Our team of Miami patent attorneys specialize in helping inventors, entrepreneurs, and new startups select, identify and then prepare the correct types of formation documents to protect their underlying technology. Our team of attorneys have drafted, prepared and negotiated numerous technology agreements, including the following:
HOW WE CAN HELP
The incredible and unprecedented advance of Internet business has required technology start-up businesses to seek legal counsel on how to best protect their ideas, how to engage their employees, and how to interact with prospective consumers on the web and in social media. Moreover, the value of intellectual property protection over the Internet is a crucial component to any businesses business plan. Cyberlaw has become a predominant part of the collection of intellectual property that a company must now protect and grow to realize value.
Our team of Miami patent attorneys can help which selection of the aforementioned types of agreements are right for the growth of your technology start up. Moreover, we assist in these matters with a keen eye toward protecting, growing and monetizing your copyright, trade secret, patent and trademark rights.
Our attorneys also serve as outside counsel to a variety of technology companies in South Florida, helping ensure comprehensive and detailed protection of your brand, slogan, logo, creative works and ideas.
Typically an initial step for a technology venture, after identifying potential subject matter for intellectual property protection, is to form a corporate entity – typically through an application before the State of Florida Department of State Division of Corporations. It is important to select the right type of corporate entity, whether it be a limited liability company (LLC), corporation, S-Corp, or C-Corp – depending upon the size, nature and business goals of your venture.
In addition, once formed it is important to prepare an appropriate operating agreement for your LLC, or by-laws for your corporation.
Often after a technology start up incorporates and begins the process of creating an appropriate form of intellectual property protection (such as preparing an initial provisional and/or utility patent application), they often desire to create some form of presence on the Internet. Often this takes the form of not only the registration of a domain name, but also selection of a proper collection of social media (such as a Twitter handle, Facebook Page, and/or LinkedIN profile).
Prior to selecting this social media identity and/or domain name – it may be important to seek an appropriate clearance of the trade name to ensure that it does not risk direct violation of a potential competitors already adopted trademark, trade name or related indicia. A search performed by one of our Miami trademark attorneys may help identify a potential roadblock to your proposed Internet presence, and save valuable time and money in selecting a more appropriate name. We often can provide a written clearance study the same day as your inquiry.
A technology start up having an Internet presence through a website creates the opportunity to collect, process, and analyze information about prospective consumers of the underlying technology. This is a key opportunity for the start up to hone the technology, as well as determine the appropriate demographics of people interested – in order to later effectively market the technology through targeted advertising.
Our team of Miami patent attorneys provide specific advice on a full rate of privacy policies for use in technology start up Webpages.
One initial goal of technology start-up ventures is that once they have identified a potential proprietary technology – they will need to disseminate information about that technology for a variety of purposes including (a) potential investment, (b) prospective joint ventures regarding the enterprise, (c) contemplated sale of the idea, (d) identification of a potential manufacturing source, and (d) to helps elect independent contractors and other consultants to further advance the technology.
In any of these scenarios, there is a need to maintain confidentiality over the proprietary and confidential technology. What is more, even though a patent application may be pending, there is no ability to enforce prospective patent rights, since the government has not reviewed the underlying patent application, due to the early nature of the enterprise.
Recognizing this, technology start ups often require technology specific confidentiality agreements to help further their ventures, and help create partners that can help advance the progress of the business.
One form of agreement that limits access and use to a technology start up’s proprietary information is known as a non-disclosure agreement (often referred to as an NDA or Confidentiality Agreement). Such NDA / confidentiality agreement is crucial for an entrepreneur, inventor, and/or start up to help maintain the uniqueness of the invention, and prevent a party receiving such information from using it without license and/or authorization. Simply pulling a form off the internet and filling the blanks is not enough. Rather, in order to enforce an confidentiality agreement, the terms and scope must be specific and tied to the underlying goals of the technology disclosure.
