Four Intellectual-Property Questions to Answer before Opening Your New Business

You might be one of the many who recently lost a job. And you might be one of the many who’s turned lemons into a lemonade stand and parlayed unemployment into that new business you’ve always dreamed of launching. When you’re starting your new business, you’re more likely thinking about budgets and net profits than trademarks and copyrights. But an important part of your business is its intellectual property, and considering your intellectual property up front can save you money and trouble down the road. Read on for four questions every new business owner should answer before displaying the “open” sign.

Is your business or product name infringing someone else’s rights? People sometimes believe that, because they were able to register the domain name containing their new business or product name, the name is available as a trademark, too. Not necessarily. Domain-name registrars don’t conduct a trademark check when they rent you a domain name. Before you invest time and money into your new name, you should make sure someone else wasn’t using it first, or a name similar to it, in the same or similar category of goods or services. You can search the Internet and the database of the U.S. Patent and Trademark Office yourself, but a trademark-infringement lawsuit can be lethal to a business, so I encourage you to invest in a trademark attorney to conduct a comprehensive analysis of the trademark for you. And, even if no one else is using the mark, you’ll want to consider whether the mark is protectable as a trademark. For example, if you call your new bank “Bank,” you can’t monopolize that term, because it’s generic. But if you come up with a unique name for your goods or services, you’re more likely to be able to protect it as a trademark.

Do you own your website? Just because a website designer has created a website for you doesn’t mean you own the copyright to the website. You need to make sure this is the case — in writing. If you hired the designer as an independent contractor, the designer owns the website design unless specified otherwise in a writing signed by the designer. Doublecheck the designer’s agreement to make sure it specifies that you own the copyright to the content. No contract? Prepare a simple writing and ask the designer to sign it. And even if the designer is your employee, it’s a good idea to stipulate to your ownership in a signed writing or a “work for hire” agreement.

Do you own your work product? Say you’ve opened a new restaurant and hired someone to design your menus or write your employee manual. Who owns the copyright to the menus or the manual? It depends. If the person you hired was an employee acting within the scope of his employment, you can argue you own the material as a “work for hire.” If the person was an independent contractor, you won’t be able to make this argument unless you have a signed writing from the contractor transferring the copyright to you. And even if the person was an employee, he could argue later he did the work outside the scope of his employment. Why take the risk? Get anyone who will be creating copyrighted works for your business to sign a work-for-hire agreement specifying that the copyright to such works belongs to you.

Do you have permission to use others’ names or photos to peddle your wares? If not, don’t use them. Each person has a “right of publicity,” or the right to use her name, photograph, and likeness for commercial purposes. Want to use that photo of your Aunt Jane cooking fried chicken on your restaurant menu? Or that country star’s name to sell your hand-crafted guitars? Get their permission first. And — say it with me — get it in writing.