First, the fair use we most often hear about concerns copyright law. Copyright law protects the artistic expression of ideas, such as in music or images. The fair use of corporate logos or slogans (such as Apple Computer’s logo or Nike’s “Just do it” slogan) falls under Trademark Law, and this area functions a little differently.

Now that we know we’re focusing on copyright law, we should understand what copyright law fair use protects, and how it affects copyright law generally. The most important thing to understand—and which sometimes comes as a surprise—is that there is no such thing as “automatic” or “guaranteed” fair use protection. While there are some commonly respected “fair use” areas (which we will get to a little later), fair use is decided on a case-by-case basis. The ultimate decision rests with the judge each time. It is also important to understand that fair use is often spoken of as a defense. This means that it can only be asserted once a case has been brought by a plaintiff. One cannot bring suit under fair use.

Lawyers disagree over whether the fact that fair use is often asserted as a defense goes so far as to mean that it is not a right. It is perhaps best to think of fair use as an exception to or a limitation on copyright protection– that may or may not be applied, depending on the case.

So, how do judges decide whether or not a given use of copyrighted material is permissible? The first thing to know is that they make use of a four-factor “test” listed in 17 U.S.C. § 107 (Section 107 of the Copyright Law). Judges are not limited to these factors in their analysis, and no single factor can decide the outcome on its own. Judges will also compare the possibly infringing use in the case before them to that in similar cases that have come up in the past.

The four factors are:

• How and why the copyrighted material was used and it what way (if at all) it was altered.
• The nature of the original copyrighted work itself.
• How much of the original work was used.
• The effect of the use on the market for the original work.

Furthermore, the law lists several traditionally recognized areas of fair use: “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research.”

Where does this leave us? While the above framework will yield different results in different cases, we can draw some general guidelines from it.

As we might expect, the smaller the amount used of the copyrighted material, the more apt the use is to be construed as fair use. If a small amount was used, and it was just enough to get the idea of the new author across, this will weigh very favorably in the direction of fair use. If large tracts of it were used for no specific reason, the analysis will tend to go the other way.

Was the material used for commercial purposes? This is critical. A commercial purpose doesn’t rule out fair use protection, but does tend to weigh against it. If the user of the copyrighted material is profiting financially from the use, this will be looked at quite carefully.  Is the unauthorized user simply taking advantage of someone else’s creation, adding little or nothing to it of their own? How is the market for the original work affected?  Will consumers no longer feel the need to buy the original work because of the way it is now being used? On the other hand, if the new work serves a completely different function from the original, this will certainly weigh in the direction of fair use.

Judges talk about whether the use was “transformative.” This again refers to whether the material was used in a novel way, or has been changed to such a degree that it might be considered something altogether new. This is a very fact-specific sort of analysis and is difficult to determine objectively. It borders on outright determinations of artistic merit. The more novel and creative the new use is found to be, the more this will weigh toward fair use protection.

On the other hand, the creativity of the original work can affect the analysis. If the original is closer to a listing of facts (such as a specific type of telephone directory), this will weigh in the direction of fair use. The facts or ideas themselves in the original work cannot be protected, as facts and ideas must be free to be used by others. Only the creative expression of facts and ideas is protectable. If on the other hand, the original work being used is highly creative or artistic, it may be more difficult to obtain fair use protection for its re-use by someone who does not own rights to it.

Also, the use of copyrighted material for parody is often also protected. In the past, most uses involving these areas have been considered to pass the four-factor test, and are generally protected. Fair use takes into account the social effect of such uses. In general, we want the law to be conducive to things like teaching and news reporting, parody and social criticism because these are seen to benefit society.

Lastly, it is of course safest, whenever possible, to obtain a license to the work one intends to use. Many comedians and parodists whose satires would most likely be protected under fair use nonetheless opt to secure licenses every time. Given the factual and subjective basis of fair use evaluation, obtaining a license if often the wisest choice and will eliminate worries later on.

Let’s start with the basics. There are two major types of bankruptcies utilized by individuals and small business owners—Chapter 7 and Chapter 13. Chapter 7 bankruptcy is sometimes called “straight” or “liquidation” bankruptcy. Such a filing cancels your debts, but a court-assigned bankruptcy Trustee will have the power to sell (or “liquidate”) your property and use the proceeds to pay off your creditors. Shortly after filing, the debtor must attend a creditor’s (or “Section 341″) meeting before the Trustee to answer basic questions about his financial situation under oath. If everything goes right, your debts are discharged six months after you file.

