(Tony’s note: this post is a guest post from a friend who shall remain nameless)

Two years ago our corporation was sued by a larger company over trademark infringement. My business partner and I have chatted post-mortem about the experience many times since. I thought I’d try to document and share the lessons we learned in the hope that it will help other small startups who encounter the wrath of a bigger fish.

One morning we were milling around the house. My wife checked the mail – she’s the organized one – and saw a letter on a fancy envelope that looked like a law firm. She opened it and it was a cease and desist notice from a law firm telling us to stop using our company name and to hand it over to them.

Big Mistake #1:

At that point I called up a law firm who’s domain name was something like ‘domainnametrademarklawsuitlawyerattorneyguy.com’. I found him via Google (obviously). I had a chat over the phone with the guy and didn’t get much useful information but he was happy to take my money. He was very reasonably priced – he offered me a package that included a response letter and some basic negotiation for what most law firms bill per hour.

Big Mistake #2:

He sent me the first draft of the response letter and it was a letter that suggested we’d go belly up without a fight. I called him back. I still didn’t get much legal advice. But I told him to go out and buy himself a spine and rewrite the letter. So he did.

The letter came back fairly aggressive and my thought was that we’d let these guys know they can’t just push us around.

When I eventually got a good law firm working for us (more on that in a moment) my new trademark attorney couldn’t believe we sent something that aggressive to them. It set a very bad tone for negotiating.

Big Mistake #3:

After having my $2 attorney send opposing council a f***k you note, I decided to call them up. The CEO wouldn’t take my call but referred me to his attorney who I learned from the receptionist was a litigator and was on permanent retainer. I also got the impression he was based on-site. I got the litigator on the line and laughingly asked him if he thought his case actually had any merit. He said he did. The conversation quickly ended.

Later I got several calls from the CEO himself. Instead of referring him to my attorney, I got chatty with him too.

I had succeeded in making the case personal.

Big Mistake #4:

After a few weeks I got rid of domainnametrademarklawsuitlawyerattorneyguy. I posted a message on a webmaster business discussion forum and made contact with a very competent and reasonably priced trademark attorney based in SF.

Even after retaining a great law firm to deal with this, the only knowledge I was gaining about the case and trademark law was through osmosis from my attorney. I never bothered to gain a deep understanding of what I was up against.

We went through weeks of negotiating via my new attorney trying to undo the damage my previous attorney and I had caused. She did a spectacular job but we were still drafting motions and steadily heading to court.

If I’d done my homework quickly and understood what we were really up against I would have done whatever I could to bring this thing to closure much sooner.

Closure

I wont bore you with the details of how this played out and confidentiality agreements prevent me from sharing the interesting details with you. But at the 11′th hour I repaired my relationship with the plaintiff’s CEO sufficiently to talk a deal.

OK children, what have we (I) learned?

