How can you protect your intellectual property when leaving a partnership?

If you are a venture capitalist, you know how important it is to protect your intellectual property (IP) when you invest in a startup or join a partnership. But what happens when you decide to leave a partnership? How can you ensure that your IP rights are not violated or exploited by your former partners or competitors? In this article, we will discuss some strategies and tips to help you safeguard your IP when exiting a partnership agreement.

1 Identify your IP assets

The first step to protect your IP is to identify what kind of IP assets you have and how they are related to your partnership. IP assets can include patents, trademarks, trade secrets, copyrights, and know-how. Depending on the nature and scope of your partnership, you may have shared or exclusive ownership of some or all of these IP assets. You should review your partnership agreement and any other relevant documents to determine your IP rights and obligations.

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Brian A. Hall

Managing Partner, TraverseLegal.com | Founder, TraverseGC.com | The Last Lawyer You’ll Ever Have to Hire
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Start with what is in writing, including your partnership agreement, any intellectual property assignment agreement, and any other written agreement that could implicate intellectual property ownership. You may have given up previous IP rights and/or future IP rights. Joint ownership of intellectual property is also important to determine, as it can limit you and your partners ability to monetize, divest, or take other action relative to that IP and derivatives thereof.

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2 Negotiate your exit terms

The second step to protect your IP is to negotiate your exit terms with your partners. Ideally, you should have a clear and fair exit clause in your partnership agreement that specifies how your IP assets will be handled when you leave. However, if you don't have such a clause or if it is vague or unfavorable, you may need to renegotiate your exit terms with your partners. You should aim to secure your IP rights and interests, such as retaining ownership, licensing, or royalty arrangements, or preventing misuse or disclosure of your IP assets.

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R. Shawn McBride

The Planning Done Right Guy(TM) | Business nerd | Host-Future Done Right(TM) Show | Business Ownership Attorney
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This is one of the keys. Hopefully IP and a potential exit was thought of at the start of the partnership. It is often an afterthought. For many folks leaving a partnership the surprise is that IP may belong to the partnership. So for those planning a good partnership with exit terms is key early in the process. If you missed that step good negotiations at exit might save some your IP rights.

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3 Register and enforce your IP rights

The third step to protect your IP is to register and enforce your IP rights. Depending on the type of IP asset, you may need to register it with the relevant authorities to obtain legal protection and recognition. For example, you may need to register your patents, trademarks, or copyrights with the national or regional offices. You should also monitor and enforce your IP rights against any potential infringement or misappropriation by your former partners or competitors. You may need to take legal action or seek arbitration or mediation to resolve any IP disputes.

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4 Transfer or sell your IP assets

The fourth step to protect your IP is to transfer or sell your IP assets. If you want to exit a partnership completely and sever any ties with your former partners, you may consider transferring or selling your IP assets to a third party. This way, you can avoid any future conflicts or complications with your IP rights and interests. However, you should be careful and diligent when choosing a buyer or transferee for your IP assets. You should conduct due diligence, negotiate a fair price and terms, and ensure that the transfer or sale is legally valid and enforceable.

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5 Maintain your IP portfolio

The fifth step to protect your IP is to maintain your IP portfolio. Even after you exit a partnership, you should continue to manage and update your IP portfolio. This means that you should keep track of your IP assets, renew your registrations, pay your fees, and comply with any obligations or restrictions. You should also evaluate and optimize your IP portfolio periodically to ensure that it aligns with your business goals and strategies. You may want to acquire new IP assets, license or sublicense existing ones, or abandon or donate unneeded ones.

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6 Educate and communicate with your team

The sixth and final step to protect your IP is to educate and communicate with your team. If you have a team of employees, co-founders, advisors, or consultants who are involved in your IP creation, development, or management, you should make sure that they are aware and respectful of your IP rights and interests. You should provide them with proper training, guidance, and policies on how to handle your IP assets. You should also communicate with them regularly and transparently about your IP goals and expectations, and address any issues or concerns that may arise.

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7 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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How can you protect your intellectual property when leaving a partnership?

1

2

3

4

5

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1 Identify your IP assets

2 Negotiate your exit terms

3 Register and enforce your IP rights

4 Transfer or sell your IP assets

5 Maintain your IP portfolio

6 Educate and communicate with your team

7 Here’s what else to consider

Venture Capital

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How can you protect your intellectual property when leaving a partnership?

1

2

3

4

5

6

7

1 Identify your IP assets

2 Negotiate your exit terms

3 Register and enforce your IP rights

4 Transfer or sell your IP assets

5 Maintain your IP portfolio

6 Educate and communicate with your team

7 Here’s what else to consider

Venture Capital

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