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Should you take the plunge?

3/27/2012

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Entrepreneurs are starting small businesses in record numbers since the economic meltdown has left many bright people seemingly permanently unemployed.  Some people say "it's easy!  Everyone should do it!"  Others warn of losing it all, of an underperforming business sucking time and energy away from your family and the chance to look for other options. 

Are you thinking of starting a new business?  There are tons of resources to help you once you get going, but how do you decide that it's the right step?  Merely "needing money" is not enough to turn your idea into a successful business. 

This article outlines some great essential questions to answer before you send in your paperwork to the secretary of state.  While a great idea might be great, be carefully critical of your own skills and experiences so that you know when it's appropriate to bring on help before you have trouble.  A good accountant and a good attorney can work wonders to protect your assets from the get-go, even if you don't think your business has "hit the big time" yet. 
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Update on Kirkbride v. Tesco

3/21/2012

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Nicola Kirkbride, the fashion management student in the UK who found her face all over a yellow children's sweatshirt in the megaretailer Tesco, has gone from "flattered" to "shocked and angry."  The shirts have been pulled from the shelves pending an investiation (that means, Tesco is mitigating damages in case it loses a lawsuit) and Kirkbride is in discussions and has legal representation.

Another interesting detail is that Kirkbride, as someone trying to break into the fashion industry as a profession, has previously engaged in negotiations to license other images to other merchandisers.  It seems her initial thrill of being "in pictures" has given way to a more pragmatic attitude.  Stay tuned here for more updates. 
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Just because it's "free" doesn't mean it's yours

3/21/2012

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This article walks us through some of the copyright issues lurking in use of others' music.  It focuses on political campaigns, but the principles hold true no matter your purpose.  I especially like Attorney Elgin's heading, "Materials that You Did Not Create Are Not Yours."

This is something we can all take to heart, regardless of which side of the alleged infringement we are on.  Creators want strong protection of their works:  they sweated, bled, worked, cried, and finally produced a product that is valuable to others.  But in the course of creating -- say, a campaign or product commercial, a website, a radio spot, a print advertizement -- are you using the works of others?  Music often has a standard license fee that, once paid, entitles the licensee to a certain number of uses.  Art and words are not so simple.  Mere attribution is not often enough to satisfy creators. 

We should be mindful of the disconnect between the ease of cutting and pasting text or an image into a webpage or ad and the legalities of doing so.  If you're not sure if you can use something, or if you think someone is using your material without permission, it may be time to consult an attorney. 

Many attorneys offer a free initial consultation prior to any financial commitment to you.  You probably won't get all the answers in the first 30 minutes (hey, attorneys pay bills, too) but there are often steps that you can take to mitigate your situation, whether you are an alleged infringer or an alleged victim of infringement.  Copryright infringement is a federal crime and the damages can be substantial if you are found to have done it "willfully," that is, knowing it's wrong and doing it anyway. 
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Which model for leadership?

3/9/2012

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Thought-provoking article about whether it's more profitable to be tough or a team player. 
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Exit Strategy

3/9/2012

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At HLR, we help "idea people" become "business people."  Whether it's navigating the export laws so that you can source a manufacturer in China, locking down your non-disclosure agreements for employees, or helping you prepare a pitch to venture capitalists, we specialize in covering the legal stuff you don't know you don't know. 

This blog section was established to give you food for thought -- sometimes it's pending legislation, an interesting court decision or law suit, or advice about how to help your business thrive.  Today's article, from the New York Times Small Business Guide, is a thorough primer on when to sell your business.  There are a variety of issues about valuing and relinquishing control of your business you must consider, including preparing all the required documentation (and the "want-to-have" documentation) BEFORE advertizing.  Speed is key, and selling a going concern is more like selling a house in a hot market than it is selling something on Craigslist.  Be prepared to vet your buyers and have them vet you in a very short amount of time. 
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More taking-other-people's-stuff stories

3/8/2012

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To contrast the story of the fashion student whose image was commandeered by Tesco in the UK, in the United States, a former employee is suing the producer of online game World of Warcraft for using her voice and original composition song without permission or royalty. 

Ms. Lewis was an employee at the time the work was created, whereas Ms. Kirkbride was a stranger to Tesco.  There is always an argument that work related to her job created by Ms. Lewis while she was a salaried employee could be assigned to the employer.  (This is why lawyers are helpful if you find yourself in a pickle like this, even for a consult.)

As far as the employer is concerned, Ms. Lewis created something for her job, and they own it.  This is called a "work made for hire," typically owned by the employer alone.  However, it is not always clear who the copyright holder is.  From Ms. Lewis' perspective, of course, she created something on her own time related to a part of the game that was not her professional purview.  She clearly thinks this is hers alone, and is demanding royalties.

