Your product development colleagues have an idea for a better, more profitable product and you’re intrigued. As your team goes off to create, you put together a slick presentation to secure board approval and get moving on the project.
You are practically in the end zone when, to quote my favorite college football commentator, Lee Corso, you are told, “not so fast.”
One board member asks what you are doing to protect your company’s intellectual property and you pause. If this is a question you haven’t given much thought to, here are some tips to get you started.
Set clear expectations
In my company, in the first five minutes of his or her first day of employment, each employee executes an IP agreement.
Additionally, we insist that employees memorialize their work product in lab notebooks and utilize computing resources that belong to the company. This ensures that there can be no misunderstanding as to who owns the employee’s work product. If the employee works off premises, he or she is expected to use our company resources (laptops, tablets, lab notebooks) so that we can maintain the integrity of our IP.
Similarly, before a consultant renders even a minute of services, we insist that the consultant execute a consulting agreement where all rights and proceeds of the consultant’s services (including all work product) are assigned to our company.
One exception: If the consultant owns IP that will be incorporated in his or her work (frequently called background IP or pre-existing IP), the consulting agreement should address the use and payment of the background IP so there are no future “he said, she said.”
Think before you act
Sometimes, it is simply easier to buy off the shelf rather than re-invent the wheel.
When this occurs, it is important that the person negotiating the acquisition agreement understands how your company intends to use the component or technology to be acquired. All rights grants without restrictions (exclusive use anywhere, anytime in perpetuity) tend to be relatively expensive. As the rights you seek to acquire narrow as a function of cost, it is important that your negotiator understand your business, product development and marketing plans to ensure you get what you need.
You also need to be cognizant of the open-source movement, which has arguably advanced technology development.
But the use of open source components could cause an IP nightmare and actually result in your company unknowingly placing all of its otherwise protectable IP into the public domain (i.e. open season for anyone else to use). Most open-source technologies have license agreements associated with use — having a seasoned set of eyes checking the license agreement will allow you to sleep more soundly.
Educate yourself but lawyer up
IP is an area where seasoned counsel can make the difference between you toasting your success with Cristal or crying in your light beer.
Don’t, however, launch into this with your eyes closed: IP lawyers are expensive. Government agencies, including the U.S. Patent and Trademark Office, World Intellectual Property Organization and bar associations have excellent resources online — you will fare better with your counsel if you have a working understanding of the protections you seek. ●