New US patent law explained

In the United States we have devised a special system to trademark, copyright or patent ideas concepts or plans. Within said system there have been a number of challenges to the procedures and/ or claims against such copyrights (http://www.guardian.co.uk/music/2013/jun/14/happy-birthday-lawsuit-copyright-warner).  So what does that mean for your business? What are the new rules for patents and why should you worry about it?

Over the last few years there have been an increasing number of pop up companies that litigate towards larger patent carrying companies. These pop up companies attempt to sue the larger company in order to gain some kind of pay-out. For example, if there was a feature such as “buy it now” and it was a clickable feature on your webpage. Wait that sounds a bit like a common domain feature that most people would use right? (http://www.dailyfinance.com/2010/07/14/ebay-xprt-patent-lawsuit-payment-technology/) As it turns out a small company called XPRT Ventures claims to own the “buy it now” feature and has sued EBAY along with its partners over what they call a patent infringement. The lawsuit has a total collectable value of $3.8 billion dollars.

While I would like to state very clearly that I have no idea who invented the “buy it now” feature, I would submit to you that over the years many of these lawsuits have been settled blindly after measuring the cost/ benefit analysis of the lawsuit. If you are unfamiliar with a basic cost/ benefit analysis I can help. For example, if you are a larger corporation worth billions of dollars and hold many patents, trademarks, etc. and someone sues you over a process that you had patented with an infringement lawsuit, you would at that point gather all the information for the suit and measure the amount of money it would cost you to fight the suit. Then you would have to make a decision based on the cost of the lawsuit if it goes to trial (legal fees, etc.) versus the cost to settle the suit before it gets to court with some kind of monetary agreement.

Entrepreneur Mark Cuban has even suggested that “dumbass patents are crushing (small) businesses.” (http://techcrunch.com/2013/01/31/mark-cubans-awesome-justification-for-endowing-a-chair-for-eliminating-stupid-patents/) While normally suggestions by eccentric billionaires are not acknowledged, recently (September 2011) the Leahy-Smith America Invents Act (AIA) attempted to update the patent laws. The most significant change being the modification of a first-to-file system to a first inventor to file system.

“In place (of the old system) will be the new requirement that you have to make your disclosure in a patent filing. Once this understanding is established, inventors will be far more likely to base their patent applications on written documents that will support truly valid patent rights. The new system will require inventors to sit-down and figure out what it is exactly that they want to patent. For $175 they will be able to place a Provisional application on file at the US Patent Office, reserving their right to file a better and more elaborate “story” within the following year. Once the final patent application is filed by the end of that year, the “story” will be frozen. Therefore inventors should understand that they had better get it right, and they only have a year to do so.” (http://coldfusionnow.org/the-us-new-patent-law-march-16-2013/)

Proponents of the new law assert that the law will protect the system (legal) from being overrun with frivolous lawsuits from pop-up companies (patent trolls) that attempt to bleed money from corporations. “Venture capitalists, the people who invest in fledgling tech companies that stand to be trolled, tend to be pretty quiet on this issue when they’re not being vague. Few dare to speak up against patent trolling firms openly because they fear companies in their portfolio will be spotlighted and slapped with lawsuits. Intellectual Ventures (IV) is among the most feared companies when it comes to patent litigation, though the company has repeatedly pushed back against the “patent troll” label. Instead IV describes itself as “a privately-held invention capital company,” though that’s not how I or many others in the Valley would describe them. According to its Web site, the company has raised $6 billion to date and gained more than $3 billion in cumulative licensing revenues. Its investors include leading tech companies such as Apple, Adobe, Google, Microsoft, and Cisco, several venture funds, and universities such as Brown, Cornell, Northwestern and Stanford.” (http://www.washingtonpost.com/blogs/innovations/wp/2013/06/18/why-silicon-valley-likes-obamas-patent-troll-offensive/)

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Cottage Food Law (Washington State)

As many of you might be aware, Swift Bend Inc. resides in two locations. One in the greater Tacoma area (University Place) and another in Fall City, Washington. While many of you may reside in any number of locations around the world the subject of this particular article will be something more of a local law that you might be able to suggest to law makers in your region.

