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Robert OBrien

IP – Gotcha’s And The Practical Reality


Intellectual Property seems so complex that maybe it is best to avoid the subject…..it is not. It is best to be aware of potential impacts to your business through day to day operations that could kill your business. Be prepared in advance so that your processes include the appropriate agreements and language, even in your sales process. As you will see in the example below, while you may perceive IP to be very technical and legal, it may exist in your own day to day environment.

Non-Disclosure Agreement. Owner is drawn into a discussion about her product / service with a potential partner (or competitor). She explains what differentiates her product from others in a degree of detail in order to illustrate the potential value add from the product over others. Gotcha: The potential partner becomes a competitor and takes the idea and incorporates it into their product offering. Do yourself a favor and execute a mutual NDA before exposing any key details to potential partners or anyone else.

Non-Disclosure Agreement. Owner / designer has developed a part or a product that is valuable, at least in his mind and spec’d out the details, sizing, requirements, etc., and now needs to have that part made. He approaches 3rd party suppliers, machine shops, manufacturers and exposes all of the details in order to obtain a quote and understand costs for that part to meet technical requirements. Gotcha: All of a sudden, not only has that part been made, but it belongs to the company that made it, not the guy who originally designed it….and what do you do then?

Proposal / Service Agreement / Contract. Owner / salesperson goes out to meet a potential customer and discuss their potential problem / needs that they’d like to see addressed by your company. You meet, propose ideas and concepts, send to the prospect for consideration; then meet again and go through details as the next iteration of discussions; then do it again and again, each time taking time and improving design. Gotcha: They then decide that they will hire someone else for less money…..and all of your time and effort are lost. Do yourself a favor and enter into some type of agreement that protects your time, efforts, and ideas.

Sponsor Agreement. You / your company is approached by a potential sponsor / partner who is very interested in what you do / how you do it. The sponsor is convincing that your product would fit nicely in their product line or future product development efforts. They ask that you share your ideas and research with them and may even pay you a consulting fee for the work you are doing in conjunction with them. This research may go on for months and even years. Gotcha: At the end of the period, you find your sponsor / partner now own your idea, can control your time to market, and can even prevent your product from going to market because it would be competitive with their product(s). All of your time, effort, research, and money has been stolen by your sponsor company. Get an agreement in place prior to engaging with wolves dressed in sheeps’ clothing.

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