Running a startup is exciting—but it’s also risky. Legal challenges like lawsuits, regulatory investigations, or breach of contract claims can arise unexpectedly. That’s why indemnification agreements are essential for startup founders, executives, and directors.

What Is an Indemnification Agreement?

An indemnification agreement is a legal contract where one party (usually the company) agrees to protect another party (such as a founder, director, or officer) from certain legal and financial liabilities. In other words, if a founder is sued or faces legal action for something done in the course of running the business, the company agrees to cover the costs.

These agreements are especially important for founders and startup leaders, who often face personal liability for company decisions.

Key Elements of an Indemnification Agreement

A well-drafted indemnification agreement typically includes:

• Triggering Events: These are the specific scenarios that activate the agreement, such as a third-party lawsuit, a regulatory investigation, or a breach of contract.
• Covered Costs: The agreement outlines what expenses are reimbursed, including legal fees, settlements, and court judgments.
• Defense Obligations: This section specifies whether the company will pay legal fees upfront (called advancement) or only after the case is resolved.
• Terms and Conditions: These often include limitations on liability, requirements that the indemnitee acted in good faith, or other boundaries on when indemnification applies.

Why Founders Should Care About Indemnification

As a founder, you wear many hats—including that of a director or officer, which means you owe a fiduciary duty to your company and its shareholders. If a business decision is later challenged—even unfairly—you could be held personally responsible.

Without an indemnification agreement, a single lawsuit could financially devastate a founder, even if the claim has no merit. These agreements shift that burden from the individual to the company, protecting your personal assets.

Indemnification Helps Attract Top Talent

High-caliber executives, advisors, and board members often won’t join a startup unless they’re assured they’ll be protected from legal exposure. A strong indemnification agreement offers that peace of mind, making it easier to attract experienced leadership.

Agreement vs. Certificate of Incorporation or Bylaws

While some legal protections are built into a company’s Certificate of Incorporation or bylaws, a standalone indemnification agreement offers stronger and more tailored protection:

• It can’t be changed without the consent of the indemnitee.
• It allows customized protections for individual directors, officers, or employees.
• It can convert permissive indemnification into mandatory coverage, offering more certainty.

Mandatory vs. Discretionary Indemnification

Companies usually offer:

• Mandatory indemnification for directors — because they make high-level decisions and may not always have peers to approve protection after the fact.
• Discretionary indemnification for officers — especially in sensitive situations (e.g., employment disputes or harassment claims), where the company might want flexibility in deciding whether to provide legal defense.

It’s also important to clarify that if someone is both an employee and a director, they’re only covered in their capacity as a director unless otherwise stated in the agreement.

Final Thoughts

For founders and startup leaders, an indemnification agreement is more than just a legal formality—it’s a crucial shield against personal financial ruin. It ensures that the risks of doing business fall on the company, not the individual, and it plays a key role in attracting the kind of experienced leadership that helps startups grow and thrive. (Let the expert team at 91¶¶Ňő take care of your Indemnification, so that you can focus on what you do best: running your business.)

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Table of Contents

• Patent Protection for AI Algorithms
  • To secure a utility patent for an AI algorithm:
• Copyright Protection for Implementations of AI Algorithms
  • To leverage copyright for AI algorithms:
• Trade Secret Protection for Confidential Business Information
  • Best practices for maintaining trade secrecy include:
• Trademarks for Branding AI Products and Services
  • Tips for trademarking AI products and services:
• Leveraging a Mix of Legal Protections for AI Algorithms

As artificial intelligence (AI) continues to transform businesses, protecting the intellectual property (IP) behind AI algorithms is becoming increasingly important. AI algorithms provide competitive advantages, so businesses want to safeguard this IP through patents, copyrights, trademarks, and trade secrets. This article explores the best practices for IP protection of AI and machine learning technologies.

Patent Protection for AI Algorithms

Patents provide powerful protection for new inventions and are commonly used to protect AI algorithms. Software can be patented in the US if it solves a technical problem in a novel way and produces a useful result. The patentability of AI algorithms falls into an evolving gray area, but they can meet patentability standards under current case law if properly drafted.

