Entrepreneurs, Welcome to the Law, Part 2

Part 2 deals with the burgeoning areas of intellectual property law and social media law.

Intellectual Property
This is a biggie, it is about your legal right to make a profit. “Property” does not mean owning a house. It means the right to use and make money off of something. If your business involves creation or invention, it is intellectual property is fundamental to your business model.
Patents are for technical and scientific designs. Also included are new business processes. You are basically saying to the rest of the business community, that they cannot use this design without your permission, and your permission will cost them money.
Copyrights are for literary and artistic creations, in addition to software code. They last for the life of the author plus 70 years. Once I type something, like a blog post, I own a copyright in how these ideas are expressed. I can best protect my legal and business interests by filing for a copyright. I do not own the ideas or the facts, just how I articulate them.
Trademarks and trade names are about brands. The more unique sounding them name, the stronger legal protection you have, that is why medicines have such weird sounding names. Ironically, having a business name that is good for search engine optimization is bad for having a unique trade name.

*The least an entrepreneur needs to know: intellectual property belongs to the entity that paid for the work to be created or invented.
So if you are in the technology business, you need to merge product development and accounting. Technical documents, lab reports, designs and the like should be coded with the source of the money that paid for that labor. That way you can document what you have done on your own without investors, government, or other business partners. That will give you a stronger hand in controlling your company and the revenues from your products.


Social Media
Social media is by its nature, immediate and informal. But it is in writing and very public. Browsing and posting can very easily violate: employment law, securities law, defamation law, intellectual property law, criminal law, consumer protection law, and tort law. Whoever in the company is authorized to post about the company must be trained.

1. Thou shall not plant false testimonials about your products and services. Any promoting of a product on a blog must include some indication that the blogger was paid by the company.
2. Thou shall not mislead consumers as to the qualities and prices of the products and services you sell; evidence shall set you free. Just like in regular advertising.
3. Thou shall not release information designed to harm a market. Whether you post a false rumor about your company that hurts financial speculation, or causes confusion about consumers, you could get into big trouble by lying online.
4. Licensed professionals shall not give advice that is individual in nature. For example, as a lawyer, I am giving very general advice, not specific to any person.
5. Thou shall not engage in illegal promotion schemes, and take care to adhere in interstate and international laws. Watch out for sweepstakes and raffles and the like.
6. Thou shall not mislead investors and shareholders as to internal and external risks to your company. I cannot stress this enough. If a tweet from your company is inconsistent with anything in the prospectus given to investors, you are asking for a lawsuit.
7.Thou shall not publicize any sale of equity or control of the company. Again, writing publicly about equity, shares, or revenue sharing is technically violating securities laws.
8. Thou shall not release trade secrets. Self explanatory.
9. Thou shall not post the copyrighted, trademarked, or patented material of another.
10. Thou shall not defame. Note, that if you as a business person participate in a discussion or controversy online, you may be losing your “private person” status making it harder for you to sue someone for libel.

*Basically educate your management and employees about law and online social media. Remember the speed with which online posting can be spread...and taken out of context.