Royalty income from garage inventions

[megaptera]

Hello -

I've been in the US as a nonimmigrant alien on an academic visa.

I have a quite technical hobby, and I have had a "garage lab." Some of the knowledge I have acquired through my hobby is recognized by a manufacturer to be of their commercial interest, and they want to license my inventions, some with patents, some without, and they want to pay me a flat percentage royalty of the sales. The products are very similar to what I have invented for my own use to practice my hobby, and the company will manufacture, advertise, market, customer support, etc. My role is limited to send proprietary information by certified mail, and check my bank accounts.

My question is whether this royalty income is considered passive income. I do believe so, because I am not working for the company, but merely providing my knowledge. (I would make the same invention for my own use anyway, and most of them were made before the company contacted me.) However, I would like to see others' opinions and rationales before I proceed on this decision.

Thanks!

 

[megaptera]

Where did you read that? My notebook has technical records but there is no mention of money. There is not even a cost calculation. It would be hard to argue I had intended to start a business based on this alone.

I might also argue that, since my licensee is a business based outside the U.S. (also outside my home country), with money coming from abroad, it doesn't really fall under the U.S. immigration law. (If useful, I can also form a limited liability company in the licensee's country to make the licensing business part overseas.)

As you anticipated, I have had no luck with a lawyer who's interested in taking such a case. Probably there aren't enough people in similar situations to mine to be bothered to do the necessary research...

I don't know why but when I look around my problem is usually a lot more complicated than others'...

 

[megaptera]

Sounds like the law has problems everywhere... Those open source programmers are probably geeky enough to write the codes for their own enjoyment anyway, and their codes in open resource would only help others... My garage inventions are same... indeed much of my prior work is published on web sites, or openly shared on online forums like you share your legal knowledge, but I can't help others implement my inventions in many cases, or I can't spend too much of my personal time to provide technical support for free. It's not so much fun any more. Naturally, licensing the inventions to a company which can make them properly and have man power to provide customer support would be an ideal solution to me, so that I can focus on my hobby again. Royalty is not going to be a lot of money. I don't even know if it pays for the rent I pay for my garage lab!

Another scenario. Say I'm a print maker, or a painter. I make prints and paintings for my own enjoyment. People recommended me to exhibit my work. So I talked to galleries and they are now very interested in hanging my work. But they require me to offer my work for sale, and they'll take so many percents of the sales. I already have my prints and paintings, and I don't have to do any extra work other than shipping the work to the gallery and check bank accounts. It is the gallery who wants to sell.

Now what if the gallery were located outside the US?

And what if Prentice-Hall wants to print my paintings in their book and wants to pay me some money for them?

And what if I go to cafepress.com to make t-shirt of my paintings so that I can wear them, but now some strangers bought my t-shirts off their web site and I get a few bucks from cafe press?

None of these sounds like making a lot of money, nor harmful to US economy or labor market. It only helps to hire more local art students to sit in galleries or to run t-shirt printers. Yet you may be able to come up with conservative interpretations of laws and regulations against doing any of them...

 

[megaptera]

Thanks for youre response.

If there are few relevant cases in the past, how a good lawyer could help me on these questions? (I think this might be why lawyers I talked are not very interested...)

Do you know if CIS is willing to provide clarification of their views on cafepress, ebay auction, gallery sales, publishing what's already created, etc? Obviously people have useful guidelines for other passive incomes, such as owning a few houses or companies and taking rents and dividends.

Another question. Suppose I do any one or more of the above activities to generate money I could be entitled to, hypothetically, in absence of limitation of my alien status. I ask the payers to directly send the monies to nonprofit organizations I specify, so that it is well documented that I had no claim on those monies. This is essentially the same, in my mind, as voluneering for nonprofit organization I support but providing my knowledge in the area I'm good at. Does this help me in solving the legal issue?

If the nonprofit organization doesn't work, what if I decline to receive money but provide my knowledge anyway?

The reason why I think about these possibilities is that, even if I get no royalty money, my potential clients can generate profit to pay for their production line and customer support. This will reduce my time spent on responding to emails from questioners who found about my work on the internet. And if my potential client commercializes my knowledge, I can just buy my products in the future so that I can focus on the fun part.

