Episode Transcript
[00:00:00] Speaker A: Hello, everybody. My name is David Pasoski. I'm an intellectual property attorney, patent attorney for a small firm called Gerhardt Law in Summit, New Jersey.
I'm a partner there for a few years, been practicing for over 20. And I have a particular interest in education and empowerment. I'm a big believer in that. I love a client or a potential client that's informed, that knows exactly what they're getting themselves into.
And so I do believe it's my personal mission to educate and empower the startups, entrepreneurs and emerging companies of the world, which is why we decided to create this series called the Entrepreneurial Strategy Series. So we're super excited that you're all here.
This particular session is actually a part two, believe it or not, a few.
I think it might have been a year ago, maybe even more. Stephen will correct me in a second.
Myself and Stephen Friedman, my co speaker for today. We were asked to write a chapter of a book that was published by LexisNexis, and it was all about employment law.
But we were asked to do the chapter on how employment law intersects with intellectual property. And as a result of that book, it's mostly for lawyers, that book. But we like, no, we got to bring it to the masses. And so we decided, I mean, you can buy it if you want, but we decided to kind of turn it into an interactive session. And by what I mean by interactive is we will show a study statement and we want all of you to kind of weigh in whether you believe it's true or false. It's always good to see what everybody thinks the answer might be. And so we want to see how many trues and how many falses. And then we'll reveal to you what the answer is and go into some detail. That's kind of how this presentation is going to go down. That's how part one went down. It was a really fun, you know, success. And we decided we didn't get to everything. There was just so much, much to cover that we decided that we wanted to make a part two. And so that's kind of how. That's kind of how, how this is brought to you today.
I'll stop for a minute. I want to give my, my co presenter a chance to introduce himself. And I'm going to add you, Stephen. Go for it. Stephen Friedman, please introduce yourself. Let everybody know who you are and if you have any introduction about the chapter or this presentation, go for it.
[00:02:33] Speaker B: Sure. Okay.
Thank you. David. Yes, my name is Steven Friedman. I am also an attorney at Gearhart Law I've been here for, I guess, a few years now, or I guess my entire legal career. So it's been really nice. I really like our focus on helping entrepreneurs and startups and kind of getting new businesses up and running from inception to making all their dreams come true. I guess so. I really enjoy that part of our work. And so, yeah, whenever we have an opportunity for me to come on with David and participate in these ESS meetings, I love to do them.
Yeah. So my, I guess my focus at Gearhart is on trademarks and copyrights. The firm handles all kinds of intellectual property, a lot of patent work as well, but me in particular, I guess the trademarking copyright specialist here.
So I guess that's. That's a lot of the information that you're going to get from me today.
And, yeah, David and I, I guess to recap the book, David and I were asked to write a chapter for the LexisNexis textbook on employment contracts dealing with IP in particular.
[00:03:51] Speaker A: I have it there.
[00:03:54] Speaker B: Employment contracts agreements. And our chapter is chapter 11. Right.
So, yeah, I mean, a lot of the information is basically the kinds of things we write about in the book. And we're excited to share it with you guys. I think. I think we'll probably start with a bit of a recap, so we know, so we get our footing, but then we'll get into the things that we missed. At the first session, someone asked for a link to buy the book. I will have to look for it on Lexus. You should be able to find it. There's probably a store somewhere.
[00:04:29] Speaker A: Yeah, you should be able to just Google it, probably. It just came out like, less than a year ago.
[00:04:34] Speaker B: I think our session was. Our session. Our last ESS was August. You can see, here's the book title.
[00:04:44] Speaker A: Yeah, yeah, you should. You should chat it to everyone, Stephen. But again, it was meant for other attorneys. I mean, it's.
[00:04:50] Speaker B: Right.
[00:04:52] Speaker A: I think the way that it was written, at least our chapter, was to appeal to, you know, not just attorneys, but everybody else. And so, yeah, check it out for sure. But this is a good preview. And again, this is going to be fun. Get your fingers ready. Right. We want you to type whether you believe that, that. Let me, let me share my screen. We're going to put up certain statements and we want to gauge your knowledge of IP and employment law and how they intersect. And so let's get into it.
[00:05:25] Speaker B: Yeah, right. It'll be a bunch of true, false. And obviously, if you have questions during, during the presentation, just throw them in the chat and we'll respond.
[00:05:36] Speaker A: That's right. That's a good point. Stephen, I'm going to make you co host also, just in case the people try to be. If there are people that are being let, that want to be let in, please let them in if you can. If I don't see them. Okay, but yeah, that's a, that's a really good point. We want your questions. If you have a burning question, put up your hand, you know, on zoom, you know, for sure.
Or, or, or chat it. So let's get into it. Enough. Ready? Okay. Intellectual property patents, copyrights and other information, including trade secrets, are often most valuable asset a business can own. True or false?
What do you think?
Okay, I see some truths.
[00:06:27] Speaker B: No, that's what we like to see.
[00:06:28] Speaker A: That's what we like to see, right? I mean, again, we're trying, we're going to start up a little bit easy, right? So, yeah, true. I think it's, I think the statistic is that 80. I think it's 82% of all companies in the world, their biggest value is their intellectual property, is their registered patent, is their registered trademark, is their registered copyright, is their trade secrets as well. Right? Those are all the four major forms of intellectual property.
And so, yes, intellectual property is the only way in the world to stop someone doing what you're doing, making what you're making, formulating what you're formulating, designing what you're designing, branding what you're branding. Fill in the verb, right? It is the only way to stop someone from doing that. There's just no other way. Go for it, Stephen.
[00:07:21] Speaker B: And intellectual property, you know, it's such a broad term, it could mean so many things that, you know, your company's name itself is intellectual property. It's a trademark, right? So right off the bat, without the name, who are you?
You know, how could you, how can you identify yourself? How do your customers know who you are?
That by itself is probably one of the most intellectual, one of the most important assets that a business can own. But then on top of your name, anything you create, anything you're, you know, if you're selling some particular unique invention, if you are selling some kind of creative work, if you are some kind of software platform, all of that is ip. And all of that goes to basically the essence of your business, that is that without that, you know, you don't have much in the first place. So very important.
And yeah, I mean, we're intellectual property attorneys, so that is, that is going to be our opinion. But yes. Good to start off on this, with this as a basis.
[00:08:29] Speaker A: Yeah. But Jane, you know, James, I, I, I, I, I, James Gershwell just chatted. I am going to pick on him a little bit. He says perhaps it's more true for product companies compared to services companies. I'm not so sure about that, James. Most of our clients fall into two buckets. They're either creating a product or they have a service. They have a software as a service, let's say, and they better protect that software with patent or they better protect that name of their service with, with, with an actual trademark, even if they don't have something patentable that's based in science. As a service company, they're probably creating marketing materials or, or, or, or, or just anything creative and artistic that is worthy of copyright. So I think it's equally true, James. I mean, I'm picking on you a little bit, but I think it's equally true.