Certain assets are considered exempt and cannot be liquidated by the Trustee. If you don’t have any non-exempt assets, then nothing gets liquidated and your creditors get nothing. State law determines which assets are exempt. In New York, up to $50,000 of the equity in a home is exempt, or $100,000 for a married couple filing jointly. Retirement accounts such as 401(k)s are exempt. Up to $2,400 of a car’s equity is exempt. There are other exempt assets in New York, but these are the most common. It is important to know exactly what is exempt to prevent unnecessarily losing assets during a bankruptcy.

Chapter 13 bankruptcy, sometimes called reorganization bankruptcy, is quite different from Chapter 7. In a Chapter 13 bankruptcy, you don’t have to hand over any property, but you must use your future income to pay some or all of what you owe to your creditor over a three- or five-year plan, depending on the size of your debts and income. Creditors will typically take a discount on the debts that they are owed; the baseline is that each creditor has to be paid as much as they would have received under a Chapter 7 bankruptcy.

To a certain extent, the choice whether to file a Chapter 7 or Chapter 13 is out of your hands. The Bankruptcy Abuse Prevention and Consumer Protection Act (“BAPCPA”) of 2005 limits the ability of a debtor to file a Chapter 7 bankruptcy. There is a means test that prevents a Chapter 7 filing if the debtor makes too much more than he spends on basic living expenses. The theory is that the surplus can be used to pay off the creditors in Chapter 13. It will not be a surprise to most that credit card companies spent over $100 million lobbying for BAPCPA.

Certain kinds of debt are very difficult to discharge in bankruptcy. Student loans, tax liens, and child support arrears are the three most common types of these so-called “non-dischargeable” debt. It is technically possible to get student loan debts discharged by showing “undue hardship,” but successful showings are few and far between.

A bankruptcy court may refuse to grant a discharge if it believes that there is bad faith in the bankruptcy filing. A person who files repeatedly may have his later bankruptcies rejected. Sometimes, debtors try to transfer assets to their friends and relatives relatives in an attempt to keep it out of their creditors’ hands, which is frowned upon and may cause problems. Likewise, debtors who rack up a huge credit card bill for luxury goods right before filing for bankruptcy may find themselves stuck with the tab.

As you can see, bankruptcy may be a very useful tool. Most people don’t say “Hey, I have no debt now, but why not build up tons of debt and then just go bankrupt?” Filing for bankruptcy is usually done begrudgingly. Someone who lost their job and had to rack up credit card debt to pay the bills for a while may find themselves struggling to make the minimum payments given the bank’s insanely high interest rates, fees, and penalties. A bout of illness may cost tens of thousands of dollars of unforeseen debt. Credit card companies are aware of the bankruptcy laws—as we have seen, they lobbied Congress to change the laws in their favor. They factor in the risk of bankruptcy when making loans as a cost of doing business.

The moral of the story is don’t be embarrassed or afraid of the unknown, bankruptcy is there to help you. Let us figure out together the proper path for you to go down. You’d be surprised to hear that you may be able to avoid bankruptcy completely. But if bankruptcy is right for you, we can help you figure out how to maximize the exempt assets you have, and help you avoid problems with the Trustee. Come in for a free consultation.

Borrowers who want to modify their mortgages should understand that just getting the preliminary modification is not enough. They still need to get finalized, which requires more paperwork after a three month trial period. The process involves a lot of very confusing paperwork. Clients have come to us after they tried to negotiate a mortgage modification only to end up increasing their monthly payments, or have their payments go towards the banks’ attorneys fees.

A borrower facing foreclosure should consult with an experienced attorney to see if a modification may present a viable option for them. We are based in New York City, and have experience in mortgage modifications. We joked that we were responsible for more than 1% of permanent mortgage modifications approved by Bank of America, because one of our clients was approved around the time BOFA announced that it had only approved 98 permanently modifications nationwide. Of course, past performance is not a guarantee of future results. Nevertheless, we would be happy to provide you with a free consultation. Mortgage modifications are not suitable for every distressed borrower, but we can help you with your options.

The rent stabilization program is overseen by the New York State Division of Housing and Community Renewal, or the DHCR. The DHCR shares some responsibilities for regulating rent stabilization with the Housing Courts of New York City. The terms of the rent stabilization regime are set forth in the Rent Stabilization Code, 19 NYCRR Parts 2520-2530. Actions brought in Housing Court to enforce the Rent Stabilization Code are based on the Real Property Actions and Proceedings Law (RPAPL).

