what you don't know about trademarks could hurt you badly. these two small business owners had successful products until they were blind sided by cease and assist letters that threatened to shut them down. learn how to avoid costly litigation, coming up next on "your business." small businesses are revitalizing the economy and american express open is here to help. that's why we are proud to present "your business" on msnbc.

hi everyone i'm jj ramberg and welcome to "your business." the show dedicated to helping your small business grow. the whole point of having a brand and a logo to go with it is to make sure your products don't get confused with anyone else's. that's why there are laws around trademarks and other intellectual property. whats when you are accused of violating another company's ip even if you never intended to. one thing, you may end up receiving a dreaded cease and desist letter threatening expensive litigation. that was the case with two businesses on the west coast who received those notices and could have lost everything. ♪

santa cruz is a northern california beach town with a reputation for great surfing. catching the waves here is so popular that the locals call their town surf city. >> you look around town you see surf city barber shop surf city cafe, surf city everywhere. >> bruce knoll isn't third generation owner of noland's on the wharf who have been serving visitors for 50 years. >> we sell shirts, sweltatshirts, hats things for the beach. >> he had a design that he hoped would catch on big time. >> let's throw usa in on the bottom. >> soon after it went on sale however, that shirt caught the attention of a rival surfing community 400 miles to the south and bruce's mother and co-owner ginger noland got a very upsetting notice. >> she came to us with a letter that she received from lawyers representing the huntington

beach convention and visitor's bureau. she wasn't sure what the letter was about. >> the letter threatening litigation claimed that huntington beach california, also a popular surfing town owned the trademark surf city usa. as a communications director christina glynn helps local businesses. >> we sat down with her in the conference room, we read the letter. it was a cease and desist letter asking her to cease selling t-shirts emblazoned with the logo santa cruz surf city usa. >> with this notice bedemand that on or before friday september 29th 2006 you must agree to cease selling or in any other manner using the surf city usa marks. so what that's saying in plain english is unless you cease and desist immediately we're going to see you. >> theodore harold is an intellectual property attorney and partner at singulairty llp.

>> i frankly was outraged that somebody could claim trademark rights to something so generic as surf city usa. >> ted says trademarks like coke could -- coca-cola and exxon are registered as a bran. >> i knew it was serious. when i went up to the 28th floor and i was up there with atf, u.s. marshals and the fbi. >> bruce innocently thought a great t-shirt would be surf city santa cruz california usa. unbeknownst to him, somebody else claimed to have trademark rights. >> my mom thought she'd lose the business, maybe her house, the swimming pool. so she was a little frightened especially at her age, that she could lose everything. so was i a little bit. >> when big organizations take on small mom and pops like the nolands, the cost of fighting back often isn't worth it but when ted offered his legal services for free that allowed

the nolands to fight back. they got a compromise agreement. >> we just moved the word usa up a half inch and plugged in original right below it. >> today those modified shirts are one of the top selling items in the shop. >> i probably would have had to cave in and let it go and they would have got their way. thanks to ted harold a local lawyer and surfer -- >> luckily for him there's a surfer dude lawyer which is me who lives in santa cruz who saw what was going on and offered my services for free. so my reaction when i got this letter was that this isn't real. >> i was kind of like oh, yeah got to be a joke. >> last september michelle and elias in portland oregon received their own cease and desist letter. >> i have the letter from the united states olympic committee telling me to not use our name anymore. it's come to the united states olympic committee that you are

operating a restaurant in the portland area under the name olympic provisions. we request that you ultimately discontinue after the federally protected mark. >> we came up with that name because we were in the olympic mills building an old cereal mills building. >> you don't own the word olympic. hello. if anyone owns it be with the greeks own it. >> we were baffled for sure. initially we figured there was a way around it. >> and i had called my attorney. we just might not deal with it. he's like you do realize they can seize your profits from prior years and your assets. i was like okay well, that's out of the question then. then i was like we'll fight it. then my attorney informed me that no one has ever to date been successful. people with a lot more money than our company tried to fight this and have not won. so the chances are too slim.

