Hey there, today we are talking about avoiding the lemming mistake in your business. You know those little lemmings, you’ve seen the cartoons of them going off the cliff and then the next one goes and then another, and another, and another. Well a lot of small businesses do that when it comes to the legal requirements of the business. Now what am I talking about?
The most disastrous example that I came across recently was one of my clients, they are a pretty big firm, they turn over millions of dollars a year, they import a lot of goods and sell them to stores like ALDI and the Dollar Shop among others. They’ve been my clients for many years and they really should know better. In the past they have had some problems with inadvertently infringing patent designs and occasional copyright, sometimes even trademarks. So we’ve developed a system and they’ve become quite careful about what they import.
However they recently received a letter of demand from Apple, yes the big computer company Apple, which would make anybody shake in their boots because Apple is not shy about suing people. So, my clients sent me the letter of demand and I investigated the situation, and I rang them up and I said “what are you doing? Apple has got literally hundreds of patents and designs.” What had happened is our clients had imported some iphone chargers and they were selling them, but they were not genuine iPhone chargers. My client’s response was “everybody else is doing it, I’ve seen these chargers for sale in BIG W, in Khols, in Woolworths, so I know I’m fine because I’ve seen these chargers for sale.”
I say, “are you kidding me? Just because everybody else is doing it doesn’t mean you can do it.” The logic behind that is wrong because Apple could be suing those other companies, we don’t know what’s going on. The other thing that had happened with Apple was that there had been a period of time, several years, where Apple and Samsung were having this massive fight. It was like the fight of the titans, the one was suing the other one for patent infringement and the other one was suing them for patent infringement. This was a massive case and it dealt with a whole lot of patents, it was great for the IP lawyers in Sydney and it just went on forever, for years, and years, and years.
All of the energy and all of the money was tied up in this litigation, then after that suddenly they started looking around for smaller fish to fry. So it could be that my client was just caught up in that net of being a smaller fish. It could be that those other companies, BIG W and whatever, were actually importing a different product. So it might’ve looked the same but it could’ve been different, which might be why they weren’t in trouble. It could be that they were in trouble, it could be that Apple was suing them too and we just didn’t know about it. They could’ve had a license from Apple to sell that product, we just don’t know.
That’s just one example, but there are many, many times where I see somebody doing something and they say everybody else does it. For example, there used to be this thing, where if there was an image on the internet and it didn’t have a name on it, people thought you could take it and use it. Of course that’s not the case, this lemming thing is honestly one of the biggest mistakes that small businesses or even bigger businesses make. They see somebody else doing something, or somebody following a particular legal course of action and then they assume it must be fine.
Do not be a lemming, you could end up going off the cliff. The solution is do your own research, find out what is going on with your situation, and make sure that you are not in trouble. Another thing that could happen is that the laws can change sometimes, so even if you did something last week and it was fine, it might not be good this week. I had a neighbor, who ran a sawmill from his home, then later on the laws changed and then he couldn’t run that sawmill anymore, but he didn’t know about it.
Another example is I know of a lady, she wasn’t my client but I know of her, he bought a house and on the side of the house there was a coffee shop. So it was like a little granny flat that they ran the coffee shop out of, this coffee shop had been operating in Ipswich for about 20 years. Everybody loved this coffee shop, so when this woman bought it, she thought it’s a great buy. Because everybody loves this little coffee shop, it’s part of Ipswich history and culture. Then she bought the house and the coffee shop, and decided to do it herself, she didn’t need a lawyer and she knew what was happening.
She created her own contracts and after she’d been running the house or the coffee shop for two months, a city council inspector came to the premises. The inspector asked “where is your correct licensing, etc?” To which she said, “I don’t have any licenses,” she thought she could just run it out of her house. She thought she had done everything right, it had been run that way for 20 years. Turns out not only did it not have the correct commission under the food safety act. But also in that particular area, the city council zoning didn’t allow you to run a food providing establishment out of your house.
So she paid a premium for this house and cafe and within two months had to shut down the cafe. All because she was a lemming and was doing what the other person had always done. You’ve gotta feel sorry for her, because it seems logical that if you’ve taken over a business you should be able to keep going the way the previous person was going. unfortunately, the law is not always logical and just because somebody else is doing it doesn’t mean it’s right. It might just mean they haven’t been caught yet.
So how do you avoid not being a lemming? You need to do your own research and if necessary, get a lawyer involved. Spend a little bit of money and make sure that whatever you’re doing is correct. That’s what you need to do with certain things, get to the point where you’re making sure that what you’re doing is correct for your business. So don’t be a lemming, sometimes paying a little bit of money up front and getting the legal stuff right, can save you a lot in the long run. It’s Cathryn Warburton signing off, your Legal Lioness.
