But that dynamic begs the question: whose idea is it anyway?  “Who cares,” you ask?

Consider this, if a lab manager at Hewlett-Packard had been more interested in the work Steve Wozniak was doing while employed at HP in 1975, Apple Computer, the Mac and the iPhone might not have been born or, worse yet, we would be buying them with HP labels on the box rather than the über-slick Apple logo.  “So what,” you say?  Well, maybe you will be interested to know that if Honeywell had thought much of the work Paul Allen was doing on building an operating system for the MITS Altair 8800 in 1975 when he was working for Honeywell, then we might be using computers running on Honeywell Windows rather than Microsoft Windows.

So who is this Steve Wozniak fellow anyway?  And wasn’t Paul Allen a comedian on Hollywood Squares?  Well, Steve “the Woz” Wozniak co-founded Apple Computer with Steve Jobs, and Paul Allen was not as funny as he was brilliant as the co-founder of Microsoft with Bill Gates.  And both Woz and Allen were employees at large, well-established tech companies when they were hard at work germinating the seeds that would grow into Apple and Microsoft.  One could almost view HP and Honeywell as parent companies of Apple and Microsoft.

So you might be asking “what’s the point of all this,” as you yawn through this dusty reading of recent-ancient history?

It’s simple: under basic principles of the law of intellectual property and employment, those “parent” companies could have asserted claims of ownership on the work Woz and Allen were doing, which could have toasted the seeds of Apple and Microsoft before they were even planted.  That is not to say that the parent companies’ legal claims would have succeeded or that their claims were ethically valid, but it is to say that if a large, well-financed employer is determined to take an ownership interest in the work of an employee, then the golden rule may apply.  Here’s how it works – he who has the gold makes the rules.

In other words, if the deep-pocketed employer would like to own your idea because it believes you developed the idea on the employer’s dime (on company time or using company resources and equipment or the idea is related to company business), then regardless of whether you or your idea have any legal or contractual obligations to your now former employer, chances are good that your former employer can afford to pay lawyers to cause great weeping an gnashing of teeth.  And if you’re a startup company with a good idea, a meager budget, some nervous investors, and no room for error in the pre-revenue phase or shortly after going to market, the last thing you need is a former employer who feels jilted and who might send its lawyer to get biblical on you.

Now in fairness to the truth, it is worth pointing out that a premise stated at the beginning of this article may need to be examined carefully if you really know the history of Apple and Microsoft.  I stated up front that “most ground-breaking business concepts had their roots in someone’s work for another company.”  However, in the cases of Woz and Allen, it might be more accurate to say that “their concepts were developed while they were employed by another company.”  It’s a subtle distinction, but it could make a big difference in analyzing whose idea is it anyway.  But here’s the clincher, if you’re a startup company or planning a startup, and especially if your startup is going to place heavy reliance on any kind of novel concept, intellectual property or trade secret, you should get squared away on who owns what before your former employer sends its attorney to serve as the angel of death for your company – regardless of whether your business concepts had their roots in your work for another company or whether they were merely developed while you were employed by another company.

[START RANT] In the movie A Room with a View (adapted for the screen from the novel of the same name by E.M. Forster), Miss Lucy Honeychurch and her chaperone, Charlotte Bartlett, arrive excitedly at the The Pension Bertolini in Florence Italy expecting a room with a view. Then they open their window and are distressed to find they have a view only of the courtyard – nothing like the vista they were so looking forward to.

Now, I’m nowhere near the first person to write a piece criticizing Microsoft for its lousy execution of Windows Vista. In fact, quite possibly the last. But I might be the first person to draw on the classic Forster novel as an intro to a criticism of a modern computer operating system. Yet, it’s a good analogy. The women were disappointed to the point of distress. How many Windows Vista users would say they have had the same experience?

And like Miss Honeychurch and her chaperone, Windows users have the opportunity to take a different room by switching to Mac or Linux. But unlike the women in the novel, this is a major undertaking and a pricey alternative for a computer user – especially a business or corporate user.

Microsoft could have taken the well established Windows XP operating system and freshened up the interface and beefed up security. Maybe on some technical level, that’s exactly what they did. But the stability and familiarity of the Windows operating system was nearly eviscerated in the process.

