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Can I Trademark a Color?

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You can trademark a color, but it’s worth taking the time to consider if you really should or need to. The scenarios under which you can successfully trademark a color are fairly narrow, and you also have to consider the scope of protection and how that might work to protect your brand or business.

Keep reading to find out more about trademarking a color, including whether it might be the right move for your business. Then find out how a trademark attorney can help you through the process.

When Can You Trademark a Color?

Colors couldn’t always be trademarked. The first company to successfully trademark a color in the United States was Owens Corning, which fought its way through the appeals courts to earn a ruling on its trademark of a certain shade of pink. In 1985, the court ruled that Owens Corning could have a trademark on the pink associated with its insulation products and that the company could keep other competitors from using that hue.

Since that time, other businesses have trademarked colors. To successfully trademark a color, however, you must meet a few requirements. The color can’t simply serve a decorative or utilitarian purpose. For example, having a specific blue in your logo because your logo includes the image of the sky isn’t enough for a trademark. That’s simply a utilitarian use of the hue.

Instead, the color has to serve an identification function. It must be critical to differentiating your brand or product from others, and you typically have to demonstrate that the public has come to associate the color with your brand over time.

Owens Corning products, for example, are synonymous with that particular shade of pink, and consumers can often pick them out based solely on that hue. In another example, you can see two box delivery trucks up ahead on the highway. If one is a certain shade of dark brown, you know without seeing anything else that it’s a UPS truck.

Understanding Trademark Scope of Protection

When you get a trademark, the protections it offers are limited in scope. Trademarks require two parts:

  • The symbol, word, phrase, design, and/or color
  • The goods and services those marks apply to

Consider Target’s red bull’s-eye. This mark is directly related to retail stores and services. The scope of protection, then, is limited to this space and niches that may be very close to it. So, if a new retail website launched using a similar red bull’s-eye, Target would be able to stop it from using the logo under trademark protection. There’s a good chance that consumers would confuse the retail website as being associated with Target if the design is used.

However, if an archery supplies company used a red bull’s-eye pattern on its packaging to indicate what the target inside might look like, Target probably couldn’t stop this use. That’s because consumers are unlikely to see a bull’s-eye on a package for an archery target (that would naturally have a bull’s-eye on it) and think “Oh, this must be associated with Target the store.” The scope of protection would not apply here.

More Examples of Trademarked Colors

To understand the type of relationship between goods and services—and public identification of a brand—and trademarked colors, consider some of these examples:

  • Coca-Cola red. Just reading that phrase, you probably have a mental image of the color in question. At this point, that particular red is synonymous with the soda company. If you saw a cola can with that red and no logo or other information, you would still think “Coca-Cola.”
  • Home Depot orange. The home improvement store is often positioned nearby its biggest competitor, Lowe’s. But there’s no confusing the two, because Home Depot’s orange logo and design elements are ingrained in the awareness of consumers. 
  • Pepto-Bismol pink. Reaching for stomach relief is easy, even if your medicine cabinet is a bit unorganized. Almost nothing else in the niche has the same cotton-candy pink hue as Pepto.

How Can You Trademark a Color

As previously mentioned, the first step is considering whether you really do need to trademark the color. You also need to consider whether consumers have come to identify this color with your brand to a high-enough degree over time. A trademark and business litigation attorney can help you understand whether this is the right step for you and whether you have the ability to protect your trademark if you do seek it.

Once you decide to trademark a color, the path is similar to the process for any other type of trademark. You’ll have to conduct a trademark search with the United States Patent and Trademark Office to ensure a competing trademark filing isn’t already in place. Then you have to apply for the trademark with the USPTO. On average, this process can take 12 to 18 months, though it can be longer in some cases. If your trademark application is denied, you can appeal the decision if desired.

Whether you’re seeking to trademark a color or your business logo or tagline, a trademark attorney can guide you through the process, handle the paperwork details, and fight on your behalf to get your trademark approved. Find out more about how we can help by contacting Kate Charleston Law, PC, today.

The Difference Between Business Law and Corporate Law

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Starting a new business is one of the most exciting things that a person can do. After years of dreaming about starting your own cafe, bookstore, garage, or another type of company, it is finally time to take that leap of faith and see if your business can make it against the competition.

But not so fast. There are many legal issues that are going to need to be sorted out. But before you get to those, there is one question that you’ll find yourself asking: Do I need a business lawyer or a corporate lawyer?

The answer to that question is going to depend on the needs of the company, but chances are decent that you could benefit from both. To understand why that is, we will take a deeper look at both business law and corporate law. Then we’ll close out with a quick discussion about when you might want to hire a business lawyer or a corporate lawyer.

