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NDAs and confidentiality agreements: What you need to know Protection of confidential information within an organization is usually a vital business priority. Learn what you need to know when structuring confidentiality agreements.

Nearly all businesses have valuable confidential information, and for many, confidential information is a dominant asset. Companies also share, receive, and exchange confidential information with and from customers, suppliers and other parties in the ordinary course of business and in a wide variety of commercial transactions and relationships.

Contractual confidentiality obligations are fundamental and necessary to help protect the parties that disclose information in these situations. Depending on the circumstances, these obligations can be documented in either:

• A free-standing confidentiality agreement (also known as a nondisclosure agreement or NDA)
• Clauses within an agreement that covers a larger transaction

When is a confidentiality agreement needed?

A range of commercial transactions and relationships involve either the disclosure of confidential information by one party to the other or a reciprocal exchange of information. In both cases, the parties should have a confidentiality agreement in place.

For example, confidentiality agreements may be used when evaluating or engaging a business or marketing consultant or agency, where the hiring company will necessarily disclose confidential information to enable the consultant to perform the assignment. They can also be used when soliciting proposals from vendors, software developers, or other service providers, which usually involves the exchange of pricing, strategies, personnel records, business methods, technical specifications, and other confidential information of both parties.

Finally, your company may need a confidentiality agreement when entering a co-marketing relationship, as an e-commerce business, with the operator of a complementary website or a similar type of strategic alliance.

Why is it necessary to have written confidentiality agreements?

• There are numerous reasons to enter into written confidentiality agreements, such as:
• Avoiding confusion over what the parties consider to be confidential.
• Allowing more flexibility in defining what is confidential.
• Delineating expectations regarding treatment of confidential information between the parties, whether disclosing or receiving confidential information.
• Enforcing written contracts is easier than oral agreements.
• Memorializing confidentiality agreements is often required under upstream agreements with third parties (for example, a service provider's customer agreement may require written confidentiality agreements with subcontractors).
• Maximizing protection of trade secrets, because under state law this protection can be weakened or lost (deemed waived) if disclosed without a written agreement. 
• Covering issues that are indirectly related to confidentiality, such as non-solicitation.
• Maintaining standards that are expected of most commercial transactions and relationships.

The forms of confidentiality agreements

Depending on the type of transaction or relationship, only one party may share its confidential information with the other, or the parties may engage in a mutual or reciprocal exchange of information.

In unilateral confidentiality agreements, the nondisclosure obligations and access and use restrictions will apply only to the party that is the recipient of confidential information, but the operative provisions can be drafted to favor either party.

In mutual confidentiality agreements, each party is treated as both a discloser of its—and a recipient of the other party's—confidential information (such as when two companies form a strategic marketing alliance). In these situations, both parties are subject to identical nondisclosure obligations and access and use restrictions for information disclosed by the other party.

In some circumstances, the parties may share certain confidential information with each other but not on a mutual basis. Instead of entering into a fully mutual confidentiality agreement, the parties enter into a reciprocal confidentiality agreement, in which the scope and nature of the confidential information that each party will disclose is separately defined and their respective nondisclosure obligations and access and use restrictions may differ accordingly.

Limitations and risks of confidentiality agreements

Confidentiality agreements are very useful to prevent unauthorized disclosures of information, but they have inherent limitations and risks, particularly when recipients have little intention of complying with them. These limitations include the following:

• Once information is wrongfully disclosed and becomes part of the public domain, it cannot later be "undisclosed."
• Proving a breach of a confidentiality agreement can be very difficult.
• Damages for breach of contract (or an accounting of profits, where the recipient has made commercial use of the information) may be the only legal remedy available once the information is disclosed. However, damages may not be adequate or may be difficult to ascertain, especially when the confidential information has potential future value as opposed to present value.
• Even where a recipient complies with all the confidentiality agreement's requirements, it may indirectly use the disclosed confidential information to its commercial advantage.

Nondisclosure obligations

In general, recipients of confidential information are subject to an affirmative duty to keep the information confidential, and not to disclose it to third parties except as expressly permitted by the agreement. The recipient's duty is often tied to a specified standard of care. For example, the agreement may require the recipient to maintain the confidentiality of the information using the same degree of care used to protect its own confidential information, but not less than a reasonable degree of care.

Recipients should ensure there are appropriate exceptions to the general nondisclosure obligations, including for disclosures:

• To its representatives. Most confidentiality agreements permit disclosure to specified representatives for the purpose of evaluating the information and participating in negotiations of the principal agreement.
• Required by law. Confidentiality agreements usually allow the recipient to disclose confidential information if required to do so by court order or other legal process. The recipient usually must notify the disclosing party of any such order (if legally permitted to do so) and cooperate with the disclosing party to obtain a protective order.

Disclosing parties commonly try to ensure that recipients are required to have downstream confidentiality agreements in place with any third parties to which subsequent disclosure of confidential information is permitted. In these cases, either the recipient or the discloser may prefer to have these third parties enter into separate confidentiality agreements directly with the discloser.

Term of agreement and survival of nondisclosure obligations

Confidentiality agreements can run indefinitely, covering the parties' disclosures of confidential information at any time, or can terminate on a certain date or event.

Whether or not the overall agreement has a definite term, the parties' nondisclosure obligations can be stated to survive for a set period. Survival periods of one to five years are typical. The term often depends on the type of information involved and how quickly the information changes.

The information in this article was excerpted from Confidentiality and Nondisclosure Agreements. The full practice note, one of more than 65,000 resources, is available at the Thomson Reuters Practical Law website.

The information in this article was excerpted from  Confidentiality and Nondisclosure Agreements . The full practice note, one of more than 65,000 resources, is available at the Thomson Reuters Practical Law website.

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Confidentiality and Nondisclosure Agreements Explained

August 9, 2023

In a confidentiality or non-disclosure agreement, parties agree to keep private nonpublic information received during a business relationship, including in the early stages of exploring a potential business relationship. The need for confidentiality and non-disclosure agreements arises in a wide variety of contexts, including mergers and acquisitions, joint ventures, sales and services, employment, and intellectual property licensing.

Once parties have established an ongoing business relationship, non-disclosure provisions are often negotiated and incorporated into the relevant transaction documents, which may replace stand-alone agreement, and are incorporated into the larger contract management workflow for the remainder of the contract lifecycle.

[Download this sample mutual non-disclosure and confidentiality agreement that can be adapted for your individual needs.]

What is a confidentiality agreement?

Confidentiality agreements protect parties entering into business relationships or transactions that require the exchange of sensitive, private information otherwise inaccessible to third parties. Confidential information is the heart of any confidentiality agreement. For the agreement to adequately protect against unwanted disclosure, the parties must clearly describe the information or types of information they wish to protect and the scope of each party’s non-disclosure obligation.

The provider of confidential information typically wants to define its confidential information as broadly as possible to include all material shared with the recipient. The recipient, on the other hand, must be careful to carve out any information from the definition that the recipient may later be legally required to disclose; otherwise, the recipient risks choosing between breaking the law and breaking its confidentiality obligation.

Parties may also wish to expressly carve out personal data from the definition of confidential information and negotiate separate terms that govern the use and protection of such data, as applicable privacy and data security laws tend to be much stricter than general confidentiality requirements.

Is a non-disclosure agreement the same as a confidentiality agreement?

Non-disclosure agreements (NDAs) and confidentiality agreements are both legal contracts between two or more parties that specify the criteria for maintaining the confidentiality of certain information. Whereas NDAs are often used in business and legal settings to protect trade secrets, client lists, and financial data, confidentiality agreements are typically devised in employment or personal situations to protect sensitive information.

Confidentiality and non-disclosure agreements typically:

• Describe the context for the parties’ agreement, referencing any related transactional documents.
• Define the specific information to remain confidential.
• Outline the parameters for the parties’ use of confidential information.

Do confidentiality agreements expire?

Most confidentiality and non-disclosure agreements provide a specific term of non-disclosure (e.g., one to three years). Some confidentiality and non-disclosure agreements, on the other hand, are open-ended in duration, although they will not be legally enforceable to the extent the confidential information becomes public. Because a confidentiality or non-disclosure covenant will not be enforceable if the confidential information enters the public domain, parties often qualify that the confidentiality obligation applies only while the information remains nonpublic.

Having a reasonable duration is particularly important in employment-related agreements. Employers must balance their legitimate business need for confidentiality against employees’ rights to engage in protected concerted activity, such as discussing the terms and conditions of their jobs. For example, the duration of employees’ confidentiality obligations related to an internal investigation may be deemed as overly restrictive if it exceeds the duration of the investigation. In addition, various states have laws that limit the ability of employers to require their employees to sign non-compete agreements , which are generally used to prevent the use of information or know-how by former employees in a way that may unfairly benefit a competitor.

What are the limits of confidential information?

Confidentiality and non-disclosure agreements may include a unilateral covenant governing one party’s access to and use of confidential information, or they may contain mutual obligations of the parties to keep each other’s confidential information private. The typical confidentiality obligation imposes a duty to use confidential information only for its intended purpose. The agreement may allow limited disclosure of confidential information to designated agents or advisers if these third parties are made aware of the duty of confidentiality and acknowledge their duty to observe it. The duty of confidentiality generally requires the non-disclosing party to keep the information secure, exercising the same level of care as that used for its own confidential information. A confidentiality or non-disclosure agreement may prohibit confidential information from being copied and may require confidential material to be returned or destroyed when no longer needed or the agreement is terminated.

A standstill provision prevents the party receiving confidential information of a company from engaging in a hostile acquisition transaction or taking steps towards a hostile acquisition transaction for a period (often one to three years) or, if applicable, for so long as the recipient party holds at least a certain percentage of that company’s shares (typically 5%).

As an example, standstill provisions are common in private investments in public equity (PIPE) transactions when PIPE investors receive material confidential information, or in acquisition transactions when acquirers receive confidential information, in each case prior to the parties entering into definitive transaction documents. The recipient party may argue that a standstill provision isn’t necessary due to the restrictions placed on its use of confidential information. However, the party providing confidential information may argue that it is easier to prove that a standstill provision has been breached than it is to prove that its confidential information was wrongfully used in formulating the terms of a hostile transaction.

Equitable relief

Confidentiality and non-disclosure agreements frequently provide that money damages alone are an inadequate remedy for breach of the agreement, so equitable relief (including injunctions) is deemed the more appropriate enforcement mechanism.

How do you write a confidentiality agreement?

Confidentiality agreement template.

