Your Legal Questions About IM -Round 2

If you use a celebrities name in your domain name but never have a picture of her or anything, can they sue you for profiting off their name?

There's a fairly recent case about that with Chris Bosh (nba player) and Hoopology.com.

The court ordered that Luis Zavala, and his company Hoopology.com, which registered the domain "chrisbosh.com", turn over the domain to Bosh and cease all infringing conduct. The infringing website displayed ads using Chris Bosh's name to generate revenue for Zavala and Hoopology.com, and had no actual association to Bosh. Zavala and Hoopology.com currently own nearly 800 other domains incorporating the names of various professional athletes, college and high school athletes as well as well-known entertainers, product names and other entertainment properties.

"I am very happy with this ruling," said Chris Bosh, a four-time NBA all star, and Olympic gold medalist. "My intent was to make sure that consumers find me when they are looking for me on the Internet, rather than a website that is confusing and tries make money off my name and my intellectual property."
 


This is a question I see really beaten to death, but can you even just briefly summarize the major advantages/disadvantages of LLC vs S-Corp vs C-Corp in Nevada vs Delaware vs Wyoming vs your state of residence, specifically for the needs of IMers.

Sean
 
I need to trademark a brand name. What's the best step to take? Just legalzoom and go? I'm in the dark about TM vs ® really, what's the better route?
 
I am filing for a dba in Florida. I plan to use this just as a proxy in front of my real name and for payments to seem more professional when it comes to being paid (I control a website that earns lots of affiliate referral revenue). I will be the only employee under this sole proprietorship, so I will be using my SSN rather than an EIN. Do I still need a business license?

If it changes anything, this website is set to be selling ad space, or just host ad space for which I will receive referral commission.
 
I need to trademark a brand name. What's the best step to take? Just legalzoom and go? I'm in the dark about TM vs ® really, what's the better route?

I got a link for that *cough*

Edit: and don't do a trademark through LZ, they fucked up one of our guys TM really fucking bad - ask phillian.

NEVER NEVER NEVER use Legal Zoom.

FOR ANYTHING!


Especially Intellectual Property related matters.

They take your money, don't file your application- or do file your application (patent or trademark) and don't notify you of the necessary follow-up actions, like Notices to File Missing Parts, Office Action Responses, etc.

In the case that Bofu2U was referring to, MadHat/ Bacon Explosion Aaron registered a trademark... or thought he did... and had receipts from LegalZoom to prove it. When I conducted a very basic USPTO.gov search for the mark a few months later at a conference I pointed out to him that there was ZERO record of it at the USPTO. He had had the mark in use in commerce for several months at that point.

If some competitor wanted to, they could have completely stolen the rug out from underneath him on that mark- filed a TM application before him (though he thought he had one)- and he would be up a creek without a paddle. He may have been able to get the mark back, but not until after thousands of dollars and months and months of IP litigation.

And he is not the only one.

LegalZoom Sued in Class Action for Unauthorized Law Practice | IPWatchdog.com | Patents & Patent Law
 
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A lot of trademark-related questions are poppiing up, so I am going to give a kind of quick and general overview of trademark law that might help clear up some of the questions people have. I'll get into some more specific info a bit later if needed.

Trademarks are intellectual property, pure and simple. They have value, just like any other asset. Since they aren't a tangible product like cars or real estate; it happens that buying, selling, registering, and protecting them works quite a bit different than most other assets, but briefly:

You do not have to register/do any paperwork to have a trademark. There are two basic types of trademark you can have, a registered trademark (usually designated by a "circled R" (R) ) or a common law trademark. Registered ones have better protections in place, but you don't have to have registered a trademark with the USPTO gov't office (in the US) to have legal rights.

I'll use WickedFire as an example. The owner (Jon) has, at the very least, a common law trademark in the name "Wicked Fire" and the "smirking flame dude logo", whether he has registered it or not (Disclaimer: I have no idea whether he has actually registered it, if he is the only owner, etc, and i'm too lazy to check the USPTO database tonight, this is just an example). Now, if some other enterprising webmaster wanted to start up a competing forum and call it "Evil Flame" and use the same/similar logo, Jon would have a solid claim against him in court to force the other webmaster to stop using it. He (Jon) would have to prove that 1) Jon used it first in time 2) that the second dude is using something similar enough that it would create confusion as to whether it was associated with the original WF, and was basically trading on the good name/reputation of WF.