[00:09:19] Speaker B: Yeah, yeah. I mean, it's an interesting, it's an interesting distinction. And you know, I think product companies probably have a more obvious kind of intellectual property that you're trying to protect.
But service companies, you know, software is a pretty clear example. But you know, even if you're a service, you know, you're, you're giving massages to someone. Right. Like at the end of the day, differentiating yourself in the market is extremely important and probably one of the key ways of expanding your business and that's trademarks, intellectual property.
If you are providing a service that has some kind of, if you have some kind of unique way of providing the service, some kind of trade secret or kind of internal, know how those kinds of things are also ip.
And you know, differentiating your service from other services is also extremely important.
And so yeah, Richard also said a process for a service company. Exactly what I'm talking about. Right. So all of that would still fall under the category of ip.
And so, you know, as broad as it is, it's going to be probably your most valuable asset above anything else. I mean even that's probably. Yeah, never mind. Okay, let's move on.
[00:10:38] Speaker A: No, no, that's good, that's good. I'm sure we'll get into it more. Let's get to another one. You can safely skip a written contract with someone providing work for you if they are not an employee.
Can you safely skip a written contract with someone that's providing work for you even if they are not an employee? True or false?
False. False. False. False. False. False. False. Yes, we know, I know it's just. Yes, Jane. Correct, right?
Yeah, yeah. For correct. And so that is definitely false.
Wow. I cannot tell you how many times a week that we have someone that will call us and say, I, you know, ask somebody to do work for me.
Maybe they were a friend or, you know, they did it out. They did it out of altruistic reasons or whatever it is.
I think I only have like an email with them or a WhatsApp text with them or I sent them an invoice.
Now they screwed me. They didn't provide the service. Can you help?
Oh, my God. That is like, you know that. That is like the worst music to our ears as attorneys. As it should be for all of you, right? When you are asking somebody to create, especially create intellectual property for you, if you're asking somebody to invent for you, if you're asking someone to create a logo for you for a trademark, if you are asking somebody to write copy for your marketing and, you know, for, for, like to create blogs for you or whatever, whatever it is that's creative and artistic, you need a work made for hire. It is, it is, it is an agreement that all of you should have in your arsenal, period.
It's. Sometimes I'm going to, I'm going to go out in a limit. I'll say this. It is an agreement that we actually offer for free at the firm. Right. Because it's such an important one. I mean, we, don't get me wrong, the one that we're going to give you is pretty standard, right at the end of the day, but if you need one, just contact us. We would rather you sign a standard agreement. Of course, these, these service contracts should be highly, highly, highly negotiated right the end of the day and so you can use it. But at the end of the day, if it's something that's out that, that is unique in nature, then of course you should invest in an actual services agreement which would contain work made for hires. And so, yeah, Stephen, I'm sure you have a bunch of things to say, that's for sure.
[00:13:23] Speaker B: Yeah, no, I mean, it's good to see everyone saying false because so many people that, you know, come to us and they didn't have a contract or they didn't think it was important or worse, people who, you know, we settle something for, we settle a bit, you know, a problem for. And they say, oh, do we really need a contract to settle this? And I why'd you come to us?
So contracts very, very important. I will, you know, say that, say that all the Time. Because like David was saying, if something goes wrong, if there's a complication, even if something's not going wrong, but you're not exactly sure how to handle a situation that kind of comes up and you want some guidance or your working relationship with someone should be clearly defined in that contract. Right? We are talking about ip, but this goes for basically anything.
At the end of the day, you need a written contract that defines how you are going to operate in this working relationship with whoever it may be is extremely important. Right. Whether that comes to payment or what kinds of services or to what extent the services they're going to provide is going to be all extremely important. To put that out in writing. And we're going to get towards more kind of IP specific, like David was saying, work for hires and those kinds of things, we're going to explain them a little bit more, there's going to be more slides about those.
But yeah, all these kinds of relationships should have a, you know, the relationship defined in writing. So, so everyone understands what is expected, how things are going to proceed, what happens in the case of a dispute, how that is settled, all of these kinds of things.
At the end of the day, you don't want to leave it up in the air. And then when one of these things comes up, both of you wind up having to pay more legal fees for the dispute than you would have had to in the first place if you just got a contract together.
[00:15:29] Speaker A: Right? Yeah, exactly. This is not just about employee, employer, employee, this is about contractors, this is about freelancers, this is about interns. This is any sort of relationship where you ultimately want to own the thing that somebody is creating for you.
And so that's something to think about. And so, and it kind of works the reverse. You might be the contractor and you might be hired to create the thing. And you need to understand that you probably do not own the thing that you're creating under the agreement. It is owned by the person that's paying you as a contractor, as a freelancer, as an intern.
And so it's important that if you want to reserve any rights of ownership, that must be negotiated with the person that's paying with you. Not impossible, right? Employees can own parts of the things that they're creating for their employers, but it has to be a negotiated type of situation. There are employee owned companies, they own part of the intellectual property of those companies.
And so keep that in mind.
Richard, the email for the free agreement is my email. And so you can email me and I'll get you that.
Okay, let's get to, let's move on to next one.
Copyrights are automatically owned by the company, even if created by an independent contractor.
Copyrights are automatically owned by the company, even if created by an independent contractor.
What do you think?
Any other false. I think people are a little bit unsure maybe.
Right?
[00:17:27] Speaker B: Yeah.
[00:17:28] Speaker A: These are not meant to be trick questions right at the end of the day. But I mean we are lawyers at the end of the day, so sometimes the way it kind of is expressed might be a little bit abstract.
[00:17:39] Speaker B: I mean, maybe we should start with what, what even is a copyright?
You know. You know, obviously these words, we throw them around and they're thrown around all the time. Copyright, trademark, patent, these things. But a lot of people don't really know the full difference between all those.
[00:17:54] Speaker A: Go fartsy.
[00:17:56] Speaker B: So a copyright, which is what we're talking about here, is any creative work that is fixed in a tangible medium. What does that mean? It can mean all kinds of things, but essentially it protects works of original creative expression by human authors. That can be a book, that can be, you know, a video you make. It can, it can. It goes all around. It can be a song, it could be a dance you perform or an act, anything, as long as it's. As it's a fixed thing in, in a tangible medium and it's. And it has some kind of human original element that was created by you.
You can have a copyright in it and that copyrights are unique in that they pretty much attach to that work as soon as you create it and fix it.
But I mean, obviously there are advantages to registering your copyright and all these things. But we can get towards, we can specify that later. But that's what a copyright is for. This question, I guess. And you know, we'll talk about patents and trademarks and things later.
[00:19:02] Speaker A: So, so what was that? What was the consensus? I think it was false. Everybody who was a little bit unsure put some like conditions, like I, Sir Emily did. Those are all very thoughtful and, and insightful because yes, it is false.
Here's the thing. I, Stephen, kind of touched on it. Copyrights are the only form of intellectual property. That the moment the creator creates it, the moment the painter takes that paintbrush and paints a canvas, that moment he owns the copyright. The moment I take my pen and I write a song, I am the creator, I am the author, I automatically own the copyrights.
