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Copyright Considerations

■ Establishing and communicating a policy for marking all copyrightable works, including design plans, source code, and software, should be a principal objective for the company. The company should mark all documents containing such information with the copyright symbol ©, year of first publication, and legal owner and include a textual marking of the same in the source code or other documents containing design information.

■ Copyright protection arises as soon as the software is fixed in a tangible medium, which can be any medium that stores the software for an extended period of time, such as hard drives, flash drives, and CD/DVD ROMs. However, the software must be registered with the U.S. Copyright Office before the company can bring a claim of infringement, and companies may wish to implement a process for U.S. copyright registration of all versions of the software before any infringement occurs. Software should also be registered with U.S. Customs and Border Protection to prevent infringing copies from being imported.

Joint IP Considerations

In a joint development environment, the company should adopt “clean room” protocols and policies to ensure that existing and independently developed IP is isolated from new and jointly developed work product.

Policy on Embedded Open Source

The company should adopt policies to review the license terms of any open-source software components before employees and contractors may combine any open-source software components with the company’s proprietary software. Failure to properly review the applicable open-source software’s license terms could compromise IP rights in the proprietary code. There are “wrong” ways and “right” ways to implement open source in a proprietary environment, and the right way requires advance planning.

Internal Procedures

■ The company should implement a system to archive copies of each version of the design information. For the purposes of documentation, this system establishes the overall course of development. Version control software automatically tracks and documents development.

■ Verify and document the company’s right to use the software and IP of others, including design information (including “cores”), graphics, artwork, software, and photographs.

■ Implement and enforce company security policies to protect IP assets, including appropriate use of computer and mobile devices, and passwords.

Policies Following Infringement

■ Through the use of audit rights and “phone-home” features, actively monitor the use of the company’s IP by third parties and take swift action when infringement occurs.

■ Ensure that the licensing agreements require the customer, on termination or expiration of the agreement, to uninstall the program code, destroy any electronic copies, and return physical copies of the code.

■ The company should consider insuring IP against infringement.


Employee Training and Communication

■ The company should train employees involved in developing, maintaining, and protecting its IP (including software, hardware designs, and any associated documentation) on the need to protect it, how to protect it, and their responsibilities in protecting it during and after employment.

■ The company should take steps to secure its IP when employees depart the company by conducting exit interviews concerning IP issues, including discussion of inventions, and return of company property.

Contractual Protections

■ The company should require that all employees and contractors execute appropriate confidentiality and proprietary rights agreements that limits the use and disclosure of confidential information. These agreements should also include required notification for certain protected disclosures under federal and state laws, including the U.S. Defend Trade Secrets Act of 2016 (DTSA). Failure to do so can limit the damages that the company can claim against employees who improperly disclose trade secrets.

■ The company should require all new employees to acknowledge that they have not and will not use any proprietary information from any prior employer.

■ The company should require all development personnel to execute such confidentiality and proprietary rights agreements that describe what inventions created by such personnel will be considered owned by the company. The requirements of this notice may vary from state to state, and the company may require different versions of these agreements for each jurisdiction where personnel perform their jobs. In addition, these agreements should: (i) explicitly state that work product that is copyrightable subject matter is “work made for hire” and that the employee waives any moral rights to the work product, and (ii) require a present assignment of all IP rights developed while they are in the employ of the company, and that such personnel will execute any necessary documents and/or allow the company to execute those documents on the employee’s behalf.

■ The company should ensure that the employee is required to return all materials containing company confidential information upon the termination of employment and that employee’s duty of confidentiality continues after such termination.

■ The company should also consider requiring certain employees to execute noncompete and nonsolicitation agreements.

Nonemployees and Subcontractors

■ Subcontractors must be subject to appropriate confidentiality agreements. Nonemployees and subcontractors should have access only to modules as necessary to perform their tasks.

■ All nonemployees and subcontractors, especially those engaged to create or contribute to any design information, should enter into work-for-hire agreements with an express assignment of all IP ownership rights to any deliverables created for the company and a perpetual license to all IP owned by the nonemployee or subcontractor created prior to the engagement with the company or outside the scope of the engagement.

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