A right to a startup: assert it and protect it!

10 May 2016

Not all the companies that refer to themselves as “startups” fall within this definition in reality. Those that do, however, are only beginning to learn how to be successful and protect themselves and their ideas. The ways of solving the problems of Ukrainian startups, developing innovations and achieving success were discussed by Nazar Tanasyshyn, lawyer, legal advisor of 12 active startups, Honorary Ambassador of Startup Nations (Global Entrepreneurship Network) to Ukraine.

Nazar Tanasyshyn

During his Masterclass “A Right to a Startup: How to Protect Innovations”, which was a part of Entrepreneurs Meetings, a joint project of UCU Lviv Business School and iHUB Innovation and Entrepreneurship Center, he described the ways for startups to protect their ideas and products, and also offered advice on using legal norms in practice.

“To be able to call yourself a startup, your project has to satisfy several criteria, namely: novelty, scaling, and vision for the future. Additionally, and this lesson is yet to be learned by Ukrainian startups, business-planning is required. It is virtually absent nowadays. But it is absolutely necessary if you want to implement your idea. You have to protect your ideas from the moment they emerge!” emphasized the lawyer.

We have prepared an overview of tips for startups by Nazar Tanasyshyn:

Do not be afraid to talk about your ideas, don’t be afraid to spread them around. This is important. But do not reveal main technical solutions; leave room for some secrecy.

Record! Ideas have to be recorded, so that, should the necessity arise, you can prove your authorship.

Remember that litigation doesn’t bode well for startups. Try to avoid any court claims and settle all conflicts through negotiations. Remember, that it might entail reputational risks and additional costs.

Offer something tangible to your investor: a confirmation of the ownership rights, copyright or any other technical documentation. Investors like that.

Nazar Tanasyshyn

Draw up agreements. Make sure to specify all the terms and conditions, starting from who is being hired and when, what the employment terms are, and when the person might be dismissed. Provide all the terms regarding the product to be turned out and supplied, as well as the terms of supply/delivery of the products or services. Be sure to check the reputation of the party you negotiate with, try to find as much information as possible, inquire about their goodwill value (the value of the company’s reputation – editor’s note), and even the location where the negotiations are held.

The right to a program falls into two categories: personal property right and personal non-property right. Personal non-property right, the right belonging to the programmer-developer is reserved for them forever. She will always indicate that s/he is the author of this program. Property right, on the other hand, may be transferred.  If you hire a software developer, be sure to that you indicate the software rights transfer terms in their employment or civil law contract. Since the moment of creation, from the time a part of the code is written, be sure to specify it in the documents: how the right transfers and when. Record it in the Terms of Reference, in your daily correspondence. Make sure to confirm it with the statements of transfer and acceptance of the services provided or the software development. And do not forget to administer payments, as the record of payments is also very important.

Copyright appears from the moment of product creation and knows no territorial bounds. Having written a program, you are considered its author both in Ukraine and in the USA.

Don’t be afraid to lose. Learn how to endure hardships and analyze your mistakes.  

Information note: Nazar Tanasyshyn is a lawyer and Managing Partner of the Law Union “Tanasyshyn, Mykhailevskyi and Partners” (T&M Boutique Law Firm). He is a member of International Bar Association, and Startup Nations (Global Entrepreneurship Network) Honorary Ambassador to Ukraine. Nazar Tanasyshyn is well-experienced in providing legal services to Ukrainian IT projects, currently he is a legal advisor to 12 active startups, 7 of them containing a foreign element. He is a civil and political leader, and advocate of creating high-quality Ukrainian product.

Nazar Tanasyshyn