Monthly Archives: September 2014

Software Licensing and Enforcement

Software is rarely sold anymore, it is usually licensed. These licenses restrict how the software can be used and if the software can be resold. Even open source licenses, which convey rights to the users instead of take them away, have conditions on how the software can be used. When considering what to include in a software license or which open source license to use, it is important to consider how software licenses are enforced and what terms you want in your license.

License Terms vs. Covenant Terms

The enforceability of the license depends on what clause in the license is being breached and what remedy the developer is seeking. When someone breaches a copyright license, the courts look to the term that was breached to determine if it limited the scope of the license or if it was a mere covenant in the contract. For example, if the term limited the distribution method of the code, it would most likely be considered to be restricting the scope of the license. However, if the term involved how warranty claims were to be submitted, it would most likely be considered a mere covenant.

If the term being breached is considered a mere covenant, the remedies available are the traditional breach of contract remedies. While there are many of these remedies, for the most part this means that the remedy will be actual damages – how much money was actually lost because of the breach. This is not very easy to determine as the amount must be proven by evidence. For example, terms regarding the warranty of the software are usually considered covenants.

If the term being breached is limiting the license, then the breach is considered copyright infringement. This has advantages over a breach of contract action. The most important being that if the copyright was registered with the Copyright Office before the infringement, the copyright holder may be entitled to statutory damages between $750.00 and $150,000.00 per infringement. The copyright holder may also be entitled to attorney’s fees and costs. If the work is not registered before the infringement, the copyright holder is usually stuck having to prove the actual damages from the infringement. Whether or not the work was registered before the infringement, the copyright holder can also ask the court for an injunction to prevent the infringer from continuing to use the software.

When a developer is ready to license her software, what should she look out for?

Register the software with the Copyright Office. As stated above, having the work registered opens the door to remedies that do not require proof of damages. To make this even more attractive, it only costs $35.00 to register. There is no reason not to do this.
Ensure that your goals are met by the license. Whether you are using an open source license or a custom license, make sure that the terms that control the way your software is distributed are written in a way that actually accomplishes what YOU want to have happen with your software. Do not settle on a license because it is popular. Ensure that its terms meet the goals of your software project.
Consider a liquidated damages clause for covenants. Proving actual damages, especially with software licenses is extremely difficult to do. A liquidated damages clause can give a number to the actual damages in the case that one party breaches.
Prepare for if things go bad. You may want to disclaim any liability and warranties. You may also want to add a clause for attorney’s fees and costs. Also, you may want to add a choice of forum or arbitration clause to determine where or how any dispute would be handled.

What if someone is breaching your license?

If you have not done so already, register your work with the Copyright Office. To bring a claim in federal court, the work must first be registered. Get that process started as soon as possible.
Consider alternate options. If you have not registered with the Copyright Office prior to the infringement, or if the infringer has no money, a federal lawsuit may not be worth it financially. However, the Digital Millennium Copyright Act (DMCA) may offer some cheaper alternatives. This act offers a takedown procedure that asks web hosts to remove infringing material. If they refuse, they can be held liable for infringement. If the infringing work is being distributed via the Internet, a DMCA takedown notice may be a viable alternative to prevent the infringer from continuing to distribute the work without breaking the bank.
Talk to an attorney. Every situation is unique. An attorney can help you understand your situation and what your rights and options are.

If you or your company need help writing or enforcing a software license, contact us at Smith & Associates.

Software Audit Demand from the BSA

Recently, radio stations have started playing advertisements informing the listener that if they report software piracy at their place of work, they could receive a reward. While I do not condone software piracy, the Business Software Alliance (BSA), the company running the ads, along with the Software and Information Industry Association (SIIA) use very heavy-handed tactics when dealing with potential pirates. So what should you do if your company receives an audit request from the BSA, SIIA, or some other software company?

Don’t Ignore It – While it may be a valid strategy to ignore some demand letters, it is not the case with these audit requests. These companies will follow through with court cases. This can increase the costs of defense and possibly limit your options for the future.
Retain an Attorney – The BSA and SIIA have attorneys working for them with the goal of maximizing the payments made by potential infringers. You need an attorney working for you. An attorney can help ensure that the audit cannot be used against you in court and help you keep certain knowledge confidential. An attorney can help explain the copyright infringement laws – which don’t always agree with what the BSA and SIAA believe constitute copyright infringement. If infringing software is discovered, an attorney can also help you with negotiating the settlement agreement, ensuring that BSA and SIIA cannot publish your infringements publicly and the terms of any re-audit.
Don’t Buy New Licenses – Once you receive the audit demand, you may feel the need to go out and buy licenses for any non-licensed software. This will not fix the problem and will most likely just end up being a waste of money. The BSA/SIAA will look at the install date and the purchase date to ensure that the software was licensed for the entire time it was installed.
Don’t delete infringing software – Destroying evidence is never a good idea. This can lead to a presumption of infringement and possibly sanctions. This along with the fact that computer experts can recover deleted information makes deleting the infringing software a bad idea.

