There was a time when I spoke with a client who discussed she was working on a book to a friend. The friend took the book idea and discussed it with another writer who planned to make a similar book. The client wanted to know how she can protect her book idea. The unfortunate truth is that she spoke about it too early.

To understand why the mistake happened, basic knowledge of copyrights, patents, and trademarks is needed. It’s good to understand why they won’t protect the client’s idea and what non-disclosure/confidentiality agreements are.

Copyrights protect the original work of authorship on a tangible medium expressed in any way. The different works of authorship that copyright protects includes:

• Literary – Books, Blogs, Poems, Interviews, Textbooks, Advertising (printed text)
• Dramatic – Plays, Choreography, Scripts, Screenplays, Operas, Choreographic Shows
• Musical – Songs, TV and Film Audio, Recordings of Performance, Voiceovers
• Artistic – Maps, Photographs, Paintings, Sculptures, Logos, Blueprints, Buildings

Copyrights do not protect facts, ideas, systems, or methods of operation. However, they can protect how they are expressed.

The rights to her book are protected by the copyright because that is her actual written work on that idea. Therefore, the second writer would be violating the copyright if she uses any of her written material. However, if the second writer decided to use the idea and write about it in her own words, that would allow them to avoid copyright infringement.

Copyright infringement involves the unauthorized use of copyrighted material whether its reproduced, distributed, performed, publicly displayed, or made into a derivative work. There are different types of infringement and outcomes tend to vary.

Primary infringement involves directly using copyrighted material that is unauthorized by the copyright owner. If the second writer uses any of the client’s written material, that would be considered primary infringement.

Secondary infringement involves the authorized use of original work, but it was facilitated through another party. If the friend that the client told the information to decides to tell the other writer to use my client’s written content, then it would be a secondary infringement.

This type of process starts once the copyright infringement has been observed and the copyright owners send a cease and desist letter to the infringing party. Otherwise, a suit can be filed if there isn’t any correspondence.

Being found willful (or guilty) of copyright infringement can be expensive. Normally this will result in damage fees, attorney fees (for yourself and the copyright owner), and additional damage costs if the court decides.

A patent protects inventions and discoveries, but not a tangible idea. It’s common to see applicants file for mechanical patents, e-commerce system patents, software patents, and more. There are three types of patents you can apply for:

This patent refers to the new, original design for an article of manufacture. There are about 33 different design patent classifications such as photography, tools and hardware, edible products, jewelry, packages, and clothing.

A good example is the design patents that Apple obtains for its iPhones.

Utility patents protect new inventions and systems. The invention or system must be new, functional, and nonobvious according to the USPTO. The patent can protect different variations of the invention or system. Patent holders have the exclusive right to prevent others from selling, making, or using inventions. An example of utility patents is control systems.

There are several categories:

• Mathematical formulas
• Inventions made for illegal activity
• New drugs deemed to be unsafe
• Laws of nature
• Processes of human coordination
• Surgery methods or protocols
• New and natural substances

Once granted, patents are valid for 20 years. We live in a growing world with so much innovation and technology that most patents become obsolete within two decades. In the client’s case with the book, she would not be protected with a patent being that it does not particularly qualify.

Trademarks protect words, phrases, symbols, and designs, that identify the goods and/or services from one entity separating them from others. If the client with the book had a publishing company, she could trademark its name but it would not necessarily cover her book.

Trademarks can be a confusing and complex issue for startups and their startups and their entrepreneurs. Most people know they need a trademark to protect their brand, but most general knowledge on the topic seems to end there. The first thing you need to know about trademarks is that it generally comes down to a business decision, not a legal decision.

It comes down to knowing how much protection you want and what your business funds allow. That’s in addition to the format you choose for trademarks to protect your brand.

And, because it can be more complex than most people realize, it’s often an area where people make mistakes that are expensive to fix. Protecting your intellectual property should be something that’s done early in the startup phase of a business.

The standardized character format is used to protect letters, words, numbers, or a combination of those without claiming any particular font, color, design, or style. This provides the broadest rights for your trademark and allows you to use those words, letters, and numbers in any matter.

This is an example of a standard format trademark with a simple color and font with no design.

The stylized or design format is what you might use after you choose a fancy design or logo. This format is used to protect words, letters, and numbers, when they appear in a specific font, color, design, or style. This is also the trademark to protect a design or logo that may not contain words, letters, or numbers.

If you specify one color, your protection will be limited to that color. Any other color won’t be protected by that mark. So if you register your design in blue, and change it to green later, you will have to file for a new trademark to protect your new design.

This is an example of a design trademark. Starbucks is the trademark holder of this design with its green color.

Well, that depends on your exact situation. If you can afford it, filing for both will be better protection than just one or the other. In most situations, clients have enough resources for just one. In this case, the standard format trademark is best.

