Need a Trademark: 3 Simple Questions to Ask Yourself

In light of my previous post on the importance of registering your trademark, I thought it best to walk you through the initial registration process. The U.S. Patent and Trademark Office (USPTO) website wants every potential registrant to ask themselves the following questions, prior to registration.

3 Simple Questions To Ask Yourself

(1)   What is the mark that you want to register?

• You can apply for a standard mark.

 A Standard Character mark is the most flexible of all mark depictions. It grants protection to the wording itself, without regard to the font, style, size, or color.  Although the mark looks like plain typed wording when registered, a Standard Character mark means that you can change how you display the wording over the life of the trademark. Must See Video: http://www.youtube.com/watch?v=b8wJ4gVa2yk&feature=youtu.be) 

• You can apply for a stylized mark or design mark.

A stylized mark is for words that appear in a particular font or color scheme. With a design mark you protect words combined with a design or protect a design element(s) only. 

(2)  What are the goods/ services in connection with which you wish to register the mark?

This is probably the most important part of your application.  Failure to indicate the right good or service in your application will result in your application being rejected. 

Use this ID Manuel (http://tess2.uspto.gov/netahtml/tidm.html) to find your good or service.

 (3) Are you will be filing an application based on actual existing use of the mark or a bona fide intention to use a mark in the future.

If you are already using your mark in commerce, then you will file your application based on actual use.

A bonafide intent to use a mark arises when you have more than an idea but your idea is less than market ready. If there is scope for you to use your mark in the future in interstate commerce, you can file an intent to use application. 

This is only gets the ball rolling…..there is more to a trademark application than just these three questions. However, if you can successfully answer these questions, you have won half the battle.

Trademarking Your Social Media

Everyone is rushing to get on the social media bandwagon. Don’t get me wrong, I recommend using social media to promote your business as well, especially when you are starting off,  but don’t forget – the law never fails to follow you. 

Follow these 2 simple steps before proceeding:

1. Do a trademark search

Even before picking a name for your website, you SHOULD do a trademark search. You don’t want your website to named using words forming part of a registered trademark. Remember, registering your domain name is easy… however, if your domain name contains a registered trademark, you may be forced to take your website down. Any buzz you created with a recognizable company name just went down the drain. 

2. Do a Social Media search

As you begin to promote your business using Twitter, Facebook, Linkedin and Tumblr; you could run in to a host of issues. First, if someone has their company name trademarked, they have the right to object to use of their trademark on your newly created Twitter, Facebook, Linkedin or Tumblr page. All a trademark owner needs to do is write to Twitter or Facebook, who will then take the necessary action to help the trademark owner reclaim rights to the Twitter or Facebok page. The trademark owner may not even want to have a company Twitter page, but he definitely has the right to, given his registered trademark. 

Even if a federally registered trademark does not exist, you still face the risk of a popular twitter or facebook page that was created long before you started using your company name. Until you register your trademark, you don’t have rights to these social media pages.

Register your trademark first then proceed to market your business.

A free trademark search can be conducted using the US Patent and Trademark Office’s Trademark Electronic Search System (http://tess2.uspto.gov/bin/gate.exe?f=tess&state=4010:tnhit1.1.1)

You can also use Trademarkia – it’s a free service and they do a social media search for you!  All you have to do is enter your proposed company name and Trademarkia pulls out different social media profiles that are currently using the name entered. (http://socialmedia.trademarkia.com/socialmedia/)  Bloomberg featured Trademarkia in 2011.  You can find that article here - http://www.bloomberg.com/news/2011-05-31/trademarkia-upends-trademark-filing-process-angers-ip-lawyers.html

At the end of the day, Remember: your social media campaign will be largely dependent on how early you register your trademark.

 

 

 

 

Is Your Foreign LLC “Doing Business” in California

An LLC registered outside the state of California is a foreign LLC. Often, businesses register and form their LLC in Delaware but conduct business throughout the U.S. If your LLC is “doing business” in California, REGISTER your LLC with the California Secretary of State and pay your annual franchise fees.

 What Does “Doing Business” In California Mean?

“Doing Business” can mean different things under different statutes.

A. “Doing Business” Under The California Corporations Code

The California Corporations Code uses the term “to transact intrastate business”. This is defined as “entering into repeated and successive transactions of its business in this state, other than interstate or foreign commerce.”

The Code provides a list of activities that DO NOT amount to “transacting intrastate business” but fail to categorically list those activities that do amount to “transacting intrastate business.” (See California Corporations Code §17001)

A few activities that do not constitute “transacting intrastate business”:

1. Being a member or a manager of a California LLC or a foreign LLC,
2. Holding meetings of managers or members or carrying on any other activities concerning the LLC’s internal affairs;  
3. Maintaining bank accounts; or
4. Securing or collecting debts or enforcing mortgages

One way of understanding this section is through case law. For example, In Charlton Silk v Jones,[1] the Court did not consider an agent’s solicitation of orders for goods in California where fulfillment was outside California as amounting to “transacting business” in California. This is just one example of how the court conducted its analysis. Each case should be analyzed based on its own individual facts.

