In today’s knowledge-based economy, intellectual property holds a high value for businesses. Producing such property entails heavy investments in brainpower and time of skilled labor.
Contracts must stipulate how such assets should be handled to preserve their value. It includes drafting and executing contracts that define the definition of IP and include access, confidentiality, and other related clauses.
Intellectual Property Rights
Intellectual property rights are legal protections for unique work reflecting someone’s creativity. They include patents, trademarks, and copyrights. They are enforceable against people and organizations that try to use or sell the rights without permission.
Contracts are a crucial part of the process of protecting intellectual property rights. The first thing to do is define what intellectual property is being protected. It can be tricky and may require the help of a lawyer at Intuitive Edge to ensure that both parties are on the same page.
A good definition of intellectual property should be able to account for both registered and unregistered IP, domestic and foreign IP, as well as confidential information and details that give a company a competitive edge. It should also adapt with time so that the terms of contracts can reflect changes in an organization’s intellectual property portfolio. This is because intellectual property is often the lifeblood of a business and can be critical to its long-term success.
Even the most technologically advanced companies face the risk of trade secrets being misappropriated by current or former employees.
The information must be confidential and have independent economic value to qualify as a trade secret. Customer lists, industrial manufacturing processes, pricing structures, research and development projects, computer source code, algorithms – the list goes on.
The Defend Trade Secrets Act requires that a company make reasonable efforts to protect the secrecy of its trade secrets. That includes identifying the information as a secret, limiting access to it to those who need it, and maintaining a system of records to prove that these steps have been taken. If a trade secret is found to have become public knowledge, the court will likely find that it is no longer a secret and cannot be protected.
Contract management creates, executes, and analyzes contracts to optimize operational and financial performance while reducing risk. It is a time-consuming business element and requires an automated system to manage efficiently.
Confidentiality protects information that should not be shared with the public or unauthorized people. It is common in military and government organizations but can also be necessary for companies that want to protect proprietary trade secrets from competitors.
Having clear guidelines and policies can help employees understand what information is confidential, how it should be handled, and if any exceptions are possible. It helps foster trust and reduces the potential for miscommunication that can lead to misunderstandings or breach of contract. It also allows businesses to track vendor performance and evaluate supplier risks more effectively. It helps them to create powerful partnerships with vendors and to spend their money wisely.
Licensing allows a company to generate revenue without manufacturing and selling its products. It is commonly done when a new product has a low chance of success in the marketplace or if a company needs more internal resources to develop and produce the IP.
Usually, one license covers a bundle of intellectual property rights, including patents, design rights, related know-how, and the trademark. It can also cover both domestic and foreign IPs. Contracts must include a clearly defined definition of IP to ensure that both parties are on the same page regarding what is being covered and what is not.
Contracts must also provide flexibility to maximize the IP’s value. It could be through a clause that allows both parties to adjust the scope of the license agreement as they discover commercially viable opportunities, such as a new indication or seeking drug approval in another jurisdiction.