"Legal Eagle" - presented by Michelle Cohen & Rachel Hofstatter at the #wgbiz Boot Camp

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"Legal Eagle" - presented by Michelle Cohen & Rachel Hofstatter at the #wgbiz Boot Camp

  1. 1. The 2010 Women Grow Business Boot Camp<br />Sponsored & hosted by<br />Network Solutions and Steptoe & Johnson LLP<br />June 19, 2010, Washington, D.C.<br />
  2. 2. Overview of Program<br /><ul><li>Corporate Law Overview
  3. 3. Intellectual Property and Social Media</li></li></ul><li>Choice of Legal Entity <br />Four basic forms of legal entity:<br />Sole proprietorship<br />Partnership<br />Corporation<br />Limited Liability Company<br />
  4. 4. Choice of Legal Entity (cont’d.)<br />Some factors we consider when selecting the type of legal entity<br />Taxation<br />Limiting liability of owners or investors<br />Transferability of equity interests in the business<br />Raising capital<br />Formalities necessary to maintain the entity structure<br />
  5. 5. Choice of Legal Entity (cont’d.)<br />Sole Proprietorship <br />Owned by individual; controlled by owner<br />DANGER: owner personally liable for all business debts<br />all business income considered personal income taxed at personal income tax rates<br />
  6. 6. Choice of Legal Entity (cont’d.)<br />Partnership<br />Two or more individuals or other entities under a partnership agreement<br />Controlled by the partners, per partnership agreement (note: transferability may be limited)<br />All general partners fully liable for debts, liabilites and obligations of partnership<br />Limited partners are liable to the extent of their capital contribution<br />Income taxed to the extent of the partner’s distributive share of the partnership income. No tax on the partnership at the entity level<br />
  7. 7. Choice of Legal Entity (cont’d.)<br />Corporations<br />Shareholders are NOT personally liable for corporate debts, obligations and liabilities (liability limited to investment)<br />Management limited to limited number of individuals (officers & directors)<br />Disadvantage: if C-Corp, pays corporate tax on earnings. Shareholders pay individual tax on dividends (“double tax”). If S-Corp, taxed at personal tax level<br />Must adhere to certain formalities (board meetings, shareholder meetings, minute books, etc).<br />
  8. 8. Choice of Legal Entity (cont’d.)<br />Limited Liability Companies<br />No member of an LLC is personally liable for the debts, liabilities or other obligations of the LLC. Owner’s liability limited to amount of capital contributed<br />Management may be centralized in certain members<br />LLC may elect partnership or corporate tax treatment for federal income tax purposes<br />LLC may (if desired) limit the transfer of membership interests and substitution of new members per Operating Agreement<br />No formalities require to maintain LLC (of course, though, must create it formally) <br />
  9. 9. Marketing Law Basics<br />Can Spam Law<br />The surveys from you indicated that the majority who are marketing use e-mail solicitations<br />Be aware of the Federal Can Spam Law<br />You MAY send unsolicitated commercial e-mails, provided you do so per the law <br />
  10. 10. Marketing Law Basics (cont’d.)<br />Under Can Spam – the key requirements are:<br />no false or misleading headers <br />no deceptive subject lines (“here’s the information you requested” – when not requested)<br />include valid postal mailing address and company name<br />provide working opt-out method and HONOR opt-outs no later than 10 business days (can’t charge a fee, ask for more than e-mail address, or require more than reply e-mail or visiting more than a single page on a website)<br />identify as advertisement<br /> check your privacy policy to make sure being consistent<br />FTC primarily enforces, penalties can be severe $$$$<br />
