Trademark vs Copyright vs Patent: How to Protect Your Brand, Contracts & IP

In this episode of HERpresence, attorney Amber shares a cautionary story about a lawyer who spent $30,000 on a rebrand without a trademark search, risking infringement. The conversation breaks down the differences between trademarks (names, logos, slogans), copyrights (original creative works), and patents (inventions), and explains TM versus ®, the USPTO filing timeline, office actions, likelihood of confusion, descriptiveness refusals, and the importance of choosing correct classifications. They discuss renewals, enforcement limits, and why registering an LLC name with the secretary of state is not a trademark. Amber gives practical startup guidance on searching Google and USPTO, using “in use” vs “intent to use,” and avoiding mistakes that require refiling. She also covers NDAs, when to use written contracts instead of handshakes, risks of relying on AI for contracts, goodwill in business sales, and options for engaging her firm, David Eck Law Firm (rebranding to Texas Asset Protection Law) in New Braunfels.

00:00 Branding Without Searches

01:26 Trademark Copyright Patent Basics

02:50 TM vs Registered Mark

03:59 Trademark Filing Timeline

05:36 Rejections and Descriptive Marks

08:31 Classes and Confusion Examples

10:49 Renewals and Enforcement

15:05 LLC Name Is Not Trademark

15:39 Startup Search Strategy

21:00 DIY Filing Risks and Fees

23:45 Meet the Attorney and Firm

27:02 NDAs and Confidentiality Terms

28:54 Confidentiality Terms

29:32 Choosing IP Protection

31:31 LLC vs S Corp Explained

32:28 Liability Structuring Strategy

34:30 Series LLC Breakdown

37:18 Trusts vs LLCs

41:11 Getting Legal Consults

42:47 Handshake vs Contracts

44:47 AI Contract Pitfalls

47:23 Goodwill In Deals

51:58 When To Hire Counsel

54:14 Final Legal Takeaways

Transcript

SPEAKER_01 0:00

paid thirty thousand dollars for this whole new rebranding of the company and everything and she was excited and she showed me her the logo that the branding company presented and that she was gonna go forward with and I was just like lord I said I'm sure they don't they do a trademark search before like as part of the branding process no not at all I've had clients before that have been operating their business for years and then somebody came in and you know made made their thousands of dollars you know that then they're having to fight it and then they um they needed to to rebrand and all this kind of stuff but I think most business owners think that if you have an LLC that you registered that it's a trademark and it's not you may not know that and especially to your friendship make sure that you truly are on the same page and it it just clarifies things immensely.

SPEAKER_04 1:24

Okay so Amber you were saying you were telling us about a situation what was that about branding without looking up trademarks.

