By Charles Moster
Consider the following scenario:
If Darth Vader went to the best law school he could get into…
And then became the biggest baddest lawyer in town…
And set his Laser Light Saber on your Texas business, how would he fare?
May I safely assume you never asked yourself this question precisely in this way?  In fact, I’d bet the farm or Firm (keeping in mind this is not a valid offer subject to acceptance!).

In all fairness, I’ve over-dramatized the battles my business clients face day in and out, but rest assured it is a serious battle replete with heroes, villains, losers, and winners!  However, if I were to choose “the battle of all battles”, the gory details would be as follows (keeping in mind the names have been changed to protect the reputations of the innocent and guilty).

Mr. Zipper vs. Krafty Foods – I love Krafty Foods, but Mr. Zipper was my client.  He was a retired electrical engineer who made millions before the dot bomb crash and got out on time.  He got sick of retirement and decided to pursue his childhood dream of creating the hottest potato chip (as opposed to computer chip) ever devised by man.  The name “Mr. Zipper’s Hot Chips” came to him in a dream and he considered the inspiration to be divine.  Applying all of his engineering prowess, he invented a prototype hot chip, successfully test marketed it at SXSW, and was ready to go.  He invested ALL of his savings and retirement into producing 1,000,000 packages of “Mr. Zipper’s Hot Chips” with the nifty Mr. Zipper name handsomely branded.  And just in time, since my client had signed deals with every large supermarket in Texas to distribute and sell his Zippers, so to speak!

As he contemplated how he was going to exceed all cash projections the door bell rang and a small FedEx envelope sat on the door step oozing plumes of red smoke.  Mistaking the obvious symbolism for a divinely inspired sign, my client opened the package to find a smaller envelope with a postmark from New York.  Inside was a letter from Darth Vader, Attorney at Law, with the following words of warning in 26 Font “Impact” and blood red, of course, “Cease & Desist”.  Unable to translate all of the Latin legal references that followed the blood red “Cease & Desist”, Mr. Zipper decided to pay me a visit and was my first appointment one rainy Monday morning.

After listening to his spirited account (and a quick Yahoo search), I offered the following unfortunate explanation.  See, Krafty Foods had the same divinely inspired dream that my client had, but five years before.  The ingenious “Mr. Zipper” name was trademarked by Krafty Foods with the Patent Trademark Office in Washington.  The legal demand from Mr. Vader was simple, zip up the zipper name or we will sue you!

The client was unabashed.  Certainly we could distinguish Krafty’s Mr. Zipper’s Corn Chips from a Zipper Potato Chips, right?  And what about the million bags of Zippers, surely Krafty would back down or work a deal?  And what about the contracts with the hundreds of grocery stores that reserved special shelf space for the Zippers to come.  And if all… well, hell broke loose, at least the client paid $35.00 online to form a corporation from “Lawyers Not Us”.

Unfortunately, my prognosis was, hellacious.  Here was the result:

- Krafty’s approved trademark for Mr. Zipper trumped the client’s unregistered name.  Under Federal trademark law, Mr. Zipper was the intellectual property of Krafty.  The distinction between corn and potatoes was insignificant.  Result: shut down now or face a lawsuit with no chance of success.  Oh, and forget a deal with Krafty.  They weren’t interested.

- The client was liable to every grocery store in Texas for breach of contract.  They had relied on his promise that he could deliver the Zippers and reserved shelf space which could otherwise be used for… Krafty!  Damages could easily exceed the number of Zippers bagged and ready to go!

- Beware of 3’s they say, because the online cheap corporation that the client set up was not compliant with Texas law and invalid.  Moreover, a bank account was never set up or stock issued.  Only Zippers were issued and they were legally unenforceable (see above).  This result was particularly harsh since with a bogus corporation the client was now personally liable.

The client was exceedingly unhappy and stormed out.  The only thing of very negligible value left behind was… you guessed it!

So what is the moral of this Law Wars tale?  Easy.  Substitute your business for my client and just change a few of the facts.  Are you using a trade name or product name which is not properly registered?  Has a lawyer reviewed key business contracts that you use frequently?  Finally, when was the last time you took the cob webs off your corporate book to make sure it has been legally maintained so you are not exposed to personal liability?

How would you fare against Darth Vader, Attorney at Law?