17 · Entity, IP & Contracts
Week 18 · 25 hours
Objective
Put a legal structure around the business, secure your name, avoid infringing someone else’s rights, and have the handful of documents you actually need.
This module is general information, not legal advice. Footwear is one of the most aggressively litigated design categories in consumer products. Before you launch publicly, have an IP attorney do a clearance opinion on your name and your silhouette. A one-hour consultation is a few hundred dollars; a trade dress dispute is career-ending at your scale.
Why it matters commercially
Two asymmetric risks. First, you build a brand on a name you can’t own and have to rebrand after it has value. Second, you design something that infringes an existing right, sell it, and receive a cease-and-desist with a demand for your inventory and profits. Both are cheap to avoid in Week 18 and ruinous to fix later.
Core concepts
Entity
| Structure | Liability | Complexity | When |
|---|---|---|---|
| Sole proprietor / sole trader | Personal — your house is exposed | Minimal | Testing only. Not once you’re importing and selling a physical product |
| LLC (US) / Ltd (UK) / equivalent | Limited to the company | Modest — formation fee, annual filing, separate bank account | The default. Do this before you place the bulk order |
| Corporation / C-Corp | Limited | Higher; double taxation unless elected otherwise | Only if raising institutional investment |
Cost: forming an LLC is typically $50–500 depending on state, plus a registered agent (~$50–150/yr). A UK Ltd is £50. This is not the place to save money — you are about to import a consumer product that people put on their feet and walk down stairs in.
Alongside it: a business bank account (never mix funds), simple bookkeeping from day one, and registration for sales tax / VAT as your jurisdiction requires.
Trademarks
A trademark protects your brand name and logo as applied to goods. It is the most valuable IP a young brand has.
Classes. International (Nice) classification. Footwear is Class 25 (clothing, footwear, headgear). If you’ll run a shop, Class 35 (retail services) is often added. Each class costs extra.
Search before you file — and before you commit to a name.
- Free search of the national registers: USPTO TESS, EUIPO eSearch, UKIPO. Search your exact name and phonetic and visual near-misses.
- Search common-law use: Google, Instagram, Companies House / state registries, domain availability.
- Search in every market you plan to sell in. Trademarks are territorial.
- If anything is close in Class 25, get an attorney opinion before proceeding.
Filing. Indicative costs, which change — verify current fees:
| Office | Approx. official fee | Timeline to registration |
|---|---|---|
| USPTO | ~$350+ per class | ~8–14 months |
| EUIPO | ~€850 for one class, ~€50 for the second, ~€150 each thereafter | ~5–8 months if unopposed |
| UKIPO | ~£170 for one class, ~£50 per additional | ~4–6 months if unopposed |
Add attorney fees of roughly $500–1,500 per filing if you use one — worth it for your primary market, arguably skippable for secondary ones.
Intent to use. In the US you can file before you’re selling, on an intent-to-use basis, which reserves priority. Useful when your product ships in three months.
Design rights, trade dress, and the footwear minefield
Beyond your name:
- Registered design (EU Registered Community Design, UK registered design, US design patent) protects the appearance of your shoe. EU/UK registration is cheap (roughly €350 / £50 range) and fast. US design patents cost more (~$1,000–2,500 with an attorney) and take longer. Worth considering if your silhouette is genuinely distinctive.
- Trade dress protects the overall look of a product where it has become associated with a source. It is unregistered but powerful, and footwear brands enforce it hard.
- Copyright covers your artwork, graphics, patterns and photography automatically.
What you must not do. Major footwear brands actively litigate over: stripe configurations on quarter panels, side-panel device marks, specific foxing tape + toe cap + bumper combinations, midsole trade dress, and overall silhouette copying. The specific silhouettes that have generated the most litigation are exactly the ones a new designer is most tempted to reinterpret.
How to stay clear:
- Draw your own silhouette from your own last profile. Don’t trace.
- If your design has stripes, panels or a foxing band that could read as a reference to an existing mark, change it until it doesn’t.
- Get an attorney to look at your final drawing before you commit to bulk. One hour, a few hundred dollars.
- Being “inspired by” is fine. Being recognisable as a version of a protected design is not.
Contracts you actually need
| Document | Why | Get a lawyer? |
|---|---|---|
| NDA with the factory | Signalling and modest protection | Template is fine |
| Manufacturing agreement | Ownership of your patterns, lasts, dies and designs; exclusivity; quality standards; remedies | Yes, review it |
| Purchase Order | The operative order document | Template is fine |
| Terms of sale / website terms | Your contract with customers | Template, adapted |
| Returns & refunds policy | Legally required in many jurisdictions; commercially critical for footwear | Template, adapted |
| Privacy policy | Legally required if you collect any customer data (GDPR/CCPA) | Template, adapted |
| Code of conduct for suppliers | Ethical position and buyer requirement | Adapt a published one |
One clause worth insisting on: the manufacturing agreement should state that your patterns, lasts, dies, molds, artwork and designs remain your property, that the factory will not manufacture your designs for anyone else, and that on termination they return or destroy your tooling and patterns. Factories reusing a small brand’s patterns for someone else’s order is a real and common occurrence.
Insurance
Product liability insurance is not optional for footwear. People fall over. Claims happen. A small-brand policy is typically $500–2,000/year, and many retailers won’t stock you without proof of it. Get quotes in Week 18; bind coverage before you sell.
Also consider: general liability, and cargo/marine insurance for the shipment itself (~0.3–0.5% of value — cheap, and worth it).
Do this
1 · Name clearance (5h). Full search of your brand name and style name across USPTO/EUIPO/UKIPO, common law, social handles and domains. Document what you find. If there’s a Class 25 conflict, change the name now — it costs nothing today and everything later.
2 · Form the entity (3h). File it. Open the business bank account. Set up bookkeeping.
3 · File the trademark (4h). At minimum in your primary market, Class 25. Use an attorney if the budget allows; the specification of goods is easy to get wrong.
4 · Design clearance (3h). Send your final drawing set to an IP attorney for a clearance view. Budget $300–800. Do this before bulk production.
5 · Contract pack (6h). Assemble NDA, manufacturing agreement, PO, terms of sale, returns policy, privacy policy, supplier code of conduct. Get the manufacturing agreement reviewed.
6 · Insurance quotes (2h). Three product liability quotes. Note what they require of you.
7 · Registered design (2h). Decide whether to file, and if yes in which jurisdiction. Note that many jurisdictions have a grace period after first public disclosure but some do not — check before you post the shoe publicly, because publishing it can destroy your ability to register it.
Deliverable. A documented name clearance search; a formed entity with a bank account; a filed trademark application; a written design clearance view from an attorney; a complete contract pack with a reviewed manufacturing agreement; product liability insurance quotes; a decision memo on registered design.
Self-check
- Which entity type and why?
- What is Class 25 and why does territoriality matter?
- What’s the difference between a trademark, a registered design and trade dress?
- Name three footwear design elements that carry high infringement risk.
- What clause protects your patterns and lasts?
- Why might posting your design on Instagram harm your design rights?
Traps
Building an audience on a name you haven’t cleared. Rebranding at 5,000 followers is painful; at 50,000 it’s brutal.
Assuming “inspired by” is a defence. It isn’t, if the result is recognisable.
Skipping product liability insurance. One claim ends the company.
Publishing the design before considering registration. Disclosure rules vary. Check first.