Tag: Carter Law Firm

  • You Don’t Want A One-Page Operating Agreement

    At Content Marketing World last year, a fellow speaker asked, “Can you help me set up a new LLC?”

    “Sure. That’s easy.”

    “And can you write me a one-page partnership agreement?”

    <record scratch>

    (Speechless)

    Image created using dall-e

    Why a One-Page Operating Agreement is a Bad Idea

    If a client sent me a one-page contract to review, that would set off massive red flags. My first thought wouldn’t be “Let’s see what it says,” but rather, “Let’s see how many gaps are in it.”

    Because here’s the thing, unless your contract is written in tiny font that requires a magnifying glass to read a la Willy Wonka and the Chocolate Factory, the chances that your contract covering the scope of your needs is slim and none.

    “Good Day Sir!”

    Is that contract even valid since it was signed by an 11 year-old?

    Probably not, but that’s a different issue.

    Your operating agreement is the master document for your business. Its job is to put everyone one the same page about how you’re going to run the business, each owner’s rights and responsibilities, and how you’re going to resolve problems when they occur.

    And don’t forget the standard legal boilerplate verbiage that goes in almost every contract.

    When a client engages me to write their operating agreement, I start by sending them 31 questions that I recommend their operating agreement answer.

    What It Really Means When You Ask for a One-Page Agreement

    When a prospective client says they need a one-page agreement, I assume they want something that’s simple and cost-effective. They might be looking for whatever is one step above searching the internet for a free template. They don’t need something that’s complicated or expensive.

    Keeping this in mind, my brain grappled with the possibility to creating a one-page operating agreement:

    What if we kept it bare bones super simple?

    I could write a simple operating agreement that requires a unanimous vote for all decisions, but no one runs a business that way. Plus, there should be a mechanism to “vote someone off the island” if they’re not doing their job, or worse, hurting the business. That wouldn’t be possible if a unanimous vote was required.

    Could we make it a one-page agreement?

    Without committing malpractice? I doubt it.

    What if we made it almost like a template, where we provide the framework, but then they’d fill in the blanks? It might be more than one page, but it would be more cost-effective.

    Maybe to create, but we’d be doing them a disservice in the long run. What if they didn’t understand what information was needed to write an effective contract? You’ve seen the number of people who ask for help or suggestions when answering the usual 31 questions. If there ever was a dispute, they could end up spending more money on legal fees fixing a problem that we could have helped the avoid if we’d written them an effective operating agreement in the first place.

    What’s the minimum that an operating agreement needs to cover?

    Who are the owners of the LLC, the purpose of the business, each owner’s responsibilities, what decisions requires a unanimous vs majority vote, how deadlocked votes will be resolved, what happens if someone wants to leave the company or dies, what happens if the other owner(s) want to kick someone out of the company, how contract disputes will be resolved, plus the standard boilerplate terms that go into every contract.

    We can’t fit all that on one page.

    No, we can’t.

    If we can’t create a one-page operating agreement, what’s the most cost-effective way to write an operating agreement?

    Hmm…it might be to have them tell us everything they’ve already agreed on about how they want to run their business, and then draft the operating agreement, addressing the issues they haven’t mentioned based on what we think is in the company’s best interests, and let them suggest edits from there.

    Photo by tom hilton (creative commons)

    Your Operating Agreement is an Investment

    Your operating agreement is the master document for how you and your co-owner(s) are going to run your business. Too many people are so excited to start the business that they jump into running the business before they have their foundational pieces in place, and it bites them in the butt when things go sideways.

    Taking the time to create an effective operating agreement can be a litmus test to see how you are your co-owners handle difficult conversations. If you can’t come to a consensus on how to run your business, you shouldn’t be in business together.

    The best time to create your operating agreement is at the beginning of the business relationship, when everyone is optimistic and thinking about what’s best for the business. If you wait until there’s a problem to draft this, you and your co-owner(s) may be more interested in protecting your selfish interests or let your anger influence the agreement’s terms.

    Even though I make more money fixing problems, I prefer to help my clients prevent problems, or at least make them easier to navigate. A business divorce can be as stressful and expensive as a romantic divorce.

    This is not how you write an effective contract. Image courtesy of The Daily English Show.

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    Ruth Carter

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  • F*cking Up my Contract for Content Marketing World 

    I’m excited to go back to Cleveland for CMWorld!

    Content Marketing World (CMWorld) is one of my favorite events every year. They have the best of the best speaking about what’s working with content marketing.