Whether you are an employer or an employee, works made for hire are like quicksand.  In this age of immediate, widespread dissemination of content, you must protect yourself with empoyment or independent contractor agreements that spell out very clearly which creative works are owned by the creator and what are owned by the employer.  This can cut both ways, and is not just a problem for starving artists.  Engineers, computer programmers, singers, and even bookkeepers and consultants need to have clarity before taking on creative projects. 

Robust non-disclosure and non-compete agreements can protect both the employer and the employee.  It's also important to discuss who has the right to create derivative works based on the product of a particular project.  These boring, boilerplate details can become crucial when a product is successful, because they leave a lot of money on the table. 

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Ever Vigilant II

3/6/2012

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Get ready:  the newest scam is aimed at your trademark! 

Apparently, it's totally legal for "businesses" like the United States Trademark Registration Office to send you letters threatening to cancel your trademark unless you pay up.  The fine print says it's not a bill, disclaims being a government agency, and essentially lets the scammers escape any legal liability.  But don't pay them. 

You may have a keen sense of whether or not you won a Nigerian lottery or, the latest phishing scam, that your loved one got mugged in a third world country and needs a wire transfer post haste.  But don't think your business is immune to these scams!  It may seem like a rounding error to your business' bottom line, but every penny saved is a penny earned. 

When in doubt, contact an attorney or financial professional.  We're here to help. 
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Ever Vigilant!

3/6/2012

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Don't let this happen to you:  Nicola Kirkbride,  a fashion management student in the UK, blogged about an outfit she was wearing.  She set the timer on her own camera and snapped a picture of herself wearing a daisy-print blouse in her own backyard to use for the blog.  Somehow, a designer employed by Tesco, a FTSE-100 retailer and the 2nd-largest retailer on earth (behind Wal-Mart), found the etheral image and put it, unchanged, on a sweatshirt for kids. 

The article is here. 

It's important to appreciate that the UK has a very different court system than the US, designed to discourage lawsuits or even the "threat" of a lawsuit in demand letters, so it's not unusual that Ms. Kirkbride's first move was something other than suing the pants off of Tesco.  However, it's jarring to realize that her intended profession is "fashion management" and she doesn't appear to think that she's owed compensation for the use of her image.  Even if she's delighted to lend her image and chooses not to exercise her right to forbid Tesco from profiting off of derivative works based on her photo, she is still owed a reasonable royalty.

There are two lessons for us US-based artists and inventors here.  First, keep your eyes peeled.  Ms. Kirkbride was alerted by a fan that her image was on the shirt.  Remember that having a network of people who like and/or want something from you in the industry in which you work can be priceless.  Even your competitors can ultimately be allies, and it's always wise to resist burning bridges where possible.

Second, value yourself.  You are on this blog because you think your ideas are worth "something."  In the event that you are the unfortunate victim of copyright or trademark theft, you may be entitled to a "reasonable royalty," or actual damages.  Actual damages are hard to prove after the fact, but if you are proactive and take excellent records as soon as you are alerted to the infringement, you can increase the royalty owed to you.  For example, perhaps don't encourage your friends to purchase the infringing item because you think it's "cool." 

As HLR follows this case, we will keep you updated as far as we can just how much a stolen image is worth when it becomes wildly popular.  Tesco may end up selling hundreds of thousands of these shirts, not just because they are a global retailer, but now this story has made the shirt a hot commodity.  It may be pulled from the market -- buy now, then sell on eBay!  This snafu might create artificial demand.  And each one of those hundreds of thousands of shirts should generate a royalty for Ms. Kirkbride. 

Stay vigilant!  Running internet searches on your products is the first step in finding potential infringers, but it's also important to cultivate your professional network for intel.
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"Confusing Similarity" primer by the USPTO

3/5/2012

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The United States Patent & Trademark Office website has a substantial amount of free information, geared towards non-lawyers.  For example, view the concise explanation of trademark similarity here. 

Take heart however, all is not lost if your business name is already taken.  At HLR, we pride ourselves on not only providing you sound legal services, we also care about helping your business succeed.  We're happy to brainstorm alternatives with you if you come up against a roadblock. 

Some things just can't be protected by IP laws.  For example, copyrights don't protect recipes, no matter how unique.  Likewise, many catchy slogans are not protectable by trademark laws because they are too descriptive.  Patents are notoriously challenging and expensive to get.  We're happy to give you a free initial consultation to answer questions about your business. 
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Business Tax Credits in CT

3/2/2012

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Don't forget!  No matter what state you have incorporated in, there are probably incentives for hiring, employee training, loans, and expansion.  For example, in Connecticut, the Department of Revenue Services has released their 2012 guidlines.
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