Safeguard Your Ideas

Let me get right to the point. The reason our economy is in the tank today is that too many people are focused on creating money instead of creating real products and services. To correct this problem, we need to get back to the basics of creating products and services that people need or want, and let the money come as a result. That’s the business of creativity, and it’s going to be the salvation of the global economy, starting with you.

There are many people being laid off and many more living in fear of pink slips. How are people going to pay the bills? They’re going to get creative and align their passions with the delivery of products people will buy. If people aren’t willing to pay for your effort, then you have a hobby, not a business. So get serious about your future for a minute and keep reading.

The most profound choice we make in life is to either accept things as they exist or accept the personal responsibility to change them. You are making that choice right now. To become the person you want to be, you have to give up the person you currently are. It’s unavoidable. But how do you go about doing that, and why should you listen to anything I have to say about the topic?

I’m an attorney and business coach who helps creative people align their passions, talents, and interests with their future. I enjoy the honor of helping structure businesses that enable creative processes, and protecting the results of my clients’ creativity. It’s wonderful to see people escape their limiting or uncreative jobs, either by their choice or through circumstances, and start reaching for their potential. This starts with understanding a few key concepts about how creative businesses are structured and how creativity is protected.

First, know that you don’t have to be intimidated by forming a business, because most creative businesses are just a simple LLC (Limited Liability Company) or small Corporation. Yes, you should talk with a lawyer, because there is no one-size-fits-all solution, but here are my basic rules on creative business structure:

1. The default business form is an LLC.

2. If everyone who is investing in the company is going to work on a day-to-day basis in the business, then stay an LLC.

3. If there is even one person or entity investing in the business who will not be working in the business (think “silent partner”), then you should be forming a corporation.

Why form a company at all? Because aside from the liability issues that are beyond the scope of this article, the formalities of LLCs and Corporations provide a framework within which one can adequately manage the relationships of the people on the team. If you’re a sole-owner of your creative business, then having an LLC in your name will serve a marketing role: namely, letting your potential clients and customers know that you’re serious and intend your creative enterprise to be seen professionally and not as a hobby.

You also need to understand how to protect the results of your creativity. This is commonly known as “intellectual property” or “IP” and is divided into three primary areas: Patents protect your inventions, Copyrights protect your artistic expression, and Trademarks protect your investment in your brands. Note that IP law does not generally protect your IDEA, only what you’ve actually done with your idea. When sharing your ideas, you can protect those plans with contracts commonly known as non-disclosure agreements (NDAs).

Patents

I’m not a patent lawyer. Patent law is a very highly specialized area of law and lawyers practicing in this area are required to hold science, engineering, and other technical degrees before sitting for a special Patent Bar Exam. Patent lawyers speak a different language, one I barely understand. These lawyers help you secure your patent rights with the United States Patent and Trademark Office (USPTO). You should talk with a patent lawyer as soon as you have taken your idea to a stage that would allow you to build a prototype or otherwise “reduce the idea to practice.” Note that you only have one year from “disclosure” of your idea to file a patent application. If you blow that deadline, you will likely lose any exclusive rights to your invention. Remember, patent lawyers are highly technical and specialized, and while some of them understand the other aspects of creative business, most don’t. Just as you probably don’t want your printer designing your brochure, you probably don’t want your patent lawyer handling your business formation, trademark, or copyright work.

Copyrights

Copyrights protect the tangible expression of your originality. That means you have to DO something with your idea. You have to write the computer code, design the logo, paint the composition, write the poem, film the video, write the novel, sculpt the form, or perform the dance. You should document the date of your creation, but know that protection vests at the moment of tangible expression. You don’t have to publish the work, use the © symbol, or file a registration with anyone to have copyright protection for your creative work. So why should one register a copyright at all?

Unfortunately, in many creative business situations, having a righteous beef against someone and having an economic justification to enforce that righteous beef are two separate things. In copyright violation situations, unregistered copyrights are only eligible for injunctions (to make the infringement stop) and/or “actual damages.” Plus, with a few exceptions, both sides have to pay their own legal fees. Actual damages can be very hard to prove and wouldn’t even cover the legal fees in most situations. That’s no fun, thus the motivation to register your copyrights with the Copyright Office of the Library of Congress (www.copyright.gov).

When you pay the $35, send in the simple 2-page application form, and assuming your registration comes through, two major things change. First, attorney fees are on the table. This means that when you want to smack someone for copyright infringement, you’re probably not going to end up having to eat your attorney fees. The other side will be forced to pay your fees due to their infringement. Second, you don’t have to prove “actual damages.” You can let a judge award “statutory damages” of anywhere from $750 all way up to $150,000 per infringement. That’s nice. Now you have an economically justifiable motivation to enforce your rights.

If you’re in creative business, consider the $35 copyright filing fee the best insurance premium on the planet. It makes all the difference in the world and should be a standard part of your normal business processes. And, since the fee is so low, you should do this work yourself.

Trademarks

Finally, you must build a strong brand. This is the area where marketing and trademark law overlap. Trademarks can be anything that indicates a source of goods or services. Names, logos, slogans, packaging designs, colors, or interior designs for stores or restaurants can all be trademarks. You want to create a distinctive mark, which is something that moves beyond a “mere description” of your goods or services. The best way I’ve found to explain this is to think about when you hand your business card to someone. If they do not have to ask what you do, then your trademark must be merely descriptive of your goods and services, and thus it lacks the distinctiveness for trademark protection. If they have to ask what you do, then your mark must be at least “suggestive” of what you do and may be something very distinctive like the made-up words we know from the pharmaceutical industry. That cognitive gap between your mark and what you do has to be filled with some form of investment in marketing, even if it’s just a conversation. Trademark law protects the investment you have to make in answering the question, “What’s that?” or “What do you do?” The more you’ve invested, the stronger your trademark protection should be.

Trademark rights vest when you use a mark in commerce. It’s not a race to register your mark, it’s a race to USE the mark. You can, and should, start using the “TM” symbol as soon as you use the mark to offer your product or services. If you’re in a fast-moving industry like software, you should consider filing an “Intent-to-Use” trademark application with the USPTO as soon as you settle on a name for your product or service, even if it’s several months before you’re planning to launch the brand. Intent-to-Use filings set a “constructive” date of first use at your application filing date, which can come in very handy if someone else has plans to use the same name you’re considering.

Trademark law can be confusing and the forms are relatively complex when compared to the copyright forms. The filing fee is a non-refundable $275-325 per mark, per classification. So, get some qualified help on your trademark strategy.

I love seeing people reach their full potential. Honestly, I think creativity is why we’re here on the planet. The meaning of life is to add good stuff to the planet, and we do that through finding our unique way to contribute and building our livelihood around those contributions. Reach for your full potential by building your future through creative business, and help return our country to its former position of leadership.