SPEAKER_01 1:30

Yeah you had a story you were telling us so I had this good friend that was an attorney and had um legal services firm and was rebranding paid thirty thousand dollars for this whole new rebranding of the company and everything and she was excited and she showed me her the logo that the branding company presented and that she was gonna go forward with and I was just like floored. I said did I'm sure that don't they do a trademark search before like as part of the branding process no not at all and I just was like shocked because the there is no way that logo was not unique at all. There were a lot of other ones that were similar to it and could potentially have caused like infringement issues and it just it just kind of blew my mind that you could even have a branding company without that step. So anyways it just really that's scary I'm sorry yeah it it really surprised me but apparently that's like standard it's not standard that they actually do a trademark search and and I mean I for my experience and and my research but I've never worked at a branded company so well but it just so you were asking the difference what is the difference between a trademark a copyright and a patent and a patent yeah so what's in the simplest terms. So a trademark is um protection that you have for an identifier for your company um or or your person it doesn't matter but it it can be like a a name a slogan a logo like all those type of things that would be a trademark copyright is the type of protection you get over original creative works so art uh books music stuff like that that's that's what a copyright would be and then a patent is uh an intellectual property right over an invention okay so they're they're three distinct things and that's typically like an invention or like if I'm a scientist and I've discovered some no invented something yeah or we are trying to do something and we discovered or invented something that would be right yeah but artists are copyrights and all those kind of things yeah for so I'm a singer and all that so you track would be music would be but you might have a I I mean trademark in your name or likeness or or something like that. Um the types of different so for a trademark let me just use the example of um Nike there's the name Nike so that that could be a trademark there's the swoosh so their logo with the swoosh that is a whole nother mark and then there's the um just do it slogan that's that's something else that you can get a trademark on uh is a slogan like that oh so you see like the T and then you see the R. Oh yeah okay so the T Mm and then the R with a circle around it. The the T M um stands for well trademark but it's for indicates that someone is claiming their common law trademark rights. The R means that it's officially registered as a trademark as a protected trademark with the United States patent and trademark office. So if someone is not trademarked they're just running around here they can just public notice hey I'm claiming my I'm claiming it I'm claiming my my common law trademark rights. Yeah so what's the process for trademarking and copywriting okay so it's you don't automatically have it this is the interesting part that a lot of people don't know like a lot of people are like oh I have a trademark I'm like no we have filed a trademark application that means that that we filed an application with a USPTO um which is the United States Patent Trademark Office um and the process is we file it you pay their fees you pay the attorney fees to file it or you file it yourself regardless um and then six to nine months go by and then finally it's a assigned to a trademark attorney at the USPTO to review your application. Oh wow and to do a search and compare what you are trying to get an application trying to register as a mark with everything else that's in the marketplace already. And the standard the phrase is whether there's a likelihood of confusion in the marketplace if your mark compared to somebody else's mark out there, if there's a likelihood of confusion. So um and that's kind of a vague discretionary standard right but so they would do a search and come back and you get some kind of communication from the office and it was called an office action and they might say we found no conflicting marks but you know you need to do this little administrative thing here or there you know just like a minor something or another um or they might say that they're rejecting your registration because the because of these based on this mark and this one and this one and and then so after you get that communication that office action you need to review it and either you can um if there were certain things like they wanted you to disclaim certain portions of it or or whatnot um or you could argue against their rejection saying well no it's there is no likelihood of confusion because of X, Y, or Z. There's I mean there's a lot of things that that that they could say that you could also be rejected if it's merely descriptive or if it um the geographic terms in there like if there's a uh so her presence if there was a if you had a registration of of her presence and then someone else is like her presence Oklahoma well that's just geographic that's there's no um difference there. But then you couldn't it'd be really difficult to get a uh well you literally could not register a mark that said like what's donuts and your donut like you think all those you can say like yeah like just all just or if if that's what they're if they sell donuts you're just like that's merely descriptive you're just selling donuts. So that's why there's like a billion donut places around and they all just say donuts or you know some variation of that but you wouldn't be able to get registration of that is what I'm saying if it's just a general word. Um so sometimes if you have some of those words in your proposed mark you have to disclaim certain parts of them or or whatnot. Long story short like a lot of people think that like well I get my trademark or the file the application and then they have a registration and they don't it's it's like a while down the road and then someone might oppose it. Um and then then if they oppose it then you can you kind of if you're gonna respond to their opposition and and all this kind of stuff then it turns into kind of like a litigation scenario with the um the USPTO has its own you know USPTO United States Patent Trademark Office. Okay. Yeah so it's it's a big it's a big process and it's a federal the federal government so it's not fast right right so we're talking maybe a year to yeah year and a year and a half five years even three years I would say it's it's faster than that. Like you won't hear anything until about six to nine months and the the trademark office fell quite behind during COVID and I don't know if they ever really caught up but it's um it's not it's not a fast process. And another aspect of that is that there's 45 different I think it's 45 somewhere close to that different classifications. So you have to to say what classification you're trying to get the market when you're applying when you're applying yeah so some of them are for services and some of them are goods based. Right that that can indicate different things. So you have Dove soap and you have dove chocolate. Different companies different owners of the Dove the word trademark dove's no likelihood of confusion you don't typically walk down the aisle at Walgreens and be like oh the chocolate company is now making soap like there's no you don't you aren't confused of the association or or what it's indicating. But another thing too is that it's meant to so you can have a mark in in a classification like 35 which has to do like with if you're um an online retail store or something like that. And it's just meant to indicate like that to refer to your business not necessarily the the fact that this uh shot glass has your mark on it or it's not like the goods it's the services like it references the store itself you know not the specific items that are being sold. So it's a kind of a different way to think about it. Um but then some other really prolific um names like Nike or things like that it might indicate like shoes I love some or I used to uh run a lot and the shoes I really liked Nike shoes for a period of time. And so it was like technically the shoes not the company that it was like their actual shoes I liked, you know so but that mark in general is just like nobody could probably register anything close to Nike in any mark because it is so so um yeah so wide. But so do you have to renew do you do your trade mark question okay you have um after you get registered you have maintenance fees so often you have like five to six years or whatever you have to pay maintenance fees to kind of for the next five years and maintenance for what to continue having the protection of the USPTO I guess. So if if you have that's that's a good question. I never really thought of it quite like that. But once you have it um so so intellectual property rights in general are different then it's a a unique area of law um it's it's fun I like it it's but it I see a passion over here it's just it's just interesting it doesn't give you the right to do something it's not like you I don't know some legal things you go and you get some permit that allows you to go do this. What is it's flipped what it allows you to do is prohibit others from doing something so innate in that um dynamic is that you have to actively protect your mark in order for it to have any value. So um so you do you can't just let everybody use it and then all of a sudden complain and try to prevent others then then you have to actively as it goes along protect it.

SPEAKER_04 13:37

Yeah so wow so let's say that someone's going around with the TM and another person same looks identical and has registered and has gotten approval and everything then is that across the board that's like all states? Yes okay yeah that so they're registered and someone's going around with um you know um I don't know some name ABC whatever of Oklahoma you can s ask them to stop using it.

