Consider the following example which, based on actual events, illustrates real world problems:
A company embarks on the development of a significant new computer technology. Each of the key employees assigned to this project signs an agreement to keep the technology confidential and to assign to the company the patent rights and other intellectual property created by the employee within the scope of employment. Suddenly and unexpectedly, after many months of development, these key employees leave the company and establish a new company to commercialize similar (or the same) technology or the next generation thereof.
The employees claim they haven’t taken any of the source code or the company’s trade secrets or intellectual property with them, and are developing their competing technology without use of any of the company’s source code, trade secrets or intellectual property. The company alleges breach of confidentiality, misappropriation of trade secrets, and infringement of intellectual property.
The company believes that the new technology must be based on or embody trade secrets created by its former employees before they left the company, but is unable to find documents or other evidence describing in technical detail what the company’s trade secrets are. It is difficult to support a claim of trade secret misappropriation without being able to state what the trade secrets are.
The company also desires to file patent applications claiming the inventions it believes were created by its former employees before they left the company. But again, there is no detailed documentation or other evidence of the inventions. The former employees maintain that the key inventions were created after they left the company, and that the company has no claim to patent applications filed by them after leaving the company. In fact, the former employees threaten to enforce their own patent rights against the company!
Similar problems apply to copyrights in the software. The former employees claim the software was written after leaving the company. The company cannot find current or final copies of the software to document ownership of software copyrights or to establish copyright infringement by the former employees.
Finally, when the company’s replacement employees attempt to pick up where the former employees left off, they find little documentation or other materials to help them. The development environment is missing or outdated. Valuable knowledge and know how are lost. Even if the source code can be found, there may be different undated and unnumbered versions. The company even fears that the software left behind may be sabotaged with errors, defects, viruses or other harmful code.
The inability of the company to produce evidence that these trade secrets, patentable inventions and copyrightable software were developed by the former employees during their employment with the company creates serious problems. To the extent that the company does produce documents and other evidence, they are tainted by allegations of the former employees that such documents and evidence are manufactured or doctored after the fact and therefore lack credibility.
Obviously, if the company had participated in EscrowTech India’s IP Audit Trail Service it would have been in a much better position. EscrowTech India could