Attorney Michelle L. Grenier
Focusing on Business, the Whole Business and
Nothing but the Business.
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Fri, Sep 05, 2014 @ 08:37 PM
TO LICENSE OR FRANCHISE . . . THAT IS THE QUESTION . . . but not the only question you should consider.
Understanding the Differences between Licensing and Franchising . . . that is the challenge.
If it looks like a duck, walks like a duck, quacks like a duck, it’s a duck. Similarly, if a deal is structured like a franchise and/or operates like a franchise, it’s likely a “franchise,” and if so, franchise laws must be complied with, regardless of what you call the deal (i.e., even if you choose to call it a “license,” not a “franchise”). Misrepresenting the deal, misunderstanding the deal and failure to comply with necessary laws, could result in civil and criminal penalties for persons and businesses involved.
Distinguishing between a license and a franchise can be very confusing; until you realize that a franchise, is a deal that involves a license and falls within the scope of franchise laws (the “Franchise Box”). Generally, a “license” is a right to use or do something. A franchise is a deal that (a) involves a right to use or do something (a license), and (b) involves elements that puts the deal into the Franchise Box. In other words, the details of a licensing deal and/or provisions of a licensing agreement are considered in determining whether or not the licensing deal falls within the Franchise Box.
Why is not obvious, whether or not a deal is a franchise or simply a license?
The determination of whether a licensing agreement deal is a franchise or simply a license, is rarely obvious to most business persons, because many combinations of legal factors and elements of the deal are considered in aggregate (taken together) to make the determination. Some important factors considered include,
(a) the type of rights that are given as part of the deal (the licensing agreement, etc.). For example, the right to use a business trademark, proprietary business systems, secret recipes, an intellectual property license, etc.;
(b) the specific conditions or promises that are part of the deal (training, manuals, fees, etc.); and
(c) the level and type of control that the business giving the rights, will have over (i) its property while it is being used by the receiving business; and (ii) the operations of the business receiving the rights.
To Franchise or License . . . Making Cents of it all.
Why do so many small business owners want to stay away from franchising?
Typically, small businesses believe that they do not have, or they do not want to spend, the resources that are necessary for compliance with the applicable regulations, including time, effort and money.
On the other hand, why do some small business owners want to franchise, despite the additional commitment of resources required?
(a) These small business owners may be betting that revenue received as a result of the franchise deal, will well exceed the additional resources required for compliance with the applicable laws.
(b) They may be betting that the deal will build and expand their brand, increase the value of their property that is related to the deal and that such outweighs the costs.
(c) They may believe that maintaining control over their brand and property is important.
Unfortunately, for small business owners that want to offer a deal involving the receipt of payment in exchange for providing others with a right to use their property (such as a trademark, business name, proprietary business system and/or trade secrets, such as formulas, processes, methodologies, recipes, etc.), staying outside of the Franchise Box is not likely. Therefore, compliance is typically necessary to avoid significant civil and criminal penalties.
In sum, if a deal that includes licensing rights, is not properly registered, and it is not known whether the deal is “exempt” from registration (and other compliance requirements), the deal may be “illegal.” If the deal is illegal, civil and/or criminal penalties could apply to the persons and businesses involved.
Understanding the differences between licensing and franchising is challenging. Seek the advice of a qualified licensing lawyer / franchise lawyer, experienced and knowledgeable with regard to the differences between licensing and franchising, about your licensing agreement, before soliciting others with regard to deals involving licensing.
Michelle L. Grenier, Esq.,
Small Business Lawyer / Licensing Lawyer
Helping business owners understand the differences between licensing and franchising.
Franchise license attorney, difference between licensing and franchise, licensing law, licensing agreement, intellectual property licensing, franchise license, franchise lawyer, franchise license lawyer.
Mon, Jul 14, 2014
Buying Food Product Labels? Protect your investment, by obtaining the advice you need to comply the applicable label laws.
What is the difference between the FDA, USDA and FSIS?
Why is compliance so important for food processors?
