Entrepreneurship, Second Edition

13.11. IP Agreements

When you think of protecting a new idea or product, your thoughts probably turn to patents, trade secrets, and copyrights. But the game can be won or lost long before you have the opportunity to establish one of those forms of protection. That's why a fundamental form of protection—confidential disclosure agreements, employment contracts, and consultant contracts—is so important. Whether or not an idea or product is protectable by an exclusive statutory right such as a patent or copyright, before you obtain such protection keep the basic information confidential in order to prevent public use or disclosure, which can result in the loss of rights and inspire others to seek statutory rights before you.

Confidential disclosure agreements, employment agreements, and consultant agreements have some things in common. They define the obligations of the parties during the critical early stages of development of a new concept, product, or process. Entrepreneurs often overlook them until it's too late—after the relationship is well under way and a problem has arisen. One of the worst things that can happen in due diligence is to discover a programmer hired by the company as an independent consultant never signed over his copyright in the company's flagship product. For proper protection of the business, work out agreements with employees, consultants, and in some cases suppliers and customers to keep secret all important information of the business and to assign to ...