As you many know, Shreya and I have been spending a lot of time in Texas, working on some big work projects. You may also know as a Lawyer-Human, we don’t live in a mahogany office 18 hours a day in one of many gray suits. We like to get outdoors; we like to go surfing (even if it means being covered head-to-toe in neoprene wetsuits).
A buddy of mine told me to check out this great surf shop in Galveston, TX. The shop’s owner makes Senator surfboards. Senator boards are what this buddy of mine loaned me when I was first learning to surf in Washington, so they will always be a brand that I remember. When I looked up the shop’s website for information, I also found a story about the history of Senator boards, which were NOT always labeled with that name.
According to the website, in 1991, the shop owner started making boards labeled “Hurricane.” At the time this was in the guy’s garage…the way a lot of board companies get started. Business started growing. They got a bigger shop, then they got a second shop. Seems like things were going along just fine, BUT THEN…
In 2007, a South African company was granted a US trademark registration for Hurricane surfboards. According to their trademark application, they first starting making Hurricane boards in 2001…a full 10 years after the guy here in Texas. Now this other company claimed ownership to the name, and I imagine, told the shop in Texas to find a new name for its boards.
Now I don’t know what this guy’s reaction was when he found out he’d have to come up with a new name for the surfboards he had been making for over 15 years. I like to think he’s a zen-master, laid-back surfer who simply said “right on” in his best Matthew McConaughey voice.
Maybe he (like a lot of other business owners) kicked himself in the ass for not spending a few hundred bucks to stop someone else from hijacking or profiting off the brand he had invested time, money and energy into developing. And maybe no one was righteous enough to tell him that he could do something about it, brah!
So how would you feel if somebody else started using YOUR brand or business name?
If you were this business owner would you have:
A) registered your trademark early before somebody copied it?
B) fight to oppose or cancel the other company’s trademark?
C) crack open a beer and start brainstorming new business names?
As you see when it comes to protecting your brand or business, there are options ranging from proactive (don’t smoke in bed) to reactive (smoke in bed with a fire extinguisher). If you want to know more or have questions about what’s best for your business, shoot us an email or give us a call at (206) 219-9559 to schedule a time to talk.
How Do I Let the World Know I Have A Patent? Or a Patent Pending?
You have been sitting in your lab/garage/room/parents’ basement for the last few months or years creating something new. Something worth PATENTING. At least you think so.
So, what CAN you “patent?”
Legally, any person who invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent, subject to the conditions and requirements of the law. Dang, that is not the easiest read, is it?
Without worrying about the “conditions and requirements of the law,” it’s something that is significantly new and different from other things out there (novel) that solves some sort of problem or need in society (useful). I could spend a lot of time trying to describe this to you like I did with trademarks and copyrights. However, if you have this question…it’s probably best to speak with an attorney who specializes in this.
Let’s say that attorney tells you that you’re in luck. Your widget falls within the parameters of what is patentable. You fork over the dough, apply for your patent and then…you wait.
Patents take a long time to issue. It takes at least 18 months for a patent application to even be published for the world to see. That is not the same as issued (i.e. approved as a registered patent). It takes longer to get issued.
So, while you are waiting for your patent to go through the system, you start manufacturing your product or using your innovation and send it out into the world because your purpose in thinking up your widget was to make money off of it.
Can you do that? Yes! Holding a patent DOES NOT give you a right to manufacture, use, or sell your widget. Holding a patent DOES give you the right to stop others from manufacturing, using, or selling your widget.
You can start making money off of it! Yes!
BUT there’s a risk. If it’s something that your competitor could make themselves, then as soon as it’s out in the world, they could start reverse engineering your widget and selling it themselves.
So, how do you put people on notice that you have applied for a patent?
You can etch, type, write, or stamp your product with these magic words: “Patent Pending” until your patent issues (if it does). At that point, you can put the Patent Number.
Does this stop them from reverse engineering your product and selling it? No, not really. But let’s assume that most people aren’t out there to screw you over and steal your ideas and those most people will see your “patent pending” stamp and will be deterred from using your widget without the right to do so.
And the other people? Well, that’s where your lawyer can be helpful.
Do you always want to put people on notice that you’ve applied for a patent? No, it’s dependent on your industry and the ability of people to easily reverse engineer your invention, to name a few.
Patents are complicated and a commitment. I hope this helps shed light on a small sliver of the patent process. A patent should be a part of a strategy and its use should be as well. An attorney can help you with that. Also, just know that you can get a patent “cheaply” but when you invest more, you are paying for strategy.
But, do I really need an Operating Agreement/Articles of Incorporation?
Once upon a time, there was a girl who toiled away at her first job after graduating from law school. It was a start up. She felt lucky to be blazing her own trail. They were going to change the world; well, at least the face of the intellectual property portfolio management world. They strove to show businesses and clients that there was an alternative to Patent Trolls that actually HELPED people. Among them were MBA’s graduates, seasoned industry professionals, attorneys – the four of them had to succeed!