To secure a utility patent for an AI algorithm:

• Clearly articulate in the patent application how the algorithm achieves a useful result by applying AI technology in an unconventional way to solve a technical problem. Avoid overly broad claims that lack a clear technical underpinning.
• Describe the inner workings of the algorithm in detail while still maintaining trade secrecy over some implementation details. Enable a person skilled in AI to reproduce the invention without undue experimentation.
• Patent early in the development process before publicly disclosing the invention. The US has moved to a first-inventor-to-file system.
• Seek algorithmic improvements that go beyond routine optimization to demonstrate the “inventive step” required for patents. Document evidence of unexpected results achieved by the algorithm.

Copyright Protection for Implementations of AI Algorithms

While patents protect the underlying methodologies of AI algorithms, copyright can safeguard software implementations and codes. Unlike patents, copyright protection arises automatically upon the creation of an original work fixed in a tangible medium.

To leverage copyright for AI algorithms:

• Copyright the source code and machine learning models constituting creative implementations of the methodology.
• Restrict public access to the code and prohibit unauthorized copying or distribution. Make sure the code and models contain copyright notices.
• Register the copyrights with the before bringing infringement suits. Registration establishes prima facie evidence of copyright validity.
• Deposit copies of the protected code in an escrow account to verify ownership in case of disputes. The deposit establishes the content that receives protection.

Trade Secret Protection for Confidential Business Information

Trade secret law shields valuable confidential business information from misappropriation. Some aspects of AI algorithms, like data sets used for training models, may derive economic value from secrecy and qualify for trade secret protection.

Best practices for maintaining trade secrecy include:

• Restricting access to confidential data sets and models through encryption, firewalls, and employee non-disclosure agreements
• Creating secure data infrastructure, like access controls and logs, to prevent data leaks
• Promptly getting all employees, vendors, and collaborators to sign non-disclosure agreements that prohibit unauthorized uses or disclosures
• Monitoring relationships with third-party partners who may gain access to sensitive information
• Taking reasonable secrecy precautions like need-to-know access and physical security

Trademarks for Branding AI Products and Services

Trademarks can protect the brand names, slogans, and logos associated with AI offerings. Unlike the other protections that shield functional technology, trademarks safeguard brand identities and goodwill.

Tips for trademarking AI products and services:

• Perform clearance searches for identical or similar marks before adopting a brand name or logo
• Submit applications to register trademarks with the
• Use TM for unregistered common law marks and ® for registered marks
• Create branding guidelines for the proper use of protected marks
• Monitor for and address any confusingly similar offending marks

Leveraging a Mix of Legal Protections for AI Algorithms

AI developers can deploy a mix of patents, copyrights, trade secrets, and trademarks to fully protect intellectual property. Patents and copyrights safeguard AI invention and implementation, while trade secrets secure confidential data and trademarks protect branding.

This overlapping IP protection reinforces competitive advantages derived from AI algorithms. Companies should develop integrated IP strategies tailored to their specific AI capabilities, assets, and business models. As AI permeates commerce, sound IP safeguards provide the keys to fully capitalizing on AI’s revolutionary potential.

Get a Free Consultation from 91¶¶Ňő Experts

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Table of Contents

• Introduction
• Step 1: Board Resolution
• Step 2: Notify Shareholders
• Step 3: Notify Creditors
• Step 4: Liquidate Assets and Distribute Proceeds
• Step 5: Settle Debts and Obligations
• Step 6: File Final Tax Returns
• Step 7: Distribute Remaining Assets to Shareholders
• Step 8: Close Business Operations
• Step 9: File Certificate of Dissolution
• Conclusion

Introduction

Embarking on the journey to dissolve a Delaware C Corporation after an asset purchase (M&A) is a crucial step for companies looking to streamline operations or pivot their business model.

While it might seem like a complex process, with careful planning and adherence to legal requirements, and the assistance of a great law firm it can be executed smoothly.

In this guide, we’ll outline the essential steps you need to take to dissolve your Delaware C Corp after acquiring all of the company’s intellectual property (IP) and other assets.

Step 1: Board Resolution

The first step in this process is obtaining approval from the company’s board of directors.

A board resolution should be passed, affirming the decision to dissolve the corporation. This resolution should be documented and kept in the corporate records.

