Building a Firm Foundation

I am onboarding a new client and I fear that I have overwhelmed her with document requests. You see, I start every new engagement with legal due diligence. Whether you are interested in scaling or selling your business, when intellectual property is at the center of our growth strategy, we need to know that your legal foundation is firm.

Legal due diligence ensures that the foundation of your business, including your intellectual assets, is solid before we start building upon it. An unfortunate fact -- we don’t always own what we think we own. Intellectual property ownership has nothing to do with possession or even who paid for its creation. Rights ownership is entirely dependent on what IP law says, unless there is a properly executed contract to the contrary.

Getting this right before building a licensing or certification program is especially important. Let’s say you have a methodology that you have used internally for many years. It is likely that no one outside of your employees has visibility into the elements of the methodology. That changes when you start sharing it with others through a licensing or certification program. Increased visibility = increased scrutiny. Think of your licensing or certification program as adding another floor to your house. The foundation that was good enough for your first floor may not be strong enough to hold your second floor.

Performing legal due diligence on your intellectual assets before building a public facing product upon it is fundamental. Here is a reminder of how cracks can show up in your IP foundation:

Another way we get into trouble—by incorporating materials we have permission to use internally, such as an assessment tool, into a product we license to others.

Enough with the scare tactics. All this is just to say that these problems are avoidable! We just need to do our diligence.

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