Basically a business may hire two types of individuals.  These two types of individuals are employees and independent contractors.  If you hire an employee here in California, the law favors the employer being the owner of any intellectual property created by the employee, even intellectual property created by the employee while "off the clock" as long as it is related to the work the employee is performing for their employer.  However if an employee signs an intellectual property agreement with their employer then the intellectual property agreement will prevail.  If you are an engineer or computer programmer, in most cases, when hired you were asked to sign an agreement whereby you agree to release to your employer all intellectual property that was created during the period of your employment.  Refusing the sign the agreement will likely not grant you any intellectual property rights as by law you are required to turn over your intellectual property to your employer.  However, if you sign an intellectual property agreement that states you may keep any intellectual property you develop during the period of your employment then the agreement will prevail against the law and you will retain your rights to IP that you create.  This situation is, for the most part, reversed when it comes to independent contractors.  Unless the independent contractors signs an agreement to turn over any intellectual property that is created in the course of working for the company the independent contractors retains all rights to the created intellectual property.  There are exceptions to these general rules and you should talk with an attorney to get an answer for your specific case but what sets an independent contractor apart from an employee?  

The Internal Revenue Service (IRS) states that "The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done."  Here the word "payer" is the company that is paying the individual doing the work.  The IRS also provides the following details:

Question:  If I create a company to sell T-Shirts, what is the extent to be able to use likeness of other intellectual property.

Facts:  I want to start a company to sell T-Shirts, and I want to use the likeness of things from video games and movies. I see others selling shirts with the likeness or even the characters themselves on the shirt. I want to know, if I were to use the likeness of the IPs, where is the breaking point? Where is it copyright infringement.

Answer:  Intellectual Property covers the application of laws to the fields of patents, trademarks, copyrights, and trade secrets.  I will cover each field as it applies to the images you use on your t-shirts.

Patents

A patent is an exclusive right given to an inventor to exclude others, in this country, in the sale or manufacture of the idea covered by the claims in the patent.  The public policy behind patents is to encourage inventors to innovate by granting them the exclusive right to exclude others in return for their disclosure of the idea to the public who can then build upon the idea to create new innovations.  For an invention to be patentable it has to be (i) useful, (ii) novel, and (iii) not obvious.  The lifespan of a patent is 20 years from the date it is filed.

Here you will not be able to receive protection for your images by the use of a patent because the images on your t-shirts will not be considered “useful”.  The USPTO considers an invention useful if it has some utility and images are not considered to have any utility.  

There does exist a class of patents called “Design Patents” which does protect ornamental features of a useful product.  You could argue that the t-shirt is useful, provides cover and warmth, thus satisfying the first test.  However the USPTO will likely find that your images are not novel and that the idea of putting images on t-shirts is obvious.  Thus it is unlikely that the USPTO will grant you a Design Patent on your images.

The plus side of this is that the likelihood of you being sued for patent infringement is unlikely as your competitors will not be able to protect their images with a patent.

In summary, patent laws are just not applicable here.

Trademark

Many people think of logos that identify a company when considering trademarks.  However that is just one a small part of the laws regarding trademarks.  The Aspen outline on Intellectual Property describes trademarks as follows:  “Trademarks permit consumers to identify the source of goods or services. The purpose of trademark law is to ensure that consumers are able to rely on marks in exercising their purchasing preferences by prohibiting competitors from using marks in a way that confuses consumers about the source, sponsorship, or affiliation of goods or services.”.   So the public policy behind trademarks is to protect the consumer so if the consumer sees a car with the famous BMW logo on it they will know that the source of the car is BMW and not Ford.

Here you have not described any of the images you are using other than that they will be like characters and images used by other companies.  If you sell a t-shirt with an image of the BMW logo and consumers, when looking at the shirt, believe that the shirt is an authentic BMW t-shirt then you have infringed on the BMW trademark.  Likewise with characters.  You sell a shirt with an image of Snow White on it that leads people to believe that it is the same Snow White made famous by Disney then you have infringed on Disney’s Snow White trademark.

Trademark law has additional complexities in that some marks are “Famous” marks, marks are registered in certain “classes”, and marks can have national, state, and/or local scope.  However I have given you some basic information to go by.

In summary trademark law does apply to your case.  If you places images on your t-shirts that suggest to the consumer that the source of the t-shirt is a company other than yours you are likely infringing on someone’s trademark.  Penalties include significant fines.  The advantage you have on your side is that you are a small fish in a big pond.  My recommendation is to remember the golden rule.  After all you would not want someone to use a hot selling mark that you created would you?

