Employee or Independent Contractor? How Startups Get Worker Classification Wrong and What It Costs

One of the most common questions that come up us in advising new startups about how to scale comes when they are looking to onboard a team. No one wants to pay employment taxes, and its common to call someone a 1099 contractor when they are not.

So, how do we think about this problem?

First, its worth pointing out that calling someone an independant contractor does not make it so. There are tests that different jurisdictions use to decide whether the arrangement you have makes someone an employee or a contractor.

Even a signed agreement declaring someone an independent contractor does not make them one. If the facts say employee, the government and the courts will say employee, and they will say it retroactively, with interest.

Further, different jurisdictions use different tests, and the same worker can be a contractor under one and an employee under another at the same time. Here is the map.

If you are operating in California, I’ve got bad news. California has one of the most stringent tests for determining the status of a worker. They follow what is called the ABC test. New Jersey, Massachusetts and about twenty other states follow some version of the ABC test.

New York follows the traditional control test, which is significantly easier to navigate. The control test asks who controls the means and method of work. Texas and Florida also follow this track.

And, of course, the federal applies several different tests depending on the context.

See below for summaries of beach of these tests.

The ABC test: the strict one

Under the ABC test, every worker is presumed to be an employee. The company can rebut that presumption only by proving all three prongs:

A. The worker is free from the company's control and direction in performing the work, both under the contract and in fact.

B. The work performed is outside the usual course of the company's business.

C. The worker is customarily engaged in an independently established trade, occupation, or business of the same kind.

For example, if you run a software company and you hire a freelance developer to build your product, that work is squarely inside your usual course of business, and prong B fails no matter how independent the developer is. The bookkeeper you hire, on the other hand, may pass.

New Jersey applies an ABC test as well, and its version of prong B can also be satisfied if the work is performed outside all of the company's places of business. Massachusetts has one of the strictest versions in the country. More than twenty other states use some form of ABC test, in many cases just for unemployment insurance purposes rather than across the board.

The common-law control test: the traditional one

The common-law test asks one central question: does the company have the right to control not just the result of the work, but the manner and means by which it gets done? Courts weigh factors like who sets the hours, who provides the tools, whether the worker can take other clients, how the worker is paid, and how integrated the role is into the business. No single factor decides it.

The common-law test is more forgiving than ABC because there is no automatic prong B failure for core-business work, but a founder who directs a "contractor" like an employee will still lose.

The economic realities test: the dependence one

The economic realities test asks whether the worker is, as a matter of economic fact, in business for themselves or dependent on the company for their livelihood. Factors include the worker's opportunity for profit or loss, their investment in their own equipment and business, the permanence of the relationship, the degree of control, whether the work is integral to the business, and the worker's skill and initiative.

This is the test under the federal Fair Labor Standards Act, which governs minimum wage and overtime, and some states borrow it or blend it with control factors.

Yes, there is a federal test. Actually there are several.

The federal government does not speak with one voice on this.

The IRS uses a common-law test for employment tax purposes, historically expressed as twenty factors and now grouped into three categories: behavioral control, financial control, and the relationship of the parties. A company that wants certainty can ask the IRS directly for a determination on Form SS-8.

The Department of Labor uses the economic realities test for wage-and-hour claims under the FLSA. The DOL issued a six-factor rule in 2024, then announced in a 2025 field assistance bulletin that its investigators would not apply that rule in enforcement while the agency reconsiders it. The standard is in flux, which is a reason for caution, not comfort.

The National Labor Relations Board applies its own common-law analysis to decide who counts as an employee with organizing rights under federal labor law.

The practical takeaway: your developer can be a legitimate contractor to the IRS and simultaneously a misclassified employee under California wage law. Passing one test is not a defense to failing another. You have to clear the strictest test that applies to your worker, and that usually depends on where the worker lives and works, not where your company is incorporated.

What it costs when you get it wrong

Problems most often arise when a contractor is let go and files for unemployment, gets hurt and files a workers' compensation claim, or talks to a lawyer about unpaid overtime. Any one of those can trigger an audit that sweeps in every contractor you have ever paid.

The bill can include back federal and state employment taxes the company should have withheld and paid, plus penalties and interest. Unpaid minimum wage and overtime, which under the FLSA can be doubled as liquidated damages, going back two or three years. Retroactive unemployment and workers' compensation contributions. Claims for the value of benefits the worker would have received as an employee. And in some states, statutory penalties per misclassified worker on top of everything else.

There is also an IP angle startups overlook. As covered in our post on who owns your startup's code and logo, work-for-hire rules operate differently for employees and contractors. A misclassification mess and an IP ownership mess frequently arrive together, usually during diligence for a financing or acquisition, which is the worst possible time.

The checklist before your first hire

Before you engage anyone as a 1099 contractor, run through this honestly:

1. Identify the tests that apply based on where the worker lives and works, and measure against the strictest one.

2. Ask the prong B question: is this work my actual product or service? If yes, and an ABC state is involved, lean strongly toward employee.

3. Confirm the contractor runs a real business: their own entity or trade name, their own equipment, their own insurance, and ideally other clients.

4. Pay by project or deliverable where possible, not by the hour on a fixed schedule.

5. Do not direct the how. Define the result, the deadline, and the price, and let them decide the manner and means.

6. Skip the trappings of employment. No company email address, no title on the org chart, no standing meetings they are required to attend, no company laptop.

7. Get a written agreement that matches the reality above, and make sure it includes a present-tense IP assignment.

8. If the role is full-time, indefinite, and central to the business, stop trying to make contractor work. Put them on payroll. Payroll services make this far less painful than founders fear.

9. When the answer is genuinely unclear, get advice before the engagement starts. Reclassifying someone later is expensive. Being reclassified by an auditor is worse.

10. Better yet, talk to an experienced lawyer who has handled these kinds of issues. We happen to know several.

TL/DR

Classification is decided by legal tests, not by your contract. The ABC test used in states like California, New Jersey, and Massachusetts presumes employment and is very hard to satisfy for core-business work. New York and others use a control test. The federal government applies several tests of its own, and the DOL's current standard is in flux. Passing one test does not mean passing them all. Misclassification costs back taxes, double damages on unpaid overtime, and penalties, and it tends to surface during fundraising or exit diligence. When a role is core, full-time, and ongoing, hire an employee.

This post is general information, not legal advice, and does not create an attorney-client relationship. Classification rules are fact-specific, vary by state, and change. Talk to counsel about your situation.

ISOs vs. NSOs: How Startup Stock Options Actually Work

Stock options are one of the strongest tools a startup has for attracting talent without spending cash. The tax rules reward planning and punish improvisation, so setting them up correctly at the start is imperative. This is the sort of thing you should work with a professional on. Don’t wing it.

A stock option is the right to buy a set number of shares at a fixed price, called the strike price or exercise price, for a defined period. The strike is locked in when the option is granted. If the company grows and the shares become worth more, the holder can buy at the old price and keep the difference. Options are how most startups pay early employees, advisors, and sometimes contractors, because they conserve cash and align the person’s interests with value of the company.

Startup grants typically come in two types: incentive stock options (ISOs) and non-qualified stock options (NSOs, sometimes NQSOs). The mechanics of buying the shares are identical. What differs is the tax treatment and who is allowed to receive them. Getting the classification right, and setting the strike price correctly, is where founders most often need counsel.

The vocabulary

Grant: the company awards the option. Nothing is bought yet.

Vesting: the schedule on which the option becomes exercisable, often its four years with a one-year cliff, but this can vary.

Exercise: the holder pays the strike price and receives actual shares.

Spread: the difference between the fair market value of the shares at exercise and the strike price. This is where the tax lives.

Who qualifies for each

ISOs are creatures of the Internal Revenue Code and come with conditions. They can go only to employees, not to independent contractors, advisors, or non-employee directors. They must be issued under a written plan, carry a strike price no lower than fair market value at grant, and be exercised within ten years. There is also a ceiling: to the extent the value of stock, measured at grant, that first becomes exercisable in a single calendar year exceeds $100,000, the excess is treated as NSOs.

NSOs carry none of those restrictions. Anyone can receive them, including employees, contractors, advisors, and board members. The tradeoff is less favorable tax treatment.

How each is taxed

NSOs. No tax at grant. At exercise, the spread is ordinary income. For an employee that means income and payroll tax withholding on the spread, even though no cash came in beyond paying the strike. When the shares are later sold, any gain above the exercise-date value is capital gain, long term if the shares were held more than a year after exercise.

ISOs. No regular income tax at grant or at exercise. Meet both holding periods, more than two years from grant and more than one year from exercise, and the entire gain at sale is long-term capital gain. That is the advantage. Sell before meeting those periods and it is a disqualifying disposition, which pulls the spread back into ordinary income and looks much like an NSO.

The catch with ISOs is the alternative minimum tax. The spread at exercise, while free of regular tax, is an AMT adjustment. In other words: exercising ISOs can trigger a tax bill on money you have not actually made yet, for stock you may not be able to sell.

State treatment varies, so confirm the consequences for each specific holder. For example, California imposes its own AMT, so a California resident can take the hit at both the federal and state level.

The strike price and 409A

An ISO strike must be at least fair market value at grant. An NSO priced below fair market value creates its own problem under Section 409A, including immediate income inclusion plus a penalty. Because startup common stock has no public market, the company needs a defensible number to set the price. That is the 409A valuation, usually an independent appraisal that, done properly, gives the board a safe harbor. Guessing at the number, or skipping the valuation, is a common and expensive mistake.

Exercise windows and the 90-day trap

Most plans give a departing holder a short window, often 90 days, to exercise vested options or forfeit them. Separately, ISO status itself requires exercise within three months of leaving employment; miss that and the option is treated as an NSO. An employee who leaves with valuable but unexercised options then faces a choice: pay the strike price, plus any tax, inside the window, or walk away. Some companies extend the window to keep people whole, but extending an ISO past three months converts it to an NSO. Explain this in the offer, not after someone quits.

Early exercise and 83(b)

Some plans let holders exercise before vesting. Paired with an 83(b) election filed with the IRS within 30 days of exercise, this can start the capital gains clock early and cap ordinary income and AMT exposure while the stock is cheap. The risk is real cash: you pay for shares that may never vest, in a company that may fail. Early exercise is a planning tool, not a default.

