The Case
Recently I met Emma, an entrepreneur who has developed groundbreaking software that improves workflow efficiency for small businesses. She spent months developing the software and raised significant venture capital funding. About 2 months after launching, she received a letter from a large tech company claiming that she infringed their patents.
Entrepreneur's Solution: Emma saw three options:
- Continue selling the software and risk facing a costly legal battle.
- Immediately stop selling the software, potentially losing her entire business.
- Attempt to negotiate a licensing agreement with the large corporation.
Lawyer's Advice: Emma consulted a lawyer who gave her three potential courses of action:
- Conduct a patent analysis to determine if infringement has occurred, costing $3,000-$5,000.
- Consider redesigning the software to avoid patent infringement, which could be costly and time-consuming.
- Prepare for potential legal action, which could cost $25,000-$100,000 or more.
LegalPreneur's Outcome: I had a discussion with Emma, and we applied a lawyer's way of thinking from a business perspective.
What is the best possible outcome for the large corporation?
The best for them is that they quickly get a licensing deal to increase their revenues. The worst case is that they enter a long legal battle, spend money and lose.
What is the best case for Emma?
Winning a long legal battle against a big tech company isn't a "win" that would divert her startup's resources, give others the time to catch up and prevent her from focusing on growth.
The best case is that this goes away quickly with the lowest cost possible.
Our Solution
Emma was able to get a deal with the tech company to license her software to them in exchange for them licensing their patent to her. In short, the big tech company got a massive upgrade to their product suite and in-house software for free -WIN and Emma could keep selling her software directly to consumers -WIN.
This outcome likely saved her business and also set her up for a great acquisition down the line, as this company now has a relationship with her, can see the value of her product and will want to be able to purchase her brand and their future features and development to improve their own offerings.
I honestly think she made $10M+ by finding this unique solution.
