IP & Your Employees

07/28/2016 00:08:25 to watch
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With careful planning and implementation you can hire employees who will make major contributions to your business while creating and protecting intellectual property that will be essential to your company.

Suggested Readings

Founders School || Intellectual Property || IP and Your Employees || Impact Guide (PDF).

World Intellectual Property Organization, Trade Secrets and Employee Loyalty.

Gilman, Hank. What To Do When Your Star Employees Quit, Fortune, March 9, 2011.

The appeals court decision in PepsiCo, Inc. v. Redmond (1995) affirmed a preliminary injunction preventing a former PepsiCo upper management employee from working at a similar position at a competing company, Quaker. The former employee had signed a confidentiality agreement, and PepsiCo brought suit over concerns his duties at Quaker would inevitably involve divulging PepsiCo trade secrets, such as sales, marketing, logistics and financial information. In a twist of fate, PepsiCo now owns Quaker.

Many companies have programs designed to incentivize certain employee actions or behavior. Consider including incentives for productivity in the IP arena, such as monetary or social rewards for inventions, productivity improvements, issued patents (or even patent application filings), etc.

Questions for You

What good policies and procedures with respect to IP do you currently employ when it comes to recruiting and hiring? Do they include reviewing a prospective new employee’s employment agreement with his or her current and former employers? Do they include expressly telling each new employee not to use or divulge trade secrets of a former employer? If necessary, could you demonstrate that your company has been consistent in following these good practices with all new employees? What do you need to change, and how will you do it?

Does your company have robust employment agreements and require immediate signature as a condition of employment? Does the agreement include a non-compete clause and, if so, would it be enforceable in your state? Does it require disclosure of inventions and assistance in obtaining IP protection – even after departure from the company and without further compensation? Does it include an automatic and immediate assignment of inventions and other work product? Advice of counsel is important here.

Does your jurisdiction require a renewed employment agreement in the event of a significant promotion or other change in position?

What good policies and procedures with respect to IP do you have in place for departing employees? What do you need to change, and how will you do it?

Questions for Your Team

As an employee, how do you contribute to the sustainability of your companies IP strategy? How could you contribute more?

Do you understand the company’s IP policies? What would you do if a new employee planned to disclose to you or to use at the company a trade secret of his or her former employer?

Tools and Exercises

There are on-line resources, such as model employment agreements, employee policies, and new employee and exiting employee interview outlines. This is an area where advice of counsel can be valuable to ensure that your company’s paperwork, policies and procedures are appropriately tailored to your particular circumstances and needs.

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