In this scenario, that is likely an easy standard of proof for Jon to meet. With an unregistered trademark however, this would only be the case if the new competing webmaster was trying to use it in a similar industry (i.e. a webmaster online forum, basically). If someone started up a pancake house in Dallas Texas called Wicked Fire Pancakes, Jon would have no protection to do anything to that place with an unregistered/common law trademark, because they aren't in the same industry/geographical area, so there really isn't any "overlap" where that pancake house is "trading" on the reputation of Jon's webmaster forum, so he isn't protected.

So, if Jon wants protection against rogue pancake houses and overall maximum protection in general, he needs a registered trademark. To get one, you basically file an application with the United States Patent and Trademark Office. It takes a while for it to be granted, one of their staff attorneys reviews the application for "uniqueness", i.e. is it different then anything else out there, is it being used in commerce, does it infringe on any earlier trademarks, is the mark (basically, the font, styling, logo text, etc) unique and identifiable with that person's usage, etc.

There is also an "open comment" period of time, where other trademark holders can basically "protest" that if the new trademark was granted, it could interfere with their own trademark. For example, there probably aren't too many other people with a TM similar to Wicked Fire (for a future example, I'll actually look up the file for that name, but not tonight), plus the Wicked Fire usage is fairly specific and unique, so it would probably have a pretty good chance of getting granted relatively quickly. Go try to register "Koka-Kola" for use on a new drink idea you have, with a nice white and red cursive font, and see how quickly Coca-Cola's attorneys file a protest against your trademark being granted. Generally, the trademark you apply to register must be specific and identifiable to your particular usage of it, and it can't be a generic usage, or be being applied for to "ambush" the value created by someone else in that name/trademark who just hadn't gotten around to registering it themselves.

The advantages of registered trademarks is they give you an automatic "timestamp" date of first usage. If you have a registered trademark that is similar to someone else's unregistered trademark, and something occurs that makes your businesses cross paths much later in the future (usually due to biz expansion, becoming better known on the Internet, etc) the unregistered guy is likely going to lose out in areas where your businesses overlap/compete, even if he truly had started using the name earlier in time. Any usage/registration that occurs AFTER yours is going to be at a disadvantage relative to you if any future dispute comes up between you two. An advantage to registered trademarks is that there is now a built in "assumption" that anybody who starts using a similar trademark after your registration date does so at their own risk, since anybody can look up trademarks at the federal level, and that protection occurs across all states and industries; thus Jon could run that Dallas pancake house out of business with a registered TM if he decided later to supplement his income by expanding the Wicked Fire brand into the lucrative Texas breakfast industry.

There are some other advantages in terms of what kind of monetary damages you can win against unauthorized users when you have a registered trademark instead of an unregistered one, but I won't go into that right now. Consider this a very brief/basic intro to trademark law, it can get incredibly complex when it comes to determining what makes trademarks truly similar, what kinds of different usage are truly competitive, and how to calculate damages when someone gets busted for using another's trademark without permission.


OK, this was really basic, but hopefully that gives you a starting point. Moral of the story, you don't have to register your trademark right away to have protection, you can register it later after you start building more "value" into that name, but you take a risk the bigger the brand you build/longer you wait. When I first started coming up with "names" for some of the product lines I used, I checked the names against the USPTO database, because I didn't want to "build a mansion on a shaky foundation", i.e. you don't want to build something from the ground up, and then find out that just when you hit it big, someone that already had a trademark in place can shut you down because your name is too similar to theirs. It always happens late in the game, once you've achieved some level of success and get noticed, so always make sure nobody else has a registered trademark too similar to the one you want to use, ESPECIALLY in your same industry, before you put in the effort to build up that brand.
 
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^ Lots of us are looking into importing stuff to sell, and we are getting a sellers section of WickedFire pretty soon here. Can you give us a brief over view like the one above about patents? How can Target sell notebooks with a M on them that are 100% identical to Moleskine notebooks, same factory, same product, different brand, etc.
 
If you use a celebrities name in your domain name but never have a picture of her or anything, can they sue you for profiting off their name?


Yes, it doesn't matter whether it's just their name or picture, they can come after you on either, and the law doesn't treat one or the other as any less serious.

This is a good time to mention, celebrities have less protection when it comes to reporting on them, mentioning their drunken antics, etc because once a person becomes a "public figure" (i.e. famous) they don't quite have the same privacy protection rights as the 80 year old grandmother living next door to you.
On the other side, celebrities actually have more protection when it comes to people trying to profit off them w/o their permission in a commercial fashion however, because their "brand" is presumed to have more value, thus damages would be higher if you used Brad Pitt's pic to sell your new cologne, vs using your 80-year neighbor's pic, who probably doesn't have quite the same "brand value" as Mr. Pitt.
 
Yes, it doesn't matter whether it's just their name or picture, they can come after you on either, and the law doesn't treat one or the other as any less serious.

