TECHCRUNCH
MICHAEL ARRINGTON
5 MAY 08
aisen Mathai
, a Yahoo engineer, asks a good question: What can we do with failed startup intellectual property that might help the community?
The large majority of most startups fail, and a lot of them have software, patents and other intellectual property that may be of value to the community. This IP could help those startups avoid wasting time reinventing the wheel, find creative ways to solve problems, etc. In a perfect world, the best of this property would be made available via a clearing house, or turned open source. Many founders would love to see their work live on in other projects and would be open to this.
But there’s a problem: all this intellectual property is still “property” and isowned by someone, even after a startup goes bankrupt. If the company has raised any venture capital, or has any creditors, they own the property after the bankruptcy. In a very few instances that IP is sold off to return some money to creditors. This is exactly what happened with Edgeio, for example, a company that I co-founded and which failed late last year. Most of the IP assets were sold to third parties, and the proceeds went to pay off those who were entitled to the assets.
