How to Start up Your Own Tech Startup

Who Owns the Intellectual Property? Read the Fine Print

Bakman's experience at Unum was out of the ordinary. Not every company is quite as happy as Unum was to surrender rights to intellectual property developed by an employee. So don't expect them to.

"Take the high road. Keep a clear line of demarcation between work for your employer and your new firm," advises Mike Messinger, a partner at the Washington, D.C., law firm of Sterne, Keller, Goldstein & Fox, which specializes in the protection of intellectual property rights.

Although, generally speaking, an invention belongs to the inventor, even if developed on the company's time and with its equipment, there are many potential exceptions to that rule of thumb, Messinger notes. The one that comes up a lot for technologists is the employee invention agreement, which is sometimes a separate agreement and sometimes part of your employment contract. "Look them over carefully. They are written from the employer's perspective," Messinger says. You may have signed away some of your rights. California, he notes, is one of the states most likely to interpret those agreements in an employee's favor.

Doing the work at home helps you argue that your invention wasn't covered by an invention agreement, but if you remove an employer's property -- and that includes many types of electronic information -- you may weaken your case that the invention was solely yours. And if you plan to pitch your idea to the VCs, count on them asking you about the provenance of your source code and other important bits of technology, says Messinger.

Even when you and your employer seem to be on the same page about your inventions, have a lawyer look over any agreement you reach, advises Ray Bohac, founder of CallCopy, a vendor of call recording and quality monitoring software. While working for a call center outsourcer, the young programmer realized that the software used in many call centers was difficult to customize for varied business needs. Before long, Bohac had the outlines of a solution.

His employer, CallTech Communications, agreed that he could develop the idea at home, and as the software took shape, CallTech even let Bohac work on it on company time. Eventually, CallTech agreed to license Bohac's software. Sound like a model of harmony? It was. But when Bohac's friends said, "Get it in writing," he didn't take them very seriously.

And that turned out to be a mistake.

CallTech was a great partner, but the company was sold, and the new owners weren't as accommodating. In retrospect, says Bohac, "it would have been cleaner, less expensive, and less stressful if we had a lawyer's advice, even though in the end, it did work out OK."

Along with a lawyer, consider bringing on an accounting firm as you get ready for business, says Michael Ryan, CEO and co-founder of South River Technologies, which develops file management software. It will keep the financial side of your business running smoothly. "Pick a small firm; it's easier to get attention in a time of need and stick with them," he says.