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Ownership Changes in Tech Companies |
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Sharing Ownership of the Intellectual Property and or Data Sharing Agreements.
It is not uncommon (it is even hoped for) that the Original Company may want to continue the current business but also begin a new service or application. The Businesses involved are typically the Original Company (the business before any change is made to who can access the Intellectual Property) and the New Company (the second business formed by using some of the Intellectual Property of the first business.). The parties to this type of Contract are the Owners of the Original Company and the Owners of the New Company or their authorized agents.
In this type of contract it is essential to define:
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The Intellectual Property at stake,
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How that Property is going to be accessed,
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Who has the right to access,
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In what manner is it going to be accessed,
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What financial considerations should there be for access and
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The liabilities for unauthorized access and/or improper access which may damage the Intellectual Property.
These terms need to be defined for both the Original Company and the New Company.
Often times, this branch off would be jump started by licensing the Intellectual Property or forming some sort of Joint Venture. The more you know about how your Intellectual Property is created, how it is used and what benefits there are from using it, the better you will be able to address these questions.
New or Joint Venture Examples. In some cases this decision to begin a New Company may come from the top, where the Original Company may decide for legal or financial or conflict of interest or creative reasons that it is best to create a second business venture (the New Company). In other cases this decision may come from below where an employee wishes to go out on their own but wants to do so, on a friendly basis.
When a New Company Owner sells his shares back to the Original Company and leaves the Original Company to become an Owner of the New Company, the Contract is known as a Redemption Agreement.
A specific example of a Data Sharing Contract is when a New Company wants to begin a social networking site or an advertising business USING the contact information acquired in the Original Company.
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