Looking the IP opportunity in the mouth —some traps for budding entrepreneurs

You are passionate about what you do. You brim over with ideas.  Then you are approached by a business that has money, loves your work and wants to take you to the next level. What could go wrong?

Paul Brennan 2010. All rights reserved.

Brennans solicitors
Lawyers - commercial, property, IP, litigation, Will disputes

Transcript

You are passionate about what you do. You brim over with ideas for flower arranging, or fitness training or some other undertaking. Your documents start to have tables, and new names that you thought up yourself. You register some trademarks. Then you are approached by one of those companies that have business models, company structures and overseas investors. They love your work, and readily sign your “homemade” contract. They want you to consult for a great fee on each stage of their journey to world domination (money seems no object). Success is yours. 
They excel in producing proposals and presentations for what will be a worldwide clientele. Your module names, trademarks and know-how appear freely on their ever-growing website and the line between your work and theirs becomes indistinguishable. They share your information with others. 
After the initial flurry of high wages, company cars and hotel expenses, many such joint ventures need to show their investors that value has been created. It is then that they may try to steal your IP. Maybe your “homemade” contract will protect you, maybe not. 
There are four types of legal documents that give creative people control over their deals: 
1. Terms and conditions of service and/or consultancy agreement; 
2. Confidentiality agreement to stop others being told of your ideas and shown your materials; 
3. Distribution agreement and/or agency agreement; 
4. IP license to protect your ideas. 

Your IP license should, among other things: 
 . list the products, training manuals, modules and trademarks (registered and unregistered) that you own. 
 . specify the license given. For instance, a “non-exclusive” license means they can use the material, but so can anyone else with your permission. The more generous the license, the more you charge. 

You have supped with the devil, and it may be too late to pull back, but that is business, and you should either seek legal protection, or at least be aware that you are vulnerable. 
Many small business owners do without some or all of these documents and comfortably manage unsuccessful businesses for years, thereby avoiding this sort of legal expense.

Paul Brennan 2010. All rights reserved.