Commercial Contracts and Protecting Ideas

'Protecting your idea - the essential guide for innovators and entrepreneurs'
Commercial Contracts
Alex Chester, Director
BrightLaw Limited
© Brightlaw 2009. Brightlaw Limited| Registered in England | Registered number: 6952542

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: alex@brightlaw.bizhttp://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.