Legal Issues for Startups with Martin Nobel #NHSClinent

Martin Nobel @ShakespeareMartineau

Confidentiality agreement

There are different kinds of legal protection: trade secrets, copyright, trademarks, patents, trade marks.

If you tell someone else about your patentable idea they can steal it. Therefore it is best to drip-feed the information. Non-disclosure agreements should be considered but it depends on the circumstances.


Confidentiality agreements need to be framed. Why are you meeting? How long is it going to last? (NHS and govt bodies don’t like to keep things secret forever because it is too burdensome.)

Is it legally binding? Is it “subject to contract”, is there a termination or exclusivity period? Negotiation – are they just setting the scene or is this a firm agreement.

Head’s of terms documents are equally just provisional documents. Is it just a bluff?


Some things are binding. NDA’s/Confidentiality obligations in UK law is binding. There could be a 6 month exclusivity period. Speed and bargaining position all need to be considered.

NDA, Consultancy, IP licence, manufacturing, agency / distribution, collaboration and IP assignment agreements are all binding. As is Joint venture.


Memorandum of understanding, heads of terms – these are normally interim holding positions and are not formally binding.


If somebody else writes the code they technically own the copyright. The agreement needs to be clear that the contract involves exchange of money or equity for the IP (in the case of IP you are talking about a joint venture).


Joint ventures – for example the Innovation Hub joined up with Nova with a memorandum of understanding – then this was put into the articles of how the company was set up.

What are the exit provisions if the other side doesn’t perform? Not every eventuality can be covered. However, you can cover the broad areas.

Never give away more than you need to. Drip feed the information – particularly if it is out of the country. IP is like a currency that you spend around the world. It might not convert well. You can get european patents.


You want to restrict what other people can do with your IP.

Trademark and copyright are automatic to a degree when you start trading but if a logo for instance is going to be important going forward then you need to try and protect it.


The biggest danger is running too quickly into things without building the framework first.

If you do end up in difficulty then you will need legal support and a strategy to deal with it.

If a computer produces code it is the person who built the computer who owns the code. This is true for images and any individually coding that is done.

Business Planning for Success – Workshop with Paul Gaudin #NHSClinent

Without the right product and heart in the right place you will never become a multimillionaire.


The key is partnership. You need to partner in order to succeed because this will reduce the odds of failure.

You have to sort out the legal infrastructure of your business otherwise you will fail. The IP issues are massive. You will have people issues and management issues as well.

Critical Success Factors:

Start at the end and work backwards. Sense check – the outline business plan or lean canvas. What is the likelihood of success? This is something you just learn over time.

Distribution – what is the best/fastest/most profitable route to market to achieve your plan? How many mouths to feed on the way? – This HAS to be in your model.

Are you a product or a business? (If you are just a one product business then this is highly volatile and risky)

Are you in a position to pull this off. Do you really need a CTO etc? How quickly can you pull it off and are you in the position to pull it off?

This is all about patient care and these things deserve to be in the market.

What do you want to achieve?

Are you in the right place in your life? Training, personal financials, relationships, skills, etc.

Have you got the right team? (This needs to evolve along the way). Shareholder agreements when people fall out are a nightmare. You have to plan it into your business journey. As you change gear your on the cusp and red line the business. Then you solve the problem and hopefully rescue it, however, its much better to plan for this!

What is your business model? How will you generate cash.

Have you got the capital to see it through? Nobody ever has enough capital. Double everything (once the plan has come together).

Where is your market? Setting up offices in major markets – they are different all over the world! Even in China things are changing and starting to get better. There are massive healthcare markets there.

How big is it and what % can you expect to convert? (0.1% or even 0.01% is an amazing start)

The 4 P’s.

Reasons for Failure:

  • Lack of experience, (this is learned)
  • Poor leadership, (you can learn this)
  • Lack of research, (This is critical)
  • Lack of focus, (too many ideas, but lack of focus)
  • Lack of capital, (common)
  • Lack of realism, (get real)
  • Poor team dynamics, (if you don’t address the cracks it will split)
  • Wrong skills, (get the right skills and the right people. Otherwise they will be finite (which is ok as well but it needs to be planned)
  • Lack of distribution, (what channels can you use)
  • Over trading, (don’t overtrade or you run out of working capital, look at the bottom line). CASH IS KING! Planning, planning, planning.
  • Lack of innovation, (others will catch up if you become complacent)
  • No strategy (don’t be afraid to adapt to the market). It is accelerating more and more at a rate of knots. The culture is changing. There used to be only a few entrepreneurs, now there are many and this is changing the culture.

