IP Tech Knowledgy
Using Business Protection Agreements to Protect Business Owners’ IP
All companies—whether a technology company, a manufacturer or a service provider—should have business protection agreements (which are also sometimes referred to as Proprietary Information and Inventions Assignment) in place with their employees and contractors. These service providers will have access to non-public, proprietary and confidential information of the company, including business plans and strategies, customer lists, financial information, inventions and other intellectual property. It is of utmost importance to ensure that such service providers not only agree that they will not disclose or permit the disclosure of any confidential information, but that they will not use it in any way other than in connection with providing services to the Company. Business protection agreements also include an assignment from the service provider to the company of any rights all inventions and intellectual property created by the service provider during his or her engagement. Depending on the industry, some business protection agreements will also include a non-competition covenant, and most will include a covenant not to solicit company customers and employees, in each case, during the engagement and for a period of time after the engagement. Business protection agreement are not only necessary to protect the Company’s proprietary information and rights to intellectual property, but prospective investors and/or acquirers will expect that a company has caused its service providers to have executed such agreements.