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Partnerships give you a low-cost route to growth, as long as you sort out who owns the ideas you create together

To launch a disruptive idea a few years ago, you would raise £5m to £10m to take on the market leaders. If the plan worked, you’d probably end up being acquired. Today, you’re more likely to start with £250,000 to £500,000 in seed capital, then set up a series of partnerships to bring the strands of your idea together. Instead of trying to overthrow the market leader, everyone now becomes a potential ally.

Major players accept that no one can afford to innovate in isolation. Knowledge is too widely dispersed and markets move too fast. Rather than operate as standalones, they are learning to run lean business models and manage complex partnerships.

As an enterprise, it gives you the chance to scale up quickly for relatively little capital outlay. Such partnerships can look highly attractive. However, they can easily turn
sour, unless you agree the status of any resulting ideas in advance.

Intellectual property (IP) is becoming your medium of exchange. In negotiations, you can use it as a flexible tool to sub-divide the rights within your ideas. Before you go too far, check how committed your partners are to a project and be clear about each other’s expectations. Time and again, enterprises fall for the promise of being a partner, only to find that they are actually a dressed-up supplier.

Discuss initial ideas, but avoid making any assumptions of trust. Once you open up, others might feel they are free to act on what you say. So talk about the benefits without giving the game away.

Be realistic about confidentiality. You might hope for an all-embracing agreement, but that is unlikely. A corporate will fear putting at risk its other lines of inquiry. A university will always want to retain the right to publish the academic results. So instead, be specific. Determine who can see the results and when.

Lay out what IP you own before starting so there is no dispute later about what falls under the partnership. As an enterprise, you want to protect your core IP and make sure you are free to use it later.Decide who’s going to file any IP that the partnership creates. If you hold it jointly, it can be awkward to make commercial decisions. Often, it’s better to spin out a company to own the rights, which then pays you all a dividend.

Decide how the results can be used in advance. Does everyone have equal access? Who has the right to follow up any of the partnership’s work? Then work out how you are going to tackle anyone who copies your IP. Is someone going to be responsible for pursuing the case and meeting the cost? Deal with these complications in advance and there’ll be far less bickering later. You can also ensure you keep your share of the upside.

Q. We are in a niche market and have overcome a particular difficulty that our users experience. We are thinking of taking out a patent and suspect that our technique could be useful beyond our own specialised area. In our patent, can we keep open the option of following up any interest later and seeing if we can develop a new line of revenue?

A. It’s possible, but make sure you take care to avoid unduly limiting the protection in your field.Imagine it’s known how to make ballet shoes rigid to help ballerinas stay on tiptoe, but it’s difficult to get down.

You think: if the shoe were rigid against bending downwards but flexible upwards she would get support on tiptoe and get down easily.But how to do it? You devise a flat wooden strut (between insole and outsole) having transverse slots on its bottom surface. They close to prevent bending downwards, but open to allow bending upwards. This invention can also have other uses, such as in furniture or bridges.

Your patent can cover all fields by claiming slotted struts. But that would only protect ballet shoes with slotted struts. You must also claim a ballet shoe which is differentially flexible no matter how it is achieved. Both can go in the same application, which must explain how slotted struts are useful in other fields, as well as ballet shoes.Many inventions are like this: invention A is a broad invention in a narrow field; invention B is a narrow invention in a wide field.Eventually, a couple of years later, you will have to divide your application into two.