Washington State recently passed a law that could directly impact the sales of goods in your business. The new Cottage Food Law allows for the preparation of goods in your home kitchen in order to be sold either in a store of your choosing or online (so long as the goods are picked up and not mailed).

According to the State website “A cottage food operation must package and properly label for sale to the consumer any food it produces. The food may not be repackaged, sold, or used as an ingredient in other foods by a food processing plant, or sold by a food service establishment. They must comply with all applicable county and municipal laws and zoning ordinances that apply to conducting a business from one’s home residence prior to permitting as a cottage food operation, including obtaining a Master Business License.” (http://agr.wa.gov/FoodAnimal/CottageFoodOperation/)

There are, however, a number of rules that go along with adherence of said law. The first of which is that the total sales of all goods for the year cannot exceed $15,000 per year. If your sales exceed $15,000 than you will have to acquire a “food processing plant license from WSDA under chapter 69.07 RCW or cease operations.” (http://agr.wa.gov/FoodAnimal/CottageFoodOperation/)

The second rule that must be adhered to is the following statement must be made clearly on the good sold “made in a home kitchen that has not been subject to standard inspection criteria.” (http://www.washingtonstatecottagefoodlaw.com/)

Other rules include: The name/ address of where the good was produced, the ingredients by weight in descending order, and the name of the cottage food good.

Initially the law was created in order to allow cookie/ baked good sales at local gatherings. For example, a little league game where goods could be purchased at a cost to consumers or a charity event. However, it has also opened the door for small businesses to sell the goods at local events or sell the goods to the public via a local location (business).

The best advice for any local business is to adhere to all local laws and follow all of the guidelines/ inspection criteria that the State provides. A fine or closure of your business could be a poison pill to your business, one in which you may not be able to recover from.

The following steps must be made before you are allowed to sell your goods in an outlet store or online (as long as the consumer picks up the goods and they are not mailed)

1.)    Contact your local health department for potable water testing requirements if you are on a private water system.

2.)    Submit a copy of the test results of your private water supply with your application packet.

3.) Submit a copy of the Food Worker Card(s) for any person(s) who will be processing food at the Cottage Food Operation.

4.) Submit a copy of your Master Business License.

(http://agr.wa.gov/FoodAnimal/CottageFoodOperation/)

You can find the application packet at the following link: http://www.washingtonstatecottagefoodlaw.com/

 

 

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Marketplace Fairness Act

In the last few weeks there has been a lot of discussion (debate) about a bill that just passed through the Senate. The bill in question is called the Marketplace Fairness Act.  This act, as it is written now, will attempt to level the playing field between local businesses and online retail stores.  Essentially, the bill, in concept, attempts to promote small business exchanges over larger corporation exchanges. (http://www.marketplacefairness.org/bill-text/)

In the past, when you purchased goods online you did not pay a sales tax unless the State that you lived in was the same location in which you purchased the good. With the new law, if passed, the State in which you are to receive the goods or services will collect a sales tax as long as they are part of the simplified sales tax group (currently 24 States).( http://taxes.about.com/od/statetaxes/a/Streamlined-Sales-and-Use-Tax-Agreement.htm)

In addition to the collection of sales tax from online retail stores the bill would exempt small businesses that earn less than $1 million annually from out-of-state sales, and requires states to provide retailers with software to calculate sales taxes based on a buyer’s zip code. States would be allowed to collect taxes on out-of state purchases in six months, to give retailers time to prepare.

Early estimation on the collection of potential purchases online project $23 billion in annual taxes from online sales that presently go uncollected (http://www.huffingtonpost.com/edward-zelinsky/adopt-the-marketplace-fai_b_3238842.html)

Since 1992, States have not be able to collect the sales tax from items purchased online due to a court ruling (http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=504&invol=298) Quill Corp. Vs Heitkamp.

