Episode #47: Legally Protecting Your Toy Ideas with Stephanie Pottick, Esq
Listen Now
Tap Play Below or Listen On iTunes | Spotify | Google Podcasts
Today’s episode is an extremely important topic. We’re going to talk about how to protect not only your toy ideas but also your toy business. You’ll learn the 3 most valuable contracts you need to have in your arsenal as a toy business owner, as well as what you need to look out for when you’re signing any work agreement as an employee. The goal of today’s episode is to give you a better understanding of the nuances in trademark law, the high value of a copyright, and the importance of the language in your contracts. The goal of today’s episode is to illuminate what you may not already know so that you can make more informed decisions on when to bring in legal help depending on your particular circumstances. Today’s podcast guest is Stephanie Pottick, Esq. and she comes armed with a lot of valuable information that you just won’t want to miss toy people. Pop your earbuds in, take a listen, and get ready to protect those valuable toy ideas.
-
Connect with Stephanie on LinkedIn.
Learn more about Pottick Law, Legal Advice Before You Need A Lawyer® by clicking here.
Join Toy Creators Academy and make your toy ideas REAL.
-
Azhelle
You are listening to Making It in The Toy Industry, Episode Number 47.
Intro/Outro + Jingle
Welcome to Making It in The Toy Industry, podcast for inventors and entrepreneurs like you. And now your host Azhelle Wade
Steven
Well hey there toy people Azhelle Wade here and welcome back to another episode of Making It in The Toy Industry. This is a weekly podcast brought to you by thetoycoach.com. If you are an aspiring inventor, or toy entrepreneur, then listen up because Toy Creators Academy is opening for enrollment in February of 2021. And some of you may not know this, but Toy Creators Academy grads have an opportunity to pitch their toy inventions to some major toy companies once they graduate. So many of my students have told me that they gained so much clarity from the program as far as what next steps they should take to sell their ideas on their own, or to license them to toy companies on their own without the help of an agent. Now originally, this episode wasn't scheduled to be released until next year, but after some reactions and engagement based on some recent social media posts of mine on Instagram and Facebook, I got the feeling that you guys really needed to hear this episode today. So I rushed the editing and got it out to you right away. Today we are going to be talking with a legal licensing and business consultant who specializes in protecting toy IPS. We're going to cover everything as far as trademarks, copyrights, patents, and then we're Of course going to cover contracts like what's really important to know when you're working in the toy industry or starting your own toy business. So listen up to the entire episode. I don't want you to miss a thing.
Azhelle
Today. My guest is Stephanie Pottick Stephanie is a legal licensing and business consultant who is passionate about helping people like you, entrepreneurs and inventors protect their brands and businesses. Steph focuses on trademarks, copyrights, contracts, and licensing. And before becoming an attorney, Stephanie was actually an executive at Sky Kids Incorporated, which is a toy company that was based in New Jersey. And that's where she was involved with various aspects of the toy business including licensing, sales, marketing, product creation, manufacturing, and so much more. Which means she knows exactly where you're at. Stephanie's slogan is legal advice before you need a lawyer. And her goal is to help people by protecting them legally so they can minimize their risk while working towards success. Stephanie, welcome to the show.
Stephanie
Thank you, Michelle, thank you for having me. It's a pleasure to be here. I listened to your podcast and I love it.
Azhelle
I already know I know you're also women in toys webinar giver like myself and people said great things about your webinar. Even my students said great things about your webinar and what I love. What I love about you when I first started talking to you to work with you was that you worked in the toy industry. So it means that you understood my worries and my concerns from like a product and a business side. So what did you do exactly at Sky Kids?
Stephanie
Again, a little bit of everything. So you know, we came up with a product we had an r&d team which you know a few of them and now a different company
Azhelle
Mutual friend, Yeah
Stephanie
mutual friends and but yeah, we I mean everything from start to finish in the life of a product. So if our logistics guy went on vacation, I handled the logistics I worked a lot with sales and marketing as well. So I would go to Toys R Us and you know just help really from from start to finish. And you probably would have seen some of our toys we did versus vas plate Wizard of Oz dolls, Pizza Hut and Burger King play foods and Sesame Street products and a lot of arts and crafts and private label and branded goods for Toys R Us and target and other retailers. Oh,
Azhelle
it's awesome. Well, why? Why did you decide to leave the product side and become a lawyer? What happened?