Summing Up:

There is a very fine line separating those activities that do amount to “transacting business” against those that do not. Consult a business lawyer before engaging in California activities. 

B. “Doing Business” Under The Revenue and Tax Code

Is your LLC actively engaging in any transaction for the purpose of financial or pecuniary gain or profit? 

If you answer YES, your LLC is considered to be “doing business” under the Revenue and Tax Code. Remember, that even an isolated transaction amounting to pecuniary gain or profit will be considered.

As per the code, a taxpayer/LLC is considered to be “doing business” if it is organized or commercially domiciled in California. An LLC is commercially domiciled for taxation purposes at the place where realistic control of its functions is centered. That is, where does your business conduct most of its activities?

If such realistic control is exercised in California, and the LLC engages in substantial operational activity in that same state, that jurisdiction will be considered to have furnished the corporation with the majority of its protection and benefits, and accordingly have constitutional power to tax the corporation income from intangibles.[2]

How does this differ from to the Corporations Code?

Under the Revenue and Taxation Code, LLCs are considered “doing business” in California if any of the LLC’s members, managers, or other agents conducts business (as defined above) in California on behalf of the LLC.  However, the Corporations Code does not consider these activities as amounting to “doing business”. 

 Final Thoughts?

A state may have jurisdiction over a foreign LLC by virtue of its local activities for purposes of service of process, whilst lacking the power to tax or regulate the same LLC.[3] Therefore, while one statute might consider your LLC as “doing business” another statute may not. 

Similar rules apply in different states. Consult your own states law before proceeding.

 

 

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[1] Charlton Silk Co. v. Jones, 190 Cal. 341 [212 P. 203]

[2] California Franchise Tax Board, Legal Ruling 089

[3] Fielding v. Superior Court, 111 Cal.App.2d 490, 494 [244 P.2d 968]; Liquid Veneer Corp. v. Smukler, 90 F.2d 196; Thurman v. Chicago, M. & St. P. R. Co., 254 Mass. 569 [151 N.E. 63, 46 A.L.R. 563].

Certificate of Origin: What You Need To Know

A Certificate of Origin grants duties and tariff exceptions under a preferential trade agreement to an importer. To ensure preferential treatment, a Certificate of Origin GSP Form A should be included with the export documentation.[1]

The beneficiary countries are responsible for supplying the Form A. It is normally available at the government foreign trade office or the Chamber of Commerce of the beneficiary country.

The key to a certificate of origin is determining the place of manufacture. 

For export of products sufficiently worked or processed, the countries of destination have a different specific entry letter. For example:

• Shipments to the U.S.A. from recognized associations of countries such as ASEAN countries, enter the letter “Z” in Box 8 (the ‘Origin criterion’ field), followed by the sum of the cost or value of the domestic materials and the direct cost of processing, expressed as a percentage of the ex-factory price of the exported products, for example “Z” 69.5%
• Shipments to the U.S.A. from independent beneficiary countries—single country shipments—such as India, enter the letter “Y” in Box 8 (the ‘Origin criterion’ field), followed by the sum of the cost or value of the domestic materials and the direct cost of processing, expressed as a percentage of the ex-factory price of the exported products, for example “Y” 52% (http://www.export.gov)

Why A Certificate of Origin?

 

A Certificate of Origin helps custom authorities determine the source of a good. If the source of the good is a preferential trading partner, duties are almost completely eliminated. Moreover, certain countries have protected Geographical Indications (GI) and therefore identifying the source of goods becomes important for intellectual property reasons. For Ex: Companies desiring to label their bottles  with the name “Tequila” have to manufacture their tequila in Mexico only, after which they can use the label “Tequila” on their bottles. 

 

NAFTA is currently working towards reducing Certificate of Origin requirements.

 

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[1] Sample: http://www.unctad.org/sections/gsp/docs/gsp_form_a_en.pdf

Chinese Customers = Chinese Salespersons?

My recent foray to South Coast plaza had me thinking one thing – We Have A LOT of tourists!

Now, South Coast Plaza is all the way in Orange County – it’s not hollywood, it’s definitely not Universal Studios — Why so many tourists?

My Conclusion: Great Luxury Brands & Life Size Malls

It’s not everyday I muster up enough courage to walk into a Louis Vuitton store but window shopping at South Coast Plaza paved the way. The atmosphere at the store is great – overtly enthusiastic salesmen (woman); dressed in their finest.

But what really got me thinking was the alarming number of Chinese and Middle Eastern shoppers. Naturally you might assume that I am just jumping to conclusions and these are actually Chinese – American and Middle – Eastern American shoppers, after all, this is South Coast Plaza we are talking about! If not for their native tongue, I would have assumed otherwise.

It makes sense – China and the Middle East are growing economies. Middle class disposable incomes’ are increasing by the day.  What is most impressive is the fact that both these country consumers KNOW their brands. No longer do knock – offs do justice! (pun intended) Consumers want the real thing. They are willing to drop a lot of money for an original Louis Vuitton. i.e. Original = Status. 

