Three IP Tips for Newly Form SaaS Companies seeking American Investors
An India-based SaaS startup recently engaged us to advise on tax matters. During our intake, we identified a few “loose ends” in the founders’ approach to “Intellectual Property” (IP). Because it was early on the business’ evolution, we were able to provide a strategy to “tighten” up those loose ends before they approached American venture capitalists and the IP anything blew up.
If you’re a foreign SaaS founder with a real shot at getting American or Canadian capital, and you have co-founders or employees, here are three (3) strategic steps to consider taking:
(I)Register your Trademarks and Domain Names.
US Trademark law protects unique marks that you have developed to brand your products and services and patent law protects technical innovations, typically giving you the exclusive use and licensing rights. However, IP ownership is complicated, and wisdom suggests that you consult with experienced counsel. This is particularly true at the early stages of your startup, because counsel helps you make the strategic decisions at strategic times to optimize protection for your company’s (potentially) valuable IP.
(II) Protect Privacy.
If you are handling personal data of EU citizens, you will need to justify why and explain how. The GDPR–an EU privacy law–has specific new language and requirements to the existing definition of consent.
(III) Own the Intellectual Property (trademark, algorithm, software, trade secrets, etc.).
As an early stage company, it’s likely a few people contributed to developing IP. So who owns it? It depends. For patents, if there is more than one inventor, there may be more than one owner. However, ownership can be transferred or reassigned, so there are a few smart strategies to ensure that your company can benefit from IP generated by founders and employees.
- Request that all employees sign confidentiality and invention assignment agreements before they start generating intellectual property. Failure here has caused serious issues for many companies.
- Ask counsel to execute Assignment Agreements. Even when employees have signed appropriate agreements, your company should execute new IP-specific assignments naming the specific IP to have additional legal weight.
If you think we’re the right team to speak with, we have two plans, both fixed-fee, and both tax-deductible.
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Second, you’ll be invited to schedule a call if we can help you. If you’ve already completed the intake step, skip to the scheduler: https://calendly.com/kwame-dougan).
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