Jeff Patterson
General Partner
Harvard Fax
Los Angeles
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The real problem is not your corporate name but your use of the name as a trademark. A corporate name identifies the legal entity that is the company. That name must be registered with the secretary of state in the state where the company was incorporated and in every state where the company is conducting business. But once you begin advertising under that name, or in other ways associating it with your goods or ser-vices, it becomes a trademark.
A trademark is any name, word, symbol, or device used to indicate the source of a product or service and distinguish it from others. A trademark exists upon its first association with goods in trade, says lawyer Pam Walter of Gardner, Carton & Douglas, in Chicago, even if a company has not registered it. Registering a corporate name does not protect or reserve a trademark -- it only ensures that another company will not incorporate or do business in the same state with a "deceptively similar" name.
If it was there first, your New York competitor has at least common-law trademark protection against other "confusingly similar" trademarks within its product and geographic markets. It may also have registered a trademark at the state and federal levels.
If you insist on fighting this battle, find out what kind of trademark the New York company has -- common law, state, or federal. If it has not registered at the federal level, you could obtain state trademarks yourself in states where your competitor does no business. You could get common-law protection in those states just by selling something there, or you could file with the states' patent and trademark offices. You could even file for a federal trademark if the New York company hasn't. But Walter advises against that; there's a five-year waiting period, and the other company would likely find out about the application and block it.
As a national company, you probably want to do business in New York. If you decide not to register your current trademark, the other option is to change your name. If New York is the only state where your competitor does business, you could operate under a different name there, with different catalogs and invoices. Perhaps you could persuade the other Harvard Fax to buy the name from you or to pay costs you incur by changing your name, which it's likely to consider only if it wants to enter states where you hold the trademark.
Above all, Walter says, "always do a trademark search and registration." Law firms can conduct a crude search through an on-line database (cost: $20 to $30 for a basic search that turns up few marks, up to $150 for a more detailed search). Trademark-searching firms offer a much more thorough search, and, for less than $300, will even check out common-law or unregistered uses of a mark.
Call the Patent and Trademark Office (703-557-4636) for more information. Walter also suggests Intellectual Property -- Patents, Trademarks and Copyrights -- in a Nutshell (West Publishing, 1990, $15.95; 800-328-9352). And call the United States Trademark Association (212-986-5880) for its $5 Guide to Proper Trademark Use.
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Intramural Entrepreneurs
In our privately held company of 105 employees, we have a couple of high-energy people who want to work on special revenue-generating projects after-hours and on weekends. That presents two problems: compensating them for their efforts without making others jealous, and ensuring that the outside projects don't compete for time with their regular workload. Any suggestions?
Howard M. Collett
President
WordPerfect Publishing
Orem, Utah
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A gain-sharing program would be simplest, says Tony Mathews, a benefits consultant at BSI, in Los Angeles. Gain sharing rewards employees with a share of the increased revenues they help produce. Since you can't pay them forever, however, and since gain sharing should encourage employees to generate projects continually, set the percentage on each project to diminish over time. Mathews suggests setting a baseline for productivity in employees' regular work, so it isn't neglected. Also use separate accounting for the projects. The National Center for Employee Ownership publishes Gainsharing and Employee Ownership ($25 for nonmembers; 510-272-9461), an introduction to various companywide programs.
Mathews wonders, though, why you don't make these projects part of your employees' jobs. If a project is worthwhile, why make employees work on it after-hours?
Jack Stack, CEO of Springfield Remanufacturing (see "The Great Game of Business," June 1992), in Springfield, Mo., sets aside about $250,000 a year in risk capital for projects developed by employees. Because projects are conducted on company time, employees who undertake them must justify the expense of the hours spent away from their usual work. You, too, could use employees' hourly rates to convert hours worked to a cash figure and count that as their financial contribution to the project. Incorporate that figure and the corporate capital contribution into a cash-flow statement. Then pay employees a return based on their personal investment. Control cash, Stack says, and time will take care of itself. "I tell them, 'When you're out of cash, you're out of a project.' Then people have a tendency to get things done." n
-- Reported by Michael P. Cronin, Christopher Caggiano, Vera B. Gibbons, and Rachel S. Tsutsumi.