1. When you receive a cease and desist notice, take it very seriously because it may be the beginning of a very long and expensive lawsuit.
2. 2. Find a very good attorney who specializes in the relevant field. Don’t go for a big name law firm. Preferably find someone who was working for a big name law firm and recently started their own practice. You’ll get big name experience and someone who is lean and hungry – and reasonably priced. Many attorneys are happy to spend an hour with you on the phone for free chatting about your case. Use this hour wisely and you can get a ton of free legal advice. Set up conference calls with as many law firms as you can and get lots of free hours and a free education.
3. Go to school. Drive down to your local Barnes and Noble and start learning as much as you can about the problem you’re facing and the claims that have been made against you. If you’re an entrepreneur this won’t be a problem because you’re used to absorbing fantastic amounts of information in short periods of time.
4. Lawyers are notoriously shy about responding to direct questions like “Should we settle or should we go to court?”. It’s in their nature because they’re worried about getting sued. They’ll simply present you with the facts and leave the decision up to you. But if you have a good working relationship with your attorney, ask them this question and keep pressing and they’ll probably give you some advice off the record.
5. Take any advice you get from an attorney in context. If they’re a litigator, they’re just itching to battle it out in court. Even if they aren’t, if you choose to fight it means they’ll get to draft fun motions and make exciting filings and do what lawyers do. And of course they will generate many many billable hours and while many lawyers defy their field’s reputation and are in fact well meaning good people, it’s tough to turn away tens of thousands in billable hours. That’s why you need to learn as much as you can about what you’re up against and make your own decision.
6. NEVER EVER call up opposing council directly and NEVER NEVER NEVER EVER call up anyone who works for the company that’s suing you – especially the CEO. No matter how many times dad told you to deal with issues like this man-to-man, don’t do it. You’ll risk turning this from a cost-of-doing-business issue into a personal proving-a-point issue. The only reason I negotiated directly with the opposing CEO when settling was because I’d already made it personal and had to repair the damage.
7. Make sure you don’t take the fact that you’re getting sued personally. One of the things I learned is that companies who own trademarks are obliged to enforce their trademark rights or they risk losing them. The company you’re dealing with may have no choice but to ask you to change your name – or take whatever legal action they’re taking.

When making your final decision about whether or not to comply with the demands of the C&D, or whether or not to go to court, consider this:

After doing all your research you may still be unsure about whether or not you’re right and they’re wrong. Make the decision a financial one. Look at your company’s revenue and how much you would lose by complying (changing your name in my case). Then look at the cost of litigation if you went to court.

If you’re just starting out it’s very likely that you’ll make the decision to avoid the legal bills and get on with your business.

If all your research tells you that you’re in the right and the financial data says you should fight the good fight, then go for it. But know that it’s going to take a long time and it risks demoralizing the management team and staff if they’re not shielded from the process. View it as a simple cost of doing business, don’t discuss it with staff unless you have to and get on with building a successful business.

What we do now to avoid tradmark lawsuits:

I wrote this in the hope of providing some general advice on dealing with early stage lawsuits, but here are a few tips to help you avoid getting sued over trademark infringement specifically:

1. Do a search on USPTO.gov for your future name using their trademark search engine
2. Do a simple Google search for your name. The best names I’ve found have 2 or three results come up and usually it’s someone’s nickname on a discussion forum used years ago or something inconsequential like that.
3. NOLO provides many great books on trademark law, many of which we’ve bought and studied. Reading a few of these will give you a good basic understanding.
4. Do a full trademark search using a trademark attorney or search service including federal, state and local. We use trademarkexpress.com which we recommend.
   If you plan to be around for a few years, file your trademark with the USPTO using a reputable trademark attorney.

I hope you’ve found this useful.

DISCLAIMER: I am not a lawyer (ed: neither am I!) and this article is my personal opinion. It should not be construed as legal advice, in part or in whole, in any way, shape or form.

(Tony’s note: Pretty sobering experience. I’ve never been involved in any lawsuits– knock on wood– but virtually every one that I’ve personally witnessed has been a result of someone taking something personally. It’s not a game. It’s not about egos. It should be about finding the fairest compromise that allows everyone to get back to the business of making money ASAP. Heck, you can expand that truism to just about ANY business negotiation.)

People don’t always directly associate expenses and income, and very seldom calculate taxes when they do. Here’s how I gave myself a $18,642.80 raise with a few phone calls and a craigslist ad. Your mileage may vary.

1. I called Comcast and asked them to cancel my landline phone and cable TV (retaining Internet). They offered to cut my rate to let me retain all three services. I declined. They offered an even lower rate. I accepted.

   Total Savings: $1080 per year.
   Total amount I’d have to earn at a 33% tax rate to earn that money: $1436.40

2. I called the Seattle Sailing Club and canceled my membership. I love sailing, but at $200/month I wasn’t using the boats enough to justify it. There are hopefully places around town where I can rent boats from time to time, but I’ve also got a few friends with boats who invite me from time to time, so I’ll likely get my sailing fix there.

