Signed Proprietary Information Agreement Made Easy

Signature proprietary information agreement

hi I'm Matt Crowley this particular webinar is going to focus on of confidentiality agreement this is one that your employees and your independent contractors should sign so this particular one obviously your employees are going to have trade secret information in their head of all kinds of varieties so if it's a software engineer it may be the code it may be the wireframe it could be the architecture of how you're building out of platform if it's the salesperson it could very well be the customer list it could be the pricing not just the wreck rate that you advertise to the public but the internal rate in terms of how much discount different classes of customers get it could be client information about who the decision-maker is at IBM as opposed to just IBM those kinds of things are things that you might want to protect and the best way to do it is design an employee confidentiality agreement now from a technical standpoint I would call this a non-disclosure in proprietary inventions agreement and I'm going to explain what that last piece sounded was because it sounded a lot like legalese so one I want to make sure that anyone who becomes my employee that at the time that I hired them they sign a nondisclosure an adventuress agreement why is that timing important because you need in any contract to have three elements to be able to enforce the contract against another party you need to have an offer acceptance in consideration so if I offer Bob Smith an opportunity to be my engineer level five for fifty thousand a year then when he accepts it I need to also give him some consideration in return for signing a nondisclosure agreement I don't want to pay him what I'd like to do is to have the offer of employment be his consideration for entering into the non-disclosure agreement now if you're watching this video after you've already hired a few employees this is fixable in most states you're going to have to offer some extra consideration for existing employees so imagine I'm the receptionist and I know all of the fancy people that are coming through your office and you don't want me to go blabbing to TMZ that jay-z keeps coming through your office so you would like me to keep things confidential what you would do is you'd either offer me a bonus with some kind of cash you might make me the executive vice president of the reception area give me a title increase you might give me an extra day off but there has to be some consideration and needs to be documented so like I said it's fixable but you do need to make sure that you address it and have some consideration best practice get it signed at the time of employment now what about independent contractors you could have a independent contractor agreement sometimes it's called a consulting agreement could be called a service agreement doesn't really matter what it's called but you could include a clause inside the consulting agreement that requires confidentiality that's one way to address it another way to do it is if you have a form of non-disclosure and proprietary mentions agreement for employees just use the same thing for the independent contractors but don't forget to change the sentence that says I agree as part of my employment it's no it's I agree as part of my business relationship as a consultant that I will do the following things so you couldn't use that form in either direction now the important thing to understand before we get into the meat of the agreement is everyone at your company must sign a nondisclosure and invention why is that so I'm someone that does an awful lot of mergers and acquisitions and I will tell you that in tech companies and companies that don't think they have any tech they actually have quite a bit of trade secrets sitting inside them virtually every business does and the acquirer wants to know that when they buy your company that your company actually owns all of its intellectual property and no one's going to walk around doing something bad with their trade secrets so when I was the general counsel for a software company we had a head of sales that insisted she never signed anything the problem was we were trying to raise venture capital money in the third or fourth round and we were told by the venture capitals firms law firm that unless we could confirm that our company actually owned everything that was intellectual property they weren't going to invest so she had to change her mind and get out of pen and sign the non-disclosure agreement so everybody needs to sign it best to do it in employment so what's sitting inside that thing so much like the webinar that we gave an earlier weaponless ode which are welcome to look at confidential information has to actually be confidential you can take a look at that video because that'll have a little bit longer run on exactly what confidential information means but the very basics are if you put something out on your website if it's something that's readily available or known to the general public you can't expect your employees or your consultants to keep it confidential it needs to be things that are trade secrets like the customer list if you don't put it on the website your internal pricing source code development architecture those kinds of things now I also said proprietary inventions agreement so what's that piece what you want to make sure is anyone who develops any intellectual property it could be the a person who designs the logo local it could be the lady that designs the code for our software program we never want anyone who touches our intellectual property to be able to argue that they own it because what will happen is when we go to sell our company if the software engineer says you know actually you don't own that code I developed it on my own I'm gonna go sell my own software oops or I would like to turn your company a royalty to use my code those would all be very bad days we don't want that argument so we would like to know firm our employees that they're going to keep our trade secrets or confidential information confidential and we would like them to acknowledge that if we're paying them and they're on our job site during our normal business hours and they develop intellectual property related to our business we should own it we should own it outright we would also like them to tell us that in the event that we need to go get a patent or file a federal copyright registration whatever it is that they agreed to a further assurances clause which in simple terms is they agree that if we ask them to sign an assignment of patent rights or an assignment of a copyright that they agree that they're going to do that for us and that there's not going to be an argument about it sometimes you'll slip other things in there and we have to be careful in states like California you cannot ask an employee to sign a non-compete you just can't if the only time that you can get it in California is from an owner of a business that also happens to be the employee so in states like California you just wouldn't even include that you might consider asking key employees to agree that they won't solicit other employees to leave or that they won't try to steal your customers you could put in non-solicitation provisions but not non-competes I will tell you that in some states that are more employer friendly like Texas people will ask for non-competes and there was recently a case with a sandwich maker of all things Jimmy John's tried to make their sandwich makers I non-competes which was totally silly so a little bit of common sense is needed when you're drafting these agreements the last thing that you want to understand on this topic is you want to make sure that when you hire a new employee that that new employee doesn't come with a lawsuit so for example if you hire an engineer from your mortal enemy competitor and ask them to do the very same thing for you that they were doing for your competitor you want to make sure that that employee has disclosed to you that anything that they do for you is not going to require them to use any intellectual property that they've taken from that competitor and also that they're not going to use any of their own homebrew intellectual property stuff they may create in their garage or their basement because we want to know that whatever intellectual property that are creating it's for us it's owned by us and we are going to have a third party sue us because our employee is helping us effectively steal their intellectual property so now you're armed and dangerous and you know how to deal with your employees and your independent contractors keep your information safe and make sure that you own your intellectual property Thanks