Intellectual Property and Economic Policy: Part IV
Agreements Controlling Intellectual Property Rights
Once a business identifies that it has acquired intellectual property, business policies and conduct can make certain that ownership is retained. Executing employee contracts and policies (i.e. employee handbooks) may require that the employee assign his right to the intellectual property back to the business, or in certain cases that the employee keep any proprietary information confidential and and/or disclose all creative ideas made during employment.
Some businesses fail to educate their employees about intellectual property. Even worse, some do not even establish contractual relationships with their employees or even inform them on company policies affecting the same. Ownership questions occur, and employees may even be able to assert ownership of the intellect property. Though the business may have a shop right, it is better to avert a situation of uncertain ownership. Even with contacts in place, a business should establish and explain its intellectual property policies to its employees.
1. Assignment Provision
For patents, an inventor owns all rights to an invention. However, if the inventor is an employee, an employer may lay claim to the invention under certain circumstances. For instance, if an employee is hired to invent and the employer can demonstrate that this was clearly spelled out for the employee, the employer will be deemed the owner of any invention within the scope of the employee’s employment. The mere existence of an employer-employee relationship does not of itself entitle the employer to an assignment of any inventions which the employee devises during the employment. The employee may not have to assign rights over to the business, but rather control the right under self-ownership. Therefore, it is important that any business provide an employment handbooks and/or agreements with assignment provisions, in order to avert unintentional ownership issues.
2. Nondisclosure Agreements
A nondisclosure agreement is a contract in which the contractual parties promise to protect the confidentiality of secret information or company know-how that is disclosed. This type of agreement may be made between two parties during a business transaction, or between an employer and employee. These agreements can be mutual agreements (two-way), where both parties are obligated to maintain secrecy (i.e business negotiations), or they can be unilateral agreements (one-way), where only the receiving party becomes obligated to maintain secrecy (i.e. employee contract). A nondisclosure agreement can be used to protect any type of information that is not generally known, and probably one of the best ways to maintain proprietary, confidential information.
3. Non-compete Agreements
Non-compete agreements can protect a business from losing valuable trade secrets and employees who develop intellectual property. The agreements act as a written promise by an employee not to compete with the employer, or take employment to a competing business. AA non-compete agreement is either a separate agreement or clause in an employment contract, and applies to confidential information related to the business of the employer.
Although non-compete agreement can sometimes be difficult to enforce, since they may be viewed as restraining an individual’s right to employment, a properly structured agreement that imposes reasonable time and geographic restrictions, averts the possibility of losing confidential information.
