When Does An Ecommerce Company Need An Attorney? with Steven Weigler

Andy Splichal:
Welcome to the Make Each Click Count podcast. This is your host, Andy Splichal and we are happy to welcome this week's guest to discuss today's topic, which is when does an e commerce company need an attorney? Today's guest is the founder of Emerge Council, a law firm that provides entrepreneurs all over the globe. Sophisticated business and intellectual council. Over the years, he has built specific expertise in the field of e commerce law, an area in which he has helped online businesses from conceptualization all the way to sale a big welcome to Stephen Wigler. Hi Steven, how's everything going? 

Steven Weigler:
Good.

Andy Splichal:
Thanks for joining us today.

Steven Weigler:
My pleasure.

Andy Splichal:
Let's start here. There are millions of ecommerce companies from people selling stuff on Shopify or Amazon sellers. But I'm curious, what are some of the specific events that would trigger an e commerce company to seek legal counsel?

Steven Weigler:
That's a really excellent question and I think about this all the time. I have a background in business, so I was, I had a business and I wasn't a lawyer for a good eight years. And so I really understand that when you wake up in the morning and you have to run your business and you have operations and finance and everything, marketing, everything else you have in a business, and especially in the e commerce business where it's a lot about stats and shipping and everything, the last thing you're going to want to do is call an attorney do. And so I know when I had my business it was the same way I needed counsel and I really, the last thing I wanted to do was that was a conversation I really look forward to. So, I mean, I think with that being said, it is really important to build a relationship with console early on in your business. And because there's so many, the most important thing in having an e commerce business is strategically placing your brand, your goods, to be able to outperform any competitors and potentially groom the company. And you might not want to sell the business, you might want to have this forever, but really be in the position that you have all options and that you want to maximize the value of your business. And so a lot of what attorneys do at least once, that specialize is we strategize.

Steven Weigler:
We strategize both on everything from what is your brand going to be and how can we protect it from competitors to what's your business structure and does that make sense to a potential acquirer? Does it make tax sense, does it just make sense? And, and is that, is there going to be a provide ability to grow so great?

Andy Splichal:
I mean, it'd be good, you know, to have a relationship with the council, but how do you, especially if you're just starting, I mean, you filed your llc maybe, and you're, you're selling, you know, not that much, let's say 510 thousand. Do you just reach out to a council? I mean, do you interview? I mean, how, how does that process even work?

Steven Weigler:
Well, number one, it's really important to work with an attorney that you like. And so I do suggest that reaching out to an attorney at the very beginning or as soon as you realize that you probably at some point are going to need one. And really the issues are business, I hope are business related or you want to work proactively to reach out to a few attorneys that, that are in this space, then the next thing is, the most important thing when you start an e commerce business is unless you are marketing the cure for cancer, in which case, who cares what your brand is? Brand really matters. The first outreach you're usually going to have, if you've already formed your llc and you believe that's the right entity, is really focused on adequate trademark or brand protection, how important is that?

Andy Splichal:
Like if you started just selling something on Amazon, for instance, and selling, I mean, how quick should you trademark your logo?

Steven Weigler:
It could be the logo or just the brand named. It's how the consumers see that it's you and that it's a source indicator. So for example, McDonald's, when you see the yellow arches, you know, that's McDonald's. It is crucial to, number one, check to make sure that your brand is not infringing on someone else's brand that's both potentially here and internationally. And then also that the brand is something that you're in a position to build off of. So a lot of times how attorneys make their money and spend a lot of time, because time is money to us, is if someone comes to me and they already branded, like say they have a new paperclip and it's called paperclipsees. And I look and see that that's already taken or they get a cease and desist letter. There is a lot of work that needs to be done to make sure that they don't get sued and can continue on with the brand.

Steven Weigler:
Or in the worst case scenario, that brand is dead and they're going to have to rebrand. And so clearance is a really big deal. And so some entrepreneurs like go on legal zoom or something, or go to the USPTO website, which is a dependent trademark office and see, do a search and see if the name is taken. A real search, a search that an attorney does and how it works is a lot more complicated than that. And so now how much does that cost?

Andy Splichal:
You know, just ballpark.

Steven Weigler:
So to do, if you're looking at prosecuting a trademark, that's going to be real brand protection. It runs anywhere. It runs about for a search. It runs about $1,000 for a true algorithmic search. And then the whole process, you can budget around 2000 to do it right.

