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In this month’s episode of Patently Strategic, Dr. Ashley Sloat leads a discussion into responsible engagement with engineering firms. Ashley and our patent panel walk you down the aisle and explore everything you need to know to experience marital bliss and an amicable divorce with engineering partners. This talk covers the full life cycle from vetting partners to post development concerns and everything in between – with particular focus on relationship complexities like IP ownership, assignment from engineering firm inventors back to you, and how to avoid the traps of viral IP.
You have your big idea and now it’s time to breathe it into existence, but you need some help with the development. Like many others, you may turn to the aid of an engineering firm or dev shop. This relationship is a marriage of sorts. But it’s a marriage that is designed to inevitably end in divorce. How cleanly, smoothly, and successfully this separation goes depends on the steps that you take before it officially begins.
The end goals are a great product and clean asset separation. You’ll want your IP and any newly created devices, infrastructure, etc. – and the engineering firm will want to not be inhibited from doing their job with other clients going forward.
In exploring how to reduce risks, while taking full advantage of the scaling efficiencies of outsourcing, we break down the required steps at every stage of the relationship – from the ups and downs of single life and dating, to the careful optimism of engagement and prenuptials, to the marital bliss of product development all the way through the inevitable divorce of project conclusion. Note that our metaphor intentionally leaves out the honeymoon. Welcome to startup life – there is no honeymoon!
Single life is all about getting your act together before forming relationships. This is the time to get your IP, documents, and contracts in order.
Now that you have your idea, an NDA in hand, and potentially a filed provisional patent application, it’s time to put yourself out there and start vetting potential partners. Outsourcing is a largely verified model, but this is potentially a major investment and not all potential partners are created equally, so you need to do your homework.
You’ve found your partner and things are getting serious. It’s time to commit, but you first need to solidify terms and expectations. And like with any relationship, transparency is key. It’s easy to gloss over up front when times are good, trust hasn’t been tested, and time and resources feel abundant, but invest the time now, while you have all the leverage. This stage is heavily dependent upon contractual considerations including:
You’ve made your commitment official and are now working together in product development harmony. The pieces of the jigsaw start coming together. And while you’re delegating development responsibilities, you still need to take a very active role in what’s to come. Just because you’re married, it’s no time to start letting yourself go! Your responsibilities could include:
You’ve completed product development and reached the inevitable end of your relationship. Ideally, you will walk away with your product and your partner can go on to serve other clients without new constraints. If you take the right steps in the prior phases, this stage should be nearly automatic and very amicable. Maybe it’s a clean break or maybe you’ll still have a joint custody maintenance contract, but you should now be in a place with clear lines of ownership and celebrating the launch of your project. Your transition and exit plan should consider the following (well ahead of when you need it):
Ashley is also joined today by:
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