An invention assignment agreement is a written agreement in which one party (assignor) assigns, grants, or otherwise transfers all right, title, and interest in the assignee’s future inventions to a second party (assignee). Invention assignment agreements are often part of a larger employment and/or confidentiality agreement. A company hires an employee, pays him, and then states that all work he does for the company-all inventions he creates-belong by the company.

An assignment is not a license. Under a license, the company merely gets to use the invention for a time. Under an assignment, the company actually owns the invention.

Important provisions in the assignment state that:

• The employee’s inventions, concepts, know-how, original works of authorship, and so forth are assigned to the company and are “works made for hire;” in other words, the company owns them;

• The employee will notify the company of his inventions in a timely manner;

• The employee will help register the inventions for the company;

• The employee will keep the company’s confidential information confidential and not use it for his own purposes;

• In some cases, the employee will not for a time compete with the company after his employment has ended; nor solicit its employees;

• The employee’s at-will status is unaffected by the assignment, and the company’s ownership in the inventions does not end after the employee is let go; and

• The employee may have to assign later inventions to the company after his employment has been terminated if the inventions were conceived during his employment but not reduced to practice until later.

Companies have tried to expand the employee’s scope of employment such that all of his inventions fall under the “works made for hire” rubric, but courts and state laws have counteracted this desire such that inventions unrelated to the employee’s duties or the company’s goals belong to the employee, not the company.

Whereas the company must be confident that its interests are protected both during and after the employee’s employment, the employee must ensure that he is being adequately compensated for giving up his inventions in the invention assignment agreement and that he can continue to make a living after if and when his employment with the company ends.

RealDealDocs.com is a division of Practice Technologies, Inc. the creators of SmartRules.com.
SmartRules provides step by step guides to local rules and civil procedure for state courts & federal courts throughout the country.

Popularity: 5% [?]

Held in New Orleans last week was a panel speaking on the issue of “The Law Firm of the Future - Who Will be the New Winners and New Losers.” With growing financial concern, legal fees are being watched closely as companies and/or individuals are trying to decide if the fee is feasible. That is why a panel consisting of Bruce MacEwen, a New York-based law firm consultant; Sheryl Willert of Williams Kastner in Seattle; Patricia Diaz Dennis, senior vice president and assistant general counsel of AT&T; and Raymond Williams of DLA Piper’s Philadelphia office advise firms to discount rates!

It’s all about a discount now adays!

“We are facing pressure on rates,” said MacEwen, who also mentioned that one company fired its law firm after it became public that firm was charging $1,000-an-hour rates.

According to Diaz Dennis, AT&T sent out a letter to its law firms a few years back, advising them that their budget was too high.

“The ones that stepped up to the plate and offered to share that pain with us are the ones who are still working with us,” she said.

Popularity: 3% [?]

For many companies, their intellectual property - such as processes, customer lists, trademarks, copyrights, or patents - may be their most valuable asset. In instances of a sale or liquidation of a company, a valuation of this intellectual property must take place. This valuation process complex, since intellectual property is intangible, and its value will change over time (typically downward).

There are three primary ways to arrive at the value of intellectual property: Cost, Market, and Discounted Cash Flow.

• Cost - This method asks what it would cost someone else to duplicate the intellectual property if they had to start from scratch. What people would they have to hire? What equipment would they have to rent or buy? What research would they have to perform? What information would they have to gather?

• Market - This method looks at other transfers of similar property for which the price is known and makes adjustments to determine what this property is worth. This method would yield accurate results if you really could apply it, because you would be (presumably) evaluating arm’s length transactions involving well-informed buyers spending real money and well-informed sellers actually giving up their hard-won assets.
• Capitalization of cash flows - This method looks at all the benefits of owning the intellectual property and discounts them to present value. Although it’s the most complex, it’s also probably the most accurate and the most ascertainable. This approach considers all the benefits of owning the intellectual property and considers all the possible uses for the property.

These three approaches are often used in valuing Intellectual Property. Upon liquidation, the bankruptcy trustee will be the one to decide which valuation to use.

Popularity: 8% [?]

