Category Archives: commercial

Ignorance not Bliss – Avoiding liability for infringing pay-per-click advertising activity

Often, businesses treat intellectual property just as something they need to own and register, without giving enough thought to the risk of infringement.  Even where the risk of infringement is considered, business owners don’t often realise that they could be liable for the actions of their contractors or employees, even if they are unaware of them.

This is increasingly a problem when it comes to social media and online marketing, and a recent dispute illustrates the risks involved.  Ayesha Vardag, a prominent divorce lawyer, discovered that, unbeknownst to her, the marketing agency her firm had engaged was bidding on the name of her previous employer in order to generate enquiries through Google AdWords.  Following negotiations, Vardag agreed to settle for over £40,000, as reported by The Lawyer.

Intellectual Property & Change Management

Intellectual Property Rights and Change Management

Intellectual Property & Change ManagementIn any business there will be rules that management and staff need to follow.  Some will be more important than others. For example, to safeguard a company’s intellectual property rights, there are a couple of useful procedures that business might introduce. IP issues arise day to day so it’s important to manage them.

If a business outsources work or collaborates on projects with others it would do well to put systems in place so as to ensure valuable IP is not lost.  IP generally needs to be considered very early on.

Consider the inventor of the Karaoke machine.  He earned nothing from the billion dollar industry he spawned because he didn’t realise he could take steps to protect his invention so as to reap the benefits if it succeeded.  Specifically he could have patented his invention.  However, it’s not just patents that can have a far reaching impact.  There are other crucial IP rights like copyright which can be lost if you fail to take the right steps early on in a project.

In practice a simple rule requiring particular documents to be used before a company agrees certain terms with a third party makes the difference between protecting your brand or other IP and losing potentially valuable assets.  But is that the end of it or is it likely that sometimes your best laid plans will be ignored for one reason or another?

On 13 August Shireen Smith, founder of Azrights Solicitors, an intellectual property law firm, and author of the best selling book, Legally Branded, will be running a webinar to discuss this as part of a new series of webinars looking at law in its ‘real life’ business context.  Shireen will be joined by Suzanne Hazelton, author of two books, Raise Your Game, and Great Days at Work.  Suzanne is an expert in getting the best from people and processes.  She describes herself as a peopleologist as she works with the people in a business from a behavioural perspective.  She previously worked on projects such as software beta programmes within IBM, and so has a good understanding of why it is so important to have legal controls in place.  At the same time her background gives her a unique insight into the frustrations legal controls can give rise to for people within an organization, and so is ideally placed to advise companies, on how to successfully manage change.  During the webinar Suzanne will focus on what a company would want to do in practice, to ensure procedures are observed by staff, particularly in a fast moving, possibly multi-national environment.

The webinar will be relevant to companies, whether based in the UK or elsewhere, as the legal controls being discussed are likely to be universally applicable in most common law jurisdictions, such as the USA, and Australia to name a few.  The emphasis will be less on the law, and more on the need for procedures to protect IP.  So, the webinar will be relevant regardless of jurisdiction, for any business owner, or corporate in-house lawyer looking for insights into why procedures may be necessary to preserve IP, and what pitfalls they might encounter.  It will give you strategies to overcome the challenges ahead.

TV Show Mad Men faces potentially mad IP battle over photos and likeness rights

When using photographs or images in a commercial context, getting an IP lawyer to assess the copyright situation is an obvious move. However, as the producers of hit TV show ‘Mad Men’ recently discovered, it may not be enough to check the copyright position.  It may also be necessary to check whether there may be problems in using the identities of the persons represented in the image or photo that is being used.

Mad Men, an American drama set 1960s New York, follows the lives of protagonist Don Draper, and his team of high powered advertising executives, whilst simultaneously reflecting the darker sides of the American dream. The show has won numerous awards, including 7 Emmys, and famously counts Barack Obama as a fan.

However, for Lionsgate Entertainment executives, the dream recently turned slightly sour, as it emerged that Gita Hall May, a former actress and glamour model, was suing the show for using her image in the opening credits, without her consent. The image appears 11 seconds into the credit sequence, for a period of 2 seconds, and shows Gita’s face on the advertising board of an animated Madison Avenue skyscraper.

