In a World of Constant Talent Movement, How Can You Protect Your Company’s Intellectual Property (IP)?

In today’s business environment, with employee transitions, external collaborations, and joint development projects becoming increasingly common, concerns are growing over the potential leakage of internal know-how and proprietary information.

This is especially true for startups, content creators, and tech platform companies, where intellectual property (IP) often represents the company’s core value. Even a small contractual or procedural oversight can lead to significant legal and financial risk.

This article explores common risk scenarios that have been raised in legal discussions and offers practical advice and real-world examples to help companies better protect their IP assets.

Avoid Soliciting Confidential Information During Interviews

At one startup, a candidate who had previously worked in R&D was asked during an interview about differences in technical approaches, unintentionally disclosing proprietary information from their former employer. This later exposed the hiring company to potential legal claims from a competitor.

Practical Tip:

• Avoid asking candidates for details about strategies, clients, or technologies of their previous employer.

• Consider providing a brief “Do Not Disclose” reminder via email or NDA prior to the interview.

Clarify IP Ownership in Employment Agreements

Even if employees create inventions or works during employment, the company often needs legal ownership. Without clear IP assignment language, departing employees may later claim rights over what they developed on the job.

Practical Tip:

• Include a clause in employment agreements stating that all work-related inventions and IP belong to the company. (Note: From the employee’s perspective, it’s possible to negotiate limitations or exceptions.)

• Obtain a separate assignment for each patent or copyright filing.

• Establish clear onboarding procedures for employees in development, design, or research roles.

Customize Non-Compete and NDA Clauses Based on Role

Using a one-size-fits-all approach to non-compete or confidentiality clauses can backfire. In many cases, courts will invalidate overly broad or unreasonable restrictions.

Practical Tip:

• Tailor the scope of non-compete terms by role, duration, geography, and industry relevance.

• Generic templates pulled from the internet are usually insufficient.

• For enforceability in the event of a dispute, consult a legal professional to review the agreement.

New Hires with Prior Knowledge Can Pose a Risk

Companies sometimes face accusations that newly developed features or systems resemble those from a competitor—especially if they recently hired someone with insider knowledge. In many cases, the new hire may not even realize they are applying prior know-how.

Practical Tip:

• During onboarding, clearly instruct new hires not to bring in any prior materials, code, or processes.

• Be aware that in certain U.S. states, courts apply the “inevitable disclosure” doctrine, where hiring itself may be challenged.

• Include specific instructions in onboarding documents to avoid unintentional IP carryover.

Exit Interviews Are the Last Line of IP Defense

In many companies, exit procedures stop at collecting hardware. However, this is the critical moment to reinforce confidentiality obligations and ensure full separation.

Practical Tip:

• During the exit interview, reconfirm the departing employee’s ongoing obligations related to confidentiality and IP.

• For key personnel—such as developers, sales reps, and managers—consider reviewing the risk of competitor transitions.

• Revoke access to internal platforms, delete accounts, and verify that no company data is retained.

Freelancer and Vendor Agreements Must Clearly Address IP Ownership

Disputes often arise when companies commission external designers, developers, or marketers without written agreements. If the ownership of deliverables is unclear, it can be difficult to assert rights later.

Practical Tip:

• Ensure contracts with freelancers and vendors include a clause assigning all deliverables and IP rights to your company.

• In the U.S., use “Work Made for Hire” language where applicable.

• Also check for use of open-source code or third-party materials to avoid infringement.

Final Thoughts

Intellectual property is not just about patents and trademarks. Business plans, codebases, design drafts, and internal documentation are all valuable company assets that deserve protection.

In practice, I’ve seen many disputes between companies and former employees over IP ownership. Larger companies often retain in-house employment counsel specifically to manage this risk.

If you need tailored legal advice on these matters, LexSoy Legal LLC is here to help. We specialize in U.S. IP protection strategies, contract structuring, and legal guidance for startups and businesses expanding into the U.S. market.

For inquiries, please contact sc@lexsoy.com.

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