Copyright

A copyright is automatically granted to the creator of certain original works of authorship.  The “work” must be a substantial expression of an idea placed onto some tangible medium.  The public policy behind copyrights is to allow the owner of the copyright to control who can copy their original work of authorship.  

Copyright differs from trademarks a couple ways.  First is that the purpose of trademark law is to protect the consumer while copyright law protects the author.  Second is that while a trademark can protects slogans and logos a copyright will only apply to “substantial” works such as poems, books, photographs, and such.  

There are however some similarities between the two areas of law.  You do not need to register your mark or copyright to obtain the provided protections, you get them automatically (note that by registering your mark or copyright will get you expanded rights).  Also they have to be “tangible”.  That is they have to be on some reproducible medium such as paper or in a computer file.  There are some exceptions but I will exclude the exceptions here so as not to confuse the discussion.

Here you have stated that you will use images that are like other images.  If the images are similar than you possibly have violated someone’s copyright.  It is best to talk to a IP attorney but a good test is to show your images to others along with the image that served as your creative source.  If the people you show your images to do not see any similarities then it is likely that you are not violating any copyrights.  If your images have no creative source other than your mind then it is also likely you are not violating any copyrights.

Copyright law does apply to your case here.  Since you state that your images will be like other images it is likely that you will be violating someone’s copyright.  Penalties include significant fines.  The advantage you have on your side is that you are a small fish in a big pond.  Again, my recommendation is to remember the golden rule.  After all you would not want someone to offer for sale a hot selling image that you created would you?

Question:  If a business is run by a board of directors and a board member is suspected of stealing money from the business, can the other board members be held accountable if they do not report it?  Can the employees?

Answer:  A director has two duties to the entity that he/she manages - duty of due care and duty of loyalty. Normally the entity is a corporation but there are other types of entities such as non-profits and LLCs.  I will explain the duties in more detail later but these duties are imposed on each director and officer of the business entity, but not on employees that operate below an officer.  How can you separate the officers from employees?  Normally a board of directors appoints officers and officers hire employees.  Although there are exceptions to this simple test it should provide you with a simple guideline.  Now that you know that the duties only applies to directors and officers let me go over the two duties.

Duty of Due Care Defined:  Officers and Directors owe a fiduciary duty to the corporation and must discharge their duties with the same degree of diligence, care, and skill which the ordinary prudent person would exercise in the management of his own affairs.

Here the duty of due care applies because the individual is a director.  So this Director must conduct his affairs with the entity with the same degree of diligence, care, and skill which the ordinary prudent person would exercise in the management of his own affairs.  Here the Director is suspected of stealing money from the entity and if that was the case then the Director would violate his duty of due care to the entity.

This duty would also applies to officers and other directors as well.  If the officers and other directors knew of the Director’s actions and did nothing about it would they be discharging their duties with the same degree of diligence, care, and skill which the ordinary prudent person would exercise in the management of his own affairs?  If these facts are true then the answer would be no and they have breached their duty of due care.

Duty of Loyalty Defined:  Officers and directors are held to a fiduciary duty of loyalty in all of their dealings with the entity so as to promote the interests of the entity without regard for personal gain.

Here the duty of loyalty applies because the individual is a director.  So this individual must conduct his affairs with the entity so as to promote the interests of the entity without regard for personal gain.  Here the director is suspected of stealing money from the entity and if that was the case then the director would violate his duty of loyalty to the entity.

This duty would also applies to officers and other directors as well.  If the officers and other directors knew of the Director’s actions and did nothing about it would their dealings with the entity promote the interests of the entity without regard for personal gain?  If these facts are true then the answer would be no and they have breached their duty of loyalty.

Summary

In conclusion, if the facts as you presented were true, the Director breached his/her duties to the entity and so did the officers and other directors if they knew of the Director’s actions and did nothing about it.  

A couple of comments here.  The Director’s actions, if true, could also be the criminal act of embezzlement and the police should be notified.  Finally the act of stealing by a director many times is not black and white.  For example the Director could have done some work for the entity from which he/she expected to receive payment or that the board agreed to provide compensation to the Director.  I strongly suggest that you meet with an attorney to discuss all of the facts of this matter as I have only given you general guidelines here.

Question:  Is it against the law to buy a product, repackage it with my company's brand/product name and then sell it online and/or in stores?

Facts:  I would like to buy in bulk products from a company, repackage the product using a different container with my company's brand and product name, and then resell it on my company's website as well as in stores. The product will not be changed in any way. Does this violate any laws?

