Dealing with all the legal stuff as an entrepreneur can be daunting, but it’s essential for protecting your business and ensuring its long-term success. Without a solid legal foundation, you risk exposing your hard work and intellectual property to potential disputes, infringement, and costly legal battles.
I’m so happy to welcome Heather Pearce Campbell to the show! She’s a dedicated attorney and legal coach for world-changing entrepreneurs. She joins us today to shed light on the critical legal aspects that many business owners overlook.
As the founder of Pearce Law PLLC and the creator of The Legal Website Warrior, Heather provides invaluable insights into safeguarding your intellectual property, crafting rock-solid contracts, and creating a legally sound online presence. We explore the five essential legal buckets every entrepreneur should address and discuss practical strategies for minimizing legal risks while maximizing your business’s potential. Heather shares real-world examples and cautionary tales that underscore the importance of proactive legal measures in today’s fast-paced, digital business landscape.
Whether you’re a coach, consultant, online educator, speaker, author, or business owner, this episode is packed with actionable advice to help you build a strong legal foundation for your venture. Join us as we dive into the world of entrepreneurial law with Heather Pearce Campbell and discover how to protect your business, achieve peace of mind, and focus on what you do best – changing the world! So now, without any further ado, on with the show!
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In This Episode
- [02:59] – Heather Pierce Campbell shares how her interest in law sparked and how a business law course is relevant to her entrepreneurial upbringing.
- [11:21] – Stephan and Heather discuss the important contracts that entrepreneurs often overlook.
- [14:01] – Heather explains five buckets for business success.
- [22:04] – Heather underscores the importance of cybersecurity insurance for small businesses. She also discusses the significance of the IP protection plan and dispute resolution plan.
- [31:32] – Heather emphasizes how crucial timelines are for IP protection and gives ideas on protecting your creative work.
- [41:35]- Heather warns of legal risks associated with using AI in generating trademarks or copyrighted works.
- [44:20] – Stephan asks about legal links for website owners, including Terms of Use, privacy policy, earnings disclaimer, and accessibility statement.
- [48:10] – Heather offers a Website Protection Package at legalwebsitewarrior.com to help businesses create and implement proper click wrap agreements.
Heather, it’s so great to have you on this show.
Thank you, Stephan. It’s so great to see you again. I’m going to put a plug for your episode on Guts, Grit & Great Business®. It’s been a little while now, but people should also hop over there and listen to your episode.
Yeah.Thank you. We’ve known each other for a while now, and we know each other from masterminds like JVMM, so we’re both active in Joint Venture Mastermind. So maybe you could start by sharing your origin story of how you got into the law and helping entrepreneurs because there are different kinds of lawyers. What made you want to grow up and become a lawyer and specifically target the movers and shakers in the entrepreneurial world?
Yeah, fair question. Why on earth would I want to become a lawyer? So, I never did. I never once thought about it as a kid or at any time in my young adult life until I almost graduated from undergrad, getting my undergraduate degree in finance and economics. I had a double major and minor, and I wanted more education. I packed my business education into a couple of intense years. It was actually through a conversation with my mom and then a couple of courses that I was taking at the time. One was business law, a required course for my business degree. And then the other was an advanced writing course where I chose the topic of legal ethics to write on. And so, it required that I do a bunch of research into the legal industry and ethics.
Through this conversation with my mom, I realized that it was paying attention to little things. Everybody else in the business law class was falling asleep and not paying attention, and I was like, front row Joe. I found it so immensely interesting, story after story, about these situations unfolding and how they got resolved or what the decisions were. I think, in part, that was because I was raised by an entrepreneur.
Cybersecurity threats often originate internally from employees or independent contractors. Ensure proper password management, and keep your website, software, online portals, and backend access up to date. Share on XSo, my dad had always been an entrepreneur for himself. I had seen him in multiple lives, from a business standpoint, creating businesses, selling businesses, and creating another business. I had walked the path as a kid of an entrepreneur. And we were fairly engaged, even in my dad’s businesses, meaning that we were hired to work in them. We were also really do-it-yourselfers. Back to the HGTV project theme. Remodeled his businesses. I broke out tiles on the floor over Christmas break and helped relay tiles.
So it was one of those where I’d seen the path of entrepreneurs and small business owners. So I think it was a combination of things that led me into the law, which kind of felt like a left turn as I’d never thought about law. And then suddenly I was like, boom, this is the right decision. A conversation with my mom made that really clear. So thank you, Mom, for your intuition around that.