Stephanie
I always wanted to be an attorney. And I used to get frustrated working with our attorneys because they never really understood the business. And you know, I'd have to explain everything to them. And I thought, well, if I ever go back to law school, I'm going to be a better lawyer just because I get it. You know, I've walked in the business owner shoes. So when I had the opportunity to do that I did. I went back to law school in New York and I focused on intellectual property protection. And once I graduated, I just started working with clients like Sky Kids and helping protect businesses and brands.
Azhelle
know people are so excited, they heard intellectual property and they're like, this is what I need. Right now people always want to know more about this, you can never give too much information.
Stephanie
It's true. It's true.
Azhelle
Yeah. So actually, I kind of want to bring up something. So you have a slogan, legal advice before you need a lawyer, which is a registered trademark. I want to know, why did you choose to register that trademark?
Stephanie
Oh, very good question. Yeah. So so you know, just just as I would say, with most other people, when you have when you have something that's unique to you, and it's protectable, why not protect it? I mean, my whole philosophy is, is getting legal advice before problem happens. Just knowing what your options are figuring out being educated, knowing what to do, that saves so much time and energy and money and minimizes lawsuits in the future. So, you know, I kind of thought, Well, yeah, that really describes me. So I said, Well, I'm gonna walk the walk and talk the talk and file my own trademark.
Azhelle
I love it. And why did you come up with that slogan?
Stephanie
I, you know, I think probably, because when I was in business, I saw a lot of times when and, you know, when we as product creators, you know, whether it's an entrepreneur or an inventor or established company, you have the same risks, if you're smaller, your risk is actually bigger, because, you know, if someone sends a cease and desist or filed the lawsuit, then really, you could go bankrupt, it could be you know, really, you know, just just break everything. But even you know, if for a company, it's probably less so. But I saw that when we did protect ourselves, we would, it would definitely make a big difference in the long run. And I, you know, just I've seen what happens when you don't, and it's pretty ugly. So whatever you can do up front, I kind of feel is a good way to go.
Azhelle
Now that you brought up actually cease and desist. What does that mean? What is that is that really what you should do if somebody infringes on your registered trademark,
Stephanie
sometimes First, you have to figure out if you have something protectable and whether you've protected it. And then you have to also with trademark, it's very, there are a lot of nuances in trademark law. So even if you know and you had posted about this the other day, and if someone has a registered trademark, or someone's using it longer, you know, it's kind of like a state versus federal law fight. You don't even want to go there. You want to actually speak to someone who understands what you know, to look out for, figure out what's going on. And then you can decide whether or not to do a cease and desist. I will give one really good recommendation today. Well, I hope more than one, but this is one time attention to with a cease and desist letter, if you actually threaten a lawsuit. And you know, given the circumstances, the other side could take that cease and desist letter as a ticket into court, and then file against you. They can do a pre emptive pre emptive lawsuit again. Yes, yes. So, you know, sometimes clients really, they're like, you know, we want a really strong letter. I'm like, Well, you know, let's talk about this for a little bit. Sometimes, sometimes you do, it depends on the client. But I guess that's the point. You really want to understand what the consequences are, before doing something like that.
Azhelle
Oh, that's a good takeaway. So if you saw somebody using your trademark that you did register, and it is on the principal register, what should you do?
Stephanie
I would investigate how the other person is using it or company, I would want to know if they're using it longer. That's a big question. But yeah, generally, if you have trademarks and intellectual property, especially trademarks, you have to enforce you have to police in the marketplace. So you should nine times out of 10 take action.
Azhelle
Interesting, but maybe not tell them you're gonna see them.