It is no secret that marketing is one of the most important parts of today’s businesses world. The average person may not realize how much Hollywood studios, computer software companies and fast food restaurants spend on marketing every year, but it is safe to say that it is often more than development. Some big budget films now have 70-100 million dollar budgets just for marketing, an unheard of amount even 10 years ago. However, even with all this money and supposed expertise, some marketing campaigns fall flat on their face. Let’s take a look at a few common sense tips companies can follow to get the most out of their next marketing campaign.

Ignore the web at your own risk

While Arizona Senator John McCain happily announces that he not only doesn’t know how to use a computer but that he’s never been on the Internet before, he is not representative of the overwhelming majority of the American population. More and more people are not only working online, they are entertaining themselves online and the television is being pushed into the background. Not only is advertising online often cheaper than more conventional methods of advertising, but you reach the most coveted demographic online, as well, males 15-39. Granted, if you are selling life insurance and burial plots, you might want to reduce your online marketing budget, but if you are selling any other product or service in the world, the best bang for your buck is going to be in cyberspace.

Treat your audience with respect

It doesn’t matter if you are selling sugar cereal to 9 year olds or if you are selling the new Coldplay CD to teenagers and adults, people across the board are smarter today than ever before. The quickest way you can alienate a potential audience is by either talking down to them or insulting their intelligence. That’s not to say that you need to have a highbrow advertising and marketing campaign that would fit into the pages of the New Yorker; it simply means that if you make outrageous and incredible claims about your product or service, it had better live up to expectations. The days of the snake oil salesman are numbered.

Avoid blanket marketing

One of the most amazing occurrences in the cable television age is how fragmented and niche we’ve all become. It use to be that there were only a handful of networks(3 major ones + PBS), and if you wanted to run a television commercial, you tried to make it appeal to as many people as possible. The days of blanket marketing are long dead, however. Today, we have hundreds of channels, thousands of magazines and millions of websites. You are far better off creating a dozen marketing angles for your product that you can niche market to different groups to try to reach as many people as possible. Yes, it will take extra time and yes, it will take extra money, but if you don’t, your marketing campaign is likely to be dead on arrival.

Click on one of these links to check out sample legal documents drafted by Amlaw 200 Law Firms for Fortune 500 Companies.

Popularity: 6% [?]

Let’s say you are an executive of a company, and the company presents you with an Equity Incentive Agreement. The idea behind Equity Incentive Agreements is that if the financial stake of the employee is tied closely to the financial future of the company, then that employee will have the incentive to work hard to meet the company’s financial goals. The package offered to an employee, as described in an Equity Incentive Agreement, will usually contain a mix of stock and stock options, carefully adjusted and fixed to company growth so as to adequately reward the employee for good performance.

Each agreement generally contains the following provisions.

Purpose. The purpose of the agreement, that being to motivate and reward the employee and permit the company to attract and retain able persons as employees, directors, and consultants, should be explained at the top of the agreement.

Plan Administration. The name of the committee that will be administering the equity incentive plan should be addressed.

Stock Subject to Agreement. The number of stock and/or options provided should be listed, and if the agreement provides for stock options to be awarded, it must cover the employee’s right and method to exercise.

Change of Control. The agreement should address what effect a change of control of the company, as defined within, would have on the agreement. Might some provisions be accelerated? The agreement should address this scenario.

If you are presented with an Equity Incentive Agreement by your employer, be sure to look out for these provisions.

Popularity: 5% [?]

An Option Agreement is an agreement between two parties that provides one of the parties with the right, but not the obligation to buy, sell or obtain a specific asset at an agreed upon price at some time in the future. One common type of option agreement is a written outline that provides the details of an employee’s ability to obtain stock options. Several key aspects must be addressed in any Stock Option Agreement. For one, the exercise price should be listed. Second, the expiration date of the options must be provided. The vesting schedule should be provided. The agreement should also provide that the options are not transferable.

The most important part of an Option Agreement is that the optionee is not committed to purchasing the shares at a certain price or at a certain time. As the word suggests, the optionee has the choice to buy or not to buy. As long as the optionee provides the company with adequate consideration, this option contract is perfectly valid and enforceable. Generally, the consideration provided by the optionee is the optionee’s services to the company by way of his or her employment.