Although Gita had no claim over the image copyright, she objected to her face and likeness being exploited without her consent. The original photograph was taken by Richard Avendon for a Revlon hairspray advertisement. Gita May argues that she only consented to the use of her photographic likeness in that particular advert.

Ms. May, originally from Sweden, was allegedly surprised and angry to discover that, over 40 years later, her image had been “cropped from the photo, in secret, and inserted as a key element in the title sequence of a cable television series, without her consent and for commercial purposes.”  Her legal team is demanding compensation, based on the value the image has contributed to Madmen’s revenue and profits. Clearly this will be a complicated calculation. But considering the show has now run for 6 seasons, spanning 70 episodes, across worldwide territories, any final figure may be lucrative for Gita May.

Likeness Rights

In the UK where the laws governing consent to use of images or photographs are less strict, the US rules which allow for individuals, whether famous or otherwise, “to protect against the misappropriation of their likeness” seem surprising. Essentially, this means that in the USA individuals can object to non-consensual use of their identities.

There is a still a slight caveat — likeness rights do not apply to all images featuring individuals, even if used in a commercial context. To qualify, the images must be used to represent an idea, product, service or thing. Thus in the present IP case, Ms. May asserts her rights over the image by arguing that its use in the Mad Men trailer is integral to demonstrating the authentic ‘feel’ of the show.

To expand this concept further, if for example, a photo was taken of an individual, and then used to promote a specific political party which the person did not want to be associated with, they could refuse to allow their likeness to be deployed in this way. Therefore, businesses should always be wary when using images to promote their interests, for example through product advertisements.

In the case of Mad Men, Ms. May only realised her image was being used, and consequently launched her IP claim, 5 years after the show was originally aired. This demonstrates how such claims can crop up at unexpected and potentially awkward times for businesses.

Lionsgate will undoubtedly feel frustrated that the issue has only emerged recently, when the financial stakes are much higher than say, in 2007, when the original pilot episode was aired. The moral of this story, is one can never be too careful when it comes to clearing IP rights.

Licensing- Don’t Risk Losing Your Trademark

Licensing – Don’t Risk Losing Your Trademark

If your business has reached the stage where you are looking to expand abroad or diversify into different markets, licensing your brand could be the ideal way of achieving this.

With licensing, it doesn’t matter if you haven’t the staff or the money to fund your expansion.  You license your brand to a third party that already has the staff and resources available within the target market in which you wish to expand.

The positives are many: it can be a lucrative move and can generate additional revenue for your business; it can increase your brand awareness; and it can help create new products for your brand without running the risk of failure on your part.


Licensing Without Controls

However, licensing has its downsides, too, which can be exacerbated if you don’t manage your licensing effectively.  One of the biggest concerns to be aware of is loss of control.  So, whilst licensing can boost your brand’s strength, it could equally damage your brand’s reputation.

This is the risk you run if a third party is licensed to use your brand without any restrictions.  It’s not just your brand’s reputation that could be damaged; in some cases, a lack of monitoring on how a third party is using your brand name could result in you losing the rights over the name.

Eva’s Bridal Shop

Take the case of Eva’s Bridal Shop in Chicago .  In 1966, Eva Sweis opened a bridal shop under the brand name, Eva’s Bridal.  The brand built a reputation for providing top quality goods and services.  Eva obtained trademark rights in that name.

The trademark was used for generations; friends and family were allowed to set up bridal shops under the Eva’s Bridal label.  But in 2007, Eva’s Bridal attempted to take legal action against a former licensee for trademark infringement as he was using the trademark after the license had expired.  On the surface, this appeared a fairly simple case of infringement.

However, the original licence agreement exerted no control over the way the trademark was used, and the court ruled that this therefore eliminated Eva Bridal’s trademark rights in that name.

This is because licences over a trademark granted without any regulations or restrictions, are considered to be abandoning the trademark, no matter how long you may have previously had the rights over it.

Therefore, it is vital to ensure when you license a trademark to a third party, it is  not just an agreement stipulating how much you are licensing a trademark for, but also to ensure you have control over the way the trademark is used.

Trademark as a Symbol of Trust

Trademarks are there primarily to indicate to the public the origin of goods, and to protect them from confusion.  It enables the public to rely on a brand as a signifier of quality, or standard, and is a symbol of trust.

Therefore, if you are planning on licensing your business, be sure to introduce quality controls, and limit the distributor’s rights to sub-license the trademark.