Stephanie
There are ways around it. You can always be like, hey, you may not realize this, but should you know you've been using my Registered Trademark? Yeah. Yeah, sometimes people really don't know. Sometimes they do. So that's why everything is kind of fact intensive. And I should just say, right here, when I was in law school, I think the most depressing day of law school for me was when, you know, I realized, oh, there really is no right or wrong answer or yes or no. It always depends on the circumstances and the facts. Yeah. So it's just one of those things where it's, it's, it's all about you, it's all about your situation. So you definitely want to figure out what's going on before you know, making a plan of action.
Azhelle
So now that we're talking about trademarks, I'm thinking what about copyrights? How is a copyright different from a trademark? Let's start there.
Stephanie
Okay, so I mean, there are three basic especially for you know, for inventors and entrepreneurs and business owners. There are three main types of intellectual property. The first is the trademark that protects your brand. You know, think of the names like Nike or Coca Cola or slogan like just Do it or my legal advice before you need a lawyer. You know, but there are also some non traditional if you've ever the the NBC chimes, those are trademarks. And did you know I have to do before we go to copyright? That Hasbro protected the smell of playdough. So anything that kind of reminds you? Oh yeah, that's the brand. I know what that is the mecca trademark.
Azhelle
You can trademark a smell.
Stephanie
Yes. And colors. It it's much harder than a name or slogan for sure. But you can you can with with patents, that usually just protects inventions. So there are two main types, a utility patent and a design patent. copyrights. Think of that as more of the creative protection. So logo and illustration content, a song movie, that logo can be trademarked or copyrighted. Yeah. So again, it just depends on the situation. If you hire a third party, to create your logo, or do your website, or you know something else for you, you have to be aware that even if you pay for it, you may not or probably not the owner, unless there's something else in writing.
Azhelle
Yes, that's so good. Yeah, that's a really scary, but also very important. Yes. One of the things I want to bring up because I know that with trademarks, everyone says, Don't put your logo as a trademark. First, you want to trademark your the the words, the plain text, right, because somebody could change it to Windows at 20% or something and then argue that it's different. And it wouldn't confuse somebody for your brand.
Stephanie
You know, you can't just change it's made up, you can't change something 20% or change five things or, you know, the inquiry into whether something is confusingly similar or substantially similar and copyright that's really backed fact intensive. We used to do our instruction sheets, we would draw out and type before you know, like computers were on every desk, right? We type out the instructions and then hand draw the the illustrations. Yeah, yeah, exactly. So no, right then and there, the protection is is created, you have a copyright, that's different than filing an actual application getting registration.
Azhelle
So why do you file the application if you already have, if you already have protection,
Stephanie
the main reason is because you need the copyright registration in order to enforce it, there was a recent Supreme Court decision that states that if you want to sue someone for copyright infringement, you need to have a registration of valid registration. And that makes sense because you have to have something in hand in order to sue somebody else.
Azhelle
But then suing is so expensive, we don't even want to go there. Can't we just do arbitration?
Stephanie
You I mean, you can and but that's, that's where you know, contracts will come in. So you know, when you're working with someone else, you can do that. But with copyrights, and a lot of people in your community are creators. If you file a copyright application, let's say for a photo, I don't know, if everyone's heard of like Getty Images, if you use the photo on people, they'll send the cease and desist letter. Well, they basically take an image, take a photo, file the copyright, get the registration, and then they you know, they look on the internet who's using it, because with copyright infringement, damages don't matter. If you file a copyright registration, again, under certain circumstances, you can get up to $150,000 without showing any damage. Wow, exactly as and attorneys fees, and the government filing fee is $65. So it's the big bang for your buck.
Azhelle
And the big bang for your buck.
Stephanie
They've been changing how you can apply for for different things, unpublished works, it doesn't have to be one particular thing. So yeah, it's really you know, it can be very cost effective. And you know, have you heard of the hangover two story?
Azhelle
No.
Stephanie
Okay, go. No. So who do you think owns Mike Tyson's tattoo?
Azhelle
I don't know. Well, now, I don't think it's my case.
Stephanie
And the tattoo artist, the copyright and the tattoo on Mike Tyson space. So
Azhelle
What?
