Business Trademarks: What’s Really in a Name?

This name is not available.

If you’re thinking of starting a business (or already have a business in the works), make sure that the name you use is not already taken.  Original names are essential for three reasons:  marketing power, clarity, and trademark infringement avoidance.  For example, if you’ve decided to open a coffee shop, it’s fairly easy to determine that the name “Starbucks” is notan option.  But, what about “Smith’s?”  And what happens if the “Smith’s” trademark is an auto insurance company in your town? 

What’s Really in a Name When it Comes to Business Trademarks?

Before attempting to trademark your business’s name, find out if the name is available on the U.S. Patent and Trademark Office’s website.  TESS, the Trademark Electronic Search System database, will indicate whether someone else has already claimed the name or symbol you want to use. 

  • While U.S. trademark protection is granted to the first company to use it in its operational geographic area (regardless of registration), a company that grabs the trademark first will generally have a stronger case in court.
  • In some situations, the similarities between names or symbols may be negligible.  That’s where an experienced business attorney with intellectual property experience can help. 

Often, there’s generally a way to accommodate both companies – especially when it comes to businesses with similar names, but dissimilar products (the “Smith’s” example above); those whose geographical locations may not conflict; and those whose names are too generic (for example, “The Clothing Store”).

Domain Extensions as Trademarks

In today’s marketplace, many businesses have both a physical location and an online presence.  The question then becomes whether to trademark the company name (for example, Amazon), the URL (www.amazon.com), or both.  It’s generally recommended that companies with an internet presence not register their web extensions (such as .com, .net, etc.) with their name unless planning to register the mark both with and without the web extension.  The reason is that other businesses registering the same name can do so by just adding a different (non-registered) extension and cause a great deal of confusion for customers.

A prime example is Craigslist.  The multi-purposed classified ad site is technically a “.org” site, but those who searched for craiglist.com or craiglist.net were often led astray.  The company now has trademarks for all, so typing in the latter extensions now brings you to the main .org site.

Series LLCs: (Some of) What You Need to Know

A series LLC, a relatively recently authorized form of LLC, is composed of a master LLC—the Mother Ship—which houses a series of LLCs. Each series, silo, or cell (the potential synonyms are almost endless) within the series LLC often has separate owners, and each must always maintain separate records, especially records that account only for the assets of that series—at least if the series LLC is formed in Utah or Wyoming and other ULLCA states that allow for series LLCs.

Series, Silos, or Cells: more protection at less cost?

Similar to a corporate/subsidiaries business model and like their more well-known parent LLCs, series LLCs offer asset-protection benefits, but they avoid the complexities of corporate taxes, structure, and other required formalities. 

This type of entity is well suited for certain businesses that may benefit from its relative simplicity, reduced costs, and increased asset protection. But especially because they are so new, there are also some uncertainties associated with the series LLC.

Potential Benefits of the Series LLC:

1. Simplicity

  • Reduced Administration

Although each series must be administered separately, series LLCs have the potential to save time and administration costs.

2. Reduced Costs

  • One Registration

Each of the individual series is formed and governed by the master LLC’s operating agreement.  In most states—Wyoming and Utah, included—only the master LLC must be registered with the state, which means reduced fees.

  • Potential Sales Tax Savings

Some states may not require sales tax to be paid on rent that one series pays to another series.

3. Asset Protection

  • Mixed Signals

Under most series LLC statutes, each series is protected from judgments against assets in other series under the master LLC.  But it’s not clear that this protection will be respected in bankruptcy proceedings or in states that don’t recognize series LLCs.

Potential Downsides of the Series LLC:

1.  Some Additional Costs

  • Registered Agent

Many states require a separate registered agent for each series in the series LLC, which may mean additional expenses.

  • Formation Cost

The up-front registration fee for a series LLC may be higher than the registration fee of a regular LLC.  In some states, it may be less expensive to register multiple single-member LLCs rather than a series LLC with multiple series. This is generally not the case in Wyoming and Utah.

2. Governance Issues

  • Overlap Jeopardy

The operations may not be as streamlined as anticipated. The records of each series must be maintained separately, and each series must have its own separate bank accounts.  Can administrative functions among the series overlap without jeopardizing the limited liability? Can the ownership or management overlap? Does inadequate capitalization of one series impact the other series in the series LLC? At this point, these types of questions remain unanswered.

