Someone Copied Your Product. What Next?

Taking legal action is costly and time-consuming. Here's how to weigh whether you (really) need to.

Keith Brofsky/Getty

A company is using your trademark without authorization. Someone copied one of your products. As a human being, your first response is to get furious. As an entrepreneur, your inclination is to seek justice. As a business owner, your course of action is to contact a lawyer. 

Taking legal action, however, is both expensive and time-consuming. I have learned the hard way to maximize my company's resources and minimize our losses by carefully weighing the dollars and sense of my legal options. Here's how.

Define the business goal of your legal action.

Thinking about what outcome you need for your business is crucial, because it will help you decide if engaging in legal sparring is necessary, or if there might be another way to solve your problem. In the event that you decide to contact a lawyer, being able to clearly articulate what you need to get from the situation is important in helping your legal team find a strategy that will help you resolve the situation in the way that you'd like. A few years ago, for example, I noticed another company using a very similar brand name to ours on a type of product we did not produce but that was closely related to and in the same industry as our products. I was concerned that the other company's product might be mistaken for something we sell, or that that company would eventually try to branch out into our product types with a similar brand. Rather than litigating the issue in court, our lawyers crafted a coexistence agreement that guaranteed that the other company could use the similar brand name only on the one specific product that was not related to ours. In exchange, we agreed not to use our brand name on a product the other company sold. Had I not been clear with the lawyer that I had limited resources to protect this particular aspect of our business, we might have embarked on a very different and far more costly legal journey.   

Ask for capped legal fees. 

Legal costs add up quickly, and what can appear to be a straightforward case can go on long beyond your expectations. If you have to engage in a protracted session of back and forth, ask your attorney to agree to a capped fee so that you can better anticipate the expense. In addition, ask him to inform you at regular intervals how many hours (and dollars) are accumulating on your case. Being kept informed as you go along can help you budget in the short term and also keep your legal team focused on getting results--without having to edge near bankruptcy.  

Fight only when you have to. 

If there is any way to avoid litigation and still get the business outcome you need, you should take that route instead. If you can focus on business rather than battle, you should. Alter the product that conflicts with another to make it better. Get the story of your brand out via PR instead of legal arguments. Put all your energy into building a different area of your business. If legal action is truly your only option, find ways to compartmentalize the fight so that you can safeguard the rest of your business. As an entrepreneur, chances are you already have your eye on multiple facets of your business. Adding another front, especially one that could be all encompassing, could simply distract you. Take care to insulate the core of your business from a legal battle fallout, in terms of financial drain, time strain, and mental pain.

Vanessa Merit Nornberg: In 2004, Vanessa opened Metal Mafia, a wholesale body and costume jewelry company that sells to more than 5,000 specialty shops and retail chains in 23 countries. Metal Mafia was an Inc. 500 company in 2009. @vanessanornberg

Russell Simmons: Success Isn't Measured by Results

Russell Simmons: Success Isn't Measured by Results

Russell Simmons, serial entrepreneur and founder of Rush Communications, says you can't rely on the results of your labor to make you happy. You have to be passionate about the journey.

Russell Simmons talks about the difference between good and great entrepreneurs.

Foundation: Passion, Courage & Everything Else You Need to Start Up5:23

Russell Simmons talks about how to avoid the rigid expectations of the business world.

Accountability: Who Do You Really Work For?8:09

Russell Simmons talks about what drives him every day and translating spirituality into business and life.

Q&A: How Russell Simmons Spots Talent14:15

Russell Simmons talks about what distinguishes great employes and how he balances work and family life.

• 

  HIGHLIGHTS Your Work Should Be Like a Prayer1:38

• 

  FOUNDATION Passion, Courage & Everything Else You Need to Start Up5:23

• 

  ACCOUNTABILITY Who Do You Really Work For?8:09



• 

  Q&A How Russell Simmons Spots Talent14:15

Boring People Make Better Managers

Or do they? Two experts weigh the values of instituting a steady-but-boring routine versus consciously shaking things up.