FDA. The Food and Drug Administration (“FDA”) has jurisdiction over a majority of the United States food supply, including produce, seafood, dairy and other products.
USDA. The U.S. Department of Agriculture (“USDA”) regulates meat, poultry and processed egg products, while FDA regulates all other food products.”
FSIS. USDA’s Food Safety and Inspection Service (FSIS) ensures that the U.S. meat, poultry and processed egg supply is wholesome, safe and properly labeled.
REGULATIONS/REQUIREMENTS. The FDA and USDA have separate regulations and requirements for food labeling. The USDA Food Safety & Inspection Service (FSIS) requires labeling pre-approval process; however, it also permits some products to have certain approval with certain record keeping and without submission to their Washington, DC office.
COMPLIANCE. Compliance with these regulations and requirements is essential for the success of food processors. Don’t learn the hard way. Find out what regulations and requirements apply to your food processing business. Consult a small business lawyer experienced in representing Food Processors, and obtain the advice you need, concerning these important compliance issues.
Time and time again, Food Processors invest a significant portion of their budget on packaging and labels without knowing what they need to know in order to comply with the applicable rules and regulations, only to find out that their labels do not comply. Unfortunately, custom labels are rarely “returnable” and printers typically do not provide refunds for compliance issues. This results in great losses for startup Food Processors. Obtain the advice you need from an experience small business lawyer, before you invest in labels or packaging for your products.
IMPORTANT ISSUES. Here are some of the important issues Food Processors should consider
- USDA-FSIS prior and generic approval labeling processes.
- Regulations, Standards, Policies, Guidance and Compliance basics and related resources.
- Requirements versus Optional Claims and limitations and prohibitions related to claims.
- Product names, ingredient lists, nutrition facts, net contents, product origin.
- Optional Claims – nutrient content, ingredient, quality, health related, animal-raising.
- When can you claim “all natural” or “organic”?
Tags: Food Processors
Fri, May 16, 2014 @ 07:30 AM
This article presents important issues that you should consider when choosing a Name, Brand and Trademark for your business.
- PRESCREENING. During a naming project (names for businesses, products or services), have your options prescreened against the USPTO trademark database, to reduce the risk of wasting valuable time and money considering or using names, brand and trademarks that are not likely available for registration.
- PROFESSIONAL FEEDBACK. Engage the services of and obtain professional feedback from an experienced trademark attorney, who can screen names, brands and trademarks with greater precision than those without the trademark law experience and training.
- LIKIHOOD OF SUCCESS. This will allow you to feel confident that the names, brands and trademarks that are submited to the U.S. Patent and Trademark Office, have been deemed by an experienced attorney, as likely to pass examination by the USPTO Examining Attorney and likely to be granted registration.
- FIRST IN TIME WINS. Remember that FIRST IN TIME WINS. That means in the race for obtaining exclusive rights to use a trademark, the person who uses or applies for USPTO registration of the trademark first, WINS! If you are not first, you lose. You can apply for registration even before you use the trademark and in most cases this type of application is recommended.
Thu, Mar 06, 2014
Tip For Business Success
Why Register your Trademark? Trademark Registration Benefits
Registering and maintaining your trademark registration on the USPTO Principal Register, will provide you with several benefits and advantages, including, but not limited to the following:
- A legal presumption of your ownership of the mark and your exclusive right to use the mark nationwide on or in association with the goods/services set forth in your registration;
- The ability to bring an action concerning the mark in federal court;
- The right to use the federal registration symbol ®;
- Public notice of your claim of ownership of the mark;
- The use of the U.S. registration as a basis to obtain registration in foreign countries;
- The ability to record the U.S. registration with the U.S. Customs and Border Protection (CBP) Service to prevent importation of infringing foreign goods; and
- Listing in the United States Patent and Trademark Office’s online database.
Tags: trademark registration, intellectual property rights, trademark, trademark lawyer, trademark law, trademarks, intellectual property, trademark attorney, copyright, copyrights, copyright registration, copyright law
Mon, Jan 13, 2014 @ 06:30 AM
Why include Non-Disparagement clauses in your independent contractor agreement or employment agreement?