This is a good time to mention, celebrities have less protection when it comes to reporting on them, mentioning their drunken antics, etc because once a person becomes a "public figure" (i.e. famous) they don't quite have the same privacy protection rights as the 80 year old grandmother living next door to you.
On the other side, celebrities actually have more protection when it comes to people trying to profit off them w/o their permission in a commercial fashion however, because their "brand" is presumed to have more value, thus damages would be higher if you used Brad Pitt's pic to sell your new cologne, vs using your 80-year neighbor's pic, who probably doesn't have quite the same "brand value" as Mr. Pitt.

^ oh also about this... can a celebrity photo be used to sell a product that relates to them? Like can you use a photo of Jonny Depp as a pirate on a site that sells costumes to make you look like Jonny Depp in the movie? What about Animation celebs also like Homer Simpson or something. I see stuff like this a lot just wondering.
 
This is a question I see really beaten to death, but can you even just briefly summarize the major advantages/disadvantages of LLC vs S-Corp vs C-Corp in Nevada vs Delaware vs Wyoming vs your state of residence, specifically for the needs of IMers.

Sean

I have to stay away from the "state" specific stuff, because I'm only licensed in one state jurisdiction, and its probably not yours. On the corporate formation/taxation issue in general I would say the following:

The reason most every major corporation files their articles of incorporation in Delaware is because that is the state that is still considered the most "pro business". The courts there are viewed as friendly to business, the regulations and filing requirements are pretty business-friendly, etc. Nevada is right up there ( I actually prefer Nevada corps personally) with the added advantage that Nevada is notoriously difficult about releasing the names of the principals/owners of a business, which is nice if you are are trying to hide/remain in the shadows when it comes to your association with a business.

Many business owners I know, myself included, consider California at the opposite end of the spectrum, they are much more "pro-little-guy-suing -a-business", have higher taxes and reporting requirements, overall useless red-tape and beauracracy, etc.

LLC vs S-corp vs. C-corp.
This is somewhat state specific, but any of these structures will give you some protection from personal liability (this is huge, you want this, trust me). C-corps are what you think of when you think of big corporations, they can last forever, they remove personal liability, they are their own legal entity, they can have lots of unrelated shareholders, etc. The disadvantage with C-corps is basically a double taxation issue, they are taxed first at the corporate profit level, then when they pay the leftover profits to their owners (i.e. shareholders) those profits (dividends) are subject to taxaction again at the personal level of the shareholder.

I personally prefer S-corps. They can't have quite as many shareholders as C-corps, their are limitations on having any foreign citizen owners (this is important in the IM world for non-US residents), but otherwise they have all the benefits of a C-corp, without the double taxation problem because an S-corp is a "pass-through" legal entity; the taxation issue occurs only at the owners' personal level instead of first at the corporate level. An S-corp doesn't really pay federal "taxes" per se, just the owners do on their profits (this is simplifying things, there are often some random excise, B&O taxes, etc at the state level, but its still less than a C-corp would pay). These smaller random taxes vary by state, but remember that S-corp status is just a regular corporation with some potential tax advantages as long as you meet some basic requirements, and the more income you make, the better those tax advantages are because of the way you can classify income between being salary vs. dividends. S-corps can be single owner.

An LLC (limited liability company) is my third choice, but still way better than doing stuff as a sole proprietor. LLC filing paperwork requirements, liability treatment, reporting rules, etc vary by state, check your local jurisdiction for how it works in your particular situation, some states won't allow single owners, there aren't really many tax advantages, etc.

To say it again, if your are a serious IMer, get some sort of business structure; C-corp, S-corp, LLC, whatever. If you are (a U.S. citizen in particular) making a living in this industry, and you are still doing it as a sole proprietor, you need to think really hard about making a change. Its not that complicated, its not particularly expensive, so go do it. Personal liability is no fun, plus you'll likely make a profit just by switching to a corporate status on what you can legally do on your tax bill. It looks more professional, vendors will probably take you more seriously, and you are lot less likely to lose your house/car/diamond watch if someone comes after you for your business dealings. I can't speak for the international crowd here, except to say you are probably in a similar scenario and should look to having a formal business identity.
 
Hey Mont7071, Thanks for this post and the last one, answer which ever questions you know, no need to trouble yourself for the rest. I'm writing these vaguely on purpose, if you want me to elaborate just ask.

1.......
Something I like to do is dilute massive amounts of information in word files, encapsulating the basic ideas/methodologies of the text/audiobook/website I'm consuming.

Would it be illegal in any way to create a new product(e-book for example) that I would sell containing this new stripped down version of another text?