Getty

Each morning when you wake up, do you know fairly clearly what the day has in store for you? You know what you'll eat for lunch, when you'll hit the gym, and what you'll tackle first when you sit down at your desk?

Or are you instead more of a play-it-by-ear kind of person, letting each day unfold as it may, allowing your moods to dictate the flow of your activities and often seeking out new experiences for yourself and your team?

We got to wondering: Is one or the other approach more productive for entrepreneurs, or is it all a matter of personal preference?

This contrast between the routine and the spontaneous was recently highlighted by the Harvard Business Review Blog Network, when two diametrically opposed posts on the topic followed each other in quick succession. Harvard Professor Robert Pozen weighed in first with a post entitled, "Boring Is Productive." Drawing on a recent Vanity Fair profile of President Obama in which he describes his very strict routine, Pozen argues just what you'd imagine from the post's title--make as much of your day automatic as possible. He begins with a quote from Obama: 

"You'll see I wear only gray or blue suits. I'm trying to pare down decisions. I don't want to make decisions about what I'm eating or wearing. Because I have too many other decisions to make."

I share President Obama's practice of "routinizing the routine." I eat essentially the same thing for breakfast each morning: a bowl of cold cereal and a banana. For lunch, I eat a chicken salad sandwich with a diet soda. Each morning, I dress in one of a small number of suits, each of which goes with particular shirts and ties.

Why do President Obama and I subject ourselves to such boring routines? Because both of us (especially President Obama!) make many decisions each day--decisions that are far more important to us than what we wear or what we eat for breakfast.

Making too many decisions about mundane details is a waste of a limited resource: your mental energy'.if you want to be able to have more mental resources throughout the day, you should identify the aspects of your life that you consider mundane--and then "routinize" those aspects as much as possible. In short, make fewer decisions.

Being boring then is a way to conserve your decision-making faculties for the truly important aspects of your day. But not everyone finds this approach so appealing, at least not in every situation, as another post that appeared about three hours later on the HBR Blog Network makes clear.

This one, in the form of a video, was from Frank Barrett, author of Say Yes to the Mess, and it makes a very different sort of argument. Citing jazz great Miles Davis and a customer service-challenged airline as examples, Barrett explains that by forcing yourself (or your team) out of your comfort zone by consciously disrupting your routines, you can generate far more innovative ideas. Check out the three-minute talk for the details:

Although their recommendations are 180 degrees apart, both experts could be correct. Pozen's approach is aimed at maximizing mental energy for tough decisions and rigorous thinking. Barrett is more concerned with pushing the brain to be creative and see the world afresh (similarly, others have suggested changing your physical location to shake up your mode of thinking).

As a business owner, you probably need your brain for both reasoned decision making and idea generation, so how do you balance routine and surprise in your day?

 

Jessica Stillman is a freelance writer based in London with interests in unconventional career paths, generational differences, and the future of work. She has blogged for CBS MoneyWatch, GigaOM, and Brazen Careerist. @EntryLevelRebel

Where College Grads Want to Work

According to a recent survey, college graduates across all concentrations agree: Their first job better be at a "cool" company.

shutterstock images

If you're looking to recruit recent college grads, you might be up against some stiff competition. Especially when the No. 1 most appealing company offers catered lunches, yoga on demand, and a plethora of cozy couches to snooze on.

According to the annual American Student Survey by Universum, an employer branding firm, Google tops the list of desirable companies for recent college graduates who majored in business for the fourth year in a row. 

The study, which was conducted from November 2011 to March 2012, surveyed 59,643 respondents at 318 universities across the country. Google was in the top 10 for all areas of study, including business, IT, natural sciences, and humanities/liberal arts. The Silicon Valley powerhouse ranked first among business and IT students, as well as M.B.A. students surveyed separately.

Apple ranked second in general overall appeal, yet other Silicon Valley giants such as Facebook, Microsoft, and Amazon appeared lower on the lists.

A similar trend held true for 5,748 M.B.A. students surveyed at 72 leading business schools. M.B.A. students also ranked highly financial consulting firms such as Bain, McKinsey, and Boston Consulting Group.

