Legal, IP & Compliance
Recommended: Delaware C-Corp
Given the $500K seed funding target and B2B revenue model with pharma partnerships, a Delaware C-Corporation is essential. This structure provides the legal framework investors expect, enables clean equity distribution with standard stock option plans for future clinical advisors and technical talent, and offers the strongest liability protection for a healthcare-adjacent service. The healthtech space attracts significant investor scrutiny, and operating as an LLC would complicate future funding rounds and potential acquisition by larger healthcare or pharma entities.
When to Incorporate: Immediately—before accepting any investment, signing B2B contracts with pharma partners, or processing user health data. This establishes clear ownership of IP and limits personal liability from day one.
Intellectual Property Strategy
| Asset | Status | Priority | Cost | Timeline |
|---|---|---|---|---|
| Product Name | 🔴 Not protected | High | $500-$1,500 | 8-12 months |
| Logo | 🔴 Not protected | Medium | $500-$1,500 | 8-12 months |
| "Clinical Trial Navigator" Tagline | 🟡 Consider | Low | $500-$1,500 | 8-12 months |
| Domain (clinicaltrialnavigator.com) | ✅ Secured | Critical | $15/year | Immediate |
Patent & Trade Secret Strategy
Potentially Patentable: The AI-powered eligibility criteria parsing engine that translates medical jargon into plain language with match scoring. However, given the early stage and need for speed-to-market, recommend a trade secret approach over immediate patent filing.
Trade Secrets to Protect:
- Proprietary prompt engineering for LLM eligibility translation
- Match scoring algorithms and weighting logic
- Curated mappings between patient-reported symptoms and clinical trial criteria
Protection Methods: Strict NDAs with all contractors, access controls on AI model code, and employment agreements with IP assignment clauses.
Data Privacy & Protection
| Regulation | Applies? | Key Requirements |
|---|---|---|
| GDPR | Yes | Consent for data processing, data subject rights, DPA for B2B |
| CCPA/CPRA | Yes | Opt-out rights, disclosure requirements (revenue >$25M threshold not met initially) |
| HIPAA | No* | *Not a covered entity, but implement HIPAA-like safeguards for trust |
| COPPA | No | No under-13 users targeted |
Required Documentation
- Privacy Policy: Detail FHIR data import, AI processing, and data sharing with pharma partners
- Terms of Service: Include strong disclaimers that platform doesn't provide medical advice
- Data Processing Agreement (DPA): For B2B pharma/hospital contracts
AI-Specific Privacy Risks
- Ensure OpenAI/Anthropic don't train on user health data (use enterprise API with data processing terms)
- Disclose AI usage transparently in UI: "This summary was generated by AI"
- Implement data residency controls for EU users
Insurance Requirements
| Insurance | Priority | Cost/Year |
|---|---|---|
| Professional Liability (E&O) | High | $2,500 |
| Cyber Liability | High | $3,000 |
| D&O Insurance | Medium (post-funding) | $4,000 |
Legal Budget Estimate (Year 1)
Use templates for Privacy Policy/Terms, but invest in attorney review for B2B pharma contracts and IP assignment agreements.
Critical Legal Risks & Mitigations
AI Medical Advice Liability
User relies on AI trial summary, makes health decision, suffers harm.
Mitigation: Prominent disclaimers, E&O insurance, never position as medical advice.
Data Breach
Health condition data exposed during breach.
Mitigation: Encrypt all health data, cyber insurance, minimal data retention policy.
Pharma Partnership Perception
Patients distrust platform as "pharma shill."
Mitigation: Transparent disclosure of partnerships, patient-first design principles.
Pre-Launch Compliance Checklist
Entity & IP
- Form Delaware C-Corp
- File trademark application
- IP assignment agreements
Privacy & Data
- Privacy Policy & ToS live
- GDPR-compliant cookie banner
- AI disclaimers in UI
Insurance & Risk
- Professional Liability insurance
- Cyber Liability insurance
- Incident response plan