  11. 11. Marketing Law Basics (cont’d.)<br />Telemarketing – BEWARE<br />There are a host of federal and state laws restricting telemarketing<br />Regulators/private parties can sue- $$<br />Live calls: Feds: Existing customers can be called (3 mos for an inquiry/18 mos for a purchase), unless they tell you NOT to call – then you must remove them from your calling list<br />Prospects – do not call databases must be scrubbed first. <br />Calling hours – nothing before 8am, after 9pm, per feds (some states more restrictive)<br />
  12. 12. Marketing Law Basics (cont’d.)<br />Fax Marketing<br />heavily regulated and very litigious<br />need existing business relationship or prior express consent to fax unsolicited fax ads<br />specific opt-out language on fax – without it, separate violation<br />must promptly process opt-outs (within 30 days) <br />best to seek counsel <br />
  13. 13. Final Points <br />Advise any employees to get any advertising initiatives approved by you or another responsible official – sometimes employees think there are being creative and “running with the ball.” This can lead to $$$ penalties, litigation costs, loss of goodwill, etc.<br />Any lawsuit notices, threatening letters, investigations – PAY ATTENTION – do not ignore – defaults, annoyed regulators, etc.<br />
  14. 14. Intellectual Propertyand Social Media<br /><ul><li>Intellectual Property Basics
  15. 15. Trademarks 101
  16. 16. Social Media for Small Businesses</li></li></ul><li>Intellectual Property Types<br /><ul><li>Trademarks
  17. 17. Patents
  18. 18. Copyrights
  19. 19. Trade Dress</li></li></ul><li>What is a Trademark?<br /><ul><li>A trademark is a mark, name, word, or symbol used to identify goods and to distinguish them from competitors’ offerings</li></ul>Example: COACH® leather goods<br /><ul><li>A service mark is the same as a trademark, but identifies the origin or sources of services</li></ul>Example: DELTA® for air travel services<br />
  20. 20. What is a Patent?<br />Exclusive right to prevent others from making, using, selling or importing an invention in the United States<br />Exists for a limited time only<br />After expiration, invention becomes part of public domain and can be made, used, or sold by anyone<br />
  21. 21. Copyright Examples<br />Bundle of exclusive rights in a “creative work”<br />Includes right to reproduce a work, to create adaptations (“derivative works”), to distribute copies, and to publicly perform/display a work<br />Designs<br />Patterns<br />Sound Recordings<br />Paintings<br />Literary Works<br />Software<br />What is a Copyright?<br />
  22. 22. What is Trade Dress?<br />Overall look and feel of a product or its packaging<br />Signifies to the consumer that it comes from a particular company<br />Sum-total of the appearance of the product or its packaging, including:<br />Trademarks<br />Copyrights<br />Other non-protectable design features<br />
  23. 23. Trademarksand Domain Names<br /><ul><li>Examples of Trademarks
  24. 24. Importance of Trademarks in Business
  25. 25. Selecting a Trademark and Domain Name
  26. 26. Obtaining and Protecting Trademarks
  27. 27. Trademark and Domain Name Enforcement Basics
  28. 28. Proper Trademark Use</li></li></ul><li><ul><li>Symbols/designs:
  29. 29. Numbers: </li></ul>The Many Faces of a Trademark<br /><ul><li>Words:</li></ul>Walmart®<br /> American Red Cross®<br /><ul><li>Letters:</li></li></ul><li>The Many Faces of a Trademark<br /><ul><li>Slogans:
  30. 30. Shapes:
  31. 31. Sounds:
  32. 32. Color: </li></li></ul><li>Importance ofTrademarks in Business<br /><ul><li>Represent a company’s good will and reputation
  33. 33. Ensure that your customers and the public associate your brands with your business
  34. 34. Can be a company’s most valuable business asset</li></li></ul><li>Choosing a Trademark or Domain Name<br /><ul><li>When choosing a trademark, consider whether the mark is available:
  35. 35. Is someone else using the same or a similar mark, especially for the same/similar goods or services?
  36. 36. Has someone filed an application for or registered the same or a similar mark?