What makes a successful innovation?:

Is it worth doing? Are you providing a service solution or a product. Can I make sufficient margin out of it? Is it valued> If so how much and by whom? Who pays? Follow the wave – be a fast follower. Is there evidence or research? What is the cost and the timescale to market? Have you got enough research and capital? (DOUBLE IT!) Will you gain sufficient distribution before competition overtakes you?

For the first time businesses are having to compromise on how long it takes to get a new idea out because they can’t afford to wait any longer. Don’t wait till its too late! Plan ahead. Evidence and research is becoming less important by necessity. What is the best chance of success to impact problem x (Diabetes for example.) A lot of businesses keep a low profile with secret partnerships, and then come out of nowhere because this is a great way to succeed.

distribution, strategy, margin, time , marketing budget – These are the things people tend to underestimate.

Other tools: OGSM – The 1 page business plan. Objective, Goals, Strategies, Measures.

Business Models

Business Model is quite simply ‘how you plan to make money’.

De-risking your model:

  • Synchronise with your main client of distributor
  • Discounting, freemium, up-sell, cross-sell, etc…
  • Deploy a responsive and multi-channel strategy with different pricing models delivered against a common RRP
  • Develop a loyal test consumer group who can act as your canary in the mine.

4 P’s: Product, Price, Promotion and …

Financial Modelling:

Sales – A

  • D2c
  • Distributor
  • International
  • Licence
  • Franchise

Sales – B

  • Production Cost
  • Sales and Marketing


  • Human resources
    • Directors
    • Management
    • Production
    • Sales
    • Admin
    • Other
  • Material
    • Rent and rates (how can you best find the lowest cost rent and rates and work it down)
    • Light and heat
    • Communications and IT
    • Professional Fees – (Lawyers you have to have them, they win either way) Patents require feeding and growing. They can cost an enormous amount of money. £7million case recently – took many years (extremely frustrating).
    • Marketing and PR
    • Finance Cost

Output – D

Operating profit is C – D

Profit percentages vary per industry. R & D costs and fixed assets are deducted from the profits to generate and end of year profit and contribute to the balance sheet. Massive variations between 100% gross profit and 30% depending on industry. Revenue is vanity. Profit is sanity.

Share capital can inspire confidence.

Liquidity ratios enable you to borrow money (look this up) – Available cash you have got to enable you to cover your debts.

Valuations – what are they valuing you on? Main measures – current and potential.

Investors are interested in shareholder value (this is very different to making money). Distribution channel, number of customers, revenues, profit, product, IP, patents.

EBITDA = net profit + interest + taxes + depreciation + amortisation.
Look at the chief exec. Are they growing the business or consolidating it? Are they a 2 year CEO = probably stay away. 3-5 they might be making long term value for the business. It’s the business cycle that counts.

Case Studies:

New York bagel company. 18 months R&D. $1 million startup costs, $1 million marketing costs. Took a year to get the water content right. Good repeatable revenues, high barrier to entry for competitors because of distribution and brand. Year 1 – 2m bagels – 5 year ROI. 10 years too early – nobody knew what a bagel was. Supermarkets wanted preservatives added. If they had started at the end they might have been able to bake this in from the beginning. They had to be sold as the bread roll with the non-fattening centre because people didn’t get them.

Q Score. Total pivot from bagels. Totally different concept. Single number that gives you a cardiovascular risk. Doing in conjuction with key healthcare people. Now moved into corporate wellness market.

Carebnb and Tutella – 3 hospitals signed up to enable social cohesion back to care. We are heading towards a big change in the proportion of carers to those who need care. Japan will hit 1 to 1 by 2050. The patients now have the data. They are becoming real experts. The money is migrating to the consumer which is a good thing.

The legal challenges and #opportunities for #disruptors in the healthcare sector


Digital health has become a much bigger legal sector than it ever was before. This is because consumer products, telecommunications and health are already heavily regulated sectors.