Step 2: Notify Shareholders

After obtaining board approval, you must notify the shareholders of the decision to dissolve the corporation.

This can be done by sending them a notice of the special meeting where the resolution was passed, or through written consent in lieu of a meeting, depending on the company’s bylaws.

Step 3: Notify Creditors

Once the Certificate of Dissolution is filed, it’s crucial to notify all known creditors of the corporation.

This notice should include a deadline for submitting claims against the company.

This step helps ensure that all outstanding debts are addressed before finalizing the dissolution process.

Step 4: Liquidate Assets and Distribute Proceeds

Following notification to creditors, the corporation must liquidate its remaining assets.

This includes selling any tangible assets like equipment or real estate and transferring the proceeds to a designated account. Additionally, any remaining IP rights should be transferred to the acquiring entity, as outlined in the asset purchase agreement.

Step 5: Settle Debts and Obligations

With the proceeds from asset liquidation, settle all outstanding debts, including those identified by creditors who responded to the notice.

It’s essential to ensure that all debts are resolved before proceeding further.

Step 6: File Final Tax Returns

File the final federal, state, and local tax returns for the corporation.

Ensure all tax liabilities are satisfied, and obtain the necessary tax clearance certificates, if applicable.

Step 7: Distribute Remaining Assets to Shareholders

Once all debts are settled, distribute any remaining assets to the shareholders in accordance with their ownership percentages.

This should be done in compliance with tax laws and regulations.

Step 8: Close Business Operations

Conclude any remaining business operations, such as canceling leases, contracts, and any other ongoing commitments.

Notify employees, if applicable, and address any remaining employment-related matters.

Step 9: File Certificate of Dissolution

In Delaware, you’ll need to file a Certificate of Dissolution with the Delaware Secretary of State.

This form will contain essential information about the corporation, such as its name, date of dissolution, and a statement that all corporate debts and obligations have been paid or adequately provided for.

Conclusion

Dissolving a Delaware C Corporation after an asset purchase (M&A) is a structured process that requires meticulous attention to detail and adherence to legal requirements.

By following these steps and seeking professional advice when necessary, you can navigate the dissolution process smoothly, ensuring a seamless transition to the next phase of your business endeavors.

Remember, consulting with legal and financial professionals familiar with Delaware corporate law is crucial to ensure compliance with all legal obligations.

If you have any questions about the process please reach out to our team at 91¶¶Ňő for a free consultation with an experienced and friendly Business Attorney

The post What you have to know to Dissolve a Delaware C Corp After an Asset Purchase M&A transaction appeared first on 91¶¶Ňő Business Law Firm.

Table of Contents

• 1. Introduction.
• 2. Conducting Due Diligence
• 3. Identifying Trademark Assets.
• 4. Drafting and signing the trademark assignment agreement.
• 5. Recordation of the assignment.
• 6. Post-Acquisition considerations.
• 7. Conclusion

1. Introduction.

The goal of any good startup is to generate great intellectual property, when it is time for mergers & acquisitions (M&A), the transfer of intellectual property (IP) assets is a crucial component of any asset purchase agreement. Among these assets, trademarks play a vital role in protecting a company’s brand identity and goodwill. When acquiring a company’s assets through an M&A transaction, it is important to understand how trademarks and trademark applications can be assigned. This blog post will provide an overview/outline of the process of assigning a trademark in an M&A asset purchase agreement.

2. Conducting Due Diligence

Before proceeding with an M&A transaction, it is essential to conduct thorough due diligence on the target company’s intellectual property portfolio, including its trademarks. This process helps the acquiring party:

– identify the target’s trademark assets; confirm the ownership, scope, validity, and enforceability of the trademark assets, as well as their assignability,

– investigate the risk of infringement and third-party claims regarding the target’s trademark assets,

– make sure that no third-party consent is required for the assignment of the trademark assets.

The due diligence process may involve reviewing trademark registrations and applications and examining any existing licenses or agreements related to the trademarks.