  37. 37. Conduct a WHOIS search before selecting a domain name</li></li></ul><li>Obtaining and Protecting Trademarks<br /><ul><li>Trademark rights in the United States are based on use
  38. 38. Trademark rights are geographical in scope
  39. 39. If a trademark is used locally, only local rights are granted
  40. 40. If a trademark is used in interstate commerce, national (federal) rights are granted
  41. 41. Registration of a trademark
  42. 42. Can apply based on current use of a mark
  43. 43. Can also apply based on a bona fide intent to use a mark in the near future
  44. 44. Allows time to do market research product development and regulatory clearance--and obtain rights in a clever mark!</li></li></ul><li>Trademark and Domain Name Enforcement Basics<br /><ul><li>Monitor the marketplace
  45. 45. Document situations of confusion
  46. 46. Help co-workers use your company’s marks properly
  47. 47. Honor and make proper use of other parties’ trademarks</li></li></ul><li>Proper Use of Trademarks<br /><ul><li>Once obtained, trademarks must be protected and nurtured like any other property
  48. 48. Proper use on all business documents, advertising, displays, packaging, labels, and correspondence is critical to survival
  49. 49. Use the ®, TM, and SM trademark notices as frequently as possible!
  50. 50. Make sure that only those with a license to use the marks use them under your control
  51. 51. DO NOT permit modification of your mark
  52. 52. Monitor the marketplace to make sure others are not using your mark for similar goods or services</li></li></ul><li>Social Mediafor Small Businesses<br /><ul><li>Overview of major platforms and demographics
  53. 53. Business uses of social media
  54. 54. Best practices for developers
  55. 55. Developing and executing a social media policy
  56. 56. Enforcement in social media spaces</li></li></ul><li>Social Media Platforms<br /><ul><li>Facebook
  57. 57. Twitter
  58. 58. YouTube
  59. 59. Mobile Applications</li></li></ul><li>Noteworthy Demographics<br />Users are decision-making consumers with strong purchasing power<br />Many users are over 35, have children and earn over $100,000 per year<br />Tens of millions of visitors a month (or more) for major platforms such as YouTube, Craigslist, Blogger, Twitter<br />30% global growth in social media use from February 2009 to February 2010<br />
  60. 60. Business Uses for Social Media<br />Increasing brand exposure<br />Improving customer satisfaction and investment<br />Search engine optimization<br />Application development <br />
  61. 61. Developer Considerations<br />Use the proper platforms for your demographic, including geographical considerations<br />Consider mobile applications and different types of hardware<br />Look to user community to help determine optimal app features and feature updates<br />Understand terms and conditions for developers – different and separate from user policies<br />Conduct legal review before releasing an app to the public<br />Use your trademarks properly and respect others’ trademarks and copyrights<br />
  62. 62. Social Media Policy Basics<br />Policy defines acceptable social media behavior for employees, third parties such as licensees and affiliaties, and other third-party users of social media resources<br />May include one or more of the following:<br />Information on philosophy, strategy and presence<br />Guidelines for employees authorized to speak officially for the company, including who is authorized to speak.<br />General employee and affiliate guidelines<br />Terms and conditions for general user community<br />Ensure that policy is designed to suit your organization’s needs – do not copy another organization’s policy<br />
  63. 63. Social Media Enforcement Mechanisms<br />Maintain library of information on major platforms’ terms and conditions and enforcement policies<br />Facebook has takedown procedures for copyright infringement and other IP infringement, as well as an impersonation reporting mechanism<br />Twitter also has copyright, trademark, and impersonation reporting options<br />YouTube allows for submission of copyright complaints; videos that violate community guidelines can be flagged<br />
  64. 64. THANK YOU!<br />Michelle W. CohenPartner, CIPPThompson Hine LLPPhone: 202.263.4151Email: michelle.cohen@thompsonhine.com<br />Rachel HofstatterAssociateSteptoe & Johnson LLPPhone: 202.429.3903Email: rhofstatter@steptoe.com<br />

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