In a recent Tips from the Top column, we discussed key legal considerations when launching an online business. Today, we dig a little bit deeper to provide you with detailed answers about claiming your intellectual property, including sales and delivery costs, avoiding scams and more.
In part two of our legal Q&A, our General Counsel, Tanya Avila, continues her discussion with an in-depth look at more ways to help bulletproof your business.
Volusion is not providing legal advice, rather general advice for readers. For more specific information, please seek individual legal counsel.
What’s the best way to claim intellectual property?
There are a few key areas that you’ll want to consider when determining the type of intellectual property you’ll need to claim. Consider the following:
- Copyrights – Copyrights include your rights to a fixed expression, such as a movie or song. In the US, you don’t need to register this to obtain the rights. However, registering will give you better enforcement options, including increased damages should you need to formally enforce your rights.
- Trademark or Services mark – These are symbols used to identify the source of a good or service, such as Volusion as the source of ecommerce software. To register your trademark you can hire a service, or complete an application online at the US Patent Trademark office. You need to actively police your trademark to keep the exclusive rights. It’s also important to note that trademarks can expire and need to be renewed periodically.
- Patent – A patent is a protection on ideas, which needs to be new, novel and not obvious. For something like this, you’ll want to hire an attorney that specializes in patents. A general business lawyer won’t be able to navigate all issues as expertly as a patent specialist – this is one area where specialization is important.
- Trade Secrets – This is one of the most common and underrated categories. Anything that your company guards that gives you a competitive edge is a trade secret, like a secret recipe. You don’t need to get this in writing, but you should document steps to protect this secret, especially when other employees or associates have access to it.
Do I have to include sales taxes and delivery costs in the price that my customers see?
For delivery costs, you don’t have to include this price. As far as sales taxes are concerned, it depends on your region (e.g., city, state, country) for specific requirements. There’s a lot of confusion about sales tax these days, but it boils down to knowing that there’s always sales tax on every sale. Sometimes the tax needs to be collected and reported by the seller, and sometimes it’s the buyer’s responsibility to report the use tax. Whether it’s your responsibility to collect or not depends on where the customer is located in relation to you.
You’ll always have to collect and report sales tax on sales made within the same region your store is based out of. You most likely don’t have to collect or report sales tax on sales made to customers outside of that region unless you have a “nexus” to that region, i.g. a distribution center like Amazon has in California. Some states have recently tried to narrow the definition of “nexus” to be able to capture more taxes from the seller. These laws are relatively new and don’t yet have a huge impact on small business, but it’s definitely something to keep an eye on.
What are the best ways to avoid scams or fraud?
It’s always a good idea to check out Fraud Score or other technologies to assist with avoiding potential issues (Fraud Score is a tool that Volusion offers to help gauge the risk involved before processing orders). You can take other proactive steps by never giving a third party permission to setup your site for you. This will keep you from getting locked out of your site and make you less susceptible to scams.
It’s also important to note that you should stay up-to-date on ever-changing scams that exist, as they’re constantly evolving. Additionally, having an SSL certificate will help to ensure safe credit card transactions as well as promote the legitimacy of your website.
Use your best judgment when visiting another site, because if it feels unsafe, it probably is. If you feel like you or your customers have been compromised due to a scam, there are key steps you can take to report fraud-related issues, such as, reporting the incident to a host, the local police or filing an online complaint with the FBI.
That’s a wrap! We hope we were able to provide you with helpful hints to keep your business in fighting form.
Stay tuned to Tips from the Top for future advice from key Volusion experts to help you stay profitable.
Tanya Avila was named General Counsel of Volusion Inc. in October 2010. Avila oversees all aspects of Volusion’s legal affairs around the world as well as managing Volusion’s compliance and brand enforcement efforts.
Avila began her legal career at internet giant GoDaddy.com in Scottsdale, Arizona. Her passion for technology and law provided unique insight into matters related to new product development, hosting liability, and brand protection. After moving to Austin, Texas, Avila served as General Counsel for Wincor Nixdorf USA Division. In that capacity she was responsible for the operation of the US legal department of an international leader in financial and retail technology.
Avila is a graduate of Arizona State University and Arizona State University College of Law. She is a member of Arizona and Texas bars. In her limited spare time, Avila enjoys spending time with the future boy band, ‘The Avila boys,’ otherwise known as her sons Zander, Gabriel and Slate.