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One Woman Said

People talk.  Sometimes they speak the truth, and sometimes they share what they believe to be true.  There is a three-letter acronym in the Russian language, OBS, that stands for what would be translated into English as “One Woman Said.”  It refers to widely believed misconceptions like sitting on a stone will unavoidably trigger a cold or vaccinating your child may cause autism.  Believe it or not, there are plenty of OBSs in the legal world, and we will talk about some of them today:

1. A non-disclosure agreement (“NDA”) is always a “cookie-cutter” document that you could get off the internet, have it signed, and you would be as secured as a rider strapped in on Fury 325 at Carowinds.  Not quite. A non-disclosure agreement, also known as a confidentiality agreement, confidential disclosure agreement, proprietary information agreement or secrecy agreement, is a legal contract designed to protect any type of confidential, proprietary information, or trade secrets of a specific business.  As such, confidential information would vary greatly from one business field to the other. If you are a healthcare software developer, your non-public business information and trade secrets will differ significantly from the proprietary information of a business involved in tobacco export.  An NDA must be crafted specifically to your company’s needs; it should be based on your business model while keeping in mind the nuances of your trade.

2. Patents will keep others from stealing your ideas.   “Wrong, wrong, wrong!” as President Trump would have said loudly and unambiguously. First of all, ideas are not protected.  Second, when you file for patent protection, all information about your invention including methodology and processes becomes public and available for anyone’s review at the United States Patent and Trademark Office’s website.  By providing a full disclosure of your invention, if you succeed with registering your invention, you get a period of exclusivity during which you have the right to prevent others from making, using, or selling the invention. So, filing for a patent is a tool to obtain exclusive rights to exploit your invention for a period of time; however, it will not prevent others from stealing your “ideas.” One instrument to protect your concept or idea is a non-disclosure agreement, the real one – not a cookie-cutter from the internet.

3. Contracts must be in writing.  Not always. Contracts can either be written or oral and still be legally enforceable.  There are exceptions to this rule as some agreements must be in writing in order to be binding, and set forth below are several examples of those agreements:

  • Real estate sales;
  • Agreements to pay the debt of another;
  • Contracts that take longer than one year to complete;
  • Generally, contracts for the sale of goods for the price of $500 or more;
  • Commercial loan commitments for loans in excess of $50,000.

4. Businesses automatically own all intellectual property created for them.  Not so fast!  While this is generally true for the intellectual property created by company’s employees in the course of their employment, the company may not have any rights to the intellectual property created by a contractor.  To ensure that your business is the rightful owner of all intellectual property created by its employees and contractors, you must have agreements in place governing the IP ownership. An employment agreement, an independent contractor, or an intellectual property ownership agreement are useful instruments for setting out these terms.

Explicit language indicating that any work created, developed, or conceived shall be the exclusive property of the company without further or additional compensation to the employee or the contractor is recommended.  Such work must:

  • Relate to the business of the company or company’s products or services;
  • Result from tasks, which employee is responsible for performing during the course of employment; or
  • Result from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by the company.

Intellectual property that is created by an employee or a contractor other than in the course of their employment, is generally owned by the employee.

5. A worldwide patent will protect your rights domestically and abroad.  It couldn’t be further from the truth. There is no such thing as an international patent and better yet, a worldwide patent.  If you are a patent owner in the U.S., you can stop anyone from making, using, selling, or offering for sale whatever product, system, methodology, design, etc. protected under your patent in the U.S.  In addition, you, as the U.S. patent holder, can bar anyone from importing unauthorized copies of your invention into this country. Your rights, however, stop at the American border. The U.S. patent holder cannot use his or her patent to stop third parties from making, selling, or using the invention in another country. To do that, U.S. patent holders must acquire patent rights in a foreign jurisdiction through the Patent Cooperation Treaty (“PCT”) or other international treaties.  PCT is a treaty that enables inventors to file a what’s called a “PCT application” within one year of their home country’s filing date.  It is a convenient tool to file a fairly economical single application designating foreign jurisdictions. The inventor must eventually file separate “national” applications in each country or regional group of countries where the inventor wants coverage, but there are advantages of filing a PCT application:

  • A single filing date is assigned in each member country where the inventor seeks patent protection;
  • An initial international patent search will be conducted.  The initial search procedure simplifies the international patent process.

So, there is no such thing as a world-wide patent, but there is a multi-country PCT application that can ultimately result in a patent being obtained in most countries around the world.

There are many other legal myths that are floating around the internet or get communicated by word of mouth.  So, next time you hear legal information, make sure it’s not OBS!