SPEAKER_01 14:21

You can sell send a cease and desist and yeah try to get them to stop using it. That does that is challenging like the in the ability to effectively enforce your marks and stuff is is um a whole nother issue but um having the registration gives you a prima facie which means like on its face a better better um superior right to use the mark than somebody else but if push came to shove and you're you're in litigation and this and that and that person can prove they've been using it actively for much longer than the other person that actually has the registration. So once you get a registered mark it's not even guaranteed that that you can prevent everyone else from using it. It's very fact specific been using this longer than you've been born and make up yeah but it's if you really have a unique name that you're trying to use or or a logo or that type of thing then I I do still recommend that you get the registration because it would it really would help if someone else tried to prevent you from using it. I have had clients before that had been operating their business for years and then somebody came in and you know kind of made made their thousands of dollars you know that then they're having to fight it and then they oh my gosh they needed to to rebrand and all this kind of stuff and and um it was really that was a difficult conversation because she's like okay so I didn't I didn't do this step before so okay now I want how how much do I pay to to do to get this this trademark and when do I have it you know and I was like well we can file the regist the we can file the application for it but I can't guarantee I there's zero guarantee that you're ever going to get it.

SPEAKER_03 16:22

So um anyway she was not happy with the scenario but that's just the way it is yeah but I think most business owners think that if you have an LLC that you registered that it's a trademark and it's not that's that's a very good point.

SPEAKER_01 16:36

A lot of people what you have with the secretary of state what what name you pick it has literally nothing to do with a trademark is a totally different um you can still you can have an uh red be registered with the secretary of state have your name and everything and if you use it in the marketplace it could infringe on somebody else's trademark depending what your name is and how you're using it.

SPEAKER_00 17:03

So how does a company prevent all of that in the beginning if you're starting up what is one of the first things you need to do to ensure is how would you do that start that search what would you do?

SPEAKER_01 17:15

It really depends on what type of company it is because um so I had this other client um who she had been operating uh it was a hair salon type business and she'd been operating it in the hill country in New Bromfalls for 10 12 years she did hair um for weddings and things like that and she got a cease and desist from some girl that had some kind of a hair salon in the Philadelphia area so and there actually was some not not even a likelihood of confusion in the marketplace there was actual confusion because their emails their websites looked very similar to each other and so there were some people that just pull it up pull up the website and I mean honestly if they looked closer they could tell ones on the literally like what 1500 miles away like that it was the wrong one but they looked and seemed so similar. Um but on the on the flip side because they were so different they she received a cease and desist and we responded and we tried to negotiate and be like okay well you know I'll do this I'll do this and then it came down to it and it was like the we didn't stop using it. And whether in part because we knew this salon owner was not going to actually sue her. But you'd figure that out yeah yeah I mean and and what is the likelihood that she would actually win there there was that because it's so far away the physical location is so far away right the um the name was not like I mean it was different it was similar their name was very very very similar to each other um actually it was identical to be honest but the how many hair salons are there you know i'm saying just because of that that type of a business and the fact that it's it's mostly local the and just the the specific details of that that's crazy i i wonder what happened like were they booking people were paying money and no i never got it then we find out oh it's going over here to Texas this Texas place you know I wonder wow there there was um confusion in in the emails and stuff like that and um it it just came down to where I think eventually the other party just changed their name or their email um but they actually had the registration but my client had been using it years longer um and yeah but so so a little bit it depends on on the type of business right the the level of um just in general the the type of business yeah you really have to when you do your branding you really have to go in with your eyes wide open do all the research see if there is a possibility that once you spend this money this time and registering that it's going to be worth it like what is the likelihood if someone you know is there anything out there already some like super unique cool name well so my recommendation when you're looking at stuff like that do a Google search or you know like that type of a thing um do it on some variations of your name don't just put the one thing in and sometimes your searches are limited on depending on the search engine they're limited geographically so maybe you're not pulling up everything in the country um but you know do do a deep dive in that direction but also at on the USPTO website um which is just www.uspto.gov um when you go there it um there you can select the trademark um tab or whatever and just do a search and their search engine is really simple you know it has like a Boolean search you can do a more advanced one but you can just put in some main n names there and see what comes up and see if something's already already out there. Um I don't know it's I I kind of like go back and forth in my head and what the actual recommendation would be of like what are the steps should you take first because if you if you pay like thousands of dollars and try to get multiple different um trademarks and try to do that first and you're not even guaranteed for that But a lot of that you'll get it. But a lot of um companies don't have thousands of dollars when they're starting out. You know, so that's very um it's kind of risky.

SPEAKER_05 22:12

Yeah, it's risky.

SPEAKER_01 22:14

But then I do recommend once you once you have your um feet on the ground and you're kind of then you revisit it.