"They're interested in the 'me brand,' and they are more concerned about their employability," Joao Araujo of Universum told Bloomberg Businessweek. "They want a company with a good reputation. They want to say they work for a 'cool' company."

Even so, new graduates will likely prioritize job security and growth opportunities as they enter the workforce. So, take heart, small businesses: An on-staff yoga instructor may not be required--yet.

 

 

Maeghan Ouimet is a business and culture reporter whose work has appeared in Boston Magazine and Rolling Stone. She covers technology start-ups and innovations from the San Francisco bureau for Inc.com. @MaeghanO

City Threatens Shop Owner Who Cleaned Up Neighborhood

After city officials refused to clean the vacant lot beside Ori Fiebush's coffee shop, he decided to take matters into his own hands. Oops.

Flickr photo courtesy of Vlasta Juricek

Small-business owner Ori Fiebush is facing heat from Philadelphia housing officials after renovating a vacant lot next to his newly opened coffee shop.

The lot, which is owned by the city, was overgrown with weeds, littered with trash, and without a traversable sidewalk for years, Fiebush says.

'From a fundamental standpoint, if you're opening a business next to a trash-strewn, despicable lot, it's difficult to convince people to come and visit,' Fiebush says.

Fiebush owns the building next to the vacant lot and says he has tried to purchase the uninhabited space from the city. When that didn't work, he says, he asked the city if it would allow him to just clean up the lot. The city still said no.

Not wanting his coffee shop to abut the public eyesore, Fiebush says he decided to take matters into his own hands. Big mistake.

Ignoring the city's request that he leave the property alone, Fiebush says he went in and renovated the lot anyway. Spending close to $30,000 of his own money, he cleared the lot of trash, installed plants and benches, and redid the sidewalk. He admits that he received written and verbal demands from the city to stop, but says he shrugged them off and kept renovating.

'I knew that lot next to us would be the kiss of death,' he says. 'I knew there was no other way.'

Now, however, Philadelphia's redevelopment authority has gone beyond written demands and is reportedly threatening to take legal action, accusing Fiebush of trespassing.

"Like any property owner, [the authority] does not permit unauthorized access to or alteration of its property,' Paul D. Chrystie, director of communications at the Office of Housing and Community Development, told the Philadelphia Daily News. "This is both on principle (no property owner knowingly allows trespassing) and to limit taxpayer liability."

Fiebush says the Office of Housing and Community Development is telling him to put a barrier back around the lot and to stay out of it. According to the Daily News, Chrystie said that the office is currently reviewing its options. (At time of publication, Paul Chrystie's office had not responded to Inc.'s request for comment.)

The coffee shop opened in late August, but Fiebush says it still isn't getting much business--renovations or no. He blames the neighborhood's weak economic health: 'There hasn't been a new business there for 60 years; we knew that,' he says. 'But we knew what would it would mean for the area. We had to be the pioneer.'

Hiring Trick: Better Way to Check References

People who seem perfectly stable on paper or even in an interview might not act that way on the job. A reference check--done properly--can help.

Getty

It's every business owner's worst nightmare: You hire someone who looks smart on paper and seems fine in the interview, who then turns out to be a disaster. And not just a run-of-the-mill disaster. As recent incidents in Aurora, Colorado, and New York City have shown, it's possible for heinous acts to be committed by people who, outwardly at least, appear perfectly well adjusted.

Mental illness is a taboo subject on so many levels, and that taboo puts small businesses at risk when they hire. I have worked with some absolutely brilliant people who live with mental health challenges. When managed properly, these illnesses can be kept in check, and the wonderful person underneath can shine. I wish our society were more open, because it sure would help if employers and employees could openly talk about these issues. 

It used to be that employers would look for gaps on a resumé and flag those as risks. Why? Because people suffering from certain mental illnesses often had gaps in their employment history. That's not a good approach, but there isn't a good approach, really. In today's economy, so many people have gaps because their companies went out of business or downsized that even this lame approach is no longer the crutch it once was. Not to mention the ethical issues surrounding this type of discrimination.

