Start Your Business

Starting a business requires you to complete a number of steps and make some key decisions. Though part of your overall plan, you’ll need to select a location, decide on a business structure, and obtain the necessary licenses and permits. In addition, determining which financing options will meet your short-term needs and long-term goals is crucial.

Choose a Business Structure

Find the best ownership structure for your small business. The most basic of all business legal structures is the sole proprietorship. Other possible structures include the popular limited liability company, a partnership, or an S corporation.

Register Your Business

Starting a small business requires the usual paperwork and regulations. Secretary of State offices register corporations, LLC’s, partnerships, and articles of dissolution. Setting up your small business may require an employer identification number. The EIN is also used by state taxing authorities to identify businesses.

StartUp Costs

Every business is different and has its own specific cash needs at different stages of development. It is vital to know whether you will have enough money to launch your business venture. To determine your startup costs, you must identify all the expenses your business will incur during its startup phase. Some of these expenses will be one-time costs, such as the fee for incorporating your business and the price of a sign for your building. Some expenses will be ongoing, such as the cost of utilities, inventory, insurance, etc. While identifying these costs, decide whether they are essential or optional. A realistic startup budget should only include those elements that are necessary to start the business. These essential expenses can then be divided into two separate categories: fixed (overhead) expenses and variable (related to business sales) expenses. Fixed expenses will include figures like the monthly rent, utilities, and administrative and insurance costs. Variable expenses will include inventory, shipping and packaging costs, sales commissions, and other costs associated with the direct sale of a product or service. The most effective way to calculate your startup costs is to use a worksheet that lists the various categories of costs (both one-time and ongoing) that you will need to estimate prior to starting your business.

Debt Financing

There are many sources for debt financing: banks, savings and loans, commercial finance companies, and the U.S. Small Business Administration are the most common. State and local governments have developed many programs in recent years to encourage the growth of small businesses in recognition of their positive effects on the economy.

Not All Money Is the Same

There are two types of financing: equity and debt financing. When looking for money, you must consider your company’s debt-to-equity ratio - the relation between dollars you’ve borrowed and dollars you’ve invested in your business. The more money owners have invested in their business, the easier it is to attract financing.

Apple has used a variety of distinctive advertising campaigns to promote its iPod portable digital music player. The campaigns include television commercials, print ads, posters in public places, and wrap advertising campaigns. All of these advertising techniques are unified by a distinctive, consistent style that differs from their other ads.

Style

The more famous commercials and print advertising featured dark silhouetted characters against bright-coloured backgrounds. The silhouettes are usually dancing, and in television commercials are backed by up-beat music. The silhouettes are also usually holding iPods and listening to them with Apple’s supplied earphones. These distinctively appear in white, so that they stand out against the colored background and black silhouettes. Apple seems to change the style of these commercials quite often depending on the song’s theme or genre.

The original television commercials and posters featured solid black silhouettes against a solid bright color, which usually changed every time the camera angle changed. Some of the television adverts also depicted highlights on the silhouettes using darkened shades of the background color, and shadows on the floor. Since then, various commercials in the campaign have changed the format further:

