I've always been very, very cautious about intellectual property rights (IPR) for Semacode. I have a good background for it. I took an IPR law course at university, and I managed the Darwin 1.0 program at Apple, which required a strong understanding of IPR as it relates to open source. Also, I actually have a bit of a flair for writing contracts. For example, I once managed to avoid a nasty situation for the company by writing a few terms on the subject of IPR ownership into a contract myself. At the time I was just being careful, but it wound up being a very important three paragraphs.

The problem is that small mistakes can amplify at critical moments. Let's take a real-world example from Waterloo. Gary Will documented a situation where a customer (UBS) sued their former consultants (PixStream) and got a hefty $25 million settlement . Broadly speaking, the pre-cursor to PixStream did some work for UBS which was unsuccessful. But it was a good idea, I guess, because PixStream then went and built an actual working technology along the same idea lines.

This is one of your classic scenarios. Someone who thinks that they have a claim on your IPR waits until just the right moment — usually just before you're about to raise money or get bought or IPO — and then pops out saying that you owe them money. The reason they do that is that you really, really want to close the deal and you don't have time to actually fight them in court. So, instead of drawing it out and ultimately winning (but losing the investment), you make a quick settlement to make the problem go away. Which is what PixStream did. They got the Cisco money, and the UBS people got $25 million that they probably didn't really deserve.

IPR problems can also drag down projects before they even get started. Make sure you have good IPR agreements with everyone who contributes to your technology from the very start. It's a lot easier to do it when there isn't a lot of money on the table. I heard of a story where some student who was involved in a project at an early stage found out that the others were about to raise VC money and demanded a huge stake — something really outlandish — and wouldn't back down. Ultimately the whole deal broke and nobody got any money and the tech was never commercialized, just because one guy was an ass. I can't remember any of the details, but this scenario can happen, and probably does a fair bit.

Lilia Manguy is inside another academic IPR alligator swamp. In her blog she describes her problems with iBuyRight , "a mobile phone application that displays social and environmental information about a product, enabling consumers to make purchases consciously aligned with their personal values." Similar to AURA but specifically about CSR .

But who owns her work? It's complicated but important because the prof involved wants to commercialize. He had the idea and contributed content but nothing else, so in this case Cal regulations state that Lilia + the 3 other students own the IPR. Poor prof — he should have sat down with university's experts and the students and worked something out in a fair and reasonable manner. Instead the prof went forward without any paperwork and it wasn't long before he and Lilia got into a conflict: he wanted everything to be a secret; she had to post her project online per university regs. He tried to get it taken down by the university. In order to protect her academic work, Lilia rightly refused to sign anything with the prof, and she got help from friends, academics, etc (including someone at EFF) and got the backing she needed to keep her work online. I don't know what's happened to the company but without her signature they'd have to start over from scratch.

And then there's also patent issues but that's enough for one post...