Trade Marks and Service Marks
If you use a slogan or logo, consider registering your company’s marks, both to protect your investment in the mark and to prevent unintentional violations of marks of other businesses. A trademark is either a word, phrase, symbol or design, or combination of words, phrases, symbols or designs which identifies and distinguishes the source of the goods or services of one party from those of others. A service mark is the same as a trademark except that it identifies and distinguishes the source of a service rather than a product.
Generally, the first party who uses a mark in commerce has the ultimate right to register a mark. Registration in California is effective for 10 years, renewable for another 10 years, and there is no limitation on the number of renewals. Registration with the state of California serves as prima facie evidence of ownership of such mark as applied to the goods or services and it is constructive notice of the registrant = s claim of ownership.
In addition to establishing the right of use, a registered mark acts as a shield against potential law suits and protects the owner of the mark from others who have concurrent or prior use of a similar mark. Any owner of a mark registered may proceed by suit to enjoin the manufacture, use, display or sale of any counterfeits. California law provides that any court of competent jurisdiction may grant injunctions and shall require the defendants to pay to the owner up to three times their profits from and up to three times all damages suffered by reason of the wrongful manufacture, use, display, or sale of a registered mark.
You can also obtain national protection by registration with the US Patent and Trademark Office. A U.S. registration requires that the product or service behind the mark be placed in interstate or international commerce. Use of a mark in purely local commerce within a state does not qualify as interstate commerce. An applicant may apply for federal registration in two principal ways: (1) An applicant who has already commenced using a mark in commerce may file based on that use (a @ use @ application). Advertising without actually providing the product or service will not qualify as a A use @ application. (2) An applicant who has not yet used the mark may apply based on a bona fide intention to use the mark in commerce (an A intent-to-use @ application).
Separate existence. A corporation through legal fiction has it own legal existence and with that existence come economic rights. Some of those rights are: the right too enter into a contract; due process protection of corporate assets against state and federal government takings; freedom of commercial speech in the form of advertisements; and equal protection of the Fourteenth Amendment. A corporation does not have individual rights such as: the 5th amendment right to protection against self incrimination, the 4th amendment protection against unreasonable search and seizure or the 1st amendment protection of political free speech. Because of this separate existence created by legal fiction, a corporation can exist beyond the lives of it’s shareholders.
Centralized management. Corporate law provides an organizational structure to operate the business and the capital of many individuals. The basic structure is as follows. Shareholders are the owners of the corporation, directors are elected by the shareholders and are the locus of power. Directors appoint the corporate officers. Directors approve policy and procedures of the operations of the corporation. Corporate officers carry on the day to day activities of the corporation and serve at the pleasure of the board of directors.
Transferability of ownership interest. The issuance of shares creates a kind of currency in with value based on the assets owned by the corporation or the financial performance of the corporation. Shares facilitate transferability of ownership. This enhances the marketability of the entity and allows for an exit strategy for the owners.
Limited liability. A corporation shields its owners from personal liability for the debt of the corporation.
Author:Mark W. Bidwell
Advantage of a Corporation over a Sole Proprietor or Individual
Transferrability of Ownership Interest
The issuance of shares creates a kind of currency in with value based on the assets owned by the corporation or the financial performance of the corporation. Shares facilitate transferability of ownership. This enhances the marketability of the entity and allows for an exit strategy for the owners. Exit strategy is also known as succession planning.
A corporation shields its owners from personal liability for the debt of the corporation. It is important to understand protection is only from corporate debts and not personal debts of the owner.