3. Liability Questions

  • Bankruptcy Issues

Federal bankruptcy laws do not yet address series LLC issues.  Can an

individual series within a series LLC file for bankruptcy? Are the assets of the non-filing series and the master LLC protected from the filing series?  At this time, there are no clear answers to these and other bankruptcy-related questions.

  • Choice-of-Law Issues

If a series LLC gets sued by a third party in a state that doesn’t authorize series LLCs, the assets of each series and the master LLC may be at risk. For LLCs that operate in states with and without series LLC statutes, this may make a series LLCs much less attractive.

The series LLC is potentially a star on the rise and is definitely worth watching.  If your business is particularly well suited to this compartmentalized approach—real estate investing, for example—and you live in one of the states[1] that currently authorizes series LLCs, you may want to this novel entity.


[1] As of November 2019, Alabama, Delaware, DC, Illinois, Indiana, Iowa, Kansas, Missouri, Montana, Nevada, North Dakota, Oklahoma, Tennessee, Texas, Utah Wisconsin, Wyoming, and Puerto Rico provide for series LLCs in their statutues.

Kanban Boards, Focus, and Productivity

One of my many weaknesses is maintaining focus. Often it seems squirrels are everywhere. And that’s frustrating because when I am focused, my head down, I move forward quickly and accomplish a lot.

So it was that I got excited when I heard John Grant describe so-called Kanban Boards on a Legal Talk Network podcast. (Warning, the podcast starts out slowly and Grant can be a bit jargony–so much so that I almost turned the podcast off–but it gets better and when he began talking about Kanban Boards, I was hooked.)

I rushed home, watched his video on the the subject and created my own  board. I’d show you my board, but I have client names on some of the Post-it Notes–did I mention that a Kanban Board is essentially a white board divided into columns and covered with Post-It Notes? Since I began using my board three weeks ago, I’ve been multiple times more focused and productive. Can’t recommend the tool highly enough.

By the way, Kanban Boards are not just for attorneys. They’ll improve anybody’s life.

Here’s the video:

 

What’s the Value of Water?

The answer to the question, “what’s the value of water?” is it depends. No surprise there, but to be clear, I’m not talking about the value of the water that runs out of your tap. I speaking of the value of water that is appurtenant to your farm or ranch land. What’s it worth in an of itself?

Well, Deborah Stephenson of DMS Natural Resources LLC, writing at Hall and Hall makes clear that the answer is in no way clear and depends on a number of things, including:

  1. Quantity – The quantity of water that a water right yields.

  2. Marketable Region – The feasible region in which the asset can be transferred to a new user.

  3. Alternative Water Supply Options – Availability of existing water supplies and future water development opportunities within the region.

  4. Water Quality – The quality of a water source can influence the suitability of a water right for a potential new use.

  5. Reliability – The amount of water that is regularly available to the water right holder compared to the claimed or stated volume on the water right. The amount of water available is determined based on a combination of water source yields, hydrological conditions, and the water right’s legal attributes –  mainly priority date.

  6. Seasonality – The period during which the water right holder can divert or withdraw water from the source.

  7. Highest and Best Use – The highest value use to which the water right can physically and legally be put to use.

Using those seven criterion, you can arrive at an appraised value of the water in question. But that only gets you so far, Stephenson says. No, you also have to look at water in the operational context, and that assessment is based on three considerations:

  1. Utilizing the water in the current agricultural operation.

  2. Utilizing the water on-site, but changing the use to a non-agricultural purpose.

  3. Decoupling the water and transferring it off the property.

You should be able to readily see that each of those factors will influence the value the water. I’m going to leave it at that. Stephenson covers the topic quite well, so click on the link above and continue–if you’re interested.

Value Water? Listen to The Water Values Podcast!

In an effort to keep abreast of water, water law, and water rights, I listen regularly to David T. McGimpsey, host of the Water Values Podcast. An attorney with Bigham Greenebaum Doll, David does water law, among other things. In his podcast, he interviews water experts and professionals from all walks of life–engineers, lawyers, hydrologists, water administrators, entrepreneurs, anybody and virtually everybody who does anything with water. I almost always come away from his podcast thinking that was time well spent.

My interest in water law stems from my estate planning and business practice. Water is property and proper estate and business planning ensures that property stays in the right hands over time.