3. Identifying Trademark Assets.

During the due diligence process, it is important to identify the specific trademarks assets that will be included in the asset purchase agreement, these could be either registered trademarks (state or federal), pending trademark applications or unregistered trademarks (common law rights in trademarks) of the target company. Additionally, any related intellectual property rights, such as logos, slogans, or trade dress, should also be identified and considered. The acquiring party needs to make sure that if the trademarks include any logos or designs, the target company owns all rights in such logos and designs. It is important to note that not all trademark assets can be assigned, certain trademark applications, such the intent-to-use applications, cannot be assigned before the marks are fully registered.

4. Drafting and signing the trademark assignment agreement.

In an asset purchase transaction, besides the asset purchase agreement, the parties also need to execute a trademark assignment agreement as an ancillary document. The agreement should explicitly state which registered trademarks and trademark applications are being assigned to the acquiring party. It should also include certain provisions regarding the transfer of the title and interest in the trademark assets. The assignment is considered completed when both the asset purchase agreement and the trademark assignment agreement have been finalized and executed.

5. Recordation of the assignment.

Under US law once executed, the trademark assignment agreement can be recorded with the . Recordation is not mandatory; however, it is highly recommended. It protects the byer’s interest by:

– creating public evidence of the buyer’s ownership rights,

– provides constructive notice to third parties about the assignment, and

– priority against subsequent bona fide purchasers of the trademark assets without notice.

6. Post-Acquisition considerations.

Following the completion of the M&A transaction and the assignment of the trademark assets, the acquiring party should develop a post-acquisition trademark strategy to protect its trademark assets. This strategy should involve trademark maintenance and renewal of the trademark registrations, monitoring and identifying similar or infringing trademarks and/or applications, as well as trademark enforcement against potential infringers.

7. Conclusion

Assigning a trademark as part of an M&A asset purchase transaction is a complex process that requires careful consideration and legal expertise. Conducting due diligence, identifying trademark assets, drafting a comprehensive asset purchase agreement and a trademark assignment agreement, and properly executing those agreements are critical steps to ensure a successful transfer of ownership. By following these steps and implementing a post-acquisition trademark strategy, the acquiring party can protect and leverage the acquired trademarks to enhance its brand presence and business objectives. If you would like to speak with an experienced M&A attorney or trademark attorney, please reach out to 91¶¶Ňő for a free consultation.

The post Assignment of trademark rights as part of an M&A Asset Purchase appeared first on 91¶¶Ňő Business Law Firm.

Business attorneys often have to deal with frivolous lawsuits, however, copyright and patent trolls are despised by company lawyers.

A copyright troll is a party that enforces copyrights it holds in order to make money by having their attorneys file strategic litigation, in a manner considered extremely aggressive or opportunistic, and generally, without creating or licensing the works it owns for paid distribution.

In the fashion industry, particularly in fast fashion, fabrics with patterns/designs are purchased in bulk from manufacturers, and those fabrics are sold to clothing manufacturers to create clothing that is later sold to retailers.

Many individuals who purchase these fabrics in bulk to sell to clothing manufacturers rarely know the origin of the pattern, likely never know if anyone owns the copyright to the pattern, and rarely have their general counsel conduct a copyright search.

The trolls enter the fashion world by having their attorneys file to register the copyright of a design, in turn obtaining ownership of the fabric design.

The trolls will then cast a very wide net, having their attorneys send out hundreds of thousands of accusatory letters claiming copyright infringement against any party who has bought, sold, or acquired a piece of fabric that has a design that resembles the copyrighted work.

These letters are intimidating and lead individuals to be scared into hiring their own attorneys and paying tens of thousands of dollars to an individual even though they had no intent of doing anything wrong.

It is highly recommended to contact an attorney if threatened by a copyright troll to avoid paying money when there has been an innocent use. 

Many times, the trolls never actually use this copyrighted work nor did they create the copyrighted work, but by owning the copyright registration they are able to claim infringement against innocent infringers and they rely on the fact that they may not know they should contact an attorney before giving money to the accusers.

Unfortunately, even though trolls often take advantage of innocent individuals the damage rewards obtained have been far from nominal.

These suits require representation from an attorney who knows how to best represent innocent infringers. A copyright owner may elect to recover actual damages, which are the actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.

The copyright owner is required to present proof only of the infringer’s gross revenue, and the infringer is required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.

