Addressing Complex Legal Issues
for Client-Specific Circumstances
Report by Simon O'Brien, '12
On the 2011 Public Law & Leadership course at Elon Law
Our team’s client was Greensboro-based adult literacy advocate Reading Connections. Officially founded in 1990, Reading Connections strives to advance adult literacy and life skills, and to improve the self-esteem, leadership skills and community involvement of adults dealing with illiteracy. Through the dedicated work of an experienced staff and the kind service of over 300 volunteers, Reading Connections helped a little over 1,000 adult students in 2010 alone.
Reading Connections’ most innovative work however, has been the development of its Literacy Toolkit. Devised to promote adult literacy on a national scale, the Toolkit takes conventional methods of teaching adult literacy, and expands upon them with an improved process which allows for individualized student learning. Though still in its development and testing stages, the Toolkit is proving successful and Reading Connections is interested in marketing and selling it across the country. With this in mind, their tasks for our winter term team were three fold:
- How best to protect Reading Connections intellectual property rights encapsulated within the Toolkit.
- How to market and sell the Toolkit without losing their 501c3 non-profit and tax exemption status.
- To produce all necessary documentation in order to protect the intellectual property while at the same time shielding Reading Connections from liability.
After having met with the client and having learned of their concerns, our team decided to split off into groups. Knowing that we would have to turn in both a presentation and memo, we decided to allot certain positions first. Those positions were two speakers, one presentation creator, one contract forms researcher, and one facilitator to act as a point person between all team members, the client, and various Elon staff members assigned to oversee our progress. Once these positions had been allotted, we split the team further into two research groups. One group researched ways to protect intellectual property, and the other researched ways to market and sell a product while protecting 501c3 non-profit status. Each of these two sub groups had a leader and those leaders worked closely with the overall facilitator to ensure successful time management and team communication.
The results presented by the intellectual property group suggested a need for Reading Connections to trademark, copyright and patent their work. Firstly, in order to successfully trademark the names and symbols under which Reading Connections will sell the Toolkit, it is important for them to choose a name which is original and only marginally descriptive. Secondly, once trademarks have been filed with the United States Patent and Trademark Office (USPTO), it is important for Reading Connections to register the actual Toolkit with the U.S. Copyright Office. Finally (and most expensively), we advised our client to apply for a patent with the USPTO in order to protect the processes contained within the Toolkit. If Reading Connections follows our advice and files for all three forms of intellectual property, not only would the patent provide them with a twenty-year monopoly on the process, but the trademark and registered copyright would allow them to bring suit against any party attempting to use the Toolkit or its name without permission.
Our ultimate suggestion, on the issue of protecting the client’s non-profit status, was that Reading Connections pursue one of two viable, though opposing, options presented by the second research group. The first option was to license their rights in the Toolkit to a third party and then earn revenue by receiving royalties as compensation. Though this option does shield the client’s non-profit status, it also results in a loss of control over the future of both the Toolkit and their potential revenue stream. The second option was to create a wholly owned for-profit subsidiary which would be fully responsible for the marketing and selling of the Toolkit. Though the for-profit subsidiary would have to pay tax on the revenue earned through sales of the Toolkit, it would be able to relay profits to Reading Connections through dividends, and thus avoid a second layer of tax. Most importantly however, this option provides Reading Connections complete control over the marketing and selling process, while simultaneously shielding itself from any potential liability associated with the Toolkit.
In summation, this assignment has proven to be one of my most enjoyable law school experiences. Engaging the needs of an actual client through research, preparation of legal documents, and the presentation of our findings was both a rewarding experience and one in which our team took great pride. I was fortunate to be placed into a group composed of driven leaders who eagerly supported one another in our efforts to advance our client’s greatest needs. Our group truly values the assignment presented to us by Reading Connections, ultimately allowing us to make a lasting impact on the Greensboro community.