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  1. #1

    Default What Information is "Related to Business" for an Intellectual Property Rights Clause

    My question involves independent contractors in the state of: Texas

    I have been asked to sign a contract with the following language:

    8.1 During the course of performing under this Agreement, the CONTRACTOR and its directors, officers, employees, or other representatives may, independently or in conjunction with the COMPANY, conceive, develop or contribute to material or information related to the Business or Project of the COMPANY, including, without limitation, software, technical documentation, ideas, inventions (whether or not patentable), hardware, know-how, marketing plans, designs, techniques, documentation and records, regardless of the form or media, if any, on which such is stored (referred to in this Agreement as “Proprietary Property”).

    8.2 The CONTRACTOR acknowledges and agrees that all such Proprietary Property and documentation produced by the CONTRACTOR, including but not limited to memoranda, research notes, correspondence, emails, pleadings, and reports in the course of its work for the COMPANY, shall be the property of the COMPANY, and the CONTRACTOR shall retain no ownership, interest, or rights therein.

    I am concerned that by signing this I will not be able to work with other companies in my industry due to the potentially broad interpretation of the term "related to the Business". Is there any alternative wording that I could suggest to my employer which would prevent them from owning proprietary property I develop for other clients in the same industry?

    Thanks in advance.

  2. #2
    Join Date
    Sep 2005
    Behind a Desk

    Default Re: What Information is "Related to Business" for an Intellectual Property Rights Cla

    We have no way of telling you whether your client will be interested in negotiating language that is different from the wording of its proposed contract, or what alternative language it might find acceptable. Further, it's all-but-impossible to propose language that is going to address the client's prospective concerns, but have no room for a later, potentially over-broad interpretation.

    If you will be simultaneously working for competitors to this client, the language may be of concern if this client could conclude (even if wrongly) that you're using its proprietary information to benefit its competitors. If you are concerned not about your present clients, but about possible future clients, the same sort of issue may arise, and you would have to consider how to discuss the issue with your prospective client.

    The interpretation and application of the clause can be very industry-specific, so if the clause gives you cause for concern it's something you should discuss with a business lawyer who is knowledgeable about the industry and its practices.

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