A reciprocal, or “mutual,” non-disclosure and confidentiality agreement (also commonly titled simply a “non-disclosure agreement” or a “confidentiality agreement”) provides protection to individuals and companies from the misappropriation or unauthorized disclosure of information revealed in confidence or for a limited purpose. It is used in situations where both parties to an agreement contemplate disclosing company-private information in connection with a commercial opportunity, collaboration, or proposed transaction. Download the full confidentiality agreement sample here.

WHEREAS , the Parties desire to explore further potential opportunities or transactions involving [Describe Opportunity or Transaction Generally] (the “ Purpose ”);

WHEREAS , in connection with such [Purpose] [proposed commercial relationship], each of the Parties wishes to receive a disclosure of valuable proprietary or confidential information of the other, and is willing to ensure that such information will be treated as confidential and used only as permitted by the terms of this Agreement.

NOW THEREFORE , in consideration of the mutual covenants, promises, representations, and warranties contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. Definitions

For purposes of this Agreement, the following terms shall have the meanings set forth below:

1.1 “ Affiliate ” means with respect to any entity, any other entity that controls, is controlled by or is under common control with such first entity.

1.2 “ Confidential Information” means information furnished by the disclosing party, whether orally, in writing, electronically, in other tangible form or format, or through or by observation, and identified as confidential or proprietary or otherwise disclosed in a manner such that a reasonable person would understand its confidential nature.

(a) Confidential Information includes, without limitation,

(i) information that is related to products, product plans, services, service plans, market studies, reports, documentation, drawings, computer programs, software code (object or source codes), inventions (whether patentable or not), concepts, designs, flow charts, diagrams, product specifications, formulas, data, schematics, customer and supplier lists, price lists, designs, creations, models, business materials, work-in-progress, methods of manufacture, technical information, know-how, improvements, and Trade Secrets (as defined in Section 1.4 below);

(ii) all information relating to the disclosing party or the business, business plans, markets, condition (financial or other), operations, assets, liabilities, results of operations, forecasts, strategies, cash flows or prospects of the disclosing party (whether prepared by the disclosing party, its advisors or otherwise), historical or projected financial statements, budgets, sales, capital spending budgets, plans, or identities of key personnel; and

(iii) any information about or concerning any third party (which information was provided to the disclosing party subject to an applicable confidentiality obligation to such third party) in each case disclosed or furnished by or on behalf of the disclosing party before, on or after the date hereof, whether or not marked or designated as confidential or proprietary.

(b) Notwithstanding the foregoing, information shall not be considered Confidential Information for purposes of this Agreement, which can conclusively be demonstrated by independent written files or records if:

(i)  the receiving party or its Affiliates already possess the information without an obligation of confidentiality at the time of disclosure;

(ii)  the information is or becomes generally available to the public other than as a result of an unauthorized disclosure of such information or a violation of this Agreement by the receiving party or its Affiliates;

(iii)  the information has been or is made available to the receiving party or its Affiliates by a third party that, to the receiving party’s or its Affiliates’ knowledge, is not under an obligation of confidentiality to the disclosing party or its Affiliates; or

(iv)  the information is independently developed by the receiving party or its Affiliates without violating any obligations in this Agreement.

1.3 “ Records ” or “ records ” means and includes writings, spreadsheets, presentations, web pages, emails, voicemails, drawings, graphs, charts, photographs, sound recordings, optical or magnetic disks, and data compilations in whatever form recorded or stored from, which information can be obtained and/or translated, if necessary, into reasonably usable form, and any reproductions thereof.

1.4 “ Trade Secret(s) ” means any information (a) that is actually secret; (b) where the disclosing party has taken reasonable measures to maintain its secrecy; and (c) where independent economic value is derived from that secrecy.

2. Mutual obligations of confidentiality and non-disclosure

For a period of [Number (#)] years following the disclosure of Confidential Information, and for an indefinite period of time following the disclosure of Trade Secrets, the receiving party shall:

2.1 receive and hold the Confidential Information in strict confidence;

2.2 take such steps as may be reasonably necessary to prevent the disclosure of Confidential Information using not less than the same degree of care that the receiving party uses to prevent the unauthorized use, dissemination, or publication of its own most valuable confidential and proprietary information (but with at least the same degree of care used by a reasonably prudent business person);

2.3 not disclose such Confidential Information to any third party for any purpose whatsoever without (a) the prior written approval from the disclosing party; and (b) the agreement on the part of such third party to be bound by the restrictions on use and non-disclosure set forth in this Agreement; provided, however, that the receiving party may disclose Confidential Information to the receiving party’s Representatives (as defined herein), who are bound by the confidentiality and use provisions of this Agreement;

2.4 not permit access to the Confidential Information to anyone other than employees, officers, directors, advisors, and consultants of the Parties or their Affiliates (collectively, the “ Representatives ”) and then, only to the extent those individuals (a) need to know the Confidential Information to carry out the Purpose; (b) are informed by the receiving party of the confidential nature of the Confidential Information; and (c) are bound by the terms of their employment or engagement to treat the Confidential Information in a manner consistent with the terms of this Agreement;

2.5 not disclose, or permit any of its Representatives to disclose, without the prior written consent of the disclosing party, to any other person the fact that the Confidential Information has been made available, that discussions or evaluations are taking place concerning the Purpose, or any of the terms, conditions, or other facts with respect thereto;

2.6 acknowledge that the Confidential Information is, and will at all times remain, the exclusive property of the disclosing party; and

2.7 use the disclosing party’s Confidential Information only for the strictly limited Purpose and for no other purpose whatsoever. Notwithstanding the foregoing provisions of this Section 2, the receiving party is specifically prohibited from (a) using, directly or indirectly, any of the Confidential Information furnished to it hereunder for its own benefit or for the benefit of others, except for the Purpose as set forth above; or (b) creating any improvements, modifications, or derivative or related works or materials which incorporate or utilize, directly or indirectly, any Confidential Information (such improvements, modifications, derivative or related works, if any, receiving party acknowledges and agrees shall be deemed Confidential Information of the disclosing party).

3. Compelled disclosure

Notwithstanding the foregoing, if the receiving party is requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand, or other process) to disclose any Confidential Information, it will provide the disclosing party with prompt notice of such request so that the disclosing party may seek an appropriate protective order and/or waive compliance herewith. If, in the absence of such protective order or waiver, the receiving party is compelled to disclose Confidential Information to any tribunal or other authority, the receiving party shall (a) disclose only that part of the Confidential Information that, in the opinion of its legal counsel, is required to be disclosed; (b) deliver to the disclosing party written notice of the Confidential Information to be disclosed as far in advance of its disclosure as is practicable; and (c) use commercially reasonable efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such portion of the Confidential Information required to be disclosed.

4. Return of materials

Upon request of the disclosing party, in the disclosing party’s sole discretion, the receiving party shall either return to the disclosing party or destroy all documents and other writings supplied by the disclosing party, together with all copies of any such documents or other writings, and shall certify to the return or destruction of all tangible Confidential Information and references thereto and the destruction of any references thereto on magnetic or other intangible media. In addition, that portion of the Confidential Information which consists of analyses, compilations, data, studies, or other documents prepared by the receiving party or its Representatives will be immediately destroyed at the written request of the disclosing party and such destruction will be confirmed to the disclosing party in writing. The return to the disclosing party or destruction of such Confidential Information shall not relieve the receiving party of any obligation of confidentiality contained herein.

5. Injunctive relief

The Parties acknowledge that money damages will be both incalculable and an insufficient remedy for a breach of this Agreement by either Party. Accordingly, the Parties agree that, in the event of any breach of this Agreement, the non-breaching Party shall be entitled to equitable relief, including, without limitation, injunctive relief or specific performance. If either Party elects to seek injunctive relief for breach of this Agreement, such election shall not preclude the non-breaching Party from pursuing other legal remedies at law. Notwithstanding Section 10.5, below, regarding choice of forum, the Parties agree that equitable relief may be sought in any court of competent jurisdiction for the sake of expediency.

6. No representation or warranty

The Parties understand, acknowledge, and agree that neither the disclosing party nor its Representatives is making any representation or warranty as to the accuracy, reliability, or completeness of any Confidential Information and that neither the disclosing party nor its Representatives shall have any responsibility or liability (including, without limitation, in contract, tort, or otherwise) to the receiving party or any of its Representatives arising from use or reliance on the Confidential Information. THE DISCLOSING PARTY PROVIDES THE INFORMATION SOLELY ON AN “AS IS” BASIS.

The term of this Agreement shall be [Number (#)] years from the Effective Date unless extended or terminated earlier in accordance with the provisions of this Agreement. Either Party may terminate this Agreement by providing thirty (30) days written notice to the other. Neither the termination nor expiration of this Agreement shall affect the obligations of the Parties set forth in Section 2, Mutual Obligations of Confidentiality and Non-Disclosure.

Except as may be otherwise provided herein, all notices, requests, waivers, and other communications made pursuant to this Agreement must be in writing and are conclusively deemed to have been duly given (a) when hand delivered to the other Party; (b) when received if sent by facsimile or electronic mail to the number or the email address set forth below, provided that the sending Party receives a confirmation of delivery; (c) three (3) business days after deposit in the U.S. mail, with first class or certified mail, receipt requested, postage prepaid, and addressed to the other Party; or (d) forty-eight (48) hours after deposit with an internationally recognized overnight delivery service, postage prepaid, addressed to the other Party as set forth below with next business-day delivery guaranteed, provided that the sending Party receives a confirmation of delivery from the delivery service provider. A Party may change or supplement the addresses, facsimile numbers, and email addresses provided in its signature block below, or designate additional addresses, facsimile numbers, or email addresses, for purposes of this Section by giving the other Party written notice of the new address, facsimile numbers, or email addresses in the manner set forth above.

If to Party A: [Address and electronic coordinates]

If to Party B: [Address and electronic coordinates]

9. No binding agreement for transaction

Unless and until a definitive agreement is entered into, neither Party will be under any legal obligation of any kind whatsoever to proceed with respect to a potential business transaction or venture in whole or in part or to continue discussions relating thereto by virtue of (a) this Agreement; or (b) any written or oral expression with respect to a potential transaction by either Party or any of their respective Representatives. The Parties further understand and agree that they shall not have any claims whatsoever against the other Party or the other Party’s Representatives arising out of or relating to the possible business relationship or any potential or actual transaction unless otherwise provided in a definitive agreement.

10. Miscellaneous

10.1 This Agreement shall be binding upon the successors and assigns of the Parties hereto.

10.2 No patent, copyright, trademark, or other proprietary right is licensed, granted, or otherwise transferred directly, or by implication, estoppel, or otherwise, by this Agreement or any disclosure hereunder, except for the right to use such information in accordance with this Agreement.

