Trevor Schmidt: It might be helpful just to provide just a general overview of intellectual property. So it’s a term that gets thrown around a lot, you know, people say IP, your intellectual property, but what does, you know, what does that really mean? It’s easy to think of it in, in the kind of the most common categories you’ve got patents, you have trademarks, you have copyrights and you have trade secrets. And a lot of the things that you’re seeking to protect may fall into more than one of those categories, but kind of, as we talk about intellectual property, it tends to fall into one or more of those categories. 

So at one level you have patents and patents are going to be a new useful and non-obvious invention. So it could be a process. It could be a machine, some type of item of manufacture, or composition of matter. It’s, it’s really more on the technical side invention side. That’s what you’re trying to protect.

 A copyright is going to be a creative work. So any work of authorship, that’s going to be things like photographs, artwork, books, things, you write a graphic design, images, logos. All of those things fit in with copyright, but also in the us and around the world, copyright also encompasses software code cause that’s considered to be a creative expression. So software is protected by copyright, even if it also might be protected by patent under kind of different considerations. 

The next one you have trademark. a trademark really is how you are differentiating your product or service from the goods and services of others. So it could be the name, it could be the logo, it could be the color of the packaging. It could be different branding associated with it. It could be the packaging shape, really anything that you’re using to attribute kind of a designation of origin. So how are, how are your customers trying to find you that’s going to be protected by trademark. 

And then a trade secret is really anything that has value because it’s not known outside of your company. So if you’ve got, you know, the famous 12 herbs and spices of KFC or the recipe for Coke, or, you know, really the algorithm that you’re using in your software, if you take steps within your company to protect that by having policies in place, by having limited access to people within the company, but not disclosing it outside the company and taking all of those steps, that’s going to be something that can be protected by, by a trade secret. So at a high level, those are kind of just the broad categories. 

Wow, I mean, how do you even think about this as like a young company? And that’s who you’re working with for the most part at Hutchison is, is startups. There’s so many things to think about when you’re starting up a company and how do you even know like, okay, well I need this protected. Is this even a trade secret? How do I even know where to start with this stuff?

Trevor: Yeah, I think it helps by having conversations with people early and often, you know, find advisors, find other companies that you’ve worked with, find good outside counsel to kind of have these conversations with, to ask that question, what do I need to protect? But also in your own mind for companies to think about what is it that I have that is super valuable to the company?

What differentiates me from, you know, the startup down in Florida? What differentiates our company from something else, and what can I do to protect that? In some cases, it may not be much that you can do to protect it. You just have to get to market first and do it better than other people. But it’s worth asking that question.

This is what I think is valuable to my company. Is there something I can do to protect that? And then a good outside advisor, like a, you know, an IP attorney should be able to say, yeah, this is something that we can protect either through copyright. You may be eligible for patent protection and, you know, come up with some good branding and we can protect it from a trademark side.

Jason: Gotcha. Okay. So the 12 herbs and spices with KFC, that is a trade secret, right? 

Trevor: Correct? Yeah.

Jason: Do they just have to protect that from their own employees? Like, how does that work?

Trevor: It’s interesting because some of these things too are questioned, whether they’re actually real or if it’s urban or, you know, an urban legend and you know, sometimes these ideas of trade secrets get passed around also too, as a form of marketing, we have must have something really special because nobody knows about it.

That issue aside, the reality is the yes. So you have to have all of these documents in place or policies and procedures in place that show that you’re taking reasonable steps to make sure that this information is not disclosed outside of the company. That could be limiting disclosure within the company, or it could just be a matter of the fact that we don’t tell anybody else outside of the company about this information. So the only people that get to see it are people who’ve signed onto our employment agreement and have signed on to confidentiality and proprietary information disclosure agreements, you know, whatever it may be, you’re taking these steps to make sure it’s protected. 

