Startups Stack Exchange Archive

How do we prevent our pre-launch testers from claiming our IP?

We are currently testing our new IP. How do we prevent people that help us test and provide feedback from coming back and claiming our IP or demanding shares and/or revenue?

Answer 3589

For starters keep very good and detailed records as to what you did and didn’t come up with. If you feel like you need to file then do so early, even if the patent isn’t yet granted the file is already in the works and it creates a supportive paper trail.

All that said, I am more along the lines of the thinking of Elon Musk (CEO of Tesla Motos, founder of Paypal). He open-sourced Tesla’s patents last year (or the year before). He realized that their time was better spent innovating over litigating.

He realized that by sharing their knowledge and letting anyone use them others inadvertently helped him improve their IP. Because they would be testing it and tweaking it. Tesla can learn from their mistakes with it and their successes. At the same time, by sharing the technology it will be able to reduce production costs by economies of scale AND it would cause his competitors to help expand Tesla’s marketplace with their own uses of the technology.

You protect your intellectual property (which in itself is an absurd thought, to own an idea) from competition by staying ahead. Since you created it you are the first to use it. You are the first to see it. You are the first to find the flaws that need to be improved. You stay ahead by constantly working to produce the best product.

Instead of litigating you should focus on innovating. If you want some great articles on this subject then I suggest you read through TechDirt.com. This subject comes up ALOT.

Answer 3587

Have anyone that is not a part of your start-up sign a NDA. By signing a non-disclosure agreement they state that they will not disclose any of your IP or (depending on how you write the NDA) even disclose anything about the project other than that they are working with your group.

I would advise that you speak to a lawyer about this if you think your IP is potentially worth warranting a NDA.

Wikipedia article on NDA : http://en.wikipedia.org/wiki/Non-disclosure_agreement
Example NDA agreement form from harvard : http://www.hbs.edu/entrepreneurship/pdf/Sample_NDA.pdf


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