What to Ask: Intellectual Property | Richard A. Green, Esq.
Starting a new business? UpCounsel attorney Richard A. Green explains what every startup should be asking their legal team about intellectual property2 min read
What are the company's most valuable assets and how are you protecting them?
Answer is dependent on nature of business, but if manufacturing, trade secret protection is essential in joint enterprises, contract manufacturing, and other situations.
Is the company protecting its information?
With the explosion of electronically-stored information and the proliferation of cloud computing, corporate information is at risk and must be intelligently managed, including defensible deletion.
Are outside counsel accountable to the corporation?
Without management systems, such as engagement letters, budgets, and management plans, outside counsel are likely to escape accountability and under-perform, costing the corporation money.
Are the corporation's commercial terms and conditions advantageous and does the corporation succeed in the use of its terms and conditions when contracting with other parties?
Not limiting liability and failing to restrict or eliminate warranties will cost the corporation money in product liability and other situations.
In the acquisition of technology (hardware, software, cloud computing), can the corporation effectively negotiate purchases without specialized legal counsel or other consultants?
Probably not. Failing to understand technology agreements can cost the corporation dearly when the time arrives to upgrade, extend, etc. technology, or if the vendor audits software licenses.
What is the best way a small business owner can protect personal wealth and assets from business risks?
Good, solid commercial terms and conditions and appropriate insurance.
What specifically are small business owners most confused about when you first meet with them?
How a good corporate lawyer adds value to the organization.
How can quality legal services help a small business grow?
By creating sensible, low-cost legal management systems to help the business maximize its relationships with customers and vendors.
How can quality legal services help small businesses save money?
Intelligently and effectively manage outside counsel, and sharpen commercial terms and conditions.
How can small businesses maximize the value of their legal team’s services?
If they employ counsel, it is imperative that employed counsel effectively manage outside counsel. Secondly, employed counsel should in-source all work that can be most economically done in-house and that benefits from their insights about the business and continuity in service.
Should business partners have the same amount of equity in a company? Why or why not?
It depends on the relative contributions and commitments made to the company by the partners at that moment in time, and whether those contributions are in cash, in kind, or otherwise.
What are the top three things a small business owner should be aware of when purchasing an existing business?
Accurately determine the value, Due diligence reviewing customer lists, sale records, advertising materials, and employee contracts, Find out if there are any human resources issues or outstanding lawsuits pending against the company.
Do you have any other essential legal guidance for startups that you haven't already included in this survey?
Whether using employed counsel (full or part-time) or outside counsel, make certain that counsel is sufficiently integrated into the business to really understand the business. Ordinarily this can only be accomplished by spending at least two days per week in the home office.