Valuing Early Code Prior To Corporate Formation
Pre-incorporation code creates personal property rights that require formal replacement cost valuation and legal transfer before corporate equity allocation.
prior invention schedule
Meaning
A detailed list appended to an employment or founder agreement enumerates all intellectual property developed by an individual before joining the company. This document is known as a prior invention schedule and excludes those listed assets from the automatic assignment of inventions to the new employer. It establishes clear boundaries between previous creations and the work created for the current entity.
Protection Protocol
Filing this registry protects the founder from losing ownership of personal projects or patented technologies developed in the past. When individuals include these projects on the prior invention schedule, they prevent future legal claims by the startup over those specific creations. This separation is particularly important for serial entrepreneurs who have ongoing parallel projects.
Disclosure Requirement
The document must list patents or active trademarks with enough specificity to avoid future confusion. When completing a prior invention schedule, the signer must describe each asset thoroughly without disclosing confidential details. This documentation must be signed and dated simultaneously with the main employment contract to remain valid.
It prevents the company from claiming that the listed technology was developed during company hours with company resources.
Conflict Avoidance
Failing to document past works can result in ownership disputes during a funding round or acquisition. Investors will audit the intellectual property chain to ensure the company has unencumbered rights to its technology. Unresolved overlaps can delay or derail transactions.