Basically, what do I need to do to the information I'm re-writing to make it 'mine' legally?
*This stuff all goes back to what is fair usage. As you probably remember from school book reports, you can refer to other work, but if you copy it directly its bad. Copyright infringement cases are always "case by case", no 2 fact situations are the same. Basically view it as a sliding scale, the more changes/differences between your version and the original version(s), the safer you are. Say you wanted to write an ebook about basic "SEO" practices. Now, at this point, nothing you write about it is going to be particularly unique (e.g. get backlinks, use anchor text, get relevant theme-based links, use meta descriptions, etc) but that doesn't mean you aren't free to write an SEO eBook as long as you don't copy word for word something that is already out there. General rule, the more "sources" you pull from the better, and the more "rewritten" the content (not just using third-world guys with a book of synonyms) the better. Quick rule of thumb, if you "rewrite" something, and it can't pass a Copyscape test, go back to editing until it can.

2....... see below



Thanks again.
How long do I have to wait before,

2.1 I can legally use the persona of someone, likeness, words, or works in my own business in profit related endeavors? Does copyright extend beyond lifetimes, or is once a person is deceased it's ok to use their face etc..?
*basically for as long as they are alive, plus 70 years after is how long copyright protection lasts for most situations (it can vary from about 50-100 years depending on the exact scenario).So you can re-release your version of Michael Jackson's "Thriller" to promote your biz-opps in about 69 years. ;)

2.2-5.0 questions

Most of the these other questions you can find the time limits for copyright duration and the basic rules that apply here..
http://www.copyright.gov/circs/circ15a.pdf


http://www.copyright.gov/circs/circ1.pdf
 
What measures would I need to take as a hosting reseller to absolve myself of responsibility for a hosted affiliate getting served. Am I under legal obligation to provide logs/IP/owners/etc and other stuff when asked, even if I were to just suspend the offending account?


This is an interesting question, I've never had a case like this. As I read the DMCA, they should be going directly to the actual (root) hosting company. Say you are a reseller for HostGator (God forbid) private labeling your hosting as XYZ Hosting and marking it up for resell, but the clients sites are located on HostGator. Then, a person suing for copyright infringment would likely send the legal docs to HostGator, and there would probably be an "end-run" around you completely, they'd probably ignore you as the middle-man, which would be a good thing for your liability.

Your legal obligation to provide logs/IP/owners info etc would likely come down to the contractual relationship between you and the hosting company you are a reseller for. Since the actual hosting company can pull the plug on the offending website, they probably wouldn't need you involved if they didn't want to. If someone was doing something criminal (e.g. child porn, emailing terroristic threats, etc) and a Federal judge issued a subpeona for those records, they would probably send it to the hosting company first, who would then issue a response that you as the "reseller" would need to be joined in as a necessary party, at which point they'd probably issue a new subpoena directly to you.

This is just an educated guess, I'd have to research it more to see exactly how past case law treats such a scenario, its a great question. General rule of thumb, let the root host company deal with the decision to take down content so that you aren't potentially liable for making the wrong choice, and if there is ever a state/federal inquiry, hand over the personal records because you don't want to be joined into that kind of lawsuit over a hosting account you probably make $25 a month off of.
 
this may be a bit different.. but in regards to US law and IMer's...

Lets say I'm an affiliate that doing ALL kinds of shady shit and I dont feel like stopping. Is their any countries you would recommend that basically give a middle finger to US law in regards to what us affiliates do?

For example, If I move to Canada and continue to do things, I can get brought back in rather easily, but I heard that moving to someplace like Panama might be a lot harder to bring me to justice. Any thoughts on this?

I might not move there myself, but rather set up hosting, domain, set up corp there.. etc. just wondering what "safe havens" might actually be out there and how good they are.
 
Here is a legal question that popped up in another thread:

If you are buying a product unbranded in bulk and you re-brand it and resell it under your own name, how liable are you for this product and how can you protect yourself? For example, if you purchase a supplement in bulk or a baby toy of some kind, rebrand it, sell it, and someone has an allergic reaction or gets hurt...they try to sue you. You DO NOT have product liability insurance since you are a rather small and new company and can't afford it...what can they get from you if everything is run through an s-corp? Can you just payroll yourself as the money comes in and then file bankruptcy if someone sues basically giving them a very small amount they could sue you for?
 
logos/endorsements/"as seen on"

This thread is great. Here's my question:

What's the proper, right way to use a trusted logo ala "as seen on X"?

Suppose the next great health berry comes out, let's call it the fooberry, ok? ABC does a special report on fooberry and I went to put their logo on my lander.