    Like every year when I have the privilege of being a speaker, I’m required to sign a contract. They recently sent me a link to the speaker contract landing page where I signed with my electronic signature. I signed the contract as it was written, but it inspired me to create a revised version. Some of the provisions I added were meant to be humorous, and others were added to fill gaps in the contract’s verbiage. I sent the revised contract to CMWorld, and they thought it was funny.

    Re-writing my friends’ real contracts has become one of my new hobbies. I keep these documents in a folder on my computer entitled, “Let’s Fuck Up Contracts.”

    Below are some of the provisions in the original CMWorld contract I signed followed by how I revised them.

    It’s ironic that I mostly revised it in ways that would benefit the event. Historically, when I’ve revised a contract I’ve been asked to sign, I do so in ways that only benefit me – like when I revised the liability waiver for a race so I could sue the organizers if they ran me into oncoming traffic or something. As a lawyer, I draft contracts based on what’s in my client’s best interests, which again, is not this situation.

    Compensation

    In CMWorld’s Original Contract:

    For my participation, I will be provided:

    • (1) Pass to the main event including admission to all main conference sessions, networking functions, and workshops.
    • (1) Complimentary access to on demand videos for up to one year following the event.

    How I Revised It:

    For my participation, I will be provided:

    • One (1) Main Conference Pass allowing access to all sessions at the Event including all networking functions and conference workshops,
    • One (1) Complimentary Pass to all sessions on demand for twelve (12) months following the Event,
    • Copious amounts of hugs and high fives from the Event team, as long as I’m not creepy about it,
    • First dibs to pet the dogs at the Yappy Hour event where there will be no less than four (4) rescue dogs; and
    • Access to the Event speaker lounge that will be stocked with hot and cold caffeinated beverages; ice cold sparkling water with lime; a selection or orange-colored candies, including, but not limited to M&Ms, Reese’s Pieces, Skittles, Starburst, and Mike & Ikes, each in a separate container (because mixing them is gross); and at least thirty (30) power outlets. 

    Power outlets are in high demand in the speaker lounge. Also, CMWorld has not said whether or not they will have a Yappy Hour at this year’s event. And just so there’s no confusion, I = me, Event = CMWorld, and Informa is the company that owns the Event.

    Photo by 3V Photo (Creative Commons License)

    No Selling From the Stage

    In CMWorld’s Original Contract:

    The Event is an educational event, not a sales or marketing platform. Informa is retaining me to provide an objective presentation that meets the educational needs of the Event attendees.  Informa may revoke my speaker invitation at any time if in its sole judgement that is in the best interests of the Event.

    How I Revised It:

    I grant to Informa a worldwide, non-exclusive, royalty-free, perpetual license to copy, distribute, display, and make derivative works using all materials and recordings of and related to the speaking engagement, in whole or in part, in any Informa anthology, compilation, or educational publication of materials associated with the Event, including without limitation any format, including those that haven’t been invented yet. I acknowledge and agree that this license is assignable and sublicensable without any limitations.

    I also added in the following: Moreover, if Informa is accused of wrongdoing for using any rights licensed to it by me herein, I, or my employer where possible, will indemnify and reimburse all its legal costs, including associated damages, for resolving the matter.

    Photo by JD Hancock (Creative Commons License)

    Dispute Resolution

    In CMWorld’s Original Contract:

    This Agreement and Release is governed by California law. Choice of law rules do not apply, regardless of jurisdiction.

    How I Revised It:

    Even though Informa is a UK company and the Event is in Ohio, I acknowledge and agree that this Agreement and Release is governed by California law and all disputes regarding this contract will be resolved in a court located in Los Angeles County, California. Choice of law rules do not apply, regardless of jurisdiction. Furthermore, I acknowledge and agree that, in a dispute, the non-prevailing party will be responsible for the prevailing party’s attorneys’ fees and cost.

    Other Terms I Added

    Entire Agreement: This contract contains the entire agreement between myself and Informa regarding my participation as a speaker at the Event, regardless of any discussions to date or in the future. Any modification must be in writing and signed by both parties.

    Force Majeure: I acknowledge and agree that neither Informa nor the Event, their employees, contractors, directors, affiliates, or lawyers (because the lawyers always cover their asses as well as their clients’) shall not be liable for damages or any inability to perform under this agreement, which is directly, or indirectly, caused by circumstances beyond their control, including, but not limited to, natural disasters, inclement weather, acts of god, acts by other deities, illness, plague, fires, alien invasion or abduction, floods, riots, strikes, government orders or recommendations, if someone releases a kraken, or any other justifiable conditions outside of Informa’s or the Event’s control.

