Take Five With Trish: 5 Things You Need To Know, and Do, When Starting A Business – Part 4 – Make Sure You Own The Intellectual Property You Think You Own

(This is the fourth part of a six part series. The first part can be found here.)

In this fourth part of our series on the five things you need to do when starting a business, we are going to discuss intellectual  property ownership, and how to ensure you own the intellectual property (IP) created for you by a third party.

Unless you, or one of your partners, have the knowledge and skill to create all of your business associated intellectual property, you will need to hire a third-party professional to help you out.

Whether you enlist a graphic designer to create a logo and collateral materials, or a developer to build your company website, mobile application or software-as-a-service platform, you need to make sure you have it in writing that you are the sole owner of these creations.

The law is clear when it comes to intellectual property ownership – the creator of any intellectual property is automatically deemed the owner of that creation, unless it is specifically spelled out in writing to the contrary. Even if you pay someone to develop intellectual property for you, such as a logo, it does not mean you automatically own it. If you don’t have it specifically spelled out in a contract that you are the sole owner of that IP, they could claim that you paid to use the creation, not own it, and could potentially have a claim against revenue generated by that IP.

Let’s take your new business website as an example. Are you providing all the images and written content for the site, or is the developer providing all of that?  If the developer is providing images or applications that they license, is that license passed to you?  If a license is passed to you, what rights and responsibilities do you have under the license agreement? These are all important things to consider.

As we mentioned in the first segment of this series, but worth repeating, you should register the domain name of your business yourself. Do not let the designer or developer do it for you, even if it sounds convenient. There have been cases where a business had a website developer register their domain, only to realize later that the developer had  ownership, and control, to the key component of their online brand! Don’t let this happen to you – always register your domain name yourself.

To protect all your intellectual property, and prevent unwelcome surprises down the road, you need to have solid contacts in place with third parties. Your contract should include, among other things, wording stating that you are the sole owner of the intellectual property created. It should be clearly spelled out if the third party is incorporating any other intellectual property into what they are creating for you, such as licensed applications or images, and how those licenses are transferred to you, so as to not impact your business in the future.

Even if the person doing the IP development is a family member or friend, get it in writing. Not only will you be protected if things don’t go well, but often a well-drafted contract will prevent things from going south in the first place by clarifying expectations and preventing misunderstandings.

When it comes to protecting your intellectual property and business future, a good business attorney is a must. They will know all the appropriate steps to take to make sure you own the intellectual property you think you own.

If you have any questions about contracts necessary to ensure intellectual property ownership for your business, please reach out to us. We are always here to help!