James Gourley of Carstens, Allen & Gourley On The Top 5 Mistakes Businesses Make Without Legal Counsel
An Interview With Chad Silverstein
Not doing enough due diligence on the trademark chosen for the business. This can lead to costly legal disputes, and possibly a decision to change the name of the business, which means all of the goodwill built up in the first name is lost.
In today’s fast-paced business world, the complexity of legal matters can often be overlooked, leading to significant repercussions for businesses of all sizes. From startup ventures to established corporations, the absence of legal guidance can result in critical errors that affect growth, operations, and sustainability. These mistakes range from issues with contracts and intellectual property to compliance and employment law, each carrying the potential for financial loss and reputational damage. I had the pleasure of interviewing James Gourley.
James Gourley, partner at Carstens, Allen & Gourley, LLP, has successfully obtained federally registered patents, trademarks, and copyrights, and understands the significance of intellectual property rights as vital assets for companies. He has built strong IP portfolios, negotiated licensing and employment agreements, and provided due diligence for corporate mergers and acquisitions. Notably, he served as lead defense counsel in a landmark patent infringement lawsuit on cannabis formulations. A registered patent attorney with the United States Patent and Trademark Office, James served on the Board of the Dallas Bar Association’s Intellectual Property Section before moving to Denver. He is a member of the State Bar of Texas and Colorado and is admitted to practice in the U.S. District Courts for the Northern, Southern, Eastern, and Western Districts of Texas; the District of Colorado; the Fifth Circuit Court of Appeals; and the United States Supreme Court.
James holds a Bachelor of Science in Chemical Engineering from the University of Oklahoma and a JD from Southern Methodist University.
To start, could you share your “origin story” with our readers? How did you begin your career? What challenges did you face in the early days? How did you overcome them?
While I was studying chemical engineering during my undergraduate education, I was not excited about the job prospects that were being opened to me with that degree. I was mostly getting interviews from big oil companies for jobs that involved managing a gas processing facility or an oil refining facility in a small town in Texas. So, I started considering other career paths. My mother is an attorney, so we talked about what kinds of careers attorneys with scientific degrees can expect, and when she explained the world of intellectual property, I was intrigued.
Law school presented a different set of challenges from those posed by my engineering undergraduate studies, but the biggest change I made during law school was moving from someone who hated writing to someone who truly enjoys it.
Is there a particular book that made a significant impact on you? Can you share a story or explain why it resonated with you so much?
Continuing with the theme of writing, the book that has had the biggest impact on how I write is The Winning Brief by Bryan Garner. The format of the book lends itself to continuous re-reading because it has 100 separate tips for improving the clarity and persuasiveness of your writing. Each one is 2–3 pages long, so it’s easy to consume the book in bite-sized pieces over a long period of time.
Do you have a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life or your work?
My favorite quote comes from Calvin Coolidge. I have found that his take on “persistence” is spot-on and has held true for every area of my life where I’ve found success. “Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘Press On!’ has solved and always will solve the problems of the human race.”
How have you used your success to make the world a better place?
I have been lucky over the years to handle several client matters that resonated deeply with me because I believed from an ideological standpoint that the client’s position was truly, morally correct and important to the world. The most recent one involved a client who was accused of copyright infringement for making copies of model codes (for example, a model electrical code) that had been adopted as the law. We set an important precedent in the appellate courts, all the way up to the Supreme Court, that citizens are allowed to do whatever they please with the laws that bind them, and that no monopoly copyright holder can control that kind of activity. This secured the fundamental right of unfettered access to the laws that bind us.
Ok, let’s now turn to the central part of our interview. What is the most common legal mistake you see businesses make due to the lack of proper legal counsel, and what are its potential consequences?
I think a lot of businesses should do more due diligence at the beginning of the business on their trademark. If you choose a trademark that is confusingly similar to a previously existing business name, you may be spending resources generating goodwill in a name that you will ultimately end up changing in order to avoid confusion in the marketplace. Vetting a business name up front is relatively inexpensive, and it is far less expensive than investing a lot of money into a business name, only to have to change it midstream and start back at close to zero in the mind of the consumer. Doing the work upfront can also avoid costly legal battles over who has senior rights in the name.
Can you share an example where early legal intervention could have significantly altered the outcome of a business dispute or challenge?
