Monday, November 23, 2015

Why Do Most People Hate Paying Legal Fees?

It happens on a weekly, sometimes daily basis. I receive a question from a blog reader and the question is not general in nature; in fact, the question seeks legal advice (often on a fairly significant matter that involves potential liability) which can only be provided after thoroughly reviewing the reader's governing documents and rendering a legal opinion. My standard response is usually: "Do you have an attorney for your association?"

Ninety percent of the time, the blog reader responds that the association does have legal counsel and then offers a reason why the association's counsel was not contacted with the question. The reasons run the gamut from the lawyer being inept to the reader thinking the question was not important enough to contact the attorney.

I understand, however, that the real reason is often that most people hate paying legal fees and if they can get a free first or second opinion from a blog, other social media source or even just a retired out of state lawyer at a cocktail party, all the better in some minds. These efforts to avoid paying legal fees cross many practice areas.  For example, I am amazed at how often people will sign contracts without counsel's review and with apparent disregard for crucial items like warranties, indemnification, adequate insurance coverage, dispute resolution and venue and more.  On the other hand, people facing criminal charges are far more likely to pursue and pay for quality legal assistance in order to avoid going to jail.

Unfortunately, community association directors often believe they can squeak by with advice from whatever source is cheapest or, even better, free. Some boards will go so far as to pressure their association manager to provide such advice under the belief that the service falls within the scope of their management fee. In terms of lessons being learned the hard way, many who seek discounted or free legal advice get what they pay for and overlook the fact that when things go awry (as they often do when human behavior is involved) that they will eventually need experienced legal counsel. Such representation will be more costly and more complicated as a result of the delay, especially if litigation results. 

What if instead of avoiding legal fees like they were the plague, board members and managers simply became more sophisticated consumers of legal services? When deciding whether or not to seek proper legal advice on a matter, that decision must include an acknowledgement of what costs might ensue should things go wrong. Moreover, legal expertise, successful track record and a communication style which facilitates trust, understanding and dispute resolution are all more important factors than hourly rate when choosing an attorney.

Abraham Lincoln is quoted as saying, "A lawyer’s time and advice are his stock in trade." As lawyers, we are selling our expertise to consumers who hopefully understand the difference between what is free and what is in their best interests.

Monday, November 2, 2015

Why should your community consider trademarking its name and logo?

Many communities rely upon name recognition and a certain style logo to attract attention from potential new purchasers as well as to enhance real property values for existing owners.
I live in a country club community that has a distinct font and logo which is intentionally highlighted on our association website, advertisements, business cards, stationary and, naturally, our community signage. For the sake of this blog, we will call my community Ridgeview Golf Estates. We have spent considerable effort and money over the years to build a certain mystique around the name and the look. What we failed to do, however, was to register the name and logo as our trademark and, as a result, we have had businesses in the vicinity trade on our good name over the years to the point that we now have the Shoppes of Ridgeview Golf Estates (with some less than desirable stores) and neighboring communities who use Ridgeview Golf Estates in their name even though they are not affiliated with my community. Often, well-known communities wind up with local realtors, security and pool companies and other vendors incorporating the community name into their business name in order to trade on the community's brand and reputation. By putting their names in the public eye, such exposure can give rise to trademark rights for these businesses which a community can later find difficult to challenge and can also make it harder for a community to later trademark its name in the face of these other trademark rights.
While a federal trademark registration may not be needed for most community association purposes, state trademark protection for your community's name and logo is advisable for a number of reasons.
A search of the all-state database will reveal online trademark records with other marks that begin with the words contained in the community's name or the like. Often, this search will reveal business names that have or include your community's name. Even if similar business names may not be registered as trademarks, nonetheless these business names could be used in such a way as to develop trademark rights in the companies that are using these names.  Thus, there should be some attention paid to these names as trademark rights could exist in them even if the business owners in question are not fully cognizant of their having such trademark rights.
It is important for communities to be aware that a third party could be accumulating trademark rights in a mark containing some variation of their name even without any trademark registration or any company-name registration or any other type of registration. The mere fact of using a name or mark in the public eye automatically gives rise to trademark rights. If these third-party users are far enough away from the community geographically, an argument can be made that the association should not be prevented from registering its own trademark.
In light of what else is out there in the public eye, your Intellectual Property (IP) attorney may suggest that your association should claim your rights narrowly by limiting your claim to only a stylized mark with specific design elements of your logo.
Speaking of the design portion of your mark, there are copyright issues that come into play. Copyright exists in the artwork as such, whether or not included as part of a trademark. Normally the individual artist who created the artwork would own the copyright in it. Alternatively, if that individual created the artwork in question as part of his or her normal job duties for an employer (such as an ad agency) then that employer would own the copyright in it. Either way, an association could not make use of this artwork as part of its trademark without authorization from the copyright owner, or without having that copyright owner transfer over to the association the copyright in the artwork. The fact that the association paid for the artwork to be prepared does not in and of itself accomplish any such transfer. On this subject of third party rights or creations generally, it is important for associations to be aware that as they progress further in preparing materials and taking other actions as to their websites, social media sites, advertising and other materials, they should be mindful of the possibility of trademark or copyright issues arising by virtue of using the materials of third parties.
If your association is taking the time to thoughtfully create a name and logo, it only makes sense to protect that investment. I am always surprised that most developers do not take the time to register as trademarks the names and logos of the communities they create. However, even if your developer neglected to do this, your Board of Directors is able to do so and should consider adding this item to your "To Do" list. A state trademark registration is not cost prohibitive and can provide a lot of peace of mind for years to come. Directors, managers and developers wishing to learn more about the trademark process can contact me at