Comedy Central comedian Nathan Fielder landed himself in hot water with the Los Angeles County Health Department last month when his parody coffee shop, Dumb Starbucks, was shut down for distributing coffee without the proper permits. But the city of Los Angeles wasn't the only party to take issue with Fielder's stunt.
Starbucks was less than pleased about Fielder's blatant use of its protected trademark, despite the classification of his coffee shop as a "parody," according to CNN. While Dumb Starbucks deliberately adapted the coffee giant's logo without permission, plenty of other instances of less obvious intellectual property (IP) theft occur on a daily basis.
"There are many ways that entrepreneurs could unknowingly infringe upon someone else's intellectual property, or leave themselves open for the same thing to happen [as Dumb Starbucks]," said Mary E. Juetten, founder of IP protection service provider Traklight. [Small Business Legal DIY: What's OK to Do Yourself]
One of the most costly IP mistakes entrepreneurs can make is using work they don't actually own the rights to, Juetten said. When you hire an outside source to create something for your business, ownership of the created work — graphics, written content, coding, websites, etc. — doesn't automatically transfer to your company. It needs to be explicitly stated in a contract that the creator gives his or her rights to that work to you.
Juetten gave the example of a Web designer being hired to create a website for a company. If the work is done without a contract, or is based on a contract that has no mention of who owns the website files, IP issues can arise if the designer wants use the files he or she created for another purpose. IP theft can also occur with product development if the entrepreneur hasn't secured patents for the product.
"If patents are not all assigned to the company, there may be a risk that one [developer] can commercialize the product on their own," Juetten told Business News Daily.
To ensure that your business stays out of legal trouble for IP infringement, Juetten offered the following tips:
Plan and prepare. Before you begin promoting a product, piece of content, or other material for your business, take the time to research related patents and copyrights to make sure your idea isn't already protected by someone else's IP copyright. This is especially important for crowdfunding campaigns, which can be affected by international patent rights.
- Read the fine print. Always read all the terms and conditions in contracts or licenses for online images, music, video or other content. Even if you don't have time to read the whole thing immediately, download and save a copy to refer to for any future questions about infringement.
Originally published on Business News Daily.