SPEAKER_04 22:24

And if you're trying to do this registration your own self, uh you'll be surprised about how many things you'll probably miss or not understand. I know one of the uh a couple of the things you talked about was thirty, there's thirty there's I think there's I think it's 45. Oh, 45 different types or areas or classifications. Classifications. You know, when you're I mean you definitely could do it, but then there's and and some of that stuff you can't change.

SPEAKER_01 22:57

Um once you've done it. Yeah, once you file, yeah, there is 45 distinct categories. I knew I was right. Okay, and can you and can yours be in many different categories? Yes, as long as you're actually operating in that category because you have to, as part of it, you either file it as in use or intent to use. And if it's in use, you and even intent to use later on, you have to submit what's called a statement of use and a specimen showing your actual use of it in the marketplace. Like if it's a the example I said, like some kind of uh online retail or something, some kind of Etsy related account, then you'd have to show like a screenshot of the website show showing you actually using it in commerce, but you have to be able to show the use of it in, and there's different ways and requirements of how to show the use in the different marks. Good, you know, you can't just show like a bottle of something on a website if the the bottle itself maybe doesn't have a have the mark on it, or you know, things like that. So, anyways, it it it gets tricky. And so you have in use, you have intent to use, but certain things for the trademark applications you can't change. Like you can't if you if you're like, oh, I put classification 17, and some of them are like there's coordinating classes where they work together or they're similar, and depending exactly how you're using it, it might be both or it might just be one. And but if you choose the wrong one, you can't just oh, amend it and change it, you have to refile from the beginning.

SPEAKER_05 24:27

Oh wow.

SPEAKER_01 24:28

So there is uh significant risk in doing it on your own. Um, you can't also, if it gets uh rejected, you can't change a logo, you can't change the way it looks, you have to restart again. So there, if you do look at doing it on your own, you gotta do a good amount of research because it's just really easy to and the USPTO fees are it's 300 currently and they're subject to change, right? It's $350 per mark per class right now.

SPEAKER_04 25:00

Per month can we do two? Yeah, just one. Okay. So okay, tell us about you and your law firm. Uh okay.

SPEAKER_01 25:14

Yeah. So I started, I've been an attorney over 16 years. I started my practice in the intellectual property area, so which is probably why I I I think I find it exciting. I think it's fun. But so I was um, I'm a registered patent attorney. And so I did that's where I started. And the on the prosecution, I'm a patent prosecution attorney. So that has that means like drafting and prosecuting the application. So some everything from submitting the application until it issues as a patent. Um, anything, so that's called prosecution, which is sort of a funny name. Um, can be confusing to people because it sounds like litigation, but it sounds like it would be litigation, but it's not. It's just the process of getting uh a registered, getting an issued patent, excuse me. Um anything like if there was a problem with infringement, I I do a lot of pre-litigation stuff too, like freedom to operate agreements and and some um some of that type of work. But if someone, if it's litigation, you're being sued, that's when I call, call in some of my litigation attorney friends. But anyways, I focused exclusively on patent prosecution for a number of years. And then um I started my own firm when I was trying to raise our four kids at the same time. So um I started my own firm and then got into some more of the trademark um and contract negotiation type type situations, a lot of business formation. Um and then I about five years ago started incorporating estate planning into my practice and um, which a lot of people think is just like super different. It is, it is different, certainly, but many, many individuals have their own LLCs or businesses and being able to link their interest in their business with their estate plans and talk about business succession is another big thing. Um, meaning, like what happens when when I get too old? What what about my company? Do I do I want it to go to my kids? Do I want it to go to a partner that that I've been working with? Like all that. Um it's it's a lot of things that people don't think of. Some really successful business owners and everything, they they sort of have their business and they may or may not have an estate plan, but they a lot of them don't think about linking them. Um, a lot of people that have LLCs and they have properties in maybe owned by the LLC. Well, what happens if something, if they die, if there's then that whole all those properties are not legally associated with their spouse, maybe, or their family, if they're the only person that was associated with the LLC. I don't know. It gets really interesting. Yeah, it gets really interesting.

SPEAKER_04 28:14

So and and the name of the law firm?

SPEAKER_01 28:16

Davideck law firm. We're we're rebranding to Texas Asset Protection Law, but um, we're in New Brothels. New Braffels, yeah. Okay, so right down the road. Yeah, right down the road.

SPEAKER_04 28:26

Yep, not too far away, but so um I was making sure you didn't what's it what's a non-disclosure?

SPEAKER_03 28:35

Oh, that's a great and are there is it is there another disclosure as well if you're partnering with someone?

