Articles/Newsletters

In Brief . . .

Can Companies Patent Business Methods?

The Federal Circuit U.S. Court of Appeals in 1998 held, in State Street Bank v. Signature Financial Group, that a company may be able to patent a new business method based on an application of computer software. The court held that a business can seek to patent a process that adapts a computer program that produces "a useful, concrete and tangible result."

The court implied that a new method of doing business or providing a service -- not necessarily through the use of a computer -- is potentially patentable. The decision broadens the patentability of innovations, as long as they satisfy the usual statutory requirements:

• The method -- but not the principles underlying it -- must be novel and not obvious to persons skilled in the relevant field or occupation, and
• The method must produce a useful result.

If your company has developed a new method, should you consider protecting it with a patent? After all, a competitor patenting it could block you from using it. We can help you decide whether to patent your proprietary business methods or computer programs.

Dividing Stock in a Closely Held Corporation

When a married couple who jointly own all stock in a business get a divorce and decide not to continue the business through joint ownership, how can they divide that marital asset? They could simply split the stock between them, but this might have significant adverse tax consequences. Here are some other options:

• Liquidate the corporation and distribute the proceeds between the spouses,
• Redeem just one spouse's stock -- though this might have undesirable tax consequences,
• Transfer stock to one spouse who then pays alimony to the other, or
• Divide the business into separate lines or specialties, with each spouse getting one.

Our attorneys can help you decide the best course of action for your situation.

Give Fair WARNing

Is your company thinking of downsizing? The Worker Adjustment and Retraining Notification (WARN) Act requires companies with more than 100 workers to notify workers, labor unions, and appropriate state and local officials 60 days in advance of laying off 500 or more full-time workers or laying off more than one-third of its full-time work force if that amounts to more than 50 full-time workers.