The option pool

Options come out of a pool the company sets aside, often 10 to 20 percent of the fully diluted shares. That pool is dilution. Investors usually require it to be created or topped up before their money goes in, which pushes the dilution onto the founders rather than the incoming investor. Size the pool against an actual hiring plan, because an oversized pool dilutes you now for hires you may never make.

TL/DR

This is the kind of stuff you should be hiring counsel and/or an accountant to assist with. Confirm eligibility before promising ISOs, since contractors and advisors cannot receive them. Consider getting a 409A valuation before granting. Spell out the post-termination exercise window in the offer. Flag AMT exposure to anyone exercising a meaningful ISO. And size the option pool against real hiring needs so the dilution matches the plan. Shares are typically set aside for the exercise of options, so that dilution doesn’t come as a surprise later.

This post is general information, not legal advice, and does not create an attorney-client relationship. Tax rules are fact-specific and change. Talk to counsel about your situation.

SAFEs, Convertible Notes, and Priced Rounds: A Primer on How Startups Raise Early Money

Sooner or later, most startups need financing to really scale. While the startup-community probably doesn’t give enough attention to true bootstrappers (yes, it is possible to build a business from the ground up), there are real reasons why venture capital is an important aspect of building a business, particularly in tech.

This is a primer on the most common finance vehicles that early-stage founders will likely see. We’ll talk about what each structure is, how its main terms work, and when you are most likely to encounter it and some common concerns or pitfalls. None of these instruments are inherently good or bad. Each fits a different stage and a different kind of investor.

The SAFE

A SAFE, short for Simple Agreement for Future Equity, is an agreement to give an investor equity later, when you do a priced round, in exchange for cash now. It is not debt. It carries no interest and no maturity date. Y Combinator introduced the SAFE in 2013 and released the post-money version in 2018, which is now the market standard. It is important to note that a true SAFE note is not negotiable. That’s partially the point. That’s why it is a “Simple Agreement.” An industry standard was established, and its terms are not to be changed.

A SAFE does not set a valuation today. It sets the terms for converting later, usually through two numbers. The valuation cap is the highest company value at which the money converts into shares, which rewards the investor if the company grows. The discount lets the investor convert at a set percentage below what priced-round investors pay, often in the 10 to 25 percent range. Many SAFEs include both, and the investor gets whichever produces more shares. In a post-money SAFE, the investor's ownership percentage is fixed and knowable at signing, calculated as the investment divided by the post-money cap.

SAFE Notes are common for very early, friend-and-family investors or angel investors. Accelerators like Y Combinator use them, and most seed rounds today are papered this way because a SAFE is short, inexpensive, and quick to close.

That said, remember that SAFEs notes are securities and are therefore subject to SEC regulation. Investors like to skip this part, but if you are going to take your business seriously, and treat it as if it were the multi-million dollar asset that you claim it is, you need to take the ramifications of this seriously.

Is the SEC going to knock down your door and bring you out in handcuffs because you didn’t register your uncle’s SAFE note? No, of course not. But failing to handle the details of registering your securities and providing the proper disclosures can result in complications at exit, and can increase the possibility of an investor claiming fraud. So cheap to avoid. So expensive to defend.

The convertible note

A convertible note was the default investment vehicle before SAFEs came along. It’s the same basic idea as a SAFE, with a key difference. Here an investor wants to invest, but we aren’t yet sure how to value an early-stage startup. So the convertible note punts on the question of valuation like a SAFE, but also operates as a loan. It is debt that converts into equity at a later priced round, and until it converts it accrues interest, which usually turns into additional shares rather than getting repaid in cash. Like a SAFE, a note typically carries a valuation cap, a discount, or both. Unlike a SAFE, it has a maturity date, the day the loan technically comes due.

That maturity date is the main practical difference. If you have not raised a priced round by the time the note matures, the investor can, in principle, demand repayment or use the deadline as leverage to renegotiate. A SAFE has no such trigger.

SAFEs are generally more favorable to founders. Convertible Notes are generally more favorable to investors. They can show up in seed and bridge financings, and with angels or funds who simply prefer holding debt or want the stronger position debt provides if the company winds down, since debt sits ahead of equity in any distribution. Notes were once the standard early instrument and have largely, though not entirely, given way to SAFEs.

The Priced Round (Series A, B, C, etc.)

In a priced round, you and your investors agree on a company valuation, set a price per share, and sell actual preferred stock, typically a Series Seed or Series A. Nothing waits to convert. Everyone knows who owns what the day the round closes.

The tradeoff is cost and complexity. A priced round runs on a full set of deal documents, often based on the NVCA or Series Seed model forms, covering the stock purchase, a charter amendment, investor rights, and voting arrangements. It can include a board seat and investor consent rights over major company decisions. You will also generally need a 409A valuation to set the fair market value of your common stock and grant options correctly.

Priced rounds arrive when the raise is large enough to justify the legal cost, when an institutional lead wants the governance rights that come with preferred stock, or when a company has raised on a series of SAFEs and notes and needs to convert them and clean up the cap table.

Side Letters

A side letter is a separate agreement that gives a specific investor rights not written into the main instrument. Common terms include a most-favored-nation clause, which lets the investor claim any better terms you later give someone else, pro rata rights to keep their ownership percentage in future rounds, information rights to receive financial updates, and sometimes a board observer seat. Post-money SAFEs, for example, do not include pro rata rights by default, so investors who want them ask for a side letter.

When you encounter it: side letters usually accompany a larger or more strategic check, in any of the three structures above. They are worth watching for two reasons. A most-favored-nation clause can quietly cascade, resetting an earlier investor's deal to match a better one you offer later. And a stack of inconsistent side letters becomes an administrative and compliance burden that surfaces, unhelpfully, during diligence. Keep track of every promise you make outside the main documents.

How SAFEs and Convertible Notes actually Convert

Because SAFEs and Convertible Notes convert later, their cost is easy to underestimate at signing. A simplified example shows why. If you raise $1 million on a post-money SAFE with a $10 million post-money cap, that investor ends up with roughly 10 percent of the company. Raise a second $1 million on another SAFE at the same cap, and you have committed close to 20 percent before a priced-round investor puts in a dollar, with that dilution borne by the founders. The priced round and any option pool top-up then come on top.

This is simplified and ignores the option pool and differing caps. The takeaway is that every SAFE and note is dilution already agreed to. It just does not appear until conversion, so model the fully diluted cap table before signing the next instrument.

SEC Compliance: every one of these is a securities sale

A SAFE, a convertible note, and priced-round stock are all securities. Selling them requires either registration with the SEC, which early startups do not do, or an exemption. The common exemption is Regulation D under the Securities Act. Two paths matter for most startups. Rule 506(b) lets you raise an unlimited amount from accredited investors, plus up to 35 non-accredited but sophisticated investors, as long as you do not engage in general solicitation. Rule 506(c) permits general solicitation, advertising the raise publicly, but every investor must be accredited and you must take reasonable steps to verify it, not just accept their word.

After your first sale, you file a Form D with the SEC, generally within 15 days. The accredited-investor definition and the specific rule you rely on should be confirmed for your facts. Don’t forget that many states also have blue sky laws to comply with.

Two more things to consider: First, the antifraud rules apply no matter which exemption you use. You cannot misstate or omit material facts to an investor even in a casual friends-and-family SAFE. Second, if you bring in any non-accredited investors under Rule 506(b), you trigger specific disclosure obligations. This is one reason we already recommend a private placement memo be included in the deal.

What’s a private placement memo and do I need one?

A private placement memorandum, or PPM, is a disclosure document describing the company, the terms of the offering, and the risks of investing. Our general view is that for an early raise from accredited investors on a SAFE or convertible note, a detailed, 60 page, intricate PPM disclosing every possible risk, issue, development, and piece of analysis is usually unnecessary and not worth the cost. However, a straightforward, simple disclosure regarding the risks of investment is easy to produce, and can save a lot of headaches later if litigation ever follows.

For accredited investors, a disclosure like a PPM is optional. However, if you accept non-accredited investors (which I’d rather you didn’t) under Rule 506(b), disclosure is no longer optional. If you use general solicitations, raise a larger or more public round, or take money from less sophisticated investors (which often includes friends and family), a more robust written set of risk factors and disclosures is worth preparing.

We typically recommend a PPM in all cases, although the depth and complexity of the disclosure depends on who is investing and how you are reaching them, so it is worth a specific conversation rather than a default assumption in either direction.

The Recap

SAFEs dominate the earliest money, notes appear when an investor wants debt or a bridge, and priced rounds arrive with larger and more institutional capital. Side letters ride alongside all three and deserve close tracking. Whichever structure you use, it is a securities sale governed by Regulation D and state blue sky laws, the antifraud rules always apply, and the PPM is a judgment call driven by who is investing. Understanding these building blocks before you raise makes every conversation with an investor, and every later diligence review, go more smoothly.

This post is general information, not legal advice, and does not create an attorney-client relationship. Securities and tax rules are fact-specific and change. Talk to counsel about your situation.

Do I Need to Register My Trademark?

Using your mark gives you some local rights. Federal registration buys you protections you cannot get any other way. Whether it is worth it comes down to your budget, your growth plans, and how much the name is worth to the business.

What you get just by using the mark.

In the United States, trademark rights start with use, not paperwork. The moment you sell goods or services under a name, you have common-law rights in it. You can put TM, or SM for a service, next to the mark without filing anything or asking anyone.

The catch is that common-law rights reach only as far as you actually do business. If you only sell in your local city, your rights only cover you there, not nationwide. Common-law rights are also harder to prove in court. In the legal community “harder” is pronounced: “mor x-pen-sive”. When someone copies you, you have to show where and when you used the name, which turns into a fact fight. And if a competitor federally registers the same mark before you do, you can end up boxed into the small area where you can prove earlier use, while they take the rest of the country.

TM versus the registered symbol

TM means you are claiming rights in the mark. Anyone can use it, registered or not.

The R-in-a-circle symbol means the mark is federally registered. Do not use it until your registration actually issues. Using it early is improper and can be held against you later, including as a reason to refuse or challenge the mark.

