Enhance the Benefits for Investors in Your Company

Virginia provides a limited tax credit to individuals who invest in small businesses by purchasing equity or subordinated debt with a term of at least three years. The Commonwealth of Virginia maintains a $5,000,000 pool of tax credits to be shared by investors in qualifying businesses. In order for your investors to participate in this pool, your company must apply to the Commonwealth of Virginia and receive certification as a qualifying business prior to the investors’ investment.

Investors will be allocated credits to be applied to their Virginia income tax in an amount of up to $50,000. The exact amount awarded to each investor will not be determined until after the end of the taxable year when the Commonwealth allocates the pool among all qualifying investors.

To apply for your business’s qualification, complete Form QBA, which can be obtained at www.tax.state.va.us.

For more information regarding this opportunity, or questions regarding venture capital legal issues, please contact Vince Mastracco.

Attorneys’ Fees In Civil Rights Cases

In a significant case for the recovery of attorneys’ fees in civil rights actions, the U.S. Supreme Court recently narrowed the definition of “prevailing party.” A suit was brought by a plaintiff who alleged that a West Virginia law violated multiple federal civil rights statutes. Thereafter, the West Virginia legislature abolished the law, and the district court dismissed the suit as moot. The plaintiff moved for attorneys’ fees and costs as a “prevailing party” under the “catalyst” theory, claiming that the suit achieved its desired result because it brought about a voluntary change in the defendant’s conduct. The Court defined “prevailing party” as a party “in whose favor a judgment is rendered, regardless of the amount of damages awarded.” To recover attorneys’ fees and costs, the Supreme Court held that a “prevailing party” must obtain a court-ordered change in the legal relationship between the parties and denied the plaintiff attorneys’ fees. The case is Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep’t of Health & Human Resources, 532 U.S. 598 (2001).

For more information about this subject, contact David N. Anthony.

Publications:

Municipal Law Update - Summer 2002

Newsletter authored by David Anthony and Shep Wainger. Articles include: Attorneys' Fees in Civil Rights Cases; Racial Profiling; Sexual Harassment; School Violence; Student Grading; and more.

Everything You Always Wanted to Know About Patent Protection

You've just conceived of the world's greatest widget, the next it that will overcome world hunger, bring about world peace, and propel us far into the 21st century. How do you keep others from stealing your invention?

Well, there are several options available to any inventor who wishes to protect his or her new and novel idea, but once you begin investigating the options, you will undoubtedly hear about disclosure document programs, provisional patent applications, non-provisional patent applications, utility patents, design patents, and even plant patents. Some of these available options will never provide you, as the inventor, with any enforceable rights, some provide you with a very limited, temporary "shelter", and some have the potential to mature into valid, enforceable U.S. patents. The difficulty often lies in trying to understand the nature of each of these options, the level of protection that each option ultimately provides, or more importantly does not provide, and whether your circumstances warrant the use of one option over the others.

Before we move any further, we should be sure to define three central concepts: what is a "patent", what are the patent "claims", and what is the "one-year statutory bar". A patent is a type of temporary monopoly granted by the government, to the inventor or inventors of any new and useful process, machine, article of manufacture, composition of matter, or any new and useful improvement thereof, or any new, original, and ornamental design for an article of manufacture. During the term of the patent, the patent owner can exclude others from making, using, or selling the claimed invention in the United States or importing the claimed invention into the United States, without permission. When the term of the patent expires, the claimed invention becomes public domain and is available for use without permission from the patent owner. In exchange for this temporary monopoly, the inventor must provide a complete disclosure of the potential invention and the best method he or she is aware of for making and using the invention.

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New Business Start Up Ideas

Choice of Entity for Start Up and Growing Businesses by Chuck McPhillips is a quick, easy read. Created to assist new investors, start up businesses and growing businesses in understanding some basics to consider when making plans, this article will answer some questions and offer alternate considerations.