This year at a4uexpo London, after I was finished with my talk, I held a clinic session in the exhibition hall. The idea is that people with a legal question come along for a chat and to ask questions. My job was to give some quick practical advice before moving onto the next 'patient'. It was an interesting way to meet new people and hear about new businesses - sitting at the table there is no way of knowing who will turn up or what advice they might need.
Of course, I can’t say too much about people I spoke to or the exact questions they asked – all of that is confidential. However, I can share some anonymised versions of the questions I was asked by a couple of the delegates and the advice I gave in response.
Readying yourself for an exit
The first person to visit the clinic was just starting out in the world of affiliate marketing. She had a great idea for a clothing price comparison website with a few interesting USPs. The domain had been registered and the website was live. Traffic was on the way up but it was still early days. The question asked was an open ended one: ‘What should I do now to be ready for an exit in a few years time'.
The first recommendation was to make sure the freelance designers and developers which built the website signed comprehensive assignments of the intellectual property of the website, including the look-and-feel and any back end code, to the company. The last thing a purchaser wants to read in his due diligence report is that the target company can't prove it owns its main asset.
The second thing I recommended was getting the trade mark registered. It's a pretty cheap job to do but can add huge value to a business. I suggested that this delegate also start registering accounts and user names with social media platforms, even if she didn’t have the chance to make use of all of the platforms just yet. The important thing is to make sure the user names you want are available when you get around to using them. Like the assignment of the website IP, it’s another key step to making sure the business owns or controls all of the IP it needs to run.
Third-party trade marks
The next person to visit ran an affiliate website promoting electrical goods. The affiliate had registered a few domains and one or two of them contained third party trade marks as part of a longer URL. My advice was that this most likely constituted trade mark infringement and there was a risk that the trade mark owner could claim all of the profits made by the use of its trade mark. There are some defences to the use of third-party trade marks, but unfortunately this affiliate was not making the most of them.
However, the domains had been up and running for a couple of years and the trade mark owner had never been in touch. It seemed very likely that the trade mark owner, a famously aggressive defender of its brand, knew about the domains but had chosen to take no action. On that basis the affiliate took the 'wait and see' option. It can be a risky approach but in the meantime the website continues to generate commissions.