How to License Effectively

The first consideration when approaching a licence agreement is to describe what is being licensed, and to take account of the extent of your trademark portfolio.  What specific products or services are covered and in which geographical areas?  Who will be responsible for filing further trademarks, and who will bear the cost of these?

As a general rule, it’s important for you, the licensor, to retain responsibility for the trademark registration.  The licence will be for a specific period of time and may impose a number of conditions.  In return, the licensee agrees to pay you royalties and is willing to do so because you have something that’s popular.

Licensing can be an invaluable tool to some business owners wishing to expand their brand, so, it is essential to make sure that licensing helps rather than hinders your business.

If you have had any experiences of licensing which you would be willing to share, I’d love it if you left a comment below.

Do you need to bother with trade marks?

Since writing my book, Legally Branded, a number of business owners have thanked me for making this fundamentally important subject of intellectual property (particularly trade marks) understandable.

Some entrepreneur friends have even  suggested I emphasise the risks, and danger of ignoring intellectual property advice.  However, I’ve always tried to steer clear of scare mongering as a tactic to raise the profile of intellectual property, preferring to work with those clients that “get” the importance of intellectual property.  Our clients are the ones that get it, even if they’re not in industries where IP is obviously critical to their success.  They value their IP from the moment they start their businesses as did our client Headspace, for example, who are doing great things to make meditation accessible.

I recently attended a meeting with a business owner whose mind was firmly made up that there was no point paying expensive lawyers to give advice on IP.  I had agreed to meet with him at the request of his marketing manager who understands the importance of IP and hoped that someone more aware of the ins and outs of IP may be able to persuade his boss.  However, this business owner’s views did not shift one bit as a result of our meeting mainly because he talked far more than he was willing to listen, and his mind was already made up.  So, I know better than to try to address those whose minds are already made up that they know all they need to know about IP.

This is for readers who are curious, or undecided

This post is for those who may be curious, or who are still on the fence about whether it’s worth bothering with trade marks.  While it’s never a good idea to generalise about who does or does not need IP, I will stick my neck out and say that if you’re a lifestyle business (by which I mean you’re aiming to earn a livelihood and are not trying to build a big business or one you can ultimately pass on or sell) you can ignore trade marks.  You’re unlikely to come to anyone’s attention, or pose a threat to existing trade mark owners such that they would want you to rebrand for infringing on their rights.  Even if someone did require you to rebrand, chances are it will just be an inconvenience to change your marketing materials and rename the business.  You won’t have a name that attracts business, so could rename the business without suffering a drop in activity.  Similarly, if you’re setting up a business and want to first see if it will take off, then you MAY, depending on your business idea, be able to use a temporary name, or take a chance with the name you want to use (provided you’re willing to change it if the advice is that you would do better to choose an alternative name), and see if you can get anything off the ground before worrying about trade marking.  But for everyone else, it would be really foolish not to get trade mark advice from a specialist lawyer on the name you’re using.

Trade marks may be revoked

Trade marks can be cancelled, so even if you’ve secured a trade mark registration it doesn’t mean you’re alright to use that mark.  That’s why it’s misguided to do your own registration work, just to save on legal fees.  You may end up getting a registration, but it may not be for a mark that is capable of generating brand value.  You may not have an adequate scope of coverage, so that although you’re registered, it may not protect you if someone were to challenge your rights.  For example, registering a logo with a totally descriptive name – that is, one that describes what the business does – is easy enough to secure.  However, it’s an extremely poor choice of branding.

The law protects businesses against various unfair competitive practices, and helps you fight off competitors who use similar marks to yours, but you have very limited recourse with a descriptive name.  Using a descriptive name or a name that is otherwise incapable of being owned by you as a trade mark, leaves you wide open.  You will lose business that may have been intended for you, and you will have a business that is far less valuable than it might have been had you selected a legally powerful name.  This is the reason you should always consult your own IP lawyer on any name your branding professionals help you to choose, unless they are willing to take responsibility for its legal effectiveness.

Keyword rich names probably best avoided 

Also, take a look at the blog I wrote about Google’s recent algorithm change, which makes it even more of a poor decision to use descriptive names now online.  The writing is on the wall, so I would avoid choosing keyword rich names too when branding your business online.  The slides from my talk at Make It Big in 2013 also discuss descriptive names more.

