Ip · Startup Law

Anyone had success getting patent work done for sweat equity?

Rodney Rice

December 17th, 2014

I've recently started an incubator and will be generating a lot of ideas which require patent prosecution. I'd really like to cut an IP attorney in on the equity in exchange for their services with the cash burden on the business being contained to the hard filing costs. Curious whether anyone has had success doing it via this approach.

Kasey Christie Patent Attorney & Entrepreneur

December 17th, 2014

Honestly, MOST patent attorneys are not going to be terribly interested in working for equity as their sole or primary payment method. More precisely, most patent attorneys that are any good won't be very interested. Why?

1. Most good patent attorneys are very busy. There is lots of available work from large clients that pay. Maybe not always pay well...but pay.
2. Most good patent attorneys have seen/heard plenty of song-and-dance from cash-poor but self-hyped start-ups. They tend to be wary of spin and want to see the money as a way of knowing that others believe in the company enough to invest.
3. Most patent attorneys have poor social and business skills. They are unable to recognize good opportunities that are out of the norm. Their expertise is in legal and tech. So, they just want to paid for the work.

I am a patent attorney that, in recent years, has made several deals with start-ups. Typically, those deals involve some combination of cash and equity. The exact proportion of cash/equity varies based upon how convinced I was in the combo of the biz ability of the founders, the disruptiveness of the invention, and market potential.

You can probably find a patent attorney like me. They will tend to be very experienced. But they have grown tired of working for the big corporate tech behemoths. Instead, they want to help new companies get their start. But they are hard to find.

Mike Moyer

December 17th, 2014

I work with a patent attorney in the Chicago area (Brian Fahrenbach) who is willing to work for equity. 

The key is determining how much equity. Most allocations are arbitrary and giving an arbitrary chuck to anyone can cause problems. The amount of work that goes into a patent can vary quite dramatically.

I use the Slicing Pie method (SlicingPie.com, I invented it). This allows you to determine exactly how much equity to give the attorney. Brian works under the Slicing Pie method on my projects.