When considering the standard format trademark, it is usually protecting your brand name which is your identification in the marketplace. It’s what people associate with your products or services. Just be careful in choosing your brand name because you’ll have to change it if you ever receive a cease and desist letter. You’ll have to tell everyone about the new name and that can be costly.

When you decide on the trademark you are going to file, you’ll need to decide what class of goods you want to protect. The class of trademark determines which types of goods or services your mark applies to.

The most simple way to describe a class is what your customers purchase from you. If it’s tangible, that would be considered a good. If you’re hired to perform some activity, you offer a service.

The USPTO publishes an ID Manual with thousands of approved descriptions. If one of those identifications accurately describes what you’re selling, you can use that. If you can’t find an accurate description, you can also request to add your own.

You must get your description right the first time. You can’t add the description later, or even change it once it’s filed. Any changes require a new application.

Now, let’s suppose that you’ll be selling more than one type of good. The descriptions are organized into 45 classes. While you can use more than one description in a particular class, the cost of the trademark is based on how many classes you want to protect. Since each trademark is $350, attempting to put your mark on goods in different classes can add up quickly.

It is important to properly identify your goods, spending some time evaluating which marks you want to protect, and evaluating the most effective method of protecting your mark.

One of the requirements of a federal trademark application is that you must be selling the product using the mark across state lines. In legalese, this is interstate commerce and gives the federal government and the United States Patent Trademark Office (USPTO) jurisdiction to register your trademark. This presents a problem to business owners who are doing business in only one state but plan on expanding to other states.

If you have not started selling your product interstate, but still want to go ahead and protect your mark, you can file your trademark application on Section 1(b) of the Trademark Act. This is commonly called an “intent to use” application. This type of application allows you to register your mark, but you won’t have full trademark protection until you file a statement of use.

After filing your application, you’ll have six months after the trademark office issues a notice of allowance to file a statement of use. The cost of filing the statement of use is $100, per trademark application class. The purpose of this statement of use is to declare that you’re actually using the mark in interstate commerce, and would like to activate the trademark registration.

If you have not begun selling across state lines yet, you can request a six-month extension. The fee for the extension is $150 per application class. And since you may only request four extensions, this amounts to 2 years of time in which you can “lockdown” a trademark you intend to use.

Trademark infringement is a lot like copyright infringement. The only real difference is that different types of intellectual property are misused. You’ll be sure to face the legal fees you would have just like copyright infringement. Seizure of goods that use the trademark could happen and most certainly an injunction to stop producing goods under the trademark.

There are several different insurance policies every business should have in place. Every business is different so every business should have a policy tailored to their specific needs.

General liability covers damages done at the fault of your business.

This can include:

• Bodily injury
• Personal liabilities (i.e. infringements, invasion of privacy, etc.)
• Property damages
• Medical payments (incidents on business property)
• Legal defense

It is highly recommended to have this insurance in place if your business has accumulated assets.

Property liability is coverage if you or any of your employees make a mistake that could lead to lawsuits.

For example, a hairstylist could damage their client’s hair from using the wrong products or techniques. This is the type of insurance to help handle any possible lawsuit that a business could endure from that.

Worker’s compensation is the coverage that helps when employees get injured in the workplace.

This helps take care of medical costs and lost wages the injured will have. Any business with employees that are not owners will be required to have this insurance.

Home-based business insurance protects the equipment and inventory the business owner has at their residence.

Rental insurance and home insurance typically doesn’t cover business equipment and inventory, but you can contact your insurance provider and confirm.

Product Liability pertains to the protection of business if a product damages a customer.

More than likely they will sue if the damage is moderate, so coverage should be created specifically for the products you offer.

Umbrella insurance helps take care of anything your main policies cannot fully cover.

Based on the coverage amount on your policies, it may not be needed. It’s just an insurance claim backup.

There are also other insurances such as vehicle insurance and unemployment insurance that your business can obtain if needed. Determine with an insurance provider what’s best for your business.

When asking your insurance agent questions, you need to be specific. Asking “Am I covered?” is just not sufficient.

The best advice is to imagine different scenarios as possible, list them out, and work them individually to determine whether or not coverage would apply.

Let’s say you own a bar. You might think of possible scenarios like:

• Violence inside your bar resulting in damages and a lawsuit
• A natural disaster that temporarily puts you and your employees out of work
• A bartender or other employee injured from slipping and falling on a wet floor
• A customer getting sick from consuming your food and drinks

Think of as many as you can pertaining to your business and walk through them to get an idea for the necessary coverage. But knowing what to communicate is just part of the process.

Do your research and find a reputable insurance broker. There are plenty of unreliable insurance agents out there. The last thing you want is to ask for policy and jump through hoops just to obtain a copy.