There are a variety of ways for a building to become rent stabilized. Buildings become rent-stabilized if they contain six residential units or more and were built between February 1, 1947 and January 1, 1974. Tenants in buildings built before February 1, 1947 and who moved in after June 30, 1971 are rent stabilized. Also, rental units that come off rent control become rent stabilized. Lastly, buildings owners may elect to enter the rent stabilization program in order to receive real property tax abatements under the J-51 and 421-a programs. However, note that not all units in a rent stabilized building may be in the program.

Rental units leave the rent stabilization program in a few ways. If the building entered the rent stabilization program via J-51 or 421-a, the building generally becomes deregulated at the end of the last lease entered into during the period there was a tax abatement. There is also high-rent and high-income deregulation. A rental unit leaves the rent stabilization program when the legal rent exceeds $2,000 and the existing tenant vacates. Landlords may seek to deregulate an occupied unit whose legal rent exceeds $2,000 if the tenant’s annual household income exceeded $175,000 for the preceding two calendar years.

Landlords cannot raise rents for rent-stabilized units with three exceptions. Every year, the Rent Guidelines Board determines a maximum allowable rent increase rate that landlords may set. Landlords may increase rent with the written consent of the tenant in return for increased services or equipment, or improves the tenant’s apartment. Landlords may also increase rent with the approval of the DHCR in case of hardship or if building-wide major capital improvements are installed.

By filing a complaint with the DHCR, a tenant may seek a refund of any rent paid in excess of the legal rate. If the overcharge in rent was willful, then the tenant can recover triple the amount of the overcharge. However, there is a four year statute of limitations to overcharge requests. This means that overcharges paid more than four years ago generally cannot be recovered.

The DHCR may reduce rents upon application if it determines that the owner has not provided required services such as heat, or did not repair the building or rental units. If a tenant receives a rent reduction, the owner cannot collect any increases until the services are restored, and the rent is restored by the DHCR.

Residents in the rent-stabilized rental unit of a relative may have the right to succession once the named tenant moves out or dies. For instance, a son who lives with his mother in her rent-stabilized apartment for more than two years may get a rent-stabilized lease for the apartment if she passes away or moves out.

Rent stabilization in New York City is a very complicated program for both landlords and tenants. Hopefully, this article provided a helpful overview of this system.

A cease and desist letter details the rights claimed by the sender, as well as the actions taken by the recipient that are allegedly infringing these rights. Normally, cease and desist letters are drafted by attorneys, and demand for certain actions to be taken. For instance, such a letter may claim that the recipient’s products infringe a trademark or patent, and demand that sales of these allegedly infringing products stop. Cease and desist letters usually threaten a lawsuit if these demanded actions are not promptly taken.

Upon receiving such a letter, a business can basically do three things. It can take the actions demanded by the sender to avoid a lawsuit. Or it can challenge the rights claimed by the sender. Lastly, a business may request that the supplier of allegedly-infringing products guarantee that they do not infringe the rights claimed in the cease and desist letter.

Complying with the cease and desist letter may be the least costly alternative. If sales of the allegedly-infringing products are low, then dropping that product to avoid a lawsuit may make sense. However, the recipient that chooses to comply with the cease and desist letter must have the sender promise in writing not to sue. Otherwise, the sender may conceivably sue for past damages even if the complained-of actions cease.

Challenging the rights being asserted in the cease and desist letter is probably the most expensive approach. An experienced attorney’s analysis detailing deficiencies in the claimed rights may be sufficient to stop the sender. However, this can lead to a very expensive lawsuit. Furthermore, even if the claim to the intellectual property is weak or tangential, proving that in court will be very expensive and time-consuming. It might be a Pyrrhic victory. As that legal aphorism goes, winning a lawsuit is the worst way to go bankrupt.

Lastly, a business may receive a cease and desist letter regarding products bought from a supplier. In such a case, the recipient should forward the letter to the supplier, who may insist that the sender’s assertions are frivolous. In that case, the recipient should ask the supplier to warranty that its products are not infringing, and to indemnify and defend the recipient against any action brought by the sender. Without these protections from the supplier, the recipient of a cease and desist letter should not take the supplier’s reassurances to heart.

Companies are becoming aware of the need to protect their intellectual properties. Cease and desist letters are the first step in asserting these rights, and they should not be ignored or taken lightly. A business has a few options in responding to the letters, but whatever choices are made has to be put down in writing to head off costly litigation.

Please keep in mind that this article should not be taken as legal advice. Only your attorney can give you legal advice.