 

[sick_of_waiting]

I believe it is illegal for people in the US on non-immigrant visas to receive royalty or licensing fee from a company. Why?? Because:

1) You took away the chance of a US citizen to come up with the same invention and receive the royalty/license fee.

2) Even though the work was produced in your garage, you produced it on a non-immigrant visa and are therefore not entitled to any monetary benefit from that work.

Remember...it is illegal to even "throw somebody else's trash out"...I made the mistake of throwing my 80 year old neighbor's trash out, now I live in constant fear...what if immigration gets to know about it!! I even refused cookies she made for me for the fear that it could be construed as compensation for my "throwing out the trash" for her.

So remember, be very careful and refuse to receive any such payments from any such company.

I hope this helps.

 

[luissanchez13]

Thats enough idiot

Patented technology is not called intellectual property for nothing.Its like you are leasing your property and receiving some rent (royalty).Its completely passive in nature and perfectly legal.

Please read the below book for better understanding.

Protecting Your #1 Asset : Creating Fortunes from Your Ideas : An Intellectual Property Handbook (Rich Dad's Advisors) (Paperback)
by Robert T. Kiyosaki, Michael A. Lechter


JoeF, If i hear one more time misleading people i will come after you,take care.

 

[Picaso]

Patented technology is not called intellectual property for nothing.Its like you are leasing your property and receiving some rent (royalty).Its completely passive in nature and perfectly legal.

Please read the below book for better understanding.

Protecting Your #1 Asset : Creating Fortunes from Your Ideas : An Intellectual Property Handbook (Rich Dad's Advisors) (Paperback)
by Robert T. Kiyosaki, Michael A. Lechter


JoeF, If i hear one more time misleading people i will come after you,take care.

luissanchez13, as I told again and again, joef is jobless and has no life. He spents all the time on this board, if you see he posts at midnight also. That shows he got some mental illness which causes him to post again and again . Also he lost all senses what is right and wrong, so he keeps posting WRONG information thinking its correct. Thats some freaky mental problem.

All he need is some job and after staying jobless for many years its hard to get job for him. If joef posts his education, members can help him to find some atleast minimum wage job. He needs to come up clean , so that he can be helped to get over his miserable life.

 

[sick_of_waiting]

Originally Posted by JoeF
I'm sorry, but that's BS. An invention is not something that takes anything away from a US citizen. Every foreign graduate student would then violate the law, because a PhD is awarded for something novel that nobody else has done before, i.e., an invention.

I did not say that inventing something in the US is illegal; I said that receiving monetary benefit from it in the shape of licensing fee etc. is illegal while one is on a non-immigrant visa. It is perfectly legal to invent or create whatever you want while in the US on a non-immigrant visa but you can not receive any money for it.

Originally Posted by JoeF
That's also not true. The intent is what matters.

…yes, but the burden of proof is on the non-immigrant. Remember, in immigration issues you are not entitled to “innocent until proven guilty” logic. How do you prove that you spent countless hours in your garage to create/invent something just for fun and it just happened to have the potential of making you a millionaire?

Are you suggesting that if one creates something for hobby and then they happen to make money from it while on a non-immigrant visa, it is legally okay.

My wife is an avid painter, she paints in our garage and she is good at it. She has a collection of her paintings. A friend of mine who owns a motel wants to buy the paintings, but my wife does not want to sell her collection. The friend offers to rent the paintings for his 50 room motel from her at $20 per month per painting. Are you suggesting that it is perfectly legal for my wife (who is on H4 visa) to accept $20x50 = $1,000 per month from my friend for her paintings?

How is it different from a researcher coming up with an invention in his/her lab (or garage) and then licensing it out while on a non-immigrant visa?

Originally Posted by JoeF
Not surprisingly, your attempt at ridicule falls flat...
People have been denied visitor visas for watching their daughter's children. People on visitor visas have gotten into trouble helping friends paint their house. These things are work because if these people wouldn't help, somebody would get hired to do the job.