Andy Splichal:
And then, I mean, one of the big problems for e commerce companies, especially if they get bigger, is you're going to find people knocking you off. And so whether it's somebody coming from China, somebody's doing this or that, I mean, after you've set up your trademark, you've set up your, you've protected your products, how do you, I mean, if you're seeing somebody, especially if they're overseas copying your products, I mean, what you bring an attorney involved, I mean, what's that process like?

Steven Weigler:
Well, and it kind of brings home your first question. It's like if you have a relationship with an attorney, if you know, if you planned that this could happen and take the steps early on, protect your brand, get a trademark registration, potentially check you, look at your shipping sources and know that you might be dealing with China, there's a whole bunch of things that if you know upfront, it's much easier to alleviate or not have the problem later on. And so once you start seeing infringement, it could be because number one, you didn't protect the brand. And any infringer, they do their homework too, and they're going to look at or you did it wrong, say you use the wrong category or you didn't describe it right, etcetera, you open yourself up to more infringement. If you have a registered trademark and if you have kind of checked the supply chain, it's going to be much easier for an attorney. And the attorney knows you and your brand and what your goals are and how that particular play actually works from working with others, it's going to be much easier for the attorney to handle it. How we handle it is in a number of ways. We sometimes do Alibaba takedowns if you're buying it on alley.

Steven Weigler:
We work with chinese consoles sometimes. If it's a chinese infringement, we do Amazon takedown notices. We work with software companies that effectuate takedowns a lot more effectively than a human being can. We do more extensive searches. There's a whole bunch of things to do. But if you don't know anything, if you did it wrong or you don't have an adequate strategy when you're doing your IP protection, it's going to cost a lot more money and the chances are we're both going to have issues on effectuating a good strategy for you later on.

Andy Splichal:
What is an Amazon takedown strategy? Because I know a lot of the counterfeits that I've heard from people are other companies counterfeiting their products and selling them on Amazon.

Steven Weigler:
Sure, it's a pretty open question, but there's, what we look at when we get a client is on the intellectual property side is there's copyright, which it protects original works of art. So a logo is an example of something that can be copyrighted, the box design, the product design, all these things that can be copyright protected, the marketing copy. So it depends on what you see on Amazon that they're lifting the infringer. If you have registered copyrights, you might be able to effectuate what's called a DMCA takedown. And that's codified, meaning it's a legal statute that allows that if you file it, Amazon has to take it down unless there's a counter. So copyrights are really, takedowns are a really important strategy, brand strategy. If you see that it's infringing on your brand and you have a registered trademark, Amazon's going to take it down. The third thing is if you have a patent which protects an invention, and we can go more into that, a patent can be if you see infringement, Amazon actually even has programs that they will take a look at the validity of the patent and potentially take it down on their own.

Steven Weigler:
So it depends on what the intellectual property is, the strategy you have on how you can take it down. Now, Andy, one thing is that a lot of times when you see Amazon Seller sees infringement on the website, they're just looking at the first peel of onion or they're looking at the cap on the huge bottle. In other words. There's a lot more that you can't see, a lot more infringement that you can't see. You can. And there's software vendors we work with to do more extensive searches and effectuate the takedowns much more broadly than any human being.

Andy Splichal:
So I mean that's good. The Amazon is very curious, but what if somebody is counterfeiting and replicating you with a shopify store? I mean they're selling online, they're not selling on Amazon, they're selling on their own website, but they're impersonating you. I've had this happen to a couple of clients. What would be the remedy for that?

Steven Weigler:
So for a Shopify site, number one, you can know Shopify will take down the, but you know, you know, and.

Andy Splichal:
I shouldn't, you know, I shouldn't have said Shopify. I say shopify almost now for e commerce. But most of the people who are going to be counterfeiting aren't going to be shopify. They're going to be using some, some kind of off the Wall e commerce platform.

Steven Weigler:
Sure. So there's every, so one thing is to research the platform and use our takedown provisions. If it's totally rogue, which it happens, we always write what's called a, we can write what's called the cease and desist letter. But again, we have to have a strategy that all, what we're talking about one, why there's infringement that should be considered before you, you know, you write the letter. We can work with the clients on if they don't want to write such a formal letter that they can, you know, how to position this, but, and then, you know, the next thing is, and this is kind of tricks of the trade, but we would prepare like what's called a dummy lawsuit potentially, which a dummy lawsuit means we would send like, you know, pretty quick down and dirty complaint that we haven't filed yet to the, to let them know that this is coming. Depending on if there's a timeline that we have to work with, we might seek, you know, an injunction. It just really, that's where like strategy really matters because it really depends on the facts on who the entrepreneur is, on what they're looking for out of the business. There's a million ways, it's like a tool chest.