If you or your company have received a letter from the BSA, SIAA, or any other software company demanding an audit, contact us at Smith & Associates. The BSA/SIAA will use attorneys against you – don’t go it alone.

Can I get a U.S. Trademark Registration to Protect My Brand?

While there are many factors that determine whether or not a particular brand or mark can be registered with the U.S. Patent and Trademark Office, the three most important factors are distinctiveness, likelihood of confusion, and use in interstate commerce. Your brand must be distinctive, this is a legal term of art that will be described later. Also, your brand must not confuse consumers into thinking your brand is represents some other entities goods or services. And finally, you must actually be using your mark in commerce.

Distinctiveness

It is generally accepted that there are five levels of distinctiveness. They are listed below from most distinctive to least distinctive.

Artful/Fanciful: This level is the most distinctive. They are words that were invented to represent the product or service. The words have no meaning other than the invented meaning. Examples include: Xerox, Google, Kodak, Bidzuku.
Arbitrary: These are words that have a dictionary meaning, but that meaning does not relate to the product or service. The most notable example of this is ‘Apple’ for a computer company.
Suggestive: These are marks that ‘suggest’ what a product is by the name. These marks are more than just ‘merely descriptive’ of the product and are considered distinctive by the Trademark Office. Be careful because these levels are subjective and what may be suggestive to you could be merely descriptive to the Trademark Office. Examples include: Citibank, Playboy, and Mustang.
Descriptive: These are marks that merely describe the product or service. While there are methods for registering descriptive marks, for all intents and purposes, these marks are not distinct enough to be registered with the Trademark Office. Also note that surnames usually fall within this level. Examples include: Qik Print, Eyeglass Superstore, Chinese Restaurant.
Generic: These marks merely describes the category of goods or services. These marks are not protected. E.g. Food, Restaurant, Computer.

For you to register your mark, the United States Patent and Trademark Office (USPTO) must determine that your mark is at least suggestive. While there are ways to register a descriptive mark, that is outside of the scope of this post.

Likelihood of Confusion

Your brand cannot mislead or confuse consumers. This usually occurs when your mark is the same or similar to existing trademarks. For example, it might be possible for two companies to use the mark ‘Apple’ if one was selling computers and the other was selling teaching supplies. Conversely, even if the mark is different, if it is similar enough and in the same or similar class, consumers may still be confused. For example ‘Teachbook’ may infringe on ‘Facebook’s’ mark. Even if there is not a similar mark registered with the U.S. Trademark Office, there may still be uses of your mark that will affect your rights. Trademarks can also be filed with a state or acquired through use (this is called a common law trademark). While these marks may not preclude you from registering with the U.S. Trademark Office, they can prevent you from using your mark where they have priority over your mark. This is why a good trademark search is vital before attempting to register your mark.

Use In Commerce

This is another term of art, but it basically means that the mark is actually being used to sell goods or services. Thus if you are still in the planning phase of your project, you cannot get a trademark. You must actually be using the mark. However, there is an ‘Intent to Use’ application that can be filed when you know you want to use a mark, but are not yet using it. This does not grant you any actual protection, but it will provide a record of your use of the mark if you are worried someone might try to steal your brand. If you do file an Intent to Use application, you will still be required to file an actual registration to obtain any rights.

Conclusion

This is just a general overview of some of the key issues when it comes to eligibility to receive a U.S. Trademark Registration. Your specific situation will affect if your mark can be registered. If you have any questions, please feel free to contact us here.

CON for SNF Beds: New Opportunities for ALF Operators

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After a 13 year moratorium on issuing Certificates of Need for new Skilled Nursing Facility beds, Florida is poised for the return of nursing home CON beginning in October. This will present new opportunities for owners and operators of Assisted Living Facilities. Those existing ALFs that would like to obtain approval to offer Skilled Nursing Facility services should be making plans now. It is expected that the competition for approval of new SNF beds will be substantial. But for those who plan ahead and develop a strong argument for need to offer SNF services as part of an overall continuum of care, the rewards can be well worth the effort.

