The State Liquor Enforcement Division (LED) is looking for some basic things.
If you’re thinking of starting a business (or already have a business in the works), make sure that the name you use is not already taken. Original names are essential for three reasons: marketing power, clarity, and trademark infringement avoidance. For example, if you’ve decided to open a coffee shop, it’s fairly easy to determine that the name “Starbucks” is not an option. But, what about “Smith’s?” And what happens if the “Smith’s” trademark is an auto insurance company in your town?
What’s Really in a Name When it Comes to Business Trademarks?
Before attempting to trademark your business’s name, find out if the name is available on the U.S. Patent and Trademark Office’s website. TESS, the Trademark Electronic Search System database, will indicate whether someone else has already claimed the name or symbol you want to use.
Often, there’s generally a way to accommodate both companies – especially when it comes to businesses with similar names, but dissimilar products (the “Smith’s” example above); those whose geographical locations may not conflict; and those whose names are too generic (for example, “The Clothing Store”).
Domain Extensions as Trademarks
In today’s marketplace, many businesses have both a physical location and an online presence. The question then becomes whether to trademark the company name (for example, Amazon), the URL (www.amazon.com), or both. It’s generally recommended that companies with an internet presence not register their web extensions (such as .com, .net, etc.) with their name unless planning to register the mark both with and without the web extension. The reason is that other businesses registering the same name can do so by just adding a different (non-registered) extension and cause a great deal of confusion for customers.
A prime example is Craigslist. The multi-purposed classified ad site is technically a “.org” site, but those who searched for craiglist.com or craiglist.net were often led astray. The company now has trademarks for all, so typing in the latter extensions now brings you to the main .org site.
If you have questions about business trademarks, call our office and we’ll guide you through trademark protections so your business and your efforts are protected.
You and several friends start a new business and decide to operate it as a limited liability company (LLC). Now that you’ve completed the first step—choosing a business entity—it is now important to prepare an operating agreement. The operating agreement is a contract which governs the operations of the LLC and sets forth the arrangements made among the members, including their rights and responsibilities upon the withdrawal of a member. Although departure from the business may be the last thing on anyone’s mind, it is important to plan ahead. A non-competition, or non-compete, clause can help protect the company from harm inflicted if a former member decides to form a competing business.
What Is a Non-Competition Clause?
A non-compete clause protects business assets like goodwill, confidential information, and trade secrets by preventing the former member from using the knowledge gained while participating as a member of the LLC to compete against the LLC.
If the operating agreement contains a non-compete provision, a former member can be precluded from engaging in a similar type of business directly or indirectly in competition with the LLC. If the operating agreement does not contain such a clause, the former member is free to compete with the LLC.
In addition, the non-compete clause may prevent the member from soliciting the LLC’s clients or customers for business. Usually, such provisions take effect after the relationship has ended, although they sometimes may preclude members from competing with the LLC during their membership in the LLC.
Because non-competition provisions place restrictions on the former member’s ability to secure future employment, they will only be enforced if they are not unduly burdensome. Consequently, they must only restrict competition for a reasonable period of time and in a reasonable geographic area, Additionally, the scope of the services the former member may provide in a competing business must not be unduly restricted.
Members of LLCs often have intimate knowledge of the business, such as its trade secrets, confidential information, and customer lists. If members are permitted to compete with the business immediately after they withdraw, and in the same geographical location, the financial success of the original business could be jeopardized.
Although many LLCs are formed by small groups of friends or family members who get along well and trust each other in the beginning, you cannot ignore the possibility of a dispute arising in the future. Circumstances can change, and it is important to try to prevent disagreements from undermining the success of your business. Including a non-compete clause in your operating agreement will help ensure your business is protected against a preventable harm.
We Are Here to Help
If you are interested in protecting your new or existing LLC, we can help you draft or amend your operating agreement to include key provisions such as a non-compete clause, as well as others specifically tailored to meet your business’s needs. Please give us a call today to set up a consultation.