1. Drafting an Agreement to Safeguard IP Rights
2. Employee Assignments and IP Ownership
3. Development or Consulting Agreements

Pre-existing intellectual property rights are rights previously enjoyed before entering into a new business relationship. In general, each party retains pre-existing IP ownership, although the specifics should be outlined in an agreement.

Drafting an Agreement to Safeguard IP Rights

Intellectual property rights arise from various situations, many of which are covered by written agreements. These situations include:

  • Consultant services
  • Employee developments
  • Joint development arrangements
  • Acquisitions

When dealing with pre-existing intellectual property, it's important to draft an agreement to protect one's ownership. When negotiating an agreement, take care to ensure the owner's rights are specifically identified and protected.

In many cases, intellectual property is developed for a company by individual employees, through joint efforts with third parties, or through outside parties retained by the company. In these cases, careful consideration must be made regarding who owns the intellectual property. Keep in mind that a company's ability to exploit and use developed intellectual property is a key concern for any agreement.

An effective IP agreement will consider various provisions and definitions. As such, it's important to have legal counsel when drafting an agreement to make sure all terms and conditions are met, and that the goals of each party are outlined clearly.

Employee Assignments and IP Ownership

Ownership of intellectual property rests with the inventor, not the company the inventor works for. Because of this U.S. law, an inventor employed by a company must transfer their IP ownership to the company via an appropriate written document.

Gaining ownership allows a company to better protect the invention through costly patent applications and legal enforcement of ownership rights. However, without the inventor's permission, the invention remains the property of the individual who created the product or process and the company has no rights to the invention.

The United States Patent and Trademark Office (USPTO) allows companies to pursue patent applications under special circumstances without the inventor's signed agreement. Although filing for a patent doesn't resolve ownership issues, it does help protect the invention.

Another thing to keep in mind is that, although the company may obtain a patent, the inventor is free to exploit that patent. In theory, the inventor could go as far as sharing the patent with competitors to make a profit.

The best way to avoid these worst-case scenarios is to have a written agreement and proof of IP rights. When several inventors are working within a company, it's important to obtain assignments from each inventor to avoid issues, including recently departed inventors who may be trouble tracking down in the future.

Be sure to include any relevant provisions in your employment agreements to safeguard these situations where former employees refuse to sign over IP ownership. The employment agreement should contain language which states that employees assign all inventions created during employment to the company. Once signed, this employment agreement proves that each employee had an obligation to assign IP rights to their employer.

With respect to copyrights, the employment agreement should include a clause stating that all parties agree work produced on the job was “made for hire.” Using language such as “hereby assigns” instead of “agrees to assign” places the assignment in the present, not in the future, so no further transfer of ownership rights is necessary. The company can simply provide this document with the employee's signature to the USPTO.

Development or Consulting Agreements

Most companies seeking to produce new technologies seek assistance from outside parties. Unfortunately, company rights can be compromised if a proper agreement isn't in place before consulting with an outside party or otherwise contributing to joint efforts.

Research and development personnel often enter into a non-disclosure agreement (NDA) before starting discussions on joint projects, but a non-disclosure agreement alone isn't enough to protect the company's interests in intellectual property rights. In fact, terms related to IP rights, restrictions, responsibilities, and confidentiality are not included in most NDAs, so the parties involved must enter into a more comprehensive written agreement.

Don't allow R&D personnel to lose sight of NDA limitations. They should only enter into further agreements once an agreement regarding IP rights has been addressed and signed. Unless everyone involved enters into the agreement before development begins, the company can lose some of its IP rights as well as leverage in negotiations.

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