What federal registration adds

Registering with the U.S. Patent and Trademark Office gives you things common-law use never will.

Nationwide priority as of your filing date, not just the corner of the map where you operate.

A legal presumption that you own the mark and that it is valid, which flips the burden onto the other side in a dispute.

Access to federal court and a stronger set of remedies.

A path to incontestable status after five years of continuous use, which cuts off many of the arguments someone could otherwise use to attack your mark.

Practical leverage. A registration deters copycats, lets you record the mark with U.S. Customs to block counterfeit imports, and unlocks brand-protection programs on the major online marketplaces.

State Trademarks

Each offers their own trademark registrations. These are cheaper and faster than a federal filing, but they only protect you inside that state and carry far less weight. State registration can make sense for a genuinely local business but most founders skip this and go straight to federal registration.

Secure Your Name Before You Launch

If you have settled on a name but have not gone to market, you can file based on a genuine intent to use it. Do it right and your priority can date back to the filing, not the launch. For a founder sitting on a name during a long build, that head start is worth real money. This also protects from having to re-brand in the future. There’s nothing worse than having to change your brand name, after receiving a cease and desist letter that could have been avoided with a little research beforehand.

Should you file a Trademark yourself?

We file trademarks for a living, so feel free to take what I say with a grain of salt. That said, our honest answer is that while some trademarks can be very straightforward, there are real advantages to having counsel do this for you right the first time.

First is that your application is more likely to be accepted. A study of roughly 5.5 million applications found that 82 percent of applications filed by attorneys won preliminary approval, compared with 60 percent of applications filed by people representing themselves. When an application hit a problem and drew a formal objection from the examiner (which is not uncommon), attorneys prevailed for their clients 72 percent of the time. Self-filers made it 45 percent of the time.

Source: Deborah Gerhardt and Jon McClanahan, "Do Trademark Lawyers Matter?", 16 Stanford Technology Law Review 583 (2013), available here. See also Deborah Gerhardt and Jon Lee, "Lessons from USPTO Trademark Prosecution Data," 112 The Trademark Reporter (2022), available here.

Filing yourself could make sense depending on whether the mark is distinctive or made up, you are in a single product category, already using it, you have run a real search and found nothing close, and you can afford to lose the filing fee if it fails. That fee does not come back.

Self-filers tend to go wrong when the mark describes what you sell, when there is a similar mark already on the register, when you pick the wrong category or write a goods-and-services description that is too broad or too narrow, when your specimen does not satisfy the examiner, and when the scam solicitations that target self-filers start showing up in your mailbox looking like official bills.

Another factor is whether you believe your time, as a founder, is best served learning trademarks law, or doing what you do best. While it’s very common for early-stage to have to wear many hats, there are certain fields where I generally do not think founders are best served by attempting to become subject-matter experts in fields unrelated to their role in the business. Get back to code-writing or whatever it is that you do!

There is one last issue to consider. Your mistakes are permanent and public. Every application you file lives in the USPTO's public record, including the ones that get refused or abandoned. A future examiner can see that your mark was turned down before, and so can anyone who later opposes you. A past refusal does not automatically bind the next examiner, because each application is judged on its own merits. But the refusal is right there in the file. Worse, the arguments you made, the disclaimers you agreed to, and the narrower description you accepted while trying to rescue a bad filing can all be quoted back at you the next time around. A clumsy first attempt can make the second one harder, not just slower.

The honest rule of thumb: if the name is core to the business, if you will ever need to enforce it, or if it will show up when an investor or a buyer runs diligence, do it right the first time. A trademark is an asset. Treat the filing like one.

The bottom line

Using your mark protects you a little. Registering it protects you a lot, and in ways that matter exactly when the stakes are highest. For most businesses with plans to grow, the question is not whether to register, but when, and who should handle it.

This post is general information, not legal advice, and it does not create an attorney-client relationship. Every business is different. If you are choosing or protecting a brand name, talk to a lawyer about your facts, or set up a consultation with us: https://long.law/intake

Who Actually Owns Your Startup's Code and Logo?

You paid for your logo. That doesn’t mean you own it.

Same goes for your code, your website, and the illustrations on your landing page. You wrote the check. The law still says, as a default, that the person who made the work owns it, unless they signed that ownership over to your company in writing.

Founders learn this at the worst possible time: in diligence, when an investor or a buyer asks for proof that the company owns its own technology, and the paper trail has a hole in it.

The default rule runs against you

Copyright belongs to the creator the moment the work exists. The freelance designer who made your logo owns that logo. The developer who wrote your first version owns that code. Hiring them and paying them does not change it.

There is one exception. Work created by an employee, inside the scope of the job, belongs to the employer. That is the work made for hire rule. It covers W-2 employees. It usually does not cover independent contractors, who are exactly the people most early startups use to build the first product and the first brand.

So the Fiverr designer, the overseas dev shop, the friend who built your MVP for equity that never got papered: under the default rule, each of them owns what they made. You have a license to use it, maybe, and an argument. You do not have clean ownership.

The fix is boring and cheap

Get an assignment in writing from everyone who touches the company's IP. Founders, employees, and contractors.

For employees, the standard tool is a proprietary information and inventions agreement. It assigns to the company what they create on the job and protects your confidential information at the same time. Sign it on day one of employment.

For contractors, the assignment language goes in the contract before they start. Do not rely on a work made for hire label by itself. For a contractor, that label alone often fails to transfer ownership of code or a logo, because the law reserves work made for hire treatment for employees and for a short list of commissioned work that does not include software. Use an explicit present assignment of all rights, with a backup license.

There are also state laws to contend with here. For instance, in California calling a contractor's agreement “work made for hire” can reclassify that contractor as your employee for state purposes like workers' compensation and unemployment insurance. One more reason to use a clean assignment instead of the work made for hire label.

For founders, this matters more than you expect. Work you did before the company existed, the prototype you coded on nights and weekends, the brand you sketched in a notebook, is yours personally until you assign it. Assign it when you incorporate. This is the sort of stuff that kills VC deals. Believe me, I’ve litigated over this very issue.

You can even own the trademark and still not own the drawing. The day you want to change vendors, chase a copycat, or sell the company, the missing copyright assignment on the logo art becomes a problem. Get the designer to assign the artwork, not just send you a PNG.

One more trap: open source

If a contractor built your product fast, ask what they pulled in. Open source code carries license terms, and some of them, the copyleft licenses like the GPL, can attach obligations to the code you wrap around them. You do not need to fear open source. You need to know what is in your codebase before an acquirer's lawyers find it for you.

The bottom line

Do not wait for diligence to find the hole. Get assignments from every founder, employee, and contractor, signed when the work happens. It costs almost nothing now. A missing signature can cost you the deal later.

This post is general information, not legal advice, and it does not create an attorney-client relationship. Every company is different. If you are not sure your company owns its own code and brand, talk to a lawyer, or set up a consultation with us to discuss: https://long.law/intake

When the Three Musketeers Become Two: Early-Stage Founder Equity and Vesting

When a startup is founded among partners, equity usually gets divided over a handshake. Most founders want equal partnership. All for one and one for all! Right?

But what happens when the Three Musketeers become two? Or one?

Founders’ Agreements are designed to address this question, and should be an integral part of the startup formation process for multi-founder companies.

While a 50/50 split on day one assumes both partners will contribute equally for years, real life has other plans. One founder burns out. One takes a salaried job. One has a kid and goes quiet for a year. The work doesn’t stop, but now one founder is left holding the bag, and the others may own the majority of shares. It’s a recipe for disaster, and ultimately, failure.

Those inactive shares sit on the cap table, they don’t just go away. Investors will see that, and will not want to fund a company with zombie founders owning the majority of the company. Even operating the company itself becomes very difficult with inactive founders who own large stakes of the business.

Therefore, a good founders’ agreement typically will provide for vesting of equity over time.

How vesting works

Vesting means you earn your shares over time. You do not own them all on day one. You own them as you stay and work.

The standard is four years with a one-year cliff. Leave in the first twelve months and you get nothing. Stay past the cliff and your shares vest a little each month for the rest of the four years.

So if your co-founder walks after eight months, they walk with nothing. Their shares go back to the company. The people who stayed are protected. That is the whole point.

Founders’ Agreements will also cover questions like whether unvested shares pay out early in the event of an acquisition or exit. Single trigger and double trigger are the two common versions. Decide now, not in the middle of the deal.

While we’re negotiating Founders’ Agreements, there are other important bases for the company to cover.

IP Assignments

Every line of code. Every design. The logo a friend made for you. The company does not own these automatically. Without an Agreement covering this, such IP may belong to individual founders. Each founder has to assign their IP to the company in writing.

Do not treat this as paperwork. Every investor and every buyer checks for it in diligence. A missing IP assignment can stall a deal or kill it. Sign the assignments when you form the company.

The 83(b) election and its 30-day clock

When you get stock that vests over time, the IRS gives you (the individual founder) a choice as to when to pay taxes on stock issuances. You can file an 83(b) election and pay tax now, while the stock is worth almost nothing. Or skip it and pay tax each year as the stock vests, on a higher value every time. In most instances, startup founders want to pay the tax now.

The catch is, you have 30 days from the day you receive the stock to decide whether to make that tax election. Miss it and you cannot go back. This is a short filing that can save you a large tax bill. Talk to a tax advisor and do not let the window close.

The Moral of the Story

Three documents do the work:

• A Founders’ Agreement that establishes the expectations for each Founder, the circumstances under which a Founder is considered “out”, and what happens when a Founder leaves.

• A Stock Purchase Agreement that includes your vesting schedule.

• An IP assignment signed by each founder.

At the end of the day, split the equity however you want. Then build vesting, IP assignment, and exit terms around it.

Do it early, while everyone still likes each other. The conversation is cheap now. It gets expensive later, when one of the Musketeers is gone and still owns a third of your company.

This post is general information, not legal advice, and it does not create an attorney-client relationship. Every company is different. If you are splitting equity with a co-founder, talk to a lawyer about your facts, or set up a consultation with us to discuss your options: https://long.law/intake

How Do I Choose the Right Business Entity for My Startup?