Get legal advice

Even though you get some protection in this country just by using a name, don’t let that lull you into a false sense of security.  For example, if someone registers a Community Trade Mark they can stop you using a name you’ve been using, or limit you to using it only in a certain geographical area.  Why court the vagaries of litigation with all the cost implications when you can secure your rights in a name you’re getting recognition with, by paying ten times less?

Trade marks and legal advice should not be dismissed as too expensive to bother with for anyone who has a viable business.  They are an investment, and are the foundation for licensing and other ways of monetising your products and services.  In particular, don’t wait till you have reached certain turnover targets, because trade marks are fundamentally relevant to any business that aspires to be more than a lifestyle business.  Your business name is what the law protects when competitors behave unfairly.  So, trade marking is good business practice and isn’t just about whether you intend to become a brand, or think that if you sold your company whoever bought it would want to use your brand name.

Misunderstanding IP

There is a lot of misunderstanding about the relevance of IP, and huge generalisations are made about its costs.  But given that there are many different IP rights, of which trade marks are just one type, it’s foolish to dismiss them all as too expensive.  Knowing how to implement procedures to protect just one of these rights may be the critical element to your business success after all.

I think the problem is down to the complexity of IP law.  We are still in a transitional period between an industrial economy and a knowledge economy.   Consequently knowing how to deal with the physical things, the tangibles comes easy while intangibles that you can’t feel or touch, are less well understood. Intangibles are our knowledge, our brands, our digital content, and more.  By their very nature, they are easy to lose. Being transient, and non-physical, their legal significance can sometimes be overlooked or misunderstood.

Scrabulous and other high profile cases

The fact is that it can be difficult for lawyers to point out the benefits of IP except by pointing to situations where there have been well known incidents, such as with Scrabulous, which I discussed in a post recently.  Those of us IP lawyers who prefer to focus on the positives, won’t therefore want to keep pointing out the dangers, but I have outlined a number of scenarios in my book Legally Branded, which should help you better understand the risks.  Don’t assume that just because big businesses like Apple resolve their IP issues, that you will do so too.  People should know that for smaller businesses, the scenarios they hear about in the news about the Googles, Microsofts, Apples of this world would put them out of business because they would not have the resources to get themselves out of trouble.

So the moral is if you are a small business without access to huge sums of money to litigate your way out of  trouble then you absolutely need to make sure you avoid the problem in the first place by getting professional advice to register your trade mark.

Also, if you’re going to ignore IP protection, you need to know what you’re doing.  It could in some cases be rather like deciding not to bother with the foundations of a house you’re building.  In television programs like Grand Designs, the participants who overspend may end up not having enough money to do all the fine design details they had wanted.  Their  lack of funds means they have to compromise on the surface issues like designs.  They can’t compromise on the very structure and foundation of a building.  Unfortunately, the opposite approach happens in business when IP is ignored.  People can spend a fortune on the surface things like branding and websites while ignoring the fundamentals.

Distinguish IP from other legal work

While there are some legal issues you can and should skimp on in the early days of a business, IP isn’t one of them.  Note that IP is very often a contractual matter, and isn’t just about registrations.  So, take advice to see how to minimise your IP expenditure in a safe way if you think spending on IP may seem a waste.  Some business owners question any expenditure which doesn’t enable them to make money (such as learning a new marketing trick would increase their  chances of generating revenues).  However , think of IP as what enables you to keep the money you make, and in some cases to continue to earn revenues. So at the very least you absolutely have to take advice in order to develop your strategy for IP.

Plain packaging, lessons to learn from the (possibly) coming tobacco identity crisis

I recently enjoyed a debate with an economic consultant friend of mine on the implications of plain packaging for cigarettes.  As an occasional smoker myself, I was very interested in what proposals to restrict branding opportunities for manufacturers might mean for my own habits.

A study by the British Brands Group found that removing on-pack branding would “make it harder for consumers to identify the brand at the point of purchase” and that “This has the potential to distort competition by focusing attention on price rather than quality, opening up the prospect that a regulation intended to reduce demand might perversely increase demand and sales if the intensification of price competition leads to lower prices and reduced average quality”.  Although increased demand might sound promising for the industry, the authors suggest that not only would the tobacco sector lose out  from smaller revenues, but so would the government, through a reduced tax take.