10.3 It is understood and agreed that no failure or delay by either Party in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power, or privilege thereunder.

10.4 The laws of the [State/Commonwealth] of [State], without giving effect to its conflicts of law principles, govern all matters arising out of or relating to this Agreement, without limitation, its validity, interpretation, construction, performance, and enforcement.

10.5 Each Party hereto unconditionally consents to the personal jurisdiction of the state or federal courts located within the [Jurisdiction] for any actions, suits, or proceedings arising out of or relating to this Agreement and, subject to and except as provided in Section 5 hereof regarding equitable actions, each Party agrees not to commence any action, suit, or proceeding relating thereto except in such courts. Each Party unconditionally waives and agrees not to plead in any such court that any such action, suit, or proceeding brought in any such court has been brought in an inconvenient forum.

10.6 The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of the other provisions of this Agreement, which shall remain in full force and effect. If any of the covenants or provisions of this Agreement shall be deemed to be unenforceable by reason of its extent, duration, scope, or otherwise, then the Parties contemplate that the court making such determination shall reduce such extent, duration, scope, or other provision, and shall enforce them in their reduced form for all purposes contemplated by this Agreement.

10.7 This Agreement embodies the entire understanding and agreement between the Parties with respect to the subject matter hereof and supersedes any prior written or oral understandings and agreements relating thereto.

10.8 This Agreement may not be amended or modified except in writing executed by both Parties. This Agreement and any such written amendment or modification may be executed in counterparts.

10.9 Neither Party shall assign this Agreement or any rights provided under this Agreement without the prior written consent of the other Party. Any such attempted assignment shall be null and void. Neither Party shall delegate or subcontract any obligation or performance under this Agreement without the prior written consent of the other Party, and any such attempted delegation or subcontract shall be void.

10.10 No agency or partnership relationship is created between the Parties by this Agreement.

IN WITNESS WHEREOF , each the Parties hereto has caused this Agreement to be executed by a duly authorized representative as of the Effective Date.

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Legal Templates

Home Assignment Agreement CIIAA

Confidential Information and Invention Assignment Agreement Template

Use our confidential information and invention assignment agreement to protect the work employees produce on company time.

Updated February 5, 2024 Written by Josh Sainsbury | Reviewed by Brooke Davis

A confidential information and invention assignment agreement (CIIAA)  protects intellectual property like trademarks and patents, work products, business ideas, and internal processes.

It prevents the loss of this information by unscrupulous competitors or those seeking to claim the idea as their own. A business has the right to protect its intellectual property when it contributes its funds and resources to ideas or inventions, and a confidential information and invention assignment agreement can provide this protection.

What Is a Confidential Information and Invention Assignment Agreement?

When to use a confidential information and assignment agreement, limits on invention assignment agreements, how to write a ciia agreement, is a confidential information and invention assignment agreement enforceable, confidential information and invention assignment sample.

A confidential information and invention assignment agreement is a legal contract that gives an employer certain rights to inventions. These inventions refer to all the work that employees create during their employment with company resources, on company time, and for the company.

This agreement requires the employee to disclose inventions to the employer and “assign” ownership rights of the invention. The document will also state that the employee must assist the employer in obtaining a patent on the invention, when applicable.

You may want to use a confidential information and invention assignment agreement if:

• You own or manage a business and want to protect intellectual property.
• You work in human resources and need to update documents covering intellectual property.
• You want to protect against the disclosure of confidential information related to an invention.
• You want to ensure exclusive ownership of an invention.

There are limitations to what a confidential information and invention assignment can do. Some of these restrictions are placed by state law. For example, California ( California Labor Code § 2870 ) and Washington ( Washington Revised Code § 49.44.140 ) will not enforce an agreement when the invention was created entirely on the employee’s time and if they didn’t use any employer resources to invent it.

This limitation can deal with complicated nuances, but it is essential to understand that this agreement’s provisions must comply with state law.

The burden of proof usually rests with the employee to show they didn’t use company resources or knowledge in making their invention. Showing this proof may be challenging for the employee, so the agreement will likely remain enforceable despite any challenges by the employee.

Follow these steps to write an effective CIIA agreement:

Step 1 – Describe the Invention Assignment

Most contracts will assign intellectual property rights from the employee to the employer. These clauses will precisely define the invention and intellectual property that the company will own.

It should also specify all rights the employee is ceding to the employer . If the employee is to retain a partial interest as part of your agreement, this clarification will also be included here.

Step 2 – Explain the Confidentiality Requirements

This section will explain that any information related to the invention is confidential. It will also warn of the penalties for a breach of confidentiality.

The employee is not permitted to disclose the information except as permitted by the employer or the contract.

Outlining the effect of a breach helps to create an enforceable contract and warn the employee that you are serious. Some CIIA’s may also contain non-disclosure clauses to ensure confidentiality.

Step 3 – Highlight Any Exceptions

Some states require that a confidentiality and invention agreement have exceptions. This usually includes exceptions for employees who did not use company time, intellectual property, or resources in creating their invention.

Failure to include this exception is often damaging to the contract if a state requires exceptions.

Step 4 – Include Non-Compete Clauses

Many CIIAs include non-compete clauses as well. These clauses state that the employee isn’t allowed to enter business in the same industry for a certain period after leaving the company.

This clause prevents an employee from taking inventions they’ve made during their employment to another competitor or using them in a business of their own.

Non-competes have particular legal requirements in many jurisdictions to be enforceable. In certain professions, a non-compete may be against public policy and unenforceable. Make sure that an attorney analyzes your agreement to ensure it’s enforceable.

Step 5 – State the Duration of Agreement

The contract must explain when the employee’s inventions will become the company’s property. Many clauses explain how this will happen automatically at a particular time or the commencement of a specific event.

This is usually when the company employs the employee and can extend the employment for a certain period.

Step 6 – Provide the Governing Law

Provide the name of the state that will govern the agreement . If an issue arises in the future, you can refer to that particular state’s laws for guidance on how to proceed.

A properly drafted CIIA agreement is legally enforceable. It’s a contract between the employee and the employer and must comply with your state’s general contract requirements. It should typically include:

• Clear terms of the agreement
• Mutual acceptance of the terms
• An offer and an acceptance
• Consideration for the contract

CIIA agreements, in particular, must meet your state’s specific legal requirements. Different jurisdictions may require certain elements to enforce the confidentiality & invention assignment agreement.

This sample CIIA template can help you get started on drafting your own. Download it below as a PDF or Word File:

Related Documents

• Copyright Infringement : Use this document to warn violators who are copying, stealing, or imitating your original work that you will take legal action unless they stop.
• Trademark Infringement Cease and Desist Letter : Use this document to let offending parties know they are violating your trademark.
• Employee Non-Disclosure Agreement : An employee NDA is used to make sure employees don't use or make public information learned while working through the company.
• Interview Non-Disclosure Agreement : Protects your company from any disclosure of information made to a candidate who applies for a position.
• Mutual Non-Disclosure Agreement : An agreement written to protect both parties entering into the agreement.
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Home » Blog » Confidentiality and IP Assignment Agreements

Confidentiality and IP Assignment Agreements

• April 23, 2024
• Brand , Intellectual Property , Trademarks

In today’s competitive business landscape, innovation is the lifeblood of success. Companies invest significant resources in developing new ideas and intellectual property (IP). To safeguard these valuable assets, confidentiality and IP assignment agreements are crucial tools.

Understanding Confidentiality Agreements (CAs)

A confidentiality agreement (CA), also known as a non-disclosure agreement (NDA), is a legal contract between two or more parties. It outlines what information is considered confidential and restricts the receiving party from disclosing it to unauthorized third parties.

Why Use a Confidentiality Agreement?

There are several compelling reasons why businesses rely on confidentiality agreements:

• Protecting Trade Secrets:  CAs shield sensitive information that gives your company a competitive edge, such as product formulas, marketing strategies, or customer lists.
• Facilitating Open Communication:  CAs create a safe space for sharing confidential information during negotiations, potential partnerships, or discussions with potential investors.
• Safeguarding Employee Information:  CAs can be used to protect sensitive employee information like salary data or personnel files.

Key Elements of a Strong Confidentiality Agreement

A well-drafted confidentiality agreement should clearly define the following:

• Confidential Information:  This section clearly specifies what information is considered confidential and subject to the agreement. This might include details about inventions, marketing plans, or customer data.
• Term:  The duration of the agreement outlines how long the confidentiality obligations remain in effect. This timeframe can vary depending on the sensitivity of the information.
• Permitted Use:  The agreement may outline specific situations where disclosure of confidential information is allowed, such as with legal requirements or with prior written consent from the disclosing party.
• Remedies:  This section describes the legal consequences if a party breaches the agreement and improperly discloses confidential information. This could involve financial penalties or even legal action.

Understanding IP Assignment Agreements

An intellectual property (IP) assignment agreement is a legal contract that transfers ownership rights of specific intellectual property from one party (assignor) to another party (assignee). This can include patents, copyrights, trademarks, or trade secrets.

Why Use an IP Assignment Agreement?

There are several scenarios where IP assignment agreements become essential:

• Employee Inventions:  When employees create inventions during their employment, assignment agreements ensure these inventions become the property of the company. This ensures the company can benefit from the employee’s work.
• Acquisitions and Mergers:  In mergers and acquisitions, IP assignment agreements transfer ownership of the acquired company’s intellectual property to the acquiring company. This ensures the acquiring company has full rights to utilize the acquired IP.
• Commissioned Work:  If a company hires an independent contractor to develop intellectual property (like writing software or designing a logo), an assignment agreement ensures ownership rights are transferred to the company upon completion of the work. This clarifies who owns the rights to the finished product.

Key Elements of an IP Assignment Agreement

A well-drafted IP assignment agreement should clearly define the following:

• Specific IP Assigned:  This section clearly identifies the specific intellectual property being transferred, such as a patent number, copyright registration details, or a detailed description of a trade secret. The more specific the description, the better.
• Scope of Assignment:  The agreement specifies whether the assignment is exclusive (complete ownership transfer) or non-exclusive (assignor retains some rights). This clarifies the extent of ownership transfer.
• Warranties:  The assignor may offer warranties regarding the ownership and validity of the assigned intellectual property. This provides assurances to the assignee.
• Representations:  Both parties may make representations about their authority to enter into the agreement and the accuracy of information provided. This helps ensure both parties are acting in good faith.

