Simple Steps to Plug IP Drainout

This post was first published on 6th August, 2013.
Start-ups and SMEs are often focused on building business and staying afloat in the competitive market that more often than not they miss out on taking simple measures that can go a long way in protecting their IP that forms the crux of their business, from people who deal with it every day.
Signing of appropriate employment agreements is one among many such simple steps in safeguarding IP and is extremely important for an organisation. Besides streamlining the human resource management related aspects of the organisation employment agreements provide ownership over employees’ creations under the employment and safeguard the confidential and proprietary information of the company. A professionally drafted employment also ensures organisations complete control over employees’ creations during the course of employment and manner of handling of the organisation’s proprietary information by the employees post termination of employment.
Here are the ten most important provisions in an Employment Agreement:

  1. Clearly define the ownership of Intellectual Property created during the term of employment.
  2. Ensure that ownership on all IP created during the term of employment are transferred to the Employer.
  3. Ensure that Employee is obliged to execute all necessary documents and assists the Employer in transferring any Intellectual Property created by him during his employment to the Employer. Also incorporate provisions requiring employee’s co-operation with respect to prosecution and litigation.
  4. Refrain employees from using third party Intellectual Property without the permission of the Employer. Incorporate necessary safeguards in case of such a use by the Employee. Have clear guidelines for use of Open Source materials.
  5. Take appropriate warranties against use of previous employer’s IP during the current employment.
  6. Define Confidential Information that may be disclosed to the Employee during his employment. Incorporate appropriate provisions to maintain confidentiality both within and outside the organisation.
  7. Incorporate non-competition and non-solicitation clauses based on the position of the employee and his access to the Employer’s confidential information.
  8. Include post employment obligations of the Employee clearly with regard to Confidential Information and Intellectual Property among others;
  9. Ensure that Employee indemnifies the Employer for any losses or damages suffered by the Employer due to the Employee’s action or inaction. Have specified contractual damages of high amounts to deter employees from practicing IP malpractice.
  10. Include adequate remedies in case of breach of terms of agreement by the Employee and retain rights for injunctive reliefs.

Contributed by: Sandeep Hegde M., Managing Associate, BananaIP

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