Businesses deal in three types of property. Real property involves contracts, leases, deeds and is generally document driven and is very formal. In contrast to this, personal property, which can be everything from staplers to semi-trucks (as long as they are not attached to a building or land) and do not necessarily require strict formality unless the items are exceptionally valuable. Intellectual property takes on a whole different aspect because of the government registration aspects.
I will be frank, real property stresses me out. I can do it well, but since my dad had a land title business, I grew up around it and know a lot about the problems people get into so I have a very healthy respect for dealing with it. I can deal in ideas all day and they are forgiving. Real property is unforgiving if it improperly handled. Business owners need to be very careful in handling their real property and should always seek legal advice.
This goes for leases too. Getting into a bad lease can be a nightmare for a business. A friend of mine just rented a building from a delusional swindler. The roof leaks and the air conditioner does not work. The lease is unclear on who has the responsibility for fixing these. The law is clear that the landlord is responsible, but who wants to stop business and go to the courthouse to fight with a lunatic? Meanwhile in this upscale women’s clothing store the coolest they can get it is 85 degrees in the summer. My friend is reluctant to “break” the lease because she does not want to end up at the courthouse fighting about who is right. A good lease might have prevented this disaster and made it clear that she is within her rights to leave.
A businesses personal property involves contracts with both vendors and customers. It involves bot inventory and the tools of the trade. Managing the flow of inventory is of course critical and making sure the contract for the provision of it are in place are a key component of protecting the company. The tools and equipment of the company also need to be protected with sound contracts including warranties where they can be obtained.
Intellectual property is a specialized area of the law. Many companies, even big, sophisticated ones, do not realize the extent of legal protection they can get for their business name, logos, inventions, processes, catch phrases and the like. Protecting these from other companies or people does not have to be expensive and sometimes involves just a simple registration with the state.
Another aspect of intellectual property protection that businesses commonly overlook is getting protection from its own employees. Often if an employee is working for a company and develops an invention, protectable system, or idea and it is unclear who owns it. The company has a claim, but it is preferable to have this locked down rather than just having a claim. Accordingly, all companies with any potential for this problem should have employees sign an Invention and Non-disclosure agreement.
Companies should also have a review of significant new marketing or production ventures they take on to ensure that they do not infringe on anyone else’s intellectual property. One of my lawyer friends who litigated intellectual property cases for forty years tells the story of a major company in his city that completely rebranded with the logos up on the outside of their buildings an all. Next thing they knew they had a Summons to appear in Federal Court in Chicago for trademark infringement. Down came the signs.
To learn more about how the team at Davis Business Law can help you, reach out to us online or give us a call at 866-950-7634.