But the thing about, you know, the other aspect about IP is that there’s a lot of different caveats as far as what it protects. So for example, a trade secret: keep somebody from taking that from you and then using it as their own, but it doesn’t protect the company against independent development. So if I go into my kitchen and I somehow magically put together the 12 spices, of KFC and I start using it, nothing they can do to stop me from independently developing it. All they can do is prevent me from going into their office and somehow stealing the recipe and coming out and using it. 

But with like a patent, a patent really is kind of the opposite. It does stop somebody from independent development. If you are the first to invent and then the first to get it on file in the United States, you can stop somebody else from doing it, even if they’ve never heard of you, even if they’ve never heard of your research and they’ve independently developed it, you have an exclusive right to that invention for the term of the patent.

Jason: Oh, that’s so interesting. And this is something that you help out with all the time, right? And figuring out what you need what a startup needs, whether it’s a patent or a copyright or trademark. Yeah, that’s super interesting.

Trevor: Yeah, these are conversations we have all the time. And the other thing that is always a constant balance for our companies, especially those that are just getting started is there’s always going to be a tension between what you want to protect, what you need to protect, and then what you can afford to protect, and because all of these have certain cost considerations. 

And so there has to be a balancing act between. What do I need to do to protect my company? What can wait maybe a year or two years down the road? What should I wait until I get my first round of funding and then seek to protect? But along those lines, you know, there were some aspects of IP where if you don’t take the right steps, initially, you’re going to be foreclosed from, you know, having an opportunity even to protect it.

So for example, for patents, there are concepts called statutory bars, where if you’re on sale in the United States, or you’ve had a public disclosure of all of what makes up your patented invention and you don’t get a patent on file within a year of that disclosure, you’re actually foreclosed from ever getting a patent, no matter what, you know, what you’ve done in between then.

So there are certain things that you need to kind of take into consideration, either protect them now, or I’m not going to be able to protect it with this tool. Even if it is going to be a difficult thing to bear from a cost side.

Jason: Well, I mean, so many things to think about. And you may have touched on some of these already, but I mean, what I really want to talk to you about today is what are some common mistakes that you see from startups when it comes to intellectual property? Like, do you have a, a top three, top five tips that you can give, or common mistakes that you see in startup?

Trevor: Yeah, I can think of, at least there’s some common ones that I see. You know, one, I think would be really not documenting IP rights and transferring those into the company. So one of the different things about the different types of IP as well is that who owns the rights initially, it kind of varies whether it’s a patent, whether it’s a copyright, whether it’s a trademark, et cetera.

And so you have to bear that in mind, as you think about a young company growing, you know, do I have employees that are developing this for me? Is this something that I created before I formed the company? Is this something that I’m hiring an outside contractor for, then they’re developing? How do I make sure all of those individual pieces get transferred back to the company?

Because there are some pretty easy pitfalls that you would, you know, I’m paying a contractor to develop the software code for me, but he’s my neighbor. I haven’t documented it. I don’t have an agreement in place, but I’ve paid him. So obviously I own it. Unfortunately, it’s not really the case because copyrights initially belonged to the author of, of whatever was created.

So the contractor, if he’s an independent contractor and he’s created code for you, initially that person owns the code. So unless there’s an agreement in place that transfers those rights back to the company, you may have a situation where you think you want something that’s really owned by somebody else.

Jason: Whoa. Like, so with founders like that creates a tough decision, maybe like where is it their own property or is it the company’s property? And so like everybody, as a founder thinks that their company is going to grow to the level and they’re going to be the, the owners and everything, but that’s not always the case.

And so, you know, do you…

Trevor: yeah, well, I mean, that should be the one of the first steps for, for, for the founders as they’re forming the actual legal entity to be the company is really the expectation should be the founders are contributing, whatever they have that they’re bringing into the company, to the company and that’s what the receiving their shares for.

