McKown Bailey

Just what is trade dress?

2022-08-11T10:49:59Z

Trademark law includes something called “trade dress.” This can be a little difficult to define in specific terms. Federal trademark law isn’t much help in that area. It has described it as “almost anything at all that is capable of carrying meaning.” It essentially refers to the unique design or appearance of a product and/or its packaging, labeling or display that set it apart from others and is recognized and associated with that product. That could be a color, shape, font, texture and even themes that run through their branding and displays.

Examples of trade dress

It’s easier to give examples. The shape of a Coca-Cola bottle is a well-known one. So is the Tiffany blue that the jeweler’s distinctive boxes and packing are known for – although “Pantone Tiffany Blue 1837” wasn’t actually registered with the U.S. Patent and Trademark Office (USPTO) until the late 1990s. The mattress company Purple has that distinctive color on its products. Even Adidas’s stripes and the red Levi tag are considered trade dress. Like other aspects of trademarks, trade dress can be protected under intellectual property laws. That’s because use by another company could cause customer confusion and therefore harm the company’s sales and its brand. That’s why companies often register their trade dress to help protect it from infringement. This also helps them take legal action against those who might use it – particularly for a similar product.

Trademark vs. trade dress protection

Trademark protection typically covers things like logos, symbols, words and phrases and names. Trade dress protection, as we’ve noted, covers things more essential to the way a product is “dressed” for sale or use. Trade dress can be difficult to define, which means that what constitutes an infringement may not always be clear. If your company is facing potential legal action for infringement on another company’s trade dress – or if you’re concerned about possible infringement – it’s wise to seek legal guidance.

Options when you’re at odds with a business partner

2022-08-11T10:27:06Z

Having a partner in business offers several benefits. It allows you to have the benefit of someone who complements your strengths and weaknesses, which makes your business stronger in the long run. However, in any business partnership, issues and disagreements can occur. Do you know what options you have if you experience problems with your partner? Keep reading to find out.

Sue your partner

In some situations, if a breach of contract occurs, you can receive damages. This is possible if your business experienced some type of loss caused by your partner’s unethical or illegal actions. Talking to a legal professional will help you with this.

Reach a settlement

Do you want to continue your partnership? If so, then reaching a settlement with your partner is recommended. This will help you come to a compromise without having to dissolve your partnership completely. In some cases, you can receive restitution for the breach and then move forward for the good of the business.

Expel your partner

In some situations, the breach will be so serious that you want to expel your partner. Unfortunately, this isn’t an option unless your agreement addresses this specifically. If not, then you can’t opt for expulsion without a fight.

Rely on your contract when it comes to taking action

If you need to take action against your business partner, it’s important to rely on your partnership agreement. While a breach of contract can be difficult to deal with, you have options and legal rights, so keep this in mind. When in doubt, review your contract and consider experienced legal guidance to help you proceed.

What’s a choice of language clause in an international contract?

2022-08-11T10:27:12Z

In a global economy, it’s hard to expand your business without eventually developing overseas connections – and that means international contracts. Unfortunately, any international contract presents unique problems that domestic contracts do not. In particular, you may run into problems simply due to the fact that your contracts may need to be written in more than one language.

Why is the use of multiple languages a problem?

In essence, it comes down to this: The mere act of translation will subtly change the wording of a contract, no matter how skilled the translator may be. That can lead to confusion down the line when you have one contract in English and another in Chinese, Japanese or Russian. If there’s a disagreement about the meaning of a contract, the question becomes, “Which contract, in which language, is the official version?”

How can a choice of language clause help?

A choice of language clause can eliminate a lot of hassles when there is a conflict between the parties by specifically designating which version of the contract – the one in English or the one in another language – controls the situation. In many cases, it’s preferable to designate the English-language contract as the controlling document in these cases (since that’s most likely the only common tongue between the parties), but not always. Chinese courts, for example, have sometimes held that English-language contracts are invalid in that country. Because of the complicated nature of international contracts, you don’t want to risk a misunderstanding that could come back to haunt you. Make sure that you have experienced legal guidance that knows the nuances of international contract law.

Your rights when another business breaches your contract

2022-08-11T10:27:17Z

When you reach an agreement with another company, whether you intend to sublet part of their space or receive routine chemical deliveries from them, you expect that they will uphold their side of the agreement. The entire reason you executed a contract is to make your agreement binding and ensure that you understand the terms of your arrangements. Despite having a written record of your agreement, the other party could fail to deliver the goods or provide the services that they promised. When another business breaches its contract with your company, that failure will affect your business operations adversely. What rights do you have when another company fails to uphold a contract with your business?