Then, as I progressed into law school, I mean, one of the really pivotal things that happened was that I lost my mom early in my law school experience. She became terminally ill with a brain tumor. So, she was sick my entire first year of law school. I did law school about half the time everybody else did it. I did law school Monday through Wednesday, and then I traveled home and spent time with my mom and my family, basically Thursday through Sunday, and then traveled back to Seattle. And then, on repeat, she ended up passing away at the start of my second year of law school.
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That experience just really changed. It changed so much for me, not only my perspective on life in general but also my willingness to do other people’s work right, not be self-directed, and to subscribe to so many traditional stories around me. Here’s how you get the right experience. Here’s how you finally get the opportunity you’ve always wanted. That path looked like taking jobs and taking work that may not really be a great fit but would just get you experience. While there’s a certain amount of that that’s true, you have to do the work to get experience.
I became much more critical about just signing on to things that didn’t fit me. When I graduated from law school, I ended up launching my practice and essentially hanging my shingle right out of school, which was unheard of then. The market has been through enough of this sense, and we were in a really down market that, by necessity, some other law school graduates have had to figure out how to do some. You see more of that these days, which is interesting.
I feel mixed emotions about that. I happen to be really good at enrolling mentors for myself. I have always been a people person, and I wasn’t afraid of people, and I knew that that’s where work would come from. But I also was great at making connections and essentially creating mentors, and even though I wasn’t embedded into a firm, I got myself onto some of their largest projects. I worked with people I could learn from and then took on my own clients.
There’s pretty much nothing that you can do in business that does not overlap the law.
The end of your question about how I ended up choosing business and entrepreneurs as the community to serve is that in my first decade of practicing law, I saw how underserved the small business community is in the traditional legal field. There’s just so many gaps. So, I’ve always considered myself somebody that’s pretty equal-brained. Like, I’m creative, and I’m analytical.
I just thought there was a better solution, a way to do this, and a better way to help people. So, that’s where the legal website warrior model came from. And that shift, about ten years in, became pretty exclusive. My work became pretty exclusively about businesses.
Gotcha. And so you mentioned there that you saw so many gaps with small businesses. They’re flying by the seat, the pants, fast, loose, or whatever the expression is. What are some of those gaps?
They tend not to get legal advice early enough in their journey. So, part of it is even just knowing the map for their business. When I say the map, I mean the legal map for their business, knowing the legal overlay, not only for their business model but maybe for their industry and marketing. There’s pretty much nothing that you can do in business that does not overlap the law. So, getting people the map became really paramount for me. I do a lot of educating. It’s part of why I created so many free resources on The Legal Website Warrior. So that’s one of the big early gaps I see: just getting some fundamental education about their legal needs.
Then, as you progress into your business journey, often there’s the ready, aim, fire. And then there’s the fire, ready, aim. You really see that dichotomy in business. There are a lot of people that are doing business and even building pretty established, thriving small businesses before they’ve had a legal review, before they’ve had somebody comprehensively help them fill in those gaps which typically live around areas involving IP, having a proper IP assessment, and actually even creating and protecting IP as you go.
A lot of what I see is a lot of people and a lot of small businesses have already created a pretty significant body of work or a certain amount of IP, and it’s after the fact that they’re like, “Okay, how do we protect this now?” Right? And sometimes that comes, like, I’m in a case right now where we actually had to file a federal lawsuit a couple of weeks ago for a client because she was more of the aim fire-ready type.
And that’s okay; it can happen. I just want to avoid the heartache of suddenly having to incur $20 to $30,000 a month in legal fees to untangle some of those infringement scenarios.
Yeah. So, an entrepreneur, business owner, or marketing department might do stuff quickly and loosely and create, for example, a privacy policy because they read somewhere it needs to go on their website. They don’t have anything, so they just grab a template off of the Internet and then paste it in. Or they don’t have a copyright assignment from the website designer who designed their new website. So technically, it’s not even their IP. They don’t even own their website.
60% of small businesses don’t even have a legal entity set up.
Oh, that’s a big one.
Or NDAs, right? Nondisclosure agreements or confidentiality agreements that are invalid or may not even be signed or don’t even exist in any form with vendors, potential vendors, clients, and potential clients. And it’s a huge gaping hole in their business terms of service that they grabbed off of the Internet and used instead of properly fine-tuning it for their business and their needs, statements of work, proposals, and things that require client signatures. They just whipped that together or used their client as the example and reused it elsewhere. And it’s all very one-sided, and they didn’t realize it. So, these are all nightmare scenarios. Where do we start with all that?