“Quill was a Delaware corporation with offices and warehouses in Illinois, California, and Georgia. None of its employees worked or resided in North Dakota, and its ownership of tangible property in that State was either insignificant or nonexistent.  Quill sold office equipment and supplies; but solicited businesses through catalogs and flyers, advertisements in national periodicals, and telephone calls. Its annual national sales exceed $200 million, of which almost $1 million was made to about 3,000 customers in North Dakota. It is the sixth largest vendor of office supplies in the State. It delivered all of its merchandise to its North Dakota customers by mail or common carrier from out-of-state locations.” (http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=504&invol=298)

“Quill argued that North Dakota did not have the power to compel him to collect a use tax from its North Dakota customers. Consequently, the State, through its Tax Commissioner, filed this action to require Quill to pay taxes (as well as interest and penalties) on all such sales made after July 1, 1987. The trial court ruled in Quill’s favor, finding that the State had not shown that it had spent tax revenues for the benefit of the mail-order business.

(http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=US&vol=504&invol=298)

So far the bill has made its way through the Senate (69-27) and should be argued on the floor of the House within the next few weeks. That being said, if it does pass the House and is signed into law by the President, how will it affect your business?

1.)    If your company earns less than $1 million dollars a year you will have an exemption and will not have to charge a sales tax on your goods or services. (online)

2.)    If your State does not pay a sales tax (Oregon, Delaware, Montana, New Hampshire, Alaska) than you will not be required to pay the sales tax as long as the good that you are purchasing is not from another State that does have the sales tax.

 

 

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HTML5 Drag and Drop Howto

Check out this guide on HTML5 drag and drop and the File API which is the first of a series of tutorials on HTML5 features we will be doing. The next one will be on HTML5 Canvas.

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Accurate Advertising and the FTC

When it comes to advertising or marketing your small business you might want to reference a few rules and regulations that are in place. For example, there is a law called the Federal Trade Commission Act that allows the FTC to act in the interest of all consumers to prevent deception or/ and unfair acts or practices. http://www.business.ftc.gov/documents/bus28-advertising-and-marketing-internet-rules-road

Essentially, what the law states is that the commission (FTC) has the right to evaluate your claim and determine if the claim on your site represents or practices a form of deception.  Likely forms of deception are: intentionally misleading consumers, making medical statements without a doctor’s approval, disclaimers or disclosures that cannot be substantiated, or warranties and guarantees that are not being delivered.

One of the more common problems with online businesses is the zero down policy for places like automobile sites. For example, the site promotes “$0 Down” but when you arrive at the dealership there are undisclosed charges due at lease signing.  While this marketing tactic is not in violation of the FTC Act it is a form of deception which makes it difficult for start-up companies to thrive in the market.

Furthermore, “advertising agencies or website designers are responsible for reviewing the information used to substantiate ad claims. They may not simply rely on an advertiser’s assurance that the claims are substantiated. In determining whether an ad agency should be held liable, the FTC looks at the extent of the agency’s participation in the preparation of the challenged ad, and whether the agency knew or should have known that the ad included false or deceptive claims.” (directly from FTC Act) http://www.business.ftc.gov/documents/bus28-advertising-and-marketing-internet-rules-road

“To protect themselves, catalog marketers should ask for material to back up claims rather than repeat what the manufacturer says about the product. If the manufacturer doesn’t come forward with proof or turns over proof that looks questionable, the catalog marketer should see a yellow “caution light” and proceed appropriately, especially when it comes to extravagant performance claims, health or weight loss promises, or earnings guarantees. In writing ad copy, catalogers should stick to claims that can be supported. Most important, catalog marketers should trust their instincts when a product sounds too good to be true.” (http://business.ftc.gov/documents/bus28-advertising-and-marketing-internet-rules-road)

So how do you keep yourself off of the list of the FTC’s most wanted?