An important policy consideration identified by that study is the problem of parasitic copying, and the crucial role of regulation in protecting intellectual property: “the branding and packaging investments made by established brands can be undermined by copycat products free-riding on these investments and diverting sales … so distorting competition”.  This reminded me of a series of adverts I’ve noticed recently, I caught the below image in the New Statesman, and it was also in the Daily Telegraph:

The point being made by Japan Tobacco International was that plain packaging will make it more difficult to identify counterfeit cigarettes.  The ad argues that this would “be a dream for organised crime, but a nightmare for everyone else”, noting that fake cigarettes have been found to contain undesirables such as ground glass and even rodent faeces.  In the same edition of the New Statesman, Imperial Tobacco had taken out a full page advert, claiming that plain packaging will “make life easier for counterfeiters” and threaten the livelihoods of those directly employed in the supply, distribution and retail of tobacco.

On the other side of the debate, the Guardian offered an interesting perspective recently, arguing that “introducing plain packaging for cigarettes could certainly help to reduce the brand marketing appeal of cigarettes to teenagers”, and so stop them developing a habit in the first place.  The article points to research by the University of Stirling’s Management School, which led to a government consultation on standardised packaging.  That research is far too comprehensive to summarise here, but some of the issues it highlights include five ways in which the visibility of branded packaging may function as a marketing tool:

  1. By acting as an advertisement at the point of sale
  2. By making cigarette use appear ubiquitous, and more normal to consumers
  3. By inciting cravings in smokers who want to quit
  4. By ensuring long term loyalty from new users by “providing favorable and compelling images they can continue to experience”
  5. By reducing the effectiveness of health warnings, by reducing their potential size, and due to competition from ‘eye-catching’ logos

Conflicting views abound, and the findings of the British Brand Groups’ study, mentioned above, were echoed by London Economics in a report which found, by employing online simulation techniques, that “If consumers can’t differentiate between brands in the market, they opt for cheaper brands, whether it’s beer, cigarettes or almost any other product. If manufacturers respond by competing on price to maintain market share, prices may decline.”

So, perhaps intuitively, as prices are reduced traditional thinking suggests that demand will grow.  I’m no economist, but from my own experience I suspect that, if I found it more difficult to identify premium brands, and was less affected by their marketing at the point of sale, then price would have a greater impact on my decision.  As a result I might tend to buy cheaper cigarettes, and have no difficulty in accepting that this means I might buy more cigarettes.  On the other hand, I also believe I get satisfaction from knowing I’ve opted for a premium brand, and I’m sure the appeal of the packaging holds some sway in my decision.  Which of these factors will have the stronger impact I don’t know, but it’s a moot point given that I’ve made up my mind to try and stop altogether, and hope to have done so before plain packaging arrives.

Opinion is clearly divided on the economic implications, but a common thread throughout is the resounding importance of branding.  There is an important lesson hiding in plain sight here – though much of the comment is focused on how effective standardised packaging will be in reducing tobacco consumption, the more widely applicable analysis tells us how vital it is to growth, or even survival, that businesses are free to differentiate their products from those of competitors.  On the one hand, a failure to differentiate yourself may mean a race to the bottom on price, increasing demand but destroying your margins, and on the other it risks hampering sales and loyalty because your products are less memorable, and lose some of their glamour.

It is surely a good idea to tackle smoking, and standardised packaging may or may not be one way to do this, but for businesses which are not subject to such regulation, what is clear is that ownership of your brand, as secured through trade mark registration, and the freedom to leverage that brand to set yourself apart from competitors, will help you to get ahead.

New cookie law no longer an issue following an ICO backtrack?

Many people breathed a sigh of relief following the Guardian’s take on last week’s ‘watering down’ of  EU regulations by the ICO which impact on the use of cookies by UK websites.  Unfortunately, perhaps as a result of Chinese whispers, the growing consensus seems to be that the European rules don’t apply and sites no longer need to take action.

The previous version of the guidance, seemingly no longer available from the ICO following a quick search, provided, at page 6, that:

“general awareness of the functions and uses of cookies is simply not high enough for websites to look to rely entirely in the first instance on implied consent.  As consumer awareness increases over the next few years it may well be easier for organisations to rely on that shared understanding to a greater degree”

The same paragraph suggested that the shared understanding necessary to rely on implied consent is more likely to be achieved ‘if websites make a real effort to ensure information about cookies is made clearly available to their users’.  Notably, the guidance indicated that mentioning cookies in a privacy policy would not be sufficient.