The largest awards come from statutory damages that the copyright owner may elect to recover instead of actual damages and profits.

Statutory damages for all infringements involved for any one infringer is liable for a sum of not less than $750 or no more than $30,000 as the court considers just.

If the court finds that the infringer was not aware and had no reason to believe that his or her acts constituted an infringement of copyright, the court in its discretion may reduce the award of statutory damages to a sum of not less than $200.

Even if one is an innocent infringer the burden of proving innocent intent is on the defendant’s attorney and is a heavy one.

The reduction of statutory damages for innocent infringement requires an inquiry into the defendant’s state of mind to determine whether he or she “was not aware and had no reason to believe that his or her acts constituted an infringement.”

17 U.S.C. § 504(c)(2) Luckily, many courts are aware of copyright trolls and also take into consideration the sophistication or level of understanding to prompt an inquiry into the source of the unmarked goods.

If you have received a copyright infringement letter you are welcome to reach out to us for a free consultation by a seasoned Bay Area Business Attorney. To set up an appointment call or email.

The post How to Cope with Copyright Trolls (from a Business Attorney’s Perspective) appeared first on 91¶¶Ňő Business Law Firm.

by Attorney Boyana Bounkova

Table of Contents

• 1- It is good to select a mark for your product as early as possible.
• 2- Your company name does not need to be the trademark for your product or services.
• 3- Make sure you and your attorney select the name carefully before you start using it and attempting to register it.
• 4- Have your attorney file for registration as soon as you can.
• 5- If properly and timely maintained, the mark registration can last forever.

As an experienced San Francisco and Bay Area Intellectual Property, Trademark, and Copyright attorney I can attest to the importance of securing your name and trademark.

I have personally worked in startup acquisitions where the primary asset of the company is its registered trademark. Yet, for some startup companies trademark protection is not something that they generally consider a top priority, trademarks are usually believed to be expensive and not of immediate importance.

Trademarks, however, are a core asset for each business, they create an immediate value that has the potential to grow and even be sold as a separate property.

In addition, if the mark is properly selected, the registration process is pretty straightforward and inexpensive.

This is why it is very important for startups to protect their mark as early as possible to secure their interest in the brand name they have chosen.

Here are some helpful tips to keep in mind while doing so.

1- It is good to select a mark for your product as early as possible.

The sooner you select the name for your mark, the earlier you may start building value in your product or service. Also early choice of a mark gives you the chance to secure your rights in the name first and thus keep direct competitors and other related businesses from using similar names for similar goods and products.

Of course, in order to obtain the full scope of protection accorded to a trademark by the U.S. Trademark Act, you need to register your mark with the United States Patent and Trademark Office.

2- Your company name does not need to be the trademark for your product or services.

Your corporate company name, which you use to register your business with the Secretary of State, does not immediately become your trademark.

If you would like to use your company name as your business name and a trademark for your goods and services you need to obtain trademark protection for it.

Also, the trademark for your goods and services does not need to be the same as your company name. In fact, you can have multiple trademarks for the different goods and services that your company offers and provides.

3- Make sure you and your attorney select the name carefully before you start using it and attempting to register it.

You need to be very careful when selecting the name for your mark because not every mark can legally serve as a trademark, nor can it be registered with the United States Patent and Trademark Office.

Before you choose your mark, make sure that you select a word that is unique and distinctive.

You need to do a comprehensive search to see if another company or person is using the same or similar mark for goods or services that are similar or somehow related to yours. 

Another important issue you need to consider is how ‘strong’ your mark is from a legal standpoint.

If a mark is ‘weak’ it will not be protected, usually, generic and descriptive marks are considered weak and incapable of protection, while strong marks are considered those that are fanciful, arbitrary, or suggestive.

In addition, the USPTO will not allow registration of marks that are: surnames, geographically descriptive of the origin of the goods and services; foreign terms that translate into descriptive or generic terms; names and likenesses of individuals; titles of single books and/or movies and matters that are used in a purely ornamental manner.

4- Have your attorney file for registration as soon as you can.

