Intellectual property issues are one of the biggest issues a new startup has to encounter. Protecting your Intellectual Property and Trade secrets can save you a ridiculous amount of money. A startup faces a lot of problems and the director has to wear lots of different hats. You’ll have to hire employees, raise capital, develop strategies and market your business. Giving all that work dealing with intellectual property can be a big distraction and expensive. However.. If you miss out on it, it could cost you an absolute fortune or even worse your startup.
Intellectual property is often the most valuable assets a startup can have. Protecting your intellectual property is can be a requirement when trying to get funding. It can also prevent competitors from unfairly competing with you.
Try implementing some of these strategies-
1. Keep your employment work separate from your new idea
Is a scary idea of giving up a paycheck to take the risk of working on your startup with no pay. However one of the biggest problems is when the founder is working on their idea and working for someone else too. Conflicting obligations can put your company’s ownership at risk. Its important to keep track of what was done, when, what resources were used etc etc. Knowing your employment obligations also helps a tonne and ensuring your startup isn’t conflicting with your work is vital.
Most companies require their employees to sign an agreement which basically says the employee acknowledges that any ideas and inventions developed by the employee related to the business is owned by the employer. Unless an employer gives approval on side projects without claiming ownership right it’s a bad idea to use company resources and time to do something.
2. Don’t let other people claim ownership of your IP or your company
Some of the best ideas are developed over discussions with friends or when we least expect them. Lets face it, it’s fun to brainstorm and the best ideas can come to us when we least expect it. Let’s say you and your friend have an idea and form a company. You’re both co-founders now but if you don’t set out the rules from the get go you could run into problems.
Here’s what you should discuss when forming the company:-
- How much % of the company does everyone involved own?
- What are the roles of the founders? Who has responsibilities and what for?
- If a founder leaves what happens to their shares? does the company or the other founders have the option to buy back that founder’s shares? And if they do at what price?
- How much time commitment is expected from those involved?
- What salaries will everyone get? (if there are any)
- How will selling the business be decided?
- What happens if a founder doesn’t live up to the expectations of the founder agreement? How will you get around this?
- What is the goal and vision of the business?
- Does everyone involved agree that intellectual property will be owned by the company and if it isn’t how will the company make sure it’s in the right to use the technology it develops?
3. Don’t let other people claim ownership of your IP or your company
You can have a number of different stakeholders contribute their IP to your new company. IP rights generally belong to the person who created the work in the first place. Written agreements should always be put in place to make sure the rights get assigned to the company or the company gets permission to use the IP.
If you would like further assistance in Intellectual Property you should check out Goodwin Law