    I’d expect every event to have a force majeure provision, especially with the COVID pandemic. This is particularly true if the event is at a third-party venue where the event would likely need to be cancelled or rescheduled if the location were no longer available due to a catastrophic event like a fire or earthquake.

    Learn More About Contracts – for Free!

    Earlier this year, I created a mini course for The Tilt called What Content Creators Need to Know Now to Avoid Legal Trouble. It’s a quick 20-minute overview of what content entrepreneurs need to understand about contracts, including how to read a contract and suggested terms to include in your own contract templates.

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    To my fellow CMWorld speakers: If we have containers of different types of orange-colored candies at this year’s event, you’re welcome.

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    Ruth Carter

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  • Registered Trade Name vs Registered Trademark: Who Wins?

    “Kum & Go,” photo by Dustin Murrell Broadcast Journalist (Creative Commons License)

    Last week, I wrote about intellectual property disputes where one side had the website domain and the other side has the registered trademark. Someone asked me how do registered trade names factor into these situations.

    What’s a Trade Name?

    In general, a trade name is something you register with your state. This is different than registering a trademark with the U.S. Patent and Trademark Office (USPTO). This is a way to register the name of your company or your product with your state. It typically takes only a matter of days to get and is cheap. In Arizona, the filing fee for a trade name is $10.00, whereas the minimum filing fee to register a trademark with the USPTO is $250, and it takes months (if not longer) for the USPTO to process your application. Your state may also give you the ability to register a state-level slogan or logo.

    Value of Registering a Trade Name

    To be honest, there’s little value in registering a trade name at the state level. It could be helpful in situations where the name of your legal entity is different than the company or product name. For example, if your entity was XYZ Company LLC and your did business as Green Ice Marketing, if you registered Green Ice Marketing as your trade name, your state might not let another company use the same name and compete with you ask Green Ice Marketing LLC.

    Even if you have a state-level trade name, it does not automatically give you statewide common law trademark rights. Common law trademark rights are based on your established geographic market, based on where you’re using the mark in commerce. Thus, if you register a trade name with your state, but you’re only using it commerce in your county, your common law trademark rights may only be that county, not the whole state.

    Registering a trade name creates a third-party record of when you started using a trademark, which may be helpful in a trademark dispute, but there are other ways to demonstrate when you began using a particular trademark in commerce.

    Trade Name vs Trademark

    In a trademark dispute, timing is often a deciding factor when two companies are selling similar products using the same or confusingly similar trademarks. In a trade name vs trademark dispute, there are two ways it could go down.

    Option #1: You Registered a Trade Name Before They Registered the Trademark.

    As stated above, when you only register a trade name with your state, there are no associated federal trademark rights that come with that registration. You only get common law trademark rights based on the established geographic market where you’re using your trade name in commerce.

    The moment your competition registered the trademark with the USPTO, you become “frozen” in your established geographic market. The registrant gets the exclusive right to use the trademark everywhere else in the United States except within the geographic market you established prior to their registration.

    It’s like a snow globe dropped over your area at that moment. They can’t go into your area, and you can’t expand beyond that invisible barrier unless you rebrand. This is what happened in the Burger King situation.

    Option #2: You Registered a Trade Name After They Registered the Trademark.

    Once someone registered a trademark with the USPTO, they have the right to keep competitors from entering the marketplace in the U.S. while using their trademark or one that is confusingly similar to it.

    Once they get their trademark, you can’t start using it too for a similar product or service.

    Here’s the rub. You state probably will not cross-check the USPTO database if you try to register the same mark as a trade name. They will deny your trade name application only if it matches something in their database of registered trade names in that state. Similar to the web domain situation, a lot people get a false sense of security when they can get a state-level trade name, but it won’t provide any protection from an accusation of trademark infringement in this situation.

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    Ruth Carter

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  • You Have the Domain. They Have the Trademark. Who Wins in the IP Dispute?

    “Stone Stacks – Lindisfarne” by Linton Snapper from Flickr (Creative Common License)

    I saw this scenario come through my Reddit feed. Two U.S. companies are in the same industry and using the same name for their brand. One has the dot-com web domain. The other has registered the brand as a trademark with the U.S. Patent and Trademark Office (USPTO). Which company should get to use the brand and force the other to change their name?

    Timing Matters: Who Was First

    The answer to every legal question starts with “It depends,” and here it depends on which company was using the mark in commerce first. By “use” I mean which company made the first bona fide offer for sale to the public, not who came up with the idea for the brand first.

