Using a Registered Trademark to Protect Your Business
Orlando Corporate law attorney, Julia Dennis, discusses the importance of protecting your company brand through a trademark, and the difference between a federal or state trademark.
Trademark Deadline Update
The USPTO has announced an extension of certain trademark-related timing deadlines under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. Certain filings (such as responses to Office Actions, statements of use, extensions of time to file statements of use, and others) that are due between, and inclusive of, March 27, 2020 and April 20, 2020 will be extended 30 days from the initial date it was due, provided that the filing is accompanied by a statement that the delay in filing or payment was due to the COVID-19 outbreak. An applicant, registrant or other person will be deemed to have been affected by the COVID-19 outbreak including, without limitation, through office closures, cash flow interruptions, inaccessibility of files or other materials, travel delays, personal or family illness, or similar circumstances, such that the outbreak materially interfered with a timely filing or payment.
Further, the USPTO is also granting some relief to applicants or registrants that allowed their applications and registrations to be abandoned or canceled due to inability to respond timely to a trademark-related USPTO communication as a result of the COVID-19 outbreak. Note that if an applicant or registrant has a filing before the Trademark Trials and Appeals Board, no such automatic extension will be granted without an express request or motion.
The ShuffieldLowman intellectual property team remains available to assist with any new trademark filings and any responses that may be due to the USPTO during this crisis.
Primary Contact: Julia Dennis
Titling Real Property: The Benefits of Using LLCs and Revocable Trusts
It is well-known that in Florida, a great way to own your home is in your individual name so that the home can qualify for homestead protection. Florida’s homestead laws are among the broadest in the country, and exempt homestead property from levy and execution by judgment creditors.
However, homestead laws extend only to your principal, permanent residence. What happens if you want to purchase a beach condo, an office building, or a piece of land to potentially build on in the future? How you title this property can have a significant effect on your business and your other assets.
Generally, holding each piece of real property in a separate limited liability company (“LLC”) owned by a revocable trust is an effective way of ownership with a number of business and estate planning advantages:
- Asset Protection. Owning property through an LLC maximizes the protection for your personal assets. Because there is an inherent risk of liability that goes along with property ownership, you, as a property owner, could potentially be subject to tort claims stemming from activities that occur on the property. If the property were held in your individual name or in the name of your revocable trust at the time a tort claim was made and the claim resulted in a judgment against you or your trust, your personal assets or the assets of your revocable trust could be attached to satisfy the judgment. However, if the property is held in an LLC and is the only asset of the LLC, only this property can be used to satisfy the judgment. The same principal applies if you hold a number of real properties, each with a significant value. Generally, each such property should be placed into a separate LLC for these purposes.
- Estate Planning. Having each piece of real property in a separate LLC has advantages from an estate planning standpoint in that it makes it simple to transfer ownership to family members. The ownership of real estate held by an LLC is represented proportionately by a member’s shares of an LLC. Rather than filing a new deed, the owners can transfer ownership of the property to their children by simply issuing them membership interests in the LLC. This makes gifting away interest in the real estate very simple and cost effective. Further, the LLC could also be structured with voting and nonvoting units. The owner can preserve control over the property during his or her lifetime and, at the same time, move some of the value of the property out of his or her estate, by gifting only the nonvoting units to family members. The owner could then prescribe how the property is to be controlled at his or her passing by devising the voting interests in the LLC to one or more beneficiaries of the owner’s estate.
- Avoidance of Probate. Owning real property through an LLC that is in turn owned by a revocable trust enables one to avoid the difficult probate process with respect to that property, which in turn eases the administration of your estate in the event of your passing.
A less effective, yet still a better way of owning real property than in your individual name, is placing the property into a revocable trust. This type of ownership does not have the asset protection and estate planning benefits described above, but it does remove the property from the probate process at your passing.
If property has already been purchased, it is still possible to take advantage of some of the protections discussed above by transferring the property into the appropriate holding structure. A major consideration as to whether to transfer the property into a revocable trust or an LLC is whether the real property is encumbered by a mortgage. If the property is unencumbered, it should be transferred into a newly formed LLC to take advantage of the LLC’s asset protection attributes. If there is a mortgage on the property, however, a transfer into an LLC would trigger documentary stamp taxes in the amount of $.70 on each $100 of the mortgage payable to the state of Florida. So, for example, on a $500,000 mortgage, the documentary stamp taxes payable to the state at the time of the transfer would be $3,500, which, for some, may not be worth the benefits of the transfer in the first place. If this property is transferred into a revocable trust, however, nominal documentary stamp taxes would be due on the transfer.
While the Florida LLC is an effective and frequently used vehicle for holding real property, there are other options that may be more appropriate for property owners. The specific circumstances and goals of the property owner must be evaluated before making this decision.
Maximizing the value of intellectual property in your business
In today’s diverse and dynamic tech industry, strong intellectual property (“IP”) protection is key to establishing and accumulating value in your business. With the Apple, Inc. v. Samsung Electronics Co., Ltd. case inundating the tech news over the past few weeks, understanding that it is difficult to prevent a competitor from attacking your IP, we started thinking about what businesses can do to minimize IP problems from the inside out. We wanted to share a few of these items in today’s blog.
- File for and monitor federal and/or state registrations. Depending on the level of protection desired and the availability of financial resources, you may consider registering some of your IP with applicable federal or state governing bodies. The process can take anywhere from a couple of days (e.g. for certain state trademark offices) to several years (e.g. for issuance of a federal patent), but an issued registration imparts a presumption that your business holds exclusive rights to the registered IP.
- Enforce your rights. Once you have secured registration of your patents, trademarks and copyright, it is critical that you police your industry and enforce your rights. Failure to police your IP will weaken even an issued registration. But beware of sending out poorly researched cease and desist letters, as those can sometimes have the disastrous effect of voiding your registered mark. See Firehouse Subs case
. - Check your employment and consulting agreements. Any time a business engages an employee or consultant, the business must make sure that their employment and consulting agreements convey sole ownership of any work product to the company. While there is a legal presumption that the company would own any work product that its employees produce, such a presumption does not exist with respect to independent contractors who, absent a written agreement to the contrary, will be deemed to have sole ownership to any work they produce for you. To be safe, for both employees and independent contractors – get it in writing.
For more recommendations or for a complete assessment of the intellectual property used in your businesss, contact the attorneys at ShuffieldLowman.