Maximizing Protection: Considerations for Both Agreements

Here are some additional factors to consider for both confidentiality and IP assignment agreements:

• Specificity is Key:  The more specific the agreement is regarding confidential information or assigned IP, the better it protects your interests. Leaving things vague can lead to future disputes.
• Carve-Outs:  Certain information, like publicly known knowledge, may be excluded from confidentiality restrictions. Specifying these carve-outs helps avoid confusion.
• Dispute Resolution:  The agreement should outline the process for resolving any disagreements that may arise. This can help avoid costly litigation.

Seeking Legal Help for Strong Agreements

Confidentiality and IP assignment agreements are legally binding documents. Consulting with an experienced lawyer specializing in intellectual property law is crucial to ensure these agreements are properly drafted and effectively protect your company’s valuable assets. An attorney can guide you through the legal complexities and ensure the agreements are tailored to your specific needs.

How Carbon Law Group Can Assist You

Carbon Law Group can help you with all aspects of confidentiality and IP assignment agreements:

• Drafting Agreements:  Our lawyers can draft clear and comprehensive confidentiality and IP assignment agreements tailored to your specific needs. We understand the importance of clear language and will ensure the agreements are easy to understand for all parties involved.
• Negotiating Terms:  We can help you negotiate favorable terms in the agreements to maximize your protection. Our experienced attorneys will represent your interests and ensure the agreements are fair and balanced.
• Reviewing Existing Agreements:  If you have existing confidentiality or IP assignment agreements, Carbon Law Group can review them and ensure they still adequately protect your interests. We can identify any potential weaknesses and recommend revisions if necessary.

By working with experienced legal counsel, you can ensure your confidentiality and IP assignment agreements are effective tools for safeguarding your company’s valuable intellectual property.

Confidentiality and IP assignment agreements are essential tools for protecting your company’s innovation and intellectual property. By understanding the purpose of each agreement, the key elements they should contain, and the importance of seeking legal help, you can ensure these agreements are working for you.

Additional Resources

For further information on intellectual property protection, consider these resources:

• United States Patent and Trademark Office (USPTO):  https://www.uspto.gov/
• World Intellectual Property Organization (WIPO):  https://www.wipo.int/

If you have specific questions about confidentiality or IP assignment agreements, or require assistance with any other legal aspects of your business, don’t hesitate to contact Carbon Law Group. Our team of experienced attorneys is here to help you navigate the legal complexities of protecting your intellectual property and ensuring your business thrives.

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What Is a Confidentiality and Invention Assignment Agreement?

A Confidentiality and Invention Assignment Agreement is a legally binding contract that establishes the terms and conditions for disclosing confidential information and assigning intellectual property rights, protecting valuable trade secrets and inventions from unauthorized use, disclosure, or misappropriation. This agreement outlines the parties' obligations and responsibilities, preventing misunderstandings and disputes, and enables businesses to share confidential information while maintaining confidentiality. By understanding the intricacies of this agreement, businesses can safeguard the protection of their intellectual property and foster trust in their relationships – a vital step in driving innovation and growth.

Table of Contents

Purpose of the Agreement

The purpose of this Confidentiality and Invention Assignment Agreement is to establish the terms and conditions under which confidential information will be disclosed and inventions will be assigned. This agreement provides contractual clarity, guaranteeing that all parties involved are aware of their obligations and responsibilities. By outlining the specific terms of confidentiality and invention assignment, businesses can protect their valuable intellectual property and trade secrets.

In today's competitive business landscape, safeguarding sensitive information is essential for maintaining a competitive edge. This agreement serves as a indispensable tool for business protection, enabling companies to share confidential information with employees, contractors, or partners while maintaining confidentiality. By assigning inventions and intellectual property rights, businesses can retain ownership and control over their innovations. This agreement provides a thorough framework for managing confidential information and intellectual property, thereby mitigating the risk of unauthorized disclosure or misappropriation.

Confidential Information Protection

To safeguard the confidentiality of sensitive information, this agreement outlines specific protocols for the protection of confidential information, including restrictions on disclosure, use, and reproduction. This is particularly vital for protecting trade secrets, which are valuable assets that can be compromised by information leaks. The agreement guarantees that all confidential information is handled with utmost care, and any unauthorized disclosure or use is strictly prohibited.

Invention Assignment Provisions

Invention assignment provisions are a critical component of a confidentiality and invention assignment agreement, as they dictate the terms under which intellectual property rights are transferred from the inventor to the assignee. The scope of assignment is a key consideration, as it defines the breadth of inventions and intellectual property that are subject to ownership transfer. The ownership rights provision, in particular, is crucial in establishing clear title to the assigned inventions and related intellectual property.

Ownership Rights

Upon creation, all intellectual property rights to any invention or discovery, whether or not patentable, shall vest exclusively in and be owned by the Company. This provision guarantees that the Company retains full control over all intellectual property developed by its employees, contractors, or agents. This includes, but is not limited to, patents, trademarks, copyrights, and trade secrets.

The ownership rights provision is a critical component of the invention assignment agreement, as it establishes the legal boundaries of intellectual property ownership. By vesting ownership exclusively in the Company, the agreement safeguards that the Company can fully exploit and protect its intellectual property rights.

Key aspects of ownership rights include:

• Exclusive ownership : The Company retains sole ownership of all intellectual property rights.
• Global applicability : The provision applies to all intellectual property developed globally.
• Comprehensive scope : The provision covers all types of intellectual property, including patents, trademarks, copyrights, and trade secrets.

Assignment Scope

The assignment scope provisions of this agreement delineate the specific circumstances under which the Company acquires ownership of intellectual property rights to inventions or discoveries made by its employees, contractors, or agents. These provisions establish clear boundaries, preventing scope creep and safeguarding that the Company's intellectual property rights are protected.

The assignment scope provisions define the parameters of the Company's ownership rights, safeguarding that the Company's interests are protected while also respecting the intellectual property rights of its employees, contractors, and agents. By establishing clear assignment boundaries, the Company can prevent scope creep and safeguard that its intellectual property rights are protected.

Types of Protected Information

Company confidential information comprises trade secrets, business strategies, and technical know-how that provide a competitive advantage. This type of information is vital to a company's success and is often protected by confidentiality agreements.

The following types of information are commonly protected:

• Trade Secrets : Confidential manufacturing processes, formulas, or recipes that give a company a competitive edge. Examples include Coca-Cola's formula and Google's search algorithm.
• Intellectual Property : Patents, copyrights, and trademarks that are owned by the company, including software code, technical documentation, and creative works.
• Business Strategies : Confidential business plans, marketing strategies, and financial information that could be used by competitors to gain an unfair advantage.

Protecting this type of information is vital to maintaining a company's competitive advantage and preventing intellectual property theft. By understanding what types of information are protected, companies can take the necessary steps to safeguard their confidential information remains confidential.

Employee Obligations and Restrictions

Employees are bound by confidentiality obligations, which restrict their ability to disclose or use confidential information for personal gain or to the detriment of the company. This means that employees are prohibited from sharing trade secrets, proprietary information, or other confidential data with external parties or using it for personal benefit. In addition to confidentiality obligations, employees may also be subject to non-compete and non-solicitation clauses, which restrict their ability to engage in competitive activities or solicit clients or colleagues after leaving the company.

These restrictions can have a significant impact on an employee's career impact, work-life balance, and performance metrics. For instance, an employee may need to ponder exit strategies that do not involve competing with their former employer or soliciting former colleagues. Moreover, the restrictions may influence an employee's ability to shift to a new position or industry, which can affect their overall career trajectory. By understanding the scope of these obligations and restrictions, employees can better navigate their employment agreements and make informed decisions about their career paths.

Consequences of Non-Compliance

In the event of non-compliance with the confidentiality and invention assignment agreement, employees may face severe consequences. Failure to uphold their obligations can lead to legal ramifications, including lawsuits and court orders, which can lead to significant financial penalties. In addition, non-compliance can also lead to disciplinary actions, up to and including termination of employment, highlighting the importance of adhering to the agreement's terms.

Legal Ramifications

Failure to comply with the terms of the Confidentiality and Invention Assignment Agreement can lead to severe legal consequences, including but not limited to, damages, injunctive relief, and other legal remedies. Non-compliance can lead to costly legal battles, damaging an individual's or organization's reputation and financial stability.

The legal ramifications of non-compliance can be far-reaching, with court precedents setting a strong foundation for legal action against those who breach the terms of the agreement. In such cases, attorney fees can add up quickly, further exacerbating the financial burden of non-compliance.

Some key legal consequences of non-compliance include:

• Damages : Monetary compensation for losses incurred due to breach of contract.
• Injunctive Relief : Court-ordered restrictions to prevent further breaches of the agreement.
• Attorney Fees : The cost of legal representation, which can be substantial in complex cases.

It is crucial to understand the legal implications of non-compliance and take measures to guarantee adherence to the terms of the Confidentiality and Invention Assignment Agreement.

Financial Penalties

Non-compliance with the terms of the Confidentiality and Invention Assignment Agreement can lead to substantial financial penalties, which can have a debilitating impact on an individual's or organization's fiscal stability. In cases of breach, the agreement may stipulate breach fines, which can be substantial and crippling to one's financial health. These fines serve as a deterrent, encouraging parties to adhere to the agreement's terms and protect confidential information.

Penalty clauses are often incorporated into the agreement to outline the specific financial consequences of non-compliance. These clauses may include liquidated damages, which provide a predetermined amount of compensation in the event of a breach. The penalty clauses may also specify the method of calculation for damages, ensuring that the offending party is held accountable for their actions.

In addition to breach fines, non-compliance may also lead to other financial repercussions, such as legal fees, damages, and lost business opportunities. Therefore, it is essential for parties to understand the financial implications of non-compliance and to take necessary measures to ensure adherence to the agreement's terms. By doing so, individuals and organizations can mitigate the risk of financial penalties and protect their financial well-being.

Importance in Business Relationships

A well-drafted Confidentiality and Invention Assignment Agreement is crucial to fostering trust and protecting intellectual property in business relationships, as it clearly outlines the parties' obligations and responsibilities. This agreement plays a vital role in establishing a foundation of trust and cooperation between partners, investors, and employees. By outlining the terms of confidentiality and intellectual property ownership, parties can confidently share sensitive information, collaborate on projects, and drive innovation.

The importance of a Confidentiality and Invention Assignment Agreement in business relationships can be summarized as follows:

• Establishes Business Trust : A clear agreement helps build trust among partners, ensuring that sensitive information is protected and intellectual property is assigned correctly.
• Clarifies Partnership Dynamics : The agreement outlines the roles and responsibilities of each party, preventing misunderstandings and disputes.
• Protects Intellectual Property : By assigning ownership of intellectual property, the agreement safeguards innovative ideas and creations, ensuring that they are used for the intended purpose.