Let’s take Joe the Plumber as our first example. Joe has a $2,500 monthly mortgage payment. Recently, however, Joe has been falling behind due to one of many reasons that have befallen us during this dire economy. Seemingly without warning, Joe misses his first payment.  He then misses another payment.  Judiciously, he seeks help and is able to work out a modification that will lower his monthly payment to $1,750 a month and wipe out his arrearages. You might think Joe is lucky. I would say Joe isn’t lucky, rather he is proactive. He understood his situation early, sought help and realized banks are more than willing to keep folks in their homes.

Now let’s take Jane the Occupational Therapist. Jane also has a $2,500 monthly mortgage payment. She too has fallen on hard times. Unfortunately, Jane is not as diligent as Joe and she waits 5 months before she seeks help, only after getting a notice of foreclosure from big bad bank’s attorneys. She too is able to work out a loan modification that will lower her payments to $1,750 and wipe arrearages. Wait! It seems waiting is the key. Not only did Jane save $7,500 more than Joe by not making three payments, she got to sit there and do nothing for 3 additional months?! Did I forget to mention that there was a foreclosure action on her? Did I also forget to mention that the banks were unwilling to speak to her because she was 5 months late and in foreclosure already? How much did she spend to not only get the modification but also fight the foreclosure action? Jane might not have been ahead of Joe after all!

Now let’s take Jack the Ripper. Like Joe and Jane, Jack also has a $2,500 monthly mortgage payment and has fallen on difficult times. Jack is so down on himself, he waits 9 months to seek help only after the bank’s attorneys send him a notice of sale. Jack is up in arms. He doesn’t want to lose his home, but he is 9 months behind, surely there is no remedy for Jack situation!? Luckily Jack calls his attorney, who tells him he has options up until the property is sold (and sometimes even immediately after). Bankruptcy! Bankruptcy? How is that going to help? Well, when you file a Chapter 13 the court issues an order (called the Order for Relief) that includes something not well-known – the “automatic stay.” The automatic stay directs your creditors to cease their collection activities immediately, no excuses. If your home is scheduled for a foreclosure sale, the sale will be legally postponed while the bankruptcy is pending–typically for three to four months. Oh and by the way, this will help protect against other creditors too. However, there are exceptions to this general rule that I will mention in a parenthetical but not get into now (lender can file a motion to lift the stay). Chapter 13 bankruptcy lets you pay off the “arrearage” over the length of a repayment plan you propose–five years in some cases. But you’ll need enough income to at least meet your current mortgage payment at the same time you’re paying off the arrearage. Assuming you make all the required payments up to the end of the repayment plan, you’ll avoid foreclosure and keep your home. But wait there’s more:  Chapter 13 may also help you eliminate the payments on your second or third mortgage too. If your first mortgage principal is greater than the value of your home, you may no longer have any equity with which to secure the later mortgages. That allows the Chapter 13 court to “strip off” the second and third mortgages and recategorize them as unsecured debt–which, under Chapter 13, takes last priority and assuming you stick to your repayment plan may not have to be paid back at all. Jack is sure one lucky guy! But did I mention that bankruptcies stay on your credit report for years! And did I mention all the fees fees Jack racked up filing for bankruptcy?

So what’s the moral of the story? First, don’t sit on your hands. Being proactive is essential to successfully dealing with bad situations. Call an attorney with experience in all facets of home retention. A good attorney will know what to do in every situation. Loan modification might be the best remedy, but not in all cases. Lowering principal balances on 2^nd and 3^rd mortgages might be the best remedy, but not in all cases. Ask questions, get answers and most importantly, be proactive.

On October 9, 2009, the federal bankruptcy court in the Southern District of New York wiped out a $461,263 mortgage on a debtor’s house after the bank could not prove that it had the right to collect the mortgage. The debtor refinanced a home loan with Mortgage World Banks, Inc. but fell behind. She filed Chapter 13 bankruptcy to restructure her debt. PHH Mortgage showed up at the bankruptcy proceedings as the servicer of the mortgage, which it claimed was held by US Bank. However, PHH could not show the paperwork demonstrating how US Bank ended up with a mortgage that was originally sold to Mortgage World Banks. Thus, the bankruptcy court threw the mortgage out.

However, the debtor still does not own clear title to the house, despite the bankruptcy ruling. There is a mortgage on her house, but it is uncertain who, if anyone, has the right to collect. Her attorney is considering a lawsuit to clear title. It may be the case that in the world of high finance, a house slipped between the cracks.

State courts have dismissed foreclosure cases where the purported creditor could not show it owned the mortgage. However, the recent ruling wiping out a mortgage is significant because the servicer lost the right to collect the debt due to the bankruptcy proceedings.

