Think through what you sign

I have been dealing with several matters in the past year that have dealt with business persons signing contracts without clearly thinking them through.

Usually, the individual involved signs the contract order to get money or close a deal that he or she thinks must be done or that is absolutely necessary. In a sense it is a sign of the times that business persons are thinking along those desperate lines.

The problems that arise are many. It is not a good deal. The terms are vague and contradictory. Some times, a business owner will fail to sign as an officer of the business entity (such as a corporation), so that the business owner is personally liable.

Haste makes waste and, in this case, the waste of time and money in legal disputes. People are in such a hurry and blinded by need that they stop thinking.

If it is a deal that must be done, particularly if it has to be done soon, then it is trouble.

My suggestion is that business owners slow down. Nothing has to be signed today. Put the agreement aside and read it again tomorrow. Have someone else read it through - particularly an attorney. It can save you an enormous amount of grief and money.

Partnership Agreements Make A Difference

I have working on several partnership dissolutions this year. Perhaps it is a sign of the times.

Once again, the amount of anger, pain, time and money spent on these dissolutions is in direct proportion to the involvement of attorneys in the beginning of these businesses.

When an attorney is deeply involved in the formation of a business entitys, such as a partnership, corporation or limited liability company, then the dissolution is relatively fast and inexpensive. The owners have the procedures in place to buy out an owner who is leaving or isn't performing.

On the other hand, when an attorney is not involved, the dissolution can turn ugly and end a lawsuit. This can result in legal fees of tens of thousands of dollars.

The real difference isn't the documents and agreements that I or an other attorney provides. The difference is that the owners are directed to think of issues and problems that they will otherwise over look. Things such as: what happens if one person stops working the business, what happens if we want to bring in someone else, who will be performing what role in the business, etc.

Addressing those issues also means that the business is more likely to be successful.

Create an Intellectual Property Portfolio

All business have intagible assets that need to be protected. In particular, business have intellectual property assets that need protection. Things such a trademarks, copyrights, trade secrets, etc. A method of doing systematically is called an intellectual property portfolio.

An IP portfolio is a systematic method of protecting the IP of a business by inventorying, cataloging and periodically reviewing the business' IP. The reason for doing is to prevent the loss of IP through the lapse of registrations from lapsing or licenses and to prevent the misuse a company's IP assets.

For instance, Federal trademark registrations lapse after 10 years. Furthermore, a new trademark registration has certain filing requirements six years after registration or the registration will be cancelled. Unless a company has a systematic method of reviewing its IP assets, it may let the registration lapse. I have personally seen this happen several times.

Another advantage of creating an IP portfolio is that it reminds business owners of their IP assets and gets them thinking about their use and what else needs to be protected.

The final and biggest reason for creating an IP portfolio is that it increases the marketability and value of a business. A company that does not have registrations for its trademarks or does not protect its copyrights is almost unmarketable. A company that not only protects its IP assets but has a standard system for reviewing and protecting all of its IP is much more valuable and attractive.

Large corporations have in-house attorneys, or hire big law firms, to manage their IP portfolios. Companies that own large amounts of copyright protected material, or own many patents, or have several brands, may have several attorneys dedicated to managing their IP portfolios. Those companies are very serious about protecting their IP. The small and medium sized business owner should be also.

How does one create a IP portfolio?

1. Take an inventory. Review all of the IP of the company including its copyrighted materials, trade secrets, trademarks, licenses, etc.

2. Take steps to ensure that the company's IP is protected. Often the inventory will reveal IP that a company wasn't aware of and that needs protection. Register copyrights, trademarks, create non-disclosure agreements, etc. Also educate employees of the use of trademarks, copyright protected materials and trade secrets.

3. Create an easy to use and understandable series of files or notebooks that have summaries of all of the company's IP. For instance, a file regarding a trademark might have a copy of the registration and a page with the dates that the registration must be renewed and what goods or services it can be used with.

The idea is to have in one place a summary of all of the IP of the company that can be easily reviewed and understood.

4. Periodically review. Assign someone the job of reviewing the portfolio. I recommend not less than every six months. In this way, nothing lapses.

As a part of that review, the business owner should also think about what other IP assets that the company has that need to be protected. For instance, a company might start using a trademark for goods that were not listed in its original registration. A new registration should be filed to list those goods.

A well managed IP portfolio can be invaluable to a business. It increases the value of a company and prevent the loss of important IP.

For a modest fee, I help small and medium sized business develop their own IP portfolios. We review a company's IP assets and help organize an easy to use portfolio that the business can manage. I then send periodic reminders to my clients for them to review their portfolios. In this way, small and medium size businesses can have the same level of professional IP management as large corporations, even if they don't have their own in-house legal departments.

Protect Your Brand

Branding is the development of a company's name, trademarks, domains, and other intellectual property such that the company has a unique and recognizable identity. A company's brand can be closely tied to a company's goodwill. Goodwill is the reputation of a company for the goods or services that it provides. A company that has strong goodwill and a recognizable brand will be very valuable.

Protecting that brand can be critical to safeguarding the value of a company. A company can work hard at its services or in providing excellent products, only to have that goodwill undermined if it could suddenly no longer use the name with which it has done business. Imagine building a business for two or three years and building your company's goodwill and then getting a cease and desist letter to stop using your company's name and website domain, because you infringe on a Federally registered trademark. That happens frequently and it is devastating.

The best way to protect your brand is to do so from the beginning. Consulting with an attorney as to how to protect your domains and trademarks is a crucial and basic step in creating a brand. Large corporations will spend a considerable amount of time developing brands in secret. When they are nearly ready to use they brand, they will file multiple trademark registration applications to ensure that they have the rights to that brand. Small business owners won't be able to spend that much money but they can take similar steps in ensuring that their domains and trademarks are protected.