The 2010 Women Grow Business Boot Camp

Sponsored & hosted byNetwork Solutions and Steptoe & Johnson LLP

June 19, 2010, Washington, D.C.

Overview of Program

• Intellectual Property and Social Media

• Employment and Contract Issues

Intellectual Propertyand Social Media

• Intellectual Property Basics

• Trademarks 101

• Social Media for Small Businesses

Intellectual Property Types

• Trademarks

• Patents

• Copyrights

• Trade Dress

What is a Trademark?• A trademark is a mark, name, word, or symbol

used to identify goods and to distinguish them from competitors’ offerings

Example: COACH® leather goods

• A service mark is the same as a trademark, but identifies the origin or sources of services

Example: DELTA® for air travel services

What is a Patent?

• Exclusive right to prevent others from making, using, selling or importing an invention in the United States

• Exists for a limited time only• After expiration, invention becomes part of

public domain and can be made, used, or sold by anyone

Copyright Examples

Literary WorksSoftware

Sound Recordings

Paintings

DesignsPatterns

What is a Copyright?

• Bundle of exclusive rights in a “creative work”

• Includes right to reproduce a work, to create adaptations (“derivative works”), to distribute copies, and to publicly perform/display a work

What is Trade Dress?

• Overall look and feel of a product or its packaging

• Signifies to the consumer that it comes from a particular company

• Sum-total of the appearance of the product or its packaging, including:– Trademarks– Copyrights– Other non-protectable design features

Trademarksand Domain Names

• Examples of Trademarks

• Importance of Trademarks in Business

• Selecting a Trademark and Domain Name

• Obtaining and Protecting Trademarks

• Trademark and Domain Name Enforcement Basics

• Proper Trademark Use

Symbols/designs:

Numbers:

The Many Faces of a Trademark

Words:Walmart®

American Red Cross®

Letters:

The Many Faces of a Trademark

Slogans:

Shapes:

Sounds:

Color:

Importance ofTrademarks in Business

• Represent a company’s good will and reputation• Ensure that your customers and the public associate

your brands with your business• Can be a company’s most valuable business asset

Choosing a Trademark or Domain Name

• When choosing a trademark, consider whether the mark is available:• Is someone else using the same or a similar

mark, especially for the same/similar goods or services?

• Has someone filed an application for or registered the same or a similar mark?

• Conduct a WHOIS search before selecting a domain name

Obtaining and Protecting Trademarks

• Trademark rights in the United States are based on use• Trademark rights are geographical in scope

• If a trademark is used locally, only local rights are granted• If a trademark is used in interstate commerce, national

(federal) rights are granted

• Registration of a trademark• Can apply based on current use of a mark• Can also apply based on a bona fide intent to

use a mark in the near future• Allows time to do market research product

development and regulatory clearance--and obtain rights in a clever mark!

Trademark and Domain Name Enforcement Basics

• Monitor the marketplace• Document situations of confusion• Help co-workers use your company’s marks

properly• Honor and make proper use of other

parties’ trademarks

Proper Use of Trademarks

• Once obtained, trademarks must be protected and nurtured like any other property

• Proper use on all business documents, advertising, displays, packaging, labels, and correspondence is critical to survival

• Use the ®, TM, and SM trademark notices as frequently as possible!

• Make sure that only those with a license to use the marks use them under your control

• DO NOT permit modification of your mark• Monitor the marketplace to make sure others are

not using your mark for similar goods or services

Social Mediafor Small Businesses

• Overview of major platforms and demographics

• Business uses of social media

• Best practices for developers

• Developing and executing a social media policy

• Enforcement in social media spaces

Social Media Platforms

• Facebook

• Twitter

• YouTube

• Mobile Applications

Noteworthy Demographics

• Users are decision-making consumers with strong purchasing power

• Many users are over 35, have children and earn over $100,000 per year

• Tens of millions of visitors a month (or more) for major platforms such as YouTube, Craigslist, Blogger, Twitter

• 30% global growth in social media use from February 2009 to February 2010

Business Uses for Social Media

• Increasing brand exposure

• Improving customer satisfaction and investment

• Search engine optimization

• Application development

Developer Considerations

• Use the proper platforms for your demographic, including geographical considerations

• Consider mobile applications and different types of hardware

• Look to user community to help determine optimal app features and feature updates

• Understand terms and conditions for developers – different and separate from user policies

• Conduct legal review before releasing an app to the public

• Use your trademarks properly and respect others’ trademarks and copyrights

Social Media Policy Basics

• Policy defines acceptable social media behavior for employees, third parties such as licensees and affiliaties, and other third-party users of social media resources

• May include one or more of the following:– Information on philosophy, strategy and presence– Guidelines for employees authorized to speak officially for the

company, including who is authorized to speak.– General employee and affiliate guidelines– Terms and conditions for general user community

• Ensure that policy is designed to suit your organization’s needs – do not copy another organization’s policy

Social Media Enforcement Mechanisms

• Maintain library of information on major platforms’ terms and conditions and enforcement policies

• Facebook has takedown procedures for copyright infringement and other IP infringement, as well as an impersonation reporting mechanism

• Twitter also has copyright, trademark, and impersonation reporting options

• YouTube allows for submission of copyright complaints; videos that violate community guidelines can be flagged

Business Functions

• Finance• IT• Human Resources• Marketing • Development• Office Services/Operations• Legal

Employee or Independent Contractor?