What Is Business Law?

Business law is a wide-ranging field that covers a lot of what goes into running a business. There is a mistaken belief that business law and corporate law are primarily focused on the size of the business in question, with business lawyers working for smaller companies and corporate lawyers working for larger ones. This is not exactly true as you’ll see, but many small or medium-sized businesses are more likely to retain the services of a business lawyer rather than a corporate lawyer.

This is because a business lawyer’s skills will be more appropriate for their daily needs. Business law focuses on areas like the relationship between the business and its customers, suppliers, and vendors to ensure that everything is handled appropriately and legally. A business lawyer would be aware of any legal implications that may arise from these dealings, or from other aspects of handling a business such as unforeseen delays.

Perhaps the most vital area that business law covers is that of employment law. The hiring and firing of employees is an important component of any business, but it can also be a major source of pain. The laws around the hiring and firing of employees are very strict; a failure to abide by them can be incredibly costly. A business lawyer will help to ensure you don’t end up on the wrong side of those laws.

Other areas that a business lawyer will help with are ensuring that your business maintains a safe working environment and dealing with the fallout from a failure to do so. While a business lawyer won’t perform maintenance for you, they will keep you aware of issues that could make for an unsafe environment. If left unchecked, issues of this nature can leave a company open to a premises liability lawsuit.

In addition to the tasks above, a business lawyer can also help with issues of taxation, disagreements, and litigation. This includes both filing a lawsuit and representing the business’s interests in the case that the company is sued over a relevant matter.

What Is Corporate Law?

Corporate law is similar to business law, though it focuses on different areas. A fairly common expression states that corporate lawyers write the contracts, but business lawyers interpret them. This is a simplified version of how the two compare to each other, though there is some validity to it.

While some companies may hire a corporate lawyer to be on staff, it is quite a bit more unusual than having a business lawyer on the payroll. Many companies don’t need the ongoing services of a corporate lawyer, so instead, they hire a corporate law firm to help them with certain issues or special circumstances.

Corporate lawyers help with writing contracts and taking care of the corporate legal work that needs to be done in order for the company to function properly and legally so as to avoid litigation. They don’t want to deal with the litigation itself, they’re goal is to try to limit or avoid it in the first place.

Corporate lawyers are especially valuable for companies with an international aim. While a corporate lawyer will help you to comply with local, national, and state laws, it is often the international laws that cause the biggest issue.

When Should I Retain a Business Lawyer or a Corporate Attorney?

Of the two types of lawyers, you are much more likely to want to start an ongoing relationship with a business lawyer. A relationship with a business lawyer is a more active experience. You may want the services of a business lawyer when:

  • You need representation to assist with employment disputes, tax disputes, or other business-related disputes
  • Your business needs to file a lawsuit
  • Your business needs to enforce a contract
  • You are looking for advice on matters ranging from disputes to intellectual property
  • You need advice or assistance understanding and complying with tax law
  • Your business is being investigated by state or federal authorities

A corporate lawyer is often referred to as a transactional lawyer since many of the issues they deal with are transactional in nature. A corporate attorney is useful when:

  • You’re looking to buy or sell goods internationally
  • It’s time to negotiate contracts with other businesses, individuals, or entities
  • Issues have arisen from a contractual relationship
  • You are looking to avoid litigation around matters like legal documents, active processes, or other areas of the company
  • Your business is looking to attract investors or partners
  • You want to start, sell, or dissolve a corporation
  • When you need contracts drafted such as NDAs, agreements, and other vital paperwork
  • You want to change the structure of your business

Do I Need a Business or Corporate Lawyer?

While your business may be too small to think about staffing a business lawyer, it’s always a good idea to consult with a business lawyer on important matters. But you should try to stick with the same lawyer.

Building a relationship with a business lawyer can be beneficial, too, because you don’t need to explain to them what your business is each and every time. That’s more time focusing on whatever issues are at hand and less time (and money) spent trying to explain to a stranger what they need to know to assist you.

How Do I Decide if an LLC is a Better Choice Than a Sole Proprietorship for My Business?

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Choosing the right business structure for your company is important. The type of business structure you choose plays a role in how you file taxes, how you pay yourself or draw money from the business, what type of liability you may have, and many other considerations.

For small business owners, deciding between an LLC and a sole proprietorship can be difficult. They both offer pros and cons, and each is definitely more right (or more wrong) for certain types of businesses than others.

If you’re not sure where to start when launching your own business, a business law attorney can help. Check out the information about sole proprietorships and LLCs below, and then get in touch with Katie Charleston Law, P.C., for help creating and protecting your business.