Stephanie
Yes. So I'm sure I'm sure mike tyson could do whatever he wants with that, because yeah, I'm sure that the tattoo artists would not want to go up against Mike. Exactly. But but the Hangover 2 do remember, I don't know if you've seen the hangover 2.
Azhelle
I think I have.
Stephanie
So Ed Helms, that's the one that Ed Helms was the bachelor and he came out with Tyson's tattoo. He came out of the bathtub. Yeah, the tattoo artist must have been watching TV and said, Hey, wait a minute. So the commercial for hangover two, and said they're using my tattoo without my permission through using my copyright because lawyer one They filed a lawsuit. Yes, they filed a lawsuit against the movie studio. And the judge says they filed for copyright infringement. And also to stop the movie from coming out. Ah, yes. Because injunction, you know, I don't want to get so personal. Yeah, injunction is a remedy for intellectual property infringement, which is a huge tool. Anyway. So the judge says, Okay, I'm not going to stop the roofie from coming out. But tattoo artists, you have a decent copyright case, I'm going to let the case move forward. So what happened was they settled, and the fact that the DVD and the you know, the rerelease had the same and Holmes had that same tattoo. I think that the tattoo artists for $65 at that point, I think, was $35. For the filing fee. That was the best bang for his book, because
Azhelle
Holy crap,
Stephanie
I can imagine he's sitting somewhere in his beach house being a pina colada. Ah, oh, holy crud.
Azhelle
That's incredible. But he had to shell out money to go through this lawsuit.
Stephanie
Yeah, yes. But it was worth his while. Yeah, I'm sure.
Azhelle
You know, but like, how do you how can you set yourself up for success? Because like, how do you know if you'll win, like, I'm just guessing that there's anything that could happen, that could just make you lose, even if it is your work? You know,
Stephanie
it's true, you know, and that's it, you know, and that that really is the issue. That's why I think it's important for for people starting out or anyone who has anything of a creative nature to protect what they can, because you want to give yourself options. If you don't, your options may be gone. You know, it's a matter of sometimes it is a David versus Goliath. But there have been when I went to law school, we had we did, we reviewed a lot of Mattel cases, where there was Mattel was doing the little guy. And the little guy was represented by, you know, the ACLU or some organization that said, Hey, we know that you small artists can't protect yourself. We're gonna help you. You know, you never know. Never know.
Azhelle
Okay, so if so what if one of my listeners is listening? And they're like, oh, I've had a book and the book has been selling for, let's say, the last three years? Yes. And I'm listening to this episode. I'm freaking out. I'm on the copyright website. Right now. I'm trying to copyright my book. Right. So they, so they copyright their book, and then they see somebody had just ripped it off blatantly. And maybe they've been selling it for the past year? Do they have the right to defend their work if they didn't technically have their copyright when that person ripped it off?
Stephanie
A very good, another? Very good question. So with copyright, you can't enforce until you have the registration. However, it doesn't matter is once that registration is, you know, is in your the person's hands, then they can they can take action. Here's something else too, you know, even sending a letter to that third party that's been using it. They may not know that third party may not know that you need a valid copyright registration. Yeah, a lot of people don't really understand intellectual property, which makes it you know, which makes it sometimes harder and sometimes easier to enforce.
Azhelle
So interesting. Okay. Can you dispel one myth right now, because I hear this way too often. Okay. Everyone's like, Oh, you just created something written, just like put it in an envelope and mail it to yourself registered mail and never open it. And that's your copyright.
Stephanie
I have heard that it's they think they called it the poor man's copy.
Azhelle
Yes, yes.
Stephanie
It's basically this. So it's not, it's not creating any rights that you didn't already have. What it's doing, what it's doing is if you've created something, and you're showing it to a third party, and you've sent it to yourself, and that third party does something you can you know, if you can show that you have sent it to yourself beforehand, it wasn't opened, if you ever have to go to court, you can be like, Hey, I did it before I showed it to them before they actually came out with their product or their book or whatever was so interesting,
Azhelle
like an extra thing that might help.
Stephanie
Yes.
