How A Patent Lawyer Can Protect Your Invention

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How A Patent Lawyer Can Protect Your InventionA good patent lawyer will be able to help you determine whether your invention can be protected by registration with the U.S. Patent & Trademark Office (USPTO). As part of the process, you’ll learn the type of patent you’ll want to get to for your intellectual property.

What Is A U.S. Patent?

If the USPTO ultimately determines your invention a “new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof,” then the federal government will grant you the exclusive right to make, use or sell your intellectual property for 14 to 20 years, depending upon the type of patent. If others want to legally use your invention during that time, they have to pay you for the privilege (license) of doing so.

What About A U.S. Provisional Patent?

Like a unicorn, that really doesn’t exist. However, there are some circumstances justifying the need to file a provisional patent application (PPA) for your invention with the USPTO first, especially as the U.S. has now adopted a “First to File” (and no longer a “First to Invent”) patent system, in order to establish priority.

Note that if one files a PPA, it must be “converted” to a regular, non-provisional application within 12 months of filing the PPA, else the PPA is automatically deemed abandoned, i.e. you’ll lose the benefits of filing the provisional app and be statutorily barred from filing the non-provisional application thereafter.

Non-Compete Agreement and Independent Contractors

By | Dallas Business Lawyer, Featured Articles, Independent Contractor Agreements, Intellectual Property, Trade Secrets | No Comments
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Should your independent contractors execute a non-compete agreement?

When you outsource work to an independent contractor, should the contractor be required to sign a non-compete agreement as part of the deal?

According to Dallas Internet Lawyer Mike Young, it depends upon the circumstances.

Should Individual Freelancers Sign a Non-Compete Agreement?

If the work is to be done by an individual working as a freelancer, there’s a real legal risk that a non-compete agreement can make the worker an employee rather an independent contractor. If the worker is an employee, then you’re probably on the hook for payroll taxes, unemployment compensation and worker’s compensation insurance contributions, and compliance with applicable federal and state wage and hour labor laws.

Of course, there’s usually no way of know about this problem until the worker makes a successful claim against you for violating employment laws, files for unemployment compensation, etc.

Because of this risk, it rarely makes sense to have an individual working as an independent contractor to agree to a covenant not to compete with your business regardless of the scope of the agreement with regard to term, geographic area, and type of work covered as competing.

Business Entities as Independent Contractors

When you outsource work to a corporation or a limited liability company (LLC), it may make sense to require a non-compete agreement as part of the deal, particularly if there’s a real risk the contractor may take the knowledge acquired from you and misuse it to become your competitor.

Because the contracting party is a business entity instead of an individual freelancer, the risk of finding the contractor is really an employee is almost nonexistent even if the entity is owned by a single shareholder or member.

Confidentiality Agreements and Independent Contractors

Whether or not your contractor agrees not to compete with you, confidentiality agreements are important for protecting your trade secrets, customer lists, and other intellectual property (IP).

Drafted correctly, the agreement will cover how your important information is handled during the term of the agreement, after termination, and adequate remedies for breach to minimize damages if your contractor decides to violate the terms and conditions of the confidentiality agreement.

Single Contract or Multiple Agreements?

As a general rule, it makes sense to incorporate non-compete and confidentiality provisions into a single independent contractor agreement rather than having them as separate contracts.

Why?

Your contractor may be able to argue the separate agreements are unenforceable because they were signed without consideration, i.e. you gave nothing of value to the contractor in exchange for the agreements not to compete or keep your stuff confidential.

On the other hand, if these provisions are included in the independent contractor agreement, it’s easy to identify what you’re giving to the contractor for them (e.g. payment).

An experienced business lawyer will be able to draft an independent contractor agreement that covers these legal issue and other important provisions you’ll need to protect yourself when outsourcing projects to others rather than having employees do the work.

Nondisclosure Agreement: Oculus Rift and Virtual Reality

By | eCommerce and Technology, Intellectual Property, Patents, Software Agreements, Technology Contracts, Trade Secrets | No Comments
oculus rift

Did Oculus Rift founder Palmer Luckey violate a nondisclosure agreement?

A federal judge in California is letting a civil lawsuit proceed against Oculus founder Palmer Luckey for alleged breach of a nondisclosure agreement (NDA).

Total Recall Technologies (a Hawaiian partnership) claims that Luckey agreed to build 3D virtual reality glasses for the company pursuant to a written “non-disclosure, exclusivity, and payments agreement.”

According to Total Recall, Palmer Luckey’s work was to be performed based upon the company’s pending patent for a “[s]ystem and method for creating a navigable, three-dimensional virtual reality environment having ultra-wide field of view.”

However, the company alleges that Luckey breached this confidentiality agreement and launched a Kickstarter crowdfunding campaign to build “a highly immersive, wide field of view, stereoscopic headmounted display at an affordable price – a device that Luckey named the Oculus Rift.”

Whether there was an enforceable nondisclosure agreement between Total Recall and Luckey that was breached remains to be seen if there’s no settlement reached before trial.

Millions of dollars are at stake. Total Recall is seeking compensatory, exemplary, and punitive damages in addition to other remedies.

There are two important lessons you can learn from this breach of nondisclosure agreement lawsuit.

  1. Whether you’re paying a hardware developer or a software developer, a professionally written contract (employment contract or independent contractor agreement) that contains confidentiality provisions is important to protect your intellectual property rights.
  2. Any contract (including a confidentiality agreement) is only as good as the parties who sign it. If both parties are honest and acting in good faith, it’s unlikely you’ll end up in an expensive courtroom fight over whether misconduct occurred during performance of the agreement.

