The ABCs of Getting Started
by Amy Goldsmith
As a student evaluating your options for life and work
now and after graduation, you may be thinking about going into business
for yourself. Even though you’ll be your own boss, establishing your
own successful business is not as straightforward as it might appear,
and it’s important to consider how to protect your business name, brand
and unique inventions. An entrepreneur who considers the following
checklist will be in good shape to capitalize on a new business idea.
Protecting Intellectual Property Rights
Intellectual
property–the name, logo, designs and ideas of the entrepreneur–is often
the single most important asset of a new business, especially in
today’s competitive environment. Taking steps to apply for such
protection as copyright registrations or artistic creations; trademark
registrations of names, logos or slogans; design patents for protecting
the ornamental design of a product; or utility patents to protect the
actual workings or mechanism of a product or a business method, is an
integral part of start-up planning.
If documentations for ownership or
intellectual property rights are in place, they can be offered as
serious collateral for fi nancial assessment and backing of a newly
formed business entity.
Trademarks
After a company or trade
name has been selected for a new business venture, and that name has
been deemed “available” through the appropriate state offi ce, the
entrepreneur will often assume that it is proper to go forward with
doing business under this name. Incorporation takes place, stationery
and cards are printed, advertising and signs are designed or
commissioned, and goods may be advertised on the Internet. This
presumption, that the path ahead has been opened for doing business, is
one of the most common mistakes made by the fl edgling entrepreneur,
and it can be very costly–even disastrous. The type of “clearance”
offered by the Secretaries of State of the various states secures
virtually no rights to the name, should the name conflict with a
previously, properly established name. It’s important to take steps to
assure that no major pitfalls arise from the establishment of a
business name.
What should be done to make certain that the name which
is proposed for a new business venture does not conflict with the established trademark, trade name or corporate name rights of another party?
The answer is clear.
First,
choose a name which itself can be protected as a trademark. Select from
imaginative, fanciful, and arbitrary choices as opposed to common,
descriptive, or geographical names. Selecting a name such as “Superb
Lighting” or “New York Dinnerware” will only lead to difficulties with
respect to both prior rights of others and rights against subsequent
users. Also, remember that many states have statutes which require the
use of such additions as Inc., Corp. or Ltd. to a name, and restrict
certain inapplicable
terms.
Next, a pre-corporation search
should be conducted to determine the existence of similar trademarks on
record in various states, or commercial names listed in telephone
directories or on the Internet. The search should also include
trademarks and trade names listed in various trade publications,
advertised in newspapers or magazines, or which are registered in (or
are the subject of pending applications in) the United States Patent
and Trademark Offi ce. If the proposed name is likely to confl ict with
the rights of others, it should be dropped and the entire procedure of
choosing another name--searching it and obtaining a written
opinion—must be undertaken again.
However, compared to the possibility
of a legal claim by a third party and to the price of advancing funds
for start-up operations under the wrong name, precaution and prevention of unintentional confl ict more than pays for itself.
Even
start-up businesses need to think globally. If the product is to be
manufactured or sold abroad, it would be wise to obtain searches for
the name in those countries that are deemed most essential to the
success of the new venture. If a conflict arises from the search, the
name may have to be changed once again, but at least it would be done
in time to prevent further financial outlays.
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