Steven Weigler:
There's a million tools you can use and as a, this is my field and I just have a ton of tools, but I need to customize the tool to get that effective strategy. And the effective strategy turns out to be much cheaper if you have a strategy to begin with. If you're like, God, I didn't do anything. No, I don't really think about that. But now I'm coming with this huge problem. And you didn't do any protection. You still have bylaws to your company. It's really difficult to step in and not charge on an arm and a leg because it's like going to take, we're doing a lot of catch up to even get to the point.

Steven Weigler:
We can write a cease and desist letter. Yeah.

Andy Splichal:
Now you had mentioned that, you know, that scammers or I guess counterfeiters will go after people who haven't properly protected their products. What are some of the mistakes that you've seen with companies trying to protect their designs or their copyrights or patents? I mean, how are they doing it wrong?

Steven Weigler:
Sure. Well, so let's start, let's start with copyright. You cannot enforce a copyright claim, generally speaking, you can try to take down those at Amazon without registered copyright, but generally you cannot enforce copyright without a registration of copyright. And so copyright registration, it's not like each design you have could be a separate copyright. And so that becomes very, can be costly to get a strategy together for copyright. My advice to my clients is, well, more is not necessarily better. We just have to really go with the essence of what the unique designs are and really focus on that for copyright protection. So copyright is you got to have your act together and get those registrations and have some kind of strategy on patent.

Steven Weigler:
I think a common misperception of my clients is that they're one and done like they file one patent. And that's a strategy. And patent is a very complicated area of law. And a patent itself is not saying it's not the commercial value of the patent, it's just saying I have a unique invention that I'm publishing and for x number of years no one can infringe on that invention or design element. Well, again, if you file one, it's very easy for any attorney to poke, or anyone to poke holes through that. Plus he published it and so some infringers just go through the publications and start infringing right away and it's really difficult to enforce. And so that's a common misperception that one has done on trademark. It's really like, I think a common misperception is that, well, I filed one and I even got a registration, but if you look at the registration, you look how they filed it, it's really worth the piece of paper it's written on.

Steven Weigler:
And so there has to be a strategy and a maximization of it might be the wrong category or the wrong description or they didn't trademark the, the stylized element of it. There's a whole bunch of things and then they come to me, it's like, well, I have this trademark, I have infringement or someone's suing me for infringement, I have this trademark. It's like you never thought about, you just filled out a form. So it's really a misconception on what you really the search that needs to happen and the placement that needs to happen to have a proper glance on trademark. Then the fourth one is all these are tools. So if you have a patented trademark and copyright, how you weave those together, how you put together those pieces is a strategy. And so you might have three copyrights at $350 a piece and one trademark. And weaving woven together, that provides a tremendous amount more protection than filing 30 trademarks and 20 copyrights or filing nothing.

Steven Weigler:
The point is it's like we're trying to look at what together is going to be attractive. First of all, build a high enough fence to avoid infringement. And number two, if there's infringement, be able to do something about it. And number three, makes sense to an acquirer. They check off the box, they did their homework on what really needs to protect it. What are the crucial elements and true things that this business has unique that's showing in value by also the financials and the IP strategy.

Andy Splichal:
Now I looked at your website and I saw that one of the services that you also offer is getting Amazon brand registry. How is that different than getting the copyright and all that?

Steven Weigler:
Sure. So Amazon brand registry provides basically optimization on Amazon. And so it used to be that you needed either need to go through what's called the IP accelerator or you would need to wait for your registrar, your mark to register to get on the brand registry. Now you can do with a serial number. And our value proposition on that is if you really sit down and look at the IP accelerator, it's a lot more expensive. And a lot of times we get clients because the IP accelerator might say, all right, it's $1500. Well they don't do that, doesn't include the search. So you pay 1500 bucks, they file a trade attorney or whoever does it files a trademark.

Steven Weigler:
And there was never any search done. Well, all of a sudden they're getting cease and desist letters. They're like, well, what happened? It's like, well, no one ever did a comprehensive search. We just package it. We don't not do a search. There's one right way to file a trademark. We do it, we can get you on the brand registry easier and cheaper than the IP accelerator. And so that's really the value proposition on that.