The drafters of a Stock Option Agreement must be sure that the transaction comports with all applicable laws promulgated by the Securities Exchange Commission (SEC), most importantly the reporting and liability provisions of Section 16 of the Securities Exchange Act of 1934. These rules prohibit an optionee from selling, transferring, or otherwise disposing of any of the common stock underlying the exercised options during the six (6) months immediately following the grant of the option. In fact, the agreement itself may place even stricter limitations on transfer of the stock in an effort to curtail the risk of insider trading. Also, the employee must acknowledge that his or her decision to execute the Agreement was not based on any oral or written representation as to fact or otherwise made by or on behalf of company, and was only based solely upon a review of publicly available information.

The company’s purpose in granting stock options to an executive is to motivate the executive to work hard towards the company’s growth. This purpose is undermined if the executive optionee is allowed to sell his stock immediately after exercising the option. Thus, it is reasonable to include a holding period whereby the stock cannot be sold, transferred, or otherwise disposed of.

A valid Stock Option Agreement must adequately address these legal issues and further cover in detail the representations and warranties made by each party. If the necessary language is included, a stock option agreement is valid and enforceable once executed by both parties.

Popularity: 5% [?]

A Restricted Stock Unit Agreement is an agreement made between a company and a recipient or purchaser of that companies restricted stock, usually an employee. A Restricted Stock Unit is a grant valued in terms of company stock, but in such a situation, company stock is not issued at the time of the grant.

Common in corporate settings, Restricted Stock Unit Agreements must identify the parties and the number of restricted shares being awarded. The agreement should refer to specific provisions of the employment agreement in terms of addressing the issue of the termination of the employee’s employment with the company. Generally, if the employee is terminated without cause, then he gets to keep the shares and they lose their restricted status. If the company terminates the employee for good cause, then the employee usually loses the shares altogether.

Usually entered into by an employer and an employee, a Restricted Stock Unit Agreement is a critical part of enticing the employee to stay with the company and, by tying the employee’s financial interests to those of the company, motivates the employee to perform at his her best.

Popularity: 8% [?]

A Restricted Stock Unit Agreement is an agreement made between a company and a recipient or purchaser of that companies restricted stock, usually an employee. A Restricted Stock Unit is a grant valued in terms of company stock, but in such a situation, company stock is not issued at the time of the grant. After the recipient of a unit satisfies the vesting requirement, the company distributes shares, or the cash equivalent of the number of shares used to value the unit. Depending on plan rules, the participant or donor may be allowed to choose whether to settle in stock or cash.

Common in corporate settings, Restricted Stock Unit Agreements generally address the following issues:

1. Parties. The name of the company and the employee must be identified.

2. Number of Shares and Price. The amount of restricted shares, the price of each share, and the total purchase price should be identified. When and how payment is to be made should also be discussed. Details regarding the purchase price may not be important if the shares are given to the employee for free.

3. Covenant Not to Sell. The most important provision of the agreement is the employee’s promise not to sell, assign, transfer, or otherwise dispose of any or all of the restricted shares until the termination date(s) set forth.

4. Termination Dates. This provision should set forth the dates that the restrictions on selling the stock terminates. The date may be the same for all shares or may be broken off. For example, perhaps 1/3 of the shares lose their restrictions after one year, 1/3 the next year, and 1/3 the following year.

5. Termination of Agreement. The agreement should refer to specific provisions of the employment agreement in terms of addressing the issue of the termination of the employee’s employment with the company. Generally, if the employee is terminated without cause, then he gets to keep the shares and they lose their restricted status. If the employee is terminated for cause, then the employee loses the shares altogether.

6. Clear Explanation of Restricted Status. The agreement should clearly notify the employee that the certificate for restricted shares shall bear a legend to the effect that the transferability of each share is restricted in accordance with the provisions of the agreement and that they have not been registered with the SEC and thus they may not be sold or transferred.

7. Employee Representations. The employee must represent and warrant to the company that the restricted shares are being acquired for him or her solely for his or her own account and not with a view to, or for sale in connection with, the distribution thereof.

8. Miscellaneous. A provision should be included that states that the agreement, together with the Employment Agreement, embodies the entire understanding between the company and the employee and supersedes all prior agreements and understandings relating to the matter covered.

