Can You Afford to be an Entrepreneur?

Money Unfolding by CreditCafe.com from Flickr (Creative Commons License)

When I decided to launch this law firm, a good friend and fellow entrepreneur/lawyer warned me: “You’re going to need 6 months’ worth of money and 12 months’ worth of patience.” He was right. Fortunately, I had nearly 3 months from deciding to opening my practice until our first day in business, which gave me time to research and formulate my offerings and tap into community and professional resources to get my business off the ground.

Other entrepreneurs aren’t that lucky. They may not have the time and/or money to consult counsel prior to launching a new venture. Even on a condensed time frame or on a shoestring budget, your legal needs should be part of the discussion and plan.

Full-Time Venture Needs Financial Backing
If you want your new venture to be your full-time job, you need to be prepared for the potential financial strain that comes with that undertaking if you don’t have a spouse or other income supporting you in the meantime. You may have the gift of time, but you can only operate your business as long as you have income or savings to cover your bills. I don’t recommend jumping into a new venture without some type of financial safety net.

For entrepreneurs starting with a side hustle, you have the opposite issue. Your regular job can pay your bills while you develop your business, but it limits how many hours you can work. And depending on your circumstances, you job may not provide much money to put towards your business after paying your bills.

Make the Business Fund Itself
While every business needs some seed money to get started, make your business fund itself. When you decide to start a business, make a list of all the services, equipment, and supplies you think your company needs. Then step back and categorize each item as “Must Have” or “Nice To Have.” Ask a trusted colleague or friend to review your list and challenge you on what you need.

Many businesses don’t need much to get started. When I started this firm, I only needed an LLC, client contract templates, computer, scanner/printer, website, email address, phone number, and business cards. I gave myself a limited budget for supplies, bar dues, and to pay for my LLC and my accountant, and after that, I didn’t buy anything for the business until the business could afford it. (Even if my personal account could afford it, I made myself wait until the business could afford it.) It forced me to be scrappy, creative, and thoughtful about how I spend my money. It’s something I recommend to other entrepreneurs, including seeking out low-cost and free options when appropriate.

Prioritize
I regularly receive emails from people who need help with the legal side of starting a business, and some of them claim that they can’t afford an hour of legal services. Sometimes I wonder if these entrepreneurs didn’t do any research into the expected costs of a consult, contract, or trademark when creating their business budget. (When people can’t afford my firm, I’m happy to provide referrals to other options and/or tell them what things they can do themselves – like filing an LLC with the Arizona Corporation Commission. The forms and instructions are online.)

A fellow entrepreneur suggested that these potential clients don’t see value in paying for quality legal services. That sounds plausible. Many new entrepreneurs are focused on their expected success that they don’t want to ponder the what-if scenarios. In many ways, quality contracts and other legal services protect you when things go wrong. You often don’t need to rely on them when things go right.

My recommendation for all new entrepreneurs is to meet with a business accountant and a lawyer to make sure you’re starting out on the right foot, and that you understand the legal implications of your venture. If you have questions about business needs, you can contact me directly or connect with me on TwitterFacebookYouTube, or LinkedIn. You can also get access to more exclusive content that is available only to people on my mailing list, by subscribing here.

Richard Prince’s “New Portraits” – Art or Infringement?

Photo courtesy of Gagosian via Gothamist

Photo courtesy of Gagosian via Gothamist

A few people sent me links to articles about Richard Prince’s art show called “New Portraits” at Gagosian gallery. He took screen shots of other people’s Instagram photos, added one comment, and is selling them for $100,000 each. From what I’ve read, he never asked any of the Instagram users for permission to use their images and they aren’t getting any of the profits from the sales.

Apparently Prince has done things like this before – taking others’ work, altering it, and selling it. According to reports, he’s been challenged in court and won in previous situations. (Fair use is a portion of the copyright law that allows others to build on other’s work in original ways, like adding commentary, creating a parody, or making new artistic statements.) Prince’s history of being victorious in the courtroom might make these Instagram users hesitate to bring a lawsuit against him now, but I’m not convinced they would lose.