• An employer must generally withhold federal income taxes, withhold and pay social security and Medicare taxes, and pay unemployment tax on wages paid to an employee

• An employer does not generally have to withhold or pay any taxes on payments to independent contractors

Employee vs. Independent Contractor

• Examine the relationship between the worker and the business, including: Behavorial Control: whether the business has the

right to direct or control how the work is done, through instructions, training or other means

Financial Control: whether business has right to direct or control the financial and business aspects of the worker’s job

Relationship of the Parties: how parties perceive their relationship

Behavioral Control

Employee

• Generally subject to the business’ instructions about when, where, and how to work:– When/where to do work– Tools or equipment to use– Workers to hire/assist w/work– Where to purchase supplies– What work must be performed– What order/sequence to follow

• May be trained

Independent Contractor

• Generally business has not retained the right to control the details of the worker’s performance and has given up that right

• Ordinarily uses her own methods

Financial Control

Employee

• May incur unreimbursed expenses

• Generally guaranteed a regular wage amount for hourly, weekly or other period of time (big indicator, even if wage supplemented by commission)

Independent Contractor

• More likely to have unreimbursed expenses

• Often has significant investment in facilities used in performing services (not necessary, though)

• Generally free to seek out business opportunities– Often advertise, maintain

visible location, available to work in relevant market

• Usually paid flat fee (or hourly)• Can make a profit or loss

Type of Relationship

Employee

• Employee-type benefits provided, such as insurance, a pension plan, vacation or sick pay

• Expectation that relationship will continue indefinitely

• If services provided are key aspect of regular business activity, more likely you will have right to direct and control activities

Independent Contractor

• Written contract describing relationship

• Expectation that relationship will continue for a specific project or period

Key Considerations in Hiring• Business Needs• Interviewing/Legal

Requirements– Questions to avoid– Anti-discrimination laws– ADA – accommodation

requirements• Written Job Description

– Key: job-related and avoid inconsistent standards

• Targeting Outreach• Recordkeeping requirements

• Offer Letter• Setting Compensation

Equitably• Fair Labor Standards Act

– Minimum wage– Pay overtime to employees

working more than 40 hrs/wk – Nonexempt vs. exempt

• Other Compensation Issues– Commissions, bonuses,

advances, stipends, benefits• Reference Checks• Background Checks

Employment At-Will Doctrine

• An employee is “at-will” if there is no definite term of employment

• DC, MD, VA and PA recognize limitations to at-will doctrine

• Terminated employees can bring claims on:– Wrongful discharge– Breach of contract– Breach of implied covenant of

good faith and fair dealing– Promissory Estoppel

• Employers can defeat implied contracts by using unambiguous disclaimers:– “No employee will have

contract of employment unless approved by company”

– Use disclaimers in handbooks, offer letters, and similar business communications

Non-competition Agreements

Some employers require employees to sign non-competition agreements to prevent employees from taking their talents and the employer’s trade secrets to competitors

Non-Competition Agreements Cont’d

• Courts will critically examine and likely enforce an agreement that is:– Narrowly drawn to protect employer’s legitimate business

interest– Not unduly burdensome on employee’s ability to earn a living – Not against public policy (e.g. restrictions limiting access to

medical or legal services, innovation of life-saving products)• Courts consider:

– Temporal scope of non-compete– Geographic scope of non-compete– Clarity and unambiguous nature of non-compete

• Silver bullet: Likely enforceable if employer pays employee for duration of non-compete

Alternative: Non-Solicitation Agreements

• Employers should consider Non-Solicitation Agreements as an Alternative to Non-Competition Agreements– Customers:

• Former, Current, Prospective– Employees:

• Former, Current

• Avoiding liability: best practice is to have new hires sign statement that they agree not to disclose to you or use any of the prior employer’s confidential or proprietary information

Surviving With Employees in a Tough Economy

• Getting the right people on the bus• Keep just your core people if downsizing (think of who

you need in the long term)• Cut expenses – including benefits if necessary• Cut your own pay, if possible• Be creative re: what your employees can do • Don’t be afraid of change as you usually cannot survive,

improve, learn, etc., without it!

THANK YOU!

Emily MurrayIP Trademark Coordinator (Non-Attorney)

Steptoe & Johnson LLPPhone: 202.429.1331

Email: emurray@steptoe.com

Kimberly BerryManaging Partner

Berry & Berry, PLLCPhone: 202.955.1100

Email: kberry@berrylegal.com