Yeah, so it’s true. You’ve just listed a long list of very typical examples. These live inside a five-bucket framework I walk people through, right? These all live inside of the contracts bucket. Everything you just mentioned, including contracts, is a big bucket where I spend a lot of time with my clients. Any exchange of value that you create in your business, whether you’re hiring people, right, you gave the website example, whether you’re bringing on and hiring people, even from an independent contractor perspective, whether you’re hiring a team like in house team, whether you’re creating a new client service or offering a new product to the world, you’ve got all of these exchanges of value that you create through your business.
Each of those needs contractual protection if you’re doing it right, not only for your IP. Mostly, when you say IP, people automatically think of registrations, right? We started with the IP bucket because there are also a lot of issues in the IP space related to the types of businesses I serve. And that’s one of the buckets.
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You have an IP protection plan in place. But contracts are a really heavy bucket, from day-to-day transactional stuff. From that standpoint, you need to beef up contracts and have them fit your business. There are two things that I regularly say about contracts. They need to be clear. I mean, clarity always wins over. People often think I want a bulletproof contract. I want something that will save the day.
I think you and I have talked about this before. And I will say, look, there’s no such thing as a bulletproof contract. You cannot draft for every potential scenario that could ever happen in your business or this particular situation. You can have really solid contracts drafted, but they’re only solid if they’re clear and a fit for your business.
So often, people will just grab something and go, oh well, my business coach gave me this, or my friend who has a business that looks kind of like mine, let me use this. Or I found it on the Internet even worse, right? Because then there’s potential copyright infringement around those scenarios as well. I’m just going to use this template, and people tend not to think about infringement regarding legal language. But if you didn’t pay for it, you didn’t hire somebody to create it for you.
Yes, there are free template sites, but if a free template site is designed for the world, it’s very likely not designed for your specific kind of business. A lot of businesses are industry-specific and location-specific in some instances. They’ve got other things that make them unique. Copying and pasting and using piecemeal contracts will not serve you well.
So you mentioned the contracts bucket, but what are the other four buckets?
Yeah, the other four buckets. Very quickly, you’ve got your legal entity. That’s the first bucket, right? And I tell everybody, look, if you’re serious about your business, here’s the ironic statistic: in the United States, 60% of small businesses don’t even have a legal entity set up. 60%. It’s a massive number, right? And even a lot of people in the coaching consulting space might operate as sole proprietors for years. But there’s no legal barrier distinguishing their business from the personal side of their life, assets, bank accounts, home, or whatever they own, right? So take your first step, setting up a proper legal entity, seriously. It’s the only way to contain liability related to your work. Right, on the work side.
So that’s step number one. Step number two is business contracts. I tell people, protect your money maker, whatever it is that you’re doing to generate revenue, whether you have a standard client service that you offer, right, you’ve got a program, a course, whatever it is you’re doing, get a contract in place that is a great fit for that service that is drafted specifically for you, specifically for the way that you do business, because you want contracts that support your unique process. Every business is slightly different in how they enroll their people and vet somebody as a client; you want a contract that supports that process and doesn’t interfere with it. Right. So, contracts are bucket number two.
Protect your money maker, whatever it is that you’re doing to generate revenue.
Yeah. By the way, contracts that are seemingly bulletproof and very one-sided can actually be a deterrent for a potential contractor or client to sign on board with you. I remember the last few months doing a photo shoot with a local photographer, and the contract was so one-sided that I almost didn’t work with her. I mean, she did agree to make a whole bunch of changes, but I was like, wow, whoever wrote this contract for her really wanted to take the screws to whoever the new client was and not protect the client at all.
Yeah.
The indemnifications were all for her and none for the client. For example, there are no warranties for her; all the warranties were for the client. How does that work?
Yeah. You’re right about your point about this bulletproof contract approach. I really don’t support working. I’ve done a lot of contract drafting over the years and worked on other people’s contracts. Many of my clients are going into bigger businesses to deliver a service, a leadership program, marketing services, or whatever it may be. It is fascinating how often I see horrible contracts that are not holistically drafted to support the relationship. It should not be me first, your first tug of war.
It should be, how do we create this fair, clear scenario from the start where we both understand what the exchange is, and we also have a process for either resolving something that comes up or getting help? There have been many times when with a smaller client who’s going to work for a big business in an independent contractor type of scenario, I’ve just said don’t work with them.
That’s particularly in those scenarios where they’re unwilling to budge. They’re like, this is our standard language; take it or leave it. Right? Whether it’s Microsoft or Starbucks, I’m in Seattle. I’ve worked with all the large corporations around here because my clients work with those companies. So much of whether a contract gets revised appropriately has to do with the original relationship of the parties.