Answered:  Like many of the questions posted here by individuals such as yourself there is just not enough information to come to a conclusion.  I will present you with some guidance so that you will understand some of the legal issues being raised here.  However I would strongly recommend that you sit down with an “Intellectual Property” attorney and disclose in detail your plans.  An ounce of prevention is worth a pound of cure they say and that applies here.  Making the wrong decisions may impact your relationship with your supplier and your customers and cause harm to your business.

One area of law raise here is Trademarks.  Many people think of logos that identify a company when considering trademarks.  However that is just one a small part of the laws regarding trademarks.  The Aspen outline on Intellectual Property describes trademarks as follows:  “Trademarks permit consumers to identify the source of goods or services. The purpose of trademark law is to ensure that consumers are able to rely on marks in exercising their purchasing preferences by prohibiting competitors from using marks in a way that confuses consumers about the source, sponsorship, or affiliation of goods or services.”.  Here you are presenting to the consumer a product as if you were the source product because you are repackaging the product with your company’s brand and product name.  A consumer purchasing the product would not realize that the source of the product was your supplier and not you.  

Another area of law raised here is Patents.  A patent owner is granted by the Federal government the exclusive right to prevent others from infringing on the patent.  A patent may be infringed by even selling a patent protected product without its owner permission.

There may be other areas of law raise by facts that you have not included here.  In general I would recommend that not resell your supplier’s products in your own packaging unless you have obtained their written consent to do so.  Speak with an Intellectual Property Attorney.  They will be able to help you in drafting the agreement so that your rights are protected and your business will not be harmed by this practice.

Question:  Do I own ideas and research that I have put together off the clock?

Facts:  I am presenting an idea for a new division for my company. I have countless presentations and financials that I have put together on my time. If my company decides it is not a route they want to go, do I still own the idea and research?

Answer:  First look at any agreements you signed with your employer when you started.  Most employer / employee agreement have a clause basically saying that all intellectual property (IP) you create, regardless if you are on the clock or not, belongs to the employer.  If the IP you create outside of work is in a different field of work than what your employer is in you may have an argument in court to say that the IP belongs to you.  However from your facts it seems that the IP is in the same field of work that your employer is in so their legal position is stronger than yours.

If there are no agreements between you and your employer then your legal position is stronger but it would still be weaker than your employer's legal position.  The courts usually take the view that IP created by an employee belongs to the employer.  Note that this view does not apply to independent contractors where the result is the opposite unless the independent contractor was hired specifically to create the invention.  However from your facts you seem to be an employee.

In summary, considering you fact that the IP you created on your own time is in the same field of work as your company is in, it is likely that the IP you created belongs to your company.  

I would recommend that if your ideas are rejected by your company that you ask your company to release those ideas to you.  This may involve some negotiation and an agreement will have to be created.  Contact an IP attorney to help you in this matter.  The advantage of this approach is that it will reduce the risk of litigation later on if you do use the ideas.  Another advantage is that the consideration you have to provide your company to release the ideas will be less than what you would have to pay later on if you do use the ideas and they were successful.  An example of this is Facebook.  If Mark Zuckerberg, founder of Facebook, got an agreement from the Winklevoss twins to release the idea to him I am sure he would have had to give them far less consideration than the millions he paid them after Facebook was successful.

Question:  How often does a Board of Directors have to meet per year? 

Answer:  The general answer to your question is that the Board of Directors do not have to meet at all. Check the rules for your state to make sure.  Some corporations, in place of annual meetings, will pass resolutions by mail.  However it is important to note that holding regular annual meetings will lend legitimacy to the corporation and make to more difficult for creditors and tort judgment holders from suing shareholders in a "piercing the corporate veil" type of suit.  Besides regular annual meetings a corporation should hold a meeting whenever an action is outside the ordinary course of business for the corporation.

Question:  If I want out of my business with my partner and we have no exiting contract, what are my options?

Facts:  I went into business about a year ago and I want out and my partner is saying no. What are my options and can I take the stuff that I purchased in my name as a loan to the business until it was able to purchase it's own equipment and furniture?

Answer:  All too often people enter into business with each other without establishing, in advance, what is to happen when certain events occur.  It is so important to consult with an attorney when the business is forming to discuss situations such as this one.  Your attorney will know what events can lead to hardship between partners and can put into place an agreement on how to deal with these events.  Your story is an all too common occurrence.

Basically you will have to look at your leaving the business as a possible breach of contracts you may have between yourself and your partners.  Note that you may have “implied” contracts between yourself and your partners along with “express” contracts, both in writing and oral.  Implied contracts are contracts that are created from a party’s reasonable reliance on the other party’s words or actions.  Then you will have to look at the harm you will be causing your partner by breaching those contracts.  The more serious the harm the more your partner can sue to recover.