SPEAKER_01 28:43

Um, there's a bunch of different types of disclosures. Like so I'm um NDAs is what non-disclosure agreement. There are different types of NDAs. There's a one-way NDA or a you know, a two-way, depending who's the one releasing information or and who's the who's the disclosing party and who's the receiving party, or if it's like mutual. But NDAs are really important if um, especially as it relates to intellectual property rights, um, you want to make sure that you're protecting the not only your IP rights, um, but uh confidentiality of, and that's critical when depending on what you're sharing with these other people, if you're talking about entering into any type of a contract, then you should have an NDA in place before you get into in-depth discussions, because then you you're if you're the one trying to hire, or I don't, even if it's just a supplier, um, they are going to be privy to like how your company works, your business processes, the like some other things that are very valuable to you. And um, so and yeah, non-disclosure agreements are very important.

SPEAKER_04 29:55

What's the what's the uh life on those? Is is it forever?

SPEAKER_01 30:01

Is it it depends on what is specified in the contract? Uh most of the time there is some type of a term for it. Um, but then the confidentiality obligations, some of those go for a certain number of years after the end of the period of engagement. Like if you were thinking about merging with this company and then you decided not to, they're still obligated to keep everything they learned confidential for certain periods of time. As it relates to intellectual property, it might be forever, you know, or they it might not have a set term, but it depends on what aspect of the the information that was shared and what the contract itself says. So we you have a question?

SPEAKER_03 30:48

Go this is why you're like I'm so glad she's here. So what I'm sorry, y'all. Forget that. So what is the first IP that a entrepreneur or small business should protect when they first launch? What would you think?

SPEAKER_01 31:12

I guess it depends on what it depends on the type of company. I've worked with a lot of startups. I um was kind of synced with a um or partnered with a investment venture capitalist group that had all these different um groups of or portfolio of groups of portfolio companies that they would invest in and all this kind of stuff. And I I would meet with them, talk about business formation, intellectual property rights, all that kind of stuff. Now, some I while we talked a decent amount about trademarks and how important they are and how they they can help you. Um patent rights are if if your whole company is based around this certain, you know, uh medical robot or something, then for that company, who cares what they're called? Probably what's most important is that they're their patent, they're they they have patent protection on the device itself. Yeah. So it's so it really totally depends. Um good point. Yeah. So for something like that, it might it might be it's it's really more of a patent um important thing. If it's um some other companies, it might be a trademark because they need a unique name. Or if it has to do with um, you know, and uh uh an author, it would be a copyright for their their um creative works. The so it so it really kind of just depends. I'm sorry, that's like my go-to answer for everything. Because it isn't, I mean it's a good case. No, it's a good one. It's really not a yeah, there's a lot of very similar things with the areas of law that I've worked in and law in general, I believe. Is it's it just there's it just depends on the situation.

SPEAKER_04 32:55

So we have different types of businesses, yeah. L LLCs, S Corp, C Corp, So proprietor, you know.

SPEAKER_01 33:05

Um so so let me jump in there. Okay. Um you're saying thank you for LLC, S Corp. S Corp is actually a tax filing. So for a for an LLC, it can be taxed as um a disregarded entity. So you just, you know, in your own personal taxes is kind of like one minute. Exactly. Um it can be taxed as a partnership, it can be taxed as a a corporation, and it can be taxed as an S-corp. So all of those are ways an LLC can be can be taxed.

SPEAKER_04 33:41

Um so one is the way the IR federal government looks at you or tax.

SPEAKER_01 33:47

And the other one is typically the state or whatever, yeah. Um and one thing that I do a lot that's been really fun um is helping, like I have a number of clients that I that I've done estate plans for, and they might own a ranch. And then on that the ranch, they also have, you know, this other, this other business, but then they have cattle, but then they have this.

SPEAKER_04 34:13

So like the rent out the I have a client. He's renting out his, he has a ranch, but then he's also renting out some of the cattle. So that's a whole nother business. Renting out cattle, he's renting out some of these wow, sheep or whatever it is. So leasing. Yeah, he's leasing out.

SPEAKER_01 34:33

Sorry, not renting, but leasing out, uh-huh. But it's important to structure the the companies for liability purposes. Like you might have an LLC over um that is just the cattle, then you have an LLC that this is this land. So if there is an accident with the cattle, the only thing at issue is the cattle, not the land, because they're leasing the land from another. So there's a lot of strategic um business organization to really comprehensively protect you and your family. And um that's that's actually really fun. Cause then you just have to talk to the clients and get the specifics of okay, well, do they always be over here or do they graze elsewhere? Do they, you know, I mean, just talking about that one particular thing, but um, and then just look thinking high-level, what are the risks, you know, and and trying to minimize risk to them from a legal perspective, but still set it up in a way that is beneficial um tax-wise. So you can have like create another LLC that's sort of a essentially a holding company, and these other that is the managing partner of these other LLCs so that they can and this LLC does nothing except for manages these companies so that you only have one tax filing.

SPEAKER_04 35:55

What does series LLC mean? Ooh, that's a fun one. So sorry, everyone.