Communication with vendors, business partners, and clients is a significant factor in whether a business faces turmoil, such as litigation or a legal dispute. Share on XDo you have somebody on the other side who’s actually going to work with you? So it’s an excellent point. As a business owner or an entrepreneur, hiring an attorney to create a contract really encourages you to find somebody with that holistic approach. They value the relationship and help you value it through the contract. So that you end up with good, solid, fair language that works for both parties and is much more supportive of the scenario, it’s a hugely important point.
Yeah. Let’s go back to the buckets. You covered the legal entity and the business contracts. What are the other three?
Yeah, bucket number three is business insurance. Right. I’m not an insurance salesperson, but you need to look in the insurance bucket because you might have insurance depending on your industry. That’s what you do. Regardless, small businesses have access to 13 different types of small business insurance policies that might be a fit. And it depends on how you hire people. Do you have an on-location portion of your business? Are you entirely virtual getting? If you’ve ever gone through the process of putting homeowners insurance in place, do you own a dangerous dog? Do you have a swimming pool? Right. They want to figure out the risks related to what you’re doing in your business so that they can match you with an insurance policy that really fits you.
So, one thing I want to say about this that I had not really contemplated or understood until I had a guest recently talking about cybersecurity is you really need a separate cybersecurity insurance policy. The regular business insurance policies give short shrift, if anything, to cybersecurity. So if you get a breach or a ransomware attack, you get your client information, especially if it’s HIPAA protected or whatever is released on the dark web. Oh, my goodness. That’s a huge mess and a lot of liability. And the regular business insurance policy is not going to cover you properly.
No, that’s right. A lot of people make assumptions about what gets covered in a business insurance policy or even a homeowner’s insurance policy. Right? Don’t make any assumptions about insurance. Read the policy, have a conversation with your insurance broker or your insurance representative, and make sure that you understand your policy because this is going to serve you so much better in your decision-making as your business builds and grows, even because you talk about, like, data protection, for example, and overlay that with privacy regulations that require certain disclosures if you’ve had a data breach, even a small company, let’s say you’re a small business that only has 500 people on your list or in your database. Still, you’ve got some personally identifying information in there, right?
A data breach costs a small business $200 per client record. So, a small list of 500 people will cost you $100,000 to respond the right way, which means meeting all of the notice requirements, which vary by state, to ensure that you take any reactive measures to correct the scenario. Once that has happened, whether you need to provide identity theft monitoring for another year or whatever it is, there are a variety of things that can happen that are super expensive in a scenario like that.
A data breach costs a small business $200 per client record.
You’re right that regular business insurance won’t cover it. And so there’s a whole slew of things that you can do on the proactive side, including having proper security measures in place in the first place. And often where that starts is inside your business, with your employees, with your independent contractors, having proper password managers, making sure that your website and the software that you’re using, any online portals, any online access that you’re using to get into the back end of your business, all stay up to date. Right? These simple systems sometimes tend to slide for small businesses but are crucial for maintaining a properly secure business.
Yeah,
Yeah, it’s a good point. So insurance is bucket number three, right? My best advice there is just to connect with somebody, an insurance broker who has access to the marketplace and can guide you in piecing together policies that will be the right fit for what you’re doing in your business.
Bucket number four, we talked about the IP protection plan, right? These are trademark and copyright registrations, protecting your trade secrets. There’s a lot of protective overlay for IP in the contracts bucket, right? You talked about nondisclosure agreements; you talked about having proper independent contractor agreements and proper vendor agreements. You can also protect your IP and some of your trade secrets through contracts. So there’s some overlap between those two buckets, right?
And then the fifth bucket, this one, I joke, everybody’s running towards this bucket, they love it so much. Dispute resolution plan, right? You could swap out this title and call it a communication plan if you have a dispute resolution plan in place for your business.
So much of whether a business ends up in turmoil like litigation or a legal scenario has to do with how they communicate with vendors, business partners, and their clients, right? And really being, again, proactive about having the right conversation, because what causes somebody to get upset enough that you’re now involved in a legal scenario? There are regular mistakes like somebody naming a business or a program without doing their research, and so suddenly they’re infringing somebody else’s trademark. Right? Has less to do with communication and more to do with business strategy.
However, there are a lot of problems that arise during the creation, building, and operation of a business. People first have problems that then become legal problems, right? That’s where having a communication strategy is essential. As a business, whether internal or external, everybody’s on the same page. You know the rules for communicating so that people are heard so that you’re getting all the information you need to make the right decision to respond to a customer complaint, whatever it is.