Frequently Asked Questions

What happens if an employee refuses to sign the agreement?.

If an employee refuses to sign a confidentiality and invention assignment agreement, employment implications may arise, including potential termination or limits on job responsibilities, while legal consequences could include disputes over intellectual property ownership and potential litigation.

Can Independent Contractors Be Required to Sign This Agreement?

Independent contractors, as freelance workers, can be required to sign a Confidentiality and Invention Assignment Agreement, thereby acknowledging their freelance obligations to protect intellectual property and maintain confidentiality.

Are Confidentiality Agreements Legally Enforceable in All Jurisdictions?

While confidentiality agreements are generally legally enforceable, jurisdictional variations in legal frameworks can impact their validity, with some jurisdictions imposing stricter requirements or limitations on their enforceability.

How Long Does Confidentiality Protection Typically Last?

Typically, confidentiality protection lasts for a specified period, usually 2-5 years, but can extend indefinitely under certain circumstances, adhering to industry standards and contractual time frames, which vary depending on jurisdiction and negotiation.

Can an Employer Waive the Confidentiality Requirement?

An employer may waive the confidentiality requirement through explicit waiver clauses in the agreement, potentially limiting employer liability, but careful drafting is vital to avoid unintended consequences and maintain contractual integrity.

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Intellectual Property and Confidentiality Agreements

What is intellectual property.

Intellectual property refers to intangible creations of the human intellect, typically divided into several categories:

Patents: These protect new and useful inventions or discoveries, granting the inventor exclusive rights to their creation for a limited time (usually 20 years).

Trademarks: Trademarks safeguard brands, logos, and symbols used to identify goods or services, ensuring that consumers can distinguish between different offerings in the marketplace.

Copyrights: Copyrights protect original works of authorship, such as books, music, art, and software, giving creators the right to control how their work is used and distributed.

Trade Secrets: Trade secrets encompass confidential information that provides a business with a competitive advantage. This can include manufacturing processes, customer lists, and formulas.

These intellectual property assets are vital to businesses, as they contribute significantly to their competitive edge and market positioning. However, they are also inherently susceptible to unauthorized use or disclosure.

What is a Confidentiality Agreement?

A confidentiality agreement, often referred to as a non-disclosure agreement (NDA), is a legal contract between two or more parties that outlines the terms and conditions for sharing and protecting certain types of confidential or proprietary information. These agreements serve as a crucial tool to safeguard sensitive information and intellectual property.

Confidentiality agreements are versatile and can be used in various contexts, such as employment agreements, business partnerships, mergers and acquisitions, and collaborations with third parties. These agreements are legally binding and specify the obligations and responsibilities of the parties involved to maintain the confidentiality of the subject matter covered by the agreement.

Key Elements of a Confidentiality Agreement

• Parties: The agreement identifies the parties involved, including the disclosing party (the one sharing the information) and the receiving party (the one receiving and agreeing to protect the information).
• Definition of Confidential Information: The agreement explicitly defines what constitutes confidential or proprietary information. This definition can vary depending on the specific context but often includes information like trade secrets, business plans, financial data, and technical know-how.
• Obligations of the Receiving Party: The NDA outlines the duties and responsibilities of the receiving party, emphasizing their obligation to keep the disclosed information confidential and not to use it for any unauthorized purposes.
• Duration: Confidentiality agreements have a specified duration during which the obligation of confidentiality remains in effect. This can be a fixed term or extended indefinitely.
• Consequences of Breach: The agreement stipulates the consequences of breaching the confidentiality obligations, which can include financial penalties, injunctions, or legal action.
• Exclusions: Certain information may be excluded from the confidentiality agreement, such as information already in the public domain or information obtained from third parties without any obligation of confidentiality.

Now that we have a clear understanding of intellectual property and confidentiality agreements, let’s explore the intersection of these two concepts.

What is an Intellectual Property Agreement?

An intellectual property agreement is a legal contract that governs the ownership, use, and protection of intellectual property assets. These agreements can cover a wide range of issues related to IP, including the transfer of ownership, licensing, infringement disputes, and the enforcement of IP rights.

Intellectual property agreements can take various forms, depending on the specific needs and objectives of the parties involved. Some common types of intellectual property agreements include:

1. Licensing Agreements:

These agreements grant one party (the licensee) the right to use, manufacture, or sell a specific intellectual property owned by another party (the licensor) in exchange for royalties or other compensation.

2. Assignment Agreements:

An assignment agreement transfers ownership of intellectual property from one party to another. This is common when an inventor or creator wants to sell their IP rights to a third party.

3. Infringement Settlement Agreements:

When intellectual property rights are allegedly infringed upon, parties may enter into settlement agreements to resolve the dispute, often involving financial compensation or licensing agreements.

4. Confidentiality Agreements within IP Agreements:

Intellectual property agreements frequently include confidentiality provisions to protect the confidentiality of sensitive information related to the IP.

While confidentiality agreements can be a component of intellectual property agreements, they serve distinct purposes. Let’s delve into the relationship between intellectual property and confidentiality agreements, specifically focusing on Intellectual Property NDAs.

Is Intellectual Property Considered Confidential?

Intellectual property can encompass a wide range of creations and innovations, and not all of it is necessarily considered confidential. Whether intellectual property is confidential or not depends on the nature of the information and how it is treated by its owners and creators.

Publicly Disclosed IP: Some intellectual property, such as patents, trademarks, and copyrights, is publicly disclosed by its nature. When inventors file patent applications, for instance, they provide detailed information about their inventions, which becomes public record. However, this disclosure doesn’t mean the information is no longer confidential; it simply means that the public now has access to it.

Trade Secrets: On the other hand, trade secrets, a category of intellectual property, rely on their confidential nature for their value. Trade secrets include information like manufacturing processes, customer lists, and formulas that are not publicly disclosed and are maintained as closely guarded secrets within a company.

IP Protection: While not all intellectual property is inherently confidential, intellectual property protection measures, such as patents, trademarks, and copyrights, can grant legal rights to their owners and provide a framework for enforcing those rights. This protection is crucial in preventing unauthorized use or disclosure of IP assets.

Confidential Information within IP: In some cases, intellectual property agreements, including NDAs, may contain provisions that designate certain information related to IP as confidential. For example, a company may agree with a third party to share detailed technical specifications of a patented product, and these specifications could be treated as confidential information under the agreement.

To further clarify the relationship between intellectual property and confidentiality agreements, let’s explore the specific concept of an Intellectual Property NDA.

What is an Intellectual Property NDA?

An Intellectual Property NDA, often referred to as an IP confidentiality agreement, is a specialized form of a confidentiality agreement tailored to protect confidential information related to intellectual property. These agreements are commonly used in situations where parties need to discuss, share, or collaborate on sensitive IP matters while ensuring the secrecy and protection of that information.

An Intellectual Property NDA typically includes provisions that:

• Define the scope of the confidential information, specifying which IP assets or details are considered confidential.
• Oblige the receiving party to keep the designated IP information confidential and use it only for authorized purposes.
• Establish the duration of confidentiality, which may extend beyond the termination of the agreement.
• Specify the consequences of breaching the confidentiality obligations, including potential legal remedies.
• Address any exceptions or exclusions, such as information already in the public domain.

These agreements are particularly valuable in situations such as:

• Technology partnerships where companies share proprietary software code or designs.
• Collaborations between inventors and manufacturers discussing patented inventions.
• Licensing negotiations for the use of copyrighted content or patented technology.
• Due diligence processes during mergers and acquisitions to assess the value and risks associated with IP assets.

In essence, an Intellectual Property NDA serves as a protective shield for the sensitive and confidential aspects of intellectual property while enabling necessary collaboration and negotiations.

Do NDAs Cover Intellectual Property?

Non-Disclosure Agreements (NDAs) can and often do cover intellectual property, especially when the subject matter of the agreement involves discussions or disclosures related to IP assets. An NDA serves as a versatile legal tool to protect a wide range of confidential or proprietary information, and this includes intellectual property.

The key to understanding the coverage of NDAs lies in the specific language and provisions within the agreement. When parties enter into an NDA, they have the flexibility to define the scope of the confidential information they intend to protect. This scope can encompass various types of confidential or proprietary information, including but not limited to:

• Trade secrets
• Inventions or ideas
• Patent applications
• Copyrighted works
• Trademarks and branding
• Technical specifications
• Business strategies
• Financial data
• Customer lists

In the context of intellectual property, an NDA can be drafted to specifically address the protection of IP assets.

What is the Difference Between IP and NDA?

Understanding the key differences between intellectual property (IP) and a non-disclosure agreement (NDA) is crucial for effectively protecting and managing sensitive information in various business scenarios.

Intellectual Property (IP):

Nature: Intellectual property refers to intangible creations of the human intellect, encompassing patents, trademarks, copyrights, and trade secrets. IP assets are legally protected and provide their owners with exclusive rights.

• Ownership: IP assets are owned by individuals, companies, or entities that create or legally acquire them. Ownership can be transferred or licensed to others through agreements.
• Protection: IP assets are protected by specific laws and regulations. For instance, patents are protected under patent law, trademarks under trademark law, and so on.
• Duration: The duration of IP protection varies depending on the type of IP. For example, patents typically last 20 years, while copyrights can last the lifetime of the creator plus 70 years.
• Public Disclosure: Some IP, such as patents and copyrights, may require public disclosure during the registration process. However, trade secrets are kept confidential and rely on non-disclosure agreements to maintain their secrecy.

Non-Disclosure Agreement (NDA):

• Nature: An NDA is a legal contract that governs the sharing and protection of confidential or proprietary information. It is not an intellectual property asset but rather a tool to safeguard sensitive data.
• Scope: NDAs can cover a wide range of confidential information, including but not limited to IP. They are not limited to protecting intellectual property assets; they can also safeguard business strategies, financial data, and other sensitive information.
• Ownership: NDAs do not convey ownership of confidential information. Instead, they establish obligations and responsibilities for the parties involved to protect the information from unauthorized disclosure or use.
• Protection: NDAs are governed by contract law and enforceable in court. Breaching an NDA can lead to legal consequences, such as financial penalties or injunctive relief.
• Duration: The duration of an NDA is typically defined in the agreement itself and can vary based on the parties’ preferences. NDAs can be temporary, covering specific negotiations, or indefinite, extending beyond the agreement’s termination.

Relationship Between IP and NDA:

While IP assets have inherent legal protections, NDAs can be used to supplement these protections by safeguarding the confidentiality of sensitive IP-related information.

