Protecting Intellectual Property

You've got a startup and you're dealing with a corporate either as an investor or potential partner. How do you protect your IP? What have you kind of seen work better in the IP protection process?

And that's, as you might guess, a very common question and concern, especially entrepreneurs who put their heart and soul into a technology or into a business plan, and then suddenly they're kind of opening the kimono, right? And just say, okay, we're going to parade down Sand Hill and show it to 6 different venture capitalists. And just hope they don't tell anybody.

Or even the corporations as well.

Or even the corporations. So first off, what's interesting is venture capitalists won't sign non-disclosure agreements. The good ones won't. That's just not— you just have to trust them. That's just part of the deal. The good news is, generally speaking, if a Kleiner, Sequoia, or somebody were to start breaching that trust, word gets out and entrepreneurs don't get to them. So there's an element of trust. There's an element of how much do you show them at the first meetings. How much of your kimono do you open, so to speak, right? And so how much you're showing it to them. And so much depends on the industry as far as the IP protection. You're going to have some copyright protection for some of your software. You're going to have some trade name, trade secret barriers. But usually at the time you're first meeting with people, you usually don't have anything at the patent level yet. Some people may do what's called a provisional patent, which is sort of a cheaper version of a full patent where you kind of just slap a cover page onto your flowchart and submit it and you can start the clock in a provisional patent to get it. But a lot of people haven't, don't really have any protections at that stage. So a lot of it really is trust. Now if you're talking a true corporation, that's when you want to be a little more cognizant of that because for whatever reasons, that's when there is more risk. And so you want to either, if it is something patentable, try to button up the patent before you do that or at least get the patent started. You know, keep in mind patents are a tricky process as well. You know, process patents, some people don't think they're worth anything. I'm talking technology here, like software, that kind of thing. If it's something in biotech or med device, a patent's much more valuable. And so you have to kind of weigh that. What I usually try to do is early on, I'll try to get— again, I'm trying to be cost efficient. I'll say, hey, let's try to get a free hour from one of my IP attorneys and let's talk through your patent issues. And see what he or she thinks about how patentable this is and whether it's worth the money to do it now. You know, so you want to have that, and you want to have that discussion not necessarily with a person like me, but get a person like me to get a sort of hardcore patent person who has it, you know, knows your technology.

So what I always advise clients, and this comes up in our work as well, is if they're meeting with a strategic, you know, company, I say do not disclose anything that you would be nervous about them running with. So just be very cagey about what you disclose in an initial meeting. If you have 4 or 5 meetings, the trust is building. But in an initial meeting, you can only hurt yourself. And I think it's just much better to be cautious. There are lots of corporations that are known for stealing technology. Silicon Valley is brutal that way. And so I just, I caution people.