What some people appear to have taken away from the revised note, which elaborates on the above, is that the ‘watered down’ guidance means no action is necessary, because implied consent is suddenly an option.  However, implied consent (as opposed to requiring a visitor to subscribe, to check a box, or to click a button), was already envisaged by the ICO.  In particular, page 16 of the previous guidance explained that, if a notice is displayed asking for permission and the user does not explicitly give it by clicking ‘accept’, instead navigating to another part of the website, then “you might decide that you could set a cookie and infer consent from the fact that the user has seen a clear notice and actively indicated that they are comfortable with cookies by clicking through and using the site”.

While the revised guidance offers some further clarity on this point, and arguably relaxes the language somewhat such that implied consent seems a more viable option, it has not done away with the new requirements.  Specifically, rather than simply allowing users to opt-out of the use of cookies, websites now need opt-in consent.  To infer implied consent, you ought to be sure that visitors actually know you intend to use cookies, and why.  The Guardian, the BBC, BT and a host of other sites have been updated to do this with notices of varying size and prominence which could serve as inspiration for your own site.

If you only mention cookies in your privacy policy, or you have a link to “cookies” in your footer, it is likely that you are not doing enough to educate visitors to an extent adequate to infer consent. That doesn’t mean you need to drop everything and get your web developers on the line right away.  Although the grace period for non-enforcement by the ICO has ended it is perfectly clear the Commissioner does not intend to adopt a heavy handed approach.  However, you should also not ignore the changes, and it is important to take note that, where the new guidance refers to implied consent, it also mentions more than once how “explicit consent might allow for regulatory certainty”.  There are also international considerations to bear in mind, as mentioned in our earlier post.

What is important is to begin working towards compliance.  If you are a small business with scarce resources, then rather than dragging your heels, why not take some time to identify straightforward steps you can action now.  There are WordPress plugins, downloadable Javascripts and a range of other offerings that can help you to quickly demonstrate that you care about keeping your visitors in the loop, and complying with your legal obligations.

Do You Know Why Your Brand Could Be Worthless?

In this post I’m going to offer some information that I think might be quite useful to you when you’re establishing a new business or product.

You’re likely to be thinking about a name, commissioning a website and logo to launch it, and considering how you will market it and so on.

Relatively few people think about the legal aspects until they’ve already chosen a name, created a website and maybe even finalised their branding. When they do turn to a lawyer it’s typically to register a trade mark, or perhaps because they wonder whether there’s anything they can do to protect their business concept.

I often ask myself why do people assume lawyers should be approached at the END of a branding or website project?  It’s so strikingly different to what happens in other areas of business life. If you were about to build a house, you’d first contact a lawyer to check that you could buy the plot of land. You wouldn’t simply commission builders and take your chances that you might later secure rights to the land. The risk that someone might pop up to claim better title to the land and throw you off their turf wouldn’t be one most people would willingly entertain. Also, you’d want to know whether other people have lodged planning permission to construct buildings or roads, and whether you have all the rights of access that you need and so on.  You’d know to first sort out all these ownership issues.

Maybe because intangibles are invisible people don’t really understand that there are laws – called intellectual property or IP – which govern their branding projects.  The name you choose is the branding equivalent of your plot land, while other branding elements such as website projects are like the buildings you construct on the land.  Intangibles are every bit as important, if not more important than physical assets of your business.

While the likes of Coca Cola have access to large branding or advertising agencies and highly specialist legal teams when making their branding decisions, small and medium size businesses don’t often have the benefit of timely proactive advice to help them to make good branding choices.

I suggest you take the time to understand the basics of IP law relating to brands so you find a suitably qualified lawyer to help you to achieve a strong brand.  The requirements for powerful intellectual property rights and powerful brands are typically the same.

A specialist IP brand solicitor can advise whether the name is a good one from a legal perspective because they’ll have day to day experience of trade mark registration work, copyright issues and website projects. To get value for money from an IP brand lawyer consult them BEFORE you pick your brand name, logo and tagline or commission your website.  Nothing protects a brand better than a well-chosen name or tagline. This is unfortunately not well understood that it’s the choice that determines how easy or difficult you will find it to protect your brand, and how costly it will be.