>> at this point the brother and sister team had to decide if they wanted to challenge the u.s. olympic committee and risk even greater losses or back down and accept the high cost of changing their name. which would include legal fees printing new labels and packaging, rebranding their delivery trucks and reshooting promotional photos. >> we're looking probably around $65,000, $70,000. >> that's just what it cost them to change from olympic to olympia provisions. >> i hate to think about it. >> there's the cost of changing the website. >> it drops you down in rankings. if you're not at the top of the list it definitely takes a hit in sales. i really felt like i was doing it the right way. we had an attorney you know do a name search. we had an attorney create the llcs and come to find out we weren't. that's what was so frustrating for me. i considered myself fairly intelligent person and i missed

this. >> do i wish we could still have our name and not be spending the name and wasting all the money and been using the money to grow my business? sure. but it's gone. am i going to dwell? it's not going to benefit me. >> you certainly do not ever want to be in a situation those business owners were in. let's dive into the subject a little bit more. rhett bernie is an attorney. great to see you, rhett. >> hi how are you doing? >> you know what scares me about this piece is there are some obvious violations of someone else's ip right? so i wouldn't start a computer company and name it apple but in these two cases, it was relatively subtle i think, from the small business owner's point of view. the t-shirt one, they didn't name the company surf city usa. they just made a t-shirt. do you need to check every time

you present something, every product you create et cetera? >> i don't think it's necessary that you check every single time. but the world we live in now and the way that commerce is really going is it makes it a lot easier for your products to sort of make their way across various marketplaces. so maybe 15 or 20 years ago, the surf city usa would have stayed within that community but because of the internet and how quickly an easily things spread they end up working their way down to other communities, other states, sometimes all the way across the country. >> what do you do so you don't end up in that situation? if you are printing a t-shirt or you have a new lipstick you are naming something? a flyer with something on it? >> yes, yes. just starting very basically, you want to go online and see what other people are doing. we call it a clearance search. you look and you start with google and you work your way through yahoo! bing you go to

any particular search engine you can and see what's out there. even if you're naming it something that you think is fairly generic or descriptive, it's worth taking a look at. let's say you find something. a lot of times at that point you want to speak with an attorney. a trademark attorney someone who is familiar with what it is. surf city usa, that attorney he helped them work out a negotiated deal essentially, that allowed the trademark owners the use of their particular trademarks. they were able to co-exist. >> the second story, this one is almost even scarier. they did the search. right? they hired a lawyer. and they found out or they assumed or thought based on what they learned that it would be okay to name their company olympic provisions. it is a lot as we went through in the piece, to change the name of your company once you're established. what did they do wrong? >> it's unclear if she actually

did an actual trademark search or went to the secretary of state's office of their state and they did a search there, which are two very different things. one you're looking at a trade name, the name of your business and the other is you're looking at a trademark. you have to look beyond what's in your own state. you have to look at the federal register, the united states patent and trademark office they have a website. to look there, you'll see olympic is registered to the united states olympic company. the united states olympic committee was granted a special piece of legislation that the ted stevens act, which gives them more or less an exclusive right to use the word olympic. >> what i'm getting from this in general is start with the basic search. whether you're naming a product, putting something on a t-shirt or particularly if you're naming your company, start with a basic search online and then hire -- for the first two, hire an attorney if you find something, for the second one if you're name be a company, definitely

hire someone to help you out. >> that's exactly right. i guess my counsel generally is how much is at stake? if you're doing a complete rebrand, if you're naming your company, coming out with a whole new line of products that you're invested in and you're going to invest a lot of money, that's when you should similarly invest more money in the preparation. if you're doing something off the cuff and you're not investing anything maybe it doesn't make sense to spend as much on an attorney. you have to feel that out as a business owner. absolutely. >> rhett barney thank you for shining more light on this. i know it's a scary situation both those people were in. >> yes, thank you very much. there are many ways to attract customers but most business psychologists appealing to consumers' emotions can be one effective sales tool. for one california-based business appealing to the fear of the unknown has made for a booming business for survival