Look into getting premium adjustments on your policies. For bureaucratic and administrative reasons, 5 minutes spent proactively making adjustments could potentially save hours fighting customer service to retroactively change balances.

If you don’t fully understand insurance lingo or know every detail of your business policies, don’t feel bad. Insurance policies are not always black and white, and it’s common for a provider and an insured to dispute whether or not coverage exists. There are attorneys that help in this area.

Get a copy of your actual policy. This isn’t always sent when you purchase the policy, so you may have to ask your agent for it. The policy itself is probably 60+ pages, but most business owners are accustomed to just seeing the declarations page.

The declarations page is usually just one or two pages indicating the amount of coverage. It’s normally used as proof of insurance.

Tip: If you struggled to obtain a copy of your insurance policy, you have an even harder time filing a claim. Consider this a test of responsiveness and if they don’t meet expectations, look elsewhere for insurance coverage.

Insurance policies can be daunting, but if you’re intelligent enough to start a business, you’re absolutely intelligent enough to read and understand the policy itself. The policies are typically written more clearly than people realize.

An important point to know is that things that aren’t in a policy are just relevant as things that are. An unfamiliar eye may not realize that a common policy provision isn’t in a particular agreement.

Reviewing Coverage

First, find the part of the policy that starts talking about coverages. The particular language changes, but it’s usually toward the beginning of the policy. Coverages are usually in enumerated paragraphs with many subparagraphs.

If your policy only includes bodily injury, advertising injury, and medical expenses, you are likely to not be covered because of forced closure, pandemic, or anything similar that’s not included in the coverage. If an agent tells you that you aren’t covered for something, it may not be because the policy says you are specifically not covered. You won’t be covered because the type of loss isn’t listed in the coverages section of the policy.

Review Exclusions

An exclusion means that some event is within coverage limits, but that the insurer has excluded something within that coverage. It’s basically, “you’re covered, but not in these certain situations” dressed up in insurance lingo.

For example, we recently worked with a gymnastic instructor who purchased a GLCI policy. The policy specified that it would provide coverage if someone was hurt at her facility. However, it excluded injuries that occurred while someone was doing gymnastics. It was an odd case that took nearly two years to resolve, but it perfectly explains how coverages and exclusions work.

If going through your policies and you determine that you don’t have sufficient coverage for this pandemic, don’t be discouraged. Unfortunately, you cannot buy insurance after an event happens and get covered for it. However, you can at least take the next steps and protect your business.

Consider Filing a Claim

If you file a claim, you’ll force your insurance company to review your claim against the policy and make a written determination on coverage that outlines whether there’s coverage or not.
Sometimes the advice is not to file a claim because the premium could go up. This varies from insurer to insurer, so there’s no telling how much of a difference it could make to your premium. It could be 0.01% or even a 5% increase.

If you’re not aware, claims must be filed within a time period such as 30 days from the date of loss. If you don’t file a claim in time, you could lose your right to file a claim. If you aren’t sure about whether or not you should file, talk with your insurance agent and attorney.

Claims Filed By Former or Current Employees

Businesses and Congress have been focused more on revenue loss from quarantine. What many chose to look over are the normal risks that have always existed. Claims against businesses have more than likely spiked during this time.

In normal times, employees will tolerate a number of things from unfair conditions to even illegal behavior. The benefits of receiving a steady payback sometimes outweigh the bad things that could motivate them to file complaints. However, hours have decreased, mass layoffs occurred, and former employees have become desperate.

It isn’t just well-supported claims either, it’s also the tenuous claims where former employees are willing to accept the lowest of settlements while their income is gone. Everyone is focused on the immediate crisis, but they are not seeing the wave of “insider threat” claims that could hit if things get worse.

Business owners should prioritize calling their insurance brokers and making sure everything is prepared and organized. If they could afford it, they should also consider increasing coverage limits.

As a business owner, planning your death is vitally important not only to your family, but your employees, customers, and vendors.

You’ll need to ask yourself a few questions to check if you have a proper plan in place. If your answer is no to any of the following questions, then you may want to consider speaking with an attorney to get your will set up properly.

• Do I have a will?
• Is my will up to date?
• Do I have a living will?
• Have I renewed my will and trust in the last 3 years?

Make sure all information is included in the will such as beneficiaries, assets, debts, and executors. Not only is taking care of your personal life important if something happens to you but your business needs a plan if something happens to you.

If your business will be set up to continue after you are gone, plans need to be created to make the adjustment easier for everyone involved. Ask yourself:

Do I have a plan for key employees if something happens to me?

Make sure that you are clear on who will have what responsibilities such as who would be taking your role, or least have the authority to decide who. Key employees keep the business going, so make sure they have the direction they are going to need.