Intellectual Property NDAs (IP NDAs) are a specific type of NDA designed to protect intellectual property assets or related information, such as trade secrets, pending patent applications, or proprietary technology.

IP NDAs may be used in various IP-related scenarios, including licensing negotiations, technology partnerships, joint ventures, and mergers and acquisitions involving intellectual property.

NDAs can be a valuable tool for protecting the confidential aspects of IP, especially when disclosing sensitive information to potential partners, investors, or collaborators.

In summary, while intellectual property and non-disclosure agreements serve distinct purposes, they often intersect when it comes to safeguarding sensitive information related to IP assets. IP NDAs play a crucial role in protecting intellectual property’s confidential nature and ensuring that parties can collaborate and negotiate while maintaining the secrecy of valuable IP-related information.

Confidentiality agreements, commonly known as non-disclosure agreements (NDAs), play a vital role in safeguarding not only intellectual property but also a wide range of confidential or proprietary information. These agreements establish legal obligations and consequences for parties involved in sharing and protecting sensitive data.

While intellectual property and NDAs serve different purposes, they often intersect, especially when parties need to collaborate, negotiate, or discuss IP-related matters. Intellectual Property NDAs (IP NDAs) are specialized agreements designed to protect intellectual property assets and related information, such as trade secrets and pending patent applications.

Understanding the distinctions between IP and NDAs is essential for businesses and individuals seeking to protect their creative works, innovations, and confidential information. Whether you are an inventor, entrepreneur, or business professional, leveraging the power of intellectual property protection and confidentiality agreements can be a key strategy in safeguarding your valuable assets and maintaining a competitive edge in today’s competitive landscape.

If you require expert legal guidance on intellectual property protection, confidentiality agreements, or IP confidentiality services, consider partnering with Partners Law to ensure that your innovative ideas, creations, and confidential information receive the robust legal protection they deserve. Whether you are dealing with patent NDAs, trademark NDAs, copyright NDAs, or trade secret NDAs, Partners Law can provide you with tailored NDA agreement services to meet your specific needs.

Intellectual property is a cornerstone of innovation and competition, and understanding the intricacies of intellectual property and confidentiality agreements is paramount. By harnessing the power of legal protection and confidentiality, individuals and businesses can navigate the complex landscape of intellectual property.

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How to Create a Confidentiality and Invention Assignment Agreement

In the competitive landscape of modern business, protecting intellectual property (IP) and sensitive information is crucial. A Confidentiality and Invention Assignment Agreement (CIAA) is a key legal document that helps companies safeguard their proprietary information and ensure that inventions created by employees or contractors are owned by the company. This article will guide you through creating a CIAA and explain each clause in detail.

Introduction to Confidentiality and Invention Assignment Agreements

A Confidentiality and Invention Assignment Agreement is a contract between an employer and an employee or contractor that outlines the obligations regarding the confidentiality of company information and the assignment of rights to inventions developed during the term of employment or engagement.

Essential Clauses of a Confidentiality and Invention Assignment Agreement

1. Parties Involved

This clause identifies the parties entering the agreement. It typically includes the full legal names and addresses of the employer (the company) and the employee or contractor.

Example: “This Confidentiality and Invention Assignment Agreement (“Agreement”) is made and entered into as of [Date] by and between [Company Name], a [State] corporation with its principal place of business at [Address] (“Company”), and [Employee/Contractor Name], residing at [Address] (“Employee”).”

2. Purpose of the Agreement

This clause states the purpose of the agreement, which is to protect the company’s confidential information and ensure that any inventions created by the employee or contractor are assigned to the company.

Example: “The purpose of this Agreement is to protect the Company’s confidential information and to ensure that all inventions developed by the Employee during their employment are assigned to the Company.”

3. Definition of Confidential Information

This clause defines what constitutes confidential information, including trade secrets, business plans, financial data, customer lists, and any other proprietary information that the company wishes to protect.

Example: “For the purposes of this Agreement, ‘Confidential Information’ means any and all information, whether written, oral, or electronic, that is disclosed to the Employee by the Company, including but not limited to trade secrets, business plans, financial data, customer lists, product designs, marketing strategies, and technical specifications.”

4. Obligations of Confidentiality

This clause outlines the employee’s or contractor’s obligations to maintain the confidentiality of the company’s information. It typically includes provisions on not disclosing confidential information to third parties and using it only for the intended purposes.

Example: “The Employee agrees to maintain the confidentiality of the Company’s Confidential Information and not to disclose it to any third party without the prior written consent of the Company. The Employee further agrees to use the Confidential Information solely for the purpose of performing their duties for the Company.”

5. Exceptions to Confidentiality

This clause specifies any exceptions to the confidentiality obligations, such as information that is publicly available, already known to the employee or contractor before disclosure, or required to be disclosed by law.

Example: “The confidentiality obligations set forth in this Agreement shall not apply to information that (a) is publicly available at the time of disclosure or subsequently becomes publicly available through no fault of the Employee, (b) is known to the Employee prior to disclosure, or (c) is required to be disclosed by law or by a governmental authority.”

6. Invention Assignment

This clause requires the employee or contractor to assign to the company any inventions, discoveries, designs, or other works of authorship created during the term of their employment or engagement that relate to the company’s business.

Example: “The Employee hereby assigns to the Company all rights, title, and interest in and to any and all inventions, discoveries, designs, and other works of authorship that the Employee conceives, develops, or reduces to practice, either alone or jointly with others, during the term of their employment and that (a) relate to the Company’s business or actual or demonstrably anticipated research and development, or (b) result from any work performed by the Employee for the Company.”

7. Disclosure of Inventions

This clause requires the employee or contractor to promptly disclose any inventions or discoveries to the company, ensuring that the company is aware of all potentially valuable IP created during the employment or engagement period.

Example: “The Employee agrees to promptly disclose to the Company any and all inventions, discoveries, designs, or other works of authorship that the Employee conceives, develops, or reduces to practice during the term of their employment.”

8. Prior Inventions

This clause allows the employee or contractor to list any inventions or works of authorship that they created before their employment with the company and that should not be subject to the assignment provision of the agreement.

Example: “The Employee represents that there are no inventions, discoveries, designs, or other works of authorship that were conceived, developed, or reduced to practice by the Employee prior to their employment with the Company, except as listed on Exhibit A attached hereto.”

9. Return of Materials

This clause requires the employee or contractor to return all company materials, documents, and property upon termination of their employment or engagement.

Example: “Upon termination of their employment, the Employee agrees to return to the Company all materials, documents, and property, including but not limited to any Confidential Information, in their possession or control.”

10. Non-Compete and Non-Solicitation

This clause may include provisions that restrict the employee or contractor from competing with the company or soliciting the company’s employees or customers for a specified period after the termination of their employment.

Example: “For a period of one year following the termination of their employment, the Employee agrees not to (a) engage in any business that competes with the Company, or (b) solicit any of the Company’s employees or customers to terminate their relationship with the Company.”

11. Governing Law

This clause specifies the jurisdiction and laws that will govern the agreement. It is important to choose a jurisdiction that is relevant to the company’s operations and that has appropriate legal expertise.

Example: “This Agreement shall be governed by and construed in accordance with the laws of the State of [State], without regard to its conflict of laws principles.”

12. Dispute Resolution

This clause outlines the process for resolving any disputes that may arise under the agreement, such as mediation or arbitration.

Example: “In the event of any dispute arising out of or relating to this Agreement, the parties agree to first attempt to resolve the dispute through mediation. If mediation fails, the dispute shall be resolved through binding arbitration in accordance with the rules of the American Arbitration Association.”

13. Severability

This clause ensures that if any provision of the agreement is found to be invalid or unenforceable, the remaining provisions will continue to be in effect.

Example: “If any provision of this Agreement is found to be invalid or unenforceable, the remaining provisions shall continue in full force and effect.”

14. Entire Agreement

This clause states that the CIAA represents the complete and final agreement between the parties and supersedes any prior agreements or understandings.

Example: “This Agreement constitutes the entire agreement between the parties and supersedes all prior negotiations, understandings, and agreements, whether written or oral.”

15. Amendments

This clause outlines the process for making changes to the agreement. Any amendments must be made in writing and signed by both parties.

Example: “Any amendments to this Agreement must be made in writing and signed by both parties to be effective.”

16. Signatures

The agreement should conclude with the signatures of both parties, along with the date of signing. This formalizes the contract and indicates that both parties agree to the terms.

Example: “Signed by the duly authorized representatives of the parties as of the date first written above.

Company: _________________________ Date: ____________

Employee/Contractor: _________________________ Date: ____________

Creating a Confidentiality and Invention Assignment Agreement involves careful consideration of various clauses to ensure both parties’ interests are protected. By clearly defining confidential information, outlining the obligations of confidentiality, specifying the assignment of inventions, and including provisions for dispute resolution and governing law, you can create a comprehensive and effective agreement. This not only safeguards the company’s intellectual property but also provides clear guidelines for employees and contractors.

Did you find this article worthwhile? More engaging blogs about smart contracts on the blockchain, contract management software and electronic signatures can be found in the Legitt Blogs section. You may also contact Legitt to hire the best contract lifecycle management services and solutions along with free contract templates .

FAQs on Confidentiality and Invention Assignment Agreement

What is a confidentiality and invention assignment agreement.

A Confidentiality and Invention Assignment Agreement (CIAA) is a contract between an employer and an employee or contractor that outlines the obligations regarding the confidentiality of company information and the assignment of rights to inventions developed during the term of employment or engagement. It protects the company's proprietary information and ensures ownership of inventions created by employees or contractors.

Why is a CIAA important for companies?

A CIAA is important because it safeguards a company's confidential information and intellectual property. It ensures that any inventions or discoveries made by employees or contractors during their employment are owned by the company, preventing potential disputes and protecting the company's competitive advantage.

Who should sign a CIAA?

Employees, contractors, and any other individuals who have access to a company's confidential information or who may create inventions during their engagement should sign a CIAA. This includes full-time employees, part-time employees, interns, and consultants.

What constitutes confidential information in a CIAA?

Confidential information in a CIAA includes any information that is not publicly available and that the company wishes to keep private. This can include trade secrets, business plans, financial data, customer lists, product designs, marketing strategies, technical specifications, and any other proprietary information.

What are the obligations of confidentiality in a CIAA?

The obligations of confidentiality in a CIAA require the employee or contractor to maintain the confidentiality of the company's information, not to disclose it to third parties without prior written consent, and to use it solely for performing their duties for the company. This helps prevent unauthorized use or disclosure of sensitive information.

