The most common, classic mistake that technology startups make is not securing all rights to the intellectual property created for it by its founders, independent contractors, employees and vendors.
Friendship and verbal agreements are not enough to secure IP rights.
Relying on IP law default rules will create a complicated nightmare.
You need contracts —properly drafted contracts that assign IP rights to the company.
And everyone needs to sign one — even company founders. Especially company founders. You don’t want your startup’s IP rights walking out the door with a key founder.
Warning — not all contracts are created equal. Some are horrific. Some are poorly drafted and contain clauses that are an expensive hassle to litigate in court.
If your startup’s IP is valuable, you need contracts that will hold up in court. You need the right type of contracts with very specific language that will properly assign the IP rights to your startup.
IP rights worth millions have rested on a few contract words.
Stanford University learned this the hard way. In a recent case, a federal court found that Stanford didn’t own the rights to the HIV testing technology it thought it did because its contract with the inventor failed to use terms that actually conveyed the IP rights when the contract was signed.
To fully protect the value of your startup’s IP, you need well-drafted contracts.
If you use random contracts from the Internet that you don’t fully understand, you may be penny wise and pound foolish.
The information provided in this legal blog is not intended as legal advice and does not create an attorney-client relationship. Please do not submit questions or comments seeking legal advice or submit confidential information through this blog. By communicating through this blog, you understand and agree that the information will not be treated as confidential and the publisher has no duty to keep it confidential.