How to interact with third parties and not leak value
In most companies, IP assets are an important part of the ‘value’ of the company. The company name, logos, trademarks etc. all help in creating that unique blend of corporate identity that customers and potential customers react to.
With companies that work with science and technology to create products there is another layer of IP that can be crucial to the value of the organisation. This is the layer of know-how and patents. Yet all too often companies, especially newly-formed companies and of these particularly those founded and run by academics, are tempted to operate in a way that can compromise the value of their company and hence their chances of success.
The academic mind set is one where obtaining grants and getting good PhD students is core to building a career. When an academic, in a STEM discipline, recognises a commercial opportunity is arising from their research (a topic worth a whole separate discussion) they often think, or are advised, to create a new company (often a spin-out from a university). All well and good so long as the academic founder(s) realise that the way to build value in ‘their’ spin-out centres on that company’s ability to create and access IP that they can then own and control.
Ownership and control of IP is not at the forefront of most academics’ minds when they seek funding to support their research; instead, it is the need to simply get the financial resource to allow them to continue that is paramount. This can, and does, cause a problem when academic founders fail to see the danger of progressing what are core technology developments in the spin-out’s business plan via the mechanism of getting, for example, PhD students in their host university to work on related projects.
Yes, the technology developments may be spectacular but who will own the IP? The student (probably), the university (maybe), the academic (unlikely), the spin-out (almost definitely not, unless…….). In forging ahead without taking advice and getting the underlying contracts well drafted this fictional academic company founder has just shot the spin-out in the foot.