Jeff Wolfe and Lyle Gravatt, attorneys at Forrest Firm, lead our May Swerve Meetup to discuss how creative businesses can protect their intellectual property through the use of contracts and setting up the best legal structure for their businesses.
Jeff works out of the Winston-Salem office, focusing his practice on business law for for-profit and nonprofit organizations, business formation, financing, day-to-day contracts. Lyle practices out of the Raleigh-Durham office and focuses on intellectual property (also known as IP), which includes patents, trademarks, licensing, and arrangements.
Leading the discussion on organizing your business in a legal structure, Jeff says “as your business grows you’re going to be in different cycles.” You want to protect yourself and what you create.
We learned that it is important to create a layer of separation between you and your creative entity to decrease the chances of personal liability. Picking a legal structure for your business is a good starting point and something that should be done early on.
There are several types of business formations:
Sole-proprietorship: An entity where your business is owned by you and only you; there’s no legal distinction between you and your business.
Limited Liability Company (LLC): In this business structure you as the owner, are not personally responsible for debts and liabilities of the creative entity.
Nonprofits: Money made from doing business as a nonprofit cannot go to an individual’s benefit. You cannot sell a nonprofit – you have to transfer the assets over to another nonprofit.
S Corporation: This business structure is a federal tax designation meaning when you take a salary from your business, it will be classified as an expense.
C Corporation: A legal entity that is separate from its owners. Most of the time owners are protected from personal liability for the debts of the corporation.
After discussing how to organize and protect our creative businesses, Lyle shared how we can protect our intellectual property.
There are four types of intellectual property:
- Trademarks: A brand logo, tagline, product design (glass coke bottle), sounds (theme song). Before coming up with a trademark it is important to do research to make sure no one else has it. Once your trademark is registered, it prevents others from competing against you with your logo, product design, etc.
- Copyrights: Copyrights protect the tangible form of original literary and artistic works such as novels, films, paintings, drawings, musical works, photographs, poems, etc. If you think you have something that will be used by others, you may want to consider registering for a copyright.
- Patents: Patents protect functional inventions, processes, methods, compositions, and products. If you think you have an invention, talk to a patent attorney because the day you offer it commercially, you lose your right to serve in international countries and you only have one year to file for a patent application.
- Trade Secrets: Trade secrets do not require registration, it is just the act of not sharing information with others. Although this form of intellectual property is simple, it is often the most overlooked.
In conclusion, Jeff and Lyle provided us with great information on how to not only protect but organize our creative businesses and intellectual property. Lastly, remember to draw and keep a line between yourself as an individual and your business to create a line for personal liability, do your research, and talk to a professional if you are not sure.
If you have any questions or would like to learn more about the corporate/law side of your business, you can contact Jeff at email@example.com or (336) 223.8369. If you have any questions or would like to learn more about intellectual property, you can contact Lyle at firstname.lastname@example.org or (919) 578.5693.
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