In the Australian today ... same Patent Attorneys as in Prospectus:
Delay danger for start-ups Chris Jenkins MAY 25, 2004
TECHNOLOGY start-ups need to be aware of the way ruthless partners could walk away with their best ideas, a visiting intellectual property lawyer has warned.
"A lot of young technology companies had good technology but had a devil of a time getting it adopted," said Tarek Fahmi, managing partner of US patent attorney Blakely Sokoloff Taylor and Zafman.
Part of the reason was that big companies were interested in the technology, but not necessarily in paying for it.
"Young companies get very enthusiastic about their first deal," Mr Fahmi said.
This excitement, and lack of experience, left them open to predatory manoeuvres.
Delay was a common tactic, protracted negotiations eating away at a start-up's funding, leaving them in a weakened state.
In the meantime, the smaller company remained under pressure to turn investors into "believers" by signing deals.
In this vulnerable state, the start-ups discovered that while they had been stalled, the larger company had developed its own version of its technology or intellectual property, putting the predator in a commanding position to make a much reduced offer, or none at all.
Start-ups need to make it clear they will not put up with delaying tactics, he said.
"If it becomes demo after demo, meet this vice-president, meet that vice-president, that is a warning something is being done in the back office," he said.
Mr Fahmi said young companies needed to "capture the IP" early by registering trade secrets and patents.
"It's not easy because you are pushing engineers to sit down and document their work when they want to be researching and developing."
