Legal and Financial Help for San Antonio Area Small Business Owners Affected by COVID-19

Recent updates to the City of San Antonio website provide excellent information for small businesses:

As a small business owner, you may be finding that COVID-19 and its effects present unprecedented issues with contract compliance. In considering a party’s performance under a contract, there may be several clauses built into your agreements that might be invoked to assist your small business.

Consider having an insurance specialist review your insurance policies – Your agreement may require that you carry business interruption insurance or other coverages that may apply to the presence of COVID-19. Review your policy for language about communicable or infectious diseases, or conversely, exclusions related to virus-related losses. It is best, if possible, to have an independent third party review the policy, rather than your broker or insurance company.

Consider sitting back down at the table – You and the other party to the agreement may be able to discuss whether there are alternative means to perform contractual obligations. The other party may be amenable to adjust performance under the circumstances, including extended deadlines or partial performance of obligations.

Review your agreement for force majeure clauses. For more information, see a recent Law Blog from Aric J. Garza Law PLLC relating to such clauses. Note that contractual clauses can be interpreted differently, so it is important to discuss your situation with an attorney, whether you are seeking to enforce or excuse performance under your contract.

To learn more about 0% Interest loans from LiftFund, visit: https://www.liftfund.com/loans/

Unemployment Benefits for Workers Affected by COVID-19

On March 17, 2020, Texas Governor Greg Abbott instructed the Texas Workforce Commission to waive the waiting week for Unemployment Benefits. In addition to waiving the waiting week, the Texas Workforce Commission is exercising its authority under the Governor’s declaration of a Statewide Disaster to waive Unemployment Insurance work search requirements effective immediately.

Those seeking to apply for Unemployment Benefits will need to submit an application.

You will need the following:

  • Last employer’s business name and address
  • First and last dates (month, day and year) you worked for your last employer
  • Number of hours worked and pay rate if you worked this week (including Sunday)
  • Information related to your normal wage
  • Alien Registration Number (if not a U.S. citizen or national)

For Additional Services in San Antonio: https://www.workforcesolutionsalamo.org/

Help for Small Businesses Affected by COVID-19

The U.S. Small Business Administration (SBA) recently granted Texas’ Economic Injury Disaster Loan (EIDL) assistance declaration, making loans available statewide to small businesses and private, non-profit organizations to help alleviate economic injury caused by the Coronavirus (COVID-19).

Small businesses who believe they may be eligible for an SBA EIDL, should visit the SBA’s website where they can directly apply for assistance. The online application is the fastest method to receive a decision about loan eligibility. In order to qualify, businesses will need to assemble the following documents:

(a) Corporate governance documents (Articles of Incorporation, Articles of Organization (for LLC), or Registration of Sole Proprietorship;

(b) a Written statement justifying the nature and scope of economic injury and how/why nature of business was adversely impacted by the Coronavirus (one page/no more than two), such as loss of revenues, cancelled contracts, interrupted supply chain, etc., that resulted in economic injury;

(c) Current Accounts Payable and Accounts Receivable Aging as of date of filing for the loan;

(d) Three (3) years’ 1040 Federal Income Tax Returns for the business & owners;

(e) Three (3) years’ company FYE Income Statement and Balance Sheet and latest YTD Financial Statements (Company prepared is acceptable);

(f) Company and Owners’ Debt Schedule Tables [e.g., Lender, original loan amt., date, current balance, interest rate, collateral, purpose of loan, guarantors, status (e.g., current or past due with explanation) per row in table];

(g) Monthly two (2) years’ cash flow projections;

(h) Three (3) years’ Monthly Sales History up to date of filing for loan;

(i) Current copies of owners’ credit reports from the three (3) credit bureaus with explanations for any negative reports; and

(j) Required SBA Forms, including IRS Form 4506-T, Personal Financial Statement (SBA Form 413), Schedule of Liabilities & Fixed Assets (SBA Form 2202), Monthly Sales (SBA Form 1368), Home Loan (SBA Form 5c), if applicable.

Please share this information with any and all small business owners!

Can COVID-19 Excuse You From Contractual Obligations?

COVID-19 has brought about many horrible scenarios relating to public health and serious financial stress on our incredibly complicated financial system. But small businesses are confronting a specific issue–can COVID-19 excuse small businesses or individuals from their contractual obligations?

The answer depends on the language contained in the contract, local and state law (including Emergency Orders/Directives from governors and/or mayors), and the connection between COVID-19 and the parties’ ability to perform their contractual obligations.

Many contracts contain a “Force Majeure” clause or an “Acts of God” provision. These provisions apply when a contract cannot be performed due to causes which are outside the control of the parties and could not be avoided by exercise of due care. These clauses allocate risk between the parties when an unanticipated event makes performance impossible or impracticable for each party or both parties.