Most people assume their branding or internet professionals know all the necessary law relating to brands and websites, but they don’t. That’s not their focus or expertise. Just as you wouldn’t engage architects expecting them to also check that you can own the land on which you intend to build your house, or to know what type of locks you need to install to burglar-proof it, so it’s inappropriate to expect non-lawyers to take care of your IP rights.

The legal issues around brands and names are surprisingly complex.

Branding and internet professionals are primarily thinking about marketing, communications, and visual identity when creating websites or selecting brand elements like names and taglines for you. They may be able to do some rudimentary checks themselves to see whether a proposed name or logo is already registered by someone else, but their focus is on whether the name, tagline, logo or other component would be effective as marketing tools. An IP branding lawyer would know whether it’s a strong name which could support your business plans, as well as what checks are necessary both in the UK and elsewhere if your plans include an international dimension. It’s certainly not as straightforward as searching to see whether the same name or logo is already registered.  Similar names or logos could also pose problems, and there are a host of other considerations which your lawyer is well placed to advise upon.

A real separation exists between the worlds of branding and the law. To get a powerful brand that’s legally effective involves a close collaboration between IP brand lawyers and branding professionals. Currently it is not the norm at the smaller agency end to have such collaborative working. So whether you yourself choose your name or get a branding agency to help you, make sure you don’t end up with a weak brand name. This reduces its value as a long term IP asset.

Some name choices would be the equivalent of building a house which others could regularly break into and steal from.  I’ll explain why by taking the dance called ZUMBA as an example. The business that created this dance has given it a distinctive name and trade marked it in many countries worldwide. This means that anyone wanting to provide ZUMBA classes will need to be accredited by the business. Had the company instead chosen a descriptive name for their dance, such as NEW LATIN DANCE, they probably wouldn’t have a business now. Even if they’d managed to register this name as a trade mark in one country they’d have a tough time registering it in another and ultimately no matter how much money they spent, they would have not be able to prevent other people from offering classes featuring their invented dance.

So, for a business such as ZUMBA it would have been a bad idea to choose a descriptive name.  Instead of collecting revenues, they’d have been spending a fortune on litigation.  So, if you’ve got big plans for your business, don’t leave it till the end of your branding project to consult an IP brand lawyer.  That would reduce the legal input to one of registering and protecting your IP rights, such as they are.  It would be too late to give you effective advice.  Registering your own trade mark and not getting any legal advice at all is an even worse decision because few people manage to properly cover the full scope of their business when they do their own registration.  Your trade mark is important, so consult a specialist brand lawyer.  Contact me at Azrights or look out for my book Legally Branded out in the spring of 2012.

Why use a lawyer when you can buy a legal agreement?

In business, contracts and agreements are part of daily life.  Consulting a lawyer to draft all your agreements can be expensive, so in practice, only bigger businesses have the resources to get legal advice every time they need an agreement.

As an entrepreneur you will find it necessary to document many of your own agreements, and should know which ones are too important to draft yourself.

Written agreements are binding documents that define the obligations of the parties involved in a specific project. So it’s advisable if you sell a good or service, to have a clear record of what was actually agreed. Memories fade, and a written record ensures that if disagreements arise later about what was actually intended or agreed, you will have documents to look at to see what was actually intended when you entered into the arrangement.

So, should you buy a legal agreement to use when entering into a new type of arrangement?  In my view this can be dangerous because there is no such thing as a standard template.  The context in which you use a template will differ from the ‘standard’ scenario envisaged in the basic template.  So, you will need to tailor the template to suit your particular transaction.

The terms of your particular deal are more likely to be accurately reflected in your document if you avoid using a ‘standard’ template.  I’ve seen many completely rubbish agreements signed by entrepreneurs who drew comfort from the fact that they were using an existing template.  Unless you have solid familiarity with the template and know how to adapt it to suit your particular transaction it may be better NOT to use legal templates as the starting point when drafting your own agreements .  Instead perhaps use them as a guide as to what to include in your own drafting (subject to the point I make below about avoiding use of any legal terminology, or clauses you don’t understand).

If you have a lawyer create an agreement for you and negotiate and redraft variations of it, you may develop the necessary familiarity with that particular template to reuse it on your own.  But otherwise, in my experience it’s safer to record simple agreements by emailing details of the ‘deal’ and asking the other party to confirm by email that the terms are correct as written in your email. Here are a few elements of written agreements to focus on:

1. Define the scope of work.

2. Indicate exactly what is to be done by whom and within what time frame. Also indicate who determines if the work has been completed satisfactorily.