Azhelle
So now, I mean, let's just touch patents a little bit, because we've been all have been trademarks and copyrights. What's the difference with a patent? I mean, you already mentioned it a little bit, but would you like to go in more depth? Sure, a little bit
Stephanie
Effectively, if someone comes up with something that is non obvious, and new and novel, then it could be you know, unique design. And again, when you get the the patent, then you can enforce your patent to basically prevents other people from using it, but you have to enforce it. And utility if you've come up with a new way of doing something. Yeah. And then yes, sometimes that's really important. And you know, I think coming back to the original point of what is someone to do if they're starting they don't even know where to begin. I think it's important to figure out all What do you have, what kind of protections can you get, and then if you're limited in how you know and funds and what you should protect what's going to give you the best protection For the least amount of money when you can you know that if someone's really come up with something amazingly new, I mean, I would probably look at the patent first.
Azhelle
Yeah, no, I agree. 100%. This is gonna be our last major topic. But it's contracts. And I want it to be like part of my mission to just make sure that all these new toy people coming into the toy world are really paying attention to the things that they're signing. Yeah, there's so many different Yes, elations out there and document and no one is the same. If anyone tells you it's like a standard, there is no standard,
Stephanie
There is no standard. Absolutely, yeah, absolutely.
Azhelle
And if you don't understand a word, don't just say like, I'll just, you know, figure it out and the rest of the paragraph No, like, you, if you don't understand a word, you might need to consult a lawyer, and it seriously can impact the rest of your career, even if you're just starting out. So I would just love to talk about like, what are some of the different kinds of contracts that businesses and brand owners should think about having in their arsenal? Or even just being aware of maybe they're just having a toy career? Like, what should they be aware of?
Stephanie
Yeah, well, okay, if someone is having the toy career, then one of the things they'll probably have to sign is an employment agreement. And right there, that's going to determine what that employee can and can't do outside the scope of you know, of the job. And I think a lot of that is probably to to the the Mattel and Brad's case, that happened a few years ago. So that's something to pay attention to, if you're actually working somewhere already, if you're just doing your own thing, you know, you don't have to worry about that clearly as much. But in terms of contracts, you hit upon a really important point to show and that is, don't sign something unless you know what it says. You know, I think a lot of times, even even if inventors and entrepreneurs have protected their own intellectual property, without a lawyer, you know, which is fine, if someone feels comfortable to do it, and knows what they're doing, you know, if that's okay, but that contract, it's worth hiring someone to do to look at the contract and explain what it means. So there are a few different types that I work with a lot, NDA is the non disclosure agreements, you know, again, there, they should be similar, but one size does not fit all NDA. So usually, if you have an idea, and you want to show it to a third party, whether you want some sort of agreement that that stops them from taking your idea, and moving forward, and you know, taking it themselves. So that's the basic gist of that. If you're lucky enough to get someone to license your product or brand, then the licensing agreement is really important. It has very specialized terms. And you really want to understand because one word can make the difference between losing ownership of your intellectual property. And I did have someone come to me years ago, and I felt really well. What's that word?
Azhelle
We need? Oh, what
Stephanie
what what?
Azhelle
We need to know that one word.
Stephanie
I wish I could tell you. It could be it could be the lack of a know or adults or
Azhelle
Oh my god,
Stephanie
unfortunately, you know, it's funny, because so so the the example I was going to give was someone had given me a license, a licensing agreement, it was called a licensing agreement. And she just had a question, find it, like a couple years prior. And she had a question about loyalty. So I reviewed it, and then I came back and they said, You do realize you don't own your intellectual property anymore. And she said, What do you mean, she was really upset, which, understandably, so? I said, you don't you gave it away in the contract? She goes, Oh, look, it's called a licensing contract.
Azhelle
Oh, my God,
Stephanie
I know. I'm like, well, it doesn't matter what it's called. It matters what it says. So inside, it was actually an option agreement. So where if the company did whatever, you know, took a step, paid a fee, whatever gave that gave notice. Then they became the owners of the intellectual property.
Azhelle
Oh My God.