The Benefits of a Sole Proprietorship

Sole proprietorships tend to be the easiest of all business structures to set up. You don’t have to file any state paperwork or articles of incorporation. The only real exception is if you need a specific type of professional license or business license for the work you plan to do. In that case, you would need to file any paperwork necessary to obtain the required licenses.

With a sole proprietorship, you usually earn money from the business as a self-employed individual. The income you earn from the business is reported on your personal tax returns, typically via what’s called a Schedule C. This can give you some flexibility in how you manage your business and personal finances—though you may want to consult with an accounting professional to help you keep things separate and avoid any self-employment tax woes.

The Benefits of an LLC

An LLC, or limited liability company, is a more formal business structure than a sole proprietorship. Because of that, it may offer you better credibility in the market. That means potential customers or clients may see you as more credible or reliable. It also means business partners and lenders may be more willing to work with you.

Perhaps the biggest benefit of an LLC is the boundary it creates between you and the company. The company becomes its own entity, which means separate finances and branding. That makes it possible for you to seek credit in the company’s name rather than your own, helping you keep personal and business finances separate. It also creates some liability protection for you so you’re not automatically on the hook for business debts or lawsuits.

Some Downsides of a Sole Proprietorship

A sole proprietorship doesn’t offer the same level of liability protection that an LLC does. With a sole proprietorship, you and the business are linked much more closely. That means you’re much more likely to be considered liable for debts or lawsuits relevant to your business.

This link between you and the business may also limit the opportunities your company has for growth. You may be unable to get investors or raise capital with lending opportunities, partly because any lending might be based on your personal credit and financial situation rather than the potential of the business.

Without a business name, you also have less power in the market. You can sidestep this issue by filing DBA (doing business as) paperwork and establishing a separate business name. However, that separate name still doesn’t protect you from liability.

Some Downsides of an LLC

LLCs are more time-consuming and expensive to form than sole proprietorships, so you may not be able to open your business as quickly. You’ll have to file paperwork with the state to create the business structure. Then you may need to file reports and other paperwork annually to ensure your business remains in compliance with state laws for LLCs.

In some cases, tax costs are higher for LLCs than for sole proprietorships. It may also be more difficult or cost more to file annual tax returns for LLCs.

What Structure Might Be Right For Your Business?

The business structure you choose depends on your goals, needs, and business type. A freelance writer, graphic artist, or another service-based contractor may not benefit enough from an LLC to go through the hassle, for example.

However, a small contracting business has enough potential liability that the protection of the LLC is likely more than worth the cost of setting one up.

How a Business Law Attorney Can Help

Getting a lawyer to help set up your business can be beneficial for a number of reasons:

They can help you understand the pros and cons of all applicable business structures so you choose the right one for your needs.
They can ensure all the details are handled, such as maintaining a registered agent with the state.
They can help you create legally binding contracts and agreements when working with others.
They can advise you about your rights and potential risks to help you avoid legal troubles for your company.

For more information about how a business law attorney can help, contact us today.

What Is a Business Succession Plan and Do I Need One?

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Business succession planning involves ensuring your company has future leaders and other critical employees ready to step into roles when necessary. It can involve identifying the right people for future roles and providing opportunities for those individuals to grow and learn. However, business succession planning is about a lot more than training.

Find out more about business succession planning below, including whether you may need to create a plan for your company. Discover how an experienced business law attorney can help you take care of the details necessary to protect your business.

What Is Business Succession?

At its most basic, business succession is the process of handing a role or company off to someone else (or some other people).

The overall term casts a wide umbrella, and all of the following situations are potential examples of business succession:

  • The Director of IT is getting promoted to the VP of Technology for a firm. He or she is only successful in this move if there is someone who can step into the role of Director of IT at the right time.
  • A business owner is ready to pass the business down to a child. This may involve ensuring that person has the knowledge and skills to take control of the business. It also includes changes to the ownership structure of the company.
  • The CEO of a firm passes away, leaving the business in need of new leadership. Succession has to occur here, whether there is a plan for it or not.

Business succession planning refers to the work you do to proactively support a future succession. Typically, the idea is to create as seamless a transition as possible. You might plan for a specific time, such as when you retire and want to transfer a business to an heir. But succession planning also takes into account the unknown—such as what happens to the business or your department responsibilities if you pass away or become incapacitated?

What Are the Benefits of Business Succession Planning?

One of the biggest overall benefits of succession planning is that it provides peace of mind for the future. That’s true for the business owner, but also for stockholders, employees, suppliers, customers, and family.

