Legislate meets Mary Catherine, Chief Legal Officer at Legislate

The significance of IP and confidentiality clauses for startups.

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In this episode, Legislate meets Mary Catherine, Chief Legal Officer at Legislate and startup lawyer. With experience as a US patent attorney, a member of the US bar in New York and New Jersey and a qualified solicitor in England and Wales, Mary Catherine provides unique insight into the importance of ensuring that contracts are robust and coherent. In this episode, Mary Catherine talks about the importance of IP and confidentiality clauses in employment and consultant agreements, particularly for startups.

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Charles Brecque: Welcome to the Legislate podcast, a place to learn about the latest insights and trends in property, technology, business, building, and contract drafting. Today I'm excited to have Mary Catherine Di Nunzio on the show, startup lawyer and Chief Legal Officer of Legislate. Mary Catherine, welcome to the show.

Mary Catherine DiNunzio: Thank you.

How Mary Catherine got involved with startups

Charles Brecque: Please can you share a bit of background about yourself and how you got involved with startups?

Mary Catherine DiNunzio: Well, I have quite a long background but I have an undergraduate degree in Chemistry. And then when I graduated from college, I went to work as a patent examiner at the United States patent and trademark office in Washington, DC. And in the evenings, I attended the George Washington University Law School. I graduated from Law School in 1995 and took a job as an Associate at a boutique IP firm in New York city. I was qualified as a lawyer in New York and New Jersey and I practiced in New York for 10 years, both at firms and as an in-house counsel to a small biotech company.

In 2006, I decided I wanted to do something different so I moved to Copenhagen, Denmark and became Head of Global Patent Alliances for H Lundbeck, a Danish pharmaceutical company.

In 2014, I had a different turn of events and that's because I married a British citizen and I moved to London.

In 2015, Lundbeck did a big reorganisation and after being with law firms and in pharma for 20 years, I decided, oh, let's stir things up a bit. So I decided to requalify as a solicitor in England and Wales. So I did that in 2017 because I had to take a year and a half of classes and training.

Then I decided I would just do something completely different, outside of pharma, outside of what I've done. And I've always been interested in startups, ever since I worked at the first biotech company in 1997. I like the fact that startups move quickly and they solve problems rapidly. And they're very creative, as opposed to other kinds of law, which tends to be more stagnant.

So that's how I ended up in the startup field, I just started get my name out there and met people. I started working in 2017. And now, I advise six or eight companies on a regular basis- in all across the spectrum of technology.

Charles Brecque: That's very impressive. And with those eight companies, what sort of support do you provide to them?

Mary Catherine DiNunzio: I basically provide general legal support. So I do contracts: employment, business contracts, software contracts. I do the financing documents for them and just provide general legal advice about disputes, or things you're having with employees, or how to negotiate deals, or where your risk may lie. And I also sit on the Board for several companies.

What's been your favourite moment so far?

Charles Brecque: Interesting. In those four years, now that you've been involved in startups, what's been your favourite moment so far?

Mary Catherine DiNunzio: I like it when you solve a problem and you do it creatively. And you realise that instead of someone hating the law, which a lot of people do, they actually feel like the law has put them in a better place. So I would say an example of that is on our Legislate platform, we've worked with a lot of landlords and obviously a lease is a requisite to be a landlord and to have a tenant. But it's the part they hate most about their jobs.

Mary Catherine DiNunzio: So the part that I like with Legislate is we've solved that problem in a way that protects them legally but it doesn't slow them down and keeps them moving at the rate they want.

Charles Brecque: That's true. And I think the type of users that we work with are people who have never really used a solicitor- out of fear or out of not liking it, or obviously out of budget. And that's definitely one thing that we tried to do with the platform is make it accessible for everyone because contracts are very important and they need to be done properly.

Charles Brecque: What would you wish you had known before entering the world of startups?

Mary Catherine DiNunzio: I would say, think outside the box, having been very traditional: legal career; in studying chemistry, which is very rigid; then going to law school; becoming a patent attorney, which again, patent law changes, I think one change took 50 years to come into effect so it's not like a rapidly moving area.

I think the thing that's impressed me, surprised me, with startups is that things move quickly. And you have to not only be thinking about what you're doing today, but what you're going to do tomorrow and how that could change. Even next week.

Charles Brecque: So do you have any examples of where things are changing faster than expected?

Mary Catherine DiNunzio: Just on the technology side, you think now you have all these like deep fakes and you have things where you can fake pictures. And you can take video. And how are you going to deal with that? How. Do you deal with the GDPR aspects of things? People can do things quickly, but sometimes that doesn't mean they're done properly. So again, when it comes to legal, just because you can download a contract off the internet that someone wrote, in their basement and charge you five pounds for you don't necessarily know that's protecting all your legal needs. So I think there's a lot of risk and people taking advice on all kinds of fronts from the internet and not really knowing where that advice is coming from.

