Legal Question in Intellectual Property in Maryland

Re: Internet Business

I am an attorney with 20 years of experience in corporate and intellectual proeprty transactions.

I believe, you will be better of establishing an entity in Delaware rather than Maryland for what you want to do, for several reasons:

1. Quicker time to receive a final judgment in a court, becuase of the exclusive jurisdiction that the Delaware Court of Chancery has over technology disputes.

2. Ablity to waive judicial dissoluion of multi member LLC's. This could save you over $250,000 in you get in an dispute with any other owner. Delaware is more likely to let you waive judical dissolution than is Maryland.

3. The ability of a co-owner to withdraw is much harder in Delaware too.

4.If your idea takes off, any venture capitalist and most angel investors will demand that the entity be reestablished in Delaware anyway. It more costly to do this, than start out right in the first place.

But you will still need to qualify as a foregn LLC/Corporation with the State of Maryland, and pay your $300 personal property tax anyway. This applies even if the business is an internet business.

I would strongly and in no uncertain terms recommend that you get yourself a patent attorney to prosecute the patent application. The chances of a non lawyer be able to draft good patent claims and prosecute them through the Patent and Trademark Office are very slim. I am not a patent attorney, but I will be happy to refer you to one.

I would also recommend that you get yourself a trademark lawyer too. The Patent and Trademark Office almost always responds to Trademark applications with an office action about 18 months after the application is filed. The office action is usually three or more pages of cites to various court and Trademark Trial and Appeal Board Cases on why certain elements of the mark are not eligible for protection. You will at least need a trademark attorney to respond to the office action, and I would strongly recommend getting one to do a search and file the application as well. I do practice in the trademark area.

Furthermore, you will need to protect your trade secrets. This done through an end user license that each purchaser of any goods or services from your web site must click "I accept" before purchase. Also getting a mutual non discloure agreement so you can talk about your ideas with potential partners, is a very good idea too.

Setting up an internet based business is actually more complicated, it is not easier than setting up other businesses. I wish you the best of luck.