How can you protect a business idea when you need to bring people in for their technical skills, or maybe as a co-founder?


My answer to How can you protect a business idea when you need to bring people in for their technical skills, or ma…

Answer by Ken Larson:


Bringing intellectual property (IP) into existence requires that the tangible property as a result come under control. For small business this is usually brought about by a series of encounters with IP. They are discussed below in the relative order in which a small business encounters them.

Company Founding Personnel

A small business usually encounters IP and Proprietary Data (PD) concerns when it is formed. The operating agreement between the founders must address these matters from the perspective of who brings property to the venture and who owns it as well as the rights to the property developed thereafter. A typical operating agreement may be downloaded from the Box Net “References” cube at the site linked below:


Please examine it as a framework and add those elements that are unique to your enterprise.

Employees and Contractors

The next encounter usually entails employees or contractors who apply for work. It is wise to inquire as a standard practice, and as part of an employment agreement or contract, whether or not an individual has signed a non-compete or proprietary data agreement with prior employers. If they have, acquire a copy of the agreement and assess whether or not the employment of these personnel poses a risk of IP violations in terms of another company's property or their claim to ownership of what the candidate may develop on your behalf while in your employ.

Make it clear in your agreements of hire and contracts that IP and PD that employees may participate in developing are the exclusive property of the company, that they will not own it and that they are expected to protect it, even when they leave your firm.

Industry Partners

Declare in your non-disclosure, teaming, and contract agreements the precise definition of the IP and PD ownership brought to the table and the exact share of ownership in subsequent development items. Most firms use the efforts of their employees (labor records) as a basis to make these distinctions, but further specificity may be necessary on complex projects.

How can you protect a business idea when you need to bring people in for their technical skills, or maybe as a co-founder?


About rosecoveredglasses

2 Tours in US Army Vietnam. Retired from 36 Years in the Defense Industrial Complex after working on 25 major weapons systems, many of which are in use today in the Middle East. Volunteer MicroMentor. I specialize in Small, Veteran-owned, Minority-Owned and Woman-Owned Businesses beginning work for the Federal Government. MicroMentor is a non-profit organization offering free assistance to small business in business planning, operations, marketing and other aspects of starting and successfully operating a small enterprise. You can set up a case with me at MicroMentor by going to: key words: "Federal Government Contracting"

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