There is no cut-and-dry, black-and-white mathematical equation that will definitively show whether what a person did constitutes fair use or copyright infringement. That is up to a court to decide based on the merits of the case. The court can consider any evidence it wants in these situations, but there are four main fair use factors. I created an acronym of the fair use factors when I spoke at Phoenix Comicon last year on fan art and copyright. The acronym for the fair use factors is PAIN:

P = Purpose and character of your use

A = Amount of the original used

I = Impact on the market

N = Nature of the work you copied

Here’s my take on how the fair use factors apply to this situation:

  • P (Purpose): Prince used others’ work for a commercial purpose (to make money) and didn’t transform the originals except to add a single comment to each one and create a collection. (Does not favor Fair Use)
  • A (Amount): Prince took screen shots of each user’s Instagram profile and used an entire photo. (Does not favor Fair Use)
  • I (Impact on the market): As far as I know, Prince is the only person currently selling these images, but the fact that he’s selling them could impact the original artists’ ability to sell their work. The fact that Prince is selling these prints doesn’t change whether these images are available to view the original images online. (Weak argument for finding Fair Use at best)
  • N (Nature of copied work): Prince took images from a social media platform and created “art.” There might be an argument that the audience that would seek these images out online is different than an audience who would be interested in Prince’s work. (Weak argument for finding Fair Use.)

Do I think this is fair use? No, but I’m not the judge in this situation. We won’t know for certain until and unless the Instagram users’ whose photos were used in Prince’s work bring lawsuits against him for copyright infringement. I suspect many or all of these photos are “selfies” so these individuals may have a claim against him for commercializing their images without consent as well as a copyright infringement case.

Remember, fair use is a defense, not a permission slip. If these users sue for copyright infringement, Richard Prince would have the burden of showing that what he did was sufficient to qualify for fair use.

Fair use cases are usually complicated. If you want to chat more about fair use and copyright, please contact me directly or connect with me on social media via TwitterFacebookYouTube, or LinkedIn.

More articles about this situation:
Artist Steals Instagram Photos & Sells Them For $100K At NYC Gallery
Richard Prince Sucks

Clothing Line Intellectual Property

Geek & Graphic T-shirts by nicolas 'nclm' from Flickr (Creative Commons License)

Geek & Graphic T-shirts by nicolas ‘nclm’ from Flickr (Creative Commons License)

Recently I’ve had a few questions about intellectual property related to starting the clothing line or T-shirt business. These people asked me how they can protect their work. Is it trademark? Is it copyright? The answer is, it’s probably both!

A trademark is anything you put on your goods or services to differentiate them from the competition. And a business can have several trademarks. They are your company name, brand names, slogans, logos, etc. Likewise, a clothing line can have several trademarks including your company’s name, the name for each collection, slogans, and your logos. The triangle patch with the question mark on it is a trademark for Guess jeans as is the alligator logo for Lacoste brand clothing.

Before you select the trademarks you want for your clothing line, be sure to check the U.S. Patent and Trademark Office (USPTO) database to verify that the trademark you want has not already been claimed by another company in the apparel industry or a related industry. If a trademark has already been registered that company could stop you from entering the marketplace using a trademark that is confusingly similar to theirs. (See the story of The North Face v. The South Butt for an example.)

Your clothing line may also contain several copyrights. If you design T-shirts, you will have copyright rights in each design. You may also have copyright rights in your logo. You have rights in what you create the moment you create it; you don’t have to register them with the U.S. Copyright Office to obtain your rights (however, you do have to register if you want to sue for copyright infringement.) If your design is simply a short phrase on a shirt, it may not be copyrightable because short phrases are often not original enough to warrant having a copyright. Depending on what your phrase is, if you’re using it as a slogan, it could be a trademark.

If you outsource the creation of the designs for your clothing or the creation of your marketing materials, make sure you have clear written contracts with these independent contractors to ensure that you own whatever you have hired them to create. Otherwise you may find yourself in a situation where the artist owns the intellectual property rights in what they created, and you merely have a license to use it.

