Handling founders’ patents and inventions

by admin

circuit boardMany startups’ main asset is intellectual property, often developed by the founder.  There are a few things to note when forming a company based on a founder’s intellectual property.

Assign or License it to the Corporation

First, if the intellectual property is vital to the company’s operation or valuation, then the founder should assign or license it to the corporation.  This mean you, as a founder, either transfer the technology to the corporation or give the corporation the right to use it for a fee.  This will give your company some assets.

Assignment or License?

Speak to counsel for your specific situation.  Generally, if you, as founder, want only an equity stake in your company and do not care about royalties, then an assignment agreement would probably work best.  You would transfer the technology to the company in exchange for a fee or equity.

If, on the other hand, you want royalties in addition to an equity interest (or if you want to get the technology back from the company at some point in the future based on some contingency), then a licensing agreement would probably work for you.  Again, speak to an attorney.

Protect the Technology

Your company should protect the technology (especially if it wants it to be deemed a trade secret) by using, among other tools, employment agreements that protect against conflicts of interest and competitive behavior of the founder.





(photo courtesy of: http://flic.kr/p/8KP7CV)

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