   Total Savings: $2400 per year.
   Total amount I’d have to earn at a 33% tax rate to earn that money: $3192.00

3. My wife and I made a commitment to eat out more at our cheap favorites and limit our extravagant favorites to once a month. Our favorite cheap-eats places have outstanding meals and we’re always delighted to go there. Also on the plus side, this make the extravagant favorites a slightly more special experience.

   Total Savings: $2160 per year (replacing 3 $100 meals with 3 $40 meals per month)
   Total amount I’d have to earn at a 33% tax rate to earn that money: $2872.00

4. I’m selling my sportscar. I’ve got a bit of cash in it and have been paying $600 a month (to pay down the principal faster). I don’t get a ton of joy from cars, and can’t find a way to justify owning an expensive one. I’ll be buying a cheap 4-door sedan with the cash that I get from selling the car. While most people don’t have a $600 car payment, most people DO pay monthly payments for a nicer car than they could afford with cash. There are plenty of reliable vehicles for sale– why pay a monthly premium just to have a shinier and newer vehicle? If you get a lot of joy from cars, of course, this might be worth it. But how many great family vacations could you buy with this money?

   Total Savings: $8377.44 per year (payment plus estimated insurance for comprehensive coverage and a more expensive vehicle)
   Total amount I’d have to earn at a 33% tax rate to earn that money: $11,142.00

As I said before, your mileage may vary. The point of the exercise (for me) was to look at all optional recurring expenses and do an honest analysis of just how much happiness and satisfaction they generate when compared to the cheaper alternatives. The changes above don’t substantively change the quality of my life and bring me that much closer to my goal of having my passive income (from real estate, investments, etc) cover my life-expenses. It also, as an entrepreneur, frees my money up to invest in more interesting (and potentially lucrative) things.

One of my favorite “design” bloggers out there is Josh Porter of Bokardo. In his most recent article, Josh contends that “designers need a place at the strategy table because their work depends on and is a direct result of it. If it’s not already, realizing the business strategy of the organization in an interface should be the designer’s primary job description.”

If you’ve ever given a designer a “we’re happy with how it works, just pretty it up” job (whether it’s a web site or a word doc), you need to read this article. Preferably right now (I’ll wait).

Unfortunately, I think Josh is overestimating both strategists ( “…off using terms like “conversion”, “user-generated content”, and “ROI”” ) and designers ( “…opining about “grid-based design”, “cross-browser rendering”, or “web standards”” ).

I’ve thrown out the idea in the past (and it tends to piss off a bunch of web designers): design (as most people define it) isn’t very compatible with usability and usually only a coincidental relationship with lofty things like “business strategy”. Designers’ brains (and the brains of the people who hire them) simply aren’t wired that way.

Don’t believe me? Take this simple test to see if you’re thinking about design in the wrong way:

• If you’re a designer: Open up your portfolio. If you don’t have a portfolio, pull up a mental picture of the last one you had. What does it look like? Lots of screenshots, no? Next to each screenshot, do you talk about the business goals of the client/employer? Do you talk about how the design performed after launch? Do you know how the design performed after launch? Do you CARE how the design performed after launch? Answer that last question honestly– of COURSE you care how it performed, but was acquiring that knowledge a higher priority for you than your next pixel-slinging / xhtml-wrangling task?
• If you’ve hired a designer: Look at the last time or two you’ve hired a designer. What type of person did you hire? Why did you choose that designer over the alternatives? Did you ask about business strategy? Did you ask about post-design performance metrics?
• Bonus question for non-designers: Have you ever thought or said, “If I was only better at Photoshop and/or Illustrator and/or XHTML/CSS/JavaScript, I could do this myself.”?

Maybe– hopefully– you are the exception to the rule.

What stands in the way of making things better?

