
Key Issues With Confidentiality and Invention Assignment Agreements With Consultants
If your business works with consultants, these individuals may have access to a lot of your company’s confidential information. And you may expect these consultants to come up with ideas, work product, and inventions useful to your business.
In areas where you are particularly sensitive about confidentiality and the company’s ownership of the product developed, a company should require consultants to sign a Confidentiality and Invention Assignment Agreement. This agreement deals with the confidentiality issue, but can also provide that the ideas, work product, and inventions that the consultant creates in connection with services performed for your business belong to the company (not the consultant).
A good Consultant Confidentiality and Invention Assignment Agreement covers the following key points:
- The consultant may not use any of the company’s confidential information for his or her own benefit.
- The consultant must promptly disclose to the company any inventions, ideas, discoveries, and work product related to the company’s business that he or she makes during the period of work.
- The company owns such inventions, ideas, discoveries, and work product.
- The consultant’s work with the company does not and will not breach any agreement or duty that the consultant has with anyone else, nor may the consultant disclose to the company or use on its behalf any confidential information belonging to others.
- The consultant’s confidentiality obligations under the agreement will continue after termination of the relationship.
Venture capitalists and other investors in companies usually expect to see that consultants of the company have signed such agreements. Prospective M&A buyers of the company will also perform due diligence to determine that consultants have signed such agreements.
A sample form of Consultant Confidentiality and Invention Assignment Agreement can be found at the Forms & Agreements section of AllBusiness.com.
RELATED: Key Issues with Confidentiality and Invention Assignment Agreements With Employees
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