    Option #1: You Started Using the Domain Before They Registered the Trademark

    If two companies in the same industry the U.S. are using the same trademark, but not one has registered it with the USPTO, then each one can establish what are called common law rights in the mark in the geographic areas where they are respectively using the trademark. They can co-exist peaceful as long as one doesn’t try to infiltrate the other’s established geographic market.

    Here’s what happens when they register the trademark with the USPTO – they get the exclusive right to use the trademark everywhere in the U.S., except within your established geographic area at that time. It’s like a snow globe drops over your geographic market. They can’t go into your area, but you can’t expand your market beyond that boundary. This is what happened when the chain Burger King registered their trademark and there was a mom-and-pop restaurant with the same name already in existence. If you want to expand your geographic market beyond that invisible boundary, you have to rebrand.

    These rules are easier to follow when businesses were brick and mortar establishments. Now that commerce is largely internet-based, a company is likely to naturally expand merely by being online. You probably can’t add any new social media platforms using the trademark without them claiming your infringing on their intellectual property rights.

    If you come to me with this situation, unless you’ve established nationwide common law rights before they registered the trademark, it’s often best to save your money on litigation and rebrand instead.

    Option #2: They Registered the Trademark Before You Start Using the Domain

    Remember, when they registered their trademark with the USPTO, they got the exclusive right to use their trademark everywhere in the U.S. except any geographic area where you established your market for the same mark prior to that date. If they registered before you started using the mark at all, you can’t enter the marketplace using that trademark in that industry. They win. You lose. You have to rebrand.

    What if it’s the same situation, but you were using the mark before they registered but you hadn’t created the website yet? Publishing the website after they registered, even if you were already selling the product using that brand, would be an act that would expand your market beyond your now-limited established geographic area, which is not allowed. I would expect them to send you a cease and desist letter demanding that you take down the website.

    Getting the Domain is Not Proof to Trademark Availability

    A lot of people make the mistake of thinking that if they can get the dot com domain they want that there aren’t any trademark issues that they need to worry about. There are many reasons why a company might not get the dot com of the trademark, even if it was available:

    • They are using another type of domain, like .org.
    • They are only use companyname.com for their website and not get separate domains for each of their brands or other trademarks used by the company.
    • You and they have trademarks that sound the same but spelled slightly different.
    • You and they have slightly different domains, such as XYZ.com and TheXYZ.com.

    When I’m working with a client on selecting a company name, product name, or other trademark, I encourage them to search for their prospective trademark on the internet as well as on the USPTO database. What’s tricky about this is that even if you don’t find an exact match to the trademark you want to use, there could be one out there that is confusingly similar to the one you want to use. It’s best to do as thorough of a search as possible before investing your time and money into your brand.

    Can the Trademark Owner Force You to Give Them the Domain?

    There are lots of reasons why a person or company would have a domain that matches your registered trademark that don’t violate your intellectual property rights. If it’s a situation where your website infringes on their rights, they can demand that you remove the website. It doesn’t mean they can force you to give them the domain, though that is something you can try to leverage. They can always offer to buy it off you. (I often advise my clients wait for them to offer to buy it first so as to avoid looking like a cybersquatter.)

    If they are willing to fight you for the domain, there is a risk that they may file a claim against you in court or under the Uniform Domain-Name Dispute-Resolution Policy (UDRP). If you find yourself in a trademark dispute where you have the coveted domain, it’s best to consult a trademark attorney who can examine your specific situation, explain your options, and advocate on your behalf.

    Question of the Day: Two Companies Using the Same Trademark 

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  • Cost to Move a Business from California to Arizona

    “Arizona Welcomes You” by AlmightyWorm, public domain

    Frequently, I receive emails from people who need help moving their business from California to Arizona. They typically find me after reading my post about how challenging it is to move a company from California to Arizona, particularly a corporation. One of the most common questions they have is, “What will this cost?”

    Cost to Move a Corporation from CA to AZ

    Moving a corporation from California to Arizona is complicated because it requires forming a new business entity in Arizona and then merging with the California entity where the Arizona entity is the surviving business. This requires extra steps and extra fees. Here is the process if the surviving entity is an Arizona corporation, with all filing expedited.

    • File the Articles of Incorporation with the Arizona Corporation Commission (ACC): $95
    • File the ACC Statement of Merger: $135
    • Once the Statement of Merger is approved, request and obtain a certified copy of Statement of Merger: $42
    • Send the notice of the merger to the California Secretary of State: $100

    Total filing fees: $372

    In addition to these filing fees, you are required to publish notice of your Articles of Incorporation and Statement of Merger in a local newspaper if your Arizona business is located outside of Maricopa or Pima County: Each approved newspaper sets its own prices, which I’ve seen range from less than $40 to over $400. In my experience, the fewer approved newspapers in the county, the higher the publication fee.

