Though I’m not sure the worst of the pandemic is behind us (we are still on high alert because of these new variants), it seems like more and more people are returning to their regular lives and activities before the COVID-19 storm hit us. Plus, it’s SUMMER!!!! Myself included, those regular activities may also include going back to work, weekend brunches with friends, family barbecues, weekend getaways, and outdoor happy hours. Yay! However, if you own and run a small business like I do, then you probably also need to start thinking about rebuilding your business, catching up with bills, growing your revenue stream, or all three! I recommend setting aside some cherished fun time for a little legal housekeeping. This is a critical time to tie up any loose ends connected to your company’s formation or trademark registrations.
Many of my clients suffered devastating blows to their business and income as a result of the COVID-19 pandemic, but not all is lost. Many freelancers and small businesses, including some of our entertainment, e-commerce, and business clients grew in ways they never expected or anticipated. As a result, freelancers and entrepreneurs, now more than ever, are needing new business contracts in order to hire vendors, contractors, or to strategically partner with other people or businesses to provide a new or wider array of products or services to current and new customers. Other people or businesses who already have these types of contracts in place have been asking us to revisit and tell them what their contracts specifically say about their obligation to continue providing services during COVID-19 or any public health emergency. It is no surprise that many of the contracts we have seen say NOTHING specifically about what happens (i.e., do we keep working, will we get paid, are we obligated to stay committed to this vendor, agency, or contractor, etc.?). If we are lucky, the closest guidance we often see is simply a boilerplate “force majeure” clause that typically does not include the words “COVID-19”, “pandemic”, or “public health emergency”. In recent months, we have spent a great deal of time working with current and new clients to draft and update a range of work agreements – NDA, independent contractor, employment, professional services, and vendor agreements – to say what happens to the work relationship if something like COVID-19 ever happens again.
What is not surprisingly true about freelancers and small businesses who either suffered significant losses or thrived unexpectedly during the pandemic, is that both groups used the downtime from the lockdowns during the pandemic to focus heavily on their digital presence. Many have begun, developed, or increased their online presences exponentially by creating new social media accounts, dedicated business websites. As a result, freelancers and entrepreneurs have also created new or improved brand identifiers, such as new logos, music, or artwork, to promote and sell their product or service. Investing in their online identities has also allowed them to better market their products or services more widely and directly to fans and customers beyond their usual audience, to people around the world.
Despite the efforts and growth I have seen from a lot of freelancers or small business owners (many of whom have since hired us to help them with these business flaws), many of the freelancers and small businesses we consult are either still operating their businesses without solid work agreements in place or having taken the steps to properly register their business entities or brand identifiers (i.e., logos, slogans, jingles, product or service names). Some have started new businesses using a business name or alias (also known as a DBA), without first running a proper, prior search, which risks using a name that already belongs to someone else. Others have chosen business names that were available for registration, but have not completed important steps to complete forming their business entity. For example, if you recently formed a limited liability corporation, or an “LLC”, you (and any partners, or “members”) also need to a) publish an ad about your new LLC in 2 local newspapers and b) draft and sign an operating agreement within 120 days of forming your LLC. If you recently formed an S-corporation, or “S-Corp.”, then you (and any partners, or “shareholders”) also need to a) draft and sign a shareholder agreement and b) complete and sign certain IRS forms like Form 2553, among others. If you have not yet formed a business entity, an experienced attorney can help you determine which structure is best suited for your particular business or enterprise and properly complete the steps above. A decent attorney may charge you anywhere from $500 – $2,500 for these services, depending on how many partners, assets, filing or publication fees are required.
Increasing your exposure on the internet and growing your brand using social media is a must for all businesses, especially after COVID-19. However, this transition also highlights the need to protect the content and artwork you are using to identify your products or services online. This is where trademark registration comes in! Increase your chances for an approval of your application by selecting (or making up!) a name that has nothing to do with your business’s product or service. Think “Xerox” for paper or “Apple” for computers. What is a Xerox anyway? It’s a completely made up name we now use to refer to photo copies. What does Jamba mean? I have no idea – probably because it’s made up! – but I know they serve a mean cup of juice! Be creative, make up a name, and maximize your chances for federal trademark protection of your branded product or service. Once granted, U.S. federal protection of your brand of products or services lasts for 10 years. Trademark registration services provided by an experienced attorney generally cost anywhere from $900 – $1500, depending on the number of marks you want to register, the amount of industry classes you want to register your trade- or service mark in (e.g., restaurant services and t-shirts = 2 classes), how many brand identifiers you are looking to register (i.e., your logo, slogan, jingle, or product/service name, or all of the above – each a “mark”), and whether your application is challenged by the U.S. trademark office, which may require your attorney to prepare a formal legal response.
For many, the cost of legal services may appear daunting, expensive, or simply not something you want to invest in now or ever, especially after the losses stemming from the pandemic. It can and often is more expensive to fix legal errors or omissions than to prevent them. Properly forming your company and registering your trademarks and service marks can save you loads of time and money in the long run, especially when it comes to dealing with third-party disputes and defending your brand from copycats and counterfeiters. A business needs legal support like a person needs health care. Think of legal fees as a positive, healthy investment in your business. If you don’t defend or protect it, who will? Lawyers are essential to starting and running successful companies; we are here to help you, not hurt you. Do not wait until a legal issue arises to take care of these basic business housekeeping items. By doing so, you will be better able to focus on growth and on doing what you love doing the most with the peace of mind that your business and its brand(s) are properly registered and protected.