How do I startup if I don't own the code?
I was recently approached about commercializing some software I created while working at an academic research lab. I was paid with research grants so I'd assume the school owns the code.
I'd love to turn this into a startup... What's the best way to do it considering I don't know who owns the source?
26 comments
[ 2.2 ms ] story [ 65.8 ms ] threadI don't know what school you went to, but many (most?) large engineering/research institutions have a technology licensing office (e.g. http://web.mit.edu/tlo/www/) that can check that assumption definitively for you.
I know of three university spin-out companies that have had IP they developed assigned over to them because the university wasn't interested, upon which successful companies have been formed.
Also, I don't know about tech transfer offices in the states, but in the UK, they are completely incompetent. I wouldn't waste my time or effort in trying to negotiate a licensing deal. You probably could have re-written it by then!
E.g. if the idea is "a web 2.0 flower box" making a second implementation is fine.
If the idea is a "web 2.0 flower box using this specific patented method of procedural generation" then you won't be able to recreate the same product again - at least not without moving to Europe where there are no software patents :)
Also, if you are attending startup school, they might have half an hour talk from someone on legal issues and you could ask that person.
But I'd also recommend looking at the terms of the contract that gave you funding.
Government funded projects usually include government purpose rights. It depends on the contract how bad the rights are for a company.
In most cases, government funding means that in a pinch, they can take all your tech and give it to another company to mass produce. The reason would probably be some wartime situation where you needed to produce a million X to fight. I think this happened to B52s in WWII.
Other recommendations about tech transfer are spot on.
You should also take this as an opportunity to network with potential investors. Go to your school's entrepreneurship center (if they have one), and talk to people there about your plans.
I know for CMU, you can meet lots of Angels that way. Lots of the associated companies have probably gone through the same process.
You're different from a lot of hackers I know.
Seriously, though, you probably will eventually rewrite most of it if you turn it into a startup. And often when people rewrite things they're glad afterwards. It will probably take less time than working out a deal with the university, and be much more interesting for you.
Sounds like a justification to me. :-)
I think the point that you're getting at, and I wholeheartedly agree, is that if you understand how something works in and out that rewriting it isn't a big challenge.
University of Wisconsin sues Intel for Core 2 Duo patent infringement: http://www.engadget.com/2008/02/07/intel-sued-for-core-2-duo...
Northeastern University sues Google over Database Architecture: http://www.techcrunch.com/2007/11/10/google-being-sued-over-...
This goes to show that universities aren't always benevolent when it comes to IP. Even if the software is rewritten, there's no guarantee that university lawyers won't accuse you of infringement down the line.
Isn't licensing specifically designed to address this issue of IP? What would be a reason not to license the software from the university?
What would be a reason not to license the software from the university?
(a) That the university might have insanely unrealistic ideas about terms, because they're so inexperienced, and (b) that it could take so long to arrange the deal that it would literally be faster to rewrite it.
That's an interesting point, but 1) would the university not have sued if it were a student (or professor) that provided the IP? and 2) then why shouldn't he just use the code outright, especially since he claims to have written it and the university is not likely to care?
(a) That the university might have insanely unrealistic ideas about terms, because they're so inexperienced, and (b) that it could take so long to arrange the deal that it would literally be faster to rewrite it.
Licensing is there for a purpose--someone paid for him to develop this software, so he has an obligation to that employer to at least ask permission before using the software.
Imagine if a startup took seed money from you to develop their software, then turned around to rewrite it for use in another project and thereby sidestepping your 2-10% share. Wouldn't that be unethical? They could even claim both (a) and (b) above.
A rewrite is probably best, but it might hinder negotiation of terms.
-Pro: Wrote the original, lessons learned and experience. -Con: Isn't bringing existing IP so might not be worth as much. -Con: Maybe someone else can write a better clone (UI expert). -Con: Clean room rewrites are tainted if you have seen the original code. Willful infringement is much more expensive.
If it was me I would try and convince the university to release under an open source license. BSD would help, but the GPL could be good too depending on sector. Then I would be free to go off and commercialize it. Open source code requires a different business model, but there are plenty of examples of success, especially for companies that own the original thinking behind the project.
Some schools are quite friendly to business arrangements, while others are grabby. There are plenty of products on the market that were developed at universities and later commercialized.
"By all means -- anything 'open' is music to NSF's ears, because it means they don't have to pay for several labs to do the same work. I'll mention that in our annual report."