You can invoke any penalty clauses you included

Your contract can protect you from the financial losses you might experience due to delays or non-performance. Some businesses that have had suppliers or vendors breach a contract before will protect their profit margin by including penalties that apply if the other business breaches the agreement. If there are late fees or non-delivery penalties included in your contract, you can send an invoice to the other party along with the letter notifying them of the alleged breach.

You can file a civil lawsuit

If the other party does not respond favorably to your initial attempts to resolve the breach, then you may need to take more aggressive steps. Filing a breach of contract lawsuit does not necessarily mean you will go to court. The majority of these cases still settle outside of court. When you initiate a legal claim, you let the other party know that you intend to aggressively pursue a resolution to the matter, which can motivate them to cooperate with you. If they want to stay out of court, then they may negotiate a settlement with you or fulfill their contractual obligations. If they still don't follow through with their written promises to your company, then a judge may ultimately hold them accountable for the breach and may even award you damages. Understanding what steps you can take in a breach-of-contract situation will help you protect your business and hold others accountable for the impact of their failures on your company.

Can you protect your family recipe?

2022-08-11T10:27:23Z

What started out as a family recipe has now launched into a business venture. Your product is unique and popular, and you want to keep it this way. You’re worried that your market rivals are going to start catching on to your success and trying to poach your recipe. What measures can you take to ensure that this doesn’t happen?

Your recipe may be a trade secret

The recipe that you use has been passed on to your family through generations. It places you at an advantage over all other companies who are trying to make similar products. This means that it could be categorized as a trade secret, and there are ways to protect such insider knowledge. One of the best ways to do this is by using nondisclosure agreements. With this legal instrument, you can ensure that staff, manufacturers and distributors are obliged to keep the information to themselves, or they risk legal consequences.

Your options if someone has stolen your recipe

If someone is using a recipe that is unique to your business, and you’ve taken legal measures to prevent this, then you may be able to hold them accountable. You could issue the offending party with a cease and desist letter, which instructs them to stop any unlawful activities. If they refuse, then there are a host of other legal options open to you. The laws regarding intellectual property can be complex. To best protect your business in this area, it may be in your best interests to seek guidance from someone with a wealth of knowledge in the field.

Important elements to include in your partnership agreement

2022-08-11T10:27:29Z

Forming a business partnership can be complicated. This is especially true if your business has several facets or if you have more than one partner. It’s possible to reduce possible conflicts by creating an acceptable and clear business partnership agreement. This legal document explains how the business will operate and how partners interact and relate to each other. Not all partnership agreements are the same, and some clauses are more important than others.

Individual party’s contribution to the partnership

The contributions each partner makes to a business vary based on the purpose of the partnership. While one partner may provide start-up capital for the business, another may offer operational or managerial skills. Be sure each partner’s contributions are stated clearly in this agreement and the consequences if they fail to live up to these obligations.

Allocations for profits and liabilities

You form a partnership to earn a profit. Your partnership agreement must indicate how the profits you earn will be shared. It’s also important for the agreement to address how losses are handled.

Decision-making rights

When you start a partnership, all parties will have some type of vested interest. Because of this, every partner will have the ability to make certain decisions regarding business operations. It’s important to outline what decisions each partner has in the partnership and include this in your agreement. It will help reduce conflict and questions down the road.

Getting your partnership off to a good start

Creating a partnership agreement with these elements is a must if you want to give your partnership the best start possible. You need to make sure all aspects of the partnership and everyone’s rights are outlined in this document to prevent conflicts and other issues in the future.

What if you and your business partner can’t agree?

2022-08-11T10:27:34Z

You and your business partner have to work together to make decisions for the company. There are only two of you, so you either have to come to an agreement or compromise. There's no way to do something like putting it to a vote. For some companies, this works forever. But many will eventually run into a point where both business partners simply cannot agree on which way to proceed. Since there is no option to vote, as other companies may have, what should you do?

Ideally, your partnership agreement addresses this

One of the jobs of a partnership agreement is to set up some sort of dispute resolution process. The first thing you should do is check this document and use this process to see if it can solve it for you. In some cases, the partnership agreement will stipulate that, in the absence of a path that the two of you can agree on, one person will have to buy out the other person's share of the company. This means that you may get your way, but you may have to help your partner exit the business because they don't want to take it in the same direction. This gives both of you some security because you know you will at least get your money out of the business. If none of this will work in your specific case or if you don't have a partnership agreement at all, then it may be time to consider your legal options. Cases like this often wind up in court, and it's important to know what steps to take and what rights you have.