And so if you are asking somebody else to create something for you, then logic would say that they are the owner unless they give up their right to copyright. And the only way to give up their right to copyright is in an agreement. It has to, like you literally have to. The copyright owner literally has to say, I know that I am the owner. I created it. I am the automatic owner. That's what copyright law says around the world. But through this agreement, I am transferring it to you. You're paying me a dollar for it. You're paying me nothing for it. But there's an agreement that actually transferred. I know that I'm giving up my rights, my federal rights in copyright. And there's a. Stephen will talk about them in a second. There's a lot of rights you get when you create something.
And so employees, independent contractors, it can't just be. It can't just be assumed that they, that, that, that the things that they're creating are owned by you. It must be in a written agreement signed by both parties, the creator and the person that wants to eventually own it.
And it's important because copyright ownership comes with great, great, great powers. And so I don't know, Steven, if you want to break down the, the bundle of rights.
[00:21:19] Speaker B: Yeah. So copyright protections are, have been codified in the United States by a number of different acts. But the act that we are currently operating under is the Copyright act of 1976.
And it gives a bundle of copyright protections to the owner of the copyright.
They have the exclusive rights to reproduce the copyright, to display the copyright, if it's performable, to perform the copyright, to create derivative works of the copyright and to distribute the copyright.
And so, you know, in the case of a book that's reprinting the book, selling the book, distributing the book, I guess you can't perform a book, display the book, those kinds of things.
And right, like David was saying, if someone's creating a work for you, you know, if they're an independent contractor, that has to be addressed. Because the Copyright act, like David was saying, automatically vests copyright ownership in the author of whatever that work is.
And so if you are an independent contractor, even if you're writing the thing, if you're creating the work for something for someone else, you are automatically vested with the rights to that copyright.
The exception being under the Copyright act, that you can do what's called a work made for hire, you can, you can deem that that work you're creating as a work made for hire. And when you do, that.
Doesn't just automatically assign the rights, the copyright to the company that you are hired by, but it makes the Copyright act as if the company created the copyright and that has all kinds of implications for, you know, duration of the copyright, but, you know, most importantly, ownership and who has those exclusive rights to exploit the copyright.
And there's.
That has to be in writing under the Copyright Act. If you're an independent contractor, you can't just say it verbally.
As many of you probably know. Some contracts are binding verbally, but a work for made for hire has to be in writing under the Copyright act and pretty explicit.
So again, anytime you are utilizing an independent contractor, it is extremely important.
And yeah, it's even not just for things that sound obvious. Right, right. Like if, like the example I was giving where someone's writing a book or someone's writing code for you, those things are pretty obvious. But even where someone is, you know, you hire a marketing assistant as an independent contractor and they start creating some marketing materials for you.
You know, maybe they make some social media shorts or flyers or things like that. If you don't have work made for hire, technically at least some part of those marketing materials are going to be owned by that contractor and, you know, they might have some rights about using them, restricting your use of them, those kinds of things. So again, very important. Have. Have these things in writing, especially independent contractors, employees. There's a whole other. Well, that's the next slide. So. So we'll get to it.
[00:24:46] Speaker A: Yeah. Can we just. I don't know if you see Jane's question. It's a good one. She says can you please spend some time on enforceability of these contracts? So you have a work made for hire, you have an independent contractor agreement, you have a freelancer agreement. How again, you did everything by the book.
How easy or hard is it to enforce that against the person that actually has. The person that created your work is now. The person that created your work for your benefit is now taking it.
[00:25:18] Speaker B: Yeah, I mean, if you did everything right, it should be pretty easy, right?
[00:25:22] Speaker A: Exactly.
[00:25:23] Speaker B: You know, at the end of the day, solving things with litigation is not the ideal outcome. You know, someone can do something unlawful or, you know, if they've signed their rights away to something, they can always like go and do it, even if it's not. Not lawful. Right. And then you have to, you know, go after them somehow either.
You know, a lot of time we'll send them a letter and hopefully that resolves the issue.
But, you know, if your contractor goes out and starts reproducing the work that they made for you without your permission, and they don't respond to your request to them to stop or even a Legal a letter from your attorneys to tell them to stop, then yeah, you might have to sue them. And a copyright infringement claim, federal court is no joke, especially if you have your copyright registered. If you have your copyright registered, which you have to have it registered before you file the claim, but if you have it registered before the infringement occurs, you get all kinds of other advantages like statutory damages and attorney's fees. So another reason why registering your copyright is important.
But yeah, I mean, you submit that written agreement in court as evidence that you are the true owner of the copyright and they have signed their rights away as a work made for hire or an assignment agreement, it's pretty dispositive, you know, unless there's some kind of complication, like there's something else going on or, you know, that's not the work exactly. That they're reproducing. Something like that. But other than that, I don't see. Like, it seems to me like it would be kind of a slam dunk issue.
Um, especially if you get your registration in first, then you can get some real advantages from that. Um, so hopefully that answered the question.
[00:27:14] Speaker A: I think it did. And yes, Dwayne, this does apply to hiring a corporate or product filmmaker. Again, anybody that's going to create something creative or artistic for you, you need some sort of work made for hires that you. So that the ownership of the, of the resulting work is actually described and that there's no.
That there's no confusion later on.
[00:27:37] Speaker B: Right. GL asks, what about derived works? After assigning the copyright to an employer, can the original creator continue to use the transferred work and continue it for others and assigning the rights? No, if you've signed a good agreement, you know, if there's a good agreement in place where the, you know, technically the creator of the work is assigning their rights as a work made for hire, they wouldn't be able to create derivative works because derivative works are part of that exclusive bundle of copyright rights in the Copyright act.
And they can't then assign copyrights or sublicense them to some third party because they don't have the copyright in the first place.
I mean, like I was saying, they, you know, people can do things that aren't lawful, but, you know, lawfully, I guess is what I'm saying. They can't go ahead and do those things.
[00:28:28] Speaker A: I want to, I want to just touch on Vuger's question. Does it matter that you registered it anywhere in the world and infringement happened in the US by a global company? I want to say one Major, major thing about intellectual property. It is what we call territorial meaning. If you only have a registration for a patent, a trademark or copyright in the United States, then your property line is the United States, which means you can go after an infringer either in the United States or somebody that's trying to sell in the United States.