You only mentioned one possible contract in your fact pattern - “Can I take the stuff that I purchased in my name as a loan to the business until it was able to purchase it's own equipment and furniture?”  This seems to be a valid contract as you gave money to the venture in return for an interest in the venture.  Barring an agreement otherwise, money that is brought in by the partners determine their percent interest in the business.  It is not considered a loan.  For the equipment to have been a “loan” you will need to show the court that you and your partners agreed that your money was to be a loan that was to be repaid by the business and that your money was not an investment into the business.  If this is a “loan” then, according to the terms of the contract, have to wait until the business profits so as to pay you back.  If you take the equipment away then your partner can sue for damages or for an order from the court for you to return the equipment.  If this is an investment then you will have to wait until the business has profits.

You can ask your lender to replace your name with the name of your partner.  This is called a “Novation”.  However all three parties, you, your lender, and your partner, will have to agree to this change.

My advice would be to consult with an attorney and bring to the consultation all agreements, both implied and express, between you and your partner.  Then after the consultation talk with your partner and negotiate an exit strategy for you.  No one wants to be in business with a disinterested partner but on the other hand your breach should not cause your partner any undo hardship.

Question:  How do I insure a business conversation remains confidential?

Facts:  I am looking to start a new business service in order to improve the idea I looking to talk to owners of small businesses. Is there some sort of agreement or form that can be used to insure everything that is discussed will remain confidential.

Answer:  There exists a set agreements called "Nondisclosure Agreement" and "Nonuse Agreement".  A search on the internet will turn up a number of hits on example agreements.  Although I cannot endorse any of them and they would need to be modified to your specific needs they will provide you with a good starting point and an attorney can make any necessary final adjustments.  

It is important to note that if a business could prove that your idea is ordinary, obvious, or that they were already in possession of it, they could argue that there was no agreement formed because they got nothing of value in exchange for their promise not to disclose.  The reason for this is that the law of contracts holds that an enforcable bilateral contract is a contract where promises are exchanged for consideration.  So basically you are promising to give valuable information to the business in exchange for their promise not to disclose or use it.  If you do not give valuable information to the business then the business would be free to disclose it or use it.  

A valuable idea is an idea that is novel.  You can search the patent database at patents.google.com to see if your idea is novel.  If your idea is indeed novel then a provisional patent application will do a better job of protecting your idea than a NDA would.

My advice is to do some research on the internet on these agreements and on your idea.  Then meet with an attorney to draft an agreement that will be enforceable in court or help you file a provisional patent application to better protect your idea.

Question:  If I create a design from a copyright, can it be mass produced without my permission?

Facts:  A fellow army wife has created a website of selling bracelets and necklaces. While looking on her page, I didn't see any of her ideas that I like so I emailed her asking if I could make something personal so I created an idea for a necklace from charms she had throughout the website. Now she had such a big hit on the design by showing it to everyone and it's up for mass production on her website. Is there any way I can get compensated for her sales for that particular design or even ask her to not sell it? It lost its personal meaning now that I know everyone can own my personal design.

Answer:  The 1976 US Copyright Act provides that copyright exists "in original works of authorship fixed in any tangible medium of expression"  Now that we have defined what is a copyright lets look at the facts of your case.

Original Works of Authorship

To met this requirements you must (i) have engaged in some intellectual endeavor and not just copied the work from somewhere else and (ii) the work must be more than minimal.  From the facts it seems to me that you did engaged in some intellectual endeavor.  However it seems as if some of your intellectual endeavor was derived from the work done by the fellow army wife (FAW) because you stated that you used her charms.  If her charms were the creative work of FAW then both you and FAW have a joint claim on your necklace design.  If the charms were not copyrighted by FAW then you may be able to claim the entire necklace design.  Also from your facts I would conclude that your work was more than minimal.  Minimal work are things such as short phrases, slogans, etc.

Tangible Medium of Expression

To met this requirement the work must be sufficiently "permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration."  Here your work is tangible because FAW preceived it by creating it herself, reproduced it by selling it to others, and communicated it by advertising it on her website.

Summary

So, from the facts you presented, it seems to me that you have some right to the profits but not all rights because you used her charms in your design.  However if you wish to sue FAW for those profits you will have to register your copyright with the US Copyright office.

I would advise you to consult with a copyright attorney.  Bring with you your design, FAW’s website address, emails between you both, and anything else pertinent to this issue.