When starting a new business, the creation of the entity itself is one of the first major decisions you will need to make. How you decide to proceed is extremely important for protecting yourself from legal liability, partner disputes, and tax consequences.

Before we talk about the types of entities, it helps to start with why entities exist at all.

When a person starts a business without creating a legal business entity, their business is referred to as a sole proprietorship. The law draws no distinction between you and the business: its debts are your debts, and a claim against the business can reach your home and personal assets. Forming a legally recognized business entity changes that by limiting your potential liability only to the assets of the company. Forming an LLC, a Corporation, or other business entity creates a separate legal person that can own property, sign contracts, borrow, and sue or be sued in its own name, while shielding the owners’ personal assets if things go wrong. This also allows a company to outlive its founders, take on investors, and divide ownership into shares. Companies are created for the protection of the owners, and the operational flexibility that comes with it.

Typically, there are a few different issues to consider when forming the company:

1. What type of entity to create;

2. In what state (and county) to create that entity;

3. How company decisions will be made;

4. Who owns how much (if you have more than one shareholder);

5. How the company and its shareholders will be taxed?

This is an oversimplification, but its a good starting point for thinking about this.

The LLC

A limited liability company gives you liability protection and pass-through taxation with little paperwork. Profits flow to the owners’ personal returns, and you skip the C-corp’s second layer of tax. For consultants, agencies, real estate, and most local businesses, it is the right tool. The limits appear the moment you raise institutional money: venture funds are reluctant to invest in an LLC (it happens but its rare, and usually only as pre-seed rounds), option grants are awkward, and the QSBS tax break, discussed below, is off the table. If a priced round is likely, starting as an LLC just means paying to convert later. For bootstrappers though, LLCs are an attractive option.

The S-corporation: a tax election, not an entity

We often hear prospective clients tell us they want to form an S-Corp. It’s a common misnomer, as an S-Corp is not a type of company, it’s a tax election. An S-corp is a corporation or LLC that elects to be taxed under Subchapter S, combining pass-through treatment with a way to cut self-employment tax. But it can have no more than 100 shareholders, all U.S. individuals or qualifying trusts, and only one class of stock. A venture fund is an entity, and even individual investors typically expect preferred shares, so you can’t elect to be taxed as an S-Corp and also expect VC funding. S-corps fit profitable, closely held businesses, not companies built to raise capital.

The C-corporation, and why Delaware

Most VCs will insist on investing in Delaware C-Corps. A C-corporation is a separate taxpayer: it pays the 21% federal rate, and dividends are taxed again at the shareholder level (this is one reason why LLCs are favored where there is no investment involved). For an early-stage startup that rarely matters, because young companies seldom pay dividends and often operate at a loss. What the C-corp gets you is what investors require: unlimited shareholders, multiple stock classes, a clean option pool, and QSBS eligibility. For venture-track companies the state is almost always Delaware, whose corporate law and Court of Chancery are what investors and term sheets assume. There are reasonable debates about how much it really matters, but the fact is that VCs want Delaware C Corps so they and their attorneys don’t have to operate in several different state legal system. If you are looking for VC investment, 10,000,000 shares are considered standard.

That said, by default Delaware bills a franchise tax on the number of authorized shares method. On 10,000,000 authorized shares it comes to roughly $85,000. To avoid this, recalculate and pay under the assumed par value capital method instead, since the state lets you use whichever method is lower: with a low par value (most startups use $0.0001 per share) and modest gross assets, that method usually drops the tax to a few hundred dollars, often the $400 minimum. Just keep par value very low and don’t authorizing more shares than the company's assets justify.

Here is Delaware’s tool for calculating franchise tax. https://corp.delaware.gov/frtaxcalc/

The QSBS reason to incorporate early

Section 1202 lets shareholders of a qualified small business exclude much of their gain from federal tax on a sale, but only for original-issue stock in a domestic C-corporation. The 2025 federal tax law made it more generous for stock acquired after July 4, 2025: a tiered exclusion of 50% at three years, 75% at four, and 100% at five, a cap of the greater of $15 million or ten times basis, and a $75 million gross-asset ceiling. Confirm the thresholds and your eligibility with a tax adviser, since the rules turn on timing.

Delaware does not get you out of your home state

A Delaware entity does not mean you answer only to Delaware. If you live and work in, say, New York, you are doing business there and must register as a foreign entity and pay local taxes. New York requires new LLCs to publish formation notice in two newspapers for six weeks within 120 days (LLC Law Section 206); miss it and the state can suspend your LLC’s right to sue. California will charge you additional fees if you’re late in registering.

The bottom line

Match the entity to the plan. Funding and scaling points to a Delaware C-corp, and incorporating early starts the QSBS clock. A business you will own and operate points to a home-state LLC, with an S-election if the tax math favors it. The costly mistakes are almost always cleanup later: converting to a C-corp the week before a financing, or finding an unmet New York publication requirement in diligence.

Whose Lawyer Is It Anyway? When Your Investor Tells You to Use Their Law Firm

You have a term sheet with an investor. The round is coming together. Your investor mentions that your current counsel is not on their approved vendor list, and that you must use one of their firms. Maybe they offer to introduce you. Maybe they tell you the deal will move faster. Maybe they say their firm will need to review your existing lawyer's work, and bill you for the privilege.

This happens constantly, and most founders treat it as a logistics question. It is not. It is a question about who is actually looking out for you.

Why investors push their own firms

Start with the charitable read, because it is partly true. Large venture funds work with a small set of firms over and over. The big names in startup and venture work, firms like Wilson Sonsini, Cooley, Gunderson Dettmer, Fenwick & West, and Orrick, have done thousands of these financings. They know the fund's preferences. A financing can close quickly when both sides already speak the same shorthand.

That efficiency is real, and for a fund deploying capital across dozens of companies a year, it is valuable. The fund is not being malicious when it steers you toward familiar counsel. It is optimizing for its own throughput.

The problem is that its throughput is not your interest. And the firm doing the work knows exactly whose repeat business pays the bills.

The conflict nobody names out loud

The VC will do many deals with that firm over many years. You will do one financing with them, maybe two if you survive to the next round. When the firm's lawyers sit down to paper your deal, one client is a career-long relationship and the other is a one-time engagement that arrived as a referral from the career-long relationship.

The rules of professional conduct take this seriously. ABA Model Rule 1.7, and its state analogs, govern concurrent conflicts of interest and require informed written consent when a lawyer's representation of one client is materially limited by responsibilities to another. A firm that represents both the fund and the company in related matters is operating in exactly that zone. Good firms paper the waiver and wall things off. But a signed waiver does not change where the gravity pulls.

I am not saying the marquee firms do bad work. I am saying that excellent work performed by someone whose loyalties are divided is not the same thing as having a lawyer whose only job is you.

The fee squeeze

The pressure often shows up dressed as cost savings: the fund tells you that because your chosen counsel is unfamiliar, the fund's firm will need to review your diligence and your documents, and that you will be billed for the review. Now you are paying two firms. Or the fund suggests you simply switch to its preferred firm, which bills at two to three times what a capable smaller firm charges.

Either way the message is the same. Use our lawyers, or pay a tax for using your own. Founders, eager to keep the round friendly, usually fold. That instinct is understandable and frequently wrong.

Where the divided loyalty actually shows up

Ideally, the relationship between the investor and the company should be mutually productive. But there are different incentives on certain key terms. Being a good advocate for the company is not about fighting the investor on standard terms. It is not about fighting the investor at all. Remember, at the end of the day, we want a healthy, productive, and positive working relationship.

Start with what is genuinely not worth fighting. Ten million authorized shares at founding for a Delaware C-corp is standard. If the fund's firm tells you that number is normal, they are right, and spending credibility there only makes you look like you do not know the market. A good independent lawyer tells you the same thing, which is the point. Independent counsel is not about reflexively opposing the investor. It is about having someone whose read of each term is made for you.

The option pool is where it gets real. Investors want the unallocated pool established before the round closes, because a pre-money pool dilutes the founders and not the new money. The size of that pool is negotiable, and it is one of the quietest places an investor improves its own returns. Now ask whose lawyer is drafting the language around it. The firm the fund sent you has the least incentive in the deal to push that number down, because a larger pool helps the client who brings them repeat business and costs the client who does not. This is the single clearest place where it matters that your lawyer answers to you.

The Delaware franchise tax election is the unglamorous version of the same problem. Delaware lets you calculate the tax two ways, the authorized shares method and the assumed par value capital method. For a typical startup with a high authorized share count and low par value, the assumed par value method is almost always dramatically cheaper, but you have to affirmatively elect it. This is exactly the kind of five-minute housekeeping that slips when the lawyer papering your deal is really the fund's lawyer clearing a financing at volume. The founders who miss it open a five or six figure bill that should have been a few hundred dollars.

None of this requires a thousand-dollar-an-hour lawyer. It requires a lawyer who is reading the documents for you, and not for the person who sent you the referral.

What a smaller firm actually offers

This is the part the fund will not volunteer. A smaller firm advising the company, and only the company, has no competing loyalty to manage. Your financing is not a rounding error in our book of business that we are rushing to clear so we can get back to the client who matters more. You are the client who matters.

We also tend to cost less, not because the work is lesser, but because the overhead is. And the speed gap is smaller than investors suggest. The documents in an early financing are not exotic. The National Venture Capital Association publishes model documents that everyone, including the marquee firms, starts from. A competent corporate lawyer works from the same templates and the same market terms. What you give up in raw deal volume you get back in undivided attention.

How to push back without blowing up the round

First, its important to understand that staking out a position, and advocating for your company is considered ordinary and professional. Real Investors do not expect you to blindly follow everything proposed. Ask directly who the proposed firm represents in the transaction, and ask for any conflict waiver in writing before you sign anything. The answer tells you a great deal.

Keep your own counsel reviewing the documents even if you let the fund's firm paper the deal. A second set of eyes loyal to you is cheap insurance.

Scrutinize the option pool size and where the dilution lands, elect the assumed par value method for franchise tax, and treat every "this is standard" with a polite request to see the math.

Be willing to say no to paying for the fund's firm to review your lawyer's work. That is the fund's preference, not your obligation.

