Contracts and Intellectual Property Drafting Exercise

Contracts and Intellectual Property Drafting Exercise

LAW 531

6//22/2013

Contracts and Intellectual Property Drafting Exercise

A business must take care protecting the organization's intellectual property (IP) to maintain success. A business's IP includes its patents, copyrights, trademarks, and trade secrets. Companies insert IP contract clauses into employee contracts to control the creation of ideas and products on company time, by an agent of the organization, or while using company resources. Legal issues regularly arise in the business world because of IP contract clauses. In a business managerial setting, the application of these clauses can lea. d to legal conflicts. Some companies prefer to use alternative dispute resolution methods to settle these legal disputes

Intellectual Property Ownership Contract Clause

Definition of Intellectual Property. "Intellectual Property" is defined as all organizational business practices, trade secrets, copyrights, and patentable inventions relating thereto, including but not limited to: resource notes, designs, technical data, ideas, reports, documentation and other information.

Courts use many factors to determine ownership of IP. Employers, however, do not have widespread rights to patents without an expressed agreement with an employer who creates something. According to Takenaka (2012), “U.S. common law gives employers very limited rights in inventions made by their employees even if they are hired to invent” (p. 296). IP contract clauses are an attempt to control the legal ownership of IP. Orkin and Jurasek (1998) provide three ways for ownership. “Depending on the specific facts at issue, ownership rests with either the employer, the employee inventor, or with a combination in which the inventor retains title subject to a so-called shop right under which the employer may use the invention for its own use without paying royalties to the inventor” (p. 1024).

Legally, trade secrets are a unique type of IP. In legal terms, trade secrets are an IP that covers financial, business, scientific, technical, economic, or engineering information. To be classified as a trade secret, the owner must take reasonable measure to keep the information secret and the information must prove “independent economic value” while not being generally known or readily ascertainable by reasonable means by the public (Goldstein & Reese, 2014). Trade secrets are unique because, unlike the other forms of IP, employers must cover themselves with a confidentiality agreement signed by the employee to make disclosure wrongful. Additionally, they must sufficiently protect the information from outside sources