Legal Essentials for Quantum Startups

Todd Faulk

January 20, 2026

Disclaimer: The following is not legal advice. Please consult an attorney.

What are the main risks facing quantum startups, and what can companies do to mitigate that risk?

Deep tech innovation comes with its share of technical risk, ranging from long development cycles to technological uncertainty. But there’s also legal risk, such as IP concerns and regulatory hurdles.

That’s why, at the October 2025 Quantum Community Forum, Dynamic Tech Media invited leading attorneys who specialize in advanced technologies like quantum to join a panel on legal essentials for quantum startups.

They underscored a critical reality in today’s tech sector: engineering innovation creates value, but proper legal structures and safeguards are needed to protect and maximize that value.

Takeaways from our Quantum Community Forum on Legal Essentials

The panelists included Jackie Benson, partner at Taft; Jim Pinto, attorney and founder of Red Rocks Law; Matt Crookston of Kilpatrick Townsend & Stockton; and Duncan Williams of Michael Best & Friedrich.

“If you aren’t following securities regulations,” warned Benson, “investors may come back years later and say, ‘You breached securities laws; I want all my money back.'”

This is just one sobering reminder of why it’s critical for quantum startups to be mindful of legal considerations while working toward technical excellence.

Navigating Intellectual Property Rights that Impact Quantum Technology

In quantum startups, deciding whether to patent designs or keep them as trade secrets can make or break a business plan.

Patents grant enforceable property rights, but they require public disclosure and are limited to individual jurisdictions. Conversely, trade secrets are protected so long as confidentiality is strictly maintained, even across borders.

Matt Crookston advised, “Don’t patent things you need to keep secret; patents are public and territorial.” Therefore, early-stage companies should bucket their assets—identifying inventions best kept under wraps, those suited for patent filings, and legacy IP brought into collaborations.

Moreover, avoiding shared ownership of inventions is critical. Co-ownership can fracture rights across jurisdictions and complicate enforcement. Instead, startups should assign new inventions to a single entity and grant collaborators a broad license.

As a complementary tactic, acquiring existing patent portfolios—such as IonQ’s recent acquisitions of Oxford Ionics and Capella Space—can clear freedom-to-operate hurdles without inventing anew at every turn.

Export Controls and Talent Safeguards for Quantum and Dual-Use Tech

Naturally, many founders are focused more on hardware concerns than regulatory ones. But by keeping regulations at the forefront of any business plan, startups can avoid costly violations that could delay or even prevent a new product’s launch.

Quantum devices, most of which are dual-use, are often governed by strict rules, including Export Administration Regulations (EAR) and International Traffic in Arms Regulations (ITAR). Even lab access by non-US nationals can trigger “deemed export” rules.

In this context, thorough compliance planning is indispensable. Inadequate planning can lead to export control violations that cause serious damage to a company. Penalties range from steep fines to prison time for executives—and of course lost government contracts.

The turnover of highly skilled workers—especially due to churn, competitor recruitment, or rescission of work permits—poses another layer of risk for employers. Jim Pinto stressed the human resources dimension: “You need to ask new hires to certify that they don’t have a single document from their prior employer in their possession.”

By requiring certifications, invention-assignment clauses, and documented trade-secret training, startups shore up defenses against inadvertent misappropriation. In other words, you don’t want your IP to exist solely in the heads or files of a few key workers.

Management must make clear from the start how ownership of IP developed at the company is apportioned between the corporation and employees involved in the inventions.

Quantum Fundraising Without the Hazards

Raising capital comes with its own risks in the form of legal obligations. Beyond understanding whether a cash infusion is debt or equity, founders must heed state and federal securities laws on every share sold.

Most private placements rely on SEC Regulation D, Rule 506—a safe harbor for accredited investors that mandates a Form D filing within 15 days of the first-round closing. Neglecting this step can invite enforcement actions or investor rescission claims, derailing growth before real traction can take hold.

Even before fundraising begins, it’s important to set up a capitalization plan that avoids complexity. Overly intricate preferred-stock structures for small friends-and-family seed rounds can repel sophisticated investors later and complicate downstream financings.

Instead, transparent documentation in a private placement memorandum (PPM) helps ensure compliance with state and federal securities laws when selling equity in your company. A PPM fosters trust with investors and helps protect against potential rescission claims down the road.

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Contracts and Collaborations That Scale

Quantum startups rarely operate in isolation. Whether a company is partnering with universities, national labs, or corporate venture arms, clear agreements are the bedrock of collaboration.

Effective contracts delineate each party’s background IP and stipulate who owns newly generated inventions.

Typically, the entity contributing the largest share of resources secures ownership of joint developments while granting collaborators perpetual, royalty-free licenses. This approach ensures that teams can integrate disparate technologies seamlessly and avoid entanglements over co-ownership.

Duncan Williams emphasized the importance of avoiding co-ownership, which could lead to you losing control over your IP at some point: “I would highly recommend not co-owning anything new that’s created. Make sure that one company owns it, and the other organization has the right to use it.”

March-In Rights: An Overlooked Threat

For ventures leveraging government funding, the Bayh-Dole Act confers “march-in rights” on federal agencies if inventions remain underutilized, overpriced, or insufficiently manufactured domestically.

As Matt Crookston told the panel, “If the business or university is not developing it, or if the nonprofit is not making it available to the public with a license fee, the government can then choose to license that to somebody else, or the government can take it over itself.”

Although no agency has yet forced a march-in, recent political pressure on drug pricing revealed the government’s willingness to wield these powers. To guard against government intervention, companies must diligently document efforts to commercialize IP, honor manufacturing commitments, and demonstrate public availability.

Preparing for Exit: Diligence by Design

When it comes time to exit, unprepared founders may find themselves scrambling. But integrating a few simple procedures into the process can make things go smoothly.

Streamline due diligence by organizing corporate documents into clearly marked electronic folders—covering HR records, contracts, IP portfolios, cap tables, and financials.

Expedite responses to buyer queries by creating one-page summaries of patent families and maintaining up-to-date assignment records for quick and easy reference.

And preserve operational continuity during transitions with source-code escrow agreements and retention bonuses for critical staff.

Ultimately, good “legal hygiene” helps ensure business vitality. By addressing up front the legal matters likely to impact a quantum startup, founders preserve value, foster strategic partnerships, and accelerate paths to market and to exit. Avoiding missteps requires foresight, meticulous planning, and the right counsel.

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