A good investor is a partner, and most of the pressure here is reflex rather than malice. But the financing is one of the few moments where your interests and your investor's interests are not identical, and it is exactly the moment they will encourage you to use their lawyer. Have one of your own.

This post is general information about a common dynamic in venture finance. It is not legal advice and does not create an attorney-client relationship. Every deal turns on its own facts, so talk to a lawyer about yours.

Or better yet, set up a consultation with us to discuss: https://long.law/intake

Is your AI chat discoverable?

On February 17, 2026, Judge Jed Rakoff of the Southern District of New York ruled in United States v. Heppner that a criminal defendant's written exchanges with an AI platform were not protected by either the attorney-client privilege or the work product doctrine, and therefore had to be turned over to federal prosecutors. The court described the question as one of first impression nationwide.

The practical takeaway is simple. If you type something into a public AI tool, assume the government, a regulator, or an adversary in litigation can read it later. This is going to be a hard lesson for self-represented non-attorney litigants especially, who may not understand the benefits of attorney-client privileged communications.

What Happened in the Case

Bradley Heppner was indicted for securities fraud and related charges arising out of his role at GWG Holdings, Inc. After he received a grand jury subpoena and learned he was a target of the investigation, but before he was indicted, Heppner used Claude to prepare approximately thirty-one documents analyzing his potential defenses, the facts, and the law. He later shared those documents with his lawyers. The FBI seized them during a search of his home.

Heppner's counsel argued the documents were privileged because Heppner had prepared them to help his lawyers give him legal advice, and because he later shared them with counsel. Judge Rakoff rejected both theories.

Why the Privilege Claim Failed

The attorney-client privilege protects confidential communications between a client and attorney made for the purpose of obtaining legal advice. Judge Rakoff found the AI exchanges failed on at least two of those elements.

First, Claude is not an attorney. Discussions between a client and a non-attorney are not privileged, and AI platforms have no licensed professional on the other end who owes fiduciary duties or is subject to professional discipline.

Second, the communications were not confidential. Judge Rakoff pointed specifically to Anthropic’s Consumer Terms of Service in effect at the time, which disclosed that the company collects user inputs and outputs, can use them to improve its models, and reserves the right to share data with third parties including governmental authorities. That disclosure, in the court's view, defeated any reasonable expectation of confidentiality. Heppner was using the consumer version of Claude, where the terms expressly contemplated this kind of data handling. It is worth noting, by contrast, that the Commercial Terms of Service explicitly do not permit training of data and sharing of customer data.

The work product doctrine failed for a related reason. That doctrine protects materials prepared by or at the direction of counsel in anticipation of litigation. Heppner's lawyers conceded they had not directed him to use Claude. He did it on his own. The court held that documents a client generates without counsel's direction, even when the client intends to share them with counsel later, do not become work product.

What This Means for You

Heppner is a district court opinion, so it is not binding on any other court. But the reasoning is straightforward, rests on well-settled privilege principles, and will almost certainly be followed elsewhere. Expect to see it cited in civil litigation and regulatory matters, not just criminal cases.

A few practical consequences for business owners, executives, and individuals:

If you are facing any kind of investigation, lawsuit, regulatory inquiry, or potential dispute, do not use a public AI tool to analyze it. Once you type the facts into ChatGPT or Claude, you have likely waived any claim to confidentiality over that information. The platform provider, not you, controls what happens to it next.

If your lawyer uses AI to help prepare your case, that is a meaningfully different situation, but only if the lawyer is using it the right way. This is worth unpacking, because it drives the whole analysis. If you are unsure whether your lawyer knows how to safely use AI, ask them. They should be able to explain how they use AI while working on your case.

There are two versions of most major AI products. The consumer version (Claude Free, Pro, Max; ChatGPT Free, Plus, Pro; and similar) is governed by consumer terms of service. The enterprise or commercial version (Claude for Work, Claude Enterprise, the Anthropic API, ChatGPT Enterprise, Microsoft Copilot for Business, and similar) is governed by commercial terms of service, which are materially more protective. On the enterprise tiers, the providers contractually commit not to train models on customer inputs and outputs, treat the customer's organization as the data controller, and generally operate more like a traditional SaaS vendor handling confidential information.

That distinction matters under Judge Rakoff's reasoning. His confidentiality analysis turned on what Anthropic's consumer privacy policy told users about data handling. A lawyer using an enterprise-tier AI product under a business contract is operating under a fundamentally different set of representations, closer in structure to how lawyers have long used outside vendors such as document review platforms, e-discovery processors, and transcription services, all of which can fall within the privilege when used in the course of legal representation.

The other half of the equation is direction. Heppner turned on the fact that the defendant used Claude on his own, without counsel's direction. Judge Rakoff expressly distinguished that situation from one where a lawyer directs the use of a tool as part of preparing the case, which has long been recognized as potentially falling within the privilege under cases like United States v. Kovel, 296 F.2d 918 (2d Cir. 1961). A lawyer using an enterprise-grade AI tool, under the lawyer's direction, as part of the actual work of representation, is a far stronger candidate for privilege and work product protection than a client freelancing on a consumer account.

None of this is guaranteed. The law here is brand new, and courts will work out the edges case by case. But the short version is this: a client alone on a free or Pro account is Heppner. A lawyer using an enterprise tool in the course of representing that client is not.

If you run a business and your employees use AI tools in their work, assume anything they put into those tools is discoverable. Sensitive business strategy, personnel matters, legal exposure, confidential client information, and trade secrets should not be entered into public AI platforms. Consider an enterprise-tier AI product with contractual data protections, or an internal policy limiting what employees can input.

If you are already using AI to draft or analyze anything touching on a potential legal problem, stop, save what you have, and call your lawyer before you type another word.

A Warning About Policies That Change

The privacy policy Judge Rakoff cited was the version in effect in early 2025. In September 2025, Anthropic revised its consumer terms so that Free, Pro, and Max user conversations are, by default, retained for up to five years and used to train future models, unless the user actively opts out. Business and enterprise customers were not affected. This is the pattern across the industry. AI companies adjust their terms frequently, and the defaults usually tilt toward more data collection over time, not less.

Therefore, the terms you agreed to when you first signed up are probably not the terms governing your account today. If you are using an AI tool for anything sensitive, check your privacy settings, and do not assume today's defaults match what you consented to last year.

The Bigger Picture

Judge Rakoff closed his opinion by noting that AI's novelty does not exempt it from longstanding legal principles. That framing is going to matter. Courts are not going to invent new privileges to protect AI conversations. If anything, Heppner suggests the opposite trend: privilege rules are going to be applied strictly, and the widespread assumption that "my chat history is private" is legally wrong.

AI is a genuinely useful tool for brainstorming, drafting, research, and thinking through problems. But it is not a lawyer, it is not a confidant, and under current law, it is not confidential. Use it accordingly.

If you have questions about how to use AI responsibly in your business, or about any pending legal matter, contact Long Law, P.C.

This post is for general informational purposes only and does not constitute legal advice or create an attorney-client relationship. Consult a licensed attorney about your specific situation.

Six Years of Long Law: Growth, Gratitude, and Building from the Ground Up

Today marks six years since the founding of The Long Law Firm, and I’ve been doing a lot of reflecting.

When we first started the firm, our first office was on the third floor of the University Building in downtown Syracuse. Most evenings after 5 p.m., I would play a round of chess with Fred, one of the custodians. After that, I’d get back to work — assembling desks and chairs, running wire, putting furniture together. Building the firm from the ground up in the most literal sense.

This week, I found myself pulling a heavy, unassembled desk up a flight of stairs with my family into our new Ithaca office. And I felt that same energy again. The same early-days hustle. The same sense of building something piece by piece.

It’s amazing to see how much we’ve grown: new offices, new states, new practice areas, incredible team members, and clients who have trusted us with their businesses, disputes, intellectual property, and ideas. We’ve helped launch startups, protect brands, start non-profits, defend municipalities, and build lasting relationships along the way.

To our clients: thank you for your trust.

To our team: thank you for raising the standard every day. This all started with a vision of building the best possible version of a firm — both for our clients and for the people who work here. That standard shows in everything we do.

And today, on our anniversary, we’re also excited to share three major announcements:

1️⃣ We are now Long Law, P.C.
Same firm. Shorter name. The conversion to a professional corporation supports our expanding multi-state practice.

2️⃣ We’ve launched an AI-enabled chatbot on our website
Designed to help clients and prospective clients access information more efficiently. This is a necessary first step toward broader AI-powered tools rolling out this year.

3️⃣ We’ve launched our secure Client Portal
Clients can now track matters, retrieve documents, pay invoices, and upload files in one centralized place. Future updates will integrate AI tools directly into the portal, including the ability to ask questions about documents stored in secure folders and request a consultation.

Technology should make legal services clearer, faster, and more organized — not more complicated. That’s the goal.

Six years in, and we’re still building.

Onward.

#LongLaw #LawFirmGrowth #LegalTech #Startups #ClientExperience #BusinessLaw

Using Someone Else’s Sale Photos or Videos to Resell Property Can Be Copyright Infringement

In today’s online marketplace, it has become common for sellers to reuse photos or videos they find online to help market their own listings. This often happens with real estate, vehicles, luxury goods, horses, collectibles, and other high-value items. The assumption is usually the same: “If it’s just being used to sell the same thing, that must be allowed” or “Since I purchased the item I also own all the media associated with it.”

That assumption is wrong.

Using another person’s photos or videos—without permission—to resell an item or property can constitute copyright infringement, even if the content accurately depicts the item being sold and even if the original creator no longer owns it.

Who Owns Sale Photos and Videos?

Under U.S. copyright law, the person who creates a photograph or video automatically owns the copyright at the moment it is created. No registration, watermark, or notice is required.

That ownership belongs to the photographer or videographer—not to the owner of the property being photographed, and not to subsequent sellers—unless there is a written agreement transferring those rights.

This means:

• A real estate agent’s listing photos are typically owned by the agent or photographer.

• A seller’s horse sale videos belong to the seller or the videographer.

• A seller’s product photos belong to the seller who created them.

Ownership of the item does not equal ownership of the media.

Reselling the Same Item Does Not Grant a License

A common misconception is that reselling the same property shown in the photos somehow creates an implied right to reuse those images. It does not.