Under a Non-Disclosure Agreement, a person or organization agrees to protect proprietary information they’ve received from another business or individual. Your Non-Disclosure Agreement should include details like: who owns the information being disclosed and protected; who’s receiving the information; the owner’s business; the recipient’s business; the reason the confidential information is being disclosed; whether the information consists of financial statements, customer lists and records, trade secrets, technical information, product designs, inventions, copyrights, pricing structure or source code; the duration of any non-circumvention clause; and whether the obligations of the agreement will apply for months, years or indefinitely.
One important purpose of having third-parties enter into an NDA is it creates a recognized confidential relationship prior to disclosing a trade secret of your start up. People who have such a confidential relationship are legally bound to keep the information a secret.
An NDA is not the only way to create such a confidential relationship. A new technology enterprise can create a confidential relationship with an oral agreement or it can be implied from the conduct of the parties. However, these relationships are much more difficult to prove than a relationship based on a written agreement. NDAs can take a variety of forms, as they may be either one-way or mutual (ie, two ways). A mutual NDA is one in which both parties are exchanging confidential information — for example, you provide secret information for a company to evaluate and they provide you with secret information about their marketing strategy. A one-way agreement is used when only one party is making a disclosure — for example, when you explain your secret to a contractor or investor.
Provisions that are typically found in most NDAs for technology start ups include:
- A clear definition of the underlying confidential information. The starting point in any NDA is a proper, specific and tailored definition of the Confidential Information. Such confidential provision should set for the scope of information covered by the agreement and define the subject technology. A disclosing party may be reluctant to describe the information in a contract for fear that the underlying proprietary information may be reveled. This represents one of many reasons to hire counsel to prepare these documents.
- An explained purpose and reason for the disclosure. Such provision should limit how the confidential and/or proprietary information is revealed to the other party – and the specific purpose for such a disclosure.
- Disclosure of the implicated technology. Many confidentiality agreements do not have a disclosure provision. Such provisions call for a return of the underlying confidential information when asked by the technology start up. This requires the party receiving the information to carefully consider the scope and duties outlined in these agreements.
- No Disclosure. The Recipient must agree not to disclose the information to third parties. The extent of this provision to a large extent controls the “strength” of the non-disclosure agreement.
- No use apart from what is contemplated. While many NDA type agreements do not specifically state this, it is often important for confidentiality agreements to restrict the use of information received for purposes other that what is contemplated in the agreement (ie, to evaluate an investment, or determine manufacturing capabilities).
- Limits on Information Deemed Confidential. Practically every non-disclosure or confidentiality agreement puts some limits on the type of information that will be deemed confidential. For instance, if the recipient already knew the information before it was revealed by the Discloser, or if the information was revealed to the Recipient by a third party, that information will not be treated as confidential under the agreement. Other possible limits include information that becomes publicly known, information that is requested by order of a government agency, or information that is independently developed. The discloser may require a certain level of proof before such information is considered non-confidential.
- Term of the agreement. A term as to the length of time to maintain confidential information is a key provision in any NDA. Such term must be sufficient to protect the interests of the technology start up, but likewise should not unduly burden the recipient with maintain information long after its disclosure. Typical time periods for terms of NDAs are five years.
Breach of an NDA would create a cause of action under Florida contract law – thus enabling the start up to enforce some form of legal rights against an entity they previously disclosed confidential and proprietary information to in confidence.
Often, a technology start up will begin to employ both employees and independent contractors to provide help in advancing the venture. Technology start up ventures often will hire individuals and provide training specific to their niche business and supply experience in a field that is both unique and difficult to provide training. As Florida is an employment at will State, there are low thresholds to terminate an employee and/or independent contractor – and likewise little or no ability for an employer to restrict an employee from leaving.
Realizing the risk of loosing valuable and trained employees or contractors (who have received access to the confidential and proprietary information of the start up), many companies are requiring prospective employees to sign employment agreements, many of which include non-compete provisions. Upon executing an agreement containing non-compete restrictions, that employee promises not to work for a competitor in the industry for a specific period of time after leaving the start-up. Likewise, such non-compete agreements may include geographic restrictions such that the employee may be forced to move outside that zone of competition.
