Articles Posted in Business Law

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So far, we have discussed what licenses are necessary and how you will be using your drone. Surely, there can’t be more issues.  Well, not quite. Following the issuance of drone licenses, there are restrictions on where and when these drones can fly.  Be it for safety or for general security concerns, drones are not allowed in all national airspace. So, where can you fly? What sort of events and situations would cause the airspace to become restricted? Is there any way to fly without licensing or airspace restrictions?

Where can you fly?

This first aspect is an interesting one. When you fly, you are generally flying in the National Airspace. Be it from a blade of grass to the wild blue sky, that space is regulated by the Federal Aviation Administration.  However, not all of that space is available for drones. First, is the restriction on altitude, ranging your navigation to approximately 400 feet, and restrictions on piloting drones in certain areas, like sporting arenas, restricted airspace (e.g., Disneyland), heavily populated areas and airports. This is mainly due to security concerns, as it is measured by what damage a drone can do in those areas. For example, it is generally prohibited to fly model aircrafts within five miles of an airport without notifying the tower, to prevent any difficulties with takeoffs and landings.  In those cases, where a drone may be piloted, it’s generally with a letter of agreement with the airport, detailing the operator’s authorization.

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So, now you’ve registered and gotten everything you need for your drone. What now? Well, it depends on what you plan on using your drone for.  Maybe it’s a gift for a child or a friend. Maybe you’d just like to use it for fun. However, as we briefly touched upon in our last post, there are requirements and restrictions placed on your drone if those actions are for commercial use.  So, what qualifies as a commercial act? What has to be done regardless of commercial or non-commercial uses? What uses would require a business to register and go through the whole process, and which uses would allow an individual to operate freely?

Non-Commercial Use

Part of the reason there are fewer restrictions on non-commercial use of drones is due to the special rule of model aircraft.  This would have the drone operate under different, less restrictive rules, and while still requiring the drone be registered with the FAA if it is within the weight range of 0.55 LBS to 55 LBS, it is generally exempted from onerous requirements.

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In our ever-evolving world, there are always new technologies and new opportunities.  Why invest in a person when a machine can do the work for its useful life? Why hire a taxi driver when the car can drive itself? How could you pay for a helicopter or carrier fees when a drone can deliver the goods on its own?  However, as with all things, life is not that easy. If you plan on using drones or Unmanned Aircraft Systems (UAS), then there are some facts you need to know, as the Federal Aviation Administration (FAA) has set forth restrictions. So, what do you need to fly? How do you register a drone? Who can fly a drone?

Who can fly a drone?

In order to fly for commercial purposes it is required that the business have: (1) a Section 333 grant of exemption; (2) a Certificate of Waiver or Authorization; (3) a registered drone; and (4) a pilot with an FAA airman certification. This is a unique qualification for businesses only and hobbyists or recreational drone use would be allowed without having to jump through these requirements.

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Where are the limits of copyright?  Copyright in general is limited to those new and original works, fixed in a tangible medium.  In regards to computer programs, they are also considered literary works for the purposes of copyright law, and so, it could be argued that the language of a system could be granted copyright protections.  However, what happens when it is not simply a computer program, but the language the programs use that is subject to copyright? Can a language be subject to copyright protection?  Does it matter what the language is used for?

Oracle v. Google: API as a Copyrightable Language

Our first example is the ongoing Oracle v. Google case.  As it stands currently, Google has lost, pending the results of the remanded decision later this month regarding any fair use defenses.  This has resulted in the copyright being granted to Oracle for Java’s API (i.e., Application Programming Interface), which is a computer code that allows programs to talk to one another, like the share button on this blog post’s page, allowing a person to link this post to Twitter or Facebook.  Those codes were provided by Twitter/Facebook, and allow the browser to “talk” to another application.

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A new economy has been developing for a while, opening a unique market, with new opportunities. This is what’s called the new “sharing” economy with an entrepreneur presenting a way to connect willing participants for an economic transaction.  This has evolved from something like Craigslist, to a more user-friendly and app-based operation.  Namely, this includes businesses like Uber, Lyft, and AirBnB.

Yet now, it has opened a question with Uber via a proposed settlement about whether the service providers are employees or independent contractors.  So, what happens when you begin to question the standards of a business operation?  To what end can you control the product to ensure that there is a strong method to your brand?  How long can a settlement keep service providers from claiming they are employees and not independent contractors?

The Business Model

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After establishing the issues of preemption and standing, how can you sue for violations of CAN-SPAM? Is there any way for spam to be combated by an individual?  Yes, there is by suing for fraud or deception, which are not explicitly covered under the CAN-SPAM Act.  So, how do you plead fraud?  And how much do you need to plead?

How to plead fraud to avoid preemption?

In ASIS Internet v. Subscriberbase, which was heard by the Northern District of California, the court examined preemption and the question of fraud in relation to a motion to dismiss that was filed by defendants.  Plaintiff was suing under the California Business & Professional Code Section 17529.5, otherwise known as the False Advertising Law.  In its claim, plaintiff pleaded the following three factors California has in a fraud claim: (a) misrepresentation; (b) knowledge of falsity; and (c) intent to defraud.  However, plaintiff left out reliance and damage in its claims.  In general, the CAN-SPAM Act does not coincide with laws that prohibit falsity or deception, as well as, some other laws that overlap with it, but are extended to subject matter outside of email.  Here, that aspect of CAN-SPAM was specified to state that a claim containing the common law elements of fraud would not be prohibited.  Hence, the court decided that the complaint satisfied fraud allegations, pending the question of if all the factors were required to be alleged in the complaint.

