Insights Into Law: Getting It Right The First Time
Rob Hassett
June 1, 2008
D
o you believe if you reserved a corporate name with the Georgia Secretary of State that
you are automatically entitled to use it as the name of your business?
If you’re aware the answer to this question is “no,” you know much more about trademark law
than most businesspeople. If a little knowledge can be a dangerous thing, no knowledge about
intellectual property law can be a disaster.
Here are the four most common mistakes involving intellectual property law.
1. Not doing your homework. Businesspeople often fail to make sure that the name,
service mark and trademarks for their businesses do not violate the rights of another person. The
ability to obtain a corporate name is not a factor in whether a businessperson may use that name in
connection with the operation of a business.
Generally, the first person to either use a name in connection with the operation of a
business or apply to register the name of that business as a mark in the U.S. Patent and Trademark
Office, will own that name. Such ownership usually will apply to the same or similar names used in
the same or similar businesses. Using the mark before anyone else uses it or applies to register
it, gives the business-person rights for the geographic area in which the mark is used. Applying to
register the mark before anyone else uses or applies to register it, gives the owner rights for the
entire United States.
If the mark is “famous,” the rights of the owner are broader in that they are not industry
specific, but apply to any types of businesses. When businesspeople choose a trade name, trademark
or service mark without hiring a qualified attorney, they often eventually receive a “cease and
desist” letter requiring them to change the name and mark.
If the business owner has violated the rights of an earlier owner, the owner will have no
choice but to change its name and mark, which can be costly if the name and mark have been included
in marketing materials, on a Web site, in advertising or otherwise. Even worse, it can be a
momentum killer if marketing has started to take off.
2. Forgetting the non-disclosure. Owners often disclose confidential information
about their planned business without requiring the signing of a well-drafted, non-disclosure
agreement. Without a proper non-disclosure agreement, potential suppliers and partners are, in most
cases, free to take and/or disclose the idea and compete.
3. Not covering all your bases. Too often, business owners do not have well
drafted agreements signed by independent contractors and employees. Consequently, the independent
contractors own the copyrights to whatever they create, regardless of what may be agreed to
verbally. There also may be uncertainty about whether the independent contractors are required to
assign patent rights to the company.
The company owns any copyrightable material created by an employee who works for them. But
without a written agreement, an employee can claim the work was not created in the course of
employment and is, therefore, not a work made for hire.
4. Not registering copyrights. Business owners often do not register the
copyrights in their works in the U.S. Copyright Office. If there is an infringement before the
application for registration has been filed, the owner may still sue to stop further use of
the copyrighted material and collect provable damages. But in most cases the owner may not recover “
statutory damages,” which are much easier to prove, or attorney fees, which can be substantial.
Rob Hassett is a technology, entertainment and corporate law attorney with Casey Gilson
P.C.