See Total Recall Technologies v. Palmer Luckey et al. (N.D. Cal. Docket No. 15-cv-02281)

Non-Disclosure Agreement: How to Protect Confidential Information

By | eCommerce Agreements, Intellectual Property, Internet Business Lawyer, Internet Lawyer, Technology Contracts, Trade Secrets | No Comments
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Are you using a non-disclosure agreement to protect your confidential information?

What is a non-disclosure agreement?

A nondisclosure agreement (NDA) is a contract between two parties (individuals or businesses) that’s designed to permit sharing of trade secrets and other confidential information without it being disclosed to third parties or to the public in general without the prior express permission of the party sharing the data.

Although commonly referred to as an NDA, a non-disclosure agreement is sometimes labeled with other names, such as “confidentiality agreement.” How the contract is titled is less important than what it contains for purposes of protecting data.

Mutual or unilateral confidentiality agreement?

The agreement can be mutual (reciprocal) or unilateral. Mutual NDAs are frequently used where both parties are sharing confidential information. In contrast, a unilateral NDA is common where only one party is sharing confidential data with the other rather than it being a mutual exchange.

3 important parts of an NDA

Although the terms of your NDA will vary depending upon a variety of factors, here are three of the common issues your confidential agreement should cover.

  1. Confidential Information Defined. Your NDA should include a definition of what constitutes confidential information. Equally important, the NDA ought to make it clear what information is considered nonconfidential. This prevents misunderstandings between the parties and reduces the risk of litigation for breach in the process.
  2. Restrictions on Use. Your non-disclosure agreement should make it clear how the shared confidential data can and cannot be used by the parties to the agreement, including the protection of intellectual property (IP) rights. Can copies be made? Will the confidential information be returned by the recipient or destroyed at a certain point. If destroyed, what type of proof will be required? For example, will the recipient be required to provide an affidavit of destruction?
  3. Remedies for Breach. How will violations of the confidentiality agreement be handled? Will the nonbreaching party be able to go to court to obtain an injunction?

How to get an NDA for your business

If you need a nondisclosure agreement prepared or an existing confidentiality agreement reviewed, the first step is to set up a phone consultation with Internet Lawyer Mike Young.

11 Provisions for B2B Contracts to Protect Your Business Online

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Do your B2B contracts contains these provisions?

When your Internet business lawyer is drafting business-to-business (B2B) ecommerce agreements and technology contracts, each deal will have unique clauses discussing such things as the product/service sold, and terms of payment.

However, there will be common provisions you will see repeatedly in your contracts because they’re designed to make the deal easier and/or protect you from legal liability if things go wrong during performance of the contract.

Here are 11 topics that are frequently covered in ecommerce contracts and tech agreements.

1. Multiple Counterparts.

Because the parties to ecommerce B2B contracts are often located in different parts of the world, econtracts can authorize different copies of the same agreement to be signed by the parties. The clause will typically permit electronic signatures.

2. Independent Contractor Status.

To avoid the risk of being held liable for employment taxes, workers compensation, and unemployment compensation, a clause is often used that makes it clear that any services performed by a party is on an independent contractor (freelancer) basis rather than as an employee.

3. Confidentiality.

Because of the competitive nature of ecommerce and technology, Internet business owners will usually insist on a provision where the parties agree to keep the terms of the agreement confidential, i.e. not disclose trade secrets, details of the contract, and other information that could be used by competitors.

4. Non-Disparagement.

With it so easy to smear a business in social media these days, entrepreneurs often insist that their business-to-business contracts include provisions that prevent negative statements being made by any party (or their employees) during and after performance of the agreement.

5. Disclaimers.

To limit potential liability, disclaimers are typically included in ecommerce and technology agreements to prevent one party from making claims for damages beyond the scope of risk the other party is willing to assume. For example, it’s common for an ecommerce entrepreneur to disclaim any warranty that a particular product covered by the agreement (e.g. software) is fit for a particular purpose.

6. Liquidated Damages.

Internet entrepreneurs frequently include paragraphs in their B2B contracts that provide for a certain amount of damages in the event that there is a breach of the agreement during performance. Such clauses will encourage the other party to perform to avoid paying such damages.

7. Intellectual Property Ownership.

It’s common to include paragraphs that address which parties own what intellectual property (IP), such as ownership of copyrights, trademarks, and patents. This is important to cover any IP sold/licensed as well as ownership of IP created under a services agreement.

8. Applicable Law.

Because online businesses are frequently headquartered in different cities, states/provinces, and even countries, it is important to include a contract clause that decides which law governs any disputes between the parties.

9. Dispute Resolution.

With an exception for masochistic entrepreneurs who enjoy spending their time in court and money on trial lawyers, most entrepreneurs want to handle any serious disputes without a lawsuit. This means that the agreement will usually include one or more paragraphs that provide for alternative dispute resolution through mediation and/or arbitration.

10. Indemnification and Defense.

As an online business owner, if the other party to an ecommerce contract or technology agreement does something really stupid that results in your becoming a defendant in a lawsuit, you’re probably going to want to include contract clauses that require the other party to indemnify and defend you in the lawsuit.

11. Assignments and Subcontracting.

Most ecommerce B2B contracts and technology agreements will address situations where a party wants to assign or subcontract out some or all of its performance responsibilities. In some cases, there is a complete prohibition on delegating out the work to others. In others, B2B contract provisions can permit subcontracting or assignment under limited circumstances, such as with prior written consent of the other party.

Now, naturally, there are other contract clauses that your Internet lawyer will use to help you make a business deal go smoothly and protect you from liability in the process. However, the 11 areas discussed above are very common topics that you will want to consider addressing in most of your B2B technology and ecommerce business contracts.

To get help with your B2B contracts, set up a telephone consultation with Internet Lawyer Mike Young.