Research scientists often start companies backed only with a good idea, some basic research, personal savings and a few colleagues.
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Sometimes in the excitement of the moment and with a dearth of funds, the founders don't prepare the proper written contracts at the beginning of a new venture.
This is a BIG mistake!
You can be sure that AFTER a technology generates commercial interest that everyone involved will have a different recollection of what they were supposed to do and what their ownership stake was.
Even if you have to draft the contracts yourself, get everything in writing before taking any further steps. At the minimum, the agreements should address the scope of employment, confidentiality obligations, and ownership of both the resulting intellectual property (IP) and the company.
Be extra careful where inventions might be made with collaborators or contractors outside the company. The default rule in the US is that the employer owns all inventions made by its employees and that co-owners of a patent can each use or license the patent WITHOUT paying the other.
Therefore, it is essential to have written contracts addressing the ownership of IP before beginning any work with a non-employee.
More Tips for Scientist Entrepreneurs
To learn more about how to bring a product out of the laboratory and transition from the role of scientist to that of entrepreneur, please browse the rest of the tips for science entrepreneurs in this article series:
- Transitioning from Science to Sale - We introduce our 10 tips for entrepreneurial scientists who want to take their science to market.
- 1. Getting it in Writing - Before you get too far along in the process, it's imperative that you put together written contracts that define ownership rights, confidentiality and other important obligations and understandings.
- 2. Cultivating A Culture of Invention - Encouraging invention is the first step to creating valuable intellectual property. We look at what organizations must do in order to motivate employees to create proprietary science and apply for patents.
- 3. Getting Inventorship Right - Patent laws require that you get inventorship right. Get it wrong and you can lose the patent. Here are some simple ways to avoid making a mistake in the naming of inventors.
- 4. Using Hardbound Notebooks - Your lab notebook could end up being used as evidence to invalidate your patent claim. We discuss the proper use of hardbound lab notebooks to ensure proper IP protection.
- 5. Planning a Patent Strategy - Filing patents can be an intimidating endeavor, but there are some best practices for scientist entrepreneurs that you ought to know about.
- 6. Planning an FDA Strategy - Knowing these tips for getting FDA approval will come in handy if you are working on new drugs or medical devices.
- 7. Loosening the Reins - You can't do it all. Scientists entrepreneurs must know when to transition leadership and when it's time to bring in the pros.
- 8. Stirring Public Interest - Promoting your science before you commercialize can smooth the road to funding...but there are a few mistakes you can make if you are not careful.
- 9. Financing the Company - It takes money to make money. Here are a few things to know about the funding process.
- 10. Preparing for Due Diligence - Due diligence involves intense scrutiny of all of your documents. It's critical to keep your documents well-organized and readily accessible.