Unfortunately, things aren’t likely to change soon. There are a few attitudes that stand in the way:

• Designers need to stop thinking and acting like artists and start acting like scientists. I’m honestly not sure this is possible.
• Non-designers need to stop thinking that they are good at crafting user experiences. Don’t get me wrong– they should certainly have an opinion, voice ideas, express concerns, etc. I’m not saying that they should shut up and let the expert do their job… They just need to realize that it’s possible to BE an expert.
• Everyone need to be willing to sacrifice pretty and sacrifice “cool”. At my last job (the only time I haven’t been self-employed in the last decade), the product team united around a user experience to create a public “resume”. It was a gorgeous multi-step experience with a few inline “wizards”. Users could edit their public profile after the fact in a seamless inline manner while viewing their profile (imagine lots of “edit” links next to editable data). The team loved it. The CEO gushed. The designer was proud. The users, however, were confused as hell.
• Non-designers need to hire designers with the right attitudes and reward the right successes. If both parties think the designer’s job is done when they hear, “Wow– that’s beautiful”, then there’s a problem.

I love pretty much everything Josh is proposing, but I’ve only met a tiny handful of designers who have the discipline to purposefully make something LESS PRETTY and LESS COOL to make it more effective. And I know even fewer product managers who have the discipline to ask them to.

Facebook’s goals and your goals (as a Facebook user) are starting to get misaligned. And it’s only going to get worse. I’ll come back to this in a sec.

Alan (former VP at my previous employer) has left Facebook. He brings up a lot of cogent reasons why.

For myself, I am a bit frustrated with Facebook. I receive a pile of “notifications”, “facebook mail” and (increasingly) “sponsored crap” every week, quite a bit of it quite deceptive in its desperate bid for virality (yeah, I know virality isn’t a word). Notes that say “John would like to see what you’re reading”, “Bob wants to know what your stripper name is”, and “Alex has posted some . Click here to view them!”… All of these things lead straight to the “install this app” screen that I’ve visited a hundred times.

We’ve all done it. Responded to these “personal” invites as if they really were personal invites (I have 6 iLike invitations from people who I’m SURE aren’t really that interested in getting me to use iLike), installed the application only to remove it a week later when you realize it doesn’t do a damn thing that actually adds value to your life.

I’d like to find the setting in Facebook where I can check a checkbox that says, “I would like to find what applications I want to install on my own, thank you!” (Can you find that option in the picture below? Am I missing a setting somewhere?)

So back to misaligned goals. One of my problems with free consumer apps is that the goals of the business are virtually NEVER aligned with the goals of the user. In the beginning of a startup (like Facebook), this doesn’t come into play. The business is 100% focused on adding value to the user. The user wants to get stuff done (share ideas, photos, communicate, whatever) and the business is desperately trying to help them reach these goals as effectively as possible.

Unfortunately, pretty soon the business runs out of easy ways to add value for the user. The growth curve slows down, and you start hearing people on the product team saying, “We want the users to…” more than “Our users want…”. And it’s about this time that investors are starting to look at the burn rate and wonder how the business is going to extract value from the user. With free services like Facebook, you have a few options… I’d imagine that they’ve functionally killed their virtual gift business by releasing a public platform like they have. So that leaves advertising or premium services. Unfortunately, I haven’t heard a whisper of premium services from Facebook.

The funny thing is, users really aren’t too keen on advertising, no matter how targeted they are. And with a high use-per-day app like Facebook, they become downright invisible to the users. Quite a few people have noted that FB advertising is pretty painfully ineffective. Which means that the business needs to make ads more plentiful, more invasive, or more expensive… All of which have pretty serious negative ramifications for the user. And because EVENTUALLY there is a drive for constant revenue growth at consumer facing web startups, where else can they turn? Of course, you could argue that Facebook, with their new ad platform, have a better understanding of their users that just about anyone (in terms of demographics and intent)… But between the ad blindness that is a huge problem on utility-style apps (when was the last time you read an ad in Gmail? How about clicked on one?) and because Facebook is built on trust of your NETWORK, I think the “but Facebook advertising can be sooooo targeted!” argument doesn’t hold up.