mode and prep erper. >> it's important for people to prepare and protect their family from what's coming. for me it's not if it's when. >> i'm proud to be a prepper. i think most people are preppers. >> while they proudly call themselves survivalists or preppers, darren dammy and dave stewart, the owner and manager of off the grid survival supply store call themselves entrepreneurs. >> we carry the products you may need in an emergency to take care of your family. >> if you have to start with empty plastic bottles, get the ball rolling. know you have a supply of water you can go to. three days without water and you are dead. >> fear is an immediate motivator. it's a powerful tool in marketing for good and bad. >> adam alter is a professor of

marketing at the nyu school of business. he says entrepreneurs like darren and dave use fear. >> make a plan and work your plan. >> one of the big keys if people are feeling fearful, you give them the tools to deal with that fear. you give them a sense of control. >> i equate it back to insurance. our demographic is people whoen watt to be able to be comfortable and survive if there's an emergency. >> they actually manage the fear, overcome it. even though the chance of something bad happening is small, we want to know it's something we don't have to worry about. >> like many preppers, dave the store manager, lives on a compound at this remote location. he keeps his family and emergency supplies secured behind this steel fence. >> when that moment of crisis arrives, dave feels he's going to be well prepared. he's got a solar heated stove, water supplies independent energy sources, a defensive lookout tower and a pantry stocked to the ceiling with food, medicine and weapons.

darren told us one of his most important marketing lessons came from listening to one of his customers. a prepper who came in right after the store opened. he was stationed at a nearby military base and a small comment made a big impression on darren. >> he goes cool store. i wouldn't buy anything here. i said why's that? he said well because this is all survival kits. where's the mini survival wallet with the file if i need to file to get out of a hand cuff if i'm being kidnapped or where's the mres? where's the knives? >> right away darren expanded his selection and sales took off. his customers didn't need to be lured into the store. when they arrived, many walked right past the front counter to get advice from other customers in the back. one was a dedicated prepper who knew a lot about the gear and the politics. that was dave. >> what i would say to them you

know what please get your head out of the ground open your eyes, look at what's beginning on around you. >> dave actually came to me and said hey, i just want to hang out, talk to other people. i want to share ideas and learn what they're doing. >> that's when darren decided to hire dave to man the front counter. >> my only complaint with dave is he's so good at talking, sometimes he's not selling. >> you want to look for the fit between the sales person and what they're selling. if you're a prepper or survivalist and interested in selling to other preppers and survivalists, they're concerned about the situation at hand at that point. they're already engaged. >> adam says industries that market problgs to answer people's fears, whether it's health fitness, insurance or something else all walk a very fine line. >> you can overload people and overwhelm them with fear not enough fear doesn't motivate people.

what you find at that sweet spot that moderate level of fear and give them a sense of control to mitigate the fear. >> if something happened god forbid, i would want to be prepared for that. >> knowing who you're meeting with before you actually meet them can give you a leg up in that next business meeting. if you don't have a personal assistant or the time to do the research yourself check out charlieapp.com helps you stand out in every conversation. the site pulls from linkedin twitter and major news sources and briefs you on the people you're about to meet. charlie lets you know what you share in common and their professional background, minutes before each appointment. here are five lesser known tools than can be a great help. courtesy of entrepreneur.com. one, edgar lets you schedule

periodic tweets. two, narrow focuses on subjects relevant to your brand and industry so you can build a targeted twitter following of engaged users. three, constant marketer increases traffic and builds relationships with readers. you can also use the tool to find contact information for industry authorities by simply searching articles they've written. four filament answers specific questions you have about analytic instead of reporting dense data. and five scroll depth. this google analytics plug-in measures the extent to which users scroll down your pages to help you determine whether your content is effective and which pages visitors engage with more. when we come back how to get started when you want to