According to Rutgers University’s guide to succession planning, the main stakeholders in any succession plan are the business owners, family, and employees. Those categories are further defined as:

  • Business owners: Sole proprietors, partners, or shareholders
  • Family: Typically the family of the person or people who own the business
  • Employees: part-time and full-time staff, contractors, and, in some cases, management boards

When people know that you’ve engaged in comprehensive business succession planning, they can be more certain their careers or investments are safe—regardless of what might happen with one person within the business structure.

In addition to providing peace of mind for many people, business succession planning offers benefits such as:

  • Planning for and protecting against taxes. The right steps toward ownership succession can reduce estate taxes and other burdens should a business owner pass away. Good succession planning also looks at what taxes might be unavoidable and creates a plan to handle them.
  • Clear understanding about how the business should be distributed. In the event a business owner has numerous heirs, proactive succession planning makes it clear who might control the company in the future and what benefits others in the family can count on.
  • Opportunities for advancement. Succession planning that looks toward the future leadership of a company encourages training and professional growth at all levels. This emphasis on growth creates opportunities for advancement that can help businesses keep top talent.

Who Might Need a Business Succession Plan

If you own a business, you probably need a business succession plan. That’s especially true if you:

  • Want to pass the business on to children or other heirs in the future
  • Have a personal brand tied to the business you want to protect
  • Care personally about your employees and want to ensure they continue to see success even if you are no longer in charge
  • Care about your customers and want to ensure they continue to receive the type of service or products you can stand behind

You might also want to consider business succession planning if you’re a leader within a company or department. Planning for new leadership at every level allows current leaders to retire, take promotions, or make changes in their careers that meet personal needs without worrying that they’ll leave people with no one in charge.

How a Business Law Attorney Can Help

Depending on the type of business succession planning you’re working on, consider seeking assistance from a business law attorney. A lawyer can help you plan to sell or transition ownership of your business while protecting your rights and interests—as well as the interests of your loved ones.

Some of the things a lawyer may be able to help with include sheltering your business, you, and your heirs from taxes where possible; ensuring contracts are as strong as possible to protect your interests; and ensuring you understand all your options for protecting your business now and in the future. Reach out to the team at Katie Charleston Law, P.C. to find out how we can help.

Can I Trademark a Phrase?

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A trademark is a distinctive word, symbol, phrase, or a combination of these things connected to your business to create and improve the brand’s recognition. When you’ve found a good word or slogan for your business, it will help to protect it with a trademark with the help of a skilled national asset protection law firm.
A trademark can only be applied in the business category where it’s registered, hence protecting it from infringement. In the US, the management of trademark registration is under the US Patent and Trademark Office (USPTO).

Owning a Trademark vs. Having a Registered Trademark. What’s the Difference

A common illusion is that registering a trademark means you rightfully own a certain word or phrase, and others can’t use it. However, you generally don’t own rights to the words or phrases, only how you use the word or phrase concerning your goods or services.
For example, using a specific logo for your restaurant business to identify and set your business apart doesn’t stop another non-restaurant company from using the same symbol. Also, choosing a trademark to describe your goods or services is not enough. A creative and unique phrase makes registering a brand easier and effectively stands out from the competition.

You become a trademark owner as soon as you start using it with your business. While you also establish rights to the trademark, they are limited to the geographic area where your company operates. For stronger, nationwide trademark rights, a national asset protection lawyer can help you apply to register the trademark.

Why Is It Important to Trademark a Phrase?

Registering a phrase with the USPTO protects it from being used by other enterprises because it gains nationwide rights. Other businesses can’t claim the right to use the phrase. So:

  • You can file a lawsuit in federal court if another business uses your phrase. You can bring a claim for lost revenue or prevent a company from using the business phrase in the future.
  • A registered trademark is legally taxing. If you file a lawsuit, you don’t have to prove the trademark’s validity, but your opposition must show why the phrase should be invalid.

Without registering a trademark, anyone else can use the exact words or phrases as you and benefit from your creativity.

Are There Reasons Not to Trademark a Phrase

Sometimes it may not be possible to trademark a phrase for several reasons, including the following:

The Process is Costly

You must pay the registration fee for each category if you want to trademark a phrase in more than one business class. The cost of a trademark ranges from $225 to $400. To trademark a business phrase in three business classes, you’ll pay almost $1,000.

Complex Rules

Your business should be the only one in your class using the phrase you wish to trademark. If that’s not the case, the chances are high that the USPTO will disapprove your application.

