Part 1 of this three-part series discusses intellectual property ownership rights in the absence of another agreement. Part 2 addresses some of the common ways that parties can allocate the ownership of intellectual property in a contract. This third part covers a few best practices that will help ensure that a company owns its intellectual property.
Discussions with third parties about future business relationships and hiring of employees and consultants are routine business activities that can have detrimental effects on a company’s intellectual property if not managed properly. Appropriate non-disclosure agreements, employee confidential/proprietary information and invention assignment agreements, and consulting agreements are an important part of a company’s business operations.
Before providing any confidential information to a potential business partner, companies should enter into a written non-disclosure agreement (NDA). An NDA will define the bounds of what is considered confidential information and provide limitations on what each party can do with the confidential information of the other party. The essence of the definition of “Confidential Information” is that it is the non-public information of a company. Under a typical mutual NDA, the party that receives the information is generally only allowed to use the disclosing party’s confidential information for purposes of evaluating a further potential business relationship between the parties. In addition to providing for a potential remedy against unauthorized disclosure of confidential information, NDAs are an important means of showing that a company is using reasonable efforts to protect its trade secrets.