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5 tips that will help tech businesses avoid costly disputes

View profile for Jonathan Cole
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By their very nature tech businesses have to move fast.  You are continually evolving to keep ahead of the pack and to do that you not only need to understand what the latest technology is but also what the next technology will be. 

More than that, you need to know exactly how to make the best use of that technology to progress the next generation of your product. 

That level of R&D takes a great deal of time and effort on your part and, understandably, while you find every available minute to focus on that side of your business, administration can often be the casualty.

However, as any strategist will tell you advancing without the required foundations can be hugely problematic.  If your business doesn’t have the right legal structure in place you could find yourself facing expensive, time consuming disputes that could well stop you from taking the next steps you had planned altogether.

As a lawyer who has worked with a wide range of tech companies I’ve found the following 5 tips have really helped my clients minimise the likelihood their business would be disrupted by commercial disputes:

Structure your co-founders

They might be family, an old friend or a colleague you’ve worked with for years but there’s every chance that over the lifespan of your business, you will have disagreements. 

Regardless of your business model, you must have a documented structure in place that sets out your working relationship so if disputes do arise, you can deal with them quickly, constructively and effectively.

Structure your data

Data has been a buzz word in the tech industry for years and with the implementation of GDPR, the rest of the UK and Europe’s industry finally appears to be catching up.

Whether you are obtaining, storing or using data it is vital you ensure you have effective and compliant data management policies in place. If you fall foul of GDPR you will find yourself facing potentially disastrous fines and sanctions which can easily be avoided if you’re up to speed with the regulatory framework your tech business now has to operate in. 

Structure your ideas

Whether you have developed new code or are just about to launch an app, all of the proprietary innovation you have must be fully protected before it hits the market.

There are many ways to do this (patents, trade marks, designs or copyright) but make sure you have what you need in place from the outset to prevent others from using your ideas and hard work as if it were their own.

Structure your contracts

Tech businesses can sometimes dive into a new project without giving proper consideration to the contractual position.  This is fine until a dispute occurs at which point the contractual terms (or rather lack of terms) governing the relationship between the parties will be placed under a microscope.

As tech projects are constantly changing in scope and price, your customer contracts and supplier agreements need to be similarly flexible to allow you continue to enjoy the fluidity you want whilst retaining the properly defined and agreed scope and price point you need.

Structure your people

Your people are probably your biggest asset and a healthy workplace is essential to the success of any organisation.  Whether you prefer contractors or employees, all of your people need to know what is expected of them and what they can expect in return.

From a tech perspective, clarity from the outset on who owns/controls the intellectual property rights that will be created and used in the course of the work you do together is particularly important.   That transparency can easily be achieved with a clearly drafted employment or consultancy contract.

At Goodman Derrick the dispute resolution experts in our tech team have built up extensive experience of helping tech companies at every stage of their lives protect themselves against potential disputes.  If you’d like to discuss how your technology business could take full advantage of that experience,  please email Jonathan Cole at jcole@gdlaw.co.uk or call Jonathan on 0207 7404 0606.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact the author or call 0207 404 0606 and ask to speak to your usual Goodman Derrick contact.