Take any free consumer site that’s more 5 years old and you see how ugly this slippery slope can get. Interstitial ads, Flash ads that obscure the content of the site, pay-per-click garbage, and more. If Facebook doesn’t start looking in other directions, this is where they’ll be in a year or two– trying to manipulate their users into clicking on (or viewing a lot of) ads.

Just read a great piece on Small Business Hub about SEO entitled Stopping The Google AdWords Morphine Drip: How We Saved $183 Last Week. These guys echo a sentiment that I’ve been expressing for a long time (and just posted about a few weeks ago)… Investment in SEO is virtually ALWAYS better than investment in Adwords/PPC.

Mike’s article boils it down beautifully. The search phrase that he cares about is “Internet Marketing Software”. Buying a click for this phrase costs about 7 bucks. Having managed to SEO their way to the #6 slot on that page, they got 25 visitors in a week. So, by investing in SEO, they’ve managed to get $700 in PPC value FOR FREE. I’d also imagine that searchers have a bit more inherent trust for organic search results than ads. So, if Mike’s visitors were buyers, I imagine they’d convert a bit better than their PPC brethren.

One of the things that Mike doesn’t talk about in the article (tho we chat a bit about in the comments) is the EFFECTIVENESS of what you’re presenting in the SERP (search engine result page, for you SEO noobs at home).

This isn’t uncommon. Having read a lot of Mike’s articles, I think he’s a rare SEO guy who actually thinks about it from more traditional angles. But most SEO people are very analytical people. They are looking for systems and formulas that allow them to exploit Google better than the next guy. There are degrees of evil here (referred to as “white hat”, “gray hat”, and “black hat” tactics), but they are all variations on a theme– getting Google to perceive your importance as very high in the keyword-spaces that are important to you.

So on to the point of this post– SEOs are so damn focused on getting in front of a ton of eyeballs that they often lose sight of the next critical step– putting something in front of them that inspires action. Pretend you hired an advertising firm to promote your new soft-drink. As you tip back your scotch and soda one evening (that’s what fatcat soft-drink executives drink, right?) you see a commercial on the TV for your product. You look on, horrified, as bizarre images move across the screen. The lighting is bad, the camera work is terrible, and it’s not even clear what product the commercial is about. The next morning, you call up your agency and demand an explanation. Their response: “Yeah, we saved a TON of money on production– but the good news is that we spent the savings on more ad buys! That commercial was seen by millions more people than if we’d blown all that money making a great commercial!”.

The (somewhat meandering point) I’m trying to make here is that you have a few hundred characters to make an impression and inspire action (the click), and you aren’t going to do that by seeding your listings with a jumble of keywords.

So let’s take a look at Mike’s listing.

Not too shabby, but it certainly isn’t inspired marketing copy. A lot of product people feel feel that marketeers are manipulators and that you should just present the facts. The fact is, you can be certain your competition isn’t thinking that way. And surely you’ll agree that you can present the same facts in different ways that result in some pretty different reactions. For example (my favorite– apologies to Robert Heinlein), would you rather have a nice, juicy steak or a muscle tissue sample from a castrated bull? If you’re still not buying it, I suggest you read the studies profiled in the book Made to Stick… You’ll be floored.

The realization that your SERP presentation is so critical is unfortunate. With most user experiences, testing is easy. With SERPs, testing is damn challenging. Changing your title and meta description is easy to do… But Google doesn’t re-index your site THAT often. And a bad change can have very real consequences to your traffic (and your revenue). Testing 5 good ideas could take weeks or months. I would love to hear any ideas on how you can test in the comments.

One idea that I have is creating a faux-Google experience. Create fake Google search pages with fake results that are presented when someone clicks on the search button (with maybe a few pages of results). Then get some test subjects in your target market in and ask them to search for your term and select their vendor based off what they see. Not only would you get to see which of your SERP ideas fly well, but you could also see which of your competition performs well. It’s about as expensive as a usability test, but I think the value would exceed the cost.

