A recent decision[1] by Judge Stearns of the U. S. District Court for the District of Massachusetts demonstrates that companies should periodically examine their IP protection. In that case, an employee signed an employment agreement with a company in 2005. That agreement stated that “[t]he following are the terms of employment. . . You will be required to endorse the ‘Confidentiality and Non Compete Agreement’ enclosed.” Later, in 2012, the employee signed a new employment agreement which made no reference to any confidentiality or non competition provisions.

The court concluded that the language of the 2012 agreement precluded application of the 2005 ‘Confidentiality and Non Compete Agreement’ as a matter of law. The Court stated that there was no factual question as to whether the parties intended that the 2005 ‘Confidentiality and Non Compete Agreement’ to apply to the 2012 employment agreement, because:

“The 2012 employment agreement states on its face that it contains “the terms of [the employee’s] employment” without any reservation or reference to any other document or agreement.”

Thus, the provisions of the 2005 ‘Confidentiality and Non Compete Agreement’ were extinguished by the 2012 agreement.

This case appears specific to its facts. The lesson, however, is that a company’s IP protection should be periodically reviewed to avoid problems of non enforceability. Two further examples illustrate this. I recently looked at a company’s confidentiality agreement and concluded that because it applied to three different situations, three separate types of contracts were necessary; we therefore changed the company’s IP protection system. Second, as I have previously blogged, the whole field of non competition agreements is constantly being reviewed for change by the Massachusetts legislature. I have drafted certain IP protection agreements in anticipation of such a change.

[1]           Meschino v. Frazier Industrial Company, 2015 WL 7295463 (D. Mass. 2015).

 

 

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