | Danielle Lofton
Labor, Employment & Civil Rights | David Houston
Litigation | Andrew Moore
Election Law

Five Stories That Matter in Michigan This Week – January 5, 2024

  1. Reminder: Michigan LLCs Must File Annual Report by February 15

With the new year upon us, we want to remind you that limited liability companies formed with the Michigan Department of Licensing and Regulatory Affairs must file their annual report (called an Annual Statement) by February 15.

Why it Matters: LLCs that fail to file are subject to fines. More importantly, failure to file an annual report after two consecutive years results in an LLC falling out of good standing with the state of Michigan, which may lead to the dissolution of the entity. Contact a Fraser Trebilcock lawyer if you require help with corporate filing and reporting requirements.

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  1. Michigan Minimum Wage Increased After New Year

Now that we’re into calendar year 2024, Michigan’s minimum wage has increased per the Improved Workforce Opportunity Wage Act of 2018 which establishes the annual schedule of increases. The minimum hourly wage increased to $10.33 per hour; the 85% rate for minors aged 16 and 17 increased to $8.78 per hour; the tipped employee rate of hourly pay increased 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: It’s important to be aware of new laws, and changes to existing laws, that have taken effect as of January 1, 2024. Contact us with any questions.

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  1. Fraser Trebilcock Announces Department Chairs for 2024

Fraser Trebilcock announces new Department Chairs for 2024: Sean P. GallagherAdministrative LawRobert D. Burgee and Paul V. McCordBusiness & TaxRobert D. BurgeeEmployee Benefits: Welfare/HealthDavid J. HoustonLabor, Employment, and Civil RightsMichael P. DonnellyLitigationJared A. RobertsReal Estate; and Marlaine C. Teahan and Mark E. KelloggTrusts and Estates.

Why it Matters: A new year brings a renewed commitment to leadership within our firm. 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. Read more.

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  1. Reminder: Prevailing Wage Act Being Reinstated in Michigan in 2024

It’s important for businesses to be aware of laws that will take effect in 2024. 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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  1. 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.

Related Practice Groups and Professionals 

Business & Tax | Robert Burgee
Labor, Employment & Civil Rights | David Houston
Intellectual Property | Andrew Martin