Small business owners and entrepreneurs often wear multiple hats during the business organization formation stage. Sometimes, collaborating with another brand, individual, or other entity can help share some of the burdens of start-up tasks and provide the support necessary to get a new brand off the ground.
But it’s important to proceed with caution when collaborating with another brand. If you don’t have the right legal protections in place, you could end up with serious problems regarding trademark ownership and rights of use. A skilled intellectual property lawyer can help draft legal documents and file trademark protections before you start collaborating.
Business Collaborations Boost Growth
There are several types of collaborations to choose from. And each one could leave you exposed if you don’t have the right trademark protections and use rights in place.
Increasing social media exposure is a great way to attract a new customer base. Marketing collaborations with established brands or those with a solid market share of your target demographic introduce your business to an untapped market.
Common marketing collaborations include giveaways and promotions of one company’s products that are sponsored by another business. For example, suppose that a clothing company popular with the Gen Z demographic has a large social media following, and a new shoe designer wishes to increase their market share in the Gen Z demographic.
The designer may benefit from participating in a giveaway collaboration with the clothing company. The clothing company could sponsor a giveaway of the shoes on its social media platforms in advance of a collaborative sales partnership with the shoe designer.
Both parties benefit from this deal, but each one has separate trademarks and branding. In these kinds of marketing collaborations, it’s important to establish which, if any, use rights one party has to the trademarks of the other.
Disagreements over ownership of the resulting product do occur when companies use Intellectual property creation as a collaboration. Without proper protections in place, these arguments can quickly become a legal nightmare.
In some cases, a business owner has a new service or product they would like to sell but isn’t quite at the stage to develop and produce it in-house. Collaborating with an expert can help get a product to market faster.
Before starting this kind of collaboration, however, it’s critical to establish ownership of the intellectual property that emerges before the work begins. Your IP attorney can determine ownership and use rights so that the expert is fairly compensated for their contribution. In turn, your business can use the resulting product as necessary.
How to Protect Your Intellectual Property While Collaborating
A handshake agreement or oral contract may be binding in many situations. However, it’s usually best to have a formal contract to ensure IP ownership and protection.
Elaborate on the Rights of Each Side
Creating a signed agreement is often the best course of action. Make sure it outlines each party’s responsibilities in the collaboration and their rights to the resulting product.
Protect Your Processes
Drafting a comprehensive nondisclosure agreement (NDA) helps you protect the idea development process and the final product. An NDA also sets legal parameters for how your collaboration party can use the final product.
Make sure that any financial collaboration is clear and in writing. This includes the dollar amount each party contributes and the share of any profit from the collaboration. If one party makes a non-monetary contribution, such as an idea or other creation, the financial agreement should quantify its value.
Enlist Your Own Legal Counsel
The other party may have their own intellectual property attorney draft the collaboration contracts and agreements. To best protect yourself, though, you should have your own IP lawyer review the agreement and represent your interests.
In addition to reviewing your contracts, your lawyer can also advise you whether each collaboration will advance your business interests. They will offer insight into whether your own trademarks and IP will be protected if you proceed.
Do You Need Help with IP Protections for Your Next Collaboration?
Turn to the legal team at Quadros, Migi & Crosby for all your business IP needs. We draft protection agreements and contracts, file for IP protections, and litigate any intellectual property violations on your behalf. Contact us today for a consultation with a Texas trademarks lawyer.