Entrepreneurship Chapter 6

What is a trademark?

- A trademark is a word, symbol, or design combination that identifies the source of certain goods - it is used to identify a product - unlike a patent, a trademark can last indefinitely - ex: apple, nike swoosh, red tab for levi jeans

What is the Sarbanes-Oxley Act?

- Act passed in 2002 & amended in 2010 - CEOs are required to vouch for financial statements - directors must meet responsibilities of internal auditing & control - any attempt to influence the auditor may be seen as a criminal act

What is patent infringement?

- an entrepreneur can't infringe on someone else's patent - but many inventions are improvements on existing products (this may be an option & licensing may be an option)

What is licensing?

- contractual agreement giving rights to others to use intellectual property in return for a royalty or a fee - any information/technology protected by a patent, copyright, or trademark may be licensed

What are noncompete agreements?

- documents that are prepared by an employer & signed by employees to protect valuable assets (product info, clients, marketing ideas, and unique strategies)

How might hiring a lawyer be helpful for an entrepreneur?

- entrepreneurs usually don't have a lot of experience in different laws and regulations - may work on a retainer or for a one-time fee - legal advice is necessary to ensure appropriate decisions are made at each step of setting up a new venture

How is licensing beneficial?

- it can increase revenues without the risk and cost of a start up - could be a way to start a new venture even when the idea may infringe on someone else's patent

Why is insurance important for an entrepreneur?

- it is in their best interest to have insurance in case of any problems that might occur ex: property, casualty, life, workers' comp., and bonding

Why is it important for entrepreneurs to implement methods of confidentiality when they first start out?

- it will prevent problems in the long run

What is a contract?

- legally binding agreement between two or more parties as long as certain conditions are met - never rely on a handshake if the deal cannot be completed within one year

What are trade secrets?

- protection against others revealing/disclosing information that could be damaging to the business - not covered by any federal law, but is recognized under common laws for each state - may require employees to sign an agreement so they can't give out the "secret"

What is product safety & liability?

- responsibility of a company to meet legal specifications for a new product covered by the consumer product safety act - passed in 1972 & amended in 1990 and 2008 ex: IKEA had a recall on children's dressers

What is a copyright?

- right given to protect others from printing, copying, or publishing any original works of authorship - doesn't protect the idea so it can be used in another manner - they are registered with the library of congress & don't require an attorney - copyrights will last the life of the author plus 70 years ex: books, scripts, articles, poems, songs, sculptures

What are four requirements of a trademark?

1. completion of a written form 2. drawing of the mark 3. five specimens showing actual use of the mark 4. the appropriate fee

What are the steps in the patent application process?

1. file a provisional patent application(establishes a date of invention conception) 2. application is then made (introduction, description, and claims section) 3. include a declaration signed by the inventor 4. once the application is sent, the invention becomes "patent pending"

What are four things to know before signing a contact?

1. understand terms & conditions in contract 2. cross out anything you do not agree to 3. do not sign if there are blank spaces, cross them out 4. make a copy of your files after signing

What is a patent?

A patent is essentially a contract between the government and an inventor. - important to companies like Nike or Reebok that want to protect their designs/logo

What are three examples of patents?

Utility patent: grants owner protection from anyone making, using, and/or selling the invention (lasts 20 yrs) Design patent: cover new, original, ornamental, and unobvious designs for articles of manufacture (lasts 14 yrs) Plant patent: issued under the same provisions as the utility patent and cover new plant varieties

What is intellectual property?

this includes patents, trademarks, copyrights, or trade secrets that are held by an entrepreneur