So if I’m a founder and I get 20% equity in the company, the expectation is I’m giving all of my IP rights, all of whatever I’ve created prior to forming the company to this company so that the company owns it. And so the value can continue to grow with the company, because if you’re looking to attract outside investors or a future acquire, that’s one of the things they’re going to look to is does the company own what it thinks it owns?

And do I have assurances that if I put a million dollars into this company that we own what we need to, to continue to grow with. So I would say that that’s kind of, one of the mistakes that I see is not being careful and not documenting those things kind of at the outset of the company.

Jason: Yeah, yeah. What else?

Trevor: So, so another one would be, I think this was not a huge pitfall, but it causes a lot of kind of consternation and heartache, and that’s the idea of like either falling in love with the trademark or brand prior to doing searching for it or clearing for it, or even worse, kind of adopting a mark without having done any clearance.

And then rolling it out in a big way, especially if you’re putting it onto product or something that’s difficult to take back off the market without having done that clearance. And so I see this one come up quite a bit where, you know, I’ve had this name and mine since I was a kid, this is what my mom, my company to be. This is what it’s going to be. Sad news. There’s actually somebody who’s already got a federal registration for that market. You can’t use it. Or, you know what? We got excited. We got started. I just ordered $10,000 worth of product from the manufacturer in China. I just got it. I’m ready to sell it.

I got a cease-and-desist letter that says, hey, you may not know this, but we actually own this, this mark already. And that investment in that amount of money that you just put into that product you can’t use because it’s an infringement and you could create some liability for the company. If you continue to use the mark.

So not having done due diligence or clearance, kind of at the outset of adopting a company, name, your main product name, your service marks, whatever it is that you’re going to market with.

Jason: Oh, my gosh. I can’t imagine getting those letters I mean, I’ve gotten letters from Getty before, you know, you know, Getty images where it’s like, hey, one of our images, you’re using one of our images on your website. And I’m like, I didn’t even know I was using, but that’s scary just from Getty.

And it wasn’t about a trademark or anything. I mean, I can’t imagine getting something from China saying you need a cease and desist all operations because of whatever. That’s heartbreaking.

Trevor: Yeah, well, and that’s the thing. Most of these, most of these letters do not come off as super friendly when they send them. So, I mean, it does create just a huge amount of stress and uncertainty and all those types of things that can be avoided by, you know, taking some initial diligence. But your example also kind of leads me into my next point of some mistakes that I see. And I’m not saying that this is what the, what you did, but there’s this kind of misconception that if something I can find online through a Google search, or if it’s available online and I can access it, that somehow it’s free for me to use. 

And so I’ve worked with a number of companies that have gotten into extremely difficult situations because they have, you know, copied an image from Google images that they did a search for. You know, they’re like, hey, I need something for a movie star. So they right click a picture of that and put it on their Instagram feed, slap some products around it. And all of a sudden they’re getting a cease-and-desist letter from Getty or from one of these other image holders, from a rights owner.

And a lot of those times they have some pretty, pretty scary language when they come back with like a copyright infringement claim, because they’re going to say that you owe us multiples of thousands of dollars, because if you use, you’ve used this image and it can be a situation where you’re like, wait a minute, I just, I took one image and I put it on my social media account.

How do I now supposedly owe you $150,000? What am I supposed to do? So always be careful with taking things from the internet and then using it some sort of a commercial way, because just because you can access it, that doesn’t mean it’s free for you to use.

Jason: Oh, my gosh. So what do you do when you get those letters like that?

Trevor: Yeah. You know, a lot of the times you got to make sure that they really have the rights that they are claiming. So in the US at least, in order to be able to sue for copyright infringement, the work has to be registered. So copyright is kind of an interesting situation where you have a copyright just from the moment you created the work. So that’s bucket A, but in order to get access to certain other rights, like the ability to Sue in federal court for infringement, the ability to seek statutory damages, you have to take that right, and then register it. So a lot of these times you get a letter, you know, claiming hundreds of thousands of dollars, but basing that off the idea that they have rights to statutory damages.

