When starting a new company, it is critically important to go through the trouble of reviewing what information or technology the company has and assessing what steps should be taken to protect it.

The rationale is simple. If intellectual property rights are not built on a proper foundation, the whole house of cards could come tumbling down. You could face a potentially crippling law suit against you for infringement of someone else’s rights. Alternatively, someone else may end up using the technology you spent so much time, money and effort developing and you may have no recourse against them. Neither of these scenarios is likely to warm the hearts of your investors or customers.

Here then are some basic things you can and should do to protect your technology:

Keep Your Secrets Secret

Identify your trade secrets and put them in writing. Err on the side of caution. There is no absolute definition of a trade secret; however, almost anything that has value because it is not in the public domain will qualify as a trade secret worthy of protection. Customer lists, supplier lists, test data, marketing plans and financial information are examples worthy of protection as trade secrets.

Before disclosing your confidential information and trade secrets to other parties, ensure written confidentiality agreements are in place. Potential investors, strategic partners, customers and others who want to see what you have before they commit themselves should agree not to disclose, use or reproduce your confidential information without your consent.

Develop an in-house proprietary rights protection policy that all employees can understand. This policy should cover a number of matters such as treatment of your proprietary information and the proprietary information of other parties, confidentiality, security and access. Ensure that the privacy rights of customers are protected adequately.

Put in place physical security and access measures and policies that are enforced and adequate and ensure that confidential information is disseminated only to those persons who need to use it. Confidential information should be clearly labelled and treated as such and stored in a secure place. Confidential information of other parties that you have access to should be treated in a similar way as your own.

Registration and Ownership

Review what protection is available for your technology and products by way of patents, copyrights, trade-marks, and industrial designs. Apply for registration of such rights in all countries where you have a reasonable prospect of selling or licensing your technology or products. Ensure proprietary notices are used correctly. Register all domain names you may use or don’t want others using. Choose your domain name registrar carefully, as competing registrars have different dispute resolution policies.

Have written documentation to prove that your company owns all rights to its technology, including copyrights, patents, trade-marks, industrial designs and trade secrets. If technology owned by another party forms a component of your technology or product (for example, third party software), have a written licence or assignment from the owner that allows you to do what you want with your technology or product.

Search

Search appropriate registries to determine whether you may be infringing someone else’s rights. For example, ensure your brilliant invention is not already protected by someone else’s patent in a potential market. Similarly, there is little point in investing time, money and effort in marketing a product or service that uses a trade-mark that someone else is using and/or has registered for a similar product or service.

Conduct surveillance searches regularly to determine if anyone is infringing upon your rights. It is very important to be aware of potentially infringing actions by competitors at an early stage to be able to take swift action.

Document Employee and Independent Contractor Agreements

Ensure proper written agreements are in place with all employees and independent contractors (particularly those involved in research and development). Issues which need to be covered include: proprietary rights ownership; protection of trade secrets; disclosure of prior restrictive agreements; disclosure of all work product; documentation of work product in an acceptable form; non-solicitation of clients and employees; and, non-competition. Ideally, these agreements should be entered into at the commencement of the employment or engagement of the services.

Using the above will go a long way to helping you stay ahead of (or at least abreast of) your competition and hopefully, out of court. As technology-based businesses become more prevalent and the competition more fierce, the importance of protecting your intellectual property rights is becoming more of a priority than ever. Note that every business has unique aspects which will require tailoring of the above principles.

For assistance, please contact Neil Melliship or Brock Smith.

The information contained in this article should not be treated by readers as legal advice and ought not to be relied on without detailed legal counsel being sought.