    All of this does not include attorneys’ fees. I tell my prospective clients to expect this total process to take 3-4 hours of my time. (My current rate is $275/hour, so up to $1,100.)

    UPDATE (1/10/2023): The process to move a corporation from CA to AZ recently changed! It’s now easier, faster, and more cost-effective.

    Cost to Move an LLC from CA to AZ

    Moving a limited liability company from California to Arizona is much less complicated than moving a corporation. Thankfully, this does not require a merger.

    • File the Statement of Conversion with the ACC: $85
    • Along with the Statement of Conversion, file the Articles of Organization: $85
    • Once these filings are approved, file a Statement of Conversion with the California Secretary of State: $30

    Total filing fees: $200

    The form for each Statement of Conversion is provided by their respective states. Like a corporation, if your Arizona LLC is not located in Maricopa or Pima County, you must publish a notice of your Arizona LLC in an approved newspaper. As stated above, each publication sets its own prices and they can vary greatly, so it’s often worthwhile to call all the approved newspapers in your county, unless you have your heart set on publishing in a particular one.

    Of course, there is also the fee for your attorney’s time. I tell my prospective clients to expect this process to take 2-3 hours of my time (so at my current rate is $275/hour, it would be up to $825.)

    Moving an Entity from California to Arizona Without an Attorney

    You are not required to use an attorney to move your business entity from California to Arizona. You can submit these filings yourself. However, I strongly recommend that you consult with an attorney along the way. I’m working with a client right now who is doing their own merger. Each step of the way, he checks in with me via email, and I helped him write the notice of the merger to the California Secretary of State.

    I have another client who came to me after trying to move their entity themselves and it backfired. He tried to move his California corporation to Arizona using a Statement of Conversion. The ACC approved it, but the California Secretary of State won’t accept a Statement of Conversion as a way to move the entity out of the state. He essentially wasted his money and time filing the Statement of Conversion in Arizona, because I still have to file the Statement of Merger and the subsequent notice to California to achieve his goal of moving the entity out California. It probably cost him more trying to do it himself, because I also called the Secretary of State’s Office to see if I could untangle this mess and merely send a notice of the conversion – which they said is not permitted.

    I frequently say it’s easier and cheaper to avoid problems than to fix them. If you’re preparing to move your business to Arizona, please contact me if you need help – whether you want me to do everything for you or be available to help you do it yourself.

    If you want to regularly receive information about how you can run your business more effectively and keep up to date on other legal issues related to business, intellectual property, and internet law, please add yourself to my email list.

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    Ruth Carter

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  • Funny but Binding Contract Terms for Late Payments

    “Pizza” by stu_spivack (Creative Commons License)

    One of the biggest challenges facing small businesses seems to be getting clients to pay their bills. Dealing with non-paying clients or delinquent clients is one the most common complaints I hear about from other entrepreneurs. Your first line of defense against these people is in your contract.

    Create an Upside When Clients Don’t Pay – in Your Contract

    You can put anything you want in a contract, as long as it’s legal. (This is why you can’t have a legally binding contract to buy/sell heroin or a human kidney.) Most contracts include a provision about a late fee, so if your client is late in paying you, you can make them pay more, up to the maximum interest rate allowed by law.

    If you are a professional creative, such as a website developer, graphic designer, or photographer, you can put in your contract that you won’t give the client the final deliverables until they’ve paid the balance on their account. This is an effective way to hold your clients’ financial feet to the fire.  

    Don’t Publicly Shame Your Clients

    No matter what you put in your contracts, don’t shame your clients for being late in paying their bill. Don’t put in a provision that says if they’re late, you can put up a sign or billboard, or hire a skywriter to tell the world that the client didn’t pay their bill. That doesn’t help anything. That could easily backfire because it makes you look like a jerk.

    I had some ideas that aren’t publicly shaming, but still could make you look worse than your non-paying client if it became public information, like including a provision that says, if you’re more than 90 days late, every time we send you a reminder, the subject line will be, “Hey Asshole! Pay your bill!” As validating as that might be in the moment, it probably wouldn’t be an effective strategy for getting referrals, or even getting them to pay.

    Free Ideas for Revising Your Contracts

    Recently, I wondered what else a company could put in their contract that would encourage clients to pay their bill and have an upside for the company. For the purpose of these suggestions, “you” and “your” refer to the client and “we,” “us,” and “our” refer to the company.

