Tuesday, May 22nd, 2018
‘Tis the season for companies onboarding summer employees and unpaid interns (I’ll call them “employees” for simplicity’s sake). Below are tips for protecting your company’s intellectual property (“IP” in lawyer lingo) during their employment.
You Need a Written Agreement.
You should have a written agreement with your employees that covers confidentiality and IP ownership. It should cover other employment issues too, but that’s beyond the scope of this column.
Just having a policy and orally explaining it isn’t enough. You need a written agreement to enforce if something goes wrong.
The agreement should be prepared by an attorney, who will tailor it to your company’s situation. Don’t just grab a form off the Internet. You’ll probably hurt your company in ways you won’t perceive until it’s too late.
Explain the Agreement Orally.
Orally explain to the employee the key points of the agreement. Don’t rely on the employee reading and understanding it.
Your goal isn’t to have a strong legal claim against an employee who does something wrong. It’s to prevent anything bad from happening.
Emphasize the importance of confidentiality. Orally provide examples of things that must remain confidential.
The written agreement should protect company trade secrets and information your business is required to keep confidential. This includes information created by the employee that your company wishes to keep confidential.
Setting this up will require you to think through two questions: What are your company’s trade secrets? What other information must your company keep confidential?
Examples of information that is often a company trade secret if handled properly: customer lists, internal cost information, and methods of performing services.
Examples of third-party information that’s often required to be kept confidential: financial information provided by customers, and health information regarding employees.
Tell your employees to ask you if they have any doubt about whether information must be kept confidential. That consultation requirement should be in the written agreement.
Emphasize that confidential information cannot be taken, transmitted, or stored outside of the workplace in any form. For example, tell the employee to not put it on a personal laptop or smart phone or send it through a personal Gmail account.
Do an exit interview at the end of the summer to remind the employee of confidentiality obligations.
Focus on Issues Involving Electronics.
Advise employees that all computer equipment and resources provided by the employer are the property of the employer, and that the employee has no privacy in anything entered into or transmitted through them. Advise them that those items may be inspected by the employer at any time.
Talk with them about what they can’t do with their cell phone and on social media concerning work. Posting on social media certain information or pictures of coworkers not only can violate social norms, but can sometimes constitute a confidentiality breach or other legal violation.
Secure the Company’s IP Ownership.
The agreement should contain an assignment to the company from the employee of any IP the employee might create. The focus will be on copyrights and potential patents.
Get a copyright assignment for any potentially copyrightable material the employee might create. While the law says you own the copyright to what your employees create within the scope of employment (but not what your independent contractors create), get an assignment to remove doubt.
Examples of copyrightable works: written work product, graphics created, information complied and arranged, and pictures taken.
If there’s any chance the employee might make or contribute to a patentable invention, get an assignment of patent rights before that person begins working. Beware that, absent an assignment agreement, employees generally own the patent rights to what they invent even if they do so on company time using company resources.
Examples of potentially patentable inventions: a new type of device, or a new process for accomplishing something useful.
Make certain the employee doesn’t put intellectual property owned by others into things produced for the company.
For example, unless the company expressly permits the inclusion of these things, keep out: Open source software, things created by the employee for others, and things created by the employee before he or she began the summer job, such as work done for a school project.
Written on May 22, 2018
by John B. Farmer
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