It’s the nightmare scenario every startup fears: You finally get that meeting with a big potential partner, the presentation goes great, and you leave the room excited for the future. Until, a few months later, that big potential partner steals your idea and launches a competing product.
Sound like a paranoid hypothetical?
It actually happened to a medical technology company called SensorRx after it developed an app in 2017 called MigrnX that patients could use to track their migraine symptoms and share that information with their doctor in real time. It was a great use of technology and, according to the company, helped a number of patients cut their headache instances by more than 40% by dialing in the correct medications and doses for their exact symptoms.
That is, until SensorRx met with Eli Lilly, one of the largest pharmaceutical companies in the world. Now, the startup is alleging that the pharma giant took their idea for MigrnX and developed their own competing product.
“Rather than entering into the relationship, they said, basically, never mind and then proceeded to use all the information that they gleaned from SensorRx to improve and actually more effectively develop their own, competing, product,” SensorRx’s lawyer Marty Geer said.
Eli Lilly denies that accusation. A spokesman for the company did not return a request for an interview, but in court documents, Eli Lilly contends that its own migraine app, which it says was already in development during the talks with SensorRx, used no confidential information to improve its technology.”
SensorRx is currently in talks with other potential partners for its app — and says it’s being more careful with its technology this time — but the whole situation really is a worst-case scenario for founders. When you don’t have the capital to truly build out your product the way you want, and a big company with deep pockets takes your meeting, how do you protect your product and company?
With just a few precautions in place, these types of exploratory discussions and partnerships can happen without the big guy squashing the up-and-comer in the process.
- Protect your IP BEFORE sitting down. Don’t walk into a conference room with valuable technology that’s ripe for the picking. Assume that any conversation is putting your hard work at risk and prepare accordingly.
- Cover yourself legally. Make sure to have a mutual NDA in place to cover any ideas discussed at the meeting, as well as any improvements/brainstorming/concepts based on the meeting that arise afterwards.
- Keep strong records. Take copious notes at the meeting about who was there, who said what, what topics were discussed, etc.
- Stay in contact: Follow-up after the meeting with the notes you took, summarizing who said what, the discussed topics, and reiterating the terms of the NDA and hopes for a future outcome.
Don’t get hosed. Patents Integrated know what matters most to founders in IP discussions and has helped hundreds of companies like yours address their patent concerns. Contact us today to get started.