(Fun Fact: An Intellectual Property lawyer once told me that many luxury brand companies allow for knock offs to enter the market solely to create buzz for a new product release. Sometimes, they even allow for genuine products to be smuggled for the sake of buzz. That’s only $80,000 lost right?)

Question:

Do you think sales would double if there was a salesperson who spoke Cantonese, Mandarin or Arabic?

Answer:

Yes.

My Reasoning:

As I stood waiting at the store for someone to help me — a rather lost chinese couple walked in. I am confident they had looked at the Louis Vuitton catalog (assuming they have one) prior to even walking into the store. They knew exactly what they wanted and they did not hesitate to pick out the two bags they were looking for. As the American saleswoman approached them with her friendly smile, this couple looked up once and continued to talk to one another. Finally, the chinese woman selected a bag but still looked rather confused. The bag she did eventually pick was the smaller of the two and I am therefore assuming was lesser priced. The american woman had no conversation with them – she just stood there watching until the couple placed the bag in front of her and gestured payment.

I believe this whole situation would have been different had there been a chinese salesperson. She would have formed an instant bond with the couple – she would have guided them through the selection process, possibly suggested other higher priced bag options and even convinced them to buy the higher priced bag of the two selected bags, if not both. I am going to take this one step further and conclude that the chinese couple would have in fact listened to this salesperson.

As human beings, we naturally form greater bonds with people from the same country and background. We trust people from our own country over others. We are definitely more convinced to buy one product over another if justified by a country mate. A common culture unites us and for someone in a foreign land, that common culture could go a long way.

So I guess the lesson to take from this is: Once you are done figuring out your CUSTOMER, Hire Your SALES TEAM. (Not the other way around!)

 

How Important Is A Company Dress Code?

I know I often go back and forth between international business issues and domestic business issues, but I am a young lawyer with opinions — can you blame me?

As I sit down to write this post, I am glad to say I am wearing pajamas so asking the question “how important is a company dress code?” seems unfair but I think an important question to consider for your business.

My cousin owns a very successful equipment leasing company based out of Irvine, California. All his work is done over the phone and very rarely is he meeting clients outside the office. So when he decided to one day send a serious (no one took him seriously though!) dress code related email to his staff, employees were surprised. To sum up his email — he decided to give an employee bonus of sorts to anyone who came dressed in a suit Monday morning. His reasoning was fairly simple, “if you look the part, you feel the part.” Believe it or not, everyone showed up in a suit, my cousin included. Fast forward six months later – everyone still shows up in a suit and business is doing great!

You are kidding me right? A dress code helped make a business profitable?

Well, I am not saying having the dress code was the main contributing factor, but it definitely did bring a sense of seriousness to the office. A more business like atmosphere was created – people felt more important when they were in a suit. Yes, he played off of human psychology but it worked!

Companies that do a lot of their business on the field have their employees adhere to a dress code as well. All employees have company logo-ed polo shirts, CEO included. So when they walk in to work, not only is there a sense of uniformity maintained, there is a sense of pride created in owning a company shirt.

And as I like to always say, YOU CAN’T GO WRONG WITH FREE PUBLICITY!

What has you experience been with a company dress code?

Assessing the Risks of “Doing Business” in a Foreign Country

Why Do U.S. businesses hesitate to take their business abroad?

My goal with this blog post is to touch on a few issues that foreign businesses often deal with while considering whether they wan to “do business” abroad.

Assessing Risk: Two Important Factors

1. Foreign Investment Climate

A recent Indian Supreme Court ruling on 2G Spectrum (that is, the allocation of mobile satellite space to different mobile providers so that they can bring mobile services to consumers) shocked the nation.

As articulated by David Pilling of the Financial Times (http://www.ft.com/intl/cms/s/0/a39f14bc-572a-11e1-869b-00144feabdc0.html#axzz1ma6meBUi), the decision stripped Norway’s Telenor, Russia’s Sistema and United Arab Emirate’s Etisalat of their 2G licenses. What is disturbing about this decision is the fact that all three mobile operators had followed the procedure laid down by the government in winning their licenses, only to be taken away.  It is unclear whether companies will be compensated for expropriated licences.

This uncertain foreign investment climate is a major concern for U.S. companies. Will they be penalized after having invested $100,000 in India and told that can no longer operate?

Time will only tell how foreign investment issues are resolved in India. India has recently considered letting Pakistani businesses invest in India, which seems to be a step in the right direction for foreign investment and perhaps diplomacy.

2.  Level of Corruption

For U.S. businesses, operating in a corrupt foreign country has severe consequences. If either their U.S. personnel or foreign personnel engage in any form of corrupt activities abroad, the U.S. company will be subject to large fines. Sometimes, one of the elements to “doing business” is bribing a public official — So ask yourself, is it really worth it?

Ironically, I am all for an uncertain foreign investment climate if it means rooting out corruption!

What suggestions do you have for businesses who want to tackle these issues?