At the same time:

  • A trademark should identify the source of a product. If your phrase describes a service or product, the USPTO won’t approve it for trademark protection.
  • The phrase’s purpose should be to sell a product, without which it won’t get approval for trademark protection.
  • The USPTO doesn’t approve funny and informational phrases.

Indiana trademark attorneys can guide you and break down the rules to understand where you stand.

There are Deadlines for Trademarks

Trademark laws stipulate that you must use the trademarked phrases within a year of registration, after which it becomes inactive. Re-registering the trademark requires you to start the process from the beginning. However, there’s no guarantee that you’ll register successfully.

Incomplete Protection

One challenging thing about trademarks is that they don’t provide complete protection. The brand only protects consumers from mistaking your business for others within the same class. However, you can’t prevent another business in a different category from using your trademarked phrase unless it negatively affects your business.

Common-Law Trademark Rights

You automatically have common-law legal rights to a phrase if you’re the first to use it in marketing your business. No registration or application is necessary to get common-law rights if you often and commonly use the phrase.

Federal Trademark Rules

As earlier mentioned, the federal rules surrounding trademark registration of a phrase are complex and probably confusing. Not all words can be trademarked, not every business can trademark a phrase, and registering a trademark doesn’t always offer complete protection.
Rules surrounding a trademark application include:

  • Only a phrase used for commercial purposes may be trademarked, not because you like a term or word and don’t want anyone else to use it.
  • The phrase you trademark is only protected against use by other businesses in the same business class.
  • The trademark must identify your business as the source of goods or services.
  • The phrase may not be identical to one that has already been registered or is pending application.
  • The phrase must not be generic or descriptive but also distinctive
  • The term shouldn’t contain terms commonly used in business or the type of business in question
  • The business phrase mustn’t be part of everyday language, for example, “as a matter of fact.”

While all these rules are essential, they can be complex to master. Non-compliance could lead to the rejection of your application. Indiana trademark attorneys can review your phrase and help you understand if it complies with the regulations.

An Experienced Attorney Helping You Protect Your Trademark

The best way to protect your business trademark is to register it with USPTO. The registration must comply with Indiana’s federal trademark rules and other requirements. The process is relatively simple through the USPTO website. However, trademark attorneys in Carmel, IN, must review your application, resulting in either an approval or rejection of the trademark. The attorney may also request more information.

Our Carmel trademark attorneys can help you register your business trademark to enhance the chances of having your phrase approved. We know that protecting your assets is crucial, and we’re the right team to help you every step of the way. Get in touch with us to schedule a FREE case assessment.

Small Business Owners: Don’t Sell to Search Funds!

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Business

If you are a small business owner, you may have been approached by a search fund regarding a potential business acquisition. While it may be tempting to sell your business to these investors, we caution against doing so! In this blog post, we’ll explain why selling to a search fund can be bad for small business owners.

One of the main reasons why selling to a search fund can be detrimental is that search funds are often backed by investors that you are not aware of who may gain ultimate control of your business. So the person you are negotiating the acquisition with may not be the person that ultimately carries on your business and the legacy that you have built and may not have the same vision or ambitions as you in taking over the business.

Another reason why selling to a search fund can be devastating to a small business owner is that search funds have the resources to court small business owners into an acquisition while privately working to limit the purchase price through loopholes in contracts and other unanticipated and fraudulent behavior. Many small businesses are not as sophisticated as the investors backing the search funds and can be taken advantage of in these business dealings.

An additional reason why selling your small business to a search fund can be problematic is that the search fund may ultimately decide to liquidate your business and its assets to maximize its return on investment. This can often leave small business owners with nothing after they have sold their business and can destroy the legacy that they have worked so hard to build and deplete any retirement they hoped to have.

Yet another reason to be wary of selling your business to a search fund is that they may not have the same commitment to the local community and its employees as you do. Search funds are often based out of state or even out of the country and their primary focus is on making a profit for their investors. They may decide to move the business to another location or lay off employees to save money and increase profits.

So if you’re a small business owner, we caution against selling your business to a search fund. There are many risks involved in doing so that can be detrimental to you and your business. It’s important to do your research and understand the potential risks before making any decisions.

Selling your business can be a difficult decision, and you want to be sure that you are getting the best possible deal. If a search fund approaches you about selling your business, do your research before making a decision and retain a business attorney throughout the process. There are many factors to consider before selling, and we hope this blog post has helped shed some light on why selling to a search fund may not be in your best interest.

So if you are approached by a search fund about acquiring your business, think twice before signing on the dotted line! It may not be in your best interest to sell to these types of investors.

If you’re interested in learning more, we suggest checking out our blog. Thanks for reading!