3 things to look for in a business partner

2022-08-11T10:27:40Z

If you know that you want to start a business but you're interested in doing it with a partner, a critical part of this process is simply picking the right person. Making the proper decision can make or break your company and set it up for success or failure. So what should you look for as you seek out a business partner? Here are three things to consider.

Compatibility

You need someone that you can work with and get along with. There's an old adage that you don't want to pick a business partner that you wouldn't be able to go on vacation with. While you don't necessarily have to take it that far, remember that you have to work closely with this person every day, and you definitely need to be able to get along.

Different skills

You also want to seek out someone who has different skills that you don't possess. The idea here is that you need a well-rounded business. You may be lacking certain skills, but your partner can complement those skills and make sure that the business still can address all areas. If you both have the same skills, there's just too much overlap and your business still may be lacking something important.

Passion

You also just need someone who cares about the business as much as you do. If you get the sense that they don't have the same goals or aren't going to work as hard, even if they have excellent skills for the job, they might not be the right person. Once you find the right business partner, you need to consider how to set up your business, what structure to use, how to create a partnership agreement and much more. Be sure you know what steps to take to protect your company's future.

Will your noncompete agreement hold up in a California court?

2022-08-11T10:27:45Z

How is your company’s noncompete agreement? Is it airtight? Or is it overly broad and likely to get tossed out of civil court if challenged?

To better understand the situation, let’s address three aspects of covenants not to compete.

Prohibit employees from competing within certain parameters

Noncompetes can state that workers for a company that made gizmos cannot use their former employers’ knowledge, training and trade secrets to open their own gizmo factory. Noncompete agreements can also specify they may also not go to work for your biggest gizmo competitor. So, your noncompete could contain language specifying their not using “gizmo” in any company name or not working for any gizmo-makers within 50 miles for the three years following the last day worked for your gizmo company.

However, it would be unreasonable to say that your former worker couldn’t work for or open their own gizmo company up in Montana for the next 30 years.

Can’t poach your workers, clients or suppliers

Your noncompete agreement could prohibit fired workers or those who voluntarily quit from taking supplier and client lists for their own business interests. They can also be forbidden from hiring their former coworkers, at least for a reasonable period.

Can’t take confidential information contained in non-disclosures (and otherwise)

Work product, secret formulas, marketing strategies and additional information considered proprietary to a company’s brand is off-limits – likely forever.

Make it strong – but not unfair

If a noncompete agreement in an employment contract is overly broad, too vague or otherwise unfair to the former worker, it can get tossed out of court. Working together with legal counsel can clarify the breadth and scope of your noncompete agreement so that it best protects the interests of you and your company.

How cheap are fake products?

2022-08-11T10:27:50Z

If someone is making fake products based on your designs, they are stealing your intellectual property. They're also attempting to steal your sales. There are a lot of problems with this, from the loss of those sales themselves to the impact that the proliferation of fake products could have on your brand's reputation. If people know that fake products are common, will they assume that your products aren't as good? It can devalue the reputation you’ve created. But how cheap are these products going to be? If someone's making the same product for 10% less, are they really going to get any of your sales? What's the important price point?

Saving 50%

As you can probably imagine, the big thing that matters to those who buy fake products is just how much they have to pay. The number one reason that they're looking for these products or enticed to buy them is simply that they feel like they can get them for less money. Although the total savings can vary from one type of product to the next, along with the consumer confidence in fake products, it has been found that most people want to save about 50%. When the price of the fake product gets to that point, they're more likely to buy than if it's higher. They would still save money if it was 25% off, for example, but they may not be willing to risk buying a fake product that has subpar quality. Once they know that they're saving half, they're more likely to take that risk.

So what can you do?

It's frustrating to be facing something like this. You put a lot of time, energy and money into developing these products. These are your designs and no one else has the right to sell them, and yet it is happening. The good news is that you do have legal options. Under intellectual property laws, anything that has been patented or trademarked and is clearly owned by another business cannot be used by a third party. This means you can take legal action not only to put a stop to the sale of these fake goods, but you may also be entitled to monetary compensation for the sales that you have lost or the damage that was done to your brand.