Welcome to “How I’m Starting a Toy Company” Blog. Where “I” is former tech entrepreneur D.S.
Though I went to law school, I hate contracts, and any kind of legal work. I appreciate them. And, I appreciate lawyers. I just detest drafting or reviewing contracts. I find it incredibly boring. I can spend hours thinking about the location of a modifier. That said, contract are important. Very important. And, right now, I need to wrap up a contract with my ‘toy designer.’ This person, – awesome! – took my 32 page specifications document (for 1 stuffed animal toy) – and brought it to life.
As background, my sourcing agent (LB) introducing me to a local toy designer some 3 months ago to help me realize my creative vision. In my case, trying to realize a stuffed animal, a toy designer is really someone that is an expert seamstress. He/She knows how to work with thick plush (faux fur) fabric and sculpt it into a desired shape. (I already had my very specific creative vision, my specifications document, and all materials that I wanted used in the construction of the toy).
As a side note, Chinese (or other Asian) factories will create prototypes of your creative vision – often, at no cost to you. However, at the advice of my sourcing agent, I decided instead to work with a local toy designer to come up with my prototype. Why? I think when my agent saw my 30-something page(s) of specifications of 1 toy, she saw problems. This was not a simple thing to outsource. The Chinese would have a hard time understanding all my text and rules (simple instructions and pictures are better). I was a perfectionist. And, this process would take several back and forth mailings of prototypes/samples. Most importantly, mail takes time (1 week via mail each way) + mail is expensive ($200-$300 each time/way). It would be less expensive + quicker to work with a local seamstress to develop my prototype, my ‘golden sample.’
My sourcing agent introduced me to a toy designer (JP) in early March. I had no idea that toy designers existed or what they really were. I thought I was what you would call the toy designer. (Turns out toy designers are like suped-up seamstresses that function like engineers). In any case, we started working with JP in March. She is awesome; I would recommend her to anyone. We have been working back and forth for the last several months. How patient she is to not only work with me (an absolute novice!) but also a perfectionist that starts the process of a stuffed animal toy design with so many pages of creative instruction! Thank you to JP.
Though we have a great working relationship, and have been working together for months, we do not have any kind of written agreement. And, I wanted to make sure we do have a written agreement – to reflect that this was and is a work-for-hire situation – where I (Company) owns all work product. 99% of companies may fail – but if this company succeeds, I don’t want to have grey areas around IP ownership. Clear ownership over I.P. is also important in any kind of a license or sale situation. Especially IP ownership around the core toy that gives life to the entire brand (think the American Girl doll model of the American Girl Doll brand).
Not wanting to open the door on legal expenses at this stage of this start-up, I decided (hopefully, not mistakenly) to partly draft my own contract. My husband is also an entrepreneur and so we both have Independent Contractor agreements (AKA Work for Hire agreements) in our roster of legal agreements. These are legitimate legal contracts that we had paid big attorneys in New York for. If you are in a situation where you need one of these agreements, you can usually get one out of the box from an A+ firm for a couple hundred dollars (contrary to public opinion, they are not expensive to get from fancy law firms if you do not require customization) – or, this has been my experience.
My work-for-hire contract needed some modification. And, I thought I was capable of modifying it myself, with the help of Kenneth A. Adams’ book A Manual of Style for Contract Drafting. (The book is geared for attorneys. Non-attorneys will want to pull their hair out – for example, Adams dedicates several pages to when you should use the word ‘should’ vs. ‘may’. He has an awesome blog too: http://www.adamsdrafting.com). I modified the agreement by shortening it (to be less intimidating) and amending it to reflect pre-contract performance (AKA clarifying that the contract covered work done prior to the signing of the contract and that payment was for work performed prior to the signing of the contract). After about 10 hours, I ended up with a 2 page 12 pt. font contract. I wish I could afford an atty. Signed and countersigned on May 22. Glad that is wrapped up.