Virtually anyone involved in a new venture today is concerned about “intellectual property” (IP), and there are valid reasons for that. For example, two essential elements in any start-up in this digital age are often talented employees and the innovative IP they are able to create. To prevent problems in the future, people should begin by avoiding the following mistakes:
● The risk that a former employer will claim ownership of the IP used to create a start-up, which may be tenuous, increases over time, especially in cases where a new start-up is extremely successful and anyone who is remotely connected with it wants to share in the profits. Ordinarily, IP rights belong to the person who created the work, unless it was done in connection with the individual’s job.
● As a rule, co-founders assign their rights to an IP they created that has any relationship to the start-up and receive shares of stock in return. To ensure that future innovation will benefit the company, employees, contractors and co-founders should sign a Confidential Information and Invention Assignment Agreement or some similar document.
● Note that even people with years of business experience sometimes confuse a trade secret with a patent or a copyright with trademark. In addition when IP rights overlap, they should be treated separately as the law requires.
Getting a patent
To be patented, inventions have to be an entirely new process or method described in detail. They call for the investment of both the start-ups’ money and technical employees’ skillset, and provide 20-year government-approved control over the patented item.
Finally, note that patents are extremely important in regard to pharmaceuticals and similar areas. However, they are less significant in regard to the internet and software programs because new developments are usually related to ongoing technological changes and updated business models.
Read more at the Wall Street Journal.