As you can see, determining what intellectual property you have may be a complicated question. It’s best to consult an intellectual property attorney to assist you in identifying your intellectual property and determine the best strategies to protect it, which may include registering your copyrights and trademarks.

If you have any questions about copyrights or trademarks, feel free to shoot me an email or connect with me on Twitter, Facebook, or LinkedIn.

Exciting News: I Joined Venjuris!

My Business Card for VenJuris!

My Business Card for VenJuris!

A few months ago I made the important decision to join a law firm in Phoenix called Venjuris. The firm used to be Venable Campillo Logan and Meaney but they recently rebranded. I’m excited to combine forces with them. I’ve been getting settled in to my new office during the last two weeks and getting hooked into their computer file and billing system. I’ll be seeing clients again starting next week. Check out my new bio – I’m blonde!

Will the Type of Work I Do Change?
Not really. I will continue to work on copyright and trademark matters; website terms of service; business formations; contract negotiation, drafting, and review; and offer consultations for clients who need help with related to business, intellectual property, social media, and flash mob law issues.

What do my New Colleagues Do?
Venjuris is mostly an intellectual property firm. They do patents, copyrights, trademarks, and licensing. We also have an attorney who does intellectual property litigation. They also do a lot of international intellectual property work. They’re all awesome people. (I wouldn’t have joined the firm if they weren’t.)

What will happen to Carter Law Firm?
Nothing! I will continue to do professional speaking and writing under Carter Law Firm, but all new client matters will be handled under Venjuris. I’ll continue to write blog posts and make videos for Carter Law Firm on at least a weekly basis and I’m putting more energy into public speaking. I have gigs lined up for San Francisco, Las Vegas, and London in the first half of this year and, of course, I’m doing The Undeniable Tour starting in March.

I will be revamping this website to shift the focus to speaking, writing, blogging, and vlogging during the next few weeks (maybe months). But in terms of what I do and how I do it, not much will change.

Where’s my New Office?
1938 East Osborn Road, Phoenix, AZ 85016

Will Rosie Still Come to Work with Me?
Yes. For now, she’s allowed in the office one day a week. Hopefully my colleagues will see that she’s not a distraction and actually helps me work better and will let her come more often.

Want to See my New Office? I made a Video!

How can you Contact Me?
If you’re interested in hiring me for legal work, contact me at rcarter@venjuris.com or 602-631-9100.
If you’re interested in hiring me to write an article or post for you or speak at your event, contact me at ruth@carterlawaz.com or 602-644-1701.

Email is usually the fastest way to reach me.
Of course, you can always connect with me on Twitter, Facebook, and LinkedIn.

Can You Trademark a Hashtag?

Rémi Beaupré, Meme Snippets, 2012 by Retis from Flickr (Creative Commons License)

Rémi Beaupré, Meme Snippets, 2012 by Retis from Flickr (Creative Commons License)

I spoke at TechPhx on Social Media Horror Stories from the Legal Trenches. One of the stories I told was Turner Barr’s experience with having his blog, Around the World in 80 Jobs, essentially shut down because another company registered the trademark in the same name. At the end of my talk, someone asked if you could register the trademark in a hashtag.

A trademark is the words, slogans, logos, colors, packaging, etc., you put on your products that differentiate you from your competition. If you don’t register your trademark, you get the exclusive right to use your marks where you’ve established your market. When you register your trademark, you get the exclusive rights to use your marks on your type of products everywhere in the U.S. If you want to know more about trademarks, check the story behind the Burger King trademark.

Hash Tags are Like Snow Flakes by cambodia4kids.org from Flickr  (Creative Commons License)

Hash Tags are Like Snow Flakes by cambodia4kids.org from Flickr (Creative Commons License)

Just like you can register a trademark in a company name, product name, or slogan, you can register a trademark in a hashtag. The first rule is your trademark can’t be the generic product. If you own a coffee shop, you can’t register the trademark #coffee. If the U.S. Patent and Trademark Office (USPTO) let you have that, you could stop your competition from calling their coffee “coffee,” which would be very confusing. You could register your business name (i.e., #DansCoffee) or a slogan like #GreatMornings or #WheresMyMug.