And suppose you think about the process of building and marketing a business. In that case, your communication strategy starts clearly with your hiring team and marketing. Each touch point your business makes with the outside world is part of your communication plan. What are you saying about your business? What are you saying about your service? And does the delivery of that service or product match what you’re saying? Because that’s where things fall apart if expectations differ from the experience.
Remember, copyright registration does not protect the idea itself; it protects your unique expression of that idea. Share on XSo, an IP protection or dispute resolution plan sounds like big deliverable documents, like you’re writing a marketing plan or something. Are these expensive to produce? Are we talking about $10,000 to create this, or what?
No, absolutely not. So, depending on what you’ve got going on in your business. So, I do IP assessments for businesses all the time, right? It kicks off with a questionnaire like: What are you doing? What are you building? What have you launched? I’ve actually got an IP tracker that I give away for free. This is a great place for people to start to understand what they have created and what the important elements are, particularly when it comes to managing IP and getting proper registrations. I’ve got an article that I can link to, and people can hop over and just download a free copy of the IP tracker.
It will really get you set up so that you understand your IP and what you need to know about it to go to an attorney and present it and say, “Hey, where do we start? What do I need? What registrations are most important,” right? So that’s a great place to start, but it does not have to be overly expensive, right? Once somebody takes a look, they will put a plan in place. If they do it the right way, they will help you stairstep your legal needs, where you’re doing the most essential things first. And it doesn’t all have to be done at once. You can stairstep this over time, but you need to know that you have a plan to take care of your core assets rather than just sitting on it and hoping nothing goes wrong. That’s not a plan.
Yeah, it’s not a plan to just leave this to its own devices. So, you have very limited protection if you don’t register a trademark. If you don’t register a copyright, you have limited protection of that copyright and limited rights to go after the infringing party. It’s like statutory damages are only available if you have a copyright registration versus the actual damages you must prove and detail.
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Yes, that’s right. With registration, you have access to a recovery of your attorney’s fees, which can be cost-prohibitive in the other scenario where you may not even be able to pursue an infringer because it’s going to cost you too much to even get to court. Right. So, registration really is the difference between being able to pursue an infringer or not. It’s huge.
Let’s say that you are a consultant, a coach, or a professional speaker in the services industry, living. Maybe you have a small team, and you don’t have any trademark registrations or copyright registrations with the copyright office. Maybe you haven’t even done proper work on your contracts, and you’re just using templates and things like that. But let’s focus on the registrations of trademarks and copyrights.
Let’s say hypothetically, this person has a book they are publishing or have already published, maybe on Amazon as a Kindle Direct Publishing (KDP) kind of ebook. Maybe they also have a printed version of it, but they haven’t done anything to officially protect it. Maybe they also have a bunch of free resources they’ve created on their website, maybe some worksheets, checklists, planners, guides, and tools. So, in your process of implementing the IP protection plan, what are you typically going to advise? Let’s just take the book as an example there.
I know there are some limitations around what you can do from a trademark perspective, but what would our listeners be surprised by when they look at that hypothetical IP protection plan in relation to the book?
Registration really is the difference between being able to pursue an infringer or not. It’s huge.
Well, a couple of things. First, timelines are important, so if you want access to full statutory damages and recovery of attorney’s fees, you must complete that registration within 90 days of publishing. That’s the date that you expose that IP to the world. You hit publish on Amazon. It’s available for purchase, right? You can also make it available on your list or on your website. However, you’re pushing it out into the world because I will walk you through a recent scenario.
This client published this massive course, and we’re talking about 293 videos, right? Very short videos, little bite size, step by step by step, how you do something. She’s really good at building a following immediately, within a few months, 5000, 10,000, you know, 20,000 people on her list, and then also suffered major infringement. We had to pursue. Then, she showed up on my doorstep.
We had to pursue emergency copyright filings, which is where you request special handling of something like this. It could be a book, it could be a course, whatever it is. The difference between a standard copyright filing of $65 and the right to submit the application, including for a book or a special handling request, is $860 per filing. It’s a big difference, right? But they will; what happens on a special handling basis is if there’s litigation, if there’s pending litigation, or you have a publishing deadline, they will process that much more quickly, like in a matter of days.
