For a business in its formative stages, intellectual property (IP) can often seem like a minefield. As a result, it is sometimes not afforded the time and input it deserves. This can’t happen! Your IP will quickly become one of your business’ most valuable assets, not to mention the thing that will ultimately convince investors that you are an attractive proposition.
In this two-part series we will look at some of the key IP considerations for technology start-ups. It is based on the advice we give our clients to ensure they maximise the commercial value of their IP from both a people and a technology perspective.
We’ll look at the people-related aspects first.
With regards to the people behind the invention itself, you will need to clarify who employed the inventors in case there is a chance another party could attempt to claim some ownership over the invention. For example, if an inventor was a contractor or worked for a University at the same time as a spin-out.
Similarly, you will also need to catalogue any collaborations formed to develop the invention and define the parts both parties played. This cataloguing should be extended to include any documentation of past arrangements and, if this is missing, it needs to be addressed.
With specific focus on the patent itself, you should always prepare confirmatory assignments when filing patent applications to reduce downstream costs and made sure all resulting IP rights are in the name of the correct entity.
You should also consider how you are going to assign responsibility for your IP to the people within the business.
The first step is to establish a plan outlining how you plan to drive, commercialise and protect your innovation.
Once you have your plan, you need assign responsibility for the various tasks to individuals in the business. This process should begin by establishing who on the board has the ultimate responsibility for delivering your IP plan.
From a more practical perspective, you also need to agree the processes behind the plan. For example, how will those with day-to-day responsibility for specific tasks report in and what living documents will you need to measure and manage your progress?
Arguably, the people who will play the largest part in your success will be your investors. They are a demanding bunch and, given the enormous level of competition for funding, you need to make sure you are in the best possible shape to catch and hold their attention.
You need to make sure your business plan is investor ready. This not only means showing them what you have and how you will use what you have to deliver the returns an investor wants (including how you will reach your planned exit), it also means demonstrating you understand the part your IP will play in achieving the success they demand.
If you think the investor will need to conduct searches or freedom to operate studies or if you think passing certain milestones within your IP strategy will require significant additional funding, this all needs to be clearly flagged.
In the second part of this series, we will look at the technology-related aspects but if part one has raised any questions you’d like to ask us, please email Daniel Hudson.