Many LA businesses are playing a dangerous game with their intellectual property. With the idea that they can save money by not hiring a lawyer, they put off evaluating their intellectual property, figuring that they can do it later when they have more money. The fallacy here is that later when they have more money, they will be a much larger target for predatory lawsuits. Los Angeles is a hotbed for both law and IP. Nevium Intellectual consulting is one of the foremost firms for establishing the value of your IP. I highly recommend that you contact them or a similar firm. The following should help you build your understanding about the processes that establish Intellectual Property value.
There can be little doubt that Intellectual Property (IP) is an economic resource, but realistically, IP has little monetary value to the owner of the IP unless he/she either can (Commercialise) develop the intellectual property into a concept/product or sell the exclusive right for a negotiated payment, or license those rights in consideration of receiving either a one off' licensing fee or an agreed royalty payment for the use of the IP. A company owning valuable IP which generates regular income by licensing could (in good economic times) use IP as security to raise investment capital or obtain a bank loan. However, in most cases, before Intellectual Property can produce any revenue for its creator, it will need to be developed or processed into a product which must contain an element of commercial application before it can be valued or quantified. In other words, the IP must have a beneficial or practical use to those who may wish to utilize them.
To simplify that last statement, if you were an author, you would need to write your book before being able to claim the copyrights thereto. It would be a pointless and costly exercise to spend vast sums of money on filing numerous patent or design registrations, or indeed, defending your Intellectual Property against infringement in a court of law if indeed, your IP has limited shelf life or has limited commercial value!
Companies with a sizeable portfolio (or mixed bag) of Intellectual Property, such as patents, designs, trademarks, copyright, which may well include any fees being earned from licensing know-how', trade secrets or discoveries etc., would be advised to optimise and audit their IP from time to time, in order to establish their value in monetary terms and/or audit the amount of income earned from IP. This exercise would not only have a desired effect upon enhancing the bottom line, but would be a guiding factor to justify or quantify the value of goodwill whenever a company is sold with assets that include Intellectual Property. But of equal importance, a company with a well-managed portfolio' of Intellectual Property, which the company has granted commercial licenses for the use thereof in consideration for a licensing fee or some other revenue agreement, could effectively use those agreements as collateral in support of commercial loans with bankers.
In order to protect unregistered Intellectual Property against plagiarism- all disclosure of confidential information made to companies relating to ideas, know-how or trade secrets, etc. should only be disclosed by means of using a Confidentiality (Non-disclosure) Agreement (NDA). Any unauthorized disclosure of confidential information by the receiver would constitute breach of privacy.
Damages and costs could be recoverable upon a successful action. Damages are usually assessed by the courts upon the actual (proven) loss to the plaintiff and not the potential loss*.
The court may, however, take into account that although there had been a breach of confidentiality, such a breach would not have prevented the plaintiff from marketing his own product, which may affect the size of any damage award.
A feast for lawyers
Depending upon the nature of the claim, it would always be wise to make every endeavor to settle out of court' by granting a license to the alleged abuser. Many times, the courts will order the conflicting parties to pay their own legal costs, which can often amount to substantially more than the award of damages!
The award of costs are not always disclosed or made clear to the respective litigants by their lawyers, until it's usually too late to withdraw from the action. Furthermore, a litigant who does withdraw from action, for whatever reason, will most probably be liable for the other party's legal costs. So, don't make claims which you cannot substantiate or prove. Always regard litigation as being a feast for lawyers'; they get paid whether you win or lose. It's not their home on the line, but it could be yours!
Be mindful that even if you engage the services of the best lawyer money can buy, his/her chance of success will still be only 50%. I think it is unsafe to rely upon any lawyer's advice should he/she tell you that you have a 75% chance of winning your case. Mindful, if there are just two parties involved, the odds are 50-50, which is not quite the same odds is it? In the final analysis, it's the judge or appeal courts who are the final arbiters. The process of valuing Intellectual Property is not quite as straightforward or simple as it sounds. The methodology of valuing IP is not dissimilar to the general principles of valuing real estate.
But in truth, its much less complicated and simpler to value real estates as indeed, valuers or surveyors are able to compare the prices realized in that particular area and use such previous valuation as a benchmark' to assess the current market value of whatever real estate they are endeavoring to value - and for whatever purpose! We have to accept that, despite you own the Intellectual Property of a thing' it's not worth a bean unless it has a commercial application. That means, the thing' somehow must be capable of generating revenue for its owner.
A factor to consider wherever valuing Intellectual Property, is that the product does have a natural shelf life and products do become obsolete. Therefore, when no revenue is being generated from the so-called product, the value of your IP diminishes rapidly or becomes worthless. Just because you have a patent on a thing' for 20 years, it could be worthless if you can't make any money from the use of that patent!
A brilliant idea may need an investment of a million dollars before it become a commercial reality. In short, despite I may have said that ideas per se don't have a value, I am prepared to accept that some ideas do have a commercial value, but in order to protect the Intellectual Property you do need to develop the idea into a potential product. In other words, show or prove that the idea is workable. For example, if you had an idea for a new TV reality show, you don't need to develop every little detail before you can make a disclosure under notice of confidentiality.