It has resulted in a fragmented market. Some are very innovative but have missed out some of the regulations that apply. This has led to many discussions related to the regulation of mobile health apps and greater scrutiny. What is a good quality product?

Consumer laws

A lot of entrepreneurs have low levels of legal awareness in some areas. The general laws are:

Data protection, Consumer protection, Copyright protection, distance contracts, soft laws, medical devices directives (for medical apps).

Consumer Protection

Part of the problem is differentiating between medical apps and non-medical apps. Both will have different regulatory mechanisms and laws governing them. Either way you need to get proper consent for whatever data you collect.

Medical devices: these need to serve a medical purpose. They need to be CE marked and they need to be registered with regulatory authorities. You need to be clear about this from the outset. The key thing is actually promotion. If your business case is based on the medical claims made about the product then it is likely to be recognised as a medical device.

Consumer products: These don’t have to be CE marked or tested. The impact of consumer protection legislation has to be clear here. Health or fitness apps fall under this group. This means they are NOT making medical claims. Again you have to be careful about the marketing. The way you market the product will affect how the regulators will perceive it. There are certain disclaimers and product liability options which need to be considered.

The medical device guidelines are out of date and need to be updated. More guidance is forthcoming and the regulators are gradually catching up. Again the key is how the product is marketed.

This is so important and often underestimated by entrepreneurs. MHRA guidance

If your product is low risk and aimed at general wellness/fitness then the regulators are unlikely to be very concerned about it.

Once you get down to a particular disease it gets a bit more tricky. However, if the advice remains general and broad again it is probably acceptable and outside the FDA guidelines. Especially if it is in a low risk group and area.

Data Protection

The data you obtain is likely to be very tightly controlled. Therefore there needs to be a disclaimer, terms and conditions and consenting. Is this valid and meaningful or explicit? You have to be careful how you collect the data, and how you store and manage it. This applies whatever the data might be, especially if it might be construed as personal.

There was a recent court case in Holland where they took Nike to court because it didn’t have explicit enough consent to use the data in the app. The court determined that Nike was in breach of data protection laws because it was processing personal data without consent (on peoples fitness).

You need to consider how and where you will place these. There should be a number of places where it is presented. There has been a recent privacy code of conduct approved by the european court. It is voluntary but if you apply it then you can leverage that as a potential marketing advantage.

Protecting Your #Intellectual #Property

Protecting your valuable IP.


How to do it cost effectively and avoid the downsides.

Most of companies value is in intangible assets. Ideas themselves are not protected. Only the expressions of these in the form of being committed are protected.

Any purchaser is going to want to see IP protections in place. In the US they put budgets aside for this from an early stage (they see it as crucial).

It is an opportunity. It gives you legal protection for your product. It allows you to create and exploit products and markets without other people coming along and exploiting your product or idea. It also helps you to flush out the risks early on so you can pivot early.

Perceived problems include:

  • Lack of information / expertise
  • Cost – of acquisition and enforcement
  • Easy to ignore it – or put it off


A Menu

It is a menu of opportunities. Start with the lower cost, easy, organisational steps and measures.

From that platform consider other options based on:

  • what and where are the markets?
  • how long will it / your product last?
  • what real protection will it provide?


In roughly ascending cost order


Copyright is cheap but it can be an asset as soon as it is protected. Primary question is – do you own it?

If you or an employee create something it’s yours – you are the first owner. If not then it becomes very complex. The contractual arrangements need to be watertight.

Use the symbol!


Trade Secrets

Don’t give it away. Reinforce confidentiality amongst those in the know




If you think it will grow long term then protect the name. It is the one form of protection that lasts forever.



Register them and they are protected. Cheap and generally underused.



Beware other people might be there first. Search costs can be high but it depends what you are trying to do.



Protects the technology at the heart of the invention but it takes a lot longer to build. You also need to disclose your invention to the world in order to obtain a patent. The average cost in the UK is around £5,000-10,000 to file and protect a patent for 20 years but the range is enormous.

Keep all the contacts, records and documents in a safe place. Then if you get into a conflict you will have done all the due diligence and will be ready to prove your case. Tight confidentiality agreements are important. Don’t let IP take a back seat.