Guest Blogger, Woolly Boo - HOW TO PROTECT WHAT IS YOURS

While I am on vacation, there are a number of Guest Bloggers helping me out. Today’s Guest Blogger is Selma from WoollyBoo who is presenting some excellent MUST READ info on protecting your work from others and your personal assets, should someone be injured by one of your creations. PLEASE take time to read this important information. Selma has done a fantastic job of describing various aspects of these issues and presenting the facts in clear, concise language that we can all understand.

***WoollyBoo is a mother/daughter team that makes all natural products for your baby’s healthy and peaceful sleep. They produce mattress covers, comforters and pillows of 100% natural cotton and unprocessed wool. No chemicals are used in their production process. These materials contain naturally occurring deodorant and mildew barriers that prevent the development of germs that cause odor and material breakdown. The fine wool allow air circulation shown to have a calming effect on babies. Please take some time to check out their shop. I’ll tell you more about them once I return from my trip.

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HOW TO PROTECT WHAT IS YOURS

Reading the Community pages on Etsy, I’ve noticed a lot of posts about various copyright, trademark, or patent infringements, especially in the last few months. And the community members have given some really good advice. To make sure the information is available to all Etsians, I’ve consolidated it into this article. I know it looks a little long, but trust me, you want to read this. If not for any other reason than for your general education. For those that decide to take this route, I hope these simple steps help you along.

Protect yourself and your assets

There has been some discussion whether or not it is necessary for Etsy Sellers to incorporate. The short answer is no. But, here area few things you should consider. For example, do you own a home or a car or some stocks? Why am I asking this? Bear with me, since I have one more question for you. What happens when one of your customers develops a serious allergy that lands them in the hospital, and the doctors trace the allergy to some of the ingredients in your product? Then your customer decides to sue you, regardless of how much they like you or your product. Health care bills are very high these days. So, the judge says you now have to pay for the hospital bills. You say: “I can’t afford it. I’ve only sold three pieces this month for a total profit of $25.” Then the judge says: “What else do you have that we can sell?” See where I’m going with this? Protect yourself. It’s only a few minutes and less than $150 to register a company on your own in any of the states. Or you can pay Legal Zoom $650 and click your mouse twice. Whichever. No judgment here.

Here are the links to a few states and their Department of State or Secretary of State offices that have jurisdiction over the new business registrations:

http://www.dos.state.ny.us/corp/filing.html

http://www.nj.gov/treasury/revenue/gettingregistered.htm

http://www.sos.ca.gov/business/be/forms.htm

http://www.corp.delaware.gov/howtoform.shtml

I’ve also included a link for Delaware, since most large companies choose to register there. Why? Delaware has very favorable corporate laws. It’s simple as that. But, sellers beware - should you choose to register in Delaware, most other states require you to file “Foreign Entity” registration, otherwise you can’t operate. That’s another $125.

Note: To maintain the registration, you are required to pay an annual tax. In Delaware, it is $250.

Congratulations, you now have a profound right to collect Sales Tax, which you can fork over immediately to your state government and hope they repair the highways as they have been promising for years.

Now that the State knows I exist, what next?

Now comes the tricky part: if you only registered with your respective state, when you go to open your checking account, the bank is asking for your FEIN. FEIN? What is FEIN?

FEIN is your Federal Employee Identification Number. Technically, you only need it if you have employees. But, if you’ve done this before, you know that everyone and their mother is asking for your FEIN - your bank, your credit card issuer, UPS, FedEx, your local Costco. No kidding. It’s like the Social Security Number for your business. Here is the link where you can apply for one:

http://www.irs.gov/businesses/small/article/0..id=102767.00.html

Protect your name and your logo

This refers to the name of your company (your name could be Sarah Jones, and you incorporated as Sarah Jones, Inc. or Sarah Jones, L.L.C.) as well as the name of your products, which could be one and the same, as in my case (Woolly Boo L.L.C., the owner of Woolly Boo TM). I read a post recently where one of the comments stated that more and more sellers are using a TM sign next to their names and the names of their products. Then, shortly after that, there was another post from a different seller about Taggies TM, and, I am paraphrasing, a comment to the effect of “try making something with tags and see how fast you get slapped with a lawsuit.” So, instead of despairing about yet another highway robbery of your name, why not be on the other end of the equation and be the one slapping people with lawsuits. Granted, we are artists who want to create and not be bothered with all this paperwork. To those I say, I hope you have a really, really good lawyer or nerves of steel and really thick skin.