Copyright law protects the expression of the work—the framing, lighting, composition, editing, and creative choices—not the subject matter itself. Even if the photo accurately shows the item you are now selling, copying and reposting it is still copying a protected work.

Unless the copyright owner has granted permission, reuse is unauthorized.

“But I Didn’t Claim the Photos Were Mine”

Attribution does not cure infringement. Crediting the original seller, tagging them, or stating “photos via previous listing” does not create a legal right to use copyrighted material.

Similarly, removing a watermark or cropping an image can actually worsen the violation by suggesting willful infringement.

Fair Use Rarely Applies to Sale Listings

Some sellers attempt to justify reuse by claiming fair use. In commercial resale contexts, that argument almost always fails.

Courts evaluating fair use look at factors such as:

• Whether the use is commercial (sale listings are)

• Whether the work is copied verbatim

• Whether the new use is transformative (most resale listings are not)

• Whether the use substitutes for the original market

Using photos or videos to market a sale is classic commercial exploitation—not commentary, criticism, or education—and is therefore unlikely to qualify as fair use.

Real Consequences for Unauthorized Use

Copyright infringement is not a technicality. Consequences may include:

• DMCA takedowns and account strikes

• Removal of listings from platforms

• Monetary damages, including statutory damages

• Attorney’s fees in registered works

• Court orders prohibiting further use

In some cases, repeated misuse across platforms can significantly escalate exposure.

How to Sell Safely and Legally

To avoid infringement, sellers should:

• Take their own photos and videos

• Obtain written permission or a license from the copyright owner

• Use media provided by a broker or agent with confirmed rights

• Commission new marketing materials when reselling high-value assets

When in doubt, assume reuse is not permitted.

Bottom Line

Just because a photo or video or phtoos exists online does not make it free to use. And just because you now own the item depicted does not give you the right to copy someone else’s creative work to sell it.

If you are using photos or videos you did not create, you may be exposing yourself to copyright liability—often without realizing it.

If you are unsure whether your marketing materials are compliant, or if your content has been copied without permission, consulting with an intellectual property attorney early can prevent costly disputes later. Reach out to us at   https://long.law/intake to book a free consultation.

What every creative entrepreneur should know before entering a contract.

Being knowledgeable about contracts not only will protect you and your art but will show your colleagues that you are a professional ready to build respectful and fruitful relationships. This article is meant to act as an introduction to the terms of a contract most tailored to a specific deal or relationship being commemorated by a contract.

The purpose of a contract is two-fold. It is used to (1) memorialize all the expectations and responsibilities of the parties involved, and (2) to minimize any potential for litigation should any issues arise between the parties. A contract accomplishes both purposes through specific and thoughtful language. In the context of Artists, this occurs by ensuring that the Artist and whoever they are dealing with are clear about what the relationship will entail.

For example, when an Artist enters into a Gallery Representation Agreement, answers to the following questions will help to establish why you are entering into the agreement.

•  Do the Artist and Gallery share the same vision regarding the Artist’s career?

• What are your expectations regarding your work being featured in an exhibition(s) or art fair(s)?

• Do you trust a specific dealer who works for the Gallery that you want the representation tied to?

These high-arching generalizations provide what is called often referred to as the “recitals” or “preamble” and provide who the parties are, why they are establishing a relationship and what each hope to get out of it.

Next, come the Material Terms of an agreement, a nice way to think of this is that the Material Terms are the heart of the agreement and work in concert to reach the goals of each party. In general the main categories of Materials Terms for all contracts generally include:

• Payment

• Scope of Work — Performance and the Parties Obligations

• Term/Deadlines — How long the relationship will last and incremental deadline expectations

• Representations and Warranties — Putting in writing that each party can deliver everything they say they do and establishing what happens if things do not go as planned

To continue with our example, the next series of questions illustrate the topics established under the Material Terms. Though not exhaustive, answers to these questions help to narrow the relationship and provide for the Material Terms of the Representation.

• Will the Gallery have an exclusive agency over your entire body of work, or will the Gallery only have a right to a limited works or geographic territory?

• How often will your work be exhibited? Where, when, and for what duration of time?

• What will be your involvement in the curation and marketing of the Artwork being represented by the Gallery?

• What assurances will the Gallery provide regarding the safekeeping and transportation of your Artwork?

• Who will set the price of the Artwork?

• Will the Gallery hold the Artwork and any sale proceeds in trust for you?

• What is the Gallery’s commission structure and payment remittance schedule?

• How long is the term of the Representation, including any sunset clauses? Do you have a right to terminate with notice?

Some particularly important topics and terms to be considered as a creative professional may include:

• Material Costs

• Art Fair Expectations

• International Sales, Conversion Costs, Customs Cost

• Licensing Parameters

• Liability Protection for inherently dangerous works

• Creative Control / Final Approvals

• Copyright, Moral Rights and VARA

• Satisfaction Upon Delivery

• Termination Reasons and ensuing liabilities including but are not limited to a failed provenance assessment or missing a deadline due to reasons out of your control.

Each contract you enter throughout your Artistic career will include some or all of these topics and considerations. It is imperative for the parties involved to have a clear understanding of their individual obligations and responsibilities for the relationship to endure and grow in a positive direction. Contact us today for any contract needs. 

Saks Bankruptcy— What can emerging brands learn?

There is no secret that pop-ups, events, collaborations and direct to consumer marketing and distribution have become more prevalent for emerging brands and designers (same applies to established houses). But, what does it mean when an institution like Saks (who also owns Bergdorf and Neiman Marcus) files for bankruptcy?

First, Saks is not totally disappearing. Saks filed for Chapter 11 Bankruptcy, which basically means it is using its available funds to restructure, pay (some of) it’s debts and stay in business under the Bankruptcy Courts supervision. With that in mind there are three major takeaways all emerging designers can learn from Saks filing for bankruptcy.

1. Filing a Proof of Claim

   Paying attention to deadlines imposed by the Bankruptcy Court is imperative to receiving outstanding payments associated with any pre-bankruptcy invoices. It is also important that brands organize all correspondence especially communication or data that may establish how critical you are to the consignor, contracts, invoices, shipping records, UCC filings, etc…

   The consignor that filed for bankruptcy will send out a schedule with a list of what they have (assets) and what they owe (liabilities), all brands that are owed money must then file a proof of claim, to confirm or correct the schedule by the court imposed deadline.

2. The Underlying Contract

   The first step is ensuring that any goods provided to a consignor (like Saks) must be supported by a contract that at minimum names the brand or designer as the legal owner of the goods until they are fully paid for and specifies payment terms. This provides the Bankruptcy Court with proof of a brands legal right in the property that is being sold by the consignor.

3. Priority of Payment

   • Securing Your Property

     This is done by filing a form, called a UCC-1, that states you are legal owner of the goods on consignment with the secretary of state that the consignor is located in (the governing jurisdiction). Attention to detail matters here as it puts others on notice that you have a right to your goods, even if they are in physical possession of the consignor. Securing your interest in the goods gets you priority to any payments which are often distributed in a waterfall fashion. Should you have a legal right (under contract) and secured right (under the UCC) any outstanding payments are considered “Secured.”

   • Continuity of Business

     Should you need or want to continue providing new inventory to a consignor that has already filed for Chapter 11 Bankruptcy, any debts owed associated with the “post-petition” consignment will be considered “Administrative Claims.” The consignor (Saks) would have to pay for all new inventory under the terms of the new contract in the ordinary course of business, any non-paid invoices would be given a heightened protection under the Bankruptcy Court.

From negotiation, memorializing, and enforcing an agreement, we are here to help you.  Click here to book a free consultation.

Negotiation Skills for Creatives: A Guide to Leveraging Your Value

Throughout your career you will have varying ability to negotiate terms. 

This is a result of your position at that moment in comparison to the party you are attempting to negotiate with. For example, in the beginning of your career you likely won’t have as much leverage to negotiate a gallery representation agreement compared to an established artist simply because you aren’t as well known. You are more than likely gaining more from the exposure that may come out of the agreement than the other party would allowing you full artistic control over your exhibition. The gallery’s benefit with an emerging artist is harder to quantify, as you are an untested asset. Any agreement you enter into is about striking a balance between the parties based upon what each brings to the relationship.

Despite the potential for the other party having most or all the leverage while you are still an emerging artist, you have more leverage than you may think.

When negotiating consider the following:

• Are you expanding their demographic reach

• What hole(s) are you filling on their roster

• What are the unique qualities you bring to the deal that someone else may not

• How are they benefiting from entering into this contract with you

Going in with a plan and understanding of the other party’s needs is essential to negotiating terms that are more favorable to you. Having a clear understanding and manner of articulating what you expect or need to get out of the relationship to make it worth it for you is just as important as understanding what you bring to the table. 

For example:

• How knowledgeable is the other party in your field, what do they bring to the table?

• Who is paying for materials?

• What level of creative autonomy is required for you to deliver the quality of work expected by the other party?

• Will you need anything from the other party to fulfill your obligations? Can they provide it?

• What sort of marketing do you expect to occur? Who will pay for it? Who will approve it?

• What rights do you want to retain in the work? 

All of this is important to consider prior to beginning negotiations.

Finally, negotiations are a balancing act to ensure that each party receives what they expect from the deal and can continue working together in the future.  To help maintain positive relationships in the industry, it is imperative that these expectations are memorialized in a writing.

Some people may try to “keep things informal,” because they believe the relationship should be only built on trust and reputation or because “friends don’t need things in writing.” From experience, no matter how small a disagreement that may arise is, when friends, or people in a small industry, go into business together it requires more formalities and the writing of specific expectations to ensure relationships are maintained irregardless of the deal. 

From negotiation to memorializing an agreement, we are here to help you.  Click here to book a free consultation.  

Announcing a New Practice Group at Long Law: Fine Art and Entertainment

Long Law is proud to announce our new practice area: Fine Art and Entertainment, led by Alexandrea (Andrea) Tracy. Our mission is to empower creative professionals by protecting their rights, strengthening their business, and helping them grow with confidence.

Let’s build the foundation that lets your creativity thrive.