You could write to the agent of, for example, Simon Cowell and in your letter say that you have a great idea' for a potential TV reality show, and would he be interested in commercially evaluating it under a notice of confidentiality. Assuming all confidentiality notices are signed by both parties prior to any meeting, at the meeting he may suggest other features he would like to include in the proposed show.
If that's the case, you must not be intransigent to his suggestions' otherwise he may lose patience with you. Any agreed modifications does not diminish your copyright to the originality. Be wise, his suggestions may be the pearl' which gives your potential show that bit of excitement' which you may have overlooked.
So it's a win-win situation for you both if he thinks the format could be sub-licensed in many countries and you both end up making fortunes from your idea! Just remember, assuming you don't have the finance or experience to DIY, you'll need him more than he needs you.
So don't get too cocky!
Use a professional to negotiate your deal!
High profile celebrities do have huge egos and like to promote the impression that the new television show was their own creation, thus elevating their own genius or bankable status! It would be normal for a celebrity or their agent to say, "Well, where do we go from here?"
All you need say is "I'm seeking to grant a license to my format." Never say, "I want to sell my idea!" But if you don't want to be bothered in licensing, you can make it clear that you want to the sell the exclusive' rights to your format. If you reach this stage, it would be the right time to pass negotiation over to a more professional negotiator such as a licensing practitioner or commercial lawyer who specializes in negotiating contracts or structuring agreements. There are of course many patent agents/attorneys who have equal negotiating skills and are able to structure your agreement so you have a wide choice of professionals to call upon. If you do get to this stage, I urge you not to try and negotiate the deal yourself. You may be out-of your depth' and probably taken to the cleaners, or the last person to receive any payment from the deal. But large corporations simply don't like dealing with lone' inventors.
But if you do, be wary and don't sign any document without consulting your lawyer first.
Indeed, if you did, there could be clauses in your contract which you may not understand. In your eagerness to do the deal, you may overlook a clause which gives the other party the right to top shelf' it. This clause may give the other party the right to choose the time for production. In other words, they may not want to start producing it just yet because it may conflict' with their other shows (or products if you are an inventor). That said, your practitioner/lawyer will most certainly include a Performance clause which places an obligation on the party to start production' by a certain date or face a penalty for breach of contract. In most cases, large corporations never like to negotiate with lone entrepreneurs or inventors, and prefer to negotiate with their appointed professionals. Remember, a seasoned entrepreneur or businessman should never show any excitement whilst negotiating a possible successful deal. This would shift the bargaining power over to the potential buyer who will note your eagerness to make the deal.
However, no one more than me dislikes the Arthur Daley' types who are forever trying to screw' us to the wall whenever we sell our cars or other personal effects. I also don't agree with a certain panel member of the TV show Dragon's Den, who'd like us to believe that if we are to become or call ourselves entrepreneurs, we must have the killer instinct' and beat everyone to a pulp whenever negotiating a deal or buying a pound of apples!
Successful deals may not always be attributable to your negotiating skills, but more attributable to timing'; being in the right place at the right time and probably negotiating with a person who is desperate to sell or on the verge of bankruptcy.
Obviously, you must try and get the best deal for yourself. But how many times have we all tried to be a clever Dick' and it's backfired on us or we have been told to sod off' by some vexed person we offered peanuts for their business. When the tables are turned on us, we get irritable and offended if some one dares to take us for a ride. So it pays dividends for us to put ourselves in the same position to that of the seller. Instead of being aggressive, try a little sweet talk' and usually a deal is done and both parties are happy.
That said, if you believe the Dragon's Den advice is just great for you, then by all means, follow it to the letter and see how many people or traders will be eager to do business with you again. If traders are aware you are a greedy bastard and a person who denies them making a small or moderate profit, why should they be eager to negotiate with you? What we often overlook is that shop or business proprietors have heavy overheads' and staff to pay for. Many buyers on the other hand, want to purchase goods for less than the seller has paid for it. Be fair and equitable with those you wish to trade or do business and they will offer you fair deals! Try and screw them down for the last penny, and you will be the loser in the long term.
Although I advocate that we ought to always play fair' whenever negotiating deals, there are certain signs nonetheless which are probably more related to psychology or human behavior', which we can always use to our advantage if we know just how to interpret those signs.
For example, when you are house hunting' never show signs to the seller that you are keen to buy it. Sometimes, you must bite your tongue because if you do disclose (overly) interest, the reaction you will get from the owner is "We have been swamped with offers!" They are unlikely to reveal the actual price of the offer; it could be drastically lower than their asking price. So do nothing for a few days and they will come to you and inquire if you are interested in their home. If you get such a call, it's an obvious sign they don't have any significant offers. If they reveal they have already settled on a property, then they are eager' to do a deal! Obviously, if you are house buying and spot a potential building plot or development potential which the owners may not be aware of don't pussyfoot about; keep silent on your observation, make them an offer very close to their asking price and guarantee them a quick sale!