So much ink and bits and bytes have been spilt on lambasting Microsoft for the inscrutable Vista system, it’s hard to imagine why I would waste my time with further comment. Well, it’s just such a shock to think Microsoft could be so tone-deaf, so arrogant, to have released Vista, I just can’t restrain myself.

The Vista interface is pretty to look at. It has glassy, glossy graphics; it has some really cool new features. Vista even has the much ballyhooed aero effect, where borders of windows are somewhat translucent and a user can see through the borders to whatever lies beneath (or should it be “below”?). It’s neat eye-candy, but it’s functionally insignificant…um, unlike most of the rest of Windows Vista, which is functionally significant mainly in that it is more than merely annoying to see how much has changed for no good reason other than that Microsoft decreed that it could and should be changed.

If Microsoft had only mucked around with and messed up the graphical interface and certain user experience issues, it would still be unforgivable. However, not to be outdone by whatever prior stupidity Microsoft might have been remembered for, the brain-trust at Redmond rewrote the core software enough to make it unstable, buggy and crash prone. This corporate misstep is akin to the kid in school who wasn’t just an idiot, he delighted in reminding everyone that he was an idiot, and he apologized for being an idiot and appeared all the more an idiot because of his ill-timed and idiotic apologies. [/END RANT]

There now, I feel a little better. And I didn’t even have to drill down on specific issues.

Epilogue, July 2009. Now, some two years after Microsoft sold the world a room without a view (not unlike the rooms without a view that can be had through Expedia, Hotels.com, and Travelocity et al., but that’s another rant), Gates, Balmer & Co. have released Service Pack 2 for Windows Vista, which has finally put enough functionality issues to bed that Vista is a stable operating system and worth your consideration. Oh, but wait, didn’t I hear something about Windows 7 being just around the corner? So I guess, like Ms. Honeychurch, we’ll all go back to Florence, hoping this time to get a room with a view. However, unlike Ms. Honeychurch, we won’t be blissed-out having eloped with our new love, so we will care if the next trip leaves us looking out the window at a crumbling Tuscan wall.

Part of the problem is that when we receive paper – in bills, documents and correspondence – we do not have convenient ways to convert the paper into electronic form for storage or to share with others.

While more technically proficient people may use scanners, the reality is that scanners are still not that widely used except to reproduce pictures – even in many businesses. People who are not technophiles would probably say they haven’t had good experiences with scanners; they are just too complicated or finicky. So paper ends up being copied and faxed, using even more paper.

Enter the Fujitsu ScanSnap series of scanners. I have been using the ScanSnap S300 and S1300 scanners for several years, and they are the easiest to use and most idiot-proof of all scanners I’ve seen up to this point. The S1300 model is the second generation of Fujitsu’s first portable scanner, which was the S300. They also make a larger, faster, better desktop model called the S1500, which is what you should get if you don’t need a portable scanner.

The devices are not quite as long or wide as a loaf of bread and they sit a little higher than a six pack of English Muffins – and look about as innocuous. Either device has a flip-top lid that, when open, extends upward to support up to 25 pages of paper to be fed through the sheet feeder. Both scanners have only one button. Setting them up is a cinch. Install the software from the enclosed CD. Then, plug the scanner into a USB port on your computer, open the lid, and setup is done.

Using the ScanSnap is only a step or two more complicated. To scan a document, open the lid, extend the paper support, insert up to 25 pages of paper, press the button, wait for the scan to finish, then accept the scan on your computer. The end result is a high-quality PDF file. You don’t have to know whether to save as a pdf, gif, jpg, tif or eieio.

The scanner automatically adjusts to color, B&W and paper size. There are additional settings to accommodate single-pass duplex images (scans both sides of a page), varying degrees of resolution and other manual functions. The settings are easy to access, easy to understand and easy to set.

I scan almost every piece of paper I need to keep or share with someone else. I even scanned some dental x-rays with surprisingly good results. Storage, filing and sharing documents is now just a few clicks away. It is not often that a technology product just plain works as advertised, but the Fujitsu ScanSnap scanners are simple, sturdy and on my desk.

