Congratulations on taking the first steps toward launching your crowdsourcing project! Selecting the appropriate intellectual property (IP) agreement for your challenge will protect your ideas and the solutions arising from your challenge and will affect the number and types of innovators participating in it. In order to encourage maximum participation from the highest quality of talent, it is essential to set appropriate prize and IP incentives.
HeroX has four intellectual property templates. This guide will help you select the agreement that best meets your needs. The templates can be customized, so be sure to have your legal department review and make any necessary edits.
Challenges where the Innovator Retains all IP rights are the most inviting to potential participants. If a talented individual is searching HeroX for opportunities to compete for prizes, he/she is far more likely to invest time and resources in a competition where they can keep all IP rights.
Challenges seek solutions in one of the following five categories: Ideas, Designs, Proofs-of-Concept, Prototypes, or Products. In many of the Ideas and Designs-type challenges, submissions do not contain defensible IP. If you are launching an Ideas or Designs challenge, it makes sense to select the Innovator Retains IP template.
Reasons to consider the Innovator Retain IP template:
Although there are numerous reasons why a Sponsor may wish to own the IP arising from a challenge, there are also numerous reasons that discourage this decision. Challenges where the Sponsor is assigned the Innovator’s IP tend to have lower participation rates. Also, the insistence on owning IP can negatively impact the Sponsor’s brand or reputation. Other reasons that dissuade Sponsors from using this Sponsor Acquires IP template are:
90% of all HeroX Challenges use the Shared IP template as a base agreement. This agreement allows Innovators to retain ownership of their IP while granting you a license to use it.
Many Sponsors use this agreement as-is, but you and your legal department may choose to customize it. Common modifications include:
The Open Source IP template is common for software challenges only. This template requires the winning Innovator(s) to make the IP of their solution open source, often on a code repository like GitHub.
90% of all HeroX Challenges use the Shared IP template as a base agreement and modify it as necessary. We recommend that you talk with your legal department, or a trusted IP attorney, about the implications of your IP decision. This is particularly the case if you choose to customize a template. We encourage you to always consider the perspective of the Innovator to ensure that you arrive at a mutually beneficial endpoint. In order to register for each challenge, we require Innovators to agree to the Challenge Specific Agreement. We have seen a notable difference in the size and talent-level of the Innovator community in challenges with strict versus lenient legal agreements.
Also the IP agreements for the challenge do not have to be defining ones for your longer term relationship with an Innovator. This agreement allows you to engage with potential Innovators and award the best solutions a prize. Following the Submission Deadline, a lot of work will need to be done, likely while still in communication with the winning Innovator(s). Most Sponsors connect with the winners and collaborate on material sourcing, manufacturing, implementation into their workflows, etc. At any point following the close of the competition, you can renegotiate the terms of your relationship with the Innovator(s) involved.
We discuss intellectual property rights with almost every client. If you still have questions, we are always happy to talk!
In conclusion, we know that selecting an Intellectual Property Agreement can be difficult. First and foremost, you need to protect your idea or the business you represent. Secondarily, in order to be successful and attract talented individuals to your competition, you need to creatively incentivize them. Every client's situation is unique. We encourage you to consider the option that best benefits both your immediate and longer term needs.
If you have additional questions and would like to speak with a HeroX team member directly, please reach out to us at email@example.com.