One of an entrepreneur's best friends, then, is the reference check. But for reasons both personal and legal, it can be hard to get good information out of even the most cooperative reference.

I am not an attorney, and there is no legal advice in this column. But I have learned a few things over the years that make me more prudent in hiring or allying with others in business situations.

No one wants to give a bad reference. For one thing, people do not want to be sued! You may think that calling every reference on a list means you've been diligent, but are you digging enough to get past the surface veneer? Open-ended questions, such as these, can uncover a variety of troublesome behaviors, not matter what their cause:

• Tell me about a time when the candidate had a conflict with a co-worker. How did the situation unfold?
• What kind of schedule did the candidate keep? Did co-workers ever have trouble working with him or her because of schedule issues? Tell me about a time when this was a problem.
• Tell me about a time when the candidate surprised you. What were the circumstances? What did he/she do?
• If you were to hire the candidate again, what role do you think would be ideal? What role would not be a good fit, and why?
• We all get frustrated with each other from time to time. Tell me about a time you were really frustrated with the candidate.
• In which situations does the candidate really shine? Tell me about an example.

I have also learned to listen for euphemisms. If former colleagues describe someone as 'erratic,' that could indicate a more serious problem.

Find third-party references. Can you talk to someone who hasn't been prepped to be a reference for your candidate? If you can, you are more likely to get a spontaneous answer to your questions rather than a polished, prepared one. Some companies have policies against giving references beyond confirming dates of employment, so finding someone who has moved on to another job since working with your candidate can often be a better source of information. Find out how your candidate interacted with colleagues. Was he or she a team player, prima donna, or lone wolf?

Why did your candidate leave each position listed on the resumé? This is a key question, especially for someone with a lot of job changes. In the 'old days,' a series of job changes was a red flag for a serious problem. If someone hopped from job to job, you wondered if he or she had trouble getting along with others. Now, you could just be interviewing a hot software engineer who legitimately jumps at new opportunities every year (or less!).

Don't just take the first answer--dig into this. Look for stories that hang together and stories that don't. Inconsistencies are a red flag. See if you can corroborate the stories through reference checks, too. 

Laura Smoliar, with 15 years professional experience and a Ph.D. in physical chemistry, specializes in the commercialization of technology. She is currently CEO of Peppertree Engineering. Follow her on twitter at @lsmoliar.

Shark Tank: Should Entrepreneurs Steer Clear?

The reality-TV show apparently requires participants to give up equity or royalty on profits just to appear.

Courtesy company

NBC's Shark Tank--a reality show on which entrepreneurs pitch their business ideas to a panel of potential investors headed by Dallas Mavericks owner Mark Cuban--has brought the excitement of venture capital to prime-time television.

But not all entrepreneurs recognize what they have to give up to get on. 

To appear on Shark Tank, entrepreneurs must give Finnmax, the show's production company, either a 2% royalty on profits or a 5% equity stake in the company, Amir Kassar, founder and CEO of business loan company MultiFunding, wrote in The New York Times's small-business blog.

Recently, Kristy Hadeka and Sean Tice passed on the opportunity be on Shark Tank because of this little-known stipulation, Kassar reports. Hadeka and Tice co-own Brooklyn Slate, a company that makes homewares such as coasters and place mats out of slate.

The show offers entrepreneurs the opportunity to publicize their venture and strike deals with wealthy business owners-turned-investors, including Daymond John and Barbara Corcoran. Entrepreneurs should consider financing options, such as debt options, before accepting equity investment and entering a business partnership that's likely to last forever, Kassar writes.

Entrepreneurs interested in appearing on Shark Tank should know that deals reached during filming are not final until a formal agreement is reached later. Early in 2012, Megan Cummins successfully pitched Robert Herjavec during taping, only to have the deal fall through afterward.

 

John McDermott is a business and culture reporter whose work has appeared in the Chicago Tribune and Playboy and on AOL.com. He recently moved from Chicago to Brooklyn, New York, to work for Inc.com. @J_M_McDermott