But the opposite is true as well. If you do not have a registered patent, trademark or copyright in Canada, and you discover that somebody is potentially infringing your U.S. patent, trademark or copyright, again in this hypothetical, you do not have a registration in Canada, then you cannot take your US Patent trademark, a copyright march into the Canadian court and say, recognize me. You cannot do that. What you have to do is register your intellectual property in the countries where you want to eventually bring some sort of lawsuit. The rub here is, is that you have a very limited time to do that for certain forms of intellectual property. Like for patents, you don't have a lot of time to do that. For trademarks, you can do it, you know, whenever you want. For copyrights, you can kind of do it whenever you want as well. But there is some benefit to try to make these filings in other territories as early as possible so that somebody doesn't beat you to it. Right. They didn't file their protection first. So when, so where you think that you had some protection and that you were really first in this hypothetical in Canada, but you didn't really registered in Canada until you found out that somebody was infringing you, it could be that that infringer in Canada had already filed his copyright before you in Canada, and therefore he has a priority and senior rights. So always think about, people are always saying, where should I protect. Is there a global patent? No. Is there a global trademark filing? No. Is there a global copyright filing? No. You must file your intellectual property in each of the countries where you want to do business, where you want to market, where you're going to manufacture, where you're going to have, where we can have production. Where you think people will rip you off, you file there too.
Because if you don't, you might not. To answer your question, Vuger, you might not be able to stop them from, from, from, from infringing your copyright.
[00:31:20] Speaker B: Yeah.
[00:31:20] Speaker A: Or in this situation.
[00:31:22] Speaker B: Yeah. There are some inter country treaty kind of things like copyrights have the Berne Convention and trademarks have Madrid, the Madrid system.
But really what those do is allow you to extend your protection to countries, but you still then have to file that. Right. You can't just have it and assume that Those things will apply.
Those things are in place to allow holders of IP in one country to extend their protection to another country. But you've got to go ahead and go through the process of filing all of those things.
And yeah, like David was saying, very important to handle that, especially if you're going to be doing international business.
[00:32:03] Speaker A: Right. Do you want to.
I think we should get to the next slide. But just to Jane's question, when it comes to, you know, how would you track or find that, that.
That potentially somebody was infringing you?
It's tough for sure.
For copyrights, it's tough. You. You definitely have to be like, as the owner of property, you need to police your own property. Like in the same way you would put a fence around your home.
That's your real property, right. You'll put a gate with a code. Your building has a doorman. Right? There's some first line of defense. And so you need to usually police your copyright. You're in the industry. This is your business, this is your industry. You need to know who your competitors are. You need to do Google alerts and searching and always be on the lookout for potential infringers.
There are services that can actually provide this as well.
But in the end, it's tough.
Usually when you find out that somebody's infringing you, it's usually when that.
When that third party has reached a level of success that is possibly outdoing you or out marketing you, and then you're like, holy, they're completely surpassing me and potentially using, you know, my works. You know, and so, yeah, you got to police your own stuff.
[00:33:40] Speaker B: You know, the other thing I'll say is, well, I guess first of all, you know, if we're talking about in the context of, you know, someone who you're contracting with, you know, a contractor or an employee, you should be monitoring things that they're doing. You know, if someone wrote some code for you and, you know, you're out using it in your app and you notice, you know, you're on their LinkedIn and, oh, they seem to be writing code for a very similar app coming up, that's something you should question. So you should be monitoring those kinds of things.
I lost my train of thought on the second thing I wanted to say.
We'll come back to it.
[00:34:24] Speaker A: That's okay. We'll go to the next slide. It probably will jog your memory. Yeah, here we go, people. True or false.
And some of this you might have talked about already, but you should get it right. Employee copyrights are owned by the company even if created outside the scope of employment.
Employee copyright. So I'm an employee of a company, I create something, is it owned by my company, even if it's created outside the scope of my employment?
Employee copyrights are owned by the company even if created outside the scope of employment. What do you think? True or false?
[00:35:04] Speaker B: Another tough one. Maybe I should, we should, we should clarify the difference between employees and independent contractors.
This one maybe more people know. But you know, when we're talking about independent contractors, we're talking about people that don't get, you know, employee benefits. You know, certain tax consequences are different for an independent contractor versus an employee.
And aside from that, there's copyright differences in, in ownership when you're talking about an independent contractor or an employee. So you know that work made for hire thing we were talking about, those apply to both, but there are different requirements.
And I guess, I guess before I keep talking, we'll see.
[00:35:47] Speaker A: No, there's some, there's some good, there's some interesting insights here. There's definitely some mixed bag, but it actually is false copyrights are owned by the company only if the employee created the work in the scope of their employment. So there was a few people that got that. Right. Right.
[00:36:06] Speaker B: So it's, it's. So if we're talking about in the work for hire context, that is statutorily what is required. Right.
An employee automatically is deemed, whatever they're creating is deemed a work made for hire for their employer. And that, that only applies if they're technically an employee. Right. An independent contractor is different.
You can be an employee technically without a written agreement saying you're an employee. There's, you know, you could be an employee by default, but that's very, that's very cumbersome to prove if you're kind of in court doing that. So again, preferring an agreement that says you're an employee, but the work paid for hire context, the automatic assignment applies only in the scope of your employment. Some people said things like for large companies, all your time is supposed to be spent working for them. Or companies enforce these contracts.
Also possible if you're signing a contract with, I mean any size company, but if the contract says something like aside from the default work made for hire, that happens during the scope of your employment, the employee is also assigning all works that they do that they create, say with a company computer or if you are doing it during work, if you work at all on it during work hours.
That might not technically be under the work made for Hire default under the Copyright act, but you can still assign those rights away, you know, in a contract just between two parties without, without the, the Copyright act getting involved.
So there's a lot of ways that that can interact. But I guess this false answer is just for the default work made for hire arrangement under the Copyright Act.
But yeah, a lot of, you know, contracts, generally independent parties can contract for whatever they want, you know, as long as it's not unlawful. For some reason
[00:38:09] Speaker A: we get this question, a lot of people will call us up and say, well, I'm working for a company, but I have this side hustle.
And so usually some of the questions we ask are, okay, are you using your company computer for your side hustle? Not good, right?
Are you on the phone during workout, during your designated work hours? Are you working on your side hustle on the phone at work?
Not good, right? These are all indicators that even if that side hustle had nothing to do with the scope of employment, the fact that you are using company time, it kind of common sense, right? The fact that you're using company time to work on your side hustle may trigger something for the employee, for the employer to say, well, no, the thing that you've created while on my time dime, on my dime and my computer is actually mine. So we usually encourage employees now to look at the terms and conditions that they signed when they were, when they were hired. Right? You went, I think there's somebody from HR on this call right now. Right. Usually companies should have some sort of like HR policy related to the intellectual property that shape that the employer wants to own. And what are some of the exceptions that, that the employer's not saying you can't do a side hustle. That's not what they're saying usually. But don't do it on my time and on my diamond, on my, and, and, and, and, and on my computers, right? And definitely don't compete with me. Don't make the same thing that I'm making. Right? You want to make something else, fine. But again, do it somewhere else outside of my line of sight because the moment you bring it into the workplace, it could potentially be theirs. And so it's a very slippery slope for sure. It's a very facts fact dependent thing. But in the end it's somewhat common sense. At the end of the day, you know, if you, you know what you, you know that the things that you might be doing as an employee that maybe blur the line of, you know, like if you are an employee that has a side hustle, you, you know, deep. There is a gut feeling to this as well, you know, that the things that you might be working on at work for your side hustle might actually trigger ownership in your employer. So don't do it. Do that on the weekends, you know, do that at night, you know, or something like that, you know.