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Spam, for those lucky enough to be unfamiliar about it, are those unsolicited commercial emails that often clutter up inboxes with offers of sales and services that range from the reliable to the questionable.  Due to the issues presented to consumers, Congress, in its wisdom, enacted a law called the CAN-SPAM Act, and began enforcing it in 2004. First, what is the CAN-SPAM Act and what does it prohibit?  Second, as a federal law, does the CAN-SPAM Act override, or preempt those laws a state may already have in place?  How can you tell if that may happen?

What is the CAN-SPAM Act?

The CAN-SPAM Act places prohibitions on transmission of any email that contains false or misleading headers or “from” lines.  For example, a business that is not Facebook, and has nothing to do with Facebook, would be prohibited from sending an email with the subject “Your Facebook account has been compromised” or send an email from www.facebook.com.  In addition, this law places a requirement for three disclosures: (1) clear and conspicuous identification that the message is an advertisement or solicitation; (2) clear and conspicuous notice of the opportunity to decline to receive further commercial email messages from the sender; and (3) a valid physical postal address of the sender.  This is done, in part, due to the interest of the legislation in helping consumers under the principle that they should not be misled and should have a right to say no to unsolicited commercial emails.

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Trademarks and branding are an important part of any business organization.  They build the organization’s reputation in providing a product or service.  In late January, the Fine Brothers, had made an attempt to begin a new business venture in licensing their trademarks and intellectual property to create a larger media congregation called “React World.”  The brothers had built a business on producing videos showing the reactions of different subsets of the population, from children to the elderly.  In doing so, they would monetize the videos through sponsorship and advertisement.  To ensure their ability to monetize and license their intellectual property, they applied for trademarks for the words “React,” “Kids React,” and other derivatives.  This prompted a backlash by individuals, fearing that the actions by the Fine Brothers would be used to curtail their activities on the web.  The sheer magnitude from this backlash led to the Fine Brothers withdrawing their application from the process and cancelling their plans.

Notwithstanding the public backlash, the Fine Brothers would likely have their application approved and pushed beyond the public contest phase if they had only waited a little while longer.  The public contest phase is exactly where the Fine Brothers managed to fail.  If they had not brought attention to their trademarking efforts, it would have likely passed through the process.

In general, in the trademark application process, after the trademark examiner tentatively approves a mark, there is a 30-day period to file an opposition. This is open to all individuals that may be harmed by the mark, not just those with similar marks.  As such, the public was able to protest the granting of the “React” trademark.  When seeking a trademark application, the sort of public outcry that occurred in response to the “React” trademark should be avoided.  The 30-day period, while it would be available to the public, did not need to be publicized as with the Fine Brothers.  In filing a trademark that may garner some public opposition, there is no need to draw further attention to it.  If the brothers had not withdrawn their application, this type of opposition would have been heard by the Trademark Trial and Appeal Board, and overcome by the Fine Brothers.

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In recent years, the internet has connected the general public across continents.  Notably, it can be expected that data can easily travel across countries in a blink of an eye, without any delay and on a daily basis.  The transfer of data is an important part in business as well.  With any multinational entity, personal data crossing countries is inevitable.  However, each country may have different guidelines that a business must ensure compliance.

Recently, the European Union announced a new change to its privacy laws.  Formerly, it would allow American, and other businesses, to obtain a “pass” for its privacy laws by certifying themselves as compatible for its safe harbors scheme.  This safe harbor scheme requires a business to meet standards for privacy protection.  However, on October 6, 2015, the European Court of Justice ruled that the previous system for allowing corporations to obtain accreditation, and shifting data between the United States and Europe, was improper due to the current intelligence methods in the United States.  This oversight ended the safe harbor provision.

The new rules establish a Privacy Shield register and a free alternative dispute resolution system.  The organizations will have to self certify annually, with verification by the Department of Commerce, and comply with the Privacy Shield framework.  As part of compliance, organizations must provide a response within 45 days and create a no-cost independent recourse system where complaints and disputes will be resolved in a timely manner.  In addition, the European residents will be able to pursue legal action for claims such as, misrepresentation, and the participants must commit to binding arbitration at the European citizen’s request.

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Trademarks are a vital part of how your business is branded and how you appeal to clients and consumers.  What about those trademarks that push the boundaries on what is socially acceptable?  Generally, the government may not protect those marks that are beyond what is socially acceptable.  What is socially acceptable now?  Can the same standards apply and restrict what you can trademark?  To what extent can you push the boundaries in your branding?

How did the court rule in In Re Tam?

In recent times, the United States Patent and Trademark Office (USPTO) has ceded the restrictions on demeaning and offensive marks.  This is in response to the recent “Slants” case, where Simon Tam, a musician, filed a trademark application for his band’s name “The Slants.”  His trademark application was then denied under Section 2(a) of the Lanham Act.  This section prohibits the use of immoral, deceptive, or scandalous marks that may disparage living or dead people.  This section is infamous for the reason why the Washington Redskins trademark was cancelled.  However, Mr. Tam contested the refusal of his trademark, claiming that he wanted to take back the word “Slants” for his band, resting his argument on the First Amendment.  In doing so, through a long legal battle, the Federal Circuit eventually found for Tam, in an en banc hearing, stating that Section 2(a) violated his First Amendment right.  Furthermore, while the ruling had only applied to the disparaging part of the section, the USPTO ceded that the “scandalous and immoral” aspects of the legislation were likely to be unenforceable for similar reasons.

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