- Purpose of Non-Disparagement Clauses. Freedom of speech laws, make it very difficult to get Internet postings and websites that contain harmful, disparaging, “opinions” taken down or otherwise removed from the Internet. Non-disparagement clauses in an employment agreement or independent contractor agreement, are typically intended to, amongst other things, deter such postings and websites and make it possible to obtain an injunction and court order to have disparaging opinions taken down or removed from the Internet.
- Risk. In many cases, disgruntled ex-contractors and former employees, have done much harm to the goodwill and reputation of companies and their owners/managers through the posting of opinions (which, generally, absent a contractual restriction, is legal – so long as it’s not false and defamatory). Some disgruntled former employees and ex-contractors hold employers/companies “hostage” with threats of corporate sabotage and/or actually sabotage companies via such postings and websites.
- Applicability. Ask yourself, is there any circumstance where it would be o.k. for your employee or contractor to intentionally disparage you or your business. If your contractor is a competitor of your business, then perhaps adding a limited exception for competitive remarks may be considered reasonable.
- “Irreparable Harm.” If the disparagement clause in your independent contractor agreement or employment agreement prohibits disparaging postings only if such postings caused “irreparable harm,” that language may delay and/or prevent you from obtaining a court order to remove the posting.
- Reasonable Request. In light of the foregoing, it is reasonable, from the legal perspective, for an employer hiring an employee or a company engaging a contractor, to require, amongst other things, that the employee or contractor promise not to intentionally disparage you or the business, as a condition for employment or engagement and payment for services. These conditions should be set forth in a well-drafted independent contractor agreement or employment agreement.
Fri, Oct 25, 2013 @ 06:30 AM
What is DBE Certification and ACDBE Certification?
- DBE means Disadvantaged Business Enterprise.
- ACDBE means Airport Concessions Disadvantaged Business Enterprise.
- MBE means Minority Business Enterprise.
- WBE means Women’s Business Enterprise.
- For-profit small businesses may qualify for DBE Certification or ACDBE Certification if the business has at least one or more socially and economically disadvantaged individuals that own at least a 51% ownership interest in the business and also control management and business operations.
- There is a presumption that Women, African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans are socially and economically disadvantaged; however, other individuals can also qualify as socially and economically disadvantaged and qualification is determined on a case-by-case basis.
- In order to participate in a DBE program or ACDBE program, a small business owned, operated and controlled by one or more socially and economically disadvantaged individuals must receive DBE certification from the appropriate state(s).
- This may mean DBE certification or ACDBE Certification in more than one state. In addition, the 51% owner must have a personal net worth that does not exceed $1.3 mil. or in the case of Airport Concessions Disadvantage Business Enterprise ( ACDBE ) the personal net worth of the disadvantaged owner must not exceed $750,000.
- Also, in order to qualify for DBE Certification or ACDBE Certification the business must meet SBA size criteria and have average annual gross receipts not to exceed a maximum. Note, size limits for the airport concessions DBE program are currently higher and these maximum amounts for personal net worth and gross receipts are subject to change.
- MBE Certification for Minority Business Enterprises and WBE Certification for Women Business Enterprise, have similar requirements; however, these applications and certifications are separate from the DBE application.
- Consult an experience DBE Lawyer or ACDBE Lawyer for advice with regard to whether you qualify.
Tue, Aug 06, 2013 @ 07:29 PM
Can I use and register a famous trademark, if I use the famous trademark in association with products or services that are different than those used by the famous trademark owner?
Famous trademarks that are used in the U.S. are typically provided broader protection than non-famous trademarks.
1. What added protection do famous Trademarks have?
Famous trademarks qualify for protection under the federal anti-dilution statute. The owner of a famous mark that is distinctive (inherently distinctive or through acquired distinctiveness), is entitled to an injunction against another person who, at any time after the owner’s mark has become famous, commences use of a mark or trade name in commerce that is likely to cause dilution by blurring or dilution by tarnishment of the famous mark, regardless of the presence or absence of actual or likely confusion, of competition, or of actual economic injury.