Steven Weigler:
Anyone thinking about selling on Amazon really needs to, they really have to contemplate a trademark because not only is it brand protection, but it's like you get optimization on Amazon, which is huge. Walmart has the same policy. So that's really where it is on IP accelerator, I'm sorry, brand registry.

Andy Splichal:
So you mentioned a couple times about selling a business and getting ready to sell. And of course that's a dream of a lot of entrepreneurs. They want to launch a business, scale it up and then sell it and get out of there and then retire to an island in Tahiti. But when in the selling process, if you don't have a relationship with an attorney, and I know you're recommended to do that, but when, when you're thinking of selling, should you start to get an attorney involved?

Steven Weigler:
That's a good question. I mean, I think, I think the moment that an entrepreneur gets in their head that they need to get organized for that possible move, because there's going to be, at the get go before there's even potentially a term sheet, there's going to be a lot of questions asked. In fact, I'd say 40 or 50 of them that are going to involve documentation that the entrepreneur might not have. And they're immediately going to decrease in value the moment they start talking about their business. Really, it's almost like you drove a car, it's under warranty, and then all of a sudden it's your car and at some point you're going to want to get rid of it. Well, you better get it in checked for all the systems before you even think about putting that car online. Or the car is going to be worth two thirds of what you paid for or you want to sell it for. And so the same holds true in m and A.

Steven Weigler:
So the moment we start talking to a client, even if it's a brand new client, like meaning a brand new business, I'm always thinking towards that goal. Like, all right, how can we check off the boxes, not spend a lot of money, but make sure that everything, every area, the contracts with vendors, the international shipping agreements, everything is relatively straightforward and non problematic and collected.

Andy Splichal:
And what about the flip side? What if you are a company looking to maybe grow by acquiring a smaller business? When should you bring in an attorney then?

Steven Weigler:
Well, usually those businesses are relatively sophisticated. And so at that point, we kind of, you know, those are usually clients of mine that I have a strong relationship with, and I know what types of businesses they're looking. They, they're used to buying. If it fits in their niche, do the trademark protections that the business hat, is that going to be okay? You know, really, I kind of know a lot about their, their business. And so I think if you're thinking about buying a business, first of all, even if you're buying the. If you think you're making the biggest, like the most smaller place, like you have a, I don't know, a business where you sell paperclips, and another guy that has a guy or woman that has a $10,000 paperclip business wants you to buy them out and you contemplate the transaction. I've had cases that I've been, become involved in where that has caused litigation. So it's really like there's no, in that case, it's like it's even good to run it by an attorney.

Steven Weigler:
Now, it's not going to be a very complicated deal, but again, buying something requires some sophistication on how the title is, how it's going to fit into your product line. Is there any litigation you're stepping into? Is there any potential litigation, etcetera? And so it's really time to talk with an attorney. But it usually, and I got to say this almost about every one of my clients, it's like we don't talk all the time, but we have a good relationship, and I know what's going on in most of their businesses. And so it's really kind of not a big deal. It's not like I'm involved in their C suite meetings all the time and need to be calling once a week. It's really kind of like I know what my lane is. I know when, what I'm thinking about when I'm talking to my clients. And they know that generally, as long as it doesn't take too long, they can call me with any problems or concerns, and I'm not gonna deal relationships important, not the billing, the .1 employment.

Andy Splichal:
So I'm curious. You said you were in business before. How did you get into the law aspect of the business from running a business?

Steven Weigler:
Well, it's a pretty good story. I was, I had a technology law practice. I was working for a Fortune 50 company, and they actually sold, and I got some money at exit. You don't think a Fortune 50 company is going to sell? But it happened, and I started, it was basically a predictive analytics but it was business to government company, and it was really the good, the bad, the ugly. And when I finally, so I learned everything, I had to raise a lot of money. We almost sold to a really big company. I had personnel issues. I mean, I just had it all, but was able to make it relatively successful.

Steven Weigler:
At the end of the day, I lost control of the business because I didn't have enough. I finally diluted myself out of meaningful equity, and they basically tossed me out. And so then my wife said, well, put down, write down all the skills you're good at. And so this was eight, nine years ago, and e commerce was just starting to grow. And I just really sat down and wrote down all my skills, what I know how to do, what I don't know how to do, and really built a law firm focused on kind of that holistic or empathetic area of law. It's like a lot of attorneys have never had. We go to law school and never really had that business experience. But I've been in a lot of my entrepreneur shoes, the good, the bad, the ugly.