    • If you’re more than 30 days late paying your invoice, you agree that you will pay for an office pizza party for us every Friday, and we will add the amount to your unpaid invoice as well as send you a photo of us eating pizza.
    • If you’re more than 6 months late paying your bill, we will send a hug-a-gram to your office reminding you to pay us. (It’s like a singing telegram, but instead of singing, they hug you.) We will add the amount of their fee to your unpaid invoice along with a substantial tip.
    • For a web designer: If you are 30 days late paying your final invoice, not only will we not launch your new website, you consent that we can commandeer your current site to promote the charity of our choice.

    Final Thoughts

    Having non-traditional contract terms is not a new idea. Lots of people have had seemingly crazy provisions in their contracts. I want to do more blog posts this year with sample verbiage for contracts that I would love to write, that would be legally binding, and not your traditional legalese.  

    I want to humanize contracts. I love writing contracts in everyday language. Your contract should be written in a way that you and your clients can easily understand it. If you want to hear more about what I’m doing in my business and practical legal tips to run yours more effective, please add yourself newsletter.

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    Ruth Carter

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  • It’s the Law: Put Down Your Phone and Drive

    “Hang Up and Drive” by ToastyKen (Creative Commons License)

    Starting January 1, 2021, you can be ticketed in Arizona if you talk or text on a cell phone while driving unless the device is in a hands-free mode. The same law also applies to tablets as well as music and gaming devices It’s the 48th state to ban texting while driving. (Missouri and Montana are the only states left that don’t have laws that restrict texting while driving.)

    This law actually passed in April 2019, but drivers didn’t start getting tickets until the beginning of 2021. In the meantime, law enforcement gave over 15,000 warnings to people who were caught on their phones while driving.

    What Does This Law Actually Require?

    Essentially, you can’t touch your cell phone or other stand-alone electronic device while you’re driving. It has to be in hands-free mode. It can’t be in your hand, cradled between your ear and your shoulder, or supported by any other part of your body.

    This means you can’t write or read texts, scroll through social media, watch or record videos, or do anything else with your device that causes a distraction and requires the use of your body.

    So, I Can’t Touch My Device At All?

    There are a few exceptions. You’re allowed to touch your device to:

    • Start or end a call,
    • Use a device, like on your GPS, to navigate the vehicle, and
    • Respond to an emergency situation, like calling 911.

    It’s ok to talk on your phone while wearing an earpiece or headphones or communicate through a smart watch.

    What If I’m at a Stoplight?

    I called the Phoenix Police Department and the officer said you’re allowed to touch your phone while you’re sitting at a red light. If you’re that person who isn’t paying attention and doesn’t go when the light turns green, you can be ticketed for impeding traffic.

    What About a Stop Sign?

    According to the police officer, you’re not allowed to pick up your phone while at a stop sign. Their exact words were, “We don’t want you marinating at a stop sign.”

    Can I Shoot Video While Driving If I Hit “Record” Before I Start Driving?

    Technically, yes, but if you’re shooting a vlog while behind the wheel, I suspect you’re not paying as much attention to the road as you should be. You can still be ticketed for operating your car unsafely.

    How Can a Cop Prove I was on my Phone?

    It might be their word against yours.  Under this law, a police officer cannot confiscate or inspect your device.

    How Bad is the Fine If I Get Caught?

    For your first violation, it’s a $75 – $149 fine. If you get caught using your device while driving again, it’s a  $150 – $250 fine.

    Is It Really That Dangerous to Text and Drive?

    According to a study from the National Highway Transportation Safety Administration, texting and driving is six times more dangerous than driving while intoxicated.

    It’s scary to be driving and see other drivers talking on their phones, or worse, looking down at their lap where they’re texting with both hands. One time I was in the passenger seat of my friend’s car and while they were talking on their phone with one hand, they started writing on a notepad with the other! I told him he wasn’t allowed to do that while I was in his car. (If he needed something jotted down, I was happy to do it for him.)

    If you want more information about this new law, visit the Arizona Department of Public Safety, and please put down your phone and keep your hands on the wheel and your eyes on the road.  

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    Ruth Carter

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  • What Zach Kornfeld is Doing Right with his New Business

    “Thumbs Up!” by Kevin Gale from Flickr (Creative Commons License)

    This week, Zach Kornfeld of The Try Guys announced that he is starting a new tea company in two months or less, without leaving his apartment, and spending less than $500. The goal is to create and sell two original blends: “one for energy and one for chillin’ out.”