So you, sometimes you got to push back and say, well, do you have, is this, is this image actually registered? Or is it just a picture that you own? Because if it’s not registered, it really changes the calculus of what the value of the infringement is and what their rights are and what your obligations are.

Jason: Yeah, it seems like the easiest thing to do from there is take the image down and, and, and then it’s like, well maybe I did this by mistake, but at the same time, Like, there were no damages to you. but, maybe they come back and that’s where you help because you need a lawyer in that case to be like, no, no, no, you need this exact language to, to send back to them. Or why don’t you just give them a hundred dollars to keep them quiet or I don’t know what it would be, but something like that anyway.

Trevor: Yeah. And its interesting cause, you know, as a, as an attorney, we actually ended up representing both sides of the coin because you have rights creators that, you know, this is how they make a living. If I’m a professional photographer and I, you know, spend day and night taking images or I’m a wedding photographer and I, you know, I spend my weekends away from my family to take these, these pictures. There has to be a mechanism for those people to, to recognize the value of their craft. And so sometimes there is some real damages that are happening when you’ve used an image that you really didn’t have a right to.

So there’s that, that balance between finding, alright, what’s an unreasonable demand, $150,000 for like this one use of the image. No, but the other side is making sure that you’re kind of compensating these rights holders for the work that they’ve done. If, if that’s appropriate.

Jason: So, do you have any like success stories that you can share where somebody came up to you and was like, oh boy, I’m in a pickle here. I don’t really know what’s going on. Can you help? And you were able to, to help them?

Trevor: It’s a good question. I think most of the times, or what comes to mind when I hear that question really relates to some, you know, pre-litigation issues that we got involved with. So, you know, somebody has received that cease-and-desist letter, or, you know, somebody has been contacted by counsel or a lawsuit has already been filed.

And you really, at that point in time for the company, looking at both a huge distraction for the company, because litigation, lawsuits, disputes always take you away from your primary, you know, business of what you want to be doing. And so, you know, where I think about the times that we’ve most been able to help companies really as a band, kind of to avoid those types of a scenario and find a solution for, for the company that, that either just protects them and points out the fact that they had the right to do what they were doing. Really the end goal should be trying to find a mutual, you know, something that’s beneficial for both sides.

Nobody wants to do litigation, or most rational people don’t want to do litigation. And so, you know, finding those levers where both sides may have it make sense to settle rather than go to court, I think has been the times where I feel like I’ve helped some clients the most.

Jason: Yeah. Let’s talk about trademark. So I’ll run you through a scenario here. My wife has a company called A Southern Soiree, and she started noticing a few things. One is that, and these are separate incidents and probably separate answers to this. But one the copy from her website was being used all over the place.

And then two, she started seeing a very similar names come up. So like her name is A Southern Soiree and she saw. Not, not with an “a”, but just Southern Soiree in Texas and then another Southern Soiree or something very similar in a different state. Like how does an early business think about trademarks like that? And what they can do to protect their name? Or even if that’s necessary.

Trevor: Yeah. So it’s interesting. Cause in the us trademark rights arise on the basis of use. So you’re able to have certain rights in your trademark. From the moment you start using it. But these what are called common law trademarks are going to be limited to the geographic area that you used the mark. 

So if I’m a North Carolina business, I rolled out my company. I’ve got a shop in Durham. I do some marketing in the triangle. I’ve got some rights to my trademark in those areas, but you know, if somebody in California adopts the same name, is doing the identical business, if I’m relying just on my common law trademark rights, I can’t do anything about that. 

So to get rights beyond where you’ve actually used the mark, what you need to do is file a federal trademark registration. And when you file a trademark application to register the mark on a federal level, you end up getting a nationwide priority to the mark. So from the date that I filed my application, I have a nationwide priority that would prevent, you know, a junior user from using it in California, in Washington, wherever it may be. So it allows me to kind of expand my footprint without actually having used my mark outside of that general area. 