Steven Weigler:
Like, a lot of times they're not calling me with them. You know, we do consult on problems and even litigate. So it just, I've gone through all that, and that's what really got me into this niche, which, again, is focused on IP, because that's what my company was and business, which is from the very beginning, you want to spend as little money as possible, avoid issues, and there are certain things you have to do proactively. I know calling an attorney is not something that people usually look forward to.

Andy Splichal:
Who's your favorite client? Who do you usually work with now? And who, if they're listening out there, shouldn't, should think about giving you a call?

Steven Weigler:
Well, I love building. The ones that I love the most are the ones that I have the best relationships with, meaning. I take so much pride in watching an entrepreneur take an idea and grow it and move towards success, especially in an area such as e commerce, where the multiples can be quite high. So I like watching, helping other people grow their businesses and become wealthy. So the longer I work with that client, the happier I become. I've worked with some jewelry company that I'm working with right now. I mean, she was a one man, one woman show and now has quite a sizable enterprise, and to the point where I just was in shock going over her newest sales collateral to see how much value she's grown in the company. And I just feel like, wow, I was really, I'm so happy that we have this relationship that I can be part of that not in the day to day, and not that I know anything about how to sell jewelry, but I really knew how to help her get from point a to point b.

Steven Weigler:
And I have about a number of clients like that. I don't want to guess, but then, you know, some clients just need a trademark or need, which I consider a brand strategy if they just want to. And we're just focused on brand. Others don't even know that we do trademarks. It's just not part of their business. It's just really more of a business relationship.

Andy Splichal:
So what's the best way for an interested listener to be able to reach in?

Steven Weigler:
Sure. So the easiest way is my website is www. Dot emergeconsule emerge. And you can schedule a free consultancy with me. I'm going to just get to know you, answer some questions you have. If I'm in a good mood, I. We'll go further than that. But the point is, it's really, I always offer an initial consultancy.

Steven Weigler:
We also have a ton of information on our, on both my LinkedIn and on our website. We're always publishing for the e commerce industry articles and I'm on a lot, a number of podcasts, whatever. I really try and get the information that I know out to my clients. Third, where we, I attend a number of events in the e commerce space.

Andy Splichal:
So emerge council.

Steven Weigler:
Yeah. Emerge council.com. Dot. Yeah.

Andy Splichal:
Is that name trademarked?

Steven Weigler:
You know what? My total tm, which is our trademark process, is trademarked. My emerge console is not trademark because we got an office action and it wasn't. That means this was when I started. That means that the office had some issues with it. So instead I called the law firm that they use emerge for. It's like a filing system or something, and I could never get in touch with the person, so. But I have what's called common law rights. On that story short, it was like I hid my own nightmare and, you know, if I would do it over again, it'd be called something else where I could, you know, easily get a trademark.

Steven Weigler:
I should take care of that, though.

Andy Splichal:
Well, this has been great. Is there anything else you would like to add before we wrap it up today?

Steven Weigler:
No. I mean, the only thing is, whoever is listening to this, you are in a really exciting field. And I'm seeing a number of my clients come to me with really good potential assets or financials that really are providing quite good roi for the founders. I know that there's certain things in e commerce that are a big pain in the butt. But I'm seeing a lot of entrepreneurs, the fruits of their efforts, really paying off in big ways. If you kind of cut corners, it's really difficult to get to that point, for sure. But we all watch our dollars. I mean, that's the point of offer.

Andy Splichal:
Yeah, yeah. No, no, those are truer words never.

Steven Weigler:
Spoken, Stephen, so that's a scoop. You know, I enjoy learning from my clients, too. So if you have any good stories or anything resonated with you, please get in touch.

Andy Splichal:
Sounds great. Well, thanks for joining us again.

Steven Weigler:
Thank you.

Andy Splichal:
For listeners. Remember, if you like this episode, please go to Apple Podcast and leave us an honest review. And if you're looking for more information regarding connecting with Steven or emerge Council, you'll find the links in the show notes below. In addition, if you're looking for more information on growing your business, check out our podcast resource center, available at podcast dot makeageclickcount.com. We have compiled all of our different past guests by show topic and include each of the contact information in case you would like more information in any of the services I've discussed during previous episodes. Well, that's it for today. Remember to stay safe, keep healthy and happy marketing, and I'll talk to you in the next episode.