Sunday, October 25, 2009

Follow Up!

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A consistent problem that I have seen in my career is the classic "failure to communicate". Two parties will negotiate by phone or in person the deal points of a transaction, but never follow up that conversation with a written communication as to what was discussed.

I most often see this in litigation after two parties think that they have agreed to something and, later, discover that their understanding of what was agreed to was completely different. A salesperson and a customer will discuss pricing and timing of a sale and later discover that they are incomplete disagreement over the terms. This is a prime cause of lawsuits.

To avoid these problems, always follow up any business conversation with a written message that completely states the deal terms discussed. In this way, a permanent record is made of the things discussed and the parties avoid disagreements. Business owners and their employees and sales representatives that routinely send written follow up communications have a huge advantage in negotiations and dispute resolution.

Here are a few hints.

1. Write the message as soon as possible after the conversation. The sooner you write about a discussion, the more accurate you will be.

2. Use plain English. Write simply and clearly. Do not use slang, trade terms (unless necessary), acronyms and other terms that everyone might not understand.

3. Be complete. Write out all the terms that you discussed. Avoid using "etc." or referencing the conversation that you had without writing out the things you discussed. This may seem like a pain, but it is important to be complete.

4. Use email or a letter. The more permanent the method of communication, the better. Email is good, but make sure that it can be found. Save the emails in a place that can be recovered easily later. The good thing about emails is that the several replies between two parties can create a good record. The best method is a letter sent by fax. A fax machine can give an immediate confirmation of receipt. Plus a written letter has a greater impact. Avoid text messaging. Text messages are easy to delete and are more difficult to download into a format reviewed. There is also a greater tendency towards using shortened terms and to be incomplete in text messages.

5. Leave open the possibility for disagreement. End the communication with a phrase that states something like "If you disagree with what I have written here, please inform me." If the other side does not reply, then you can assume that they agree. They will be more likely to reply if they disagree and it is important that they communicate any disagreements.

I have seen many instances when one party to a lawsuit had consistently followed up in writing as the parties negotiated the transaction in dispute. The side that followed up consistently, clearly and completely was in a much stronger position. More importantly, companies that consistently send written follow up communications do not have disputes with their customers and vendors. They stay out of court which is the best position to be in.

Wednesday, October 7, 2009

Protect Against Hardball Trademark Tactics

I have noticed in recent years that business are increasingly unscrupulous about stealing the ideas of other businesses. This is particularly true in the area of trademarks and trade names. I have seen increasing cases in which rival business owners will file domain name registrations and trademark applications in an attempt to steal or preempt the legitimate use of a name by other business owners in the same industry.

I had case in which my client started a small recording company. My client incorporated the business and launched a website. After a few years and a producing a few CDs, she found out that someone had filed a trademark application for the same name. The person filing the trademark application was not using the name and apparently only filed the application to hold the name hostage. When I contacted the attorney for the person filing the application, his attorney informed me that his client would give up his application for money.

Another form of hardball tactics is filing domain name registrations that are similar to one already in use. This is done by registering the same name as .org, .net, or .biz, or using a hyphen in the name.

Of course, one can file lawsuits to remedy these situations but that is very expensive.

I encourage my clients to protect their business names and logos as quickly as possible. File fictitious business names for business names in use. State and Federal trademark applications are the best deterrents. We can even file what are called "Intent to Use" applications if the name is not yet in use but the owner intends to use it within the next one to two years. That application protects the name until the owner is ready to actually use - and it prevents someone from tying up that name by filing the same type of application in bad faith. The time and money needed to take these protective measures is well spent.

Saturday, October 3, 2009

Think Through Marketing Campaigns

I have dealt with several disputes in the past few years involving advertising services. The usual scenario is that an advertising company, often a search engine optimization (SEO) firm, will sell my client on a lot of expensive services. Those services don't result in new leads for my client. But, my client will have a large bill to pay.

For instance, a company that is a business to business service provider buys an expensive package of services from an SEO firm. The company's website has very high rankings on Google searches for its area of expertise, but no new business comes in. The problem is that the company's potential customers are not looking for that kind of service provider on the Internet.

So, the SEO campaign was a waste of time and money. And, the disappointment leads to a dispute over money since the company has expended considerable monies and time in the SEO campaign.

Legally, the SEO firm did everything that it said it would do even if it didn't generate any leads. So, the company buying the campaign owe the money even if it didn't generate any new revenue. I have to tell my clients that if they hired someone to dig a hole in their yard, they would have to pay the hole digger, even if the hole had no purpose.

My recommendation to my clients is that they do some serious marketing research and hire an independent marketing consultant or business coach before investing in any expensive marketing services.

This is not legal advice. But it is a common ground for disputes, so I thought I would comment on it.