Make sure that you abide by all laws and claims on your site. Make sure that your claims in advertisements are truthful, are not deceptive or unfair, are evidence-based and If you decide to claim a money back guarantee than stand by your word.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad. (http://business.ftc.gov/documents/bus28-advertising-and-marketing-internet-rules-road)

You can find the FTC Act in its entirety at: http://www.ftc.gov/ogc/ftcact.shtm

Or at: http://www.law.cornell.edu/uscode/text/15/chapter-2/subchapter-I

 

 

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This post, 11 Things I Wish I Knew About Django Development Before I Started My Company, has a nice set of things to know if you are new to development with Django or looking for some suggestions about best practices.

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Affordable Health Care Act

Periodically we (Swift Bend) will be presenting information that we have gathered during our own research and sharing it with you. You may have noticed Richard Anton’s blog about Django or how to setup a log rotation and webalizer for Apache logs.

Today we are going to discuss how the Affordable Health Care Act (March 2010) will affect your small business. By doing so we will be providing data from AARP and from the bill itself found on the .gov website.  Essentially, we would like to inform the public on how this bill will affect their small business.

The initial statement (goals) for the bill were as follows:

“Finding Insurance Options: For the first time ever, small businesses have access to a new tool that lets them research and compare their health insurance options in one place –HealthCare.gov. Just enter some basic information about your business, and you’ll see a list of all the insurance options available in your area, broken down by how much they cost and what coverage they offer. And starting in 2014, Affordable Insurance Exchanges will make buying health insurance easy. Small business owners will be able to offer their employees a range of plans from different insurers just like big employers do, while still receiving a single bill and writing a single check. They’ll also still be able to choose how much of their employees’ insurance costs they want to cover. And because small business owners will be joining a much bigger risk pool, they’ll no longer be vulnerable to sharp swings in their rates based on the health of a few employees.” (http://www.aarp.org/health/health-care-reform/health_reform_factsheets/)

After any bill is approved there is a judicial review which is normally a legal overview of the document. In the case of the Affordable Health Care Act there was a large decision that affected many Americans found at: (http://www.kff.org/healthreform/upload/8332.pdf) . The decision measured the constitutionality of an individual mandate or the ability for the government to force a tax on its citizens. While the decision did not strip away at the bill itself it did spell out in legal language what the bill really was: a tax.

The shared responsibility portion of the bill charges the recipient of health care a percentage of their income, according to the court upwards of 4 billion a year could be raised in this portion of the bill. The people that would have to pay this fee would be, for the most part, people that cannot afford health care as it stands now.

So how does this affect your small business? According to the AARP website there is a small business credit that could be collected, it reads as follows:

“Small Business Tax Credit: Small businesses have historically paid 18 percent more for health coverage than larger employees. Today, a tax credit is available to businesses with 25 or fewer full-time-equivalent employees and average wages of $50,000 or less. To get more details and learn whether you might qualify, you should visit the IRS website.”  (http://www.aarp.org/health/health-care-reform/health_reform_factsheets/)

With the current hold-up in Congress over the sequester a lot of the actionable items have been held up. I would recommend tracking the talking points via: (http://blog.aarp.org/2013/03/18/news-roundup-for-congress-big-deadlines-loom/)

 

 

 

 

 

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Vicky and Billy

Goats Happen


These are the newest addition to the Swift Bend team. So far they are not very good at web development, but they do keep down the brush in Richard’s back yard pretty well.

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Using virtualenv for Django projects

Today I am going to walk you through using virtualenv and virtualenvwrapper for deploying Django projects. The advantage of virtualenv is that it sets up your Python package dependencies separately for each virtualenv so that if you have multiple projects which need conflicting versions of the same package you will not have problems. It also makes it simpler to track dependencies. You can create a requirements file for use with Pip to install your dependencies for each project for example.

