8 common business mistakes you can avoid

Below are some common mistakes we see clients make, followed by some common mistakes I expect to see in the future.

Not documenting IP ownership

If another business or a person who is not an employee creates something for you, you don’t own it unless ownership has been explicitly assigned to you. That could be anything ranging from software to artwork to written material. There are many ways this can come back to haunt you later.

Not searching your brand

Using a brand or trademark without checking to see if someone else already uses something similar. It is a common misconception that getting a corporate name or registering a business name gives you rights to the name or absolves you from a trademark infringement claim. Having to change your corporate or brand name when you get accused of infringement after you have used it for a while is neither fun nor cheap.

Pricing

Pricing products based on current costs. Operating costs tend to go up rather than down as a business grows and gets more successful. Anticipate that when setting your prices. Pricing your product too low without a valid reason can also make customers skeptical that the product is viable.

Records

Poor record keeping for contract terms. It is important to keep on top of contracts and other obligations. Such as when you have to renew things like domain names. Also, watch for contracts that have auto-renewal obligations so you can end them when you need to.

Partnerships

Having partners. Yes, that’s a bit dramatic. But the more partners or shareholders you have the more potential grief you have. At the very least document rights in a shareholders agreement.

When to seek advice

Getting advice too late. It can be a challenge for a small business to do everything to perfection from a legal and compliance perspective. But at least get some advice early on to prioritize documents and compliance issues and when they should be dealt with. Depending on the nature of the business it might be important to start with the right customer documentation. Or to design privacy obligations into your product from the outset. Some things are harder and more expensive to fix — or perhaps impossible to fix — if left too late.

Not putting it in writing

Every agreement doesn’t have to be a long, complicated document. But reducing important things to writing is important for many reasons. For example, describing obligations helps when the players on the other end change. And much better to have the “that’s not how I figured the deal” discussion sooner rather than later

Misunderstanding artificial intelligence

Making decisions or publishing material based on “facts” that are really just AI hallucinations.

Inputting confidential or personal information into an AI tool and getting into trouble when that information resurfaces somewhere else because the AI tool has kept it.

Creating AI products without deference to emerging ethical and legal requirements.

Download AI: Issues in Artificial Intelligence series of blogs.

David Canton is a business lawyer and trademark agent at Harrison Pensa with a practice focusing on technology, privacy law, technology companies and intellectual property. Connect with David on LinkedIn and Twitter.

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