They met as a team and deliberated for a day about the details of their employment contracts, their articles of incorporation, and their by-laws. The girl wrote them though she had never done anything like that before (no, they don’t teach you that in law school).
Some months in: The girl and two of her colleagues toiled away at their designated responsibilities. And the CEO started to stroll in at 10am…or not come in at all. He would message people on social media instead of picking up the phone and he would miss meetings. They were not making the money that they thought they would by then.
There was an undercurrent of dissatisfaction with the way things were going. The girl and two toiling colleagues were unhappy. They told the CEO that they were no longer going to devote all of their time to the company (never a good sign).
THEN…a breath of relief…a good bit of money actually came in. Real money. That they had earned.
And then…the sh!t hit the fan. Because…what happened? Oh yeah, the CEO deducted a ton of expenses and when asked for the receipts/backup…well, there were delays and more delays and excuses. He offered them a token amount as a gesture of kindness. Um, what? This is a business! That’s not how dividends work, buddy!
There were arguments. The girl and her two colleagues quit in a dramatic fashion. They wanted what they had been sold – the CEO’s dream. They had lived up to their end of the bargain, dammit! The CEO invited a lawsuit (come at me, bro!) and also threatened one for breach of contract.
::apply brakes:: The girl had written those articles of incorporation AND their employment agreements. He couldn’t sue them! She may be fresh out of law school, but she was a lawyer, and she wasn’t going to be bullied!
She channeled her rage into an action plan on how to extricate herself and her two, toiling colleagues from a messy situation without more of a mess. It took one day. And an understanding of what was actually written in the contracts they had all signed. Did they lose the money that they were owed?
Yes. They did.
So, why is it still a win? Because her colleagues had families. And houses. And they all had lives that they wanted to live. And other jobs that they wanted to pursue. Any lawsuit would have cost tens of thousands of dollars (at least) and would have taken time away from all of the other important things in their lives.
Was there a better way to handle this? Maybe. But it was a great learning experience on why it’s important to have an Operating Agreement, contracts, and all of that legal stuff that just slows everything down and costs money (real life excuse heard by yours truly).
What is a Trademark Class?
This comes as a bit of a shock to many people and to many people’s pocketbooks (if you don’t know what you’re doing) but when you apply for your trademark, you are only applying for it in reference to a specific set of things or services. So, if you happen to be a business that sells t-shirts, provides advertising and graphic design services, and makes beer, then you would probably have to apply for three separate classes which means three filing fees (it can add up).
However, that is also why Delta Faucets and Delta Airlines can co-exist. The United States Patent and Trademark Office has decided that they are in different “classes.” Why do they do this? Because…
Once you break that down, it means that the USPTO feels that I’m unlikely to go to the Home Depot to pick up my Delta Faucet and think to myself, “daaaaaaang, Delta Airlines makes faucets!?” Or unlikely, as I’m buying a ticket to go on a beachin’ weekend, to think, “I hate Delta Faucets! I bought one once and it totally made an annoying ‘drip-drip’ noise throughout the night. I’m never flying Delta again!”
It (in theory) allows for people to use similar names as long as they’re not related or competing in the same market and it (in theory) helps the overworked Trademark examiner to do their job more efficiently.
I say “in theory” for a couple of reasons:
1) if you start the artisan Delta Cheese Company and start selling t-shirts and putting on your website, “let your tastebuds soar with our cheese in your mouth” or “fly away with our cheese” – Delta Airlines may still not appreciate it and try to get you to stop.
2) We help breweries who have issues with the USPTO telling them that beer and wine are related, leading to a rejected mark EVEN THOUGH the two goods are in different classes! WTF is up with that?
In sum, are trademark classes important? Yes. They help trademark applicants, lawyer-humans, and trademark examiners figure out what you’re up against in the brand department. They also make sure you’re protected for the right thing(s).
Will applying in the correct class guarantee that you are in the clear, though? No. Sorry. In this world nothing can be said to be certain, except death and taxes (with love from Benjamin Franklin). With a lawyer-human on your side, though, you can navigate these uncertainties with a well-traveled guide.
When to Slap-On a ©, ™, or ® To Your Work? – Pt 3
You see them everywhere, but why do people use them and what do they mean?
Last time, we discussed the ™ and the time before that we discussed the © . Now, it’s time to move on to the ®, which as many of you may or may not know, also signifies a trademark. Again, a trademark is a word, name, phrase, symbol, sound, or even color that identifies and distinguishes the source of goods.
Let’s recap what that means in plain English!
From last time…
Okay, so there are a couple of parts to this. It looks like anything can be a trademark from that long list of things that they have in their definition. That is sort of true as long as it “identifies and distinguishes the source of goods” – which we will get to what the heck that means in a bit. Some examples of trademarks: that apple with a bite out of it on your Mac, the roar of the MGM lion before the next movie you watch, the name “Kleenex,” or the phrase “I’m lovin’ it” for McDonald’s. All of these different things are trademarks.
