For startups, securing control over intellectual property (IP) is crucial for a successful launch and operation. Here’s a guide to ensure that your startup properly owns or licenses the necessary IP:
Assigning Founder IP: At the company’s inception, each founder should transfer all rights to their ideas and related IP to the company. This process involves formal agreements that delineate the transfer of IP rights to ensure the company holds ownership.
Existing Obligations and Third-party Rights: Founders must consider prior commitments, such as those from previous employment or education. Inventions made in these contexts may belong to a former employer or an academic institution, especially if the invention used the institution’s resources or was related to the founder’s work there. Review any relevant agreements to clarify IP ownership. If the startup’s technology derives from work done under other institutions, securing rights through licenses or waivers is often necessary.
Licensing External IP: If your startup needs to use technology developed externally, like at a university or a hospital, you’ll typically need to negotiate a license. These agreements can involve exchanging equity, making milestone payments, or ongoing royalties.
Copyright Issues: For original works like software, copyright is automatically held by the creator upon creation. If your startup hires someone to develop software, ensure that a consulting agreement or similar contract assigns copyright ownership to the company.
Patent Considerations: Patents protect inventions and discoveries. If your startup intends to patent something developed by an employee or contractor, like software, make sure to get an assignment of the invention. The contract should also include provisions for the inventor to assist in patent applications.
Strategic IP Planning: Collaborate with legal counsel to develop a comprehensive IP strategy that covers these aspects and more. Properly managing IP from the outset avoids complications and ensures the company can freely operate and scale without hindrance.
Ongoing IP Management: As your startup grows and evolves, continue to assess and manage your IP assets. New developments, products, or services may require additional IP considerations and protections.
By taking these steps, startups can secure their intellectual property, safeguarding their innovations and business operations from potential legal issues. This foundation not only protects the company but also enhances its valuation and appeal to investors and partners.
