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Legalities of starting a site:trademarks, inc/LLC, IRS, etc.

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Jay Soriano
Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 12, 2009 at 8:25:35 pm

I will be seeking legal advise from an attorney, but in the mean time I am asking for your experience. I will use the Cow as an example so hopefully you can chime in Ron. =) I live in California(if that helps) and would like to build a website w/ a forum. Before putting up the site I would like to get the legalities out of the way.

First off, would an LLC or incorporation be necessary? Currently I am one person but may possibly hire a few people if it draws enough traffic. If so, which one?

Would I need to have 3 seperate trademarks for my name, logo, and slogan? I notice the Cow image has a trademark symbol. Is that just for the Cow image or does that include your name, and slogan?

If I had a name for example, Sony.tv would that be copyright/trademark infringement?

Is an IRS EIN# required?

Any other advice or anything I may have missed is gladly appreciated! =)


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David Roth Weiss
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 12, 2009 at 9:13:34 pm

[Jay Soriano] "If I had a name for example, Sony.tv would that be copyright/trademark infringement? "

I don't think calling your site Sony.tv would be very smart Jay. I have a sneaky suspicion there might be a company out there somewhere already using that name.

Come up with some potential names and search them yourself first. There are many useful searches you can do before getting lawyers or other pros involved. Begin with Google, the move on to the U.S. Patent and Trademark Office website. Once you've found something that appears to be available, then pay to have that name searched professionally and registered.

As for how choose to setup your business, that's a matter for your accountant and lawyer. You don't absolutely need a corporation or LLC, those just add layers of protection, and they have tax consequences that can be beneficial or not depending upon where you live and what your tax bracket happens to be. Individuals can certainly own websites however, there's nothing that says you have to a separate business entity.

David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los Angeles

POST-PRODUCTION WITHOUT THE USUAL INSANITY ™


A forum host of Creative COW's Apple Final Cut Pro, Business & Marketing, Indie Film & Documentary, and Film History & Appreciations forums.


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Jay Soriano
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 12, 2009 at 9:45:24 pm

Thanks for the quick response David. I was using Sony.tv only as an example. But let's say Sony doesn't have the dot tv domain. Wouldn't I have the right to use that domain and include it in my company name, Sony.tv since it was never registered? ie: Let's say there was an electronics company named CreativeCow. They did not register their site w/ the suffix, .net. Mr. Lindenbloom starts up Creativecow.net which offers nothing related to what the company CreativeCow offers. Wouldn't this be the domain's ownes legal right? thanks again.


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David Roth Weiss
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 12, 2009 at 11:15:18 pm

I knew Sony.tv was just an example... But, just because Sony didn't register that site doesn't mean you're not trying to capitalize on their brand or that you're not harming their image. They would send you a cease and desist order immediately.

The bottom line is, if someone uses the name to make a profit, and they can prove they used it first, you're most likely infringing on their rights if you even get close to their name. And, the more money they make on that name, the farther afield you better stay from anything even close.

David Roth Weiss
Director/Editor
David Weiss Productions, Inc.
Los Angeles

POST-PRODUCTION WITHOUT THE USUAL INSANITY ™


A forum host of Creative COW's Apple Final Cut Pro, Business & Marketing, Indie Film & Documentary, and Film History & Appreciations forums.


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walter biscardi
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 12, 2009 at 11:48:46 pm

[Jay Soriano] ". But let's say Sony doesn't have the dot tv domain. Wouldn't I have the right to use that domain and include it in my company name, Sony.tv since it was never registered? "

You could, but the moment you did that, Sony would sue you to get the domain back and they would win. It's cybersquatting or taking their name. They'll be able to very easily defeat you either in court or with ICANN and take the domain back along with giving you a cease and desist order for your company name.



Walter Biscardi, Jr.
Editor, Colorist, Director, Writer, Consultant, Author.
Credits include multiple Emmy, Telly, Aurora and Peabody Awards.
Owner, Biscardi Creative Media featuring HD Post

Biscardi Creative Media

Creative Cow Forum Host:
Apple Final Cut Pro, Apple Motion, Apple Color, AJA Kona, Business & Marketing, Maxx Digital.

Read my Blog!

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Mike Cohen
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 13, 2009 at 12:41:31 am

If you recall last year a company called U Tube was suddenly getting a lot of traffic. Apparently this metal tube company sold their domain because the site is now garbage.

I am not sure exactly what information you are looking for. Your original post combines questions about the need to incorporate with being worried about trademark infringement. Thus, do you mean that you have a business name/website name that is similar to an existing company? Caution. Having an LLC does not prevent someone from taking legal action if you have infringed upon their IP.

