How to protect your intellectual property rights when collaborating with others

One of the advantages of team collaboration is being able to create more than you would on your own. Still, it comes with a dilemma—how to protect the intellectual property of the product or works created collectively.

Find out what types of agreements should be in place at the beginning of your collaboration and how the results of the joint effort can be divided among its creators.

How businesses protect intellectual property rights

Intellectual property is a huge part of the value of modern businesses.

No company, however, can create intellectual property without people. For businesses, managing creative teams so that their creative works can become new products is an overlooked yet essential process. One part of the challenge in protecting intellectual property is making sure that the business actually owns the intellectual property.

There are many ways to protect intellectual property. The most common are works made for hire. If a business employs a person to create intellectual property as part of their job, then the business can claim ownership over the intellectual property produced.

Works made for hire are essential for the management of intellectual-property collaboration. If several engineers work together to build a machine for a company, the company does not need to negotiate an intellectual-property collaboration agreement with each engineer after the fact.

Collaboration and intellectual property

However, not all businesses have employees. For example, a new startup does not have enough money in the bank to pay elite creators at their ordinary rate.

Still, entrepreneurial creators sometimes forego their normal hourly rates when an intellectual-property collaboration seems like a good investment of their time. Rather than paying for labor, a veteran creator may choose to receive shares of a company.

A startup is a good example of why it is important to protect intellectual property. New companies compete with established competitors that have more capital and customers, and new intellectual property may be the essential feature that allows the startup to compete.

The only thing stopping a larger, more established, better-resourced competitor from making the same product is the company's intellectual property rights.

Intellectual-property collaboration makes sure that all the resources needed to compete are property of the startup—such as a user-friendly interface, a robust API, and a rock-solid backend—and not something the competition can just take.

Aggregating all that valuable intellectual property into a new startup company is impossible without a clear collaboration agreement.

It must all belong to the company and not to the individual creators. With those rights, the startup can assemble all the disparate intellectual property rights into a comprehensive strategy and outperform the larger, established competitor.

How do I protect my intellectual property when collaborating in a team?

To protect your intellectual property when collaborating with others, you need to remember three things:

• Define roles. When collaborating as a team, define each team member's role in writing, and anticipate what each person will create. If the situation changes, update the plan.
• Negotiate ownership. Make sure the collaboration establishes how each creation will be protected, who will own the intellectual property, and what each creator is going to get in return.
• Get specific. A good collaboration plan includes a timetable and enough detail to handle delays, pivots, and other surprises. It should also include fees for intellectual property filings, time to help draft filings, and identify who will pay for ongoing support.

When large companies buy startups, one of the first things they establish is if they own their intellectual property rights. They'll want to see signed intellectual-property collaboration agreements before they even consider sales projections. The startup is the intellectual property, and any doubt as to ownership will eviscerate the potential value.