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What are the most effective ways to manage intellectual property rights in a co-founding team?

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Intellectual property rights (IPR) are a crucial aspect of any startup, especially when it involves a co-founding team. IPR can include patents, trademarks, copyrights, trade secrets, and other forms of intangible assets that give your startup a competitive edge and protect your innovation. However, managing IPR in a co-founding team can also pose some challenges, such as how to allocate ownership, how to prevent disputes, and how to avoid infringement. In this article, we will explore some of the most effective ways to manage IPR in a co-founding team, based on best practices and legal considerations.

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Christian B.

International Development at Cognition IP

1 Define your IPR strategy

Before you start creating or sharing any intellectual property with your co-founders, you should have a clear and coherent IPR strategy that aligns with your business goals and vision. Your IPR strategy should cover questions such as: What kind of IPR do you need or have? How will you protect and exploit your IPR? Who will own and control your IPR? How will you deal with third-party IPR? How will you monitor and enforce your IPR? Having a well-defined IPR strategy will help you avoid confusion, conflict, and costly mistakes later on.

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Christian B.

International Development at Cognition IP
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IP is often regarded as too expensive, too complicated or too long-term for most founders to prioritize in early business planning. However, the IP of any startup is inextricably connected to other aspects of business success, incl. market opportunity, attracting investment, valuation and overall risk. For this reason, it's important to get good early advice on defining & developing the IP, how it can play an important role in achieving your objectives, and what rights make the most sense for building a promising future. Good IP advice doesn't have to be expensive, complicated or delayed for more developed stages in order to get early clarity. Seek inputs from many sources and identify the IP professionals you feel are the best fit.

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2 Sign a co-founder agreement

A co-founder agreement is a legal document that outlines the roles, responsibilities, and rights of each co-founder in relation to the startup and its IPR. A co-founder agreement should cover topics such as: How much equity and voting power each co-founder will have? How will decisions be made and conflicts be resolved? How will IPR be assigned and licensed? How will IPR be transferred or terminated in case of exit or dissolution? What are the confidentiality and non-compete obligations of each co-founder? Signing a co-founder agreement will help you establish trust, transparency, and accountability among your co-founding team.

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Christian B.

International Development at Cognition IP
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Referencing above, IP is best managed early. Too often, founders postpone the IP topic, and once momentum is finally underway, they realize their lack of clarity on IP topics is a hinderance. Contracts are an essential tool for clarity for any organization. Use contracts to explore and define what happens in the best and worse case scenarios. Better to be clear with expectations, assignments and rights early, so when key business opportunities present, the organization can take advantage readily.

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3 Register and document your IPR

Depending on the type and value of your IPR, you may need to register it with the relevant authorities or agencies to secure your legal rights and benefits. For example, you may need to file for patents, trademarks, or copyrights to prevent others from copying or using your inventions, brands, or works without your permission. You may also need to document your IPR creation and development process, such as keeping records of your research, prototypes, sketches, or code, to prove your ownership and originality. Registering and documenting your IPR will help you strengthen your evidence and position in case of disputes or litigation.

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Christian B.

International Development at Cognition IP
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Once you've understood what IP you have and what you'd like to protect, each type of IP has it's own requirements for registration and maintenance. Trade secrets, for example, do not require formal registration yet should have layers of protection in place from the organizational point of view. Working with an experienced IP professional suited to your industry will help you get the most out of defining the IP, filing & protecting the IP, and maintaining for continued best practices.

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4 Educate and train your co-founders

One of the common sources of IPR issues in a co-founding team is the lack of awareness and knowledge of the relevant laws and regulations. This can lead to unintentional violations or infringements of your own or others' IPR, such as using unlicensed materials, disclosing trade secrets, or infringing patents. To avoid these risks, you should educate and train your co-founders on the basics and best practices of IPR management, such as how to conduct due diligence, how to use proper attribution, how to handle confidential information, and how to respect third-party IPR. Educating and training your co-founders will help you foster a culture of IPR compliance and responsibility.

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5 Review and update your IPR regularly

As your startup grows and evolves, so will your IPR portfolio and needs. You may create new or improve existing IPR, you may acquire or license IPR from others, you may enter new markets or partnerships, or you may face new challenges or opportunities. To keep up with these changes, you should review and update your IPR regularly, such as by conducting audits, renewing registrations, modifying agreements, or seeking legal advice. Reviewing and updating your IPR regularly will help you maintain your competitive advantage and adapt to the dynamic startup environment.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What are the most effective ways to manage intellectual property rights in a co-founding team?

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3

4

5

6

1 Define your IPR strategy

2 Sign a co-founder agreement

3 Register and document your IPR

4 Educate and train your co-founders

5 Review and update your IPR regularly

6 Here’s what else to consider

Startup Development

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What are the most effective ways to manage intellectual property rights in a co-founding team?

1

2

3

4

5

6

1 Define your IPR strategy

2 Sign a co-founder agreement

3 Register and document your IPR

4 Educate and train your co-founders

5 Review and update your IPR regularly

6 Here’s what else to consider

Startup Development

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