10 Ways to Avoid Losing Intellectual Property Assets
In my role as an attorney representing emerging growth technology companies, I spend a lot of time talking to and working with entrepreneurs as they prepare to start new companies. This is the last in a series of five posts that I will write exploring some of the legal and practical business issues that aspiring entrepreneurs need to understand as they begin this process.
Picking up where we left off last time, your company is now formed and properly capitalized. You have a great product in development and you are excited about the world of possibilities before you. As you have been adding new employees to the company, you are starting to get nervous about protecting your intellectual property, which is your most valuable asset. Here are 10 ways that you can avoid losing your intellectual property assets:
Keep your confidential information confidential by always signing nondisclosure agreements with people you discuss your technology with, and have all employees sign NDAs and invention assignment agreements as well.
- Avoid loss of trade secret rights
- Preserve patent filing rights
Keep Good Records
- Protects evolving knowledge base
- Defense mechanism in the event of trade secret infringement or misappropriation claims
- Proof of conception in first to invent patent filings
Secure Consultant Rights
Having an NDA with your consultants is not enough. A well-crafted consulting agreement will make clear who has ownership of any resulting intellectual property.
- Protects against restrictions on development rights or claims for additional payments
Consider Noncompetition Agreements
Though not enforceable in every state (California is strict about when these can be used), they are a very valuable defense mechanism to those companies in states in which they are enforceable.
- Forestall inappropriate use of information retained by employees
Restrict Incoming Trade Secrets
Having a well defined policy of what information can come into the company, will aid you in defending against common claims.
- Protects against claims of misappropriation
- Protects against corruption of product line
Analyze Freedom to Operate
If you are seeking patent protection strategy, receiving a patent is a great first step, however, knowing whether or not you can conduct your business (or have the freedom to operate) as you propose can be just as important.
- Understand if there are blocking patents
- Necessary licenses
Understand Contracts and Grant of Rights
Work with your attorneys to understand exactly what rights you are or are not receiving when you enter into an agreement.
Keep Sales People in Check
There is a lot of pressure to close deals and discussions of future features and top secret development efforts are very easy to have if they help to seal a deal. Stress the importance of confidentiality regularly.
- Loss of trade secrets
- Consider a written intellectual property policy that all employees receive
Conduct Intellectual Property Audits
Establish a process by which your team routinely reviews its practices to ensure that your greatest asset is protected as such.