Oddly, there is a film festival in France called Cinemed, but not really competition to us. The name is a coincidence, since the "med" in Cine-Med refers to medicine, not the Mediterranean Sea. In fact, we dig French cinema.

Mike Cohen





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Todd Terry
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 13, 2009 at 1:23:58 am

People have fought these domain battles before... and almost always lost. I've heard several stories of people registering company names (with non-.com suffixes) and either attempting to cash in on the cache of the name, or sell the domain to the big daddy company for big bucks.

These have gone to court, and the established well-known company has always prevailed.

In our own industry, I believe I recall that happened to Panavision.

People can get very possessive about their domain names, and rightly so. In the early days of my company, Fantastic Plastic, we wanted to register fantasticplastic.com... but alas, it was already taken (by a used record shop in Seattle) so we settled for the much-clunkier hyphenated fantastic-plastic.com. Later though we realized the value of the "better" domain and coughed up enough cash to convince the other company to sell us the domain name. It wasn't cheap.

Interestingly enough, there is also a British record label (mostly indie bands) named Fantastic Plastic. Their domain is identical to ours except they have the .co.uk suffix. We used to get quite a few misaddressed emails intended for them.


T2

__________________________________
Todd Terry
Creative Director
Fantastic Plastic Entertainment, Inc.
fantasticplastic.com






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Tim Kolb
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 13, 2009 at 1:27:04 pm

You're much better off to get a domain name that is unique and grab all the suffixes.

I'd do some synonym searches based on what meaning or topic you want to address and start searching domains that way.




TimK,
Director, Consultant
Kolb Productions,


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Jay Soriano
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 13, 2009 at 5:38:42 pm

so what about sites such as paypalsucks.com and slight lettering change as iphilm.com(instead of ifilm). are these sites possibly candidates on infringement?

i understand that it is best to find a name is unique so thank you all for your informative advice. =)

now, as far as LLC, it is not necessary but beneficial for a website owner?

how about an IRS EIN#?


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Tim Kolb
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 14, 2009 at 3:45:27 am

I suspect "paypalsucks.com" can claim satire or some such free speech issue... However, if you decided to register something like "sonycameras.com" or something similar, you're intentionaly causing confusion. Nobody will erroneously attempt to alter their paypal account by confusing the site with "paypalsucks."

The oversimplified essence of LLC or INC is a business structure that protects you from liability, but some variations will also create more tax prep/accounting work.

An EIN (employer identification number in the USA) is, as it implies, the tax reference for an employer that needs to withhold payroll taxes. If you have no employees, you could hold off until you grow and need to hire. There is additional tax prep work involved with an EIN, though it's minimal if you have no employees.

You're best off consulting an accountant and/or attorney on specifics of how any particular business structure would affect you.



TimK,
Director, Consultant
Kolb Productions,


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Jay Soriano
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 14, 2009 at 3:05:48 pm

Thank you Tim. So probably the most important thing right now is to search and apply for a trademark before launching my site? Also, I have a couple of ideas for different company names(but sound similar). Will I need to spend $$ for a search of each one? Thanks again!


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Steve Boultbee
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 14, 2009 at 5:01:29 pm

It doesn't cost you anything to get an EIN, but you do need to decide what business structure you're going to use before applying for one. You can even apply online at the IRS' website. As was stated above, you'll definitely need an EIN if you're going to hire employees (W-2 earnings) or contractors (1099 earnings). You'll also need to register with the California Employment Development Department to get a state employer number as well.

In California, you can operate as a single-member LLC. This will mean that you don't have to file a separate federal tax return - all of the business' taxable income and expense will be reported on your Form 1040, Schedule C (like a sole proprietorship). You will, however, still have to file the CA Form 568 for the LLC which takes care of the state minimum tax and the LLC fee (if applicable). So, there's a little savings from the tax prep standpoint since there's no separate federal filing.

If you incorporate, you'll have to file a full corporate return - federal and state. You also have to choose between a C corp & an S corp, but most likely you'd want to be an S. You'll also have more operational formalities with a corporation, such has keeping minutes of board meetings, etc.

I'd also suggest that you go to CA's Secretary of State website and do a business name search so that you don't decide on a name only to discover that it's already taken when you file your paperwork. You'll have to do two searches for each name - one to see if that name is taken by a corporation, and one to see if it's been taken by a partnership or LLC. Here's the website: http://kepler.sos.ca.gov/

Definitely sit down with your attorney & CPA so that you can decide what business form to take. Having a business plan with your expected earnings will help quite a bit, so that your CPA can run some numbers to get a good idea which is the best from a tax (and future growth) standpoint, and your attorney can advise you on which is best from a legal standpoint.


