This chapter explores some of the major concerns regarding intellectual property of the entrepreneur, as well as other important legal issues such as product safety, insurance, contracts, and the Sarbanes-Oxley Act. The problems with intellectual property have become more complicated with the growth of the Internet. It is important for the entrepreneur to seek legal advice in making any intellectual property legal decisions such as patents, trademarks, copyrights, and trade secrets. Lawyers have specialties that can provide the entrepreneur with the most appropriate advice under the circumstances. There are also resources identified in the chapter that should be considered before hiring an attorney. Some of this information can save time and money for the entrepreneur.

A patent requires a patent attorney, who assists the entrepreneur in completing an application to the Patent and Trademark Office with the history and description of the invention, as well as claims for its usefulness. An assessment of the existing patent(s) will help to ascertain whether infringement is likely and to evaluate the possibilities of modifying the patented product or licensing the rights from the holder of the patent. A provisional patent can be filed that will give the entrepreneur 12 months to finalize the patent. Being the first to file with a provisional patent can be very useful to provide immediate notification of ownership of the patent rights as well as provide time to develop business strategies.

A trademark may be a word, symbol, design, or some combination, or a slogan or sound that identifies the source of certain goods or services. Trademarks give the entrepreneur certain benefits as long as the following four requirements are met: (1) completion of the written application form, (2) submission of a drawing of the mark, (3) submission of five specimens showing actual use of the mark, and (4) payment of the required fees.

Copyrights protect original works of authorship. Copyrights are registered with the Library of Congress and do not usually require an attorney. Copyrights have become relevant to the use of the Internet especially to download music, literary works, pictures, or videos. Copyright protection related to the Internet will continue to be a gray area until regulations are made clearer. Both trademark and copyright applications can be filed electronically.

Licensing is a viable means of starting a business using someone else's product, name, information, and so on. It is also an important strategy that the entrepreneur can use to expand the business without extensive risk or large investments.

The entrepreneur should also be sensitive to possible product safety and liability requirements. Careful scrutiny of possible product problems, as well as insurance, can reduce the risk. Other risks relating to property insurance, life insurance, health insurance, workers' compensation, and bonding should be evaluated to ascertain the most cost-effective program for the entrepreneur.

Contracts are an important part of the transactions that the entrepreneur will make. As a rule of thumb, oral agreements are invalid for deals over one year and over $500. In addition, all real estate transactions must be in writing to be valid. It is important in a written agreement to identify all the parties and their respective roles, to describe the transaction in detail, to specify the value of the deal, and to obtain the signatures of the persons with whom you are doing business.

The Sarbanes-Oxley Act was passed in 2002 and places a great burden on public companies to streamline their financial reporting, modify the role and responsibility of boards of directors, and basically provide more checks and balances to avoid repeating the scandals of WorldCom, Enron, and others. There are a number of provisions of the law and entrepreneurs should be aware of any relevant requirements, particularly if there is intent to take the company public. At this point the law applies only to public companies, but there are possible interactions with private firms as well as likely changes to these laws that will require continued scrutiny by entrepreneurs.