* One live action TV commercial made reference to the silhouette theme to emphasize its icon status. It involved a man walking past a set of silhouette posters, which came to life and danced when his iPod was playing, but froze when he paused it.
* In October 2004, an advert featured U2 performing their single, “Vertigo” as opposed to people dancing, to promote the release of the iPod U2 Special Edition. Because this edition was not white, iPods did not feature in the advert, but the microphone and guitar leads appeared in white instead. The band and the rest of their equipment were in silhouette, but with particularly clear highlights.
* The TV commercials for the iPod shuffle used a green background with black arrows moving in the background representing the “shuffle” icon. The silhouettes danced on top of the arrows as if they were a moving floor while listening to iPod shuffles hanging from white lanyards.
* Following the release of the fifth-generation iPod, two TV commercials, one featuring Eminem and the other Wynton
Marsalis, made radical changes to the style, by exchanging the solid changing backgrounds for abstract composite backgrounds based around a main color (orange and blue respectively). The camera shots alternate between the artists
performing their songs (Eminem sporting a white microphone, Marsalis’ drummer sporting white drumsticks) and traditional silhouette dancers listening to iPods. The solid silhouette were also traded for a more varied silhouette, which shows certain facial features of a person. Apple CEO Steve Jobs has suggested that this more complex composition will be the style of future commercials as well.
* In early 2006 a new type of iPod commercial was released. It was thirty seconds, and it spotlighted album art. The album art was constructed into a city, and then dismantled and it flowed into an iPod nano and said “1,000 songs in your pocket”, the slogan for the 1st Generation iPod.
* In August 2006, another reimagining of the iPod commercial was introduced through an ad for Bob Dylan’s album available in the music store, Modern Times. In this new style, the only silhouette facet of it was that it seemed lighting was reduced on the figure of Bob Dylan and the female dancer, while the iPod was brightened. Color variation, as well as reflection on the face of the guitar, is evident. The ad is much more realistic and the people, as well as details, are much more visible. This ad was an almost complete departure from the traditional, and even the Eminem-styled adverts of the past.
* In September of 2006, Apple once again reimagined their vision of the silhouette ad campaign to go with the new iPod nano aluminum case. They made a departure from the contrasting background and characters. Both the characters and the background are thrown into deeper shadow than we’ve ever seen before, and, in order to showcase the new colors of the nano, the characters swing their nanos around while dancing, which leaves a luminescent light trail.
* In November of 2006 Apple used their original style again in their Latino TV Ad.
* As of Macworld 2007, Apple debuted their new ad campaign, featuring a reverse color scheme of previous campaigns: Colored silhouettes on a black background, as well as a second styled ad featuring colored silhouettes amongst a dynamic, moving and multi-colored background.
* In May 2007, Apple reimagined their commercial again with a commercial for the song Mi Swing Es Tropical by Nickodemus & Quantic featuring Tempo, This commercial used watercolor textures and canvas for the backgrounds, and overlayed was video of outdoors scenery, The characters were also changed, being that they masked another texture or object within the silhouette.
* In June of 2007, a brighter version featured Paul McCartney strumming a mandolin performing his song “Dance Tonight” being very much like an updated version of the Eminem commercial, having backdrops of buildings and featuring Paul McCartney walking with animations of shapes around him.

* During Macworld 2007, There was a new iPod Shuffle commercial. It featured people showing off the clip that came with the second generation iPod shuffle. They attached the clip to different clothing while the color of the iPod also changed.

Influence on pop culture

* MAD Magazine - In the Series of Unfortunate Events movie spoof, Lemony Snicket is always shown in shadow (as is the case with the movie). In one panel of the spoof, he is shown with an iPod. In the MAD March 2006 issue the cover was a parody of the iPod silhouette ad and inside there were panels that spoofed the silhouettes.
* On the Family Guy episode, “Petarded”, Peter laments that losing the kids because of his mental retardation was worse than when Stewie starred in an iPod commercial. The next scene shows Stewie dancing to Scandal’s “The Warrior” in the same style as the people in the iPod commercials.
* An episode of Weebl and Bob (”Piepod”) shows them dancing in the style used in the advert.
* In the episode of The Simpsons ‘Thank God It’s Doomsday’, a poster on the wall of the Christian shop Homer visits displays a silhouette of God wearing an iPod. The caption reads ‘iGod’, and is a clear reference to the advertisements.
* In Stephen Colbert’s first Green Screen Challenge, an entry included Stephen Colbert dancing on a colored background
with a white iPod in his hand.
* In a Season 12 episode of MADtv, they introduced an “iRack” to hold iPod accessories; and also the “iRan.” These were relating to the issues of United States in Iraq and Iran, but poked fun at Apple nonetheless. They also made an “iPad”-skit.
* The website http://ipopmyphoto.com popularized by Wired magazine as consumer evangelism, allows iPod fans to create custom iPod ads from their personal photos.