Nursing Home CON Return

Under 2014-174, Laws of Florida, the Legislature has lifted the 13 year ban on CON for skilled nursing facility beds. The imposition of the moratorium was first put in place in 2001 as a Medicaid cost saving measure. The moratorium was originally intended to last 5 years but was extended in 2006 and again in 2011. In recent years, there has been growing pressure to lift the moratorium and to begin preparing for the aging of the baby boomers. Responding to calls to allow for new development of Skilled Nursing Facilities and beds, the legislature authorized the return of CON.

The legislation lifting the moratorium includes new exemptions and expedited reviews for current owners and operators of SNF facilities. For a full summary of the provisions in the bill, please see: www.smithlawtlh.com, and click on Articles.

Opportunities for ALF Operators

It’s certainly no secret that many ALF operators are seeing increasing acuity among their resident populations. This is especially true for those ALF providers with Limited Nursing Services and Extended Congregate Care licenses. Indeed, many ALF operators have complained that the moratorium on SNF beds has resulted in increased pressure to care for higher acuity residents who, in many instances, might be better served in a SNF setting if beds were available.

The lifting of the moratorium will allow some ALF operators to expand the scope of services they offer to include a broader continuum of care. For some, this may be the addition of a SNF unit to their existing ALF facility; for others, it may mean the conversion of an existing ALF to SNF. Ultimately, some providers may seek to offer a full continuum of independent living, Assisted Living, and SNF on one single campus.

Different Architectural and License Requirements

Those interested in seeking SNF beds should thoroughly investigate the differences between SNF and ALF services in terms of the architectural and physical plant requirements as well as the operational and licensure requirements. A full discussion is beyond the scope of this Article, but generally SNF facilities will be evaluated under Florida Building Code requirements for institutional construction and, of course, will be subject to the provisions of Chapter 400, Florida Statutes and Chapter 59A-4, Florida Administrative Code. A CON Application must document the applicant’s ability to meet these standards.

The Upcoming Time Line to Seek SNF Approvals Launches in October

Under existing Rules, AHCA has a schedule that governs the procedures and a detailed time-line for applying for a Certificate of Need. Applications for new skilled nursing facilities and bed additions may be submitted two times per year in the “batching cycle” for “other beds and programs.” A “batching cycle” review is required for any party that wishes to obtain a CON for a new facility or bed addition that is not authorized under an exemption or expedited review. The key dates for the next available batching cycle are as follows:

Event	Deadline
Fixed Need Pool Projections	10/03/14
10 days to File Notice of Errors in a Fixed Need Pool	10/13/14
21 Days to File Formal Challenge to Fixed Need Pool	10/24/14
Letter of Intent Filing Deadline	10/20/14
16-day Grace Period Letter of Intent Filing Deadline	11/05/14
CON Initial Application Filing Deadline	11/19/14
Request Public Hearing	14 Days After Publication Of Application Filing in Florida Administrative Register
CON Application Omissions Response Deadline	12/24/14
State Agency Action Reports (SAARs) Issued	2/20/15
Deadline to File Petition for Formal Administrative Hearing to Challenge a SAAR	21 Days After Publication of the SAAR Results in the Florida Administrative Register

Based on the schedule for the next batching cycle, any party wishing to submit a CON Application should immediately begin the process of putting together a “CON Application Team” consisting of at least the following members:

Key management for owner/operators;
Experienced CON counsel;
Experienced health planner;
Experienced financial planner; and
A health care architect.

Conclusion

Those interested in expanding their scope of services to include SNF beds should pay careful attention to the CON process that will begin in the next several weeks. Letters of Intent must be filed by October 20th for an applicant to be considered in the upcoming batching cycle.

Geoffrey D. Smith is a shareholder in the law firm of Smith & Associates, and has practiced in the area of health care law and CON regulation for over 20 years.

Download PDF Version Here

Nursing Home CON Batching Cycle Rapidly Approaching

Now that the moratorium on Certificates of Need for Nursing Homes has been lifted, nursing homes seeking to add beds must participate in AHCA’s CON batching cycles. The first of these batching cycles since the lifting of the moratorium is rapidly approaching. On October 3, 2014, less than a month from now, AHCA will publish its Summary Need Projections in the F.A.W. Once this is published, nursing homes seeking to add beds to their facilities need to comply with a series of rules and deadlines in order to compete for the fixed number of beds available in their district. To learn more about the rules and deadlines read our article here.

A nursing home wishing to compete in this batching cycle needs to begin preparing now. If you need help competing in this upcoming batching cycle, contact the experienced counsel at Smith & Associates.