A consumer has to make sure that a contractor holds the proper license for the job at hand. A licensed contractor will have the proper insurance to prevent a homeowner from facing a lawsuit or a claim against their home insurance policy if there are any on-the-job injuries. Furthermore, a contractor with a license can be disciplined by the issuing government agency. The New York City Department of Consumer Affairs (DCA) issues licenses to home improvement contractors. Master plumbers and electricians are separately licensed by the Department of Buildings. A licensed contractor has to protect their license because that is their livelihood, so they are more likely to respond to consumer complaints than a non-licensed contractor.

Home improvements are expensive, and shopping around is a great idea. Asking a number of licensed contractors to bid on a job is a good way for a consumer to get an idea of roughly how much the project should cost, and how a project should be executed. If one contractor is asking for much more or much less money than the others, it is cause to be suspicious. If one contractor suggests a cheaper construction method that no other contractor believes is safe, then it probably is not a good idea. Do not be shy about discussing what other prospective contractors have said about the price or the nature of the work.

The consumer should ask for references. A call to the licensing agency or the Better Business Bureau will reveal any complaints against a contractor. Asking for references from previous customers is also a good way to see the quality of the contractor’s work, and will help determine a contractor’s timeliness.

Once the consumer picks a contractor, he should enter into a construction agreement before any work begins, and before any money is paid. The contract should include the names of the parties, which is important because the contractor has to be the proper legal entity (corporation, partnership, etc.) that holds the license. The contract should detail the work at hand, the materials to be used, the prices, the work schedule, and the payment plan. The consumer has to remember that oral contracts are worthless, so the written construction contract should detail every material aspect of the deal as discussed by the parties. A construction contract must give the consumer seventy-hours to rescind. For a complicated or expensive project, a consumer should consider hiring an attorney to draft the contract.

The payment plan is a crucial way to protect the homeowner. Payments should not be in cash, and not more than 25% of the total cost should be paid before any work begins. Any initial payments should be tied to the delivery of construction materials to the project site. Furthermore, payments should be split up to coincide with crucial milestones of the work, such as sinking a foundation or installing walls. Make sure that enough money is left to be paid after the contractor obtains the necessary sign-offs from the Buildings Department. A job that is not approved by the government is not complete because the homeowner is exposed to the risk of government fines and penalties.

Hiring a home improvement contractor can be time-consuming, but it is far better to spend the time and energy to find a reliable contractor than to look for another contractor to finish the job or an attorney to sue the contractor. Hiring an attorney to draft a construction contract might also be a good idea.

There is a lot of money at stake. Once the rent for a regulated apartment exceeds $2,000 a month, the landlord is free to charge market rents, which can be hundreds or even thousands more than the regulated rent. The fastest way for a landlord to increase the rents is to evict a tenant. A landlord who evicts a tenant living in a rent-stabilized apartment can get a 20% vacancy increase from the next tenant in a two-year lease. He can also get a monthly increase equal to one-fortieth of any renovations performed during the vacancy. For instance, a $4,000 set of hardwood flooring nets an increase of $100 a month until the apartment becomes deregulated. Otherwise, the landlord would have to settle for annual increases of  less than 10% for a two-year renewal lease.

Landlords have to resort to the legal system to evict a tenant, rent-regulated or otherwise. Landlords cannot turn off the utilities to an apartment or change the locks to settle a dispute with a tenant. A tenant who is being harassed by their landlords now have the option of filing a claim in Housing Court under New York City’s Tenant Protection Act (TPA). Landlords who harass tenants can be penalized between $1,000 to $5,000 for each offense. The law bars landlords from using force or making threats against a tenant, repeated or prolonged interruptions of essential services, using frivolous court proceedings to force an eviction, removing the possessions of a lawful tenant, removing doors or damaging locks to a unit, or any other acts designed to disturb a lawful occupant’s residence.

The Tenant Protection Act is balanced to protect landlords from baseless claims by disgruntled tenants. Landlords may be awarded attorneys fees if a TPA claim is frivolous. And if a landlord has three harassment allegations dismissed a ten year period, a tenant will then have to receive approval from a judge to file another harassment claim.

We have seen landlords harass tenants by not accepting rent. They either stop coming around to accept rent, or they refuse to deposit rent checks. The landlord eventually files a nonpayment eviction proceeding. Tenants who find themselves in this situation should send their rent by certified mail to their landlord, keeping the mailing receipt and a photocopy of the rent check. If the landlord keeps refusing the certified mail, keep the returned letter as evidence. Be wary. Sometimes landlords will cash all the checks at once. If the checks bounce, they will sue for nonpayment.

Tenants who believe they are being harassed by landlords should consider filing a claim under the Tenant Protection Act.