Business law consists of several different areas typically taught in law school curricula, including: Contracts, the law of Corporations and other Business Organizations, Securities Law, Intellectual Property (Patents, Trademarks, Trade Secrets, and Rights of Publicity), Antitrust, Secured Transactions, Commercial Paper, Income Tax, Pensions & Benefits, Trusts & Estates, Immigration Law, Labor Law, Employment Law and Bankruptcy.

Business method patents are a class of patents which disclose and claim new methods of doing business. This includes new types of e-commerce, insurance, banking, tax compliance etc. There is a sustained debate as to what extent such patents should be granted, particularly for inventions that are essentially legal or contractural in nature as opposed to technological in nature. Nonetheless, they have become important assets for both independent inventors and major corporations.

Legal situation

The legal situation as to whether business methods are allowed as patentable subject matter varies from legal jurisdiction to jurisdiction. The World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) does not specifically address business method patents.

The United States, Australia, Japan and Singapore are considered “safe havens” for business method patents. [opinion needs balancing] The situation in Canada, Korea and Taiwan is not clear. Patent protection for business method patents in Israel, China, India, Mexico, and most of Europe is difficult.

Australia

There is no general prohibition on the patentability of business methods in Australia. Their patentability is determined by applying the tests used to determine the patentability of any type of invention.

However, in a recent decision, Grant v Commissioner of Patents [2006] FCAFC 120, the Full Court of the Federal Court of Australia held that a business method will only be patentable if it has a physical aspect, being a concrete, tangible, physical, or observable effect or phenomenon. Accordingly, ‘pure’ business methods, being those that do not have a physical aspect, are not patentable in Australia.

Canada

Pure business methods cannot be patented in Canada because of its pre-constitutional (in 1982) subordination to British Common Law. Article 1(2)(c) of the Patent Law of 1977 “It is hereby declared that the following (among other things) are not inventions for the purposes of this Act, that is to say, anything which consists of …. a scheme, rule or method for performing a mental act, playing a game or doing business, or a program for a computer.” For example, the Canadian counterpart application of the U.S. patent at issue in the State Street case has been abandoned.

However, a business method patent may be patented in Canada if the patent is claimed in a manner which provides that an apparatus is involved. See Mark B Eisen, Arts and Crafts: The Patentability of Business Methods in Canada (2001), 17 C.I.P. Rev. 279.

European Patent Convention

Under the European Patent Convention, “Schemes, rules and methods for (…) doing business” are not regarded as being inventions and are not patentable, “to the extent that a European patent application or European patent relates to such subject-matter or activities as such”.

But if a new method solves a technical, rather than a purely administrative, problem then it may indeed be patentable. (For example, an improved design of letter-franking machine).

Japan

In Japan, business methods are well recognized and accepted as patentable subject matter. The legal standard used to assess whether a business method is patentable requires that inventions be “a highly advanced creation of technical ideas by which a law of nature is utilized.”

Patents are not issued solely for business methods. The business method must contain a technical aspect that is both tangible and real.

However this requirement may be satisfied simply by specifying that the method is implemented using a computer.

United States

There is no exclusion for methods of doing business under US patent law. Patent applications for methods of doing business are examined using the same standards as any other invention.

History

Patents have been granted in the United States on methods for doing business since the US patent system was established in 1790. The first financial patent was granted on March 19, 1799, to Jacob Perkins of Massachusetts for an invention for “Detecting Counterfeit Notes.” All details of Mr. Perkins invention, which presumably was a device or process in the printing art, were lost in the great Patent Office fire of 1836. Its existence is only known from other sources.
Header from 1840 US patent 1700 on a new type of private lottery.
Header from 1840 US patent 1700 on a new type of private lottery.

