Protecting Your Intellectual Property

My biggest business challenge is finding a fair and equitable resolution to a business dispute with a former 'informal partner.' I say informal because she did not invest capital nor did we have a written agreement. It's complicated because she believes she is entitled to patent rights as well. My business is skyrocketing and here I am mired in a legal battle. What should I do? —Desperately Seeking a Solution

Ouch. There's nothing worse than having to slow down your growth due to a legal hassle. Just when you've picked up speed, there you are slamming on the brakes. This is a prime example of why I am such a stickler about contracts. At this point Desperately needs to answer a key question first: Did the former partner help create the product? Could she be construed as a co-inventor? If there's no way she had any part in creating the invention (BusinessWeek.com, 9/12/07), make an offer. It should be a fair settlement offer, like 20% of the revenue generated since inception, since Desperately put up all the costs and 2007 was the first year of sales. If this offer is declined, the former partner can propose a counter-offer. If it is ludicrous, Desperately can raise her original offer a tiny bit and say it expires in two business days. If this doesn't work, it's time for mediation.