In the last part discussed the difference between an idea and a patent and how the proper judgment of whether something is in breach of the intellectual property is a gray area. Additionally, we spent some time analyzing the way software companies make an idea to product. We pointed out that all companies usually use already established algorithms and design patterns free of copyright. In this part, we shall discuss some techniques and pain points Start-Up founders must be aware of.
First – this advice is more oriented towards every entrepreneur – please make sure you hire a good lawyer before you do a single step of your Start-Up journey. And by good, I mean a lawyer with good work etiquette and a moral compass between wrong and right. Additional experience in the field is a bonus, but it must not be the main reason you start working with someone. Additionally, a skilled lawyer can help you set up your company in a way, which can save you many troubles in the future.
Second – make sure that you have at least one technical person with legal knowledge. This person will work closely with your lawyer when you have to make a legal decision regarding your technical product and will clear technical details regarding your contract templates, customer complaints, and, in the worst case, if someone decides to attack your organization legally. Ideally, this person must be part of your founding team but not hired.
Third – be paranoid. Contracts are invented for both sides to have the worst-case scenarios covered. And by that, we mean the worst-case scenarios indeed. Some examples are death, theft of intellectual property, not honoring the deal from one of the sides, etc. I can give you some tips: make sure you have every exit situation covered; the contract must have a period and if there is a penalty rule, make sure that there is an upper limit for it.
Fourth – make sure you don’t make enemies. A significant percent of legal arguments are because of personal reasons. The most common cause is that someone’s ego is hurt so much that this same person decides to take legal action. From a business perspective, usually, the main reason is that one of the sides chose not to honor their deal and pay some money. Sometimes the cheating side could even fabricate a whole story to get away from court action.
In conclusion, please make sure you treat your customers, partners, and employees well. Not honoring a deal must be triggered only by terrible reasons, which are out of your control. It is the only way your reputation will stay intact, and you will not make yourself a bad name. From my experience, I can give you an example where not honoring the initial deal led to the company losing all of its technical team and a delay of at least two years. Eventually, the company bankrupted.