Can you give some examples of cases where people have been denied visas for watching their daughter’s children? I can prove otherwise though; my mother, mother-in-law, and even my sister’s mother-in-law have come here on visitor visas to take care of our children, not once but several times. In fact, that was their stated purpose of coming to the US. They don’t deny visas for that, the reason they deny visas are if one is unable to prove sufficient ties to the home country and they suspect that the likelihood of the applicant settling permanently in the US are quite high.

Originally Posted by JoeF
People on visitor visas have gotten into trouble helping friends paint their house…

Again, any specific examples that you can cite?

 

[sick_of_waiting]

And as a blanket statement that is wrong.
That's where the journal and a good lawyer come into play.
It depends on the circumstances.
I gave an example with Open Source programmers. These are pretty complex issues that can't be covered with blanket statements.
He doesn't build or make the object. An invention is an idea, not a physical object. A painting is a physical object.
http://groups-beta.google.com/group/alt.visa.us/msg/5abfc9187f2758ab
That's not a proof. The fact that somebody manages to get in doesn't mean that others can. OJ Simpson got away with murder, but that doesn't mean that somebody else will...

An inventor puts down his ideas on a piece of paper and in most cases makes a prototype. An artist also puts down his/her ideas on canvas. Exactly the same situation...

The example you cited is about a lady who made it a habit to extend visas while in the US. It does not deny the fact that she was allowed in the country in most probablity to help her daughter anyway. If you exploit the system, then they will use their powers. BTW, this is not a proof either. The fact that somebody did not manage to get her visa extended (after several previous extension) does not prove your point at all. Innocents end up getting imprisoned too...

It's ironic that my personal example is brushed aside but you unrelated example of an unknown person is used to make a blanket statement.

I guess you are suggesting people to be "creative" in working on non-immigrant visas. I wonder why you are encouraging such illegal behavior.

 

[sick_of_waiting]

Nope. The inventor licenses the idea, not the prototype. An artist can't license an idea. The artist licenses the actual artwork.

A painter also carries copyright on his/her paintings. So, what you are saying is that a non-immigrant can make money if he/she has an idea and licenses it to another person or corporation. Proof??

Huh? Do not put words in my mouth. Nowhere there was mentioned that she "made it a habit."

Those were my words not yours and I inferred it from the case you mentioned.

It is perfectly legal to extend a visitor visa.

Yes, but it is immigration's decision to extend it or not and in this case they refused to do so, probably because the applicant had developed the "habit" of extending her visa on every visit. Thus her case became doubtful.

In the original admission, she probably wasn't asked about what she wanted to do. Irrelevant. Please get some legal education before going off on something completely ridiculous.

How do you know? Were you the visa office? Mothers are usually asked for the purpose of visit and in most cases mothers visit their daughters when they are pregnant and need help. Where does it say that a woman in the US (whether citizen or non-citizen) can not ask for her mother's assistance during her pregnancy?

Please get some legal education before going off on something completely ridiculous.

You sound like you made the immigration laws in this country. Any amount of legal education would be useless in front of your ignorant interpretation of the immigration law.

What personal example? That you have marriage problems because you wife wants to be "compensated"??? Get a grip on reality... Geez. Get marriage counseling. You need it...

Do not get personal. Just because you fail to prove a point does not mean that you should get personal. Grow up!

I meant mothers visiting their daughters in the US.

BTW, where is the proof that people got deported (or their visas cancelled) for painting their neighbor's house...or did you just pull it out from somewhere...

 

[sick_of_waiting]

So what??? I carry the copyright of my postings. That's automatic.
You have no clue whatsoever of logic.
You are a complete moron. Get lost!

Why should I get lost? Do you own this board? Do you automatically consider it your obligation to respond when someone posts on this message board. You do not have to respond to my posts and you are again getting personal and have no clue what you are talking about...changing you stance on every post...you are clueless buddy!

 

[sick_of_waiting]

To the OP: sorry that some idiot hijacked this thread to try and start a flamewar.
I suggest putting this idiot on your 'Ignore' list.

You still have to prove that it is illegal for a non-immigrant to help his neighbor/friend in painting his house...another decision out of your arse...