So, you know, that’s kind of, again, as you talk about the cost balance, the effort balance, those types of things, that’s one thing you need to consider is all right, at what point of time do I need to seek that, that federal registration or how long, you know, what is my plan?

Am I just going to be in North Carolina? If I’m in like a local coffee shop and I have no interest in ever, you know, opening up franchises outside of this area, I don’t need a federal trademark. I just need to continue to use my, my rights and make sure somebody doesn’t open up down the street from me. But if my ideal is to be a nationwide or global business, you need to get out and file some applications as early as you can in the company that to make sure somebody doesn’t kind of jump in front of you.

Jason: Yeah, and that’s what she ended up doing was getting a trademark. And, you know, the, the reason was she wasn’t planning on doing weddings in Texas or Utah or anything like that, but she was creating a name for herself nationally on a consulting scale. And so she didn’t want there to be any confusion about who owned A Southern Soiree, because she was the owner of A Southern Soiree. 

Trevor: Before we move on, it does raise a good point because I think a lot of times, I don’t want to say there’s a misconception about IP rights, but you really need to think about IP for what it can do. And intellectual property can be both a shield and a sword in some respects.

So sometimes you want to get that protection for your trademark, to prevent other people from coming in to your space. So even if I don’t intend to operate in Texas or I don’t intend to operate in California, you know, making sure that I have a registration to prevent somebody else from kind of slowly squeezing me out by ever expanding, you know, their presence.

And somehow then taking over my customer base, that’s an equally good consideration, kind of on the flip side, you know, not talking about trademarks, but back to kind of patents, you know, Patents can be very expensive to kind of get on the outset, but you have to think about what it is that I’m getting for that patent.

And what a patent really does is gives you the exclusive right to that invention, to that technology. So really again, it’s only going to be as valuable to you as your ability to go out and either stop other people from doing it or to use it as a protective shield, to prevent other people from trying to stop you from doing, you know, what you’re doing for your business.

So, you know, there’s not a whole lot of value of getting a patent just for the patent’s sake. You really need to ask if I get this patent, am I able and willing to go out after other people who are trying to use this invention? If I get this patent, is it going to make me look much more appealing to investors or future require?

Do I need to get this patent to make sure that, you know, I can import and export my goods with? Problems, you know, at the border, do I need to get habit to prevent some people from trying to disrupt my business by filing some sort of a lawsuit, ask those questions kind of as, as part of your consideration, as far as whether I should invest these funds, how am I going to use it? And what value does it provide to me?

Jason: Hmm, so many things to consider. So that, that leads me to my next question is then when you’re starting a company, what are the steps that you need to take when you are thinking about intellectual property?

Trevor: You know, we touched on it a little bit, but as you form your company, part of that formation needs to be making sure that if the founders have created something prior to formation, that you’re transferring those rights up to the company, then as you hire contractors and employees and other people to work with the company, And that you have your agreements in place that are again, are transferring all rights up to the company because you want to make sure everything flows into the company so that you have that value. 

Then I think it’s, it’s sitting down and asking yourselves, okay, who are we? What is our value? What can we do to protect that? Is that something that we can do now? Is that something that we can put off for a period of time, or, you know, what are the risks or benefits of filing now versus, you know, filing six months from now or a year from now?

Kind of aside from just the general protection of this IP, you know, how are we going to use it and how are we going to monetize it going forward? So are there opportunities to license it? You know, is this something that we’re going to sell to other people? How do we document that? How do we, how do we contract?

You know, if I’m a software company, what are our agreements saying about protection of our IP? What are they saying about improvements to our IP? How do we make sure that we continue to drive all of the value for what we created back to the company? and so I’m making sure that you have a good set of initial documents to license your IP, to incorporate other people, to sell your product, whatever that makes up the distributor agreement, something like that, making sure that those things are all in place as well.

