You have your big idea and now it’s time to breathe it into existence, but you need some help with the development. Like many others, you may turn to the aid of an engineering firm or dev shop. This relationship is a marriage of sorts. But it’s a marriage that is designed to inevitably end in divorce. How cleanly, smoothly, and successfully this separation goes depends on the steps that you take before it officially begins. Dr. Ashley Sloat, President and Director of Patent Strategy at Aurora, leads a discussion into Responsible Engagement with Engineering Firms, or what we affectionately refer to here as “Prenuptial Patenting”. Ashley and our all star patent panel walk you down the aisle and explore everything you need to know to experience marital bliss and an amicable divorce with your engineering partners. This talk covers the full life cycle from vetting partners to post development concerns and everything in between – with particular focus on relationship complexities like IP ownership, assignment from engineering firm inventors back to you, and how to avoid the traps of viral IP. Blog post: https://www.aurorapatents.com/blog/prenuptial-patenting Podcast Episode: https://patentlystrategic.buzzsprout.com

1. Prenuptial Patenting
Responsible Engagement with
Engineering Firms
This presentation is for information purposes only and does not
constitute legal advice.
Patently Strategic | May 31, 2022

2. Ice Breaker
Kissing Shield 7086646 - Inventor: Deloris Wood – September 2004

3. Shared Problem Solving
• Any problems you are encountering with the USPTO?
• Any practice issues arising?
• Any technical issues you are facing?

5. Key Questions
•Key considerations for working with any
outside group/firm
•Who owns the resulting IP from the
relationship?
•Ownership of IP vs. Inventorship of IP
•Whose responsibility is novelty and
inventiveness of the new product?

6. The value of a patent
• Goal: Maximize use of funding, grow, and protect your
IP from being copied.
• Patents are the strongest form of protection and one
of the best possible returns on investment.
”Are patents signals for the IPO market? An EU–US comparison for the software industry.” 17 September 2012
$338,000
median portfolio
value with
1 issued
patent
$1.1 MM
avg valuation
per patent in
software co
IPOs
35X
higher growth
for companies
that apply for
patents

7. Value of
outsourcing

8. The jigsaw problem

9. Overview
• Single life – getting your $%^& together
• Dating – vetting the right partner
• Engagement – prenuptial period
• Marriage – product development
• Divorce – post development
• Anecdotal Experiences

10. Single Life
•Reduce disclosure risk. Get an NDA before
talking with anyone.
•Inventorship/ownership. Get as much of your
IP on file asap to establish clear lines (file
provisionals!).
•Clearly identify existing IP.

11. Define: Non-Disclosure Agreement
• Ensures full confidentiality of all IP assets
• Limits 3rd party disclosure without permission
• Signed by firms (ensure it covers all engineers)
• Should not include SOW or IP agreement language

12. Overview
• Single life – getting your $%^& together
• Dating – vetting the right partner
• Engagement – prenuptial period
• Marriage – product development
• Divorce – post development
• Anecdotal Experiences – only the names change

13. Dating (swipe left a few times)
•Geography and jurisdiction
•Security / Conflict of interest management
•Relevant expertise
•Working model
•Cascading contractors

14. Overview
• Single life – getting your $%^& together
• Dating – vetting the right partner
• Engagement – prenuptial period
• Marriage – product development
• Divorce – post development
• Anecdotal Experiences

15. The Goal: Clean Separation
NDA
IP++

16. Prenuptial Contract Considerations
• Scope of Work
• Non-Disclosure Agreement
• Intellectual Property Ownership
• Termination Clause
• Other Legal Clauses

17. Prenuptial: Scope of Work
•Expectations
•Deliverables
•Timeframes
•Guarantees We’re all in agreement then.

18. Prenuptial: Inventorship ≠ Ownership
Inventorship. A person who has contributed to
conception of the invention, to the point that their
idea is clear enough to reduce to practice.
Ownership. An entity with the authority to file patent
apps and enjoys all the rights and benefits granted by
the patent, if the patent is assigned to the entity.