I'm thinking the answer is since their logo is trademarked, you can't use it unless they say so. Could you then instead say something like "ABC's special report on fooberry revealed 'yadda yadda'"?

Does this situation change if I say "As advertised on X?" Like, buy some CPM banners on abc.com, and I can say that/use their logo?

Thanks. Loving the answers so far.
 
Here is a legal question that popped up in another thread:

If you are buying a product unbranded in bulk and you re-brand it and resell it under your own name, how liable are you for this product and how can you protect yourself? For example, if you purchase a supplement in bulk or a baby toy of some kind, rebrand it, sell it, and someone has an allergic reaction or gets hurt...they try to sue you. You DO NOT have product liability insurance since you are a rather small and new company and can't afford it...what can they get from you if everything is run through an s-corp? Can you just payroll yourself as the money comes in and then file bankruptcy if someone sues basically giving them a very small amount they could sue you for?

These types of scenarios are exactly why I stress IMers should use a proper business formation. What you describe is what a lot of companies actually do, if the business gets sued, there usually isn't much left held in the name of the business, and it can just be collapsed. This is, of course, assuming you aren't doing something criminal of course.

There are limited scenarios (like criminal activity) where a "piercing of the corporate veil" can occur, and someone can come after the underlying owner for personal liability, but they are rare, hard to prove, and expensive for the person bringing the lawsuit. If your business is very obviously under-capitalized for the sole purpose of keeping funds away from creditors/people who have legal judgments against you, then courts can take a hard look at whether justice would be served best by "bypassing" your corporate structure and coming after you personally.

In my experience, if you aren't doing something blatantly obvious, or intermixing the funds of a business with your personal expenses so that its obvious the business is just a front/mirror image of you personally, then 9 times out of 10, a corporate structure is going to protect you from personal liability.
I own several corporations, and while I strive to always avoid doing anything that would open me up to liability, there is always risks like what you described (e.g. I sell supplements with raw materials from many sources/labs). Plus, the more successful you are, the bigger target you are for frivolous lawsuits aimed at making you just pay money to make them go away. Every one of my corporations could be shut down in a matter of days (if not hours) with very little , if any, monetary loss besides what happens to be in the business checking account at that time and whatever minor assets the business had on hand. In a lot of cases, having a corporate structure actually works out to be much cheaper than having general liability insurance, though its wise to use both.
 
This thread is great. Here's my question:

What's the proper, right way to use a trusted logo ala "as seen on X"?

Suppose the next great health berry comes out, let's call it the fooberry, ok? ABC does a special report on fooberry and I went to put their logo on my lander.

I'm thinking the answer is since their logo is trademarked, you can't use it unless they say so. Could you then instead say something like "ABC's special report on fooberry revealed 'yadda yadda'"?

Does this situation change if I say "As advertised on X?" Like, buy some CPM banners on abc.com, and I can say that/use their logo?

Thanks. Loving the answers so far.

Great questions for the IM world. Back to my earlier statement, the legal question this all boils down to basically is "Would your usage be likely to cause confusion to the average user about whether you were part of/sposnsored by/approved by the trademark holder?" So, if you splash CNN logos at the top of an LP, would someone visiting be likely to think that CNN had somehow "vetted" or "approved of" that usage? If that confusion is likely, you are in the danger zone.

You'll see that alot of companies like CNN that accept advertising now say specifically in the I/O contract exactly how you are allowed to use their brandname, especially recently. In a lot of cases, saying "as advertised on XYZ" is acceptable, whereas CNN and MSNBC now both say in their contract that advertisers saying just "As seen on CNN" is not acceptable. CNN used to let you use the red CNN trademark lettering as long as you only said "as advertised on", but lately have changed that.
Your example of "ABC's special report on fooberry" is a great middle-point, some would say that is fine (i.e. no risk of confusion), others might say it crosses the line, but it's a close call. If ABC sent out a C&D (they might, hard to say) then you'd probably be best to back off a little bit, but that is nowhere near as blatant as pretending to be CNN, or saying that "CNN says this product is the best" when they obviously did not say that.

You'll usually have pretty good insight into how much of a fuss a company like CNN will make, and where they draw the line on acceptable use of their trademark or mention of their name, by looking at their advertiser agreeement when you first sign up to advertise with them. Remember that there is no such thing as a trademark infringement if the company doesn't raise it. No governmental agency is out there looking for possible trademark violations and suing an abuser on behalf of the company. With trademark law, companies are expected to look out for themselves, if they don't raise the issue, nobody else is going to do it for them. Once a media company like CNN or MSNBC does contact you, it is best to pay attention to avoid being caught up in a lawsuit, even if you think your usage might be ok under a doctrine of Fair Use.