Jason: Is there a disaster story that you’ve, not necessarily been a part of, but maybe heard of, that involves IP that you can share?

Trevor: Yeah, I can’t think of like anything that kind of rises to the level of a disaster that I’ve been a part of. I mean, I think. There has certainly been moments of extreme consternation, you know, and, and heartburn about what does this look like? So, you know, worked with the company, I think that had started in, you know, you know, the prototypical undergrad dorm room, and it was a group of friends that were getting together to, to work on a project.

And you know, when they were together in the dorm room, you know, everybody’s friends, everybody’s happy little looks like the project is going to be that. You know, as time goes on, project changes a little bit. Now it’s going to be two of the three people, rather than, you know, the original eight. They’re kind of taking it in a different direction that really starts to take off show some, some, some value and you get to a point where you’re looking to take on outside investment.

And all of a sudden these questions come up with what about this group here? What about, you know, that original company, is that, is that real? Is that something that is going to threaten, you know, this company on the long-term basis and, you know, that was an issue that we had to spend some serious time and effort to try to figure out how do you, how do you make that right?

How do you either, do you go back to the original six and say, Hey, sign these, these documents. You know, we’re this company now, it’s completely different. That has his challenges in and of itself, cause people are going to be like, well, I want to enjoy the value of whatever it is that’s going to happen now, you know, how do I get paid? So, you know, it’s, it’s a process of figuring out what are the risks to the company? What can we do to mitigate those risks and then provide assurances, just both to our current investors and future investors, and hopefully a future acquirer that this has been resolved and is not an issue going forward? 

So it’s not a disaster, but it’s, you know, one of those things where you’re standing on the precipice and then this could be a huge issue for the company, or it could be something that you resolve and move forward. Fortunately, in that case we were able to resolve it and move forward.

Jason: Gosh. I mean, you deal with so many life altering decisions here, business altering life, altering decisions. I keep coming back to you, you can see why lawyers are so valuable, why your firm is so valuable that to protect all this stuff. 

Trevor: Yeah, there’s just so many different considerations that I think founders need to realize. You can’t be an expert in all things. You need to surround yourself with experts in all things, but be good at what you’re good at being good at, and then surround yourself with other people who can kind of fill in those gaps.

Jason: Mm, that’s true. Very true. So what about like drugs and life science type of companies, you had on, Dr. Moise Khayrallah, CEO of Emergo therapeutics, right. And it’s, it’s different you know, for patents and you know, trademarks and all that stuff as you’re developing drugs, is it not like how does that all work?

Trevor: Yeah, it is. I mean, I think especially in the pharmaceutical and drug and, and med tech space, you know, I think patent rights become that much more important because really the value to, you know, if you’re going to put millions and millions of dollars into drug development, if you’re going to put that much money into going through the different stages of FDA approval.

You have to have assurances that nobody else can do this for a while. And that’s why patent protection becomes that much more important for these companies. And so, you know, as you compare things like a software, a software solely tech company that’s just doing a software platform versus a drug development company. The drug development company is going to have to rely on patents at a much higher level than the software company is in, in most cases. 

Another consideration is going to be the trademark issues for drug development tend to be a lot different as well, because in addition to kind of trademark considerations that you would have with any company, is a confusingly similar to somebody else’s product? You start to get into issues of, you know, there are certain rules and regulations about not looking too similar to other drug formulations, so that when I go to the pharmacist with my, my, you know, drug written out on their scrawl and their script, that it isn’t likely to be confused just by appearances with that script.

So there’s some different considerations with regard to confusion that are totally separate from trademark, but are completely related when you’re trying to pick a name and clear it. So it’s just, it’s a whole nother level of, of analysis and consideration that is just very unique to that.

Jason: Let me go back to your why for being an IP lawyer, but then you’re also really a startup lawyer. Like you’re involved at Hutchison with a lot of startups. Like what’s interesting about startups and why did you choose that path? 