SPEAKER_01 36:03

Go back and report this. Um, it's not all states allow them, but Texas does, and I think it's great. Um, if you have seven rental properties, you could do seven separate LLCs, right? But that's a lot of cost and everything. A series LLC is essentially you have almost like a holding company. You have the master um LLC here, and then series A owns or whatever property A. Series B owns property B. Like so you could have multiple different series. Actually, I have a client that we have, I think we have A through M, like it's so many different ones. And if you properly handle these, these the separate series, then like in meaning keep them separate, like separate bank accounts, separate, you know, like all that kind of stuff, no co-mingling of the accounts, then it limits the liability to that one property.

SPEAKER_04 37:03

Because if someone goes after L, then they can actually go after A, B, C, and D because it's been co-meaning.

SPEAKER_01 37:11

If you commingle, yeah, but if you if you structure it properly, almost like its own separate LLC is the way it needs to be, then you can limit the liability just to that. And certainly, certainly, certainly you never commingle with your family funds, your individual person.

SPEAKER_04 37:29

Because now you're in trouble.

SPEAKER_01 37:31

Yeah.

SPEAKER_04 37:32

Okay, so you have the ser um, you have the series LLC. Um, and you say A is this, B, but you're but that could be a name. Or it does it, or is it an actual the the series name and then A. Do an assumed name for it if you want. But it's still under that. If it's already an LLC in place and it was not a series, you can convert it. You can convert it to a series.

SPEAKER_01 38:01

Yes, you can. Yeah, you can do that on the Secretary of State website. Um, a lot of really I know we mentioned this already, but the the critical part of it is though just the handling of it separately. I mean, so many people might get things organized and then just not not follow through with how they should be. And it does, and it if you break that that um separation, then that's how they pierce the corporate veil and they can include the assets of multiple different what should be separate series or separate is it and I know you're probably well, I don't know.

SPEAKER_04 38:41

I don't know how you're gonna answer this. Um LLC, so we have an investment, a real estate investment asset here, and should we do an LLC or should we do a trust? And does it or does it matter? Does it go together? Is some what one within the other? I don't know. Because I've heard people say, well, like ask me, should I get a trust or should I get an LLC? And I'm like, what? We're just gonna do an LLC.

SPEAKER_01 39:09

But I don't, I don't well, the okay, there are multiple different types of trusts, so that's one thing.

SPEAKER_04 39:16

Um, there are also for real estate, for their investment um I'm sorry, their business investment real estate that they're going to be using for rentals or probably they're gonna hold and rent out.

SPEAKER_01 39:34

So what we see most of is that it's an LLC and then it it is linked through their operating agreement. The interest in that LLC is linked to like a family trust or something like that. But you um you can have, I had a client yesterday that she has there's basically, so it depends what state too is is kind of where I'm going with this. Um, she has there's a property in Michigan um that her mom had put into a trust where the it's an irrevocable trust. I don't recall if it was initially an irrevocable trust or if it became irrevocable upon her death, if it was prior to that, if it was um more of like a living trust. Um, I I don't recall exactly, but now that property and the funds that were um included that are included in that trust that just allows this property be to be maintained, and then her and her siblings go there and visit each other. So there's it's like kind of set in this trust scenario to it's really nice. Yeah.

SPEAKER_04 40:41

Um so that's that's so it might have been because I don't know the details of exactly what type of trust I was, but um it might have been just the they were protect they um you know how people pick up things, they you know, so maybe it's one, it's a both is to protect, but one is for things such as what you just said, and protecting it from a family point of view, or if something happens to me, it's protected um so that it doesn't have to go through probate or whatever the case may be. Um, and then LLC is also a protection, but from a business point of view, um, you're protecting your assets. Um, maybe. Yeah. I always wonder about that. Like down through the years, people will say that, but I'm always thinking from a business point of view. So I always wonder where did trust come in with that? And I wonder if that's what it is.

SPEAKER_01 41:34

I mean, I know Yeah, there's a lot of other like some family limited partnerships and stuff, and they have different um business entities associated with those, or they have some kind of an irrevocable trust that includes this property. There's there's so much interrelation through all this, and there's a some of it can get very complex, and a lot of times people are not using the proper word, or they might just say trust, but you don't know exactly what kind of trust, what so it it does make this area kind of confusing. It it can be um for for anybody. A lot of times people come in and they say, I have this, and I have to like, okay, well, what is it? Tell me more about it. How does this work? Like, where because and then it's like, okay, I understand what you're saying. You're using not the correct word per se, but um, so so anyways, yeah, it's kind of interesting.

SPEAKER_00 42:34

Okay, uh, any questions? I have another one. How does a business owner or someone starting up get in consultation with you?