That is hugely advantageous if you face infringement and are within that 90-day window. Because what happens is if you wait beyond 90 days after the point of publishing something, you can get access to a certain amount of damages. You can’t get access to all the damages, right? So, the window of time to seek registration is relatively brief. And this is where if you’ve created something, you’re like,” Wow, I know that this will become a core asset for me in my business.” Let’s say you put together a five- or ten-video course that walks people through your framework or whatever. Maybe you create a workbook, right? People can express their ideas differently. And that’s where, with every one of my clients, I’m like, what is the best expression of that idea? Remember, copyright registration does not protect the idea itself; it protects your unique expression of that idea. So is it in a video? Is it in written format? Is it in a series of blog articles you’ve written or a newsletter you’ve published? What is your best expression of that idea? Protect that.
AI-created content is not protectable.
Start there, right? So, somebody might be like, “Yeah, I’m awesome on video. I do much better on video than I do writing something.” Or somebody else might be like, “Look, I already wrote the book, it’s there.” Protect that expression of the idea and do it quickly. $65 for a registration. If you’re doing it yourself, which plenty of people can do, that is not a big investment, and it will go a very long way to protecting that creative work. If you hire an attorney, you might be paying some legal fee on top of that, obviously, at $65. But still, in the long run, if this is your core asset, it will be worth it.
Yeah. Everyone should copyright register their entire website, right?
And you can do that in different segments. So, the copy is registered separately because that’s a literary work. Registered separately from the images, which you can also register if your website has unique imagery. So there are different ways that you can protect your work, but you definitely want to look at what is likely to be infringed. Right? So, you’re going to look at companies that are about to launch something, a program, a course, or a new offering. Have I protected the title of this thing? So, we’re talking about brand names, business names, and taglines.
A great example is thinking about Nike. Nike, the company name protected. Nike, the logo protected. These are all trademark protections. And the tagline, Just Do It. Also protectable via trademark. Those are your top-level assets.
Suppose you think about your business. I love mountain analogies. If you think about your business or brand from the standpoint that it’s mountainous, the snow-capped peaks are visible from the marketplace. This is your brand’s name, your logo, your tagline, and things that are really recognizable as your brand. Those are protectable via trademarks. Trademark registrations. Right? Trademarks protect a word or phrase, which is a short combination of words like a tagline or a logo, right? Copyrights protect the body of the work. That’s the body of the mountain. This is your videos, tutorials, workbooks, and book, all of the ways your work takes form in the world.
You protect those things with copyright registrations. So luckily, the good news for you is that copyright registrations are a lot less expensive than trademark registrations. Right? But still, they’re both achievable. Do not let the idea that it’s just so expensive that you can’t do it keep you from protecting your core assets. For most small businesses, you might initially look at one to maybe three registered marks, depending on what you’ve created and invested in. Some small businesses are really attached to their word mark. Let’s pretend they have a brand name, but they’ve also created a beautiful, stylized version that functions as a logo. You might get both a design mark and a word mark.
Registration. Many small businesses can just start with a word mark, a single registration around their brand name. Don’t let the idea that it’s too expensive keep you from pursuing the first step; take the action of looking at that.
It is even possible to register a trademark on your own, which you would file with the US Patent and Trademark Office. And that’s what, $600 or something like that?
The filing fee is per class. So, it depends on how many classes you will register in. So, for example, regular business consulting services will fall in class 35, right? Same with advertising. If you’re doing marketing or advertising, you will be in class 35. But let’s say you’ve also created a library of digital downloads, right? That’s class nine. Or maybe you’ve created some online educational content because you’re a course creator. That’s class 41. There are different classes that you might have to register for to protect that particular phrase, brand, etc.
You cannot know with any certainty that AI has not scraped that original work and used it in your output.
And that’s where having an attorney involved can really help at the start, make that assessment, and put proper descriptions in place for each class. I will say that, yes, while some people can successfully obtain a registration on their own, plenty cannot. And I’ve had very smart friends reach out to me at the 11th hour and be like, for some reason, the USPTO keeps denying this, and this is my last chance to convince. And I’m actually like, “It’s too late. You already provided the specimen. You can’t update the specimen at this point. You just had a simple error in your specimen.” Right.
The specimen is how you document the use of the mark or the brand in what you’re doing in commerce. So, there are some pitfalls that people regularly step into.
Yeah. So don’t be penny-wise and pound-foolish, basically.
That’s right. I just had a friend go through this, and he wasted all of his filing fees all the way through, plus a year and a half of his time trying to deal with this on his own. So that’s the trade-off, right? It is a fairly extensive process, but if you approach it the right way, you have the proper assessment done at the start that says they look at what’s already been registered and the marketplace. You have a knockout search done where somebody is looking on your behalf to determine if you are likely to obtain this registration. I don’t see anything that would knock you out of the running in order to obtain this. Right. That’s what you want, and then you want to help to craft those proper descriptions. But it’s all very doable, and it is not so cost-prohibitive that a small business cannot obtain proper protections in a timely way.
