Protecting Your Trade Secrets

From VT KnowledgeWorks sponsor LeClairRyan.  A version of this post appeared first on Handshake 2.0.

Entrepreneurs who are inventors may have intellectual property (IP), such as patentable ideas, as the foundation of their business ideas.

Patentable ideas may be the foundation of entrepreneurs' business ideas.Patents are a creation of federal law, having their origin in Article 1, Section 8 of the U.S. Constitution.

A patent is defined as a new, non-obvious invention including processes, machines, methods of manufacture, compositions of matter, and improvements thereon.

A patent gives the owner the right to exclude others from making, using, selling, offering to sell, or importing the patented product, for a term, in most cases, of twenty years from the date of filing the patent application.

Pursuant to federal law, patent rights vest with the individual inventor. Thus, it is necessary to properly secure patent rights from employees and contractors pursuant to an assignment document.

Standing alone, confidentiality or no-compete agreements will not afford protection of your company's rights to its patents. Assignment provisions are required to properly vest patent rights in the name of the company.

For companies that are founded by, or employ or contract with inventors, it is imperative to require, as a condition of employment, that employees/contractors execute an invention disclosure agreement whereby employees and contractors agree, among other things, to:

  1. Immediately and completely disclose any inventions created by the employee, so the employer will be in a position to decide whether to seek patent protection for the invention;
  2. Affirmatively assign any inventions to the employer;
  3. Execute any documents that may be required to assign the invention to the employer, and agree to cooperate with the prosecution of any patent applications; and
  4. Disclose any rights the employee claims in inventions created before commencement of employment, so that the employee is stopped from later asserting that a new invention was created before the obligations under the employment agreement arose.

To request a copy of his recent presentation, "Protecting Your Trade Secrets," please contact Jim Cowan. For more information on LeClairRyan's Intellectual Property practice, including patents, trade secrets, trademarks and copyrights (including rights in software), please contact Rebecca Conner.

LeClairRyan specialized in high-tech corporate law.LeClairRyan is a law firm that has deep entrepreneurial roots, having originally been founded as a venture capital boutique. With more than 350 attorneys and offices from Virginia to New York to California, the firm provides business counsel and client representation in matters of corporate law and high-stakes litigation. Its mission is to achieve excellence for its clients by providing integrated, responsive and timely services.

VT KnowledgeWorks encourages and enables creative entrepreneurship world-wide, through innovative curriculum, local business resource centers, and a global network of cooperating regions, all focused on three essential contributors to success: clear understanding of fundamental business principles; access to timely, relevant information; and meaningful personal and corporate relationships. It is a subsidiary of the Virginia Tech Corporate Research Center, supported by the continuing confidence and enthusiasm of its clients, sponsors and friends, both corporate and individual. Its world headquarters is in Blacksburg, Virginia, USA.

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VT KnowledgeWorks sponsors include Attaain, Inc., BB&T, The Branch Group, Handshake 2.0, Harris Office Furniture, Hodges, Jones & Mabry, P.C., Hutchison Law Group, LeClairRyan, New River Valley Intellectual Property Law, Science Applications International Corporation (SAIC) and The Becher Agency (TBA).

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