Confidentiality and Inventions Assignment Agreements with Consultants

June 3, 2014

document reviewWhile companies have traditionally relied on employees for the development of inventions and other proprietary information it is increasingly common to use consultants to perform similar services.  Such arrangements provide companies with more flexibility to tap into specialized skills available through consultants without the added expense of creating an employment relationship.

If a client will using consultants for technical work on a regular basis it will be useful to create a comprehensive consulting agreement that is tailored to engagements in which the consultant will be creating and/or receiving confidential information to be owned by the client and will be developing inventions and other items eligible for protection under intellectual property laws that will be assigned to the client by the consultant.  See Specialty Form at § 51:141.50.  The agreement will be similar in many ways to an employer-employee relationship; however, the agreement should clearly lay out guidelines for provision of the services that are intended to fall within the definition of an independent contractor relationship even though the consultant may receive equity in the client as part of the compensation.

The confidential information and assignment of inventions agreement should include restrictions on the consultant’s activities with respect to solicitation of the client’s employees and other consultants, as well as restrictions on the consultant’s ability to provide services to other organizations that might be deemed competitors of the client.