Necessity being the mother of invention, it has long been true that entrepreneurship rises when unemployment rises. Displaced employees often see self-employment as the most reliable means of replacing lost income. And these budding entrepreneurs often think of their unemployment benefits as a form of startup capital. So, can a new entrepreneur draw unemployment benefits after starting a business?

Two criteria are immediately apparent regarding eligibility for unemployment benefits: one must be (1) available for employment and (2) actively seeking employment. Superficially, it would seem that, by operating a company and seeking clients, an entrepreneur could say that he is available for employment by a client and that he is actively seeking employment by new clients.

But it’s not quite that simple.

A staff attorney at the North Carolina Employment Security Commission (the ”ESC”) stated that if someone receiving unemployment benefits was “so consumed” with the operation of his business that he had really “removed himself from the employment market,” then he would not be considered available for work and, therefore, he would not be eligible for unemployment benefits. On the other hand, she said that if the unemployed person was only preparing to open a business (business planning, looking for an office, shopping for office equipment and supplies, researching how to file documents to organize a business entity, etc.), then, as long as he continued to actively seek employment, he should be considered available for employment and, therefore, eligible for benefits.

At the suggestion of the ESC staff attorney, I reviewed ESC Interpretation 139 (issued in 1956), which indicates that an individual who had been self-employed as a means of supplementing his primary income would be eligible for benefits if he lost his primary employment. But an individual who lost his employment and then became self-employed as a means of replacing his primary employment income would not be eligible for unemployment, even if he is not earning any money at all through his self-employment and even if he states that he is available for and seeking other employment opportunities. Keep in mind that the ESC Interpretation states that “it must be borne in mind that each of these particular cases must be decided on the facts existing in the case.”

In a manner of speaking, the ESC’s determination of eligibility is based on an individual’s intent (although the Interpretation does not express its finding this way). If the new entrepreneur intends that his self-employment income will replace his primary employment income, then he would not be considered available for employment because he has essentially removed himself from the job market, and he would not be eligible for benefits. On the other hand, if the new entrepreneur intends that his self-employment is a means of acquiring “pick-up work” (which is discussed by that name on the ESC website) to help make ends meet during a period of unemployment, and if he is otherwise available for employment and actively seeks employment, then he should continue to be eligible to continue to receive unemployment benefits – but the final determination would be “decided on [all] the facts existing in the case.”

In evaluating “the facts existing in the case,” the ESC would look at activities that indicate intent. For example, the organization of a business entity (whether LLC or corporation) could be an indication that self-employment income was intended to replace primary employment income. Would someone who is just looking for pick-up work go to the trouble of forming a business entity? On the other hand, an attorney might advise an unemployed professional to do pick-up work through a business entity as a means of limiting his personal liability in the event of a dispute with a client or third party, which might be an effective counter-argument to the notion that the only justification for the formation of a business entity would be to provide for self-employment income that is intended to replace primary employment income.

So, self-employment through a business entity is not, by itself, a conclusive determination of one’s intent. But, self-employment through a business entity would create a strong presumption that an individual is not available for work and, therefore, not eligible for unemployment benefits.

Another example of an activity that might indicate intent could be where an unemployed person provides services as an individual subcontractor. In that scenario, the ESC might view the arrangement as indicative of a temporary situation where someone intends to get pick-up work.

But the two scenarios described above do not address the most important and fundamental question – which is whether the recipient of unemployment benefits is honestly and actually available for and actively seeking employment. To put it another way, if someone intends that his self-employment income will replace his primary employment income, then he is not eligible for unemployment benefits – period – regardless of what his self-employment activities indicate outwardly. Furthermore, if he intends that his self-employment income will replace his primary employment income, and if he draws unemployment benefits anyway, then in his weekly reports to the ESC he will have misrepresented that he is available for and actively seeking employment. Such a misrepresentation could be considered fraud – similar to insurance fraud.

Therefore, if a person intends to be available for and actively seek employment while he pursues self-employment pick-up work, then he should keep records of his attempts to secure employment. For example, he should keep (1) a file (electronic files should be fine) of emails and other communications with prospective employers, (2) a record of appointments for face-to-face and telephone interviews and (3) notes of his efforts to secure employment.