Of course, the herculean challenge here is that you don’t have free reign to create copy that sings. You have a tiny title, a little snippet (meta description) and no control over presentation style. And, most importantly, you have to be darn sure that the extra clickability that you create by optimizing your SERP content doesn’t cost you in the rankings game.

I generally don’t use this blog for life news. I figure if you know me well enough to care about what’s going on in my life, you probably would already know anything I could mention. But, given that this particular tidbit has professional ramifications, I figured I’d throw out a short post.

At day 366 of my tenure at Jobster, I submitted my resignation. For those of you who haven’t been keeping score at home, Brian Fioca and I had sold a small web startup to Jobster about a year ago. Working at Jobster was a pretty amazing learning experience in a lot of ways, but it became clear to me that I am better suited for smaller and more early-stage companies.

My current professional plans are to keep my eyes peeled for the “next big thing”, preferably a very early-stage startup with considerable equity opportunities.

In the meantime, I’m doing a bit of consulting work and working on RescueTime (which has some potential to be the aforementioned big thing). I’ve already taken on two short term consulting gigs (both with startups) that are pretty darn interesting. Given that I was gone from Jobster for all of a week (the week of July 4th at that), I’m pretty comfortable saying that there is a fairly endless supply of consulting work to be had.

Nonetheless, I’m always keeping my eyes peeled for more. So if you bump into an opportunity that seems like it might be a good fit for me, let me know!

Brief note to let my dear readers know that we’ve set up a blog for RescueTime. Right not it’s not that active, but will eventually contain lots of interesting things that we can learn from our anonymous users. By asking them a few questions, we’ll be able to look at how productivity differs by gender, age, industry, and more.

For now, we’ll tide you over with a long-n-wordy case study on our permissions marketing campaign and a link to my appearance on Dave Mason’s syndicated radio show. Good fun!

The best teams I’ve ever worked on have had a peculiar vibe of “mutual awe”. When I saw what my colleagues could pull off, I was dazzled. When I pulled off something cool, THEY were dazzled.

At the same time, I think it’s tremendously valuable to be a hobbyist in the areas where your partners are experts. I’ll never be a programmer, but I’ll always dabble– it helps me know what CAN be done. I’ll never be a salesguy (though I’ve been one), but I read books on how to sell. I’ll never be a writer, but I like to read about the art/science of writing good copy.

One of the blog entries that has stuck with me for a while is Guy Kawasaki’s post on workplace assholes (it even comes with a handy self-exam! (Are YOU one? Uh-oh. Am *I* one?!).

The main reason that the post/test stuck with me was one of the characteristics of workplace assholedom is this belief:

“I could do your job better than you’re doing.”

I’ve already sung the praises of small teams, but I’ll add this to the heap. The smaller the team, the greater to potential for mutual respect and/or awe. The larger the team, the greater the likelihood that SOMEONE on the team is thinking (or even saying) that they could make better design/coding/sales/biz decisions than the person who is currently making them.

Ironically, the larger the team, the greater the likelihood that they might be right.

Most of my personal hosting sites are hosted at a shared hosting company called Dreamhost. They’ve had some growing pains and certainly can’t handle any significant traffic, but they are a great host for dabbling (if I’m doing anything serious, like Jobby– now sold and gone– or RescueTime). They also have the benefit of hosting as many different domains as I want under my plan.

Dreamhost had some sort of hiccup after midnight last night, resulting in TonyWright.com being functionally dead in the water.

By the time I got in front of a computer this morning (9 hours later) I had 4 emails letter me know (3 from complete strangers). It’s heartening as hell to know that perfect strangers are trying to read my blog and making noise when it’s not available. Cool!

This charges me up to get back into blogging a bit, so stay tuned.

http://bokardo.com/archives/design-is-not-art-redux/

Great blog entry about design by one of my favorite bloggers.