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Jay Soriano
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 15, 2009 at 5:41:24 pm

Thank you everyone who contributed on this thread. It was very informative. I with an attorney in a couple of weeks. =)


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Ron Lindeboom
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 15, 2009 at 6:28:49 pm

[Jay Soriano] "I will use the Cow as an example so hopefully you can chime in Ron. =) I live in California(if that helps) and would like to build a website w/ a forum."

Good luck with it, many many people have tried this over the years and most all of them have failed. We have now spent well over $3 million dollars building what you see here and have devoted over 14 years of our lives to this. We work all day long, for years it was 7 days a week, and a short day is 12 hours. Most of the days we put in over the years were 15 to 18 hour days. This isn't easy and between the security attacks and server issues, bandwidth charges -- which over the years have run as high as approaching $6,000 a month for just the traffic support alone (forget the admin, security and other costs) -- this is not a cheap business to run.

People think it is but they are wrong. Kathlyn and I make less than everyone else that works for our company. You better get ready for that if you succeed, as to get and retain good people, you are going to have to pay them.


[Jay Soriano] "First off, would an LLC or incorporation be necessary? Currently I am one person but may possibly hire a few people if it draws enough traffic. If so, which one?"

We are an LLC that is recognized by the Federal Government as a corporate entity. That required a secondary filing, following the registration of the LLC.


[Jay Soriano] "Would I need to have 3 seperate trademarks for my name, logo, and slogan? I notice the Cow image has a trademark symbol. Is that just for the Cow image or does that include your name, and slogan?"

We have two marks, the "word mark" of the words Creative Cow -- which is a federally registered ® trademark, as well as a federally registered trademark of the "Bessie mark" which is the orange cow. (Although we registered it in shades of gray as that legally covers all variants of color we would chose to use, whereas if we had registered it in color, the mark would have covered those colors only.)

More bad news for you, Jay: We have spent over $130,000 protecting the use of the cow marks in this industry over the last two years alone. A sure sign of your success is that people will want to steal your marks. You will have to protect them or lose them. An unprotected mark is as good as no trademark at all. If you do not have a record of protecting your marks, the courts will refuse to recognize your marks as legally binding.


[Jay Soriano] "If I had a name for example, Sony.tv would that be copyright/trademark infringement?"

As pointed out here, "cyber-squatting" laws have been enacted that will take you to the cleaners and kick your legal butt all over the playing field if you try this.

Oh, and if your new forums include a cow, be prepared to see how quickly you meet our legal team -- who by the way, in our latest case defended and won 14 out of 15 contested points in our last case. It cost us, but Bessie is worth protecting in our opinion. I am sure that Sony feels the same way about their trademarks -- and their lawyers are bigger and badder still.


[Jay Soriano] "Is an IRS EIN# required?"

By the time you get to the level where you will need this, you will have found out that it takes years to get anyone to sponsor you and give you anything remotely resembling any money enough to hire anyone.

Setting yourself up as a corporation coming out of the gate is just plain stupid in my opinion, as you will be paying a lot of costs that are not needed up front while you figure out that you are likely going to be one of the many many who try this because it looks easy and they think they can make a lot of money at it -- and are dead wrong.

Sorry to have taken so long to address this but Kathlyn and I have been fighting internet access issues for the last few days and Abraham had to run up to the servers to fix a few issues we were having -- again. It has been really busy here and that is why the magazine hasn't been posted yet, even though it's been done for a couple of weeks now.

If you think this is going to be easy, let me tell you straight: plan to spend HUGE amounts of time and money to try to do something that many have tried and failed to do. If it was easy, most of our competitors -- which happen to be international publishing conglomerates wherein the small ones are approaching the billion dollar level while many are multi-billion dollar companies -- would have buried us long ago. They haven't, but the field is full of those who try and who have to give away their ads just to compete.

Be ready to find out what the word "commitment" really means. And tell your wife that she better get ready to work 15 to 18 hour days for nothing for years before you can guarantee that she'll see a dime.

Now THAT is the reality of what you are really asking.

Have fun,

Best regards,

Ron Lindeboom

Creativity is a type of learning process where the teacher and pupil are located in the same individual.

Perfection is achieved, not when there is nothing more to add, but when there is nothing left to take away.
- Antoine de Saint Exupéry






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Jay Soriano
Re: Legalities of starting a site:trademarks, inc/LLC, IRS, etc.
on Aug 16, 2009 at 5:27:18 pm

Thank you Ron for your response. You and Kathlyn's hard work shows. I remember when 2-pop launched(I think in 1999?) and traffic was booming...but has slowed quite a bit through the years so it's great to have a place like the Cow to learn and have discussions w/ professionals and the more experienced. For my site I'm focusing more on one product so it will be less complicated but nonetheless, understand that it may not be that easy as one might think. Much appreciation!


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