The second rule is you can’t claim a trademark that your competition is already using. If you were a soda manufacturer, you couldn’t register the trademark #Coke or #CocaCola unless you were the Coca-Cola Company.

Another thing to keep in mind is when you register your trademark, you have to declare what you’re claiming as your trademark and what goods or services you’re using it on. You only get the exclusive rights to your mark in your arena of goods. You can’t stop another company from using a similar trademark on their products as long as they are completely unrelated.

Registering a trademark allows you to prevent your competition from using your trademark or something similar to it. It doesn’t give you the ability to stop people from using your slogan in their everyday lives. For instance, the Williamstown Theatre Festival could register the trademark in the hashtag #WTF which would allow them to prevent other theatres from using the same hashtag to promote their products, services, and events, but it would allow them to stop everyone who uses it on Twitter to mean “What The Fuck.”

Registering a trademark is a long process. It can take months for the USPTO to look at your application and then there may be several rounds of communications between you and the USPTO before your trademark is approved. If you want to claim the exclusive right to use your desired hashtag, it should be for something that you’re planning on using for a long time.

So can you register a trademark in a hashtag? Yes. Should you register your hashtag as a trademark? It depends on your situation. That should probably require a joint meeting with your marketing staff and your lawyers. If you want to chat with me about this or any other topic, you can connect with meTwitterGoogle+FacebookYouTubeLinkedIn, or you can email me.
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Please visit my homepage for more information about Carter Law Firm.

Phoenix Comicon Badge Art Being Ripped Off

Phoenix Comicon 2012 Badge Ruth Carter

Picture from my 2012 Phoenix Comicon Badge

I recently wrote a post about copyright, fair use, and fan fiction and I did an analysis of Marty Freetage’s artwork that was on the badges for Phoenix Comicon this year. It was an awesome parody of Angry Birds and The Avengers. Parodies are generally permissible under the fair use doctrine and I thought Marty’s work was original enough that the copyright holders for Angry Birds and The Avengers probably wouldn’t come after him or Phoenix Comicon for copyright infringement.

Shirt on Gabilife.com

This week I was surprised to see a t-shirt for sale on Gabilife that looks exactly like Marty’s picture. A lot of people on Facebook posted that Gabilife used Marty’s work, changed the background, and stuck it on a shirt. Whoever owns the copyright in the badge art has good reason for believing that their Gabilife is infringing on their work.

This story gets more complicated by Gabilife claims to be a company in India. It raises the question of what are the possible recourse options to make them stop selling the shirt. If they have a presence in the United States, whoever owns the copyright could go after Gabilife for infringement as if they were a US-based company.

Gabilife’s terms state “Pursuant to Title 17, United States Code, Section 512(c)(2), notifications of claimed copyright infringement under United States copyright law should be sent to Service Provider’s Designated Agent.” I searched the agent list on the US Copyright website and I didn’t see a listing for Gabilife or Gabi. That makes me wonder if they just copied someone else’s terms and conditions without registering an agent.

If owned the copyright for the original badge art, I’d register the copyright in the artwork immediately. A copyright holder maximizes their options for recourse if they register their copyright within 3 months of publication or 1 month of learning of the infringement, whichever happens first. If this art hasn’t been registered, that window could still be open.

If the work was registered in time, I’d sue them for copyright infringement if it was a US company. If the company doesn’t do business in the US, there’s probably no point to suing them. If suing them would be pointless, I’d either send a DMCA takedown notice to the email address listed on their site and to their snail mail address. If I wanted to be really bold, I would send them a licensing agreement and a bill that states that they agreed to the licensing agreement by using the artwork without permission.

I wouldn’t expect them to pay me, but it would be validating.

So what is the take away message?

  1. Register your copyrights shortly after creating an original work, especially when you’re as awesome as Marty.
  2. If you suspect someone is ripping off your work, contact a copyright attorney in your community (like me!) to help you strategize and execute your response.

Feel free to connect with me via TwitterGoogle+Facebook, and LinkedIn.
Please visit my homepage for more information about Carter Law Firm.