    Constraints are Good for Creativity

    It’s intriguing to watch someone create a new company is real time, particularly in this situation where Zach has a limited budget and is sheltering in place. These limitations are not necessarily bad things. On the contrary, entrepreneur and keynote speaker Jay Acunzo regularly talks about how “Constraints are a strength.” They increase the need for thoughtfulness and creativity. Also, check out his fantastic book Break the Wheel. It has an entire chapter dedicated to constraints and decision-making.  

    Zach started by consulting Jason D’Mello at the Fred Kiesner Center for Entrepreneurship for business advice, who advised him to create a DBA (doing business as) as the start of his company. (I recommend that every entrepreneur create a separate business entity – LLC or corporation – for their company, but in California, that comes with a hefty annual fee that would break Zach’s budget, so I get why he’s starting with a DBA.)

    Before filing DBA, Zach needed a name for this new company. Zach’s first idea was to name his tea company Turtle Tea because it doesn’t matter how you start or how many times you fail. What matters is that you keep trying – slow and steady.

    What Zach Did Right – Legally Speaking

    Trademark laws apply to branding in the U.S. – company names, product names, logos, slogans, etc. There are many legal issues that can crop up when selecting a brand. Before Zach ran with Turtle Tea as his brand, he did a lot of things right.

    He Checked the USPTO Trademark Database

    Zack used the Trademark Electronic Application System (TEAS) on the U.S. Patent and Trademark Office  (USPTO) website, to try to register Turtle Tea as a trademark. He didn’t just submit an application but checked the USPTO’s trademark database first to see if anyone else had already registered that name.

    Unfortunately, someone else already owns a trademark for Turtle Herbal Tea. If he tried to register Turtle Tea with the USPTO, he would have been throwing money away. If Zach used Turtle Tea as a trademark anyway, he would have set himself up to get a cease and desist letter (or worse) from this trademark owner and would have had to rebrand his company.

    He Checked Alternative Spellings for Potential DBAs

    Now that Turtle Tea was off the table, Zach started running trademark searches for other potential names. One thing he did was check alternative spellings. A primary rule in trademark is you’re not allowed to have a trademark that is confusing similar to someone else’s such that consumers will be confused about whose product they’re buying. You can’t register a trademark if it sounds confusingly similar to someone else’s – different spelling but sounds the same.

    When Zach looked up “Zach,” he also had to check “Zack.” Likewise, when he looked up “Zach’s” he had to look up “Zax.” When I research my client’s trademarks, I try to look up alternative spellings to make sure a sound-alike trademark hasn’t already been registered.

    He Checked Related Products for Similar Trademarks

    When someone has a registered trademark, they have the right to use their name on their goods/services as well as on the ones they would logically expand into. For example, if someone sold milk, a product they’d like expand into is cheese or ice cream.

    Likewise, Zach needed to consider not just tea companies that had registered similar marks to what he wanted, but also other beverages. One of the names he was considering had to be rejected because it was already registered by a coffee brand.

    By the end of this video, Zach didn’t have a name for his company despite his many searches. This frequently happens. (Zach’s fans are suggesting names for his company via social media. The best one I’ve seen so far is Korndidtea – a take on his Twitter handle, @korndiddy.) Many clients send me dozens of trademarks to search against the USPTO database for them before deciding on a name. You don’t want to waste time and energy on a brand that have already been claimed as a trademark by someone else.

    I love that Zach’s experience shows that Joe Average people can use the USPTO trademark database to do their own preliminary searches when considering a name for company or product. I don’t recommend filing a trademark without consulting a lawyer, but you can definitely your basic research yourself.  

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    Ruth Carter

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  • Six Ways to Work on Your Photography Business While in Quarantine

    “Lens Cleaning” by The Preiser Project from Flickr (Creative Commons License)

    I cringe every time I see a post about photographers and models teaming up to shoot during the COVID-19 pandemic when they should be social distancing and staying home. The only photographers who should be out shooting these days are the ones who are documenting the pandemic.

    My business mentor taught me that when you’re not working in your business, you should be working on your business. Here are 6 ways you can work on your business while sheltering in place.

    Edit Your Images From TFP Shoots

    Models frequently complain that they rarely get images from open TFP shoots. They held up their end of the bargain. Now it’s time for you to do yours.

    Brainstorm and Research Future Projects and Collaborations

    Now is a good time to reach out to models you want to work with and research ideas for shoots you want to do when the Shelter In Place orders are lifted. There are lots of online groups where you can network with other photogs and models.

    Create Your LLC

    Are you still a sole proprietor? <shiver> Please fix that. No entrepreneur should be without a business entity for their company.