These are the most essential provisions of a Restricted Stock Units Agreement. Generally entered into by an employer and an employee, this agreement is a critical part of enticing the employee to stay with the company and, by tying the employee’s financial interests to those of the company, motivates the employee to perform at his her best.

Popularity: 6% [?]

Properly thought out and managed trademark license arrangements can be win-win opportunities for all parties, including the public. The document that goes a long way toward realizing this opportunity is the trademark license agreement. This agreement is a written contract in which the holder of a trademark (licensor) grants the revocable right to a second party (licensee) to use the holder’s trademark in exchange for royalty fees. Without the license, the licensee could not legally use the trademark.

Trademarks are a type of intellectual property. Trademarks are distinctive signs or indicators-usually phrases, logos, slogans, designs, images, or combinations thereof-that identify a specific company or organization to the public. Protected marks are accompanied by the superscript “TM” for trademark, “SM” for service mark, or the encircled “R.” They are similar to copyrights and patents but also have distinct differences. One of them is the protection they receive. Copyright protection spans the length of the author’s lifetime plus another 70 years; however, trademark protection is usually only five years, and it must be attentively guarded.

Similarly, trademark license agreements are also of limited duration. While a trademark owner may license the mark, knowing full well that the ownership does not pass to the licensee, the owner may also go one step further and sell the mark to a buyer. A sale, however, must include the underlying goodwill or assets that make the mark what it is. Without such goodwill or assets, courts have determined that such a sale is a fraud on the public, similar to selling a brand new car that lacks an engine.

Trademark license agreements should contain a handful of essential clauses for everyone’s protection, including the public. First, the trademark must remain somewhat exclusive. A licensor would be foolish to dilute the mark by licensing it to every maker of ball caps in the market. Such a scenario might seem like a bonanza for the licensor, but it would soon become absurd as trademarked caps flooded the market. Second, the licensor must make certain that the licensee adheres to the licensor’s preexisting quality control standards. To license the mark and then to discover that it is to be placed on substandard licensee products would be disastrous for all parties. Next, it is up to the licensor to provide examples of the mark, in various media forms if need be. If the licensor leaves it to the licensee to try to copy the mark as best it can, then surely trouble will result. Instead, the licensor should provide exemplars and hold the licensee to them-no slight modifications of font or color or spacing; no additions of phrases or images; nothing to alter the mark in public’s eye.

Fourth, the licensor must have veto power over the use-not merely the design-of the trademark. The licensee should not be permitted to use the mark in connection with the licensee’s political or philanthropic causes (even if they are good causes), if the agreement was for use of the mark only on the licensee’s ball caps. If the licensor does not want the mark used with political or religious organizations, or hawked to promote alcohol, the agreement must give the licensor this veto power. Lastly, the license agreement must tie these protections together under a monitoring and inspection provision. Here, the licensor can pre-approve licensee samples, so that problems do not arise later. Monitoring may seem like a luxury, but it is a necessity, for a licensor that does not monitor the quality of its products and does not safeguard its mark can be deemed to have abandoned the mark-akin to commercial suicide for many companies.

While these provisions might seem to protect only the licensor, in reality, they protect everyone. For a diluted or abandoned trademark hurts the licensor, the licensee, and even consumers.

Popularity: 14% [?]

Three principle executives of E-Gold Limited are facing some serious jailtime after pleading guilty to conspiring to engage in money laundering and operating an unlicensed money transmitting business. The three executives in the hotseat are Dr. Douglas Jackson, Principal Director of E-Gold and CEO of Gold & Silver Reserve Incorporated, and two of his Senior Directors (Barry Downey and Reid Jackson). Brought against them by the Department of Justice, this is no laughing matter. And if you think they’ll end up going to some white-collar jail like Martha Stewart…think again. White collar crimes don’t get the jailbird, A-list treatment they once received. In other words, the VIP treatment in prison has been reduced to only a select few celebrities.

Facing a fine of $3.7 million, the corporations involved (E-Gold and Silver Reserve) have already agreed to pay $1.75 million. Downey and Reid are looking at a max of 5 years and a $25,000 fine and Jackson may be headed to the big house for up to 20 years in prison and a fine of $500,000.

Popularity: 4% [?]