Charles Brecque: So part of your role then is on the one hand to keep up with the technology developed by the startups, but also to anticipate things and paths that maybe they didn't quite anticipate as implications of their technology.

Mary Catherine DiNunzio: Correct. And also just implications of their business, because as your business grows, you're going to attract more kind of spotlight from far, you're going to have more risks. So we just need to, not only look at where do you see your business today, but where do you see it tomorrow? If you want to sell your company, how are people going to look at your legals and the things you've taken them to show you dealt with your risk appropriately.

Charles Brecque: And what piece of advice, or if you're not allowed to give advice, what tips would you give to a new entrepreneur entering the world of contracts for their business?

Mary Catherine DiNunzio: I would say don't underestimate the value of a contract because when you first are entering into anything with another person, whether it's an employment contract, marriage, business deal, you have this honeymoon phase where everything looks good and unfortunately, people don't like to look at what if it all goes bad, but you need to think. If something happened, if you had to unwind, do you have proper termination clauses? What are your rights, on a startup, especially if you're hiring a lot of employees the only asset you really have as a business is your intellectual property. So what you don't want is, the minute they sever from you, they're off starting their own competing business because all the knowledge you funded they've used to start their own business with. And I think a lot of people don't think of that to start. And even founders don't think of that because, they're in this honeymoon phase, everyone's getting along. So it's unfortunate, but you always have to think of what if things don't work out.

What are the key contracts you interact with the most?

Charles Brecque: That's true. And so you mentioned employment contracts, what are the key contracts that you interact with the most?

Mary Catherine DiNunzio: I would say employment contracts and consulting contracts because obviously startups need people to function and a lot of startups use consultants, just to get started and to see how things are working out.

Then you also have NDAs. Which were like non-competes, non-disclosures.

I do basic fundraise because obviously in startups, they're always either raising money, just raised money or looking to raise more money. So there's a lot of that.

But I'd say on a daily basis, it's more contracts that involve people. Also collaborations, if you were selling your software to someone else or if you're going to co-develop a product.

Charles Brecque: Interesting. And with those contracts, obviously you mentioned quite a range, are there any common objections or patterns, in the negotiation or questions from startups, challenges from other parties? Are there any common patterns or any trends that you can share with us?

Mary Catherine DiNunzio: I think a lot of times, and this is why I think you should never let your salespeople be the people that sign your contracts, because obviously salespeople want to make a deal and sometimes, I think they so want to make a deal and either make a commission or get that win they're not looking ahead to the next deal. If you would give someone exclusive video over your IP, and they're not giving you any money, well then what do you do at the next stage when they're paying you a million pounds? What do they want from you then? So you always have to think. You can't give too much away at the start or else you have nothing to negotiate with later and I think some people are too eager to get the first one in the door that they don't think how this is going to play out over time.

Charles Brecque: Great. And around employment and IP, do you have any tips or suggestions for founders to ensure that they sufficiently protect their IP?

Mary Catherine DiNunzio: I think you have to make sure that with all your employment contracts and consulting contracts, you were paying people to do a job. Therefore, you as the company should own all that IP so you have to make sure that you have robust assignment provisions to the tune of the people who even have to if they leave they give you power of attorney to prosecute applications on their behalf. This is very important because in the US all applications are prosecuted in the name of the inventor, not in the name of the company like they are here, so you're going to have to have the individual's permission to take it forward.

I also think you have to be careful if you're in the software space about open- source software and are people complying with licenses on open-source because you don't want to develop your own code and then find out that you have to share it because you contaminated with open source.

If you were being sent a contract to sign today, what would impress you?

Charles Brecque: Interesting I'm conscious that we've already taken a lot of your time, so i'm going to ask you the closing question we ask all our guests. If you're being sent a contract assigned today what would impress you?

Mary Catherine DiNunzio: I like contracts that are coherent. Which sounds like it's a very small step or a very low bar but actually that's really important because people a lot of times, say you have termination addressed in three different provisions and they actually contradict each other so one says you can terminate at any time and other ones says you can only terminate for cause and the third provision says that only one party has the right to terminate. You might not pick that up unless you read it very carefully, but that's a massive at the other end because then if you get into a dispute if you have three contracts that contradict each other in the same contract which one takes precedent? And how, you know, if you ever had to litigate that who would even want to litigate that.

Charles Brecque: That's a very common point and something that at Legislate we fundamentally address because we know that everything is connected, especially within a contract. With the technology that we've taken we can prevent those inconsistencies from occurring. If you want to create coherent contracts use Legislate.

Thank you very much Mary Catherine for your time and being on the show and it's obviously a pleasure to work with you and look forward to working with you during the rest of Legislate’s journey.

Mary Catherine DiNunzio: Thank you Charles. And thanks for having me.

Charles Brecque: Thank you

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