What happens to my IP rights when a startup is founded to commercialize it?


If you are given, say, 10% equity in the IP of an invention, and suppose it gets patented and is the basis for a new company, do you own 10% of that company? How does the transfer of IP to the company work?

Answers: 2 public & 0 private

Steven weinrieb
Patent Attorney

If the IP is, for example, the major asset of the new company, your 10% share may in fact be worth more because any owner of the patent rights has the right to license or assign the patent rights as he/she sees fit, independent of the other patent holders/owners provided, of course, that, as inventors, you did not assign the rights to the patent when, as is usual, the patent application was filed and before the patent issued.

Patent Attorney

Nothing, “happens to [your] IP rights when a startup is founded to commercialize it” unless you take certain steps to transfer those rights to the startup. Indeed, unless you are an inventor or co-inventor (being a co-inventor means you and the other co-inventors have equal and separable rights to the invention by default), you don’t have any rights to an invention absent those parties or their assignees granting you rights to the invention. An intellectual property asset like a patent is one of many things that go into the calculus of what a business is worth, but theoretically you could have a contractual arrangement where you receive some royalty from the commercialization of a particular invention yet have no equity or other interest in the business that is commercializing the invention. An invention, or commercialization thereof, can be the basis for the business being formed and operated, but that IP asset and the business entity are separable things. If you have been materially involved in the creation of an invention, or have been offered some compensation for that or other involvement, it would be prudent to contact a local IP attorney to evaluate exactly to what you may be entitled.

Recent questions

Do people really steal invention ideas?

I sometimes see questions on forums like Quora about how to stop people stealing your invention i...

4 3457 2
Is interpretation of known historical facts protectable under copyright law?

I am looking for useful sources on protecting copyright. I am in the process of writing a book ba...

3 3549 2
Fair Use and news feeds

What is the current wisdom on compiling news feeds on a third party website so far as copyright i...

1 2377 0
Looking for good patent firm

How to find a good patent firm to help me apply patent in USA

3 2729 2
What constitutes 'prior disclosure'?

This might be a silly question but I’m a bit confused by ‘prior disclosure’ as it applies to pate...

2 2987 1

Do you have a question about your invention or intellectual property?
Search the questions below or post your enquiry to one of our experts via Directory.
(User questions are no longer posted publicly on this page.)