At Long Law, we don’t just represent Artists – we partner with them. From business formation and protecting intellectual property to negotiating licensing, consignment, and representation agreements we are here to ensure your art and career are legally protected every step of the way.

Long Law’s Fine Art and Entertainment team provides comprehensive support throughout the creative process; examples of our offerings include:

• Drafting of gallery representation deals, commission agreements, partnership agreements, collaboration                agreements, loan agreements, and media releases.

• Review and negotiation of sale agreements, consignment terms, exhibition agreements, sponsorship agreements, and licensing agreements.

• Business Formation

• Intellectual Property Protection by securing copyrights, trademarks, and licensing rights.

• Compliance and Risk Management of regulatory standards including Anti-Money Laundering, business regulations

About Andrea:

Andrea brings a unique blend of legal expertise and art-world experience. Prior to law school, Andrea received her master’s degree in museums studies, curated shows, and worked for an international art and tech company. She has long been passionate about supporting creatives at every stage of their career and is an avid collector. 

During law school she continued to work with artist through the Center for Art Law, co-founded an anti-money laundering consulting company for art market participants and was a member of the New York City Bar Association’s Art Law and Fashion Law Committees. Since graduating, Andrea has litigated complex commercial and real estate disputes as well as worked for a boutique entertainment firm supporting Artists creative needs. Andrea is also a member of the New York Volunteer Lawyers for the Arts.

At Long Law she leads with a personal commitment to ensure artists have the same level of sophisticated legal counsel as any other entrepreneur or industry leader.

Long Law – taking care of the details, so Artists can focus on inspiring the world. Contact us today.

AI Governance for Founders: What It Is and Why It Matters

Most founders are already using AI. It shows up in hiring tools, marketing software, analytics platforms, and customer support systems. Often it arrives quietly, bundled into products that promise speed and efficiency. That’s fine. Until it isn’t.

When AI makes a mistake, the question is not whether you meant harm. The question is whether you were paying attention. That’s where AI governance comes in.

What AI Governance Means

Good AI governance (just like any form of governance) is about knowing where AI is used in your business and who is responsible for the outcome. It is about understanding limits and keeping a human in the loop. Good governance does not stop innovation. It prevents surprises.

Why Founders Should Care Now

Key policymakers are watching how automated systems affect people. Investors and Boards are asking how companies manage operational risk. Customers expect transparency and care. When something goes wrong, the standard is reasonableness. Did you understand the tool? Did you use it carefully? Did you set boundaries? Frameworks like the NIST AI Risk Management Framework shape how those questions are answered.

When we start to think about how cybersecurity and data privacy compliance was shaped, similarly, we saw incorporation of third-party standards into what became required of companies managing personal data. Here, with AI, these rules are not law. Not yet. But they still matter because they are beginning to form the outlines of what is “reasonable.”

Questions Every Founder Should Ask

Where is AI used in the business today?

Does it influence hiring, pricing, marketing, or customer decisions?

Is anyone reviewing its output before action is taken?

Do we know what the system does well and where it fails?

If the AI is wrong, who is accountable?

If you cannot answer these questions, you do not have governance. You have risk.

What Reasonable AI Governance Looks Like

For early-stage companies, governance should be simple.

Clear rules about how AI tools are used. Human review where it matters. Basic diligence on vendors. Care around data and confidentiality.

And documentation. Not for show. For proof that you were thoughtful.

That is usually enough.

How a Law Firm Fits In

Good legal advice should not slow you down.

We help founders see where AI already touches their business. We translate technical issues into legal and business risk. We draft policies that people will actually read. We review vendor contracts and disclosures. We align your practices with emerging standards.

The goal is confidence, not caution.

The Point

AI governance is not about the future. It is about today.

The companies that handle it early move faster and with fewer mistakes. The ones that ignore it tend to learn under pressure. They often learn big, painful lessons.

If you are starting to think about AI governance, now is the right time to do it calmly and on your terms. We would love to discuss it with you.

Equine Disclosure Requirements in Sales Contract

Selling a horse is not just a handshake deal. In the United States, horse sales are governed by a complex mix of state statutes, contract law, and fraud principles—and sellers who misunderstand their disclosure obligations can face costly legal disputes.

A common misconception is that horse sales are always governed by “buyer beware.” While that doctrine still applies in many jurisdictions, it is far from absolute. In some states, sellers are subject to explicit statutory disclosure requirements, and in all states, misrepresentation or concealment of material facts can create liability.

This article explains horse sale disclosure requirements state by state, highlights where sellers face heightened obligations, and outlines best practices to reduce legal risk.

In most states, there is no horse-specific disclosure statute. Instead, horse sales are governed by:

• State contract law

• Common-law fraud and misrepresentation principles

• The Uniform Commercial Code (UCC), which generally treats horses as “goods”

However, a small number of states impose specific statutory requirements, and all states prohibit fraudulent or misleading conduct in horse sales.

The Universal Rule in All 50 States: No Fraud or Concealment

Regardless of location, every horse seller in the U.S. is subject to the same baseline rule: A seller may not knowingly misrepresent or conceal a material fact. This applies even when a horse is sold “as-is.”

A seller may be liable if they:

• Make false statements about soundness, age, training, or use

• Provide half-truths that mislead the buyer

• Conceal known defects the buyer could not reasonably discover

• Remain silent when prior statements create a misleading impression

Courts consistently hold that fraud overrides contract disclaimers, including “as-is” clauses.

When Does a Horse Seller Have a Duty to Disclose?

A duty to disclose commonly arises when:

• The seller has actual knowledge of a defect

• The defect is material to value, safety, or intended use

• The buyer cannot reasonably discover the issue through inspection

• The seller’s silence would make prior statements misleading

Examples that frequently lead to litigation include undisclosed lameness histories, prior surgeries, known dangerous behaviors, and performance-limiting injuries.

States With Specific Horse Sale Disclosure Laws

Florida has the most comprehensive horse sale disclosure law in the United States.

Florida law requires a written bill of sale for every horse sale, and mandates disclosure of specific information, including:

• Confirmation of lawful ownership and authority to sell

• Any warranties or representations relied upon by the buyer

• Disclosure of recent veterinary treatments that could mask soundness issues

• Disclosure of agent commissions and compensation

• Written consent for dual agency (one agent representing buyer and seller)

Failure to comply can constitute a violation of Florida’s consumer protection laws—even without proof of traditional fraud. Bottom line: Verbal disclosures are insufficient in Florida.

California and Kentucky impose statutory disclosure requirements focused on agency relationships, particularly in higher-value horse sales. In both states:

• Sales above a statutory threshold require a written bill of sale

• An agent may not represent both buyer and seller without written consent

• Undisclosed dual agency can result in treble damages and loss of commissions

These statutes are designed to prevent conflicts of interest rather than mandate medical disclosures—but violations are taken seriously.

In the remaining states, there are no horse-specific disclosure statutes. Instead, disputes are governed by:

• Fraud and negligent misrepresentation law

• Contract interpretation

• Fiduciary duty principles (when trainers or agents are involved)

In these jurisdictions, sellers are not generally required to volunteer information—but once they speak, they must be truthful and complete. The greatest legal risk often comes not from silence, but from informal assurances, marketing statements, or casual representations that later prove inaccurate.

“As-Is” Clauses  Don’t Always Protect the Seller

An “as-is” clause can limit implied warranties, but it does not protect a seller who:

• Knowingly lies

• Conceals a material defect

• Violates a statutory disclosure requirement

• Engages in deceptive conduct

Courts routinely hold that fraud defeats contractual disclaimers.

Best Practices for Horse Sellers in Any State

To reduce the risk of legal disputes, sellers should:

• Use a written bill of sale for every transaction

• Put all representations and warranties in writing

• Disclose known material defects affecting safety or use

• Avoid vague statements about future performance

• Allow independent veterinary inspections

• Clearly define agency relationships and compensation

Transparency, when documented properly, is usually the safest course.

Why Horse Sale Disclosure Issues Lead to Litigation

Horse sale disputes often arise because:

• Expectations were not documented

• Representations were made informally

• Agency roles were unclear

• Medical or behavioral issues were discussed verbally but not disclosed in writing

Clear contracts and deliberate disclosures dramatically reduce litigation risk.

Horse sale disclosure laws vary by state and fact pattern. Whether you are a seller, buyer, trainer, or agent, early legal guidance can prevent costly disputes. If you have questions about disclosure obligations, bill of sale drafting, or agency compliance reach out to us through our intake form at  https://long.law/intake to book a free consultation.

Long Law Announces Opening of New York City Office and Launch of Fine Arts & Entertainment Practice Group

FOR IMMEDIATE RELEASE
Client-driven expansion strengthens firm’s presence in New York City and broadens service to creative professionals

New York, NY — January 1, 2026 — The Long Law Firm, PLLC, a boutique law firm known for its high-level legal representation of businesses, municipalities, and nonprofit organizations, is pleased to announce the opening of its New York City office, located at 11 Broadway, Suite 468, New York, New York, effective January 1, 2026.

The New York City office reflects the firm’s continued growth and its commitment to better serving its expanding New York City–based clientele. The opening also coincides with the launch of the firm’s Fine Arts & Entertainment Practice Group, which will be headquartered in the new office and led by Alexandrea Tracy, Esq.

The Long Law Fine Arts & Entertainment Group advises fine artists, content creators, and creative entrepreneurs who are establishing themselves professionally or emerging as influential leaders in their respective fields. The group’s mission is to empower creative professionals by protecting their rights, strengthening their businesses, and helping them grow with confidence in an increasingly complex legal and commercial landscape.

“Opening a New York City office is a natural next step for the firm,” said James A. Long, Esq., founder of The Long Law Firm. “Our NYC client base has grown steadily, and this expansion allows us to better serve those clients while launching a practice group that reflects both market demand and our values as a boutique firm focused on sophisticated, relationship-driven legal counsel.”

Alexandrea (Andrea) Tracy, Esq., who will head the New York City office and the Fine Arts & Entertainment Practice Group, brings a rare combination of legal training and deep art-world experience. Prior to law school, Andrea earned a master’s degree in museum studies, curated exhibitions, worked for an international art and technology company, and is an active art collector. Her career has been consistently shaped by a passion for supporting creatives at every stage of their professional development.