Trevor: Yeah. I find startup companies to be super compelling to work with because you know, that the people that we work with are very passionate about what they’re doing. They’re very excited about their companies. They also tend to be at a point where you can really provide value to the company, to the founders, to the team, to try to help them make meaningful decisions for their company.

I find when you get a large corporate institution, they’ve already got their policies in place. They have their procedures in place. You can perform important roles for those companies, but you know, the opportunity to inform and educate and participate in the, on the business side of things is much more likely to happen kind of at a startup or growth company.

And I find that to be really compelling work, cause I like to feel more connected with the business. I like to feel like, you know, we’re moving the needle. In a significant way when we meet with our clients and kind of talk through what their hopes and plans are and how we can help them and protect them. And so that’s for me, why I like to work with startup and growth companies.

Jason: Yeah. And from what I’ve seen, y’all are very giving as well. Like startups don’t always have all the money in the world, and from what I’ve seen from y’all like you will have conversations and, you know, at, at worst point people in the right direction on what should be done, which is just awesome.

Trevor: Yeah. Well, I mean, I think that you have to be willing to do that I think to work with these types of companies, because you know, there’s always going to be a balance, of startup companies have some of the most pressing legal needs, you know, things that they have to get set up right at the beginning in order for the company to be successful.

And that may be the time when they are least able to pay. So, if you really want to work with these types of companies and provide value, you’re going to have to be flexible in your billing and flexible in what you’re willing to do, kind of in the outset to work with them early on, so that as they grow, you can continue to grow with them. And I think that’s what we’ve always tried to do at Hutchison, and it is really part of the lifeblood of the firm.

Jason: Yeah, definitely. All right, Trevor. So you always asked this on your show and I’m taking over as host for today, but you get to answer this question this time. So we are the Founder Shares podcast. Now you’ve given some amazing advice already, but away from IP advice, what’s one piece of advice that you would share with somebody who is thinking of starting a company?

Trevor: I think we may have touched on it at one, so I’m going to reiterate the fact that, you know, don’t, don’t feel like you have to do it all. I feel like that the most successful entrepreneurs that we’ve worked with really know their strong suits and then really know where they’re not as strong and then identify people to help them with that.

And I think a lot of people can take good lessons with that, cause I think in this day and age, there’s just this feeling that we have to be all things. And I think that’s just a chance to put your company, put yourself at risk. So, I also always stay humble. Entrepreneurs, I think have the amazing gift of, you know, especially the successful ones of being absolutely confident in themselves and their ability, but also being sufficiently humble enough to listen to other people’s input and take that input. And sometimes that input’s not going to be good, but be willing enough to listen to them, consider it, and accepted or reject it, but, you know, I think that’s ultimately going to be successful, but, 

I did want to add kind of one thing here. I don’t know if this necessarily applies to founders, but this has always stuck out with me as the very first kind of teaching lesson for me in my legal career. Just because you are legally correct. It really doesn’t matter unless you have some ability to either enforce it or make the other side accept that. And that, that comes with a story of, from, from like my undergrad career.

Cause I was in a free law class at the time and we were talking about commercial papers, so checks and kind of like financial instruments and those types of things. And the professor said something in passing about how, you know, you can take a check and write on the back without recourse and then endorsed the check.

And if the bank cashes that check, it really means without recourse means that they don’t have the ability to come after you if there’s insufficient funds in the checking account. And I was like, huh, that’s a helpful piece of information. I’m going to store that one away a month or so later, my wife who was doing some professional photography at the time, happened to be hired to do this wedding.

