Balancing Business and Law Blog

Dismantle the SBA?

May 24, 2006

The head of the Small Business Administration resigned and a new candidate has been nominated by President Bush. Richard McGill Murphy of Fortune Small Business argues that the SBA should be dismantled altogether -- or at least the basic small business loan programs. The SBA's varying definitions of 'small business' covers approximately 98% of businesses and the loan programs provide a competitive advantage to those businesses that know about them and are able to get them. In addition, the SBA doesn't track the success rate of businesses who receive the loans. He argues that the money could be otherwise used to support small businesses such as a FICA rebate or enhanced lobbying efforts.

Virtual channels

May 17, 2006

I found a fun article in the NY Times today about how the TV home shopping channel QVC supports the growth of entrepreneurs. QVC looks to entrepreneurs for products their customers can't find anywhere else. The article spotlights a number of companies with entrepreneurs at various levels of sophistication that QVC has helped to launch or grow their businesses by providing a centralized distribution point and allowing the business owners to market the product live, on television, to millions of potential customers who love to "root for the little guy."

IP Followup

May 11, 2006

I heard this morning a correction on NPR's Morning Edition that hit home my comment on the differences between various Intellectual Property rights. The article earlier this week was on Wal-Mart's use of the yellow smiley face and their attempts to "patent" it. The correction, which was pointed out by an IP attorney in Houston, was that the smiley face is actually a trademark -- a brand or image used in conjunction with the sale of goods or services -- not a patent -- a monopoly granted to an inventor to encourage innovation. Even the media gets it wrong sometimes.

Incorporate in Delaware?

May 10, 2006

I am often asked by clients what's the big deal with incorporating in Delaware and whether they should do so. Delaware is known for having flexible, pro-company laws and a long history of case law supporting the statutes. This provides companies with confidence as to how the law will be interpreted. These benefits are important to companies dealing with sophisticated legal issues and potential lawsuits around their business relationships. Most small companies are more concerned with startup and tax issues and prefer to have local jurisdiction in the case that a lawsuit may arise.

Intellectual Property defined

May 03, 2006

Many people generally understand the concept of intellectual property (IP) but are unclear as to the differences among the types of IP so I thought I'd provide a short overview of each. A trademark is a mark including words and/or symbols that identifies a product and its source. A servicemark identifies a service. These are typically brand names and logos that are connected with a product or service and helps consumers identify quality. McDonald's golden arches is a trademark. A copyright is the protection granted to an author or artist to have exclusivity for a period of time in copying, publishing and selling the work. We see examples of copyright protection with books, music, and artwork. A trade secret is something used in a business that provides an advantage over competitors who may not have access to that something. It may be a formula, pattern, process, or list of customers. Coca-Cola's formula is an example. A patent is the right to exclude others from making, using, or selling an invention for a period of time. Drug companies typically hold patents on the formulas for their drugs.

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