Now for the second part – it has to identify or distinguish the source of goods. So, you come up with a sick drawing of a little alien dude. You could register a copyright for that drawing, but you can not register a trademark for it at this point. Then you decide that you are going to put this little alien drawing on your craft ginger beer…which you give away to friends at parties. Still not a trademark. Then your friends LOVE IT and tell you “dude! you gotta sell this at the farmer’s market!” So, you do. You start selling your Alien Ginger Beer at the local farmer’s market.
NOW you can trademark the little alien guy in connection with your ginger beer. Why? Because people will associate the alien with your COMPANY and with your PRODUCT. When they go to Whole Foods (once you scale your product because of high demand), they will scan the shelves looking for your alien guy and will recognize your ginger beer because it has the alien on it.
This time….
You are ready to break out of your local market. You want that distribution deal from Whole Foods. Now, you might be ready to graduate from a ™ to an ® .
So, what the hell is the difference between the two and why should you care?
Like with our copyright examples, MONEY.
The ® means that you have registered your mark with the United States Patent and Trademark Office (USPTO). Once you register your trademark with the USPTO, you will be entitled to statutory damages if you prove that someone has violated your trademark. You will also be entitled to attorneys fees, which can really add up, so it helps you to enforce your rights if you know you can get reimbursed for those costs. Also, by registering your trademark you show any potential buyer, licensees, joint-venture partners, distributors, etc. that you take your product seriously enough to: 1) protect it and 2) invest in its future.
So, you can slap your ™ on there as soon as you start selling it. If someone rips off your brand (intentionally or not), you can try to stop them but you probably cannot try and collect money from them.
You can’t slap that ® on there until you register it with the USPTO. Once you register it, if someone rips off your brand (intentionally or not – sometimes it is completely innocent), you can try to stop them, you can try and collect money from them, and there are other options available to you as well.
There are a whole lot of reasons to start thinking about your trademark early. So, if you think that you’re ready to graduate from your farmer’s market, or if you have questions and want to talk to a Lawyer-Human about it – feel free to schedule some time with us or shoot me an email at shreya@layroots.com.
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How Do I Make Money Off My Idea? – Pt 3
What Is An Advisory Board? Do you need one?
Last month we discussed why I think that business cases are a necessary part of making money off of your idea (even though some sources don’t agree). Now, how do you bring that business case to life?
Well, there are three main options with many variations within those three categories:
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Sell the idea to the highest bidder
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License the idea to many companies/manufacturers
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Turn the idea into a business yourself
Although the first two are important, and often good or great options, I will focus on the third option today – turning the idea into a business.
First of all, this option may have the greatest potential for making money BUT it also has the greatest risk of failure. So, you need to be honest with yourself about whether or not you can handle it.
Question you should ask:
Are you cut out to be a business owner? Not in the Shark Tank, The Social Network, glamorized kind-of-way. I mean, do you enjoy the hard work and the emotional rollercoaster that is owning a business and are you able to delegate things that you might enjoy doing so that you can focus on money-making activities that you may not enjoy? If the answer is “no, I am not okay with those things.” That is perfectly okay! Not everyone is! You should probably consider going with options 1 or 2.
If, however, you ARE okay with those things and want to move forward as a business, then let’s keep going.
*Actual Fortune Cookie fortune from Shreya’s lunch last week. Who says they’re BS??
For one of the patents that I am working on, we are finding that the best option is to build the idea into a business for now and eventually sell the idea and/or business to someone – to flip it like a house (or a pancake).
We had to do some self-reflection at this point. Yes, we’re willing to do the work, BUT we don’t necessarily have the connections or the experience it takes to build this particular business. So, what do we do? Give up?
NO. We had two options as we saw it: 1) we hire a “CEO” or business partner who already has connections to introduce us to people and ease our entry into the market OR 2) we get help from an “Advisory Board.”
What is an Advisory Board? It is a group of more experienced and better-connected individuals who can provide guidance and/or connections but that will take a laissez-faire attitude towards the business. They are not too invested.
The CEO is a great option and we thought that we NEEDED this option at first. What we learned, though, is that it is an expensive option. No one with the experience needed would put their time and energy into helping a wee start-up like ourselves without a significant chunk of equity (think: 50%). We did not want to give up that equity. Plus, we are willing to do the legwork. We are willing to knock on doors, put ourselves out there, and otherwise put the sweat in and put the ego on the line. Therefore, the advisory board is looking like a much better option for us. Small equity options for the advisors, minimal time investment on their part. They help to ensure that we are knocking on the right doors and that the doors will at least open for us.
So, for us, the Advisory Board was just what we needed. You may need more than that or you may not know people who would be a good fit.
Hope this helps…and until next time.