Such restrictions must be reasonable, otherwise enforcing such employment obligations may be difficult. The goal is to hopefully decrease the risk of loosing employees to a competitor while at the same time protecting your company’s valuable confidential and proprietary information (which may rise to the level of a protectable trade secret). If one of your employees has access to sensitive business information or trade secrets, you’ll obviously want to prevent this employee from disclosing this information to your competitors. When an employee with access to trade secrets leaves — either because the employee quit or has been fired — he could take this information and use it to his personal advantage (and at the start-ups gave expense). A former employee or contractor may open a competing business or may go to work for a competitor and unwittingly or deliberately divulge your hard-won keys to success. Properly drafted and appropriate non-compete agreements help prevent this from happening, and provide legal recourse for the start-up to seek immediate relief from the court in the form of injunctive relief.
Key considerations in forming employment agreements with non-compete provisions include the following:
- Having a good business reason for such restrictions. A technology start up needs a valid business purpose for asking a prospective (or current) employee to sign a restrictive agreement that may include a non-compete provision. Such agreement should not be designed to punish the employee from leaving the venture, and certainly should not be aimed to prevent that employee from making a living once the depart from your employment. Rather, the key focus should be on protecting know-how, confidential information and potential trade secrets of the business venture.
- Providing a benefit to the employee and/or contractor. There needs to be consideration in exchange for an employee and/or contractor’s agreement not to compete after the end of employment. Making a job offer contingent on signing a noncompete agreement probably satisfies this requirement, since the employee is receiving a benefit (a job) in exchange for the promise. It’s more difficult to provide an existing employee with a benefit, but generally, coupling the agreement with a promotion or a raise will do the trick.
- Such agreements must be reasonable in term and geographic scope. In short, to make an employment agreement enforceable before a court of law, it must be appropriate and reasonable. Put another way, it cannot last for an unreasonable period of time, cover too wide of a geographic area, or prohibit the employee for engaging in an unreasonable scope of other business.
In conclusion, there is always a tendency to ask counsel to create an agreement that is “iron clad” or “tough.” That said, it does not pay to be over-arching in these agreements – rather the rule of reason and fair dealing should govern. Otherwise, the employment agreement will not be enforceable and the employee will be able to leave your company with little or no restriction. Our attorneys can help fashion appropriate employment agreements including those with reasonable non-compete provisions.
Once a technology venture is able to seek protection for their underlying ideas and/or consumer products, the next invariable step is to enter into a relationship with a prototype and/or manufacturer.
One key risk in exploring a manufacturing relationship is the reality that the prospective manufacturer must evaluate the technology to learn how to make it affordably and with the proper volume. This creates a disclosure risk, especially if that manufacturer is not selected (or alternatively chooses not to participate with the start-up). The complexity of the matter escalates with the manufacturer is overseas.
As with preparing all types of agreements, drafting a manufacturing agreement requires careful attention to detail, and addressing all appropriate points, including the following:
- Obligations of the manufacturer. Sets forth the expectations of the manufacturer and may include time and quantity requirements.
- Testing and inspection. Provides the right to inspect the manufacturing process to ensure that quality standards are being met.
- Methods of delivery. Specifies packaging requirements, risk of loss and transit obligations.
- Rejection of products. Specifies under what conditions a manufactured product may be rejected and can include time to cure provision.
- Intellectual property. This provision is immensely important and identified the intangible legal rights or interests that cover any idea, design, concept, technique, invention, discovery, or improvement. This extends to any work of authorship and any other similar rights.
Our team of attorneys can help fashion appropriate manufacturing terms and conditions for your company – with an eye toward protecting the disclosure of your intellectual property, maintaining confidential information, and insuring appropriate testing and inspection to allow for safeguards as to quality control.