create an e-commerce site. and how to get a high-end look without paying the high prices. american express for travel and entertainment worldwide. just show them this - the american express card. don't leave home without it! and someday, i may even use it on the moon. it's a marvelous thing! oh! haha! so you can replace plane tickets, traveler's cheques, a lost card. really? that worked? american express' timeless safety and security are now available on apple pay. the next evolution of membership is here. this week's yourbizselfie is from allison o'brien who owns

jwalking designs in union, new jersey. please send us a selfie of you and your business to yourbusiness.msnbc.com or via twitter @msnbcyourbiz. don't forget to use use #yourbizselfie. serial entrepreneur angela lee is the founder and ceo of 37 angels a network where she evaluates early stage companies and teaches women how to invest in them. and reva is the founder and ceo of grow biz media. great to see both of you guys. >> great to be here. >> let's dive into the first question. it's from a veterinarian. rocio writes i'd like my associate to purchase a stake in the company but she's not interested. her contract is up for renewal soon and i'm afraid she will

leave. i'm thinking of offering her sweat equity. is this a good idea. >> you give somebody a percentage of ownership of the company without them having to invest money. it's based on the work they've put into the company. >> hence the sweat you're putting into the company. let's dive into the meat of this. is it a good idea? >> it's potentially a great idea and a great tool to incentivize early stage employees. take a step back and ask the question why are you worried about this person leaving? is it a financial issue or is there something bigger there? i feel like throwing equity at the problem really isn't going to solve it. have a conversation and understand why. >> if you get to the point where you're going to give equity give it in a way with a vesting schedule. >> it sound like this person doesn't really know what's beginning on with this person they want to bring in. >> right. >> is the problem that the investment is too high in which case sweat equity will hurt.

is the problem that the person doesn't really care and doesn't want to work there? then it's not going to work. >> the last thing you want to do is throwing equity at people who don't want to be there. now someone else owns a part of your company. they are with you forever. >> they are attached. >> they are attached to you and they're gone and you're not getting anything in return. >> right. dave writes we would like to open an e-commerce site but we're unsure where to start. i need someone to create the website and teach me how to operate it. there's so many websites offering this service but with a limited startup budget where do you go to get the most bang for your buck? i get this question a lot. people have ideas. it's a good way to test. >> it is a good way to test. there's a number of big companies, web.com which is a client of mine go daddy, wix that will build your site for free and some will produce some kood of support. the first thing i'm going to do is go to your local store or

sbcd. you don't want to go to a company if you have no knowledge. you want to interact with the people building your site. go to score, sbcd free counseling, free classes so you can at least learn a little bit and maybe there you might meet someone who is an independent web designer and can create that kind of just for you. >> it's because often in these early stages you don't know what you don't know. >> exactly. >> you don't know the questions to ask. >> exactly. >> the other thing i would make sure to differentiate between is a content-based website and an actual e-commerce site. if you want to sell a t-shirt on a blog to support your blog you can build that on a square space versus if you want an e-commerce site where the purpose is just to sell t-shirts. you'll want a shopify in that situation. >> it has to be scaleable or

otherwise you're stuck. >> if it does take off, what's going to happen. >> servers will crash, service will go wrong and you're ruin customer engagement. >> you'll be giving more advice in the elevator soon. stick around for that. if any offious have a question for our experts, please just send us an e-mail or go to our website, openforum.com/yourbusiness. once there, click the ask the show link. a few weeks ago i was invited to a really fun poker tournament hosted by serial entrepreneur heidi mecir. she had an idea to get a whole bunch of women together to let them network. to kick off the evening she had a few people give elevator pitches in front of the crowd. i was so impressed with one of them, we asked the pitcher to come own and see how it goes in our elevator. >> hi.

