Whether you’re registering trademarks, protecting copyrights or determining who owns newly created work product, every business—at each stage from formation onward—faces intellectual property (IP) issues.
While you may choose to seek out legal representation each time IP issues arise, another option is hiring fractional legal counsel, on a retainer basis. “Fractional” legal counsel means you outsource a portion of your legal work to a specific attorney or law firm.
Together with your chosen representation, you can customize the service agreement to lay out the scope of the attorney’s responsibilities and make sure you’re getting your money’s worth as well. Part of your agreement, of course, will include the set monthly fee you’ll pay counsel to represent your ongoing IP interests.
Some benefits to hiring fractional legal counsel to handle IP issues include:
1. Preventative maintenance. Fractional legal counsel can stay in front of problems and anticipate issues before they blow up and become costly for your business.
2. No disincentive to call the attorney. Because you’re not paying for every communication through hourly billing and rates, you can feel free to pick up the phone and check in with the attorney.
3. No catch-up. Your fractional legal counsel will already be up to speed on your issues, which means—should the unexpected happen—you won’t have to spend time and money catching them up on what’s going on in your business.
4. Stay at the front of the line. Again, without the concern of hourly billing and rates, you can keep in regular contact with the attorney, solidifying both your working relationship and counsel’s understanding of your business.
5. Predictable costs. By paying a set monthly fee, you know exactly how much you’ll be spending to take care of your IP issues.
6. Potential cost savings. By hiring fractional counsel, you may even save money on legal services by spending less than you would have for representation on an as-needed, hourly basis.
If you think fractional legal counsel for IP issues might work for you, get it touch and let’s talk about it. Send a message or give us a call at (314) 454-9100 today.
Buying & Selling Intellectual Property: The Basics
If you’re opening, expanding, merging or closing a business, chances are excellent that you will encounter many legal issues related to intellectual property. One such potential issue is the buying or selling of copyrights, trademarks, patents or trade secrets. If so, you’ll need to be clear on several factors before you should even consider making a deal.
Who owns the IP?
Whether you’re buying or selling IP, you must be sure of the rightful owner. Tracking the provenance of the IP is critical because a seller can only sell what he owns. Some questions to explore include:
- Is the seller the original creating entity?
If so, generally the business owns the IP, if it was created by employees acting within the scope of their employment or by independent contractors/third parties who have a written “work for hire” and/or Invention Assignment Agreement. Otherwise, the business may not own the IP, in which case you’ll have to dig more deeply to see who does.
- Did the seller acquire the IP previously? Perhaps through bankruptcy or merger?
Are there any restrictions on the IP?
The answers to the following questions may matter more to the buyer—especially depending on what the buyer plans to do with the IP—but in any event these are some issues that should be addressed before reaching an IP sale agreement:
- Are there any restrictions on assignments of rights or a change of control of the IP?
- Are there any territorial boundaries or restrictions on use?
- Is the seller a licensee? If so, does the seller have a right to sublicense, either limited or unlimited?
- What is the scope of the license?
- Can the buyer expand to new markets?
- Are there limits in existing sales representative agreements, especially territorial limitations?
Other issues to address in the buying and selling of IP include the financing of the transaction, which may involve security agreements that require registration with the appropriate office. You may also need to handle the assignment of domain names and other online accounts as well.
As you can see, buying and selling IP can be a complex transaction that requires an incredible amount of due diligence to make sure both parties get what they are bargaining for.
If you could use the advice of an experienced IP attorney, send a message or give us a call at (314) 454-9100.
Pete Salsich III has been General Counsel for Coolfire Studios, LLC (an entertainment content creation studio), Coolfire Solutions, Inc. (a mobile software development studio focused on the military and commercial enterprise), and MedAware Solutions, Inc. (a mobile software platform company focused on the healthcare industry). Since joining AEGIS, Pete continues to serve in this capacity.