JUMPSTART OUR BUSINESS STARTUPS ACT
President Barack Obama has recently signed the Jumpstart Our Business Startups Act. The JOBS Act is intended to enable small businesses to use the Internet to raise up to $1 million in investment capital from a multitude of people by a technique known as “crowdfunding.” Larger companies may offer up to $50 million in stock to the public without registering with the Securities and Exchange Commission, which is a significant increase from the previous threshold of $5 million. The JOBS Act will allow both small businesses and high growth enterprises to raise capital from investors more efficiently, allowing startup enterprises across the country to grow and hire faster.
The JOBS Act also includes an increase in the number of shareholders a company may have before being required to register its common stock with the SEC and become a publicly reporting company. Currently, the requirements are $10 million in corporate assets and 500 shareholders. Now the threshold is reached only if the company has 2,000 total shareholders.
INTELLECTUAL PROPERTY: LEAHY-SMITH AMERICA INVENTS ACT
The Leahy-Smith America Invents Act (AIA) was signed into law by on September 16, 2011. The law represents the most significant change to the federal patent system since 1952. The law switches the U.S. patent system from a “first to invent” to a “first to file” system starting on or after March 16, 2013. The proceedings at the U.S. Patent Office for resolving priority contests among near-simultaneous inventors who both file applications for the same invention (“interference proceedings”) are repealed, because priority will be determined based on filing date.
Of note for our readers, an entity has the capability to file an application on behalf of an inventor without seeking the inventor’s execution of the application. This occurs in a scenario when an inventor assigns or is under an obligation to assign the invention rights to the entity. However, any issued patent still belongs to the actual inventor, absent a written assignment from the inventor or inventor’s estate to the entity.
Here are some additional facts relating to intellectual property:
- Industries utilizing intellectual property (includes patents, copyrights and trademarks) employ approximately 40 million Americans in 75 different industries, as per the Commerce Department.
- These 75 industries contribute more than $5 trillion to GDP — more than one-third of the U.S. economy.
- The U.S. Patent and Trademark Office has already implemented several provisions of the America Invents Act, and has reduced its patent backlog from 750,000 applications in January 2009 to approximately 641,000 currently.
THE CITY OF BUFFALO COMMERCIAL CLAIMS COURT
The City of Buffalo maintains a Commercial Claims Court, which functions as an informal court where corporations, partnerships and associations can sue for money only, up to a limit of $5,000.00.
Any corporation, including a municipal corporation or public benefit corporation, partnership, or association, which has its principal office in the State of New York or an assignee of any commercial claim may file a claim. However, collection agencies, or entities that take assignments of debts for the purpose of bringing an action in the Commercial Claims Court, may not use the Commercial Claims Court.
A PERSONAL BENEFIT OF CREATING A CORPORATION
The corporate form is a legitimate means of avoiding personal liability, and a corporation may be organized for that very purpose provided the corporation really exists and is doing business as permitted by law. The organization of a corporation for the avowed purpose of avoiding personal liability does not constitute fraud. However, the corporate entity may be disregarded on a showing of complete dominion and control or fraud, illegality, or wrongdoing. Also, where incorporation is resorted to for the purpose of avoiding an existing obligation of the incorporators, the separate legal entity of the corporation will be disregarded.
Chelus, Herdzik, Speyer, & Monte, PC would be proud to assist in any type of legal matter. Please contact our office should you or your corporation require any necessary legal assistance in these discussed matters.
Prepared by Christopher R. Poole