Intellectual Property Top Tips following firms downfall

The recent demise of CrunchPad has generated the following tips from Patricio Robles

• Hire a good IP attorney. Competent legal counsel can help you identify your IP protection needs and structure your business and its agreements to meet them. This isn't going to be cheap but as they say, an ounce of prevention is worth a pound of cure. If you think paying $300+/hour for an experienced IP attorney is painful (it is), wait until you learn the average cost of litigating a complex international IP dispute.
  
  

• Focus on ownership. Chances are you do not want to 'share' your IP with other entities, or engage in behavior that might muddy the waters when it comes to determining who owns the IP you think is yours, as appears to have been the case with the CrunchPad. Typically, you'll want employees and partners who are involved in the development of your technology to assign all IP rights to you, although sometimes licensing agreements are more appropriate. Again, competent legal counsel can help you determine the type of agreements that are most desirable, and negotiate arrangements that address the concerns of both parties.
  
  
• Think twice about 'partners'. Partnerships and joint ventures can be extremely fruitful, but they can also be very difficult to make work and add to execution risk for young companies. That's why it's important to consider how many chefs you invite into the kitchen. Here, it's pretty clear that the CrunchPad's demise was the result of a 'partnership' that wasn't very well thought out and was executed poorly, leaving room for one party to reevaluate its position and come to the conclusion that interests were misaligned. Had Arrington simply kept development in-house and outsourced manufacturing to Asia (something many companies do without problem), this all could have been avoided.
  
  
• Consider where you do business. While it's important to deal with people who you feel you can trust, there are other considerations which may be more important. In the case of the CrunchPad, for instance, it's worth noting that Fusion Garage is based in Singapore. Nothing inherently wrong with or 'dangerous' about that, but if you're going to deal with vendors or partners in countries other than yours, you had better be sure you understand the laws of those countries and any applicable international treaties that may impact the enforceability of your agreements. And more importantly, you'll want to consider whether you're even able and willing to pursue enforcement of those agreements in those countries in the first place if the relationship takes a turn for the worse.

Had more attention been paid to the protection of IP rights and the legal structuring of business relationships, I have no doubt that the CrunchPad fiasco would have been avoided. Fortunately, the amount of attention the CrunchPad had received means that its demise won't be for naught, as it provides a timely reminder for technology entrepreneurs. That reminder: protect yourself, and your IP, at all costs. The consequences of not doing so can be fatal. more>