Because trademarks are publicly searchable through several different avenues, avoiding trademark disputes is probably the easiest thing a business can do early on. Almost every trademark dispute is one that could have been avoided through early intervention. A recent famous example of a trademark dispute involved beverage giant PepsiCo launching a version of its Mountain Dew drink called “Mtn Dew Rise”. A company called Rise Brewing was already in the market with a canned coffee product called Rise. Although PepsiCo ended up winning the case, they spent millions of dollars in legal fees that could have been avoided if they had done proper due diligence before launching the new product.
How do changes in digital technology and online business practices complicate legal issues for businesses without dedicated legal advice?
The biggest intellectual property exposure most businesses face from the ease with which they can operate and advertise online is in the area of copyright infringement. It is so easy to just grab a cool photograph or illustration you find online somewhere and use it on your company’s website that a lot of companies don’t verify that they have the right to use it. There is a cottage industry of content owners that use reverse image lookup tools to find infringing uses of photographs and illustrations, and demand hefty fees for what they allege is infringing use. It is so easy in this country to drag someone into a copyright infringement lawsuit, that the threat is often very real, and accused infringers end up paying thousands of dollars to avoid it. Always, always verify that you have the right to use a photo on your website, or these content owners will find you.
In your experience, how does the absence of legal counsel impact a business’s approach to contracts and negotiations, and what advice would you give to mitigate these risks?
Most contracts are written in a language that some call “legalese”. Many times it is not entirely clear to a nonlawyer what some of these contractual terms mean in plain English. A lawyer can help explain the impact of certain terms so the business can be sure what it is agreeing to when it signs on the dotted line.
What legal pitfalls do new businesses often overlook during their initial setup and growth phases, and how can they proactively address these issues?
I addressed the trademark and copyright issues that can arise with all businesses above. The other IP asset that some companies think about too late is getting a patent on their product or service. The bottom line is that if you wait too long, the idea becomes a part of the public domain and you can no longer obtain a patent for it.
Here is our main question. Could you list and briefly explain “Top 5 Mistakes Businesses Make Without Legal Counsel” based on your experiences and insights? If you can, please share a story or example for each.
Not doing enough due diligence on the trademark chosen for the business. This can lead to costly legal disputes, and possibly a decision to change the name of the business, which means all of the goodwill built up in the first name is lost.
Not verifying that you have the rights to all photos and illustrations used on your website. Yes, even the blog post that nobody reads. Copyright owners will find you and they will come after you. I know a business that paid tens of thousands of dollars to settle a copyright infringement claim based on their use of a photo on one social media post.
Not filing a patent application for your product or service. If you wait more than a year after your product or service is available to the public, you have forfeited your ability to obtain patent protection. I routinely hear from potential clients who want to patent their product, and one of the first questions I ask is: How long have you been offering it for sale? If the answer is more than a year, their options are extremely limited or nonexistent.
Trying to settle a dispute without the advice of an attorney. An attorney who has experience with the type of dispute faced by the business can be invaluable in helping to negotiate the best deal possible. Not only will an experienced attorney be able to advise you on the worst-case scenario on your exposure, the attorney will also be able to tell you how most disputes of that type are resolved.
Failing to adequately document all IP ownership. Many businesses assume that just because they paid someone to do something for them, that the business who paid for it owns the intellectual property. The truth is that unless the contract specifically states that the business owns the IP, many times the IP will be owned by the person who created it. When this happens, the business may end up paying even more for the IP rights later down the line than they would have if the negotiations had taken place when the work was originally performed.
If you could inspire a movement that would bring the most amount of good for the greatest number of people, what would that be? You never know what your idea can trigger.
In the area of intellectual property, I would encourage attorneys to work with local organizations and nonprofits to provide free or low-cost legal counsel and IP support to marginalized entrepreneurs and creators. This would help close the equity gap and ensure their innovations and works aren’t exploited.
To follow James’ work:
LinkedIn and Carstens, Allen & Gourley, LLP
This was great. Thanks for taking time for us to learn more about you and your business. We wish you continued success!
About the Interviewer: Chad Silverstein is a seasoned entrepreneur and Thought Leader with over 25 years of business experience. He has founded, operated, and exited multiple companies and now builds into a handful of high impact CEOs. Chad has launched multiple online communities, including a recent leadership development platform, and also serves as a strategic advisor for Authority Magazine’s thought-leader incubator program.
To learn more and connect with Chad visit: chadsilverstein.io
James Gourley of Carstens, Allen & Gourley On The Top 5 Mistakes Businesses Make Without Legal… was originally published in Authority Magazine on Medium, where people are continuing the conversation by highlighting and responding to this story.