Conversely, if someone starts a new venture that is intended to replace primary employment income, then he is not legally eligible to receive the unemployment benefits, and any attempt to obtain unemployment benefits could be viewed as a fraudulent misrepresentation. While I am sure many recession-era entrepreneurs will start businesses that are partially financed by their unemployment benefits, it is a financing method that carries some serious risk.

And note that even if someone intends to be available for and actively seek employment while he pursues self-employment pick-up work and even if he keeps records of his job seeking activities, even then the ESC may still determine that he is not eligible for benefits if the total facts of the case don’t show that he was available for and actively seeking employment. Because, let’s face it, the road to hell is paved with good intentions.

Update:  There may be a bright spot for the unemployed who are feeling entrepreneurial. The U.S. Department of Labor offers a program called “Self-Employment Assistance.”  “Self-Employment Assistance offers dislocated workers the opportunity for early re-employment. The program is designed to encourage and enable unemployed workers to create their own jobs by starting their own small businesses. Under these programs, States can pay a self-employed allowance, instead of regular unemployment insurance benefits, to help unemployed workers while they are establishing businesses and becoming self-employed” (DOL website).  Unfortunately, at the time of this writing, North Carolina has not established a Self-Employment Assistance program. “[T]o date, Delaware, Maine, Maryland, New Jersey, New York, Oregon and Pennsylvania have Self-Employment Assistance programs” (DOL website).

Background: It is entirely reasonable for a business to want to have policies to protect the company from a wide assortment of potential problems – not the least of which is liability to a third party for the actions or misconduct of employees. Businesses that provide computers, email and Internet access to employees often establish policies for their employees’ use of company technology resources. In a manner of speaking, these acceptable use policies are not unlike a company’s policies for the employees’ use of a company vehicle. 

For example, if an employee uses company email for an improper or illegal purpose, the company could be liable to a third party for the employee’s improper use of the company’s email system.  A company’s liability to a third party for the actions of the employee is called “vicarious liability,” which can be very costly and disruptive. 

As I said in my post on Internet Service Providers and Third Party Liability, the law will take some time to catch up to contemporary use of internet technologies.  But a little awareness and planning may help avoid or minimize expensive problems.

At this point, some 15 years after the first widely distributed web browsers, the world wide web has permeated just about every aspect of modern life.  One of the consequences of the widespread use of the web is that parties who might never have been aware of each other in earlier times are now routinely in disputes with one another over a number of issues, such as defamation, copyright infringement and violations of privacy.  And it will be quite some time before the law catches up to the seemingly infinite variety of problems and conflicts that can arise out of the internet.

If you’re a little befuddled by what I’m talking about, here’s what I’m getting at.  Under certain circumstances, ISPs may be exposed to legal liability to third parties for the actions of the ISPs’ customers.  The circumstances that could lead to liability will vary from one ISP to another.  For example, a web hosting service may face liability under different circumstances than an internet access provider.  Similarly, some internet services companies – such as web developers or graphic designers - may also be exposed to legal liability to third parties for the actions of their customers. Employers could face third-party liability for their employees’ actions on the internet when using company internet systems.  Even a blogger could be viewed as an ISP and be on the wrong end of a dispute because of improper comments to the blog. Each liability issue will have to be evaluated on the basis of the specific facts in question.

The cost of defending a legal action is generally much higher than the cost of avoiding it.  The good news is that ISP liability to third parties can often be avoided or greatly reduced if you know what to look for and plan accordingly.

En·tre·pre·neur -

a person who organizes and manages any enterprise, esp. a business, usually with considerable initiative and risk (Random House Dictionary);

A person who organizes, operates, and assumes the risk for a business venture (American Heritage Dictionary);

One who organizes, manages, and assumes the risks of a business or enterprise (Merriam Webster).

The most prominent common denominator of the three variations of the definition of “entrepreneur” is the word “risk.”  Then, note that the first definition adds some color with ”usually with considerable initiative….”  So, now we have some ideas about entrepreneurship to work with as we discuss entrepreneurs: initiative and risk. 

Charlotte is not the first city that comes to mind when people talk about entrepreneurs or start-ups.  With Bank of America, Wachovia (now Wells Fargo) and Duke Power, Charlotte is typically thought of as a big business city.  Entrepreneurs and start-ups just don’t get much attention here.  In fact, the drop down menu on the business tab on the Charlotte Observer website shows only three choices:
Market Summary | Banking | Blogs/Columnists.