Stephanie
You know, so it's one of those things where Hey, you missed the terms in the contract. Don't be surprised. Know what, you know, know what's in there before, you know before you sign it. super important.
Azhelle
Wow. That's crazy.
Stephanie
If you need to hire someone, fees are expensive with everybody. You know, you really want to find someone, an attorney that understands you want to help can work within your budget, whatever it is, but you definitely you definitely want to, you know, know what you're signing before you do.
Azhelle
Yeah, yeah. I mean, I agree. I know I've been there. And it's been there. moments where you're like, Oh, I just want this job, or I just want this opportunity, and you just want to rush read, or you just want to sign even if you're seeing something that you're like, Oh, I'm not sure if this feels right. But it nine times out of 10, we'll come back. And when it comes back it, you know, it might not be a good thing, and it could hinder your career for months or years. Or it could change the trajectory of it for your whole life. And so I mean, like, it's really important to read and then like you were saying, if you're on your own the contracts, you need to have, like you're saying need to assign rights to the right people, otherwise, all the work you're doing could just be owned by the person who did the work in the first place. So yeah, like this is not an area to skip over a rush through.
Stephanie
Correct. Correct. And one more to think about when you're thinking about agreements is exactly what you just mentioned, the Cheryl, which is, you know, intellectual property ownership. So make sure that you have that documents in place if you're hiring a third party. So you do make sure that you own anything that you know you're paying for.
Azhelle
So the three things are NDA is licensing agreements and intellectual property ownership agreement. Yeah. But to be clear, they are not always listed separately.
Stephanie
That's true. Yeah.
Azhelle
They can be one contract with all those things inside. And it could be called a work agreement, or it could be two of those things inside. So those are, you know, just keep that in mind.
Stephanie
Yes. Thank you. That is it, though. It's, it's a really great point. I mean, I think, I think the most important takeaways from anyone listening today, and thank you for taking the time everyone for listening.
Azhelle
Well, speaking of which, I'm sure people are now wondering like, Oh, my God, can I afford Stephanie? Like, how can we work together? So who do you work with big clients, small clients?
Stephanie
I work really with a lot of entrepreneurs and inventors. I also work with more established businesses. So it really just depends what the situation is.
Azhelle
Yes. Okay. So how can people get in touch with you?
Stephanie
Well, connect with me on LinkedIn, I post a lot of articles. And I just launched my new website this week, productlaw,.com, it was revamped. Nice. So now as you know, it's brand new, and we're just thank you so much. Just shoot me an email Stephanie@productlaw.com. And tell me you listen to today's podcast, and I'll take extra special care. Yeah.
Azhelle
Oh, extra special care. She does. She will she definitely She's amazing. And I will put all of the links in the show notes, so you won't have any problem finding Stephanie and getting in contact with her. Thank you so much for coming on the show today. Stephanie. This was really valuable, really valuable conversation.
Stephanie
Thank you. I really enjoyed it. You do an awesome job. Azhelle. Thank you.
Azhelle
Thank you so much. There you have it. Toy people. I know. I know. That episode was a whole lot of tough love and straightforward. Get your legal business together conversation. I know it probably wasn't a whole lot of fun. But it was an absolute necessity. If you are a recent grad, I hope you listen to this episode very closely. I want you all being careful that you understand what you're signing before you sign it. And for all my toy entrepreneurs, I want you building legally sound businesses okay. foundation is everything. If you love this podcast and you haven't already left me a review. What are you waiting for? I love to hear how this podcast is impacting your toy experience positively so please leave me a review those notifications come right to my phone as soon as you leave them and it puts a huge smile on my face. Knowing that I'm making a difference. As always, thank you so much for joining me here today. Toy people. I know there are a lot of podcasts out there. So it means the world to me that you tune into this one. Until next week. I'll see you later toy people.
Intro/Outro + Jingle
Thanks for listening to Making It in The Toy Industry podcast with Azhelle Wade, head over to the toycoach.com for more information, tips and advice.
-
🎓Learn more about how you can develop and pitch your toy idea with Toy Creators Academy® by clicking here to visit toycreatorsacademy.com and join the waitlist.