To protect your name and logo, you have to file a claim with the United States Patent and Trademark Office. You can find the instructions and forms here:

http://www.uspto.gov/main/trademarks.htm

Note #1: You don’t have to file a Trademark protection in order to use the (“TM”) designation. Why? Because it’s what is called a “common law” - when you start using (“TM”), you’ve put the world on notice that this is your property and nobody else has a right to use it. Very simple.

Note #2: Should you still decide to register your name and your logo, please be aware that it costs $250 per category - $250 for the name and $250 for the logo. If you decide to register colors in the logo, or specific font, that’s another $250 each. So, take it slow. To protect the broadest spectrum of rights, stick to the simplest options. For example: Tribeca Film Festival in New York only registered their name, which gives them a very wide field of operation. It also allows them to change their logo, poster concept, and color combination every year, if they decide to do so.

Note #3: Before you do anything, check the trademark database, TESS. Just in case someone already had a same idea as you.

http://tess2.uspto.gov/bin/gate.exe?f=tess&state=4001:cdnt0n.1.1

Note #4: The Service Mark (“SM”) also falls under this category, as I’ve noticed a few Sellers that provide services on Etsy.

Protect your words and images

Copyright infringement seems to be a HUGE issue on Etsy. Sellers are lifting the whole shop and product descriptions. They’ve also taken photos, regardless of how bad the resolution, and used them, if not on Etsy, then on other unrelated sites. First of all, that is very uncool. Period. If you have a writer’s block, well there are a number of people on Etsy that can help you with that. Maybe even people that are selling the same product as you. Just ask.

The copyright law is rather simple as it relates to Etsy Sellers. To quote USPTO: “The copyright protects the form of expression rather than the subject matter of the writing. For example, a description of a machine could be copyrighted, but this would only prevent others from copying the description; it would not prevent others from writing a description of their own or from making and using the machine.” See, simple.

If you want to proceed with registration, here is the link:

http://www.copyright.gov/

The fees are actually not that cost prohibitive, if you are filing just a few things.

Note: It used to be required to write “All Rights Reserved” or “Copyright by…” or (c) on your work, but that is no longer the case. Most nations in the world now follow what is known as Berne Copyright convention. What that means is that everything that was created in the U.S. after April 1, 1986 is protected regardless if you can see the notice or not. But, it is also true that if you post a notice, it will make people think twice about copying your work without notice (see the end of this article).

Protect your work

Patent protection is the hardest of all. Did you really make something that nobody else in the world has ever made before? Think long and hard. The patent protection is also governed by the USPTO. Here is the link:

http://www.uspto.gov/web/patents/howtopat.htm

If you decide to go this route, I strongly suggest you get yourself a good lawyer. This is a long and expensive process, as the government does not grant patents that lightly.

In conclusion, you can do all of these things, or none at all, or any combination - it is truly up to you. You should also note that Etsy is a pretty good source of information. Check out the Copyright FAQ below. It’s more legalese than what I’ve written and you may prefer to read that.

http://www.etsy.com/faq_copyright.php

Happy selling!

Note: The above article is for information purposes only. It does not constitute a legal advice, which you can only get from your legal representative. Woolly Boo L.L.C. does not claim to be an expert in the field of business registration or any other legal form, and should any of this information prove to be incorrect, the article will be amended accordingly. For the most accurate and up-to-date information about the laws governing the registration of businesses and related subjects, you should consult your legal representative.

(c)2009 by Woolly Boo L.L.C.