Are there any exceptions to the confidentiality obligations?

Yes, exceptions to the confidentiality obligations typically include information that is publicly available at the time of disclosure, already known to the employee or contractor before disclosure, or required to be disclosed by law or by a governmental authority. These exceptions ensure that the confidentiality obligations are reasonable and enforceable.

What is an invention assignment clause?

An invention assignment clause requires the employee or contractor to assign to the company any inventions, discoveries, designs, or other works of authorship created during the term of their employment or engagement that relate to the company's business. This ensures that the company owns the rights to any valuable IP created by its employees or contractors.

How should inventions be disclosed to the company?

Employees or contractors should promptly disclose any inventions or discoveries to the company as specified in the CIAA. This typically involves providing a written description of the invention, including details on its conception and development, to ensure that the company is aware of all potentially valuable IP created during the employment or engagement period.

What are prior inventions, and how are they handled in a CIAA?

Prior inventions are inventions or works of authorship that an employee or contractor created before their employment with the company. The CIAA allows the employee or contractor to list these prior inventions, which are not subject to the assignment provision of the agreement. This protects the employee's or contractor's pre-existing IP.

What happens to company materials upon termination of employment?

Upon termination of employment, the employee or contractor is required to return all company materials, documents, and property, including any confidential information, in their possession or control. This ensures that the company's proprietary information is not retained by the departing employee or contractor.

What is a non-compete clause in a CIAA?

A non-compete clause restricts the employee or contractor from engaging in any business that competes with the company for a specified period after the termination of their employment. This helps protect the company's interests by preventing former employees or contractors from working with competitors.

What is a non-solicitation clause in a CIAA?

A non-solicitation clause restricts the employee or contractor from soliciting the company's employees or customers to terminate their relationship with the company for a specified period after the termination of their employment. This helps protect the company's workforce and client base from being poached by former employees or contractors.

How are disputes resolved under a CIAA?

Disputes under a CIAA are typically resolved through mediation or arbitration, as specified in the dispute resolution clause. This provides a structured process for resolving disagreements and helps avoid costly and time-consuming litigation.

What does the governing law clause specify?

The governing law clause specifies the jurisdiction and laws that will govern the agreement. It is important to choose a jurisdiction that is relevant to the company's operations and that has appropriate legal expertise, ensuring that the agreement is enforceable.

Can a CIAA be amended?

Yes, a CIAA can be amended, but any changes must be made in writing and signed by both parties to be effective. This ensures that both parties agree to the modifications and that the changes are properly documented.

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What is a Confidential Information and Invention Assignment Agreement?

When to use a confidential information and invention assignment agreement:.

• You own a business and want to protect your intellectual property.
• You're in HR and need to update documents relating to intellectual property.

Sample Confidential Information and Invention Assignment Agreement

The terms in your document will update based on the information you provide.

CONFIDENTIAL INFORMATION AND

INVENTION ASSIGNMENT AGREEMENT

As a condition of my becoming employed (or my employment being continued) by or retained as a consultant (or my consulting relationship being continued) by of , or any of its current or future subsidiaries, affiliates, successors or assigns (collectively, the "Company"), and in consideration of my employment or consulting relationship with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following:

1. EMPLOYMENT OR CONSULTING RELATIONSHIP. I understand and acknowledge that this Agreement does not alter, amend or expand upon any rights I may have to continue in the employ of, or in a consulting relationship with, or the duration of my employment or consulting relationship with, the Company under any existing agreements between the Company and me or under applicable law. Any employment or consulting relationship between the Company and me, whether commenced prior to or upon the date of this Agreement, shall be referred to herein as the "Relationship."

2. AT-WILL RELATIONSHIP. I understand and acknowledge that my Relationship with the Company is and shall continue to be at-will, as defined under applicable law, meaning that either I or the Company may terminate the Relationship at any time for any reason or no reason, without further obligation or liability.

3. CONFIDENTIAL INFORMATION.

(a) Company Information . I agree at all times during the term of my Relationship with the Company and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company, or to disclose to any person, firm, corporation or other entity without written authorization of the Board of Directors of the Company, any Confidential Information of the Company which I obtain or create. I further agree not to make copies of such Confidential Information except as authorized by the Company. I understand that "Confidential Information" means any Company proprietary information, technical data, trade secrets or know- how, including, but not limited to, business plans and strategies, Internet addresses and web pages, research, product plans, products, services, suppliers, customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the Relationship), prices and costs, markets, software, developments, inventions, laboratory notebooks, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, licenses, finances, budgets or other business information disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation of interfaces, parts or equipment or created by me during the period of the Relationship on behalf of or within the course and scope of my performance of services to the Company, whether or not during working hours. I understand that "Confidential Information" includes, but is not limited to, information pertaining to any aspects of the Company's business which is either information not known by actual or potential competitors of the Company or is proprietary information of the Company or its customers or suppliers, whether of a technical nature or otherwise. I further understand that Confidential Information does not include any of the foregoing items which has become publicly and widely known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved.

This Agreement is in compliance with the Defend Trade Secrets Act and provides civil or criminal immunity to any individual for the disclosure of trade secrets: (i) made in confidence to a federal, state, or local government official, or to an attorney when the disclosure is to report suspected violations of the law; or (ii) in a complaint or other document filed in a lawsuit if made under seal.

(b) Former Employer Information . I represent that my performance of all terms of this Agreement as an employee or consultant of the Company has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me in confidence or trust prior or subsequent to the commencement of my Relationship with the Company, and I will not disclose to the Company, or induce the Company to use, any inventions, confidential or proprietary information or material belonging to any previous employer or any other party.

(c) Third Party Information. I recognize that the Company has received and in the future will receive confidential or proprietary information from third parties subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company's agreement with such third party.

4. INVENTIONS.

(a) Inventions Retained and Licensed . I have attached hereto, as Exhibit A , a list describing with particularity all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to the commencement of the Relationship (collectively referred to as "Prior Inventions"), which belong solely to me or belong to me jointly with another, which relate in any way to any of the Company's proposed businesses, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions. If, in the course of my Relationship with the Company, I incorporate into a Company product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine.

(b) Assignment of Inventions . I agree that I will promptly make full written disclosure to the Company, will hold in trust for the sole right and benefit of the Company, and hereby assign to the Company, or its designee, all my right, title and interest throughout the world in and to any and all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of time in which I am employed by or a consultant of the Company (collectively referred to as "Inventions"). I further acknowledge that all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets which are made by me (solely or jointly with others) within the scope of and during the period of my Relationship with the Company are "works made for hire" (to the greatest extent permitted by applicable law) and are compensated by my salary (if I am an employee) or by such amounts paid to me under any applicable consulting agreement or consulting arrangements (if I am a consultant), unless regulated otherwise by the mandatory law of the state of .

(c) Maintenance of Records . I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my Relationship with the Company. The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, laboratory notebooks, and any other format. The records will be available to and remain the sole property of the Company at all times. I agree not to remove such records from the Company's place of business except as expressly permitted by Company policy which may, from time to time, be revised at the sole election of the Company for the purpose of furthering the Company's business.

(d) Patent and Copyright Rights . I agree to assist the Company, or its designee, at the Company's expense, in every proper way to secure the Company's rights in the Inventions and any copyrights, patents, trademarks, mask work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordation's, and all other instruments which the Company shall deem necessary in order to apply for, obtain, maintain and transfer such rights and in order to assign and convey to the Company, its successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement until the expiration of the last such intellectual property right to expire in any country of the world. If the Company is unable because of my mental or physical incapacity or unavailability or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents or copyright registrations covering Inventions or original works of authorship assigned to the Company as above, then I hereby irrevocably designate and appoint the Company and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of letters patent or copyright registrations thereon with the same legal force and effect as if originally executed by me. I hereby waive and irrevocably quitclaim to the Company and all claims, of any nature whatsoever, which I now or hereafter have for infringement of any and all proprietary rights assigned to the Company.

5. RETURNING COMPANY DOCUMENTS . I agree that, at the time of termination of my Relationship with the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, materials, flow charts, equipment, other documents or property, or reproductions of any aforementioned items developed by me pursuant to the Relationship or otherwise belonging to the Company, its successors or assigns. I further agree that to any property situated on the Company's premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice. In the event of the termination of the Relationship, I agree to sign and deliver the "Termination Certification" attached hereto as Exhibit B .

6. NOTIFICATION TO OTHER PARTIES.

(a) Employees . In the event that I leave the employ of the Company, I hereby consent to notification by the Company to my new employer about my rights and obligations under this Agreement.

(b) Consultants . I hereby grant consent to notification by the Company to any other parties besides the Company with whom I maintain a consulting relationship, including parties with whom such relationship commences after the effective date of this Agreement, about my rights and obligations under this Agreement.

7. SOLICITATION OF EMPLOYEES, CONSULTANTS AND OTHER PARTIES . I agree that during the term of my Relationship with the Company, and for a period of twelve (12) months immediately following the termination of my Relationship with the Company for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company's employees or consultants to terminate their relationship with the Company, or take away such employees or consultants, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for myself or for any other person or entity. Nothing in the previous sentence shall apply to hiring any employee or consultant through general, non-specific solicitations. Further, for a period of twenty-four (24) months following termination of my Relationship with the Company for any reason, with or without cause, I shall not solicit any licensor to or customer of the Company or licensee of the Company's products, in each case, that are known to me, with respect to any business, products or services that are competitive to the products or services offered by the Company or under development as of the date of termination of my Relationship with the Company.

8. REPRESENTATIONS AND COVENANTS.

(a) Facilitation of Agreement . I agree to execute promptly any proper oath or verify any proper document required to carry out the terms of this Agreement upon the Company's written request to do so.

(b) Conflicts . I represent that my performance of all the terms of this Agreement will not breach any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to commencement of my Relationship with the Company. I have not entered into, and I agree I will not enter into, any oral or written agreement in conflict with any of the provisions of this Agreement.

(c) Voluntary Execution . I certify and acknowledge that I have carefully read all of the provisions of this Agreement and that I understand and will fully and faithfully comply with such provisions.

9. GENERAL PROVISIONS.

(a) Governing Laws . The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of , without giving effect to the principles of conflict of laws.

(b) Entire Agreement . This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us. No modification or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by the party to be charged. Any subsequent change or changes in my duties, obligations, rights or compensation will not affect the validity or scope of this Agreement.

(c) Severability . If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

(d) Successors and Assigns . This Agreement will be binding upon my heirs, executors, administrators and other legal representatives and will be for the benefit of the Company, its successors, and its assigns.

