March 21, 2023

Volume XIII, Number 80


March 20, 2023

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Protecting Intellectual Property And Data If Employee Separation Is Anticipated

Employment is in flux. Employees are being furloughed or laid off. Employers need to ensure that the intellectual property their engineers, developers, and designers have created is securely owned by the employer and that data security is maintained. Here are some items to consider in light of the pandemic and potential employee, as well as contractor, departures. 

Employee Agreements

  • Companies should make sure to have signed employment agreements containing an invention and copyright assignment, confidentiality, and other provisions. Optimally, the assignment should include an obligation to cooperate after separation from the company. It can also be helpful to include language for the employee to grant the company a limited power of attorney to sign documents evidencing inventorship and ownership. Doing this can avoid having to track down and obtain signatures from a departed employee who may be uncooperative.

  • If the company’s assignment language is in the company’s employee handbook, make sure the handbook is up to date and there is written acknowledgement by the employee in the file and a copy of the version of the handbook signed. If there is no separate patent assignment, the handbook’s assignment portion may need to be recorded with the Patent Office or Copyright Office to document the assignment, and the employee’s signature will be needed.

Invention Assignments and Disclosures

  • Companies should make sure that all inventors and authors have executed written assignments of invention rights on all patent applications that have been filed.

  • If an employee who likely is an inventor on an invention for which a patent application will be filed shortly, and that employee may be laid off, consider filing a provisional patent application now, and having the employee sign the assignment prior to leaving the company. This may avoid the problem of later trying to obtain an assignment from the departed employee.

  • A severance agreement should be considered if there is no written assignment agreement. Among other provisions, the agreement should include an assignment provision transferring all previously created intellectual property, and obligations to not use or disclose company trade secrets and to return company property.

  • Make sure that inventors are capturing their ideas and submitting them to management using the company’s standard invention disclosure form. If you need assistance with a template, please contact your attorney, or a Barnes & Thornburg attorney listed below. 

Contractor Agreements

  • Have written assignment of IP rights with all contractors who have created or may create intellectual property. Contractors are not employees, and the copyright law’s “work made for hire” statute (which applies only to employees) does not apply. Contractors likely own the work product created for the company unless there is a written assignment of rights.

  • Review current contractor agreements and amend where appropriate to include or tighten assignment, confidentiality, and data security/privacy provisions.

Data Security and Privacy

The following procedures are in addition to typical procedures that should be followed when an employee departs.

  • Companies should make sure to have their IT department immediately de-authorize a departing employee’s login credentials to the company’s systems, including mobile phone access and video conferencing software. 

  • Remove departed employees from email distribution lists to avoid video or audio conference meeting invitations being sent to inappropriate individuals.

  • If the departing employee is a member of the company’s data breach incident response team, have that person replaced immediately.

  • Obtain from the departing employee a list of service providers and customers for which that employee was one of the primary contacts. Notify service providers and customers of a change in the company’s contact person. 

  • If the departing employee was assigned responsibility for monitoring a privacy-related email address (e.g., [email protected] for website privacy policy, terms of use, data access requests, etc.), make sure to have monitoring of that email address be moved to a new employee.

  • Monitor emails (to personal accounts) and file download traffic (of trade secret/confidential documents) to pick up indications that an employee is taking sensitive or large amounts of company information.

  • There likely is an increased amount of company information on employees’ personal devices. The company’s IT department should make sure its procedure for scrubbing the personal devices of departing employees can locate and remove such information. 

  • Employees will tend to use work laptops at home for personal browsing, increasing the risk of infection. Companies should increase the sophistication of malware scanning for phones and computers used at home.

  • As part of the company’s remote working training educate employees about not transferring or storing company information on local hard drives.

© 2023 BARNES & THORNBURG LLPNational Law Review, Volume X, Number 92

About this Author

Jason Bernstein Data Security & Privacy Attorney

A co-chair of the firm’s Data Security and Privacy practice, Jason Bernstein is a business adviser who helps clients develop, manage, protect and leverage their IP assets and valuable data. By offering real depth in a multitude of disciplines and industries, Jason is appreciated for his proven business acumen and creative problem-solving ability.

Inventions, innovations and information, particularly information security and privacy matters, are at the core of Jason’s practice. With more than three decades of experience, Jason advises on strategic planning for and the protection of...

Grant H. Peters Intellectual Property and Corporate Law Attorney Barnes Thornburg Chicago

Grant H. Peters is a partner in the Chicago office of Barnes & Thornburg LLP, a member of the Intellectual Property Department, co-chairman of the Climate Change Practice Group, a member of the Professional Responsibility Committee, and a member of the Nanotechnology Practice Group. Mr. Peters' patent prosecution practice involves mechanical, electromechanical, system, business methods, design, and plant patents. He has filed, prosecuted, and/or secured thousands of patents, trademarks, and copyrights domestically and internationally.

Mark Keenan Employment Attorney Barnes Thornburg

The most valued aspect of Mark Keenan’s labor and employment work is counseling employers on complex labor and employment issues, helping clients – including those with multiple union and union-free locations – develop positive employee relations strategies that further their employee relations’ goals.

He takes the time to learn about the businesses he advises and tailor their employee relation strategies to promote a better workforce and a better workplace. For those clients with established union relationships, Mark has worked diligently to further his clients’ labor relations...

Adam Gajadharsingh Insurance Attorney Barnes Thornburg

Adam Gajadharsingh focuses on commercial litigation, data security, and insurance coverage disputes, along with a variety of other subject matter areas. As a former business owner, he also brings first-hand knowledge of running a company when helping clients with their corporate legal needs.

Prior to joining Barnes & Thornburg, Adam practiced at a firm based in Washington, D.C., and with two other firms based in Atlanta. Adam has handled general corporate, class action, insurance defense, breach of contract, unfair competition, Lanham Act and landlord/tenant disputes. He has...