“At Long Law, my goal is to ensure that artists and creative professionals receive the same level of sophisticated legal counsel as any other entrepreneur or industry leader,” said Tracy. “Creative work is business, and artists deserve legal representation that understands both.”

In addition to its Fine Arts & Entertainment work, The Long Law Firm will continue to offer world-class legal representation in New York City for businesses of all sizes, municipalities, and nonprofit organizations, consistent with the firm’s existing practice areas.

The New York City office will operate by appointment only. Appointments may be scheduled by calling the firm’s main office at 315-991-8000.

For more information, visit https://long.law.

How Long Does It Take To Get A U.S. Patent?

There is no universal answer for how long it takes to go from submitting a patent application to owning a patent. The USPTO (United States Patent and Trademark Office) has been receiving around 600,000 utility, plant, and reissue patent applications per year for the last decade, and currently has over 1.2 million of these applications pending before it. This means inventors should expect to have some waiting period before they receive a response to their applications. To set a baseline, a majority of utility patents are granted within 3 years of the non-provisional application filing date. According to the USPTO's published data as of October, 2025, the average total pendency of a utility patent application – including granted patents and abandoned applications, but excluding applications that have filed Requests for Continued Examination (RCEs) – is 26.3 months.

Provisional Applications

Provisional patent applications allow inventors to establish a filing date and use a “Patent Pending” designation for their invention. However, provisional applications are not examined and therefore do not result in the grant of a patent without further action. A provisional patent application is active for 12 months from its filing date and then expires. Inventors may file a corresponding non-provisional patent application or request a conversion of the provisional application to a non-provisional application in this 12-month window. The non-provisional application will then be examined in accordance with its filing date. Filing a provisional application does not speed up the examination process of the non-provisional application.

Non-Provisional Applications

Excluding special circumstances, non-provisional patent applications are examined in the order they are submitted in, according to art unit. This means utility patent applications for different technologies (e.g. a biotechnical invention versus an semiconductor invention) may have different wait times for examination. Additionally, the number of communications between the USPTO and inventor required for a patent to be granted varies greatly between applications. Although rare, some applications receive a First Action Allowance, meaning they can become patents without any rejections from the USPTO. This can mean a patent is granted within 18–23 months after filing, and sometimes even sooner. A majority of patent applications receive at least one Office Action requiring response. Many receive a second, or Final Office Action, before allowance, and still others may proceed to RCEs or appeal.

The USPTO does its best to maintain various Patent Dashboard sites to give inventors a better idea of current processing times. As of 2025, only 22% of utility patent applications receive their First Office Action within 14 months of the filing date, with an average wait time of 22.5 months. After this first official communication, the USPTO and inventors engage in a correspondence pattern of Office Actions, or other official messages, and inventor responses.

Inventors typically have 3 months to respond to an Office Action, with the ability to extend the deadline up to 6 months for increasing fees. The USPTO aims to respond to all Office Action Responses from inventors within a 4 month window – if replies from the USPTO are delayed beyond this, the inventor may receive an adjustment lengthening the lifespan of their patent by a corresponding amount of time. This means that for an average non-provisional application which is allowed following a Final Office Action (three communications from the USPTO – the First Office Action, the Final Office Action, and the allowance), with responses sent to each Office Action in 3 months, and following USPTO communications sent in 4 months, a patent would be granted in 36.5 months. As First Office Actions may be sent sooner than 22.5 months, both the inventor and USPTO generally try send responses before their respective deadlines, and not all applications receive a second Office Action, many patents are granted in 24–30 months. For applications with a more complicated prosecution including at least one RCE, the average total pendency increases to 44.2 months.

Design Applications

Design patent applications are typically less technically intensive than utility patent applications, and fewer design patents are filed with the USPTO each year. According to the latest USTPO statistics, just over 65,000 design patent applications were filed in the 2025 fiscal year, with a total unexamined inventory of just over 71,000 entering 2026. This means that design patent applications on average have a faster and simpler path to becoming granted patents than utility applications. As of the end of the 2025 fiscal year, design patent applications had an average total pendency of 21.5 months from filing to final disposition (issuance or abandonment), and an average wait time of 16.9 months to receive a First Office Action.

Can You Get A Faster Examination?

For many inventors, the length of time required for patent prosecution is seen as a significant roadblock in pursuing intellectual property rights. The USPTO does provide some programs for applicants seeking a faster review of their application, though many were updated in 2025.

Track One prioritized examination: Track One examination is available for utility and plant patent applications, as well as some RCEs. Track One examination aims to give inventors a Final (second) Office Action or Notice of Allowance within 12 months of the application being accepted into the Track One program. As of July, 2025, the USPTO announced it would increase the number of patents that could be accepted into Track One prioritized examination from 15,000 to 20,000 each year. Inventors may request Track One examination by filing a request form with their application, paying an additional fee, and ensuring their application meets all requirements. According to the USPTO's latest data, petitions for Track One examination are usually granted within two months of filing, and a First Office Action for the application is usually sent within two months of that grant.

Patent Prosecution Highway: the Patent Prosecution Highway (PPH) offers applicants with international patents the opportunity to speed up their United States patent application examination. Pursuant to USPTO updates at the end of October, 2025, PPH applications are now docketed as Special – advanced to the front of the line for examination – once they reach approximately half the age of other recently docketed applications for the same technology. To access the PPH, inventors who have received a favorable ruling on a patent application from a participating foreign patent office may file a corresponding patent application with the USPTO and request accelerated examination under the PPH. To be eligible, the inventor must be able to submit a claim correspondence table showing that the claims pending before the USPTO correspond to allowed foreign claims.

Petition to Make Special: inventors may file a Petition to Make Special with their patent application, which advances the application to the front of the examination line when submitted. A Petition to Make Special may only be made under certain circumstances, such as if the inventor's age is 65 years or greater, or if the inventor's health may impair their ability to assist in prosecution.

Accelerated Examination: Accelerated Examination is available for design patent applications, but as of July, 2025 is no longer offered for utility patent applications. Accelerated Examination is similar to Track One in that the USPTO aims to return a final disposition on an application within 12 months of admission to the Accelerated Examination program, but has some additional filing requirements for inventors to be aware of.

If you have more specific questions about your patent application or need assistance with navigating the patent prosecution process, feel free to reach out to our legal team for guidance tailored to your situation. Go to https://long.law/intake to book a free consultation.

Here are the top 5 things every artist should have in writing prior to starting a commission.

First, congratulations on getting a commission. Second, congratulations for understanding how important it is to enter into a written contract with your Patron. Having a clear understanding between both parties will help the relationship grow and hopefully ensure there will be more commissions to follow. 

The commission likely began with a simple conversation, a Patron liked your work and wanted you to make them something new to fit a specific location or to add vibrancy to the décor of their business. This is the perfect moment to write down, or memorialize, the Patron’s expectations as well as yours, without delaying the project. The legal tool used for this is called a Memorandum of Understanding, think of it as a contract before the contract. A Memorandum of Understanding (“MoU”) is often structured like a letter and includes the most important terms of a contract. It is used by many companies and individuals to allow the parties to begin working towards their mutual goal with some protection and legally binding terms while the attorneys negotiate the finer details of the full contract.  

Here are the top five (5) things all artists should discuss and memorialize prior to beginning a commission:

 (1) How, When, and for What will you get paid?

• How much will you be paid for your time? Will materials and subcontractors fees be paid for by the Patron? Will you work out of your studio, on-site, or will the Patron need to provide space for you?

• Will payment be made in installments? At what intervals (i.e.: upon signing, upon first draft or “spec” being provided to Patron, at each specified deliverable or draft approval, upon final delivery)?

• Who will pay for delivery, shipping, insurance, and/or installation costs?

• Will you be paid via Cash, Venmo, Zelle, Cashier’s Check or otherwise? 

(2) The Artwork

• What is the type, description, size, and purpose of the Artwork being commissioned?

• Does the commission fit into your specific genre or style? If not, have you discussed the Patron’s reasons for choosing you for this commission and can you meet their expectations (e.g.: if you generally create abstract art and the Patron is commissioning a portrait it is advisable to memorialize any conversation regarding expectations).

• You retain final creative control, but, how much input may the Patron provide during the process of creating the Artwork?

• Will you need subcontractors to complete the Artwork?

• Note that you will retain all copyright and moral rights in the Artwork.

• Will you retain the right to use the Artwork in future exhibitions/retrospectives?

• Will you retain the right to be the one to fix Artwork should it need any conservation work?

• Will you seek the right of first refusal to buy the Artwork back should the Patron wish to sell it in the future?

(3)   How will you and the Patron communicate with each other?

• Will you be expected to text, e-mail, call, zoom,  or host in-person check-ins?

  • Which method will be utilized for general communications vs. viewing a spec?

• Who is responsible for scheduling draft viewings in-person or initiating virtual drafts being sent?

• Who is in charge of coordinating delivery and installation?

• What are your expectations regarding a reply?

  • How long does the Patron have to review and approve a draft?

  • How long does do you have to implement their feedback?

  • If a reply is delayed, how does that affect the draft or deliverable timeline?

(4)   Deliverables and Timeline:

• How long before the final commission contract needs to be signed?

• How long will the Artwork take to complete?

• How many drafts of the Artwork will be provided to Patron and at what intervals?

• When and how will the artwork be delivered in its final form?

(5)   Satisfaction Upon Delivery and/or termination:

• Upon final delivery will the Patron accept the Artwork as complete or is there a time period for which they can requests changes?

  • What is the scope of what they can request?

  • Will the you be paid hourly for any subsequent work?

• What happens if the Patron changes their mind or is unable to continue under the terms of the commission while the Artwork is still being created?

• What happens if you are unable to complete the Artwork within the timeframe or at all?

The list above is meant to inspire your thinking and is not all encompassing nor is everything applicable to every commission. Similarly, the answers to some of these points may still be vague and need to be worked out prior to the signing of the final commission contract, but that is the beauty of the MoU. It is flexible while simultaneously providing you with some protection and framework of understanding between you and your Patron.

From the MoU to the final commission agreement, we are here to help you. Click here to book a free consultation.