Even though in the United States federal registration of a trademark is not a prerequisite to protection, as soon as you are certain that the mark you have selected is unique, distinctive, and strong and of course that it has not been used or registered by another business, you should file for registration of that mark.

The registration of a mark offers multiple advantages to the mark owners, they can easily establish, prove, protect, and enforce their rights in the mark.

In the US you can file for a trademark registration before you have actually started using the mark in commerce.

5- If properly and timely maintained, the mark registration can last forever.

Unlike patent and copyright protection, which have a limited period of legal protection, trademarks can be protected forever if your business continues.

The only thing you need to do is take care of the legal formalities and renew your trademark registration by filing the required renewal forms with the USPTO.

If you would like to set up a consultation with an experienced San Francisco and Bay Area Trademark attorney call or email.

The post Ironclad Trademark tips you need to know for Startups appeared first on 91¶¶Ňő Business Law Firm.

By: Boyana Bounkova

Table of Contents

• Make sure no one else is using the trademark for similar goods or services.
• Select a strong trademark, which can be protected.
• File your trademark application as early as possible.
• Make sure there is a domain name available for the trademark you have selected.

As a seasoned trademark attorney, I have years of experience working in all aspects of trademark law. Including but not limited to trademark applications, trademark litigation, trademark disputes, trademark coexist agreements, trademark usage negotiations, USPTO Office Actions, response to trademark infringement Cease and Desist (C&D) letters from another trademark attorney, and more.

There are a number of tips that you should keep in mind before filing your trademark application to ensure that your application will pass the requirements of the USPTO and the Trademark Act.

Make sure no one else is using the trademark for similar goods or services.

The first and very important rule is to make sure the name that you have selected for your brand is not already used by a competitor for goods and services similar to the ones that you offer or plan to offer.

To do so you or your trademark attorney needs to search the available USPTO to find whether trademarks with the same or similar brand name have been filed or registered and if such trademarks exist whether they offer products and services similar to yours.

Even if there is no other trademark registered or filed for this name, it is also good for your trademark attorney to do a general search through internet search engines to make sure other companies are not using the name in commerce in a similar way.

Even if their trademark is not registered, their use of a similar name can still create consumer confusion, and this is what trademarks are meant to prevent.

Select a strong trademark, which can be protected.

Another very important tip is to select a name for your trademark that is distinctive and does not describe the goods and services you will be offering.

It doesn’t take a trademark attorney to know that the more unique and distinctive the name of the brand, the more likely it is it will receive a trademark registration.

Try selecting trademarks that are fanciful (made-up words such as ‘Pepsi’, ‘Xerox’, ‘Kodak’, etc.), arbitrary (words that are not related in any way to the services or goods you offer such as ‘Apple’ for computers or ‘Dove’ for soap and cosmetics), or suggestive trademarks (that suggest or slightly hint at a quality or aspect of the product or service you offer, such as ‘Citibank’, ‘Microsoft’, etc.).

Those trademarks can easily be registered. On the other hand, trademarks that are considered descriptive (describe the product or service) require evidence that the trademark has acquired secondary meaning in order to be registered and receive protection.

If you choose a merely descriptive name for your brand, your trademark attorney will not be able to register it without the USPTO initiating an office action.

Until your trademark is registered you (or your trademark attorney) will not be able to successfully sue someone for using a confusingly similar trademark.

Words that cannot be registered as trademarks are generic names – i.e. names identical to the product or service offered or marketed with this trademark (i.e. apple for an apple or for apple selling service).

File your trademark application as early as possible.

The earlier you file your trademark application the higher the chance that you will obtain registration for it in case there are competitors filing for a similar trademark.

Another reason to file your trademark early is that you go through an early assessment process in the USPTO and this way you make sure that you are not putting yourself at risk by infringing on someone else’s trademarked name.

USPTO will review your trademark application and if there are no obstacles (likelihood of confusion, descriptiveness, etc.) the trademark will be approved for registration.

If you wait too long to register, you may face a situation where you have started using your trademark for your products and/or services and have obtained customers, but the trademark was refused registration by the USPTO.

In that case, you will need to rebrand, which will cost time, money, and effort.

Another reason to file early for trademark registration is you have priority on the name from the moment you file. The application sets your filing date as the constructive date for establishing nationwide priority.

