Failure To Establish Clear IP Ownership-What Every Startup Needs To Know Part 7

By Debby Winters

In the last post we examined how independent contractors could try to claim IP rights. In this post we will look at IP rights as it relates to employees of the startup.

The startup eventually will have employees and it is wise to have these employees enter into work-for-hire-type agreements that explicitly confer rights in the works to the startup. That can be accomplished through an employment agreement or through separate agreements.

Additionally, startups should have employees sign confidentiality and invention assignment agreements with clauses that clearly state the obligation of the employee is to assign all developed IP to the startup. Failure to include such assignment clauses can create ownership problems for the startup, especially if the employee leaves the company to work for a competitor or cannot be subsequently located

The agreements should also state that the startup’s confidential information is only for use for the benefit of the startup; require disclosure of ideas, inventions and discoveries related to the agreement or employment; and include a statement of ownership rights over ideas, inventions and discoveries. Recordable assignment of IP rights should be required to show clear ownership of inventions and other IP developed by its contractors and employees.

It is often advisable to get help from an experienced IP attorney in the drafting of such agreements.

We have talked about establishing clear lines of ownership for the startup IP, next we will look at the failure to identify third-party rights.