The ownership of intellectual property (IP) developed in the classroom is a tricky topic.  Let’s suppose a team of 4 students (Team ZZ)  is in a business innovation class.  For a full semester Team ZZ will refine a business idea, create a business model, do a marketing analysis and competitive landscape review, and develop a company launch plan.  It is a lot of work.  Let’s assume that the team performs well and all members pull their weight.  And, at the end of the semester one of the team members (student #1) wants to launch the company.

For clarity’s sake, I am not addressing in this post university ownership of intellectual property.  A university typically does own the IP produced by its employees in the course of their university work.  So, when a faculty member or PhD student invents something during their research, the university will own it (just like Cisco owns the IP created by its employees).  Importantly, students that “pay” to go to the university (like undergrads and masters degree candidates) are not employees and the university typically does not own IP produced by them.  In my example, let’s assume the students on Team ZZ are all MBA candidates in the business school (so are not employees).

So, on Team ZZ, who owns the business idea?  Does student #1 have stronger ownership rights than student #2?  Do each of the 4 students own the idea equally?

The answer will depend on the following key factors: (i) who came up with the idea and (ii) did the members of Team ZZ agree up front on ownership rights?  The matter is not a simple one even if the core idea was student #1’s (in other words, student #1 brought the idea to Team ZZ).  For example, the other students might have added to the idea or figured out the business model to commercialize the idea.  So, it becomes critical to agree up front on ownership rights in writing.  If the core idea was student #1’s, the best approach would be for student #1 to get the other students on the team to assign their rights to the idea and team output to student #1.  The argument is “hey, this is my idea that I am bringing to you and you are getting credit for your course work”.  The argument is sound.  The agreement should be signed up at the beginning of the project.  It really is the only way to make the matter cut and dry and safe for student #1.  And there are many variations in the assignment of rights.  For example, the team members could agree to assign all rights to 2 students instead or could agree to assign all rights to the team as whole with ownership percentages specifically spelled out.

If you want to see a form of assignment of rights feel free to email me.

I spent Thursday, Friday and Saturday (March 17 – 19) at the NCAA Division 1 Wrestling Championships in Philadelphia.  I wrestled in high school (very long time ago) and follow Cornell wrestling closely.  Prior to the tournament, Cornell was ranked #1 as a team.  Cornell ended up in second place, losing to Penn State, but beating Iowa (I think for the first time ever).  So, a great result for the Big Red.  Here are some highlights of the finals: http://www.youtube.com/watch?v=h87Md3Q-hcU.  Even if you don’t like wrestling, you will probably enjoy the clip (turn off your volume if the music choice bothers you).

During the tournament I did a lot of work (mostly emails).  Given that I was watching wrestling all the while, I started to think very quickly how startups are like elite college wrestlers.  Worth some explanation:

1.  Tenacious:  startup entrepreneurs need to be tenacious in the “truly persistent and determined” sense of the word.  The best wrestlers are tenacious in this sense.   During the semi-final matches in Philadelphia, there were 1 or 2 instances where wrestlers momentarily had a mental lapse – loss of tenacity – and it cost them the match.  I am not advocating for stubbornness or being obstinate (other senses of tenacity), although sometimes those characteristics are life savers for both startups and wrestlers.

2.  Grueling = Enjoyment:  on the video clip, check out the wrestler with bandage around his head.  Wrestling is clearly one of the most grueling sports.  Incredible workouts; frequent pain; and hopefully frequent triumphs.  The similarity to startup life is uncanny.

3.  Sucking Weight = Preserving Cash:  there are various weight classes on a college wrestling team ranging from 125 lbs to 197 lbs and then heavy weight (not over 285 lbs).  With the exception of the heavy weight, wrestlers are constantly dropping pounds to make weight on match day.  Not eating while working out like a maniac is common.  Reminds me of cutting company burn rates in tough times and being a careful spender all the time.

4.  Taking Down the Competition:  the competition in Philadelphia was intense.  Cornell had 4 wrestlers in the semifinals.  Lots of us die hard fans thought all four would win and be in the finals the next night.  Only one did.  It was downright depressing.  Competition validates the sport.  Intense competition creates stress.  Competition causes you to be better and hopefully win ultimately.  Again, this sounds just like the startup world.  We all know the value of competition.  VCs invest in competitive spaces as they signify demand.   Competing companies drive innovation, and the innovation is often a stress creator inside a company.  Ultimately/hopefully, the innovation creates the winning product and the management team executes to win.

5.  There is Luck Involved:  Startups play the luck card routinely.  Right space, right time, with the right team.  In wrestling, luck can be a significant factor as well.  Might get lucky with a referee call.  Might catch your opponent in a winning move (like Bubba Jenkins did on his former teammate from Penn State – Bubba got booted off the Penn State team and transferred to Iowa State – talk about nice retribution).  In his post match interview he was quick to say there was some luck involved.  Being realistic is a winning strategy.  Being lucky can help the cause.

6.  The Glory of Winning:  If you watched the video, you noticed that one wrestler is missing a leg (Anthony Robles from Arizona – if you are interested there are plenty of clips of him on YouTube).  Last year, Troy Nickerson from Cornell beat Robles in the 3rd/4th place match at 125 lbs.  This year Robles beat last year’s defending champion in the finals at the same weight class.  And you should have seen the smile on his face!  And with only one leg!  His larger than usual upper body more than compensated for his handicap.  Winning is everything in wrestling.  Same is true for startups.   Investors know that not every company wins.

Maybe I have now converted some of you to wrestling fans.

PS:  you can also see the glory of winning on Kyle Dake’s face.  Kyle is the only Cornell wrestler in the video.  He won the national championship at 149 lbs!  Last year he won at 141 lbs.