commercial contracts and protecting ideas

'Protecting your idea - the essential guide for innovators and entrepreneurs'

Commercial Contracts Alex Chester, DirectorBrightLaw Limited

© Brightlaw 2009. Brightlaw Limited | Registered in England | Registered number: 6952542

http://www.brightlaw.biz/

The Bright Idea

• Is it unique?– research whether anything similar– does it use Rights belonging to anyone else?

• Is it just your idea?– joint authorship?– started with someone else?



Bringing the Idea to Market

• Can you afford to develop it?– Bank loan? • Bank security requirements – charge on IPR?

– Business Angel / Venture Capitalist• Investment Agreement requirements

– Sell your Idea outright?• lump sum but no income stream



Bringing the Idea to Market (2)

• Do you need third party assistance?– Manufacturer / Developer?– Joint Venture?

• Before disclosing your Idea to anyone:– Confidentiality / Non-Disclosure Agreement



Developing the Idea yourself

• Consider all third parties you may involve:– software / hardware developers– designers

• Have written contracts with all those parties– must cover ownership of Intellectual Property– if IP not transferred you need a suitable Licence



Developing with a third party


• Licensing your Idea- “The Licence Agreement”• Third party requirements / wish list:– will want certain elements of Control– will want a long contract Term– Renewal / Extension rights– Exclusivity– Restrictive Covenants– your continued involvement?


Developing with a third party (2)


• Your requirements / wish list:– Financial: Initial payment + Royalties?– Exclusivity? Link to performance? – Review of product quality– Audit rights in relation to Royalties – Limit your Liability / Insurance– Termination rights, eg linked to quality, sales


IP issues in the Contract


• You will be required to Warrant your IP ownership and Indemnify the third party

• If you or the third party may develop improvements / additions, the contract must clarify rights in resulting IP

• Who can do what with the IP after Termination?


Summary:


• Consider at each stage who you may need a contract with

• Clarify your requirements:– Financial– retention of Intellectual Property Rights

• Find the right Business Partner!


Alex ChesterBrightLaw Limited4 Longlands Spinney, Worthing BN14 9NUTel/fax: 03456 522201Mobile: 07888 094992Skype: brightlawEmail: [email protected]://www.linkedin.com/in/alexchesterbrightlaw.biz

Please note that the information given in this presentation is for guidance only. It does not represent legal advice and you should not rely on it but should instead take legal advice specific to your circumstances.


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