Q&A: Where do I start? Trademark, copyright, or LLC?!?

This question came through email (feel free to send in your own question to thelawofthebrand@gmail.com). The person who asked this question did not want me to discuss her product idea in detail. But it is a physical product. She has created the product and some materials to go with it.

Questions

I am to the point where I need to get the idea, trademarked, copyright, etc? I don’t know where to start. I am thinking I need to get it copyrighted. I bought some books about all this stuff but I need someone to guide me through this or at least tell me where to start. So, based on your expertise, what would you recommend? I also thought I would do everything through Legal Zoom. What are your thoughts about that site? You mentioned LLC in your last post but I am not sure exactly what that means to be completely honest with you.

Response

[Note: I added the headings]

Intellectual Property Overview

Copyrighting and Trademarking are important for two reasons. First, you want to make sure you are not infringing on another person’s intellectual property (IP) rights. So when you register your IP, it helps you know that you are most likely not doing that. Second, it gives you some pretty powerful rights in the event someone infringes on your IP rights. But you don’t need to register anything to start using it right away. You just have to be willing to accept the risks of both types of infringement. Registering helps to reduce those risks.

Copyright

Copyright gives you the exclusive right to the story you have authored. You have that right the moment you write [the materials]–there’s nothing else you need to do. But say someone gets your [materials], duplicates it, and starts selling it on their own. They have now infringed on your exclusive rights. In order to take action against them under federal copyright law, which is what you may want to do in this case, you have to have the [materials] registered in the federal copyright office. So the main purpose of registering a copyright is to give yourself the benefits of federal copyright protection. The registration fee is about $35-55 dollars.

Trademarks

Trademark protects, essentially, the brand. As with copyright, you have the exclusive right to your trademark without doing anything other than using it (assuming no one else has prior use). But in order to most effectively enforce the trademark, you need to register it with the federal trademark office. So, for example, you can register [name] as a trademark. You have to select what type of class or category you want the trademark to apply to. For example, it may be [identified likely classes]. There are a lot of classes to choose from. Without looking it up, I believe it is about $230 per class.

LLC

An LLC is basically a way for business owners to protect their personal assets. A limited liability company creates a barrier between the financial obligations of your business and your personal assets–meaning that you will not be personally liable for the debts of the business (but there are exceptions). So the liability that is limited, but not eliminated, is the personal liability of the owner.

My recommendations

On the legal side I would say, trademark, LLC, then copyright.

On the practical side, registering a trademark takes the longest (you probably won’t get a response for 6-8 months). Even if you don’t have your product in commerce, you can apply under an “intent to use.”

[I then gave some personal recommendation based on my knowledge of her situation. Basically, I recommend that she conduct her business ventures under an LLC because she would likely be perceived as having deep pockets because of her husband’s position and career. The LLC would give her a barrier.]

Legal Zoom

I’m not against LegalZoom. I think it’s good for the legal profession that it’s there. The main problem I have is that I think it gives people a false sense of security. There is very little that is black and white in the law and I think people take whatever they get from LegalZoom as gospel.

I have never used LegalZoom but my perception is that a lot of their services are either charging you for filling out forms that are available from the government for free or they give you basic documents that should be just a starting point but which they know you will consider to be a finished product. For example, if you want to start an LLC, you can likely go to the website for your state’s Secretary of State and find the forms you need to start an LLC. All you have to do is fill out the form and send in the fee. From what I can tell, LegalZoom will collect the same information needed on the form from you and the fee and then just fill out the form and send in the fee for you. For some people, having a middle man like that may be worth it.

As for legal documents, it may be worth it to get copies of useful forms. But, as I said, these forms will more often than not be a starting point to creating the document that works for you and for what you are trying to do. For a single member LLC, I think LegalZoom would be a good starting point. Just keep in mind that any form you get from them may not actually have what you need or want in it.

Let’s Get in Touch

If you would like to ask a question about trademarks, copyrights, or online business, shoot me an email (thelawofthebrand@gmail.com) or a text (702-291-1799) or schedule a meeting.

Schedule a FREE Consultation

Leland Faux
Attorney Leland Faux blogs about trademark, copyright, and online business issues at Law of the Brand. You can submit a question by email to thelawofthebrand@gmail.com.

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