Selling or Licensing a Recipe
Provided by HG.org
When attempting to build a company or business through intellectual property, it is important to know if the invention or process should be initiated by the individual, sold or traded for possible better benefits in the future. It is also important to have a lawyer versed in these matters available to ensure the rights of the owner are protected throughout the procedure.
No matter if the owner of a recipe or trade secret is approaching a company for selling the intellectual property or to make arrangements, he or she should have someone to back him or her during these processes legally. There are often contracts that are signed, and without legal representation, it is possible to sign away rights to the IP. Through these dealings, the owner may make mistakes or trust in the wrong person or company. Then, he or she may have nothing left but a scant paycheck that is meager in the light of what could have been possible.
Another possibility is that the selling of the IP could lead to a better financial situation for the creator of a recipe or trade secret. If the individual is unable to market or sell it appropriately, he or she may sell it at a higher cost and then move on to another endeavor. To ensure the best possible outcome is an option, legal representation should still be present and assist in advice and information through these situations. If a contract is signed, the lawyer should analyze it fully to confirm there are no negatives within the terms and conditions.
Selling the Recipe or Secret
If someone has a recipe or secret ingredient, the benefits of selling this item may outweigh the possible negatives. However, following through with this process may require some care. Businesses are out for the gains of the owner or management and may draft a contract that could appear reasonable until the possible profits of the recipe or process are quantified. The more potential income the intellectual property may garner, the more money or other benefits should be acquired when selling it to a company. This is one aspect that many are unaware of when entering into an agreement with a business.
When contacting the food company that may purchase the recipe, it is important to have a legal representative to ensure that communication is free of any promises. Then, initial talks may progress to what could be acquired by the owner of the recipe, but nothing should be agreed to until a formal document has been created. The intellectual property lawyer should look over this paperwork to ensure it has no negatives for the recipe creator. The legal representative may also explain if the deal is solid, is lower than should be accepted or if more money is better in light of the potential of the recipe.
Completing the Deal
There are multiple ways to enter into a business deal with a company. The owner of the intellectual property recipe or secret may decide he or she wants to have control and keep ownership of the IP. If this is the case, he or she may need to create a contract where he or she is creating the product for the company. This may benefit both the owner and the business through constant revenue for both, but fewer complications or difficulties in receiving income from the IP creator. Then, he or she has the ability to keep an income constant as long as the product sells with the public or other companies.
If the IP owner just wants to sell the item once and pursue other avenues of business or retire, he or she may enter into a contract where this is accomplished through a buyout. The intellectual property rights are transferred in ownership to the business and then the creator is no longer an owner. These situations are rife with complications, and it is crucial to have an agent as a go between that has the best interests of the IP owner in mind as well as a lawyer to facilitate the legal transfer.
The IP Lawyer in a Sale
The business that may purchase the recipe may only be interested in possession of the IP. Because of this, it is important to have a lawyer that understands these deals and how to look for the best benefits of the IP owner.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.