2. What is Trademark Dilution?
Trademark dilution typically involves an unauthorized use of another’s trademark on products or services that do not compete with are not related to those of the trademark owner. As an example, a famous trademark used by one company to refer to apparel might be diluted if another company began using a similar mark to refer to an animal product.
3. What determines whether a Trademark is Famous?
A mark is famous if it is widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark’s owner. In determining whether a mark possesses the requisite degree of recognition, the court may consider all relevant factors, including, but not limited to, the following:
(i) The duration, extent, and geographic reach of advertising and publicity of the mark, whether advertised or publicized by the owner or third parties.
(ii) The amount, volume, and geographic extent of sales of goods or services offered under the mark.
(iii) The extent of actual recognition of the mark.
Note related to foreign trademarks. Even if a mark is famous throughout Europe and Asia, for example, with multiple retail stores, press mentions, etc., the trademark may not be eligible for protection under the federal anti-dilution statute in a U.S. court, if the mark is not used in the U.S.
Remember: Consult with an experienced Trademark Lawyer before your invest your time, effort and money in relation to a trademark and register early, before someone else prohibits you from using and registering the trademark.
What is the difference between Trademarks, Copyrights and Patents? Click here for more info.
Tue, Jul 30, 2013 @ 07:29 AM
Can I obtain Trademark Registration for my slogan? This article addresses this common question.
Protecting your rights to your trademarks is essential to protect your investment, whether it be time, effort, money or other resources, in marketing your a product or service. It is also important to know what the limits are, for such protection, so that your marketing strategy can be developed in a manner that will allow for the greatest protection of your mark.
The United States Patent and Trademark Office (USPTO) has strict regulations regarding whether or not a slogan may be registered as a trademark. Here is a summary of issues that are relevant in determining whether a slogan is registerable.
(a) The slogan should be used to identify the source of the goods or services and not merely “laudatory,” “informational” or “generic” (that is, the should be capable of distinguishing your particular service or product from the service or product of another source).
(b) For products, the slogan should be made a part of the packaging to show that the mark is being used as a source identifier.
(c) The slogan should either
(i) be inherently distinctive and qualify as a trademark in itself;
(ii) be identified with the product or service to the extent that consumers, when seeing or hearing the slogan, relate the slogan to your particular product or service (that is, show that the slogan has developed what the law refers to as a “secondary meaning, e.g., Nike’s “Just Do It”).
Note, even if a slogan does not amount a registerable mark, under federal registration guidelines, laws protects certain slogans under “common law” principles relating to unfair competition, that is, where the mark has acquired a “secondary meaning.”
The United States Copyright office regulations prohibit copyright registration for “short phrases” and “slogans.” In addition, such regulations prevent the registration of the registration of “words, phrases, symbols, or designs that identify the source of the goods or services of one party and distinguish them from those of others.” Instead, related protections fall under the trademark laws.
Also note, if a slogan can pass the “originality” test and is not intended to identify the source of the services or products (that is, the slogan is not intended to be used as a trademark) then copyright protection may be possible. See article concerning copyright protection.
In addition, make sure your slogan is available for your use (will not infringe on the rights of others), before your invest your time, effort, money and other resources. Contact a qualified Trademark Lawyer to obtain professional advice concerning the availability of your slogan for your use and for advice concerning strategies that will help you get the greatest protection for your mark.
Michelle L. Grenier, Esq. is an experienced Trademark Lawyer. Click here to contact Attorney Grenier to start the conversation about your business plans and trademarks.
Thu, Jul 11, 2013
Prior to purchasing a business, consider the following important issues:
- Form a new Legal Entity or Entities for purposes of protecting personal assets from business activities, such as, acquiring the Business Assets, purchase property, enter into lease, etc.
- Before committing much time, money and effort to the transaction, require the potential Seller sign a well-drafted Offer to Purchase/Letter of Intent, that, amongst other things, prohibits negotiations with third parties during a certain period.
- Conduct proper and adequate Due Diligence, to find the skeletons in the closet.