Yeah. And that’s what, maybe a couple grand, right, for.
Exactly, for trademark registration. And that’s your top-level asset in your business.
Yeah. And they can work with you.
And I would love it. It’s one of my favorite things that I do because I put a great amount of time and care into that initial assessment and helping people get it right before we even file. I care very much that we’ve got solid specimens that they’re using the mark in the right way. It’s showing up in the right way. I help coach people on website corrections if we need to make a stronger presence using the mark. Right. But it’s a massive asset for all of my small business clients.
And so, yeah, we take it very seriously in our office.
Okay, so I will throw a wrench into the works here. What if they used AI, like ChatGPT, to generate the trademark design or wrote the book with the help of ChatGPT, and they want a copyright registration? What happens then?
Having an accessibility statement on your site, even for small businesses, is becoming increasingly important.
Yeah, you have to be very careful. I have a whole separate presentation on the legal risks of using AI. There are a couple of things that we can cover quickly. One is that the copyright office has a specific question asking you whether you used AI while creating something, right? AI-created content is not protectable. So, just understand that. A very clear ruling here in the United States from a federal court says that. So, anything created by AI is not considered an original work. It has to be created by a human.
So, what might that look like? Let’s pretend that you use AI to ideate something, which is the idea-generating phase, right? But then you go actually do the writing. That’s an appropriate use of AI. Let’s pretend you have AI to help you organize the topics. That may be an acceptable use of AI, but you still created the outline of the wording, etc. The trick is to understand that AI is trained on the large language models that have been built out there, which largely have scraped data from the Internet and from databases where, most of the time, proper consent was not achieved before that occurred.
So, you have AI trained essentially on information that contains a massive amount of copyrighted works or works subject to copyright protection because they were created; they were original works of authorship by another human. You cannot know with any certainty that AI has not scraped that original work and used it in your output. So there’s the risk of infringing somebody else’s right to their work. Still, there’s also the fact that you are further training this model using your own creative works that could become outputs for somebody else in their query or their question. Then, they actually obtain the copyright registration on your work ahead of you.
That’s the trick. It’s a double-edged sword. If you’re inputting massive amounts of your blood, sweat, and tears into this model without proper protection, you could be infringing on somebody else’s work, and somebody else could vicariously have access to your work.
Yeah. Crazy times.
Crazy times. Just be very aware that AI has appropriate and limited uses in creating content that becomes your core protectable work.
I know we’re running out of time here, so I have one last question before we wrap up. Then, you share your website and your socials again. So, for a website owner or marketer who is in charge of a website, what are some of those important legal links to have at the bottom of their footer? Is it a term of use? Is it an earnings disclaimer? Is it a privacy policy? Is it legal notice? A disclaimer of warranties? Is it some sort of clickwrap agreement? What’s a must for a typical website?
When you’re offering something for sale, you need to have a clickwrap.
Great question. A typical website for my clients is going to include your website terms and conditions, which should be a footer link in your footer menu, accessible via every page on your website. These are the general ground rules, right? This is for anybody who visits your site, including people who do not purchase or do not buy.
The second link should be a privacy policy. And this is going to be a GDPR-compliant privacy policy. If you’re like most of my customers and clients that are international in scope. So, privacy policy number two, link number three, for most of my clients that are b two b, or even b two c, depending on who the consumer is, it’s going to be an earnings and income disclaimer. The FTC requires this to be separately posted on your site. So, having a properly drafted earnings and income disclaimer number four, which is part of privacy, is also going to be a data processor disclosure.
I build the documents and help my clients with the process, like the functionality of where these things go and how they operate. But just remember, you have to disclose your data processors. Also, an accessibility statement. More and more small businesses are being dragged into these ADA claims, which are costing them a lot of money to figure out how to wiggle out of not being ADA-compliant. And that’s the Americans with Disabilities Act.
So, having an accessibility statement on your site, even for small businesses, is becoming increasingly important, along with taking steps to make your website more accessible. That’s a whole other discussion. And then, finally, you will have something if you offer anything for sale through your website. And all the links that we’ve talked about so far, by the way, are called browsewrap. Right? Links. That means somebody has to browse to get to them, click on that link, and have them come up. When you’re offering something for sale, you need to have a clickwrap. That means somebody has to check the box, click something that says, I agree, and acknowledge that I have read the terms of purchase.