[00:40:40] Speaker B: Yeah. And read your contract.
[00:40:42] Speaker A: And read your contract. Right, right.
[00:40:44] Speaker B: Read it. So, you know, you know, if the contract says you are going to be working from nine to five, that is when you're going to be working.
[00:40:51] Speaker A: Yeah.
[00:40:52] Speaker B: And that is. That is the definition of that.
That arrangement. Okay, next question.
[00:40:58] Speaker A: Well, I think everybody should be getting this right now. Right. Works by independent contractors and employees which go to the company are called work. Are called works for hire.
True or false?
Works by independent.
[00:41:12] Speaker B: Again, we are not a trick question.
[00:41:14] Speaker A: It's not a trick question. Works by independent contractors and employees which go to the company. So. Which are owned by the company are called works for hire. What do you think? True or false?
Yeah, this is. We'll go quickly to this one. This was true. Right. A work made for hire, as Stephen explained, is a common term in an independent contractor and.
Or an employment agreement. It's also very, very, very.
It's also a very common term in consulting agreements. Right. Consultants are like contractors also for freelancers, which are. Which is like a type of contractor. Type of contractor. And also for interns. Right. You have interns that are working for you. Some interns, depending on where you are.
Again, the things that they're creating for you are. Should be owned by you.
[00:42:04] Speaker B: Right. I think it's.
That last point is interesting that you bring up. When we use the word independent contractor, that doesn't necessarily mean at the top of the agreement it has to say independent contractor.
[00:42:16] Speaker A: That's right.
[00:42:17] Speaker B: Right. That basically refers independent contractors. Basically referring to anyone that isn't technically an employee, but someone who you have contracted with to perform some kind of service for you.
[00:42:29] Speaker A: That's right.
[00:42:30] Speaker B: Saying that can be someone who. Their title is independent contractor or their title could be consultant or anything like that. An intern, an assistant, things like that. You know, the agreement can say all kinds of things, but the law, at least the copyright law we're going to call.
We have two buckets basically with people you sign contracts with, independent contractors and employees.
And if you're not an employee, you're an independent contractor, regardless of what the technically the title of the agreement says.
[00:43:04] Speaker A: Yes. Stephen, do you want to comment? GL has a GL who.
[00:43:11] Speaker B: Can you hear the honking on the Street. I'm in Brooklyn as well, so.
[00:43:14] Speaker A: Oh, no, I don't hear it actually.
[00:43:16] Speaker B: Okay, good.
[00:43:17] Speaker A: So his point, his question is like, okay, but like, you know, most of my employees work from home. How, how am I going to know, you know, if they're working on a side hustle? You know, we were in a different world today, right?
There's no physical offices, there's no, you know, physical time.
How would you kind of address that issue? Yeah, yeah.
[00:43:43] Speaker B: I mean, I think in the first place, if you have a, you have an employee that's working from home, your. Nowadays, your contracts should probably spell out working hours, though. You know, if they're in a different time zone, be specific about those kinds of things too.
And so that's clearly defined, right. That doesn't wind up defined. What you're going to wind up with, like, if you're in a court proceeding, is them asking questions like, when do you typically work, when should you be working, when do you get email? All these kinds of things. And they're going to have to try and figure out what your work hours should have been. Right. And that becomes ambiguity, which we don't like in litigation or really any dispute. Ambiguity just makes things complicated, makes lawyers take more time, do more work, which isn't good for legal fees and leaves you unsure about what the result might be. Right. So the more specific you are on a contract, the better, the better you are. Right.
If your employee is in a different time zone and where you are, it's 11, but them, it's a working day, the contract should say something like, and their time, it should be nine to five as they're working. Something like that. Right. And if you wind up having to prove these things, nowadays with electronic discovery and all these things, there's metadata and all these documents and emails that will wind up telling you what, what time things were worked on. Right. I can, I can get a word doc, you know, in discovery and you know, with certain software you can go into the metadata and you could see when the doc was created, when it was modified, all kinds of versions of it, and they're, you know, timestamped, all these kinds of things. So that's possible. But again, more work for lawyers is less money for you.
More money for us, but less money for you.
So you don't, you don't want that.
[00:45:36] Speaker A: Right. And I think Richard is correct in his comment just now. Just have KPIs, metrics, metrics, metrics, you know, things that, and that goes for a contractor, that goes for an employee that Goes for anybody. This is what you need to be very specific. The more specific you are, then you'll be able to enforce that contract against them when they didn't, you know, deliver or do the thing that they said that they were going to do.
And so that's important. We'll go to the next question. Hang on one second.
In the United States. Oh, we're going to move from copyrights a little bit. Inventions presumptive, presumptively belong to the inventor.
In the United States, inventions, right. When we talk about inventions, this is like patent stuff here. When we talk about authors and creators, we're talking about copyrights. When we talk about inventions and inventor, we talk about patents. In the United States, inventions presumptively belong to the inventor. True or false? True, true, true.
What is it? I guess it comes from everywhere.
Not sure I understand that. Anyway, yes, true. In the United States, inventions presumptively belong to the inventor. Any transfer of ownership must be in writing.
And so we said before that if you are a, that the moment you've created or authored something, you own the copyright automatically. It's a little bit different with patents. Clearly, if you invented something, you are the inventor. But the only way to get ownership of that invention is to take that invention, technically describe it in what's called a patent application, declare yourself the inventor, and meaning, declare yourself an inventor to the patent office and file it with the United States Patent Office.
And so this. Now, in the context of employment law, when you have a company and your employees are inventing for you, then technically that employee is the inventor, the invention belongs to them, but likely as a virtue and condition of their employment, they have the obligation to transfer the invention that they created as an employee to you as the employer.
And so it's sometimes it's not, it is definitely not a given as, as we just described, you know, in the last, you know, 20 minutes, it's not a given, right? You want that in writing, but you need an additional document when it comes to inventions called an assignment that says that I, as the employee, employee, inventor, I am literally assigning my rights as the inventor, I. E. The owner of the invention. I am assigning it and transferring ownership to my employer. Very common practice.
And so, but again, most companies, especially if they're small, they're not really thinking about this. And so usually one of the documents that we create early on when, when there's a startup that has, you know, co founders and you know, CMOs and CTOs and like, you know, contractors, everybody is going to Sign the agreements that Stephen was describing. But they're also, in terms of patents, now they're going to be, they're going to be also signing something that says that they are under an obligation to assign their inventions to the company that is employing them or contracting them. And so again, none of this could be just assumed. Right. It must be in writings that transfer ownership.
[00:49:33] Speaker B: Okay, yeah, good. Contracts will have everything covered.
[00:49:37] Speaker A: That's right.
[00:49:38] Speaker B: Yeah. The only thing that came to mind for me is, you know, maybe people are, you know, wondering about, you know, difference between a patent and a copyright and I guess where the line is between them. And yes, a lot of the time intellectual property has some, some blurred lines at the edges about what is a copyright, what is a patent. But essentially the difference is functionality.
Copyrights are not meant to be functional and patents are. Right.
To the extent that, you know, maybe you, you write a book about a process you have or about certain, you know, you own your expression in that book. Right. The way you write that book, the words that you specifically choose in that order. Right. But you don't own the facts. Right. You don't own the method.
If you have a patent, you could own the method. Right. That's. That's the difference between a patent and a copyright, generally.
[00:50:34] Speaker A: Yeah, that's a great, that's a great way to put it, for sure.
Okay, I think we might. Let's do this. Next question.
An assignment of inventions provision typically gives the employer the ownership of intellectual property that was created during employment. True or false? Kind of might have given that away a little bit.
True from James, true from Stephanie. Any other truths are not.
Yes, it is true unless specifically excluded from the contract. Inventions created during employment usually belong to the company.
Period.
Right. And we see this a lot too. We definitely see we've been on both sides of this fence. We have represented employers that believe that their employees have, you know, stolen the things that again, in their estimation have stuck. Stolen the things that actually, that they created during their employment that belong to the employer. And we've been on the employee side where they say, well, I believe that I do have the right to the invention. I was never under any obligation to assign and I can do whatever I want with them. Again, these are fact, fact specific cases.
But in the end, just get everybody to sign.
Stephen, there is something from GL about AI. I mean, maybe we should.
[00:52:06] Speaker B: This is the end of the patent section. And the next, the next few slides are all going to be non competes, non disclosures.
[00:52:11] Speaker A: Okay, perfect.
So maybe a general overview. Yeah. If you can just give a general overview of. Because I think, you know, Stephen said it earlier, he used the word human.
Right. When he talked about authorship.
And so maybe we can start from there because I think people are, people want to know like how does AI affect all this?
[00:52:36] Speaker B: And he asked about the chapter too. I mean the chapter is mostly it's, it's, it's a pretty high level overview and honestly we wrote it before the like real prevalence of some of these.
[00:52:46] Speaker A: That's right.
[00:52:47] Speaker B: Which has just been exploding lately.
But I mean from a copyright perspective, the, the copyright act requires human authorship.
And so that means, you know, if you go to an, to chat GBT or whatever and ask it to create a drawing for you or, or write right. Like you know, a passage for you or whatever, they're based that copyright that, that exact those words. That drawing basically immediately goes into the public domain because it was not created by a human.
And so you can't claim ownership over that. Now say you take that and then you edit it a little bit. Right. You can claim ownership to your edits on that work. Right. If you take, take that and edit it. If you ask it for an outline and then like you turn that outline into your own book, your book is still going to be copyrighted. Right. But whatever it is spits out directly basically immediately goes into the public domain as something that was not created by a human.
And that's because copyrights require the authorship requirement under the Copyright act is being read as and defined as requiring human authorship. It's actually a very interesting case about a monkey that accidentally took a photo with a phone he stole who was denied the zoo that that was housing. The monkey sued for copyright ownership on behalf of the monkey it owned and he was denied copyright ownership because he wasn't a human author.
That's a very interesting case. His name was Naruto if anyone wants to look.
[00:54:27] Speaker A: Yeah.
And similarly.
Similarly I can't even if I pronounce that word or very similar to copyright. Inventors need to be like in terms of patents also need to be human beings. That is where we are today, right. That is what the courts say today. You need human contribution and human authorship and human invention in order to get a patent and copyright. May will that could that change? It very well could be. But right now that's where we're at. I want to just get to Dwayne for a second, I think. Yeah.
[00:55:02] Speaker B: Thinking about that changing. I don't even know where we're going to be.
[00:55:05] Speaker A: Yeah, it probably will change. I Imagine, because there's a lot of people using AI and pushing the limits. But Dwayne, to your question there, I think I may have answered it earlier. Patents, like copyrights and trademarks, are territorial. So if you file in the United States, you have a limited time. If you file a U.S. patent, you have a limited time to take that U.S. patent and file it in China, Korea, Europe, Europe or whatever. But you file it with the European Patent Office, with the Canadian Patent Patent Office. And so it's not all filed with the United States Patent and Trademark Office. It might originate in the, in your patent, might originate in the United States Patent Office, but eventually it will be filed in every individual country where you want protection.
Kendra, just very quickly on your question, my big question is, once your invention has been completely described and therefore now public, what keeps others from replicating your methods? Making small adjustments results in compromise, compromising your company's success. Kendra, I get this question, I'm not even joking again, a few times a week. Why should I file for a patent if it's just going to be public and somebody's going to read it and they're just going to change one thing?
Kendra, I'm here to tell you I don't buy that bullshit. Let me explain why. Because the way that we draft patents is we think of all the small adjustments and we include that in your patent application.
We think of all the improvements. We want you to be your own innovator, right? Step into the shoes of your competitors and put that into your patent application as well. There is no patent office in the world that requires you to build the thing that you have actually gotten a patent on. And so it begs the result that you should be your own improver. You make the small adjustments, you make your own improvements, improvements. You include all of that in your patent application so that when it becomes public and then somebody reads it and they do something similar, you can say, well, I already thought about that. Even though I didn't build it, it's already in my patent application. And so that's the way that. That's the way a good patent application is drafted. Securing your moat by. By thinking of all the different ways that you can be your own improver. So keep that in mind.
Let's go on before we get to gl's.
Yeah, let me, let me just go to the next one before. There's a bunch of questions there, but we'll take them at the end.
A restrictive covenant is a condition that restricts. This is a little bit of a legal talk A restricted covenant is a condition that restricts the actions of someone in an enforceable agreement.
What do you think? True or false?
The answer is contained in the question in this one. For sure.
[00:57:58] Speaker B: Yeah. I guess you know what the words restrictive and covenant mean.
[00:58:02] Speaker A: Yeah. A covenant is a promise to everybody. Restricted, something that restricts you. But what do you think? There's a bunch of truths.
I think we can get to it. True. Right. A restricted covenant is a condition that restricts limits, prohibits or prevents the actions of someone named in an enforceable agreement.
Anything to add, Stephen?
[00:58:24] Speaker B: Yeah, I, I mean I think this is in there just because we're going to get into kinds of restrictive covenants and so to just lay out what is this right. You could have all kinds of different provisions in a contract and you know, you might not necessarily call a section in the contract restrictive covenants. Right, right. But this is just what we refer to as a part of a contract that puts those limitations on the contractor.
Yeah. And there's all kinds of different kinds of restrictive covenants.
Specifically when we're talking about ip, there are two pretty important ones and employment and these things. So that's what we'll get into now.
[00:59:01] Speaker A: Yeah. Which is, which is, which is, which is, which is why I moved to the next one. This is a pretty big restricted covenant. A non disclosure provision is an extremely important part of an employment and contract agreement to protect company information and intellectual property.
True or false?
Yes. I mean this kind of goes without saying, but you'd be surprised that people do not put these non disclosure provisions in their contracts. In fact, there are a lot of startups and entrepreneurs that are regurgitating everything about the thing that they want to protect on social media and marketing before they protect it, which means that they're doing it without a non disclosure agreement, which means that they're probably not going to be able to protect the thing that they just disclosed to everybody. And so you have to be real. We always, I often say this to people that you should not. And I don't think, I don't necessarily think it's the lawyer in me. I just think in general you should not trust any, anyone in this world but your mother. But if your mother had the means and the motive and the opportunity to screw you, then you shouldn't trust her either. Which means that anybody that you're going to share anything with that you eventually want to protect, you need them to sign a non disclosure agreement, period. The end. I don't care. There's very few people on this earth that you do not need a non disclosure agreement like for attorneys, right? We have attorney client privilege. We don't need a non disclosure. Your doctor, Right. Doctor patient privilege, your spouse, the marital privilege, Right.
My spouse doesn't need to sign an NDA, but there is no grandmother provision, there is no mother privilege, there is no best friend privilege, there is no roommate privilege.
Right. Those people need to sign a non disclosure agreement as well because they could potentially reveal the thing that you thought that you were going to eventually protect and now you're being barred from protecting it.
And so James, I love it. These questions are too easy.
Steven, anything to say about non disclosures?
[01:01:18] Speaker B: I mean, there's all kinds of situations where this is relevant.
You know, you have an independent contractor who, you know, going on with the example about marketing material, say they need some information about your business, about your product, about your customers, about demographics of your customers. You have those kind, that kind of metadata about all those things. You know, that needs to be confidential. You don't want, you know, your, your contractor coming out and having that information, being able to do what they want with it, you know, publishing it. Maybe they're a contractor for some other business and they, they, you know, give them that information.
That's very important.
And like David was saying, so you're going into business with someone who you trust, right? You can trust them.
That doesn't mean you shouldn't have an NDA somewhere, somewhere in writing or really any contract, right. If you're going into business, you have a business partner, you should figure out on paper how you want to define that relationship. You know, organize that company. You know, say you have an LLC in your operating agreement.
There's going to be an confidentiality provisions, NDA, these kinds of things, right? Like, so you don't want, you don't want to leave any of this up to, oh, I, you know, they'll never say anything even if they don't do it on purpose. Maybe, you know, it can be an accident. Actually that might be a slide coming up. So yeah, I'll slide, you know, to.
[01:02:44] Speaker A: Stephanie has a really great question. We hear this a lot because as startups you are pitching your ideas and some startups have not protected themselves with patent, trademark or copyright yet. Yet here they are pitching to investors or they're pitching to strategic partners.
And so I think the rule of thumb, I'll just, I'll put the hierarchy if you can afford it.
The first thing that you should do is file the patent, trademark or copyright on the thing that you want to pitch Short of that, then if you can't file the patent, trademark and copyright for some reason, right? Because then you can pitch. It doesn't matter because if somebody tries to steal it, there's already proof that you filed something, so it's already suspect, right? But short of that, right. Filing the patent, copyright, short of that, the next hierarchy is you need an NDA, period. If you cannot get that NDA and protect that disclosure that you're about to make that is unprotected, then yeah, you are definitely putting yourself in a precarious situation.
The third thing, and we hear, I tell people all the time, you gotta go with your gut. I get it. Not every startup or entrepreneur has the money to file for a patent, trademark or copyright, right? Not every startup is going to pitch to someone that's going to want to sign an NDA, right? Investors don't sign NDAs. Everybody knows that. So. But I still want to pitch to him. Go with your gut, right? As an entrepreneur, that's what you should be following all the time anyway, right? If you believe that you making this pitch to an investor, strategic partner could actually result in business and it's worth the risk, then do it. Right? But remember, even if you land that business, the fact that you revealed something that's not under a non disclosure could mean that you might be statutorily and barred, legally barred from filing a patent. Now patent, not a trademark or copyright, from filing a patent in many countries in this world, that's another kind of layer that you have to think about. Again, you might be disclosing something that's not patentable. Great. You don't have to worry about it. Right? But all I'm trying to say is in the hierarchy of things, follow that, but definitely follow your gut.
[01:05:04] Speaker B: You know, I think that's a good, that's a really good point. I mean as far as entrepreneurs go, you know, as lawyers, you know, we, we, we give you all this advice to mitigate risk primarily to, to help you avoid problems down the road and, and get your ducks in order. Something get your ducks in a row. That's the, to get your ducks in a row before a problem comes up, right? But like David was saying, you know, if you're in a, a startup, an entrepreneur, you don't necessarily have the money to, to get lawyers to, you know, draft a ton of contracts, file a IP on every little thing.
You know, at a certain point you have to accept the risk that comes with that and try and decide, you know, what is most important to you to get Things taken care of and what kind of risks can you accept?
And that's, that's really something. I mean that you should, you should figure out as an entrepreneur, if you have partners, you should figure that out with your partners and, and get that straight. Because you know, you're not always going to have, you're not always going to have the infinite resources that, that it could take to, to cover every, every base. Right. We're as lawyers, we're probably going to have, you know, 100 things that we want you to do to mitigate your risk. Right. We can, we can see 100 different scenarios where a problem could arise and a way to prevent that from arising in the first place. Right. So, but, but yeah, you have to decide, trust your gut and make decisions on what is most important to your business.
And, and something like that. You know, if you're pitching a product that NDA is pretty important because you don't want someone receiving that pitch and then going out and spreading, spreading copies of, of your, you know, your, your brand new novel idea to a bunch of competitors or using it themselves. Right. So that's, that seems pretty important.
Yeah, maybe, maybe your trademark takes, takes a, takes a back seat for a second when you figure that. What if you have to figure that out first? Right. But there's, you know, a lot of different things to consider.
[01:07:19] Speaker A: Yeah, I think we, I didn't realize that we were over that. We're a little bit over time. Thank you for everybody sticking on. We just have a few more and then we'll be done.
Confidential the next one. Confidential confidentiality obligations in employment contracts can end once the employee leaves the company. True or false?
Interesting. James. True. A non false. Depends on what the contract says. False, false, false, false, false. Hold on, what is, is false confidentiality obligations typically exist after James. I guess it wasn't that easy. Right.
[01:08:07] Speaker B: Maybe the can, maybe the word can tripped him up.
[01:08:10] Speaker A: Yeah, it probably tripped him up.
[01:08:11] Speaker B: Depends on what the contract says is really the right answer. And yeah, that's, that's almost, that's depend. It depends is a good answer for any legal question. Usually.
[01:08:20] Speaker A: Yeah.
[01:08:21] Speaker B: But yeah, most confidentiality obligations and contracts are going to have some timeline where that exists for, you know, usually it's going to say a few years, some, some number of years after the contract ends, you are still bound to keep things confidential. Sometimes it's indefinite, sometimes it ends. A lot of the times if you have confidential information, you're bound to just return it or destroy it at the end of the contract.
Right. Like if if your contract with your company ends and you have a computer with all of these files on it, you, you know, the contract might say you're, you have the files or delete the digital copies, all these things. So
[01:09:02] Speaker A: yeah, yeah, and, and, and, and, and to, to, to, to Jane's point, I think she pointed out this is a very state by state specific situation going on here.
There are some states have taken a hard line on this. You can't, you can't expect someone to keep confidentiality forever as an example. And so again we're not going to get into the different states. We do get into it somewhat in the book chapter, but let's go to the next one.
Many non disclosure provision provision breaches happen by accident.
Many non disclosure provision breaches happen by accident.
True or false?
Michonne says true. James says true.
Okay, let's see what it is. True. Many, many non disclosure provision breaches happen because of misunderstanding. Many can be avoided with clearly defined parameters. This is actually something we do at the firm for companies, right. We educate them on the, the, the need for non disclosure agreements and, and we educate the employees as to how they should be treating, or the contractors how they should be treating the confidential information like going on like Tik Tok and, and like sharing a TikTok video about what you're working on at work. You know, you might think that would have been cool but like at the end of the day you just breached your nondisclosure provision and so you know, inadvertent marketing materials also. Right. I said too much.
Right. I display too much. So, so, so usually what we do for, for people is they send us their, their actual, the they, they, they actually send us their marketing materials and we kind of compare it to like the things that they were trying to protect or have protected to give them some sort of evaluation. Like this is saying too much and you shouldn't be saying this per se, like especially if you want to keep it a trade secret or something like that, you know.
[01:11:09] Speaker B: Yeah. Maybe you're just chit chatting with your friends at happy hour.
[01:11:13] Speaker A: Right, exactly.
[01:11:14] Speaker B: Something comes up that you aren't technically supposed to be saying. You know, that's right. Probably no one's intending.
Very few people probably go out intentionally to breach their confidentiality obligations. Right. So good point. You put in the contract, hopefully that someone reads the contract. The more they're able to understand what their obligations are, the less likely the accidental breach happens.
[01:11:40] Speaker A: Stephen, how many more slides did you say we have?
[01:11:42] Speaker B: I think this, this there's like five more questions after.
[01:11:46] Speaker A: Let's just do a non. Yeah, I guess we can do a non compete one.
A non compete clause allows an individual to join a competing business after employment with the original employer with the non compete course. There is no period of time at an inter. Individual must wait before they can join another competing business.
False from James.
There is no period of time individual must wait before they can join another competing business.
Is that a non compete clause true or false?
[01:12:21] Speaker B: Yeah, maybe we, we end on the non compete clauses as, as our.
[01:12:25] Speaker A: I think we should.
So a lot of falses and you are correct. A non compete clause prevents an individual from joining a competitor competing business for a period of time after employment the original company employer business.
Although non compete clauses have come into disfavor and so this is kind of what we were hinting at again. You there, there used to be many, many, many years ago you could sign a non complete cause that said that after I stopped working for you I will never be able to work anywhere else. You know, like I cannot work for a competing business for like you know, 50 years and you know, anywhere in the world or whatever. No, it's that it doesn't work that way anymore.
The actual period of time. Like courts have said, you can't stop someone from making a living at the end of the day, especially if they have a specialized skill. Right. You can't stop them from, you know, not working in the, not working for a competitor for like 15 years or 10 years even. Like so, so, so the time the periods are getting shorter and shorter for sure.
Again, it's a very state by state specific thing. Go for it Stephen.
[01:13:37] Speaker B: Yeah, and even geographic restrictions too. Right. You know, if you, that's right. You know, you, you, you perform a certain service in New York for, for your company and you know, the non compete says, you know, after you leave this company, you can't compete for another company, you know, in the same geographic region for X years. Right. Every state handles these things differently. But like David was saying, in the last few decades most courts have been coming down on the side of employees saying you can't restrict these people from making a life from, from, from their livelihood. Right. If this is their skill set and they live in New York, you can't restrict them from like a non compete cause would essentially force them to move or go into an entirely different business they don't know anything about. It's too restrictive on employees. And I mean if you're looking at it from a policy perspective, it disfavors Kind of, you know, labor mobility and competition and those kinds of things. So courts don't like it for that reason.
So they've come into a lot of disfavor. Some states are just outright not allowing them anymore.
[01:14:48] Speaker A: That's right.
[01:14:49] Speaker B: And I would predict that that is going to be kind of the way that things go and that, you know, again, in the next few, in the next few decades non competes probably go the way of the dodo. But you know, you never know with, with how things go and, and things could be different.
But.
Right. James was saying someone can do it, but then the company would have to sue them. That's, that's true about any, any kind of breach of contract. Right. You can do it, but you know, someone will come and enforce something against you. Right. And if you do it and you know you wind up getting sued for it, you know, the consequences might not be just stop doing it. Right. You could get you. There could be damages, fees, costs, all those kinds of things. The, the mental toll that a lawsuit takes on you.
Just not worth it. It's just not worth getting into it most of the time.
[01:15:46] Speaker A: True.
[01:15:47] Speaker B: So. Yeah.
[01:15:48] Speaker A: So do we want to do one more or do we want to.
What are the topics of the other ones? I can't see them in front of me.
[01:15:55] Speaker B: Prior, Prior inventions.
[01:15:58] Speaker A: Skip that. I think we're okay. Listen, we don't want to end, but we can truly go on forever. But it has been an hour and 20 minutes.
I do want to thank everybody for sticking around.
We will have another.
We may have a part three on this but, but definitely look at part one. Yes, this is recorded so you all will get anybody that's registered. There's about 250 registrants. Everybody will get a copy of this recording as well as. And then course the slides will be there. But if you want, if you want them separately, just email Stephen or I reach out on LinkedIn if you want to connect. Our next ESS topic actually is all about tariffs. We have a lot of companies that have awesome inventions that ship in from that ship out of America, ship into America, manufactured overseas, whatever. And so we have three federal founders that are, we have three founders that are in that business and they'll be talking about their experiences with what's going on with tariffs, which has thrown their businesses and most a lot of businesses into disarray, which we're all feeling as the ultimate consumer.
And so that is in April. I want to thank Steven. Steven, thank you so much. I love when you do these with me and I think it was super fun. Thank you so much.
[01:17:21] Speaker B: I have a lot of fun. And yes, thanks for inviting me again. And we can talk about so. So we could talk about the things we wrote about and interact with all these wonderful people that came today. So. Yeah, awesome.
[01:17:34] Speaker A: And yes, and thank you for your interaction. We really appreciate it. If there's any kind of qu. I think we got to all the questions, but if anything, just email us and that's it. Happy holidays to everyone and we will see you soon.
Take care, everybody.
[01:17:47] Speaker B: Bye. Bye.
[01:17:48] Speaker A: Bye.
