For both start-ups and established companies, protecting your intellectual property is the foundation for all company growth and success. Start-ups that forget to protect their IP can discover later that all their hard work, ideas, and inventions don’t actually belong to their company.

Even if it’s your own employees or contracted consultants who develop the next WhatsApp while working for your start-up, the idea is not necessarily your company's property. And, surely the quickly end an investment deal is to let it be known your company does not own the property they thought they did.

To avoid such a situation, you should have and use three key agreements for consultants and employees that will protect your start-up's IP. 

Non-Disclosure Agreements

The first step to protecting your intellectual property is to use confidentiality or non-disclosure agreements (NDA’s) to ensure all your trade secrets stay as secrets. Failure to do so would stop your startup’s ability from preventing other businesses from using your ideas.

In fact, you never want to disclose your company secrets to a third party without an NDA. Prematurely revealing the next ‘great idea’ to the public will substantially devalue your company.

Employee Agreements

Next, require every employee to sign an employee confidentiality and propriety rights agreement. Without it, it’s possible an employee can walk out the door with your company’s ideas, and there would be no way to stop them.

Make sure each agreement is tailored to your start-up and its situation, including a provision mandating the ‘present assignment’ of legal rights that contains language of performance as opposed to a language of promise. The former (“I hereby do assign) vs. the latter (“I promise to assign “) makes the difference between owning an invention and never owning it.

Effective and specific language guarantees inventions developed by employees as part of their work belong to your company.

Independent Contractor Agreement

Your start-up may not be able to afford full-time employees, and instead rely on independent contractors to complete tasks. If that's the case, your company should use independent consultant agreements.

Similar to employment agreements, consultant agreements cover key issues such as who owns the finished product, the relationship between the parties, and the scope of the project. It also covers confidentiality and assignment of rights.

Ensure language in the contract clearly establishes who owns any copyrightable work between the parties to ensure no problems arise latter on account of ambiguous meanings.

Creating and using these actual agreements will keep your inventions safe. That's good news for your start-up.

Even better news is that these various agreements can be drafted up rather quickly and inexpensively. If these agreements are neglected, your start-up can lose a lot of money, investments, and market value.

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