So this is, if you’re offering anything for sale, you want a separate set of terms that are specific to that sale. And if they’re done, right? They cover your IP and a bunch of other things, but they have disclaimers, right? You mentioned disclaimers.
Warranties, indemnifications, all that.
Exactly. All of that stuff will be properly drafted for your business, offerings, and IP. Anybody who makes a purchase needs to acknowledge that beforehand. Clickwrap again, and click the box before they give you money. Many businesses do this wrong because they get the order wrong and transact the sale.
Boom. They get whatever amount, which could be $200 or $25,000, in their account. And then they send out the terms like, “Oh, by the way, here’s the terms.” No, that’s a bait and switch. Don’t do it. You have to get constructive notice before somebody purchases something. So there’s my little ranch.
Wow, that’s amazing. That is absolute gold, what you just dropped right there.
By the way, I have a package called the Website Protection Package that does all of this and helps you with exactly where these things go, where they should show up, and where they cross-link. Because function in this instance is really important, you must have the language and the proper function related to these documents.
I want to save people the heartache of having something go wrong where somebody steals that IP that they got access to inside of that course.
And the website protection package that’s available at legalwebsitewarrior.com?
That’s right. Yeah, it’s one of my four bundles. Nearly all of my clients start there because they’re all heavy in the online space.
But you have a clickwrap agreement that you have to click before you pay the money. Right?
You’re right. I don’t know how you guessed that. You’re right.
Oh, my goodness. There are so many, like web marketers and agencies, that they think about this stuff after the fact. And it’s like, “Oh, that was a mess.” I’m guilty as per.
It happens to totally, no, it happens. I want to save people the heartache of having something go wrong where somebody steals that IP that they got access to inside of that course and goes and does something with it where the terms might have prevented it in the first place. Because people see like, “Oh my gosh, this person has all their stuff buttoned up, not going to mess around.” And you now have a contract to say, “Hey, you agreed you weren’t going to take this stuff. You weren’t going to copy it. You weren’t going to use it in any other way other than to get educated.” And it’s amazing how often I see clients showing up saying, this person took my entire course. They copied word for word, the course, the section, or whatever it is, whatever the offering is, and they’re now using it in their business.
They didn’t have any terms in place. They didn’t have anything that says, here’s the proper use of this IP.
Yeah. Wow. All right, so I hope we’ve scared the heck out of our listeners, and they’re going to run, not walk, to legalwebsitewarrior.com.
Thank you so much. That’s my goal, to scare people. Thank you, Stephan. I really appreciate you.
Thank you, listener. I hope that you actually take proactive, powerful action and also make it a great week. We’ll catch you on the next episode. I’m your host, Stephan Spencer, signing off.
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Your Checklist of Actions to Take
Have clear terms covering IP, disclaimers, warranties, and indemnifications acknowledged before a sale.
Timely register trademarks and copyrights to access statutory damages and protect assets early on.
Implement a click wrap agreement at the point of sale. Customers must actively click to agree to terms and conditions before payment, ensuring that terms are legally binding.
Tailor contracts to fit my unique business processes rather than using generic templates. Generic contract templates often fail to address my business’s specific needs and nuances.
Invest in cybersecurity insurance and tailor policies to cover my specific business needs as cybersecurity threats can devastate financial and reputational impacts, especially for small businesses.
Obtain legal advice early to map out my business’ legal needs, avoid future pitfalls, and establish a solid growth and risk management foundation.
Draft fair and supportive contracts for all parties to maintain good client relationships and protect my interests.
Register IP within 90 days of exposure to ensure full legal protection. Timely registration acts as a deterrent against potential infringers and strengthens my legal standing if disputes arise.
Have a dispute resolution plan in place and ensure consistency between my marketing and actual customer experience.
Visit legalwebsitewarrior.com for comprehensive legal guidance and resources tailored to small businesses.
About Heather Pearce Campbell
Heather Pearce Campbell is a warrior mama, nature lover, and dedicated attorney who also serves as a legal coach for world-changing entrepreneurs. Based in Seattle, she is the mom of two little wild munchkins and the founder of Pearce Law PLLC, which is home to her legal practice. She is also the creator of The Legal Website Warrior®, an online business that provides legal education and support to information entrepreneurs (coaches, consultants, online educators, speakers & authors) around the U.S. and the world.
She hoards information, paper, and books while secretly dreaming of becoming a minimalist. She relishes an occasional rare night with her hubby when the kiddos are miraculously asleep, and she can soak up HGTV without guilt. Heather is also the host of the Guts, Grit & Great Business™ podcast.
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