Also, the more specific the clause, the more limited application it has. Most clauses specify that they are only invoked when performance becomes impossible.

Courts generally require the party claiming force majeure to show that the event was not foreseeable and directly caused the failure to meet its contractual obligations. Thus, a pandemic resulting in mass closures of all restaurants, bars, schools and the like should not be a close call. This is not a normal risk of doing business.

Note that many contracts have specific requirements in order to trigger the “Force Majeure” clause or “Acts of God” provision–namely, notice to the other party.

Proposed Legislation on Texas Property Taxes Could Affect You

A great article in The Texas Tribune (by Chris Essig, Ben Hasson and Brandon Formby) concerning proposed legislation to modify how property tax rates are set:

“Senate Bill 2 and House Bill 2 — both dubbed the Texas Property Tax Reform and Relief Act of 2019 — won’t provide across-the-board cuts to property tax bills. Instead, the bills would limit the amount of revenue that local governments like cities, counties and special districts can collect without voter approval.”

https://bit.ly/2EmBHI4

The difference between patents, trademarks, and copyrights

Guest post by Samar Shah of Shah IP Law, PLLC, a patent strategy law firm in San Antonio.

Startup clients, who are just getting their businesses off the ground, inherently understand the value in protecting their intellectual property. They are rightfully concerned that their nascent venture may be easily replicated by someone else, or that a larger competitor will apply its significant resources to out-execute on the startup’s original idea.

Although startups immediately grasp the value of IP protection, they often flounder at selecting the best option for protecting their business ventures. In this post, we discus some of the most common ways that startups and more established businesses protect their intellectual property, including patents, trademarks, and copyrights.

1.     Patents protect products, processes, and chemical compositions

Patents protect (1) products, processes, and chemical compositions that are (2) novel and non-obvious. Your idea must meet both of these requirements in order to be patent eligible. Examples of patent eligible inventions include semiconductors, chemical fertilizers, and processes for manipulating genetic traits in mice, etc.

In order to figure out whether your idea is sufficiently novel and non-obvious, you must look at your invention from the perspective of a person who is ordinarily skilled in your field or technology. This perspective shift often requires us to perform a “prior art search” to identify pre-existing alternative solutions to your inventive idea, and identify the reasons why an ordinarily skilled artisan would not have come-up with the same solution as the inventive idea.

Unlike some of the other forms of protection discussed here, patents must be filed—and granted—by the United States Patent Office in order to confer protection. The standard length of a patent term is 20 years.

2.     Trademarks protect business names and logos

Trademarks protect (1) word, phrase, symbol, design, color, sound, scent, or any combination thereof that (2) are distinctive by identifying and distinguishing products or services.

The distinctiveness of trademarks is measured along a spectrum, of increasing distinctiveness: (1) generic, (2) merely descriptive, (3) suggestive, (4) arbitrary, and (5) fanciful. Generic terms, such as “pizza,” or “car wash” receive little protection, but arbitrary terms (which include the use of generic terms applied to an unrelated product), such as “Apple” for computing devices, and fanciful terms (which include the use of newly invented words), such as “Exxon” or “Google” receive a wider scope of protection.

Trademark rights are created through use, not registration. Standard use protects the owner in the geographic area where the mark is used, in the channels of trade in which the products or services are offered or sold, and for those goods and services with which the mark is associated. Unlike patents, which have a limited term, trademarks can last for as long as they are properly maintained.

3.     Copyrights protect original creative works

Copyrights protect (1) original works of authorship that are (2) fixed into a “tangible form.” Works of authorship that are typically protected include literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture. In order for a work of authorship to be original, it must not be derivative or be copied from someone else. And a fixed “tangible form” refers to a medium, such as a book, a photo, music sheet, or a recorded song. A work must meet both of these requirements in order to receive copyright protection.

A copyright is created as soon as you create an original work and fix it into a tangible medium. However, in order to better protect your work and prevent others from using it, we typically recommend that you register your copyright.

The duration of copyright protection depends on several factors. For works created by an individual, protection lasts for the life of the author, plus 70 years. For works created anonymously, pseudonymously, and for hire, protection lasts 95 years from the date of publication or 120 years from the date of creation, whichever is shorter.

4.     Conclusion

In some cases, a business may be protectible by all three of these options. The selection of an appropriate IP protection strategy for your business comes down to an analysis of the various options discussed here along with a proper understanding of the unique value proposition of your business.

We recommend that you contact an attorney to learn more about your options. The materials in this post are made available for informational purposes only and do not constitute legal advice. Moreover, the receipt of information contained in this post does not create an attorney-client relationship.