dm van-#8705020-v1-ubc apsci ppt winter 2014
TRANSCRIPT
What Ethical Dimensions?
•IP can be the most valuable asset a
company has
•IP can be stolen without being taken
•There is no property in an idea
Corporate Life Cycle (Hypothetical)
•The idea
•Formation of the company
•Development of the product
•Launch, sales, success
•Exits and inevitable breakups
Stage 1: The Idea
•Step 1: Have brilliant idea
Stage 1: The Idea
•Who do you tell?
•How do you tell them?
•How do you still keep it a secret?
•How do you start protecting your idea?
Stage 1: The Idea
•Non-disclosure agreements (NDA)
•Patents
•Other IP protections
• Trade-mark? Copyright?
•Balance potential protection with business
reality
Stage 1: The Idea
•What if the partnership fails?
• What does the NDA say?
•What if you heard the idea and there was
no NDA?
• Was it a secret?
• Is it valuable?
• Where and how did you hear it?
Stage 1: The Idea
Step 2: Company Formation
Stage 2: Company Formation
•Share Issuance Issues
•Assignment of rights in IP to company
• e.g. copyright
•Trade secrets: key employee agreements
Step 2: Company Formation
•Who is really in control?
•What did each bring to the table and is it
now the company’s?
• What’s mine is mine, what’s yours is ours
•Never too early to think about breaking up
• What if it doesn’t work?
Stage 3: Development
Stage 3: Development
•Hiring (and firing)
•Employment contracts
•Information flow
•Who needs to know what?
•Corporate culture
Stage 3: Development
•Problem 1: so you had to fire someone
• Restrictive covenant?
•Problem 2: they are trying to give their new
boss your IP
• Did you have an IP policy?
Stage 4: Launch and Inevitable Success
Stage 4: Launch and Inevitable Success
•Nice problems to have:
•Trade-mark filing in appropriate
territories
•Copyright clearance
•Licensing opportunities
Stage 4: Launch and Inevitable Success
• Not-so-nice problems to have:
• Knock offs, e.g. merchandise
Stage 4: Launch and Inevitable Success
• Nightmare scenario:
• Demand letter alleging breach confidentiality,
misappropriation of trade-secrets
• Demands immediate halt, accounting of profits
• How to respond?
• Is your house in order?
• Is there a basis for the complaint?
• Fight or negotiate?
Stage 5: Growth Strategy?
•Need to raise venture capital money?
Maybe a major internet company wants to
purchase the company.
• Due diligence
• Have to be clear on what you have to
offer
• Claims against the IP?
• Ethical issues
Stage 5: Exit Strategy- Inevitable Breakup
• Disagreement over next steps: sequels vs. new
development?
• Lawsuit still ongoing
• Consider:
• Sale of company to one faction?
• Assets v. Shares?
• Ethical concerns regarding sale during litigation
Questions for the Lawyers?