i'm lizzie klein and i founded it super duper to let you in on the secrets of the $63 billion make-up universe and help you spend smarter. secrets like the only difference between this bottle of chanel and this bottle of wet and wild is $26. where do you get this information? enter super duper. i launched super duper as a free ios app and with zero spent we've had 7,000 downloads and fantastic press from tech crunch to the zoe report. i'm raising $1 million to bring super duper to android and web customers and to expand to include other products like eye liner, lipstick and mascara. if you're interested in getting in on the next breakthrough in e-commerce, let's talk. thank you. >> congratulations on all the press. that's fantastic. >> thank you. >> all right. both of you guys. i want two numbers, one is what

do you think of the product and what do you think of the pitch? >> product is first. >> product's first. >> $26 and you get the same thing basically you're saying? >> there's the proof. no difference. >> it's basically information. you are providing great useful information to people. >> we want to bring transparency to the beauty industry. >> reva? >> for the product i think it's a 9, probably close to a 10. this is a product that i think needs to exist for a long period of time. because women don't know. they spend money because there's a name and they don't realize that's all marketing. to know that this is actually equal to that i think is a product that needs -- has long needed to exist in make-up market. >> and the pitch? >> the pitch was 7. i know you're a little nervous. i think you could have included more information like target your demographic a little. are you going after all women, are you going after a smaller niche of women in that information would be really key. and are you going to try working

with some maybe major retailers who are selling those like ulta that sell both. they wouldn't object to we don't want to talk about the wet and wild. >> angela you look at tons of pitches like this. >> slightly less positive in terms of the product, i gave it a 7. it's completely needed from a customer perspective. i would personally use it as well. i am a little bit confused as a customer, how am i going to hear about it? it's only for nail polish and you're expanding? >> that was my initial product. >> if i have to go to one other site just for this one thing, i feel like it's not enough to get me to go to the 18th website of the day. >> sure. >> from a pitch perspective, i think that you did a good job of explaining exactly what the product is. but not so good of a job understanding why is the customer going to be interested in this time and time again? is this a one-time use thing, a

multiple-use thing and more importantly, how are you going to make money. >> thank you for everything. if any of you have a product or service and you want feedback from our elevator pitch panel on your chances of getting interested investors, send us an e-mail, yourbusiness@msnbc.com. include a short summary of what your company does how much money you intend to raise and what you'll do with that money. thank you so much for joining us today. we hope you learned a lot and if you want to see any of the pieces from the show just head on over to our website, it's openforum.com/yourbusiness. we also put up a lot of web exclusive content with a lot more information to help your business grow. we are on twitter as well, @misdlbsyourbiz and facebook and instagram, too. next week we grab a seat on a hip hop bus tour that's giving riders a fresh look at new york. while everything may seem like a

smooth ride now, it wasn't always the case for this business owner. >> i was on a bus every tour. from beginning to end i had truck load and bags of speakers and portable speakers and cds. it was a mess. >> we'll see how outsourcing some of her work to another company gives her time to focus on the parts of her business that make her small business stand out. until them i'm jj ramberg. remember, we make "your business" our business. american express for travel and entertainment worldwide. just show them this - the american express card. don't leave home without it! and someday, i may even use it on the moon. it's a marvelous thing! oh! haha! so you can replace plane tickets, traveler's cheques, a lost card. really? that worked?

american express' timeless safety and security are now available on apple pay. the next evolution of membership is here. >> a lot to come in this hour. a lot of news in the world tonight. lots to update you on. we're going to have an update on what we learned today and tonight about the latest american mass shooting, this attack in lafayette, louisiana last night in which a man with a semi-automatic shot people. we've got new information today about who he was, about the condition of the survivors still hospitalized after that attack. and we've got very difficult questions raised today and tonight about how the shooter obtained the gun that he used in that mass shooting given some of the very disturbing things that