Intellectual Property: In The End It's The Beginning That Counts

Posted on April 29, 2011 by Pete Salsich

"In the end, it's the beginning that counts."

Isn't that so true?  It applies in so many settings.  For example, it's a wonderful trademark tag line for the elementary school my kids attend.  It just resonates with parents making that all-important choice of a first school for their children.

It applies in the business world, too.  My friend Julie Taylor had a great blog post the other day about enjoying the "start" of your start-up.  She's a terrific business writer who regularly works with start-up companies, and she's absolutely right. 

And it really, really applies when you're dealing with Intellectual Property.  If you don't concentrate on the beginning, you're not going to like the end.

For example, when two or three people begin talking about their next great idea, if they don't start with a good Nondisclosure Agreement and an agreement assigning ownership of any intellectual property they create, their greatest potential is for very expensive litigation down the road.

It's very important in the entertainment industry, too.  Check out any CD -- you'll notice a copyright claim by the record company.  But before the record company can claim that copyright, it has to get everyone else's rights along the way up.  And if those rights aren't correctly captured when the songs are first recorded, the musician just might have a good lawsuit and the record company may find itself doling out profits it never thought it would have to share.

So if  you're thinking about starting a company, producing a CD, or releasing a movie, make sure you've done your due dilligence at the start--or you may not like the ending.

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How Intellectual Is Your Property? Protecting The Next Great Idea

Posted on April 12, 2011 by Pete Salsich

"Two guys walk into a law office . . . "

One of the most frequent scenarios these days at BrickHouse Law involves some version of the following: Somebody comes in with a great idea for a new business, filled with excitement about how they are going to replace Facebook, or eliminate the need for shoes, etc.  You get the picture.

Some of the ideas sound great -- others, well, lets just say they need a little more time on the proverbial drawing board. No matter how varied the ideas, though -- one thing is true about all of them: they cannot be protected (not in their "idea only" form).

This is one of the most important lessons all entrepreneurs need to learn (and learning it can sometimes be very expensive).

You cannot copyright an idea -- only the original expression of that idea.

You cannot patent an idea -- only the invention that embodies that idea.

You cannot trademark an idea -- only the names of the businesses and products and services embodying the idea.

So what do you do when you have the NEXT GREAT IDEA but you haven't developed it yet?  You need investors, perhaps manufacturers, distributors, etc., all of whom are going to need to know what your idea is.  That's where confidentiality and nondisclosure agreements ("NDA's") come in. Most entrepreneurs have heard of NDA's -- but many do not use them as early in the process as they should. 

When should you use an NDA?  At the moment you start talking seriously with your future business partners. That's right -- many times the most important contract you will sign is the first one with your business partner.  In addition to confidentiality, that first contract should identify any ideas, concepts, treatments, designs, etc. that have already been created by you and your business partner and include language assigning ownership of this IP to your new company. 

This is really only the beginning of the entreprenurial process, of course, and is not meant to cover everything that should be in your first agreement. In fact, my friend Diana Kander has a very helpful post entitled "10 Things You Must Answer Before Signing a Non-Disclosure Agreement." Check it out.  My point is simply this -- the best time for you and your business partner to agree on the important stuff is before anyone has made any money!

 

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