Of course, I’m also interested in water because, as McGimpsey says at the end of every podcast, “Water is our most valuable resource, so please join me by going out into the word and acting like it.” Words to live by.

To C or LLC? That’s Today’s Question

I just read an interesting post over at The Startup Law Blog, a post written six years ago. The writer lists “12 Reasons For A Startup Not To Be An LLC.” The key word in that post is “startup,” and key thing to understand is the author’s audience, largely captured in the following paragraph from the post:

For tech or growth companies planning to follow the traditional path of regular and ongoing equity grants to employees, multiple rounds of financing, and reinvestment of as much capital into the business as possible, with the goal of an ultimate sale to a big, maybe public, company in exchange for cash and/or stock, LLCs are typically not the way to go.

If that paragraph describes you, then maybe the C corporation should be the entity of choice for you.

As for the C corp, the author makes another important point. We’ve all heard that one reason–if not the major reason–to avoid the C corp is the possibility of double taxation. Well, maybe:

The bogeyman that you will hear about most frequently is the “double tax” bogeyman. You will be told—don’t form a C Corporation because you will be subject to a double tax.

What is meant by this is that if the C Corporation makes money, it will pay tax on that money. And if it pays dividends to its shareholders, they will pay tax on the dividends. This is true. And so if you anticipate your business being a cash cow, and immediately generating so much money that you will earn more than you can reasonably pay out in salary to the owner executives, then maybe an LLC is a good choice for you. But for most growth businesses, whose goal is to raise capital, reinvest capital, grow fast, grant equity incentives, and ultimately be acquired or go public, a C Corporation is the way to go.  For these businesses, the double tax bogeyman rarely appears, and most exits are structured as one layer of tax stock sales. (Emphasis supplied)

In the end, the real lesson, make that two lessons, from the blog post is that one size doesn’t fit all and that there are lots of questions to answer on the road to choosing an entity for your new business venture.

Will you know the answers? Better yet, do you know the questions?

Just Leave It Alone?

As many will recall, then candidate Trump promised to eliminate the estate tax. That was then. This is now–he’s the President. What will he actually do? Will he also eliminate the estate tax’s two siblings: the gift tax and the generation skipping tax? No one knows, though many people care, especially those who preach tax fairness.

Given that married couples currently have to be worth almost $11 million dollars before  the estate tax kicks in–it’s more complicated than that, but still–eliminating the estate tax is going to help only the very, very wealthy. And maybe that’s a bad (or a good) thing.

I’m here to argue for the advisor. Estate planning attorneys, life insurance and investment advisors, CPAs and financial planners. I’m betting that each and every one of them agree with the following:

Because the estate tax generates a meager 0.005 percent of annual tax collections, according to I.R.S. figures, it generates far more political debate than federal revenue. And among many tax planners, the calls aren’t so much for reform as for stability, or at least a period of benign neglect.

“Just leave it alone so we can plan,” Mr. Jenney said. “But every administration seems to want to put their own twist on the estate tax.”

Farm and Ranch Transition Conference–University of Wyoming College of Law

The Rural Law Center at the University of Wyoming College of Law is sponsoring the Farm and Ranch Transition Conference on March 3, 2017, a Friday, in Laramie. It’s free. The conference is open to the public. Those interested may attend either in person or via live streaming video. The  program sounds interesting.

24 Blogs to Read Beside Mine

I just stumbled upon this list of 24 [supposedly] Must-Read Blogs for Entrepreneurs I can’t vouch for them because I haven’t read them all, but many of the names behind the blogs are  recognizable: Mark Cuban, Penelope Trunk, Scott Adams, Guy Kawasaki, and others, so go take a look. If you’re thinking of or are in the middle of starting a business, you should be reading a lot about how to make things work.

Two that I’m going to be reading from now on are Duct Tape Marketing and Seth Godin’s blog (that’s Seth in the photo to the left). I need to become a better marketer of my own business, and  well, Seth Godin’s a genius.

Estate Planning? I Don’t Have Time . . .

Why doves cry. Half of Prince’s estate to go to government.

The Wyoming State Bar does not certify any lawyer as a specialist or expert. Anyone considering a lawyer should independently investigate the lawyer’s credentials and ability, and not rely upon advertisements or self-proclaimed expertise. This website is an advertisement.