If we asked you whether you own your intellectual property, your answer most likely would be a swift and unqualified “yes.” Not so fast…
Did you invent your idea while at school or working for your prior employer? Has everyone ever involved with your idea signed an assignment of inventions agreement? It is not uncommon to hear founders hesitate if we ask more detailed questions. The wrong answer to either of these questions can be a big problem for your company.
Your school or prior employer could have a claim that they own your IP. If you developed your idea while conducting research for your school, during business hours, or using resources of your prior employer, there could be potential claims that your idea actually belongs to them, whether your idea relates to your school or employer’s work or not. When it comes to university IP policies and company assignment of inventions agreements, the language normally favors the university or company…heavily.
Other people also could have a claim that they own your IP. If a co-founder, an employee, or a consultant thinks that he or she came up with your idea and has not signed or, for whatever reason, will not sign an assignment of inventions agreement, he or she may have a potential claim of ownership. In this situation, you could find yourself negotiating without much leverage, relying on the willingness of the other party to be reasonable. Furthermore, you can find yourself in a time bind: your company is on the verge of receiving the first wave of real financing and the venture fund is asking you to represent that anyone who has touched your IP has signed away his or her ownership rights to you. At best, it can stall momentum on a deal; at worst, it can bring into question to safety of the assets that makes ownership in your company valuable.
It is never too early to focus on identifying and protecting your IP. If you implement good practices from Day One, along with a few other key document retention practices, you will thank yourself later as your company grows.