But we should look back for a little historical perspective.  Unlike most large cities on the east coast, Charlotte is a newcomer to the ranks of large cities.  In fact, Charlotte is really not all that large.  But the groundwork for Charlotte’s spectacular growth over the past 100 years, and especially the past 30 years, was laid by entrepreneurs like Walker Gill Wylie and James B. Duke, who started Duke Power Company, which supplied power to the emerging textile manufacturers in the Carolinas; William Henry Belk, a Monroe dry goods merchant who founded Belk stores with innovative ownership and financing methods; and the numerous bankers who provided the capital to fuel the growth of the businesses in the region.

So, there is a long and successful history of entrepreneurship in the Charlotte area.  It’s just that in the recent decades of Charlotte’s business landscape being dominated by big companies, it’s hard to realize that these large institutionalized companies were once – stay with me here – entrepreneurial start-ups.

Now that some of Charlotte’s large institutional companies are being acquired by out-of-state rivals, vulnerable to nationalization, laying off employees and otherwise being bludgeoned by the economy (even if they also played a role in bludgeoning the economy), it’s time to return to Charlotte’s entrepreneurial roots.  It’s time for some of the people who have been accustomed to the comfort of a steady paycheck from a (formerly) stable employer to exercise some initiative, assume some risk and do a start-up.

If you are considering starting a company, take a page from the past and apply it to the future: innovate.  What I’m getting at is that when Duke Power was started in 1900, hydroelectric power generation had only been in existence for a short period of time.  To his agricultural and merchant friends, Buck Duke must have seemed a little nuts to do something as far-fetched as generating and distributing electricity.  Contemporary Charlotte businesses are not often recognized for such radical innovation.

Thus, even if the financial sector recovers its former prominence in Charlotte, events of the past year should show us that we need to diversify our economy.  To restore and maintain Charlotte’s economic vitality, we need start-ups.  And innovative start-ups may open a whole new economic sector in the Charlotte economy.

Q. I received an email that went to many other recipients.  All of the other recipients’ e-mail addresses were displayed.  Am I legally allowed to use those addresses to send information about my business?  Where can I look up rules and regulations?

If you send an unsolicited email to the other recipients, this may be a spam e-mail.  In 2003, Congress enacted a law called the CAN-SPAM Act to regulate spam e-mail (sometimes jokingly referred to as the “You Can Spam Act”).

The CAN-SPAM legislation prohibits sending commercial e-mail without an accurate return e-mail address, using false or misleading transmission information, using deceptive subject headings or to a recipient who has requested not to receive further commercial e-mail. It also requires that the sender include clear and conspicuous identification that the e-mail is an advertisement or solicitation, an obvious means by which the recipient can opt out of further messages and a valid physical postal address for the sender.

There is more to it than this summary, but the basic idea is to ensure that commercial e-mail is sent by a legitimate business identified in the e-mail and that recipients can opt out of further distributions.

Also, each state has its own law. In fact, a Raleigh man, Jeremy Jaynes, was convicted in 2004 in Virginia of violating the Virginia anti-spam laws.  The jury recommended that he should be sentenced to nine years in prison.  While that may seem like a hefty penalty, he was sending about 10 million e-mails each day, and he earned as much as $750,000 to $975,000 per month.  Fortunately for Mr. Jaynes, his conviction was overturned in 2007.  But regardless of whether Jaynes was sent to prison, he spent a lot of time and money defending himself.

My point is that sending commercial e-mail can be tricky and the mood of the public, lawmakers and law enforcement authorities is to give spammers 90 days in the hole.

Which brings me to the second and most important problem you have with using these e-mail addresses. Given the proliferation of spam (some estimates are that 95 percent of e-mail traffic is spam) and that people universally hate spam, do you really want to risk the reputation of your business by sending unsolicited commercial e-mail about your business?

If you want to look further into the laws governing commercial e-mail, check out the Coalition Against Unsolicited Commercial Email at www.cauce.org, Spamhaus at www.spamhaus.org, or Spam Laws at www.spamlaws.com. Finally, if you do a Google search on “spam laws” or “unsolicited commercial email,” you will come up with hundreds, if not thousands, of relevant Web sites.