SPEAKER_01 42:42

Um, to call our front desk and schedule it. Okay. Yeah. We do do um our estate planning consultations after people fill out the intake form and everything. It's a two-hour block where where we're not paid if they don't engage. So it's a free two-hour whatever, but it's two hours of education. It it is. That's exactly what it is. Um, for a business scenario, either typically it's like a 15-minute phone call, again, free. Um, and I I talked to a lady yesterday, really sweet, and she's starting out her business. She had she has a logo, she's excited about this and that, but hadn't um hasn't registered it with the Secretary of State, really just didn't know where to start. I talked to her for 30 minutes, and she might circle back in a year when she's ready, when she's ready. But um so at least a 15-minute phone call would be a good place to start to see if somebody's ready or where they are to gauge where they are. Um but not not all firms do that, but it's it's kind of I think it's great when someone does because you don't you don't know what you don't know and you don't necessarily know where to start. And Yeah.

SPEAKER_04 44:02

So I think it and it it definitely for us and uncovered a bunch of other things that we needed help in that we did not know that we needed help in.

SPEAKER_03 44:10

So so um with new businesses, I'm getting I'm I'm trying not to laugh at this one. Um people want to say that a good handshake is uh great for conducting business. When would you want to do a handshake versus a written contract?

SPEAKER_01 44:32

I don't know. If I was a good old boy man from the 1950s and might do a handshake, but I would never do that now. I think everything should be in writing and it should be I mean especially especially when it's a lot of people like well we're we're good friends, we're on the same page. This you may not know that, and especially to protect your friendship, make sure that you truly are on the same page, and if it just clarifies things immensely.

SPEAKER_04 45:04

I think that is so good to protect the friendship, yeah, or even the family that we've been talking about, like even with the previous episode this these things are set to protect the relationship, the relationships between children, between um friends, yeah, between family, yeah.

SPEAKER_01 45:29

The I I mean, I I've seen so many situations where siblings or friends, they think they're on the same page, and and maybe they are on some points, but the things they don't think to talk about, they're not on the same page with. And then inevitably somebody feels like they put more into it than the other person and blah blah blah, and then it ends up a mess, right? So, so I don't think a handshake is a great idea unless you like if it's after you sign something. I don't know.

SPEAKER_04 46:01

I thought you were gonna let this letting you're done with the handshake. Give you a little hug. It's not it's and it's funny you ring out you ring of contracts, so you know I can look on AI and get a contract. We talked about this. Yeah.

SPEAKER_01 46:21

So you had a story. Oh my gosh. And the AI, AI is great. I mean, I use it, and the, but it only gives you feedback based on your prompt that you put in. And if and a non-attorney doesn't necessarily know what to put in to get to get the correct feedback, but um, I had I was I was kind of outside general counsel for this one company um for for a while, and it was it was really fun. I did draft it and got got patents ish like issued for them and stuff, and it was it was it was a neat thing. But anyways, um the after there was this other agreement we're trying to put in place for me with them for consultation or or attorney work or whatever. And so I I provided them with a draft agreement and they came back with it like redlined, well, and it had an indemnification provision, meaning like if if I cause something, then I indemnify you. And and on that one, I don't know. It just they had a whole bunch of of notes on it and stuff that was that were totally irrelevant, had to do with like a supplier type of agreement rather than than like legal services. And then on the indemnification provision, it was like, this really needs to be two-sided, this and that. Um, we can have someone look at it, or I we can have another attorney look at it, or you know, would you just agree to to like uh reciprocal uh indemnification? Um, I just laughed because I was like, okay, so so you're saying it needs to be in here that you indemnify me. Okay, like like just so so like they were like the opinion was, I mean, because otherwise that's saying you owe me money, like it was not there, it was the draft that I provided them did not because the within the scope of work, there wasn't a scenario where it was appropriate for them to have to indemnify me for anything because they weren't gonna do anything that would have harmed me. But you know, they ran it through AI and they came back and saying, you know, it really should be two-sided. And I was like, okay, this like it just like it just it was kind of laughable. Well no.

SPEAKER_04 48:37

So okay, full of these contracts, I think. Yeah, um, okay, so we actually have about can you believe it, two or three more minutes. Oh my goodness. Um, so goodwill. Goodwill in a contract. So, okay, so my understanding of goodwill is you actually, and we talked about this also, not in a contract, just goodwill when uh um as far as an um intangible asset. Um and it usually doesn't come about until you're about to, or until you sell, or there's a transaction of selling, right? Yeah. But do you guys deal with or what's your thoughts on goodwill?

SPEAKER_01 49:18

It is how to it is an intangible asset, right? And in some ways it can be quantified, but not always. And it's really challenging. I've done a number of of agreements, business sales. Um, one that was based, it was primarily the goodwill that my client was purchasing. The tricky part about that is though, if you're selling, you know, the goodwill and your contacts, your customer contacts and all this, you have to how do you know that that other person who was selling their goodwill is gonna follow through on that side? Um, there's there's tax implications on how you structure the agreement. That's another thing. If there are um tangible assets that go along with the goodwill, um, they they can be really tricky. Um there is no way you should ever do that without a written agreement and attorney consult consultation.

unknown 50:16

Yes.