- Propose a well-drafted Business (or Business Asset) Purchase and Sale Agreement. Discuss with your lawyer, whether an Asset Purchase would be better than an entity/stock purchase.
- Consider the Real Estate issues that are associated with the transaction, such as, is the Seller’s Lease freely assignable and transferable? Do you need a Real Estate Purchase & Sale Agreement? Are there property Title Issues? Are there issues with the with Landlord?
- Consider Inventory Purchase issues: usable versus non-usable; cost, etc.
- What are the Issues specific to the type of Business you are purchasing?
- Are there Local and State Permitting issues or obstacles to overcome?
- Do you want to purchase Supplies and Supplier/Vendor information and contracts?
- What are the issues associated with Seller’s Employment Agreements with former and current Employees (Executives and Staff)? For example, Terms of Employment; Termination or Retention issues.
It is important to have advice from experienced professionals when purchasing a business and making related decisions. Such professionals include legal counsel, tax professionals and may include business valuators and other professionals specific to your industry. For more information on Business Acquisitions and Purchase and Sale Agreements, click here.
Michelle L Grenier, Esq., is an experience Business Lawyer, that can provide you with the information you need to make informed decisions related buying a business. Click here to consult with Attorney Michelle L. Grenier.
Wed, Feb 27, 2013 @ 06:20 AM
WHAT IS THE DIFFERENCE BETWEEN TRADEMARKS, COPYRIGHTS AND PATENTS? AND WHY YOU WANT TO KNOW.
Briefly, Trademark rights protect WORDS, NAMES, SYMBOLS OR DEVICES, Copyrights protect the EXPRESSION and Patent rights protect the INVENTION.
1. Trademark rights protect the WORD, NAME, SYMBOL OR DEVICE.
The word, name, symbol or device must be used in trade with goods, to indicate the source of the goods and to distinguish them from the goods of others.
However, applications for Trademark Registration may be filed, prior to such use.
Trademark rights may be used to prevent others from using a confusingly similar mark, but NOT to prevent others from making the same or similar goods or from offering or selling the same or similar goods or services under a clearly different mark (generally, where a reasonable person would not confuse the two marks as being derived from the same source).
Trademarks which are used in interstate or foreign commerce may be registered with the United States Patent and Trademark Office.
The terms “trademark” and “mark” are commonly used to refer to both trademarks and service marks.
2. Copyright protects the EXPRESSION.
Copyright is a type of protection provided to the authors/creators of “original works of authorship” including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished. Generally, the 1976 Copyright Act provides the owner of copyrights with rights.
The copyright protects the form of expression, NOT the subject matter of the work. For example, a description of a robot could be copyrighted, but this only prevents others from copying the description; it would NOT prevent others from writing their own description or from making and using the robot.
Copyrights are registered by the Copyright Office of the Library of Congress.
3. Patent rights protect the INVENTION.
Patent registration provides the right to exclude others from making, using, offering for sale, or selling the invention in the United States or “importing” the invention into the United States.
What is granted is NOT the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention.
A patent for an invention is the grant of a property right to the inventor, issued by the Patent and Trademark Office for a term of 20 years from the date on which the application for the patent was filed with the U.S Patent and Trademark Office.* Note, patents granted by the USPTO are effective only within the United States, US territories, and US possessions.
* In special cases, the start of the 20 year period commences on the date an earlier related application was filed (subject to the payment of applicable maintenance fees).
Click here for a FREE EASY TO UNDERSTAND CHART, showing a side-by-side comparison of the differences between Trademarks, Copyrights and Patents.
The foregoing is provided for informational purposes only. This is not intended to be, and is not, legal advice. Do not rely solely on this document. Seek advice of a qualified lawyer with regard to the specifics of your situation.
Tags: trademark registration, intellectual property rights, trademark, trademark lawyer, trademark law, trademarks, intellectual property, trademark attorney, Intellectual Property agreement, copyright, copyrights, copyright registration, copyright law, trade name, licensing, licensing agreements, license trademark, license intellectual property, copyright registration checklist
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