The protection of intellectual property is essential to the success of a business focused on development and marketing of a new technology. The protective approach shall be broad instead of narrow. It may include the use of Non-Disclosure Agreement (NDA) or Confidentiality Agreement, specifically tailored employment or third party service contract, Noncompetition Covenant, ,filing of a Provisional Patent or a trademark.
NDA may be a standalone agreement or a confidentiality clause may be built into a service contract. It is a fairly common practice for a technology start-up to forbid the disclosure of its proprietary technology by another party who needs access to this technology to design systems, platforms or products for the start-up. The goal is not only prohibiting the disclosure, but also clarifying who owns the intellectual property of what specific component. It is the best interest for most businesses to require the service provider to release the ownership of intellectual property right of any work provided. This shall be made clear in the contract.
The company shall require the primary sales representative or software developer to sign a Noncompetition Agreement. That individual could be either an employee or contractor. The extent of the non-competition as to the geographic regions, time and scope shall be reasonable and for legitimate business purpose. Legitimate business purpose is construed as protect trade secret, confidential information and goodwill. If the engagement is with another business, not an individual, the non-competition prohibition could be difficult to impose depends on the circumstances.