SPEAKER_01 50:18

Yeah. Um so those that that is it's it it was one of the more challenging contracts to to put together. Like we everybody, the parties kind of agreed on the terms and stuff, but then having to put in the um what's the word? The benchmarks of how do you know when when this has been fulfilled, when you know, if the other person was required to um turn over a contact list and to to uh not act in a certain way that that is gonna then damage the goodwill that you are paying for.

SPEAKER_04 51:04

And it's a value really challenging. So, okay, so I'm gonna make sure I understand or that we put out what goodwill. So um, like so I all of my tangible things have a value, right?

SPEAKER_01 51:15

And even the list, which you can get a fair market value for, right? Like how much how much did you buy the piece of machinery for? How much could you sell it for now? What is the depreciation? Like some of that is a lot more set, right?

SPEAKER_04 51:29

Right. That's like, okay, we can find that. That's you know, there's not a lot of gray area, right? Right. And then my list of people goes into starts going into this, because it has a value, it goes into this.

SPEAKER_01 51:43

Yeah, so if you're for goodwill, a lot of times, or in some of the circumstances, you're you're paying for the relationship. So, and the fact like not just the customer list, but them saying, You should use this person, you know, like this is so you're a household brand, a household name, household name. A lot of times if you're using you're buying someone's goodwill, then they're not going to use it anymore. So they can't operate in that space anymore. I mean, it could there could be um scenarios where you agree that they can or or whatever, but for the most part, if you're buying someone's someone's goodwill, they're not also using it at the same time, basically. Maybe they're retiring or they're just going into a different field or whatever. But but part of buying the goodwill a lot of times is buying the their relationship with with clients or customers that the list of which they're turning over or whatever. But but also you could, you know, buy someone's goodwill and then maybe they go out and do something crazy, and that damages the value of what their goodwill was, if it's some really public thing, you know. Uh so those agreements can be challenging.

SPEAKER_04 52:58

You're connected to the goodwill because they're they're part of the brand, their face is the brand of that. So anything they do after the fact, then there's like if you do damage it, then you owe me money too. I need that in the contract. Yeah, in writing, yeah.

SPEAKER_03 53:16

So we talked about contracts uh a little bit earlier before we we don't do the handshake, but we have a contract. How often or when should I hire an attorney to view a contract for me? And what are the if I don't have um the money to have one on on my team, what are ways that I can acquire an attorney?

SPEAKER_01 53:39

Uh a lot of times I'll I'll draft templates for for different people that more on kind of a project basis, like, okay, I'm there's this one um client I had that recently that she's gonna be hiring a bunch of um nurse practitioners to or PAs or something like that to work under her. So I drafted up like a customized agreement for her to be able to do that. Um, that type of scenario, um if you're doing gonna be hiring a whole bunch of people that you have a lot of different levels and different types of obligations to them as as well as you know, so so in those scenarios, getting some templates for in the beginning on you could do that on a project basis, that's a great idea. Another recommendation is if you're entering into um a contract for a certain work. There's a client I have that that does like um you know, architecture role type projects, CAD related, you know, um something like that. And he was asked to, well, he's trying to get to win this project, this is a hundred thousand dollar project or something like that. And they have attorneys on their side, get your own attorney. Yeah, so yeah, I I definitely recommend that. Okay.

SPEAKER_03 55:00

Thanks. Two scenarios. And other options for me to obtain an attorney, retainer, retainer.

SPEAKER_01 55:08

You can do it on project basis. You can, I mean, it depends. It's up to the attorney and the firm how they operate, but but I do project basis. Um, we could do hourly, we could, you know, but it's good to have an attorney contact, certainly.

SPEAKER_04 55:22

And then we get that relationship, that goodwill.

SPEAKER_03 55:26

Yes, it's different. You ignore your business and they're able to also provide you good information.

SPEAKER_04 55:31

Sure. Yeah, okay. Man, this could go on forever. We could keep talking. Oh, wow. Okay, so any one thing that's a takeaway for our listeners, anything that has to do with um patents or trademarks or goodwill, copy, contract, contract, attaining an attorney. Obtain an attorney, anything, any uh takeaway.

SPEAKER_01 56:00

Um for a big, yes. I would say like for big contracts or big engagements for your your company, seek an attorney. Um, don't rely solely on AI. Definitely don't rely solely on that. Um, you don't necessarily have to go pay an attorney to set up your LLC get the operating agreement and everything, like before you even know if you have a business. You know, try to figure out that first, and then at the soonest possibility, then I would say seek out a good attorney and get some legal expertise.

SPEAKER_04 56:44

Well, thank you for joining us. Thank you guys for coming and listening to her presence. Um, please make sure that you share, like, subscribe. We are on YouTube, we are also on Spotify, all the major platforms, social media platforms, and the uh podcast platforms. Um, and make sure you join us next time. Thank you again.