Intellectual Property Guidelines for New Businesses
Jay Hollander, Esq. is the principal of Hollander and Company LLC, www.hollanderco.com, a New York City law firm concentrating its efforts in the protection and development of property interests relating to real property, intellectual property and commercial interests, as well as related litigation.
The content of this article is intended to provide general information relating to its subject matter. Providing it does not establish any attorney-client relationship and does not constitute legal advice. Personal advice in the context of a mutually agreed attorney-client relationship should be sought about your specific circumstances.
Clients that come into our law firm's office for help starting a new business often come prepared to discuss whether they should form some type of entity to protect them from personal exposure, such as a corporation or a limited liability company. Most have even thought of a snappy name for their product or service.
Yet, even in the age of all things Internet, surprisingly few have adequately considered what might be one of the most important long term investments that they could make in their company, namely their intellectual property protection.
Like many fledgling small business owners that come to see us, you might think that intellectual property is an issue primarily geared to Internet firms or software companies or even big drug manufacturers, but the truth is that almost no business starting in today's World can afford not to think about and invest in establishing its intellectual property beach head if it intends to stay in business or to grow it into a thriving enterprise.
The simple reason for this is that modern business is about more than a good product or service. It's about being known for and identified as the go-to source of that product or service, being able to demonstrate your goods and capabilities to inquiring audiences on the Internet, and preventing your ideas and innovations from being stolen.
Once you realize this, bringing in legal counsel that's knowledgeable about intellectual property at the beginning of a company's formation becomes an obvious and inevitable decision for you as a savvy entrepreneur looking for an edge.
The first things to focus on is a trademark, your main branding protection. Trademarks, or service marks in service businesses, stake your claim to your product or service in your marketplace by identifying it with your name, slogan or logo in the mind of your potential customers. Who hasn't looked at the bright red logo and distinctive bottle of Coca-Cola and not been able to distinguish it from Pepsi, even without the blind taste test?
Product, service or even brand names must be chosen carefully from the very beginning because not all are capable of qualifying as trademarks. For example, using "Apple" as a brand name for the sale of apples can't earn a trademark because it's considered generic, merely using the name of the product itself. But, Apple Bank and Apple Computer can be trademarks because "Apple" is distinctive in those contexts.
Picking a name that can qualify as a trademark is also important because it allows your business to fend off cybersquatters that trade off your business' good will by registering your mark as a domain name for their own goods or, even to extort you into buying from them at an exorbitant price.
Your company will also have to focus on who owns the rights to the contents of your web site.
While a trademark protects a name, slogan or logo that brands a product or service, copyright protects the original expressions of ideas that are set down in a tangible medium, such as the words and images on a web site, among other things. Many businesses are so anxious to get their websites up and running that they fail to carefully check the contracts they enter into with their web designers, logo designers and advertising copywriters.
In particular, they fail to properly insure that they will own the copyrights to the web page design, the logo and the words and pictures on their website. That's because the copyrights to these things belong to their creators, even if you paid for it, unless you enter into the right legal agreements or relationship before the work is done. Even if you write your own copy, take your own pictures and code your own website, you will still need to protect your copyrights so that you can either prevent theft or obtain financial damages from those that steal your work on the Web.
While all of this may sound daunting, you can achieve a real comfort level by addressing these issues with appropriate legal counsel from the very beginning. If your small business lawyer isn't one who can also address intellectual property law issues, find one that can do so. If you build your business' brand and protect its ideas from the beginning, your business will have a real leg up on your competition for a long time to come.
Copyright © Jay Hollander, 2006. All Rights Reserved.