3. Establish time frames.

4. Indicate how long the agreement lasts and how you will be able to terminate it sooner if for any reason either of you want to do so.  There should be a clear exit strategy.

5. Establish milestones and indicate when payments are to be made and clarify payment arrangements.

6. Focus especially on clarity about money issues: who pays what, when and how. What happens if payment is not made on time?

Be sure to avoid using legal language unless you know really well what those terms mean.  Legal terminology if misused could have unintended consequences on your circumstances.  For example, if you intend to give someone sole rights to distribute something but use the wrong term and give them exclusive rights instead, the legal consequence is that you give the other party all the rights, and deprive yourself of the right to distribute that thing yourself.  Nor should you ever say ‘sole and exclusive’.  This is a tautology.  Each of these words has a very precise legal meaning and consequent impact on the scope of the rights granted.  Be clear whether you mean ‘sole’ or ‘exclusive’. That’s why in my opinion  it’s far better to avoid such pitfalls by using plain English.  Say exactly what you mean in ordinary language you both understand.  Whether you’re agreeing something with clients, vendors, joint venture partners, affiliates, or anyone else for that matter, by ensuring the details are documented in a style and language you both understand, it’s much more likely you’ll end up with an effective written agreement.   

The benefit of recording the terms of your agreements in writing is that you air issues upfront and sort essential details out so you stand a better chance of negotiating your own solution if things don’t work out between you.  Next week I’ll explain what tends to happen when two parties end up in a dispute they can’t resolve without the help of lawyers.

Going through this process of documenting your agreement could very quickly show if you are about to engage in business with someone you shouldn’t be entering into business with.

Obviously, complex agreements (especially where a great deal of money is at stake) should always be drawn up or reviewed by a lawyer. It would be false economy not to consult a lawyer if the transaction concerns a commercially significant issue for your business.  Otherwise you will spend ten times as much ultimately on legal fees.

Software Licences and the US First Sale Doctrine – Psystar judgment handed down

Key to Apple’s surging popularity have been the ease of use of its products and software, and seamless integration between its devices and services.

Arguably unique in the personal computer industry, Apple exercises strict controls over every element of its product line.  This control over both the hardware and software used in its computers, peripherals and devices has enabled the company to ensure a consistent user experience worldwide, and to avoid compatibility issues which have in the past plagued other platforms.

However, this monopoly also means less choice for consumers.  Often, PC users choose to buy their own commodity hardware, put it together and install their operating system of choice.  The motivations for this are varied: some users are searching for bleeding edge performance; others are looking for value; and some simply enjoy the experience of building their own PC.

In the past a number of businesses have established themselves as alternative Mac hardware vendors – typically selling cheaper PCs tailored to be compatible with Apple’s OS X.  A recent example of such a business, fighting Apple in the courts for the right to do so, is Psystar.

Some would argue that Apple are shooting themselves in the foot by preventing other vendors from selling compatible packages that might increase the user base of OS X, sell more copies of the operating system and, possibly, sell more devices developed to integrate with that operating system.  However, Apple differs from companies like Microsoft in that it is arguably a hardware business.  Allowing hardware competitors into the marketplace to increase software sales is not good business sense for the company.  Particularly as the strength of Apple’s brand depends upon its ability to exercise strict controls over the user experience – “It just works”.

So, Apple’s software licence for OS X imposes significant restrictions on licensees.  A recent US ruling highlights the utility of software licences in enabling developers to control how their work is used.  At issue was whether the US first sale doctrine applied such that a purchaser could sell on Apple’s software as they saw fit – think buying a car and selling it on second hand.  The court found, unsurprisingly, that customers are not buying the software itself – they do not own the software after they buy a disc holding a copy of OS X, or download it – they are merely granted a licence to use it subject to a range of restrictions.  The terms of the licence they are granted preclude its use on other hardware.

This is bad news for Psystar but, as Groklaw points out, good news for proponents of Open Source Software.  It affirms the (albeit widely accepted) presumption that a US purchaser of open source software is not entitled by way of the first sale doctrine to resell it on their own terms and thereby circumvent an open source licence.