by Sandra Cohen, Esq.
Even though you might not think of yourself as a risk taker, the fact that you own a business proves otherwise. In fact, running your own business may be your dream come true. To keep your dream alive and reduce your risks, consider the following the necessary steps to protect your business.
Who Owns Your Web site?
One of the first things many businesses do is to create a Web site. While this is usually an easy decision—call a Web master and have the Web site developed, designed, and loaded—there are issues to address with your Web developer and/or designer.
First, be sure that you own all code or software or have a license to use it. Just because you pay for the design and development does not mean you own the product. Make sure you have a written agreement transferring the ownership of the Web site and every facet (code, graphics, text, designs etc.) of it to you. If the developer cannot transfer ownership of the software, be sure you have a license to use it. If you need passwords to access the code, make sure you get them from the developer and/or designer and test them to make sure they work. Otherwise, if you want to change something on your Web site, you will have to call the developer or the designer. What will you do if you can’t find him or her?
Second, have your Web developer and/or designer transfer and assign all copyright ownership to you, and state that he or she is not using someone else’s materials (photographs, copy, music, etc.). It is very easy for developers/designers to obtain information, design, graphics, or text, then copy it and post it to your site. Without assurance that the material is original work, you run the risk of copyright infringement on another’s work. To keep your business up and running, make sure you own your Web site and all of its parts.
A major step for business owners is signing a lease for office space. Clearly, it will include the term of your lease, the rental amount, and payment terms. Make sure you understand whether you are responsible for your utilities or if they are included in the rent. Review the lease to see if you are paying the landlord’s real estate taxes and insurance. It is not uncommon for tenants to pay the real estate taxes, but be sure you are only paying your proportionate share (the percentage of the building that your space represents to the entire building). Usually, a landlord shifts all expenses it has to pay for the care and maintenance of the building to the tenant, including the common areas (areas shared by all tenants). The lease should also specify who is responsible for repairs to the premises. Keep in mind that a commercial lease is often drafted in favor of the landlord. These are just some of the key provisions to consider.
Protect Your Products and Services
If you use a word, phrase, symbol, and/or design that identifies your product or service, consider trademark registration. A trademark is a word or design that indicates you as the source of the product. Similarly, a service mark identifies the source of the service. (Note: Trademark is used here to refer to both service marks and trademarks.) For example, we all know that a product bearing a “swoosh” is made by Nike. A trademark that is similar to another mark may be refused registration because it is likely to cause confusion for the consumer if both marks are used in connection with similar good or services.
You can legally protect your mark on a state or federal level. If you only do business in one state, a state registration may be enough. However, if you do business nationwide, federal trademark registration is a good idea. Doing so protects your mark and prevents others from using the mark in connection with similar goods or services. Once the mark is used in commerce, you can add the trademark symbol ™. You can use this designation without any registration. However the symbol ® can only be used once you obtain federal registration of the trademark. Consider applying for trademark registration to protect your rights and enhance your business brand and its assets.
Keep it Confidential
A confidentiality agreement or nondisclosure agreement (NDA) can be critical to a business. These agreements protect confidential and proprietary information. The type of information covered is set forth in the agreement and can range from specific product information to marketing strategy.
An NDA can be between you and an employee or consultant. Or it can be between you and another party with whom you seek to do business. For example, you might evaluate if you want to perform services for one another, or if the information is being disclosed so the other party can manufacture a product for you. Before disclosing information or ideas, ask the other party to sign a confidentiality agreement or NDA. By entering into such an agreement, the other party cannot disclose information you provide if it is considered confidential under the agreement. The agreement should state that your information remains confidential, even if your relationship with the other party ends.
Running a successful business includes taking risks. But failing to legally protect your business assets is risky business. That is why safeguarding your business is a major key to success in today’s competitive world.
FOOTNOTE: The points raised are general in nature and should not be taken as legal advice or as a substitute for careful review of your business concerns with an attorney and the preparation of appropriate documentation. Every business and its situations are unique and different approaches may be necessary in different circumstances. This information is intended as a guide. To make sure you are in compliance, consult individual state laws as well as federal laws.
Sandra L. Cohen, Esq. is a partner at Epstein Cohen & Gilberti, LLC in Red Bank, New Jersey. She practices in the areas of corporate, transactional, real estate, trademark, and franchise law. Sandra has been an instructor of Corporate Law at Farleigh Dickinson University, Paralegal Studies program. She received her J.D. from Seton Hall Law School, cum laude, and her B.A. from Douglass College, Rutgers University, cum laude and studied at Notre Dame University, London, England. She is a member of the New Jersey State Bar Association.
For more information, contact Sandra by phone: 732-212-0400 .