And we did this wet and, you know, I went out and held her camera dutifully and those types of things. And we got some sense that at that time that there, there may be some questionable aspects of about this bank account that were getting paid out of. And so she got this check for the work that she’d done for the wedding. And I was like, hey, I learned this in school. We should do this right without recourse on the back of it and endorse it and take it to the bank. And we did that cashed it. Sure enough, and the next week we get a call from the bank saying there was insufficient funds in the account. We needed to bring that money back to the account. And it’s like, ah, it’s without recourse, you cashed it. I don’t, I don’t owe you anything. 

And long story short, I ended up getting called. I mean, this is small town in Western, Nebraska at the time. So I could call into the, the bank, talk to the bank president whose like golfing buddies with the partner at the law firm that I’m working with. He’s just haranguing me about; I don’t know what they’re teaching you there. And it’s like, this is, this is the law. And he had gone back and they looked through the bank policy manuals, their bank policy manuals say, don’t accept without recourse checks. Cause this is what the law says, but it didn’t matter.

None of it really mattered. And at the end of the day, the only way that this ended up getting resolved was the fact that we were able to touch base with the folks that we took the wedding picture for. And they paid us in cash and we were able to resolve it with the bank, but that lesson forever has shaped my legal career being legally right doesn’t matter if at the end of the day, you can’t, you don’t, you either don’t have the leverage. You don’t have the access to the resources. You don’t have access to the courts to actually enforce it. So there are days when you’d be like, you were absolutely. But that doesn’t matter.

Jason: Oh my gosh, what a great lesson. I just can’t imagine you all needed that money, probably like you’re struggling and in college, law school and all that, and you’re like, no, you’re going to fight this so hard. Oh my gosh, what a great lesson.

Trevor: Yeah. I just said, watch out for the idealistic law students. They’re in trouble.

Jason: Yeah. So, so Trevor, you’ve been doing this podcast for a year and a half or so now, and you’ve heard some incredible stories. Is there anything that stands out to you where you should tell listeners look, if you listen to one episode, you should go back to this one.

Trevor: I mean, I, you know, it’s like picking a favorite child. I think that’s, that’s tough to asks anybody to do. Cause I, I think you’re right. I’ve really enjoyed the podcast and I’ve really enjoyed just the chance to hear these wide and varied stories. I mean, everybody that we’ve talked to has had a different kind of approach to the business, why they’re doing the business, how they got into it, it’s all been fascinating.

But I mean, you know, you mentioned Dr. Khayrallah and, you know, his experience going from, from Lebanon to the United States and founding multiple successful companies. I mean, that’s a fascinating, fascinating story. You talk about, you know, Andrew Samson with Rainway and kind of his experience of when he was homeless, he was going to the public library to learn how to code these things and then developing the super successful company that he has right now. I mean, it’s a fascinating story, but all of them just have just great insight as far as what it takes to create a business, what it takes to operate that business, how you pick yourself up from mistakes or issues that you’ve made and kind of keep going.

I think they’re all just fascinating. That’s what I love to do. I’d love to hear these stories. So, you know, whether anybody else listened to the podcast, I get great value out of it, just hearing these stories and taking them to heart.

Jason: Yeah, well, you do a great job with it and yes, true, right. Some of these stories have been just incredible to listen to will Trevor Smith. Thank you so much for letting me host the Founder Shares podcast. How can our listeners get in touch you?

Trevor: check us out at the, our website, hutchlaw.com. I think my profile is there on Twitter at inretrevor. Listen to the podcast, be sure to check out Founders Shares and subscribe and listen if you don’t already. But I think those are all great ways to get in touch.

Jason: Awesome. Thanks so much, Trevor

Trevor: I appreciate it, Jason.

Jason: Alright everyone, you heard Trevor – if you’re a founder or business owner and need legal advice, be sure to check out Trevor and the rest of the Hutchison team at HutchLaw.com. They have the capacity to help you out with just about any legal need your company may be facing. They are passionate about the innovation economy and ready to help you on your entrepreneurial journey.

The show was edited and produced by your Earfluence.

I’m Jason Gillikin, and thanks for listening to the Founder Shares podcast.