Installing

Install virtualenv, pip and virtualenvwrapper if not present. Depending on your system, you probably need to run these commands with sudo.

sudo easy_install virtualenv
sudo easy_install pip
sudo pip install virtualenvwrapper

Edit your .basrhc to add these lines (or .zshrc or equivalent for your shell of choice)

export WORKON_HOME=$HOME/.virtualenvs
# Edit this path to be wherever pip install virtualenvwrapper put your virtualenvwrapper.sh
source /usr/bin/virtualenvwrapper.sh
export PIP_VIRTUALENV_BASE=$WORKON_HOME
export PIP_RESPECT_VIRTUALENV=true

And also execute them in current shell or logout/back in or run them directly, or you can source them like this.

source ~/.bashrc

Now create a virtual env to work in:

mkvirtualenv --no-site-packages --distribute -p python2.6 my_test_env_name

You can choose with virtualenv to use with workon or just run workon to list your environments

workon some_env_name

You can remove a virtual env you no longer want like this:

rmvirtualenv env_to_kill

Original documentation by the author of virtualenvwrapper is available at http://www.doughellmann.com/articles/pythonmagazine/completely-different/2008-05-virtualenvwrapper/index.html

Install yolk which is a tool for querying what PyPI and Python packages are installed.
You can use it to detect what is installed in your Python environment.

pip install yolk
yolk -l # Lists all installed packages

You can install the requirements of an existing project from a file listing them like this.

pip install -r requirements.txt

For our purposes, we will of course need Django.

pip install Django

You can use the freeze option to pip create a requirements file matching what is currently installed in your virtualenv like this.

pip freeze > requirements.txt

Setting up your WSGI script

In order to get this working for Django using WSGI, you need your Django project’s .wsgi file setup correctly. Below is an example WSGI script, be sure to change the env_dir value.

import os
import sys
import site

# Find project directory by this file's path
proj_dir = os.path.dirname(__file__)
# specify environment dir
env_dir = "/home/ranton/.virtualenvs/my_test_env_name"

# Tell wsgi to add the Python site-packages to its path. 
site.addsitedir(os.path.join(env_dir,'lib/python2.6/site-packages'))

# add the project dir itself to the sys path
sys.path.append(proj_dir)

# add the egg cache
os.environ['PYTHON_EGG_CACHE'] = os.path.join(proj_dir,'.python-egg')

# define the settings module
os.environ['DJANGO_SETTINGS_MODULE'] = 'settings'

# Run the virtualenv activation script
activate_this = os.path.join(env_dir,"bin/activate_this.py")
execfile(activate_this, dict(__file__=activate_this))

import django.core.handlers.wsgi
application = django.core.handlers.wsgi.WSGIHandler()

Configuring Apache

And of course you need to configure your Apache (or other web server) to load the project using WSGI.
You will need mod_wsgi installed for this to work. I do not cover mod_wsgi setup in depth here, but you can find more information in Django’s own documentation

# Be sure to change all the base paths to match where your Django project
# is actually installed on your server.
<VirtualHost *:80>
     ServerAdmin webmaster@anvil@house.com
     ServerName www.mydomain.com

     DocumentRoot /var/www/mydemo/public_html

     <Directory /var/www/mydemo/app>
       Order allow,deny
       Allow from all
     </Directory>

     WSGIScriptAlias / /var/www/mydemo/app/django.wsgi
     # If your apache user is named something else you need to change it here.
     WSGIDaemonProcess  house.com user=apache  group=apache threads=5
     WSGIProcessGroup house.com

     Alias /static /var/www/html/static

     ErrorLog /var/www/mydemo/logs/error.log
     CustomLog /var/www/mydemo/logs/access.log combined
</VirtualHost>

Assuming everything is setup correctly you should be able to see your Django app running on your site. If things don’t work you will need to look at your server logs to see what is happening. Keep in mind that server setup like whether SELinux is in use can cause problems as well as the WSGI script and Apache configuration.

References

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Automating server backups

Keeping your servers backed up is an important task, and my philosophy is the only kind of acceptable backup is an automated backup. Otherwise it’s just too easy to let other work get in the way of running that regular backup to safe gaurd your data. At other times in the past I have used dedicated backup servers to automate backups from other machines, but now in the days of cloud computing you can automate backups without dedicated hardware and with less trouble by using a storage service such as S3. For those of you looking to automate your backups similarly check out this howto on automating Linux backups using Duplicity and S3.

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