    In most states, you can create a business entity online. Look up your state’s Secretary of State Office or Corporation Commission.

    Review or Create Your Legal Documents

    Do you have templates for your client contracts, model releases, and copyright license? If not, now you have the time to create them. If you have them, can you remember the last time your reviewed them? If not, now would be a good time to do that. A lot of people are double checking that they have an effective force majeure provision in their agreements.

    If you want to respond to suspected copyright infringement by sending a cease and desist letter, now is the time to create an epic C&D template so you’re ready to lay the smack down on anyone who violates your rights.

    Update Your Website

    I bet it’s been a while since you did that. Make sure it accurately reflects your style and strengths. Even I’ve spent time while sheltering in place, updating this site.

    Clean Your Gear

    Now you have the time to clean your gear, including cleaning out gear you no longer use. Get your gear serviced if your camera shop is still open. Don’t forget to go through your memory cards and get rid of images you’ll never do anything with.

    If you can’t resist the urge to pick up a camera, please limit yourself to shooting still life, self-portraits, and/or shooting at home with members of your household. You can also work on your craft by re-editing older photos and taking online trainings on various techniques and skills.

    Lights Camera LawsuitTM

    There’s always a need for quality legal information for photographers. That’s why I created an online course called Lights Camera Lawsuit: The Legal Side of Professional Photography to address photographers’ most important questions. It’s 23 lessons, nearly 6 hours of legal information, with tons of information about contracts and copyright. I want you to feel secure in your business, confident in the way you operate day-to-day, knowing that you’ve set yourself up to get paid what your worth without incident.

    The course is $497, but until June 1, 2020, you can get it for 20% off with promo code thrive20.

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    Ruth Carter

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  • Share, Don’t Steal Content in Response to COVID-19

    Don’t Steal by Marguerite Elias from Flickr (Creative Commons License)

    During this pandemic, many companies are reaching out to their audience with message of reassurance, information about changes in their services, and ways their audience can help during this challenging time.

    My friend, Jessica Bay, walks dogs professionally as well as educates would-be professional dog walkers. She created a helpful graphic for her audience:

    A short while later, she noticed this in her social media feed:

    And later this one:

    She asked me if these were instances of copyright infringement. If someone is copying word-for-word or close to it, that raises the red flag for copyright infringement. There are definite similarities. I wouldn’t be surprised if one of these graphics were inspired by another’s post.

    Let’s assume that one of these graphics is a rip-off of another. It doesn’t make sense to me that someone would do that. In a niche market like dog walking and pet sitting, there’s no downside to sharing another’s graphic since the provider has to be in the physical vicinity of their clients. And for companies that educate would-be dog walkers, you should be confident enough in your work that your clients aren’t going to jump ship because of a graphic on social media.

    Conversely, there are only so many ways to convey the same information, and independent creation is a defense against copyright infringement. It’s possible that each of these three companies independently came up with the idea of creating a graphic about how their audience could support the dog walking/pet care industry while under quarantine or practicing social distancing.  

    My Two Cents

    Speaking as a lawyer and as an entrepreneur, if you see a graphic that would be helpful to your audience, share it. The best way you can add to the conversation would be to create your own content that builds on the original message, not just repeats it. (If you’re going to create content that repeats another’s message or general information, at least find an original way to do it.) If someone wanted to build on this, they could have created a graphic about the importance of maintaining normalcy in your pet’s life, which includes their walking schedule.

    If you get caught copying another’s content that’s so blatant that everyone will know that one is a rip-off of the other, it’s going to have an adverse impact. Instead of coming across has helpful, you risk being seen as lacking integrity and creativity.

    If You Get Caught Stealing Content

    If someone calls you out for potentially stealing content, and that’s what you did, just delete what you created, and don’t do it again. Saying it’s a “good message to spread” is not a valid excuse for copyright infringement.

    Ripping off a company’s graphic is on the same level as claiming another person’s poem as your own because you thought it was pretty. I think some people have a mental disconnect where they don’t think copying commercial speech is as bad as other infringing behavior. (Creating a graphic with your business logo on it, even though it is not a sales pitch, is commercial speech.)

    If someone has a good message to share, and their original content is shareable, then share it. That’s the best way to share the valuable message with your audience.

    Sharing Done Right

    I have seen this graphic all over social media over the last few days:

    Hat tip to The Counseling Teacher for creating such a helpful graphic. This graphic has the right message at the right time. Additionally, I haven’t seen any instances where sharing this graphic had a negative impact on anyone’s business.

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    Ruth Carter

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