(e) Survival . The provisions of this Agreement shall survive the termination of the Relationship and the assignment of this Agreement by the Company to any successor in interest or other assignee.

(f) Signatories . This Agreement shall be signed on behalf of the Company by , , and by me. This Agreement shall take effect immediately after being signed by both parties.

(g) Advice of Counsel . I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

[Signature Page Follows]

EMPLOYEE/CONSULTANT:

TO CONFIDENTIAL INFORMATION AND INVENTIONS ASSIGNMENT AGREEMENT

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

EXCLUDED FROM SECTION 4

TERMINATION CERTIFICATE

This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, flow charts, materials, equipment, other documents or property, or copies or reproductions of any aforementioned items belonging to , its subsidiaries, affiliates, successors or assigns (together the "Company").

I further certify that I have complied with all the terms of the Company's Confidential Information and Invention Assignment Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

I further agree that, in compliance with the Confidential Information and Invention Assignment Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

I further agree that for twelve (12) months from the date of this Certificate, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company's employees or consultants to terminate their relationship with the Company, or take away such employees or consultants, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for myself or for any other person or entity. Nothing in the previous sentence shall apply to non-specific solicitations. Further, for a period of twenty-four (24) months from the date of this Certificate, I shall not solicit any licensor to or customer of the Company or licensee of the Company's products, in each case, that are known to me, with respect to any business, products or services that are competitive to the products or services offered by the Company or under development as of the date of termination of my Relationship with the Company.

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Invention Assignment Agreement

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An invention assignment agreement is a legal contract between an employer and a contractor or employee. It has become important as the world becomes increasingly digital. It is because intellectual property has become an invaluable asset for businesses. Protecting this asset is essential to ensure that companies retain their competitive edge. One way to do this is through an invention assignment agreement. This legal contract assigns ownership rights to any intellectual property created by an employee or contractor during their employment or contract period.

Essential Features of an Invention Assignment Agreement

Invention assignment agreement outlines ownership rights to any intellectual property created during the employee's tenure or contract period. Intellectual property includes patents, copyrights , trade secrets, and trademarks . The invention assignment agreement is essential to ensure that the employer retains ownership of any intellectual property created by the employee or contractor while working for the company.

The agreement typically includes confidentiality, incentives, and dispute-resolution provisions. Employees and contractors should carefully review the terms of the agreement and seek legal advice before signing. Invention assignment agreements are becoming increasingly common in industries that rely heavily on intellectual property, such as technology and biotech.

Importance of Invention Assignment Agreements

There are several reasons why invention assignment agreements are important. Some of these reasons include the following:

• Protecting Intellectual Property: As mentioned earlier, intellectual property is a valuable business asset. Invention assignment agreements help protect this asset by ensuring that the employer retains ownership rights to any intellectual property created by the employee or contractor.
• Clear Ownership: Without an invention assignment agreement, there can be confusion over who owns the intellectual property created during an employee's tenure. The agreement makes it clear that the employer owns intellectual property.
• Avoiding Disputes: Invention assignment agreements can help avoid disputes over intellectual property ownership. The agreement outlines ownership rights and can act as evidence in a dispute.

Key Provisions of an Invention Assignment Agreement

When creating an invention assignment agreement, several key provisions should be included. These provisions include:

• Definition of Intellectual Property: Defining what constitutes intellectual property is essential. This ensures that both parties understand what is covered under the agreement.
• Scope of the Agreement: The agreement should specify the types of intellectual property covered, such as patents, copyrights, trade secrets, and trademarks.
• Assignment of Ownership: The agreement should clearly state that the employee or contractor assigns ownership rights to any intellectual property created during their tenure.
• Confidentiality: The agreement should include a confidentiality clause to ensure that the employee or contractor does not disclose confidential information to third parties.
• Incentives: Employers can provide incentives to encourage employees to create intellectual property. The agreement should specify what incentives are available to the employee.

How to Enforce an Invention Assignment Agreement

Enforcing an invention assignment agreement can be challenging, especially if the employee or contractor disputes intellectual property ownership. However, there are several steps that employers can take to enforce the agreement:

• Review the Agreement: The first step is to review the invention assignment agreement to ensure it is legally binding and enforceable. Employers should ensure the agreement is properly signed and all key provisions are included.
• Notify the Employee or Contractor: If the employer believes that the employee or contractor has breached the invention assignment agreement, they should notify the employee or contractor in writing. The notification should specify the alleged breach and provide a copy of the agreement.
• Investigate the Alleged Breach: Employers should investigate the alleged breach to determine if there is evidence of wrongdoing. This may involve reviewing company records, interviewing witnesses, or consulting legal experts.
• Attempt to Resolve the Dispute: If possible, the employer should attempt to resolve the dispute with the employee or contractor. This may involve negotiating a settlement or agreeing to modify the terms of the invention assignment agreement.
• Seek Legal Action: The employer may need legal action if the dispute cannot be resolved. This may involve filing a lawsuit to enforce the agreement or seeking an injunction to prevent the employee or contractor from using the intellectual property.

It is essential to have a solid invention assignment agreement in place to protect your intellectual property. Employers can enforce the agreement and protect their valuable assets by following the steps outlined above. However, seeking legal advice before taking any legal action is important, as the laws governing intellectual property can be complex and vary by jurisdiction. A qualified attorney can provide guidance and protect the employer's rights.

Tips for Invention Assignment Agreement Terms

When negotiating an invention assignment agreement, there are several tips that employees and contractors should keep in mind. Some of these tips include:

• Seek Legal Advice: Employees and contractors should seek legal advice before signing an invention assignment agreement. A lawyer can review the agreement and ensure that the terms are fair.
• Negotiate Incentives: Employees and contractors can negotiate incentives, such as bonuses or equity, for creating valuable intellectual property.
• Clarify Ownership Rights: Employees and contractors should clarify ownership rights to any intellectual property created outside work hours or using their resources.
• Understand the Consequences of Breaching the Agreement: It is essential to understand the consequences of breaching the invention assignment agreement. Breaching the agreement can result in legal action and termination of employment.

Key Terms for Invention Assignment Agreements

• Intellectual Property: Refers to any creation of the mind, including inventions, designs, and artistic works, that can be protected by law.
• Scope of Agreement : Outlines the intellectual property of the invention assignment agreement.
• Assignment of Ownership: Specifies that the employer is the sole owner of any intellectual property created by the employee or contractor during their tenure or contract period.
• Confidentiality: Requires the employee or contractor to keep all information related to the intellectual property confidential.
• Incentives: Employees or contractors may provide compensation or other incentives for creating valuable intellectual property.

Final Thoughts on Invention Assignment Agreements

Invention assignment agreements are essential to protect intellectual property and avoid disputes over ownership rights. Employers should ensure that their employees and contractors sign an invention assignment agreement. Employees and contractors should seek legal advice before signing the agreement and negotiating favorable terms. By following the tips outlined in the blog post, both parties can reach an agreement that protects their interests.

An invention assignment agreement is a legal contract that outlines ownership rights to any intellectual property created during an employee's tenure or contract period. The agreement is essential to ensure that the employer retains ownership of any intellectual property created by the employee or contractor while working for the company.

Key provisions to include in an invention assignment agreement include a definition of intellectual property, the scope of the agreement, assignment of ownership, confidentiality, and incentives. Employees and contractors should seek legal advice before signing the agreement and negotiating favorable terms. By following these guidelines, companies can protect their intellectual property while incentivizing their employees and contractors to create valuable assets.

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Should You Sign an Inventions Assignment Agreement?

In many states, employers may require employees to transfer ownerhship of works created during the employment relationship..

If you do creative, engineering, design, or development work, your employer might ask you to sign an invention assignment agreement: a contract giving your employer ownership rights in inventions and intellectual property you develop during your employment. Read on to learn whether these agreements are enforceable, what they require and allow, and whether you should sign one.

What Is an Invention Assignment Agreement?

An invention assignment agreement is a contract that gives the employer certain rights to inventions created or conceptualized by the employee during the employment relationship. Typically, this type of agreement requires the employee to disclose any such inventions to the employer, to "assign" (legally transfer) ownership rights in such inventions to the employer, and to assist the employer in getting a patent on any such inventions.

These types of agreements might include other clauses as well. For example, the agreement might ask the employee to list all inventions the employee created before working at the company (which the employer will not own the rights to). This prevents the employee from later claiming rights to any inventions that are not on the list. In other words, all inventions not listed are assumed to be the property of the employer.

Assignment agreements often include other standard contract language too, such as a provision requiring the losing party in a dispute to pay for attorneys' fees, or an "integration" clause, stating that the written contract represents the entire agreement between the parties (that way, neither party can later claim that they had a separate side deal or handshake agreement that doesn't appear in the written contract).

Limits on Invention Assignment Agreements

Some states place limits on how far an inventions assignment can go in requiring an employee to give up his or her rights. In California, for example, an invention assignment agreement is not valid as to inventions created entirely on the employee's own time, without using any of the employer's resources or property (including intellectual property). (Although there are exceptions where the invention results from the work the employee did for the employer or relates to the employer's business or anticipated research or development.) California employees who are asked to sign an invention assignment agreement must also receive a written notification of these rules.

A handful of other states, including Illinois and Washington, have similar laws. (See Who Owns Patent Rights? for more information.) If you work in one of these states, make sure any contract you are asked to sign meets your state's requirements. If you can't figure out whether the contract is legal, consult with a local employment lawyer before signing.

Should You Sign an Assignment Agreement?

If you are asked to sign an invention assignment agreement, and you anticipate you might create something valuable during your employment, it's probably a good idea to talk to an experienced employment lawyer. A lawyer can explain how courts in your state have interpreted its intellectual property and employee ownership rules, and he or she can review the contract to see whether it can be enforced.

Among the things to consider in making this decision are:

• Can your employer require you to sign? If the contract is legal, and you will be hired as an at-will employee (one who can be fired at any time, for any reason that is not illegal), your employer can probably require you to sign the contract as a condition of employment. While the employer can't force you to sign, it can refuse to hire you if you don't.
• Are you likely to invent during your employment? If you are a creative tinkerer, always coming up with ideas and improvements, you might not want to sign away your rights to earn some money off whatever you invent.
• Can you carve out your inventions? If you do your own work in the same field in which you'll be employed, you might be able to arrange a side deal. For example, if you are hired to develop fitness apps for smartphones, and you like to spend your free time developing apps that help people manage their time better, you might want to talk to your employer before signing the agreement. Be specific about what you plan to work on during your employment, and ask your employer to carve that type of work out from your invention assignment. A lawyer can help you with this.

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