Hartford Business Journal

www.HartfordBusiness.com • April 23, 2018 • Hartford Business Journal 11 FOCUS national and state income tax issues relating to the federal tax law changes needed to be addressed, which created yet more work. Honestly, I'm glad this tax season is in the rearview mirror. Q. More specifically, what impact did the federal tax law have on small busi- nesses this tax season? What about larger employers? A. The driving question from small businesses was and still is: What does tax reform mean to our business and its owners? Our clients were asking if they should change the way their busi- ness is structured to take advantage of some of the changes. For example, starting in 2018, many small businesses will be entitled to a new "flow-through entity" deduction, but there are a number of complexities in determining this deduction. So, our clients have been asking if they should change how they pay the business own- ers and whether they should split the business into two or more segments? Also, the rules relating to the deduct- ibility of interest changed and now busi- nesses, both large and small, are asking how to structure their cash needs, meaning would debt or equity be more beneficial. Keep in mind that we're also still waiting on guidance from the IRS to answer some of these questions. Interestingly, there were many discus- sions relating to IRC Section 1202 stock, which is not a new provision. While Section 1202 was not changed as part of tax reform, it essentially provides for tax-free treatment of gains from the sale of qualified small business C-corpo- ration stock, provided that the Section 1202 requirements are met. Surpris- ingly, for certain small businesses, a C-corporation may be a better tax entity choice than a flow-through entity, such as a partnership or S-corporation. For many larger businesses the issues were similar, but with added complexity. For example, businesses with foreign operations and significant multistate filings had even more work to do. Complying with the "deemed repatria- tion" provisions, determining how much income was required to be included in the 2017 provision and the tax return, and whether to defer the tax due or pay in installments was time consuming. Q. Tax filings provide a snapshot of the overall financial health of a company. How would you assess how Connecticut companies are doing? A. My sense is that Connecticut busi- nesses are doing better than last year, but I think there are still headwinds. And I think the Connecticut budget situation has had a dampening effect on the Connecticut business climate. With that said, with federal tax reform being beneficial to most businesses and gener- ally better economic conditions nation- ally, many of our clients are optimistic and looking to acquire new businesses and reinvest profits in their business. We are hoping for a strong 2018. uct will receive a patent and be sold by September. The clinic also helped Norton trade- mark the business logo for his current business venture, Peak Leadership Train- ing, which specializes in corporate lead- ership development and team-building. He said the clinic helped him save thousands of dollars in legal fees. "The clinic has really simplified a complex process," Norton said. "All of the students were of the utmost professionalism and took a simple idea and refined it into a full patent application." Diverse client applications Founded in 2007, more than 200 law students have served 430 clients at the clin- ic, filing 131 patent applications, with 27 patents issued and another 21 non-provisional patent applications pending. Almost 200 of 258 trademark applications filed have been registered, the clinic reported. Co-directors Diane Covello and Kathleen Lombardi oversee the clinic, supervising students and clients in patent and trademark matters. They select client applications based on financial need and if they can provide necessary resources. Acceptance into the clinic ensures free counseling; entrepreneurs are only re- quired to pay for government filing fees. Lombardi said the clinic serves a large demographic of clients, with participants coming from each of Connecticut's eight counties, ranging from an 11-year-old boy to a retired 90-year-old UConn professor. The staff's case workload varies depending on a client's contribu- tions during the patent applica- tion process, which often takes two to three years before the USPTO officially decides, the co- directors said. Recently, cli- ents were issued patents for a fire- arms attachment, a vehicle provid- ing transport across frozen water and an external stimulator with patch electrodes that treats foot pain. Ryan Papageorge and his wife, Li, also represent the clinic's large scope of clients. The Shelton couple had struggled to wash their baby son James, so they designed a bathtub- and sink-friendly insert for infants. The product features a soft-cushioned seat belt that prevents babies from sliding during bathes. Papageorge, a full-time mechani- cal engineer, said the clinic provided patentability searches and filed their applications for a trademark and patent. Awaiting ap- proval, the couple began selling their invention — the Honey Bee Baby Bath — on Ama- zon in February. "It has been such a pleasure working with each and every stu- dent that's been assigned to our cases," Papageorge said. "The patents covered all the key features of our product and they were very careful in how they wrote the patent." Student's perspective The couple was assisted by Chris Holshouser, who is one of 11 UConn Law students cur- rently working at the clinic. Holshouser, 33, enrolled at UConn Law in 2014 during his active duty in the U.S. Navy, where he served as a nuclear reac- tor operations instructor at the Naval Submarine School in Groton. Holshouser, who will graduate in May, said he worked with about a dozen clients seeking patents and spent a "considerable" amount of time learning from supervising attorneys. The individual mentorship, he says, is rarely provided at law firms. "As I've spoken with prospective employers over the last several months, they have frequently been impressed at the amount of patent work I have already performed," Hols- houser said. In 2008, Uconn's IP law clinic was one of the first to enroll in a na- tional certification program provided by the USPTO. The national program currently enrolls 58 law school clinics and allows students to practice law, under supervising faculty, before the federal patent and trademark agency. The program allows law stu- dents to com- municate with the agency's patent examiners as they are also expected to draft and file applica- tions and respond to office actions, according to the agency's website. Covello and Lombardi said these opportuni- ties provide unique experiences for law students who become well-versed in meeting the daily challeng- es of an intellectual property attorney. "From our perspective the students who come out of the program have a lot of client contact," Lombardi said. "This is not just a Hartford operation, it's statewide." BY THE NUMBERS Uconn's IP law clinic 200+ The number of UConn law students who have participated in the school's Intellec- tual Property and Entrepreneurship Law Clinic since it was founded in 2007. 430 The number of clients who have been served by the law clinic. 131 The number of patent applications filed by the law clinic. 27 The number of patents filed by the law clinic and issued by the U.S. Patent and Trademark Office. 258 The number of trademark applications filed by the law clinic, nearly 200 of which have been registered. Ryan and Li Papageorge began selling their invention, the Honey Bee Baby Bath, on Amazon in February after the UConn IP Law Clinic helped the couple file trademark and patent applications. PHOTO | CONTRIBUTED "All of the students were of the utmost professionalism and took a simple idea and refined it into a full patent application." Jon Norton , developer of the Rope Protector

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