The first financial patent for which any detailed written description survives was to a printing method entitled “A Mode of Preventing Counterfeiting” granted to John Kneass on April 28, 1815. The first fifty years of the U.S. Patent Office saw the granting of forty-one financial patents in the arts of bank notes (2 patents), bills of credit (1), bills of exchange (1), check blanks (4); detecting and preventing counterfeiting (10), coin counting (1), interest calculation tables (5), and lotteries (17).

On the other hand, cases such as Hotel Security Checking Co. v. Lorraine Co., 160 F. 467 (2d Cir. 1908), which held that a bookkeeping system to prevent embezzlement by waiters was unpatentable, were often read to imply a “business method exception”, in which business methods are unpatentable.

For many years, the USPTO took the position that “methods of doing business” were not patentable. With the emergence in the 1980 and 1990’s of patent applications on internet or computer enabled methods of doing commerce, however, USPTO found that it was no longer practical to determine if a particular computer implemented invention was a technological invention or a business invention. Consequently they took the position that examiners would not have to determine if a claimed invention was a method of doing business or not. They would determine patentability based on the same statutory requirements as any other invention.

The subsequent allowance of patents on computer implemented methods for doing business was challenged in the 1998 State Street Bank v. Signature Financial Group, Inc., (47 USPQ 2d 1596 (CAFC 1998)). The court affirmed the position of the USPTO and rejected the theory that a “method of doing business” was excluded subject matter. The court further confirmed this principle with AT&T Corporation v. Excel Communications, Inc., (50 USPQ 2d 1447 (Fed. Cir. 1999)).

The USPTO continued to require, however, that business method inventions must apply, involve, use or advance the “technological arts” in order to be patentable. This was based on an unpublished decision of the U.S. Board of Patent Appeals and Interferences, Ex Parte Bowman, 61 USPQ2d 1665, 1671 (Bd Pat. App. & Inter. 2001). This requirement could be met by merely requiring that the invention be carried out on a computer.

In October 2005 the USPTO’s own administrative judges overturned this position in a majority decision of the board in Ex Parte Lundgren, Appeal No. 2003-2088 (BPAI 2005). The board ruled that the “technological arts” requirement could not be sustained, as no such requirement existed in law.

In light of Ex Parte Lundgren, the USPTO has issued interim guidelines for patent examiners to determine if a given claimed invention meets the statutory requirements of being a process, manufacture, composition of matter or machine (35 USC 101). These guidelines assert that a process, including a process for doing business, must produce a concrete, useful and tangible result in order to be patentable. It does not matter if the process is within the traditional technological arts or not. A price for a financial product, for example, is considered to be a concrete useful and tangible result (see State Street Bank decision).

The USPTO has reasserted its position that literary works, compositions of music, compilations of data, legal documents (such as insurance policies), and forms of energy (such as data packets transmitted over the Internet), are not considered “manufactures” and hence, by themselves, are not patentable. Nonetheless, the USPTO has requested comments from the public on this position.

The Supreme Court has not recently ruled on business method patents. Justice Kennedy’s concurrence in eBay Inc. v. MercExchange, L.L.C. referred to “potential vagueness and suspect validity” of some business method patents.

Classification

Methods of doing business that involve the use of a computer are classified in Class 705 (”data processing: financial, business practice, management or cost/price determination”). Class 705 includes sub-categories for industries such as health care, insurance, electronic shopping, inventory management, accounting, and finance.

Delays in examination

The USPTO is experiencing significant delays in examining business method patents. Projected delays of up to 14 years have been reported. The delays are due to a combination of the step change in business method filings as of the State Street Bank decision and the difficulty in hiring qualified examiners with financial services backgrounds (e.g. insurance and banking). It has also been reported, however, that inventors can get their patent applications examined in as little as six months, if they submit a Petition to make special. A petition to make special is a procedure for getting particular patents examined early.