If you file a trademark intent to use application on January 1 but haven’t launched your product yet and another company comes in and files an actual use trademark application on January 17, you will have superior rights to the name even though the other company went to market first.

Make sure there is a domain name available for the trademark you have selected.

You do not want to be in a situation where you have a trademark secured, but someone else has already registered and using a domain name for that trademark, which may lead to consumer confusion and difficulties for your potential clients to find your business webpage and for you to grow your business.

We offer a free consultation with an experienced trademark attorney. If you are interested in talking about your trademark you can reach out to us for a free consultation.

Boyana Bounkova Attorney at Law

The post Trademarks 101, What you Need to Know?! appeared first on 91¶¶Ňő Business Law Firm.

Intellectual Property Laws in the Fashion Industry. By Eric H. Milliken, Founder of 91¶¶Ňő, a San Francisco Business Law Firm.

It is no secret that the fashion industry isn’t afforded many protections under intellectual property laws in the United States. But there is tension over what effect this has on the industry. On the one hand, there is the frustrated designer who feels that their art is being stolen by others and they have no incentive to create. On the other hand, there is the designer who has made their living copying elements of other designs and believes that ownership of intellectual property can have stifling effects on creativity.  This blog was inspired by a TEDx talk by Johanna Blakely which can be found here. Ms. Blakely believes that the fashion industry is thriving due to little intellectual property protection.

Intellectual Property law governs creations of the mind. It is divided into three main categories patents, copyrights, and trademarks, which all aim to protect creator’s rights.

Patents are awarded for inventions that are new (original) and useful (functioning or serving their purpose). In the fashion industry patents could be filed for wrinkle free or UV filtering fabrics. The legal usefulness of patents in the fashion industry is limited due to the difficulty to prove a something is completely novel.

Copyrights are reserved for original pieces of art. However, if you ask any intellectual property attorney they will tell you that copyrights are not available for art or sculpture that has utility. Clothing is by definition utilitarian; it serves a function, mainly to cover us and protect us from the elements and thus is not afforded copyright protection. The policy behind this “utilitarian” rule is important. If a designer was allowed to copyright the basic building blocks of design, such as a collar, creativity in the fashion world would be incredibly restricted. People would have to seek permission to incorporate the basic elements of all clothing into their designs. A few individuals could dictate the entire industry. If you have questions about Copyrights feel free to contact one of our San Francisco business attorneys.

Another element limiting the power of copyrights in fashion is separability; it is the art on the clothing not the clothing itself that is protected by copyright. For example, in the fashion industry an artist may create a painting, copyright it, and print it on an item of clothing. In this example, the artwork is copyrighted and cannot be reprinted by others without permission; however, the overall design of the item of clothing is not copyrighted. This line between art and utility can be unclear.

Trademarks are symbols that identify a brand or a product trademarks can include labels, logos or slogans. Trademarks are common in the fashion industry and are some of the most recognizable elements of a fashion brand. For example, the Nike swoosh or the interlocking C’s of the Chanel logo are trademarks. Companies can use trademarks as a way to make it impossible for others to create a similar product. For example, a Louis Vuitton bag, with the classic LV marks repeatedly printed on the bag cannot be copied to a certain extent. A major part of the design of the bag is the trademarked logo which cannot be recreated without permission. Thus, trademarks can be a sword to designers seeking protection through intellectual property laws. If you have questions about Trademarks feel free to contact one of our San Francisco business attorneys.

So what is the argument that the inability of the fashion industry to take advantage of all these Intellectual Property laws is a good thing? Whether designers like it or not they are copying some element of something, whether it is a collar or a sleeve, all clothing designs have certain elements in common. By allowing designers to copy elements of each other’s designs new combinations, variations, and creations result and thus creativity is fostered. Furthermore, fashions have become more available. Clothing companies have made fortunes making high end designs affordable to the masses. This in turn has resulted in fast moving trends which can be good for business and creativity. No matter what side of the argument you are on, it is important to understand these legal concepts and how they may or may not affect your fashion business.

If you have more questions about the fashion industry and protecting your business please feel free to contact one of 91¶¶Ňő’s Business Law Attorneys.

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