19. Prenuptial: IP Ownership
•Creator is the owner unless contract says
otherwise
•Include “Work-for-Hire” provision
•Ensure your ownership of IP that results from
marriage
•Require firm and its employees to participate
in IP requirements

20. Prenuptial: Termination & Other Legalities
• Course of action
• Jurisdiction for resolution of issues
• Indemnity clause (who pays)
• Right to Audit Clause
• Joinder Agreement

21. Overview
• Single life – getting your $%^& together
• Dating – vetting the right partner
• Engagement – prenuptial period
• Marriage – product development
• Divorce – post development
• Anecdotal Experiences

22. An active role: Don’t
let yourself go!
• Sources of innovation
• Code ownership
• Impact of Agile
• Patentability and FTO
responsibility
• Open-source considerations
• Device considerations
• Wearing pants occasionally

23. Sources of
innovation
contribution
New code
&
devices
OSS &
off the
shelf
Vendor owned
code, devices,
tests, etc.
Compliance
Constraints

24. Code Ownership
• Don’t wait for project completion
• Admin access to code repositories
• Passwords, certs, and tokens for access to servers and
other infrastructure components in places like AWS,
Google Cloud, Azure, etc.

25. Impact of agile methodology
• Manage public disclosure. Allow for user review
without jeopardizing patentability.
• Capture Inventions. Match agile’s fast pace and
iterative nature, and incorporate identification into
your development lifecycle.

26. Matching Agile’s Rhythm: Filing
Syncing IP capture with dev cycles
S1 S2 S3 S4 Release
P1 P2
P3
P4
Abandon – disappears
P0

27. Patentability & FTO of newly developed
product
• No Guarantees. Engineering firm may conduct some
light searching, but patentability & FTO responsibility
rests on YOU and your IP COUNSEL
• Search, search, and search some more. Conduct
highly targeted, brief searches on all key concepts or
components
• Bond. IP counsel should work closely with
engineering firm and closely with you!

28. Patentability vs.
Freedom-To-Operate
• Patentability: your technology is
new and inventive over prior
publications, patents, journal
articles, websites, etc.
• Freedom-To-Operate: there is not
an issued patent that prevents
you from making, using, selling, or
importing your invention into the
United States

29. if (usingOpenSource) {
proceedWithCaution();
}
Open-source Considerations

30. Open-source: Copyrights w/ Consequences
• OSS Licenses. Royalty-free, copyright licenses
granting 3rd parties the rights to copy, modify and
distribute computer code … with strings attached.
• Copyleft. Viral type of OSS license requiring
derivative works to distribute using the same terms
(example: GPL), making your software open-source
and eliminating proprietary rights.

31. Open-source tips when outsourcing
• Lead the conversation. Take an active role.
• Set expectations. Establish clear expectations
around open-source inclusion and contribution
policies.
• Ensure disclosure. Obtain a Firm-provided list of all
used software packages.

32. FDA Compliance

33. Device Considerations
• Food and Drug Administration. Preparation of required
documentation, test data, etc.?
• Materials. Use of medical grade materials, particular
components, power requirements, etc.?
• End Goal in Mind. Are you prototyping? Proof of
concept? End user ready?

34. Overview
• Single life – getting your $%^& together
• Dating – vetting the right partner
• Engagement – prenuptial period
• Marriage – product development
• Divorce – post development
• Anecdotal Experiences

35. Divorce
• Develop transition or exit plan well ahead of time
• Where possible, get assignments/declarations signed before you fully disengage
• Provide notice
• Transition ownership of infrastructure, code, devices, etc. to whomever will now be
responsible
• Cutoff access to networks, systems, assets and data
• Vendor data destruction
• Pay your bills
• Continue third-party monitoring

36. Overview
• Single life – getting your $%^& together
• Dating – vetting the right partner
• Engagement – prenuptial period
• Marriage – product development
• Divorce – post development
• Anecdotal Experiences

38. • GOOD IDEA: Have development agreements on file
before starting development.
• BAD IDEA: Without a development agreement in place,
Company paid Acme Engineering for the software
development of a new product that incorporated at
least some of the base code developed by Acme
Engineering.
Development agreement on file
GOOD IDEA
BAD IDEA

39. • GOOD IDEA: In general, when brainstorming sessions,
development, etc. has resulted in gray areas of inventorship,
be over-inclusive.
• BAD IDEA: Acme Engineering develops device product for
Company. The product was Company’s idea, but innovative
concepts came about in how Acme Engineering actually
reduced it to practice. Company failed to list the Acme
engineer as an inventor.
Inventorship Inclusion
GOOD IDEA
BAD IDEA

40. Key Takeaways
• Protect as much as possible before disclosure (provisionals)
• Carefully vet potential partners
• CONTRACTS – particular attention to assignments and work
for hire
• Maintain access to physical and digital assets
• Match an iterative IP approach to your development workflow
• Know what’s getting baked into your product and the
implications of its commercial use
• Execute a well-thought exit plan

41. Key Takeaways
And of course, never go to bed angry J