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Protecting intellectual capital in Minnesota

Companies in Minnesota must protect their intellectual capital. These protections are formalized through copyrights, patents, trade secrets, trademarks and other legal devices. Violations of these protections, such as where an employee engages in a breach of confidentiality agreement, should be vigorously prosecuted.

An employer should draft and enter a formal agreement, known as a non-competition and solicitation agreement, which establishes that the employer has control and ownership of its intellectual property, even when an employee is hired by another business or becomes a competitor. Employers may require these agreements as a condition of employment.

These agreements may also prohibit the employee from soliciting customers or employees if the employee starts another business or works for another company. Confidentiality obligations and agreements to assign inventions are usually included.

These agreements should provide notice of these agreements to prospective hires and make it clear that entering the agreement is a condition of hire or exchange of payment. These agreements should be a separate written document. The agreement must comply with the state laws where the employee lives.

Federal copyrights protect original works fixed in any physical means of expression from which the work can be reproduced, perceived or communicated now or in the future. These works must possess some minimal degree of creativity and generally include literature, music, dramatic works, motion pictures, sound recordings, architectural works and audio-visual works.

Minnesota patents protect ownership of inventions. The state Trades Secrets Act protects information that derives economic value from not being known to the general public and is not accessible to others who can benefit financially from it. Its secrecy must be protected through reasonable efforts.

The Computer Frauds and Abuse Act provides additional protections against present or past workers who illegally access computers in order to transmit or copy or company information to themselves or new employers. This law may also allow the use of injunctions, damage awards and attorney fees when the employer's computer is used to loot trade secrets or other valuable intellectual property.

Drafting and utilization of these protections are often complex and require assistance to help eliminate loopholes and assure that a business is protected in intellectual property disputes. Inadequate drafting and utilization can lead to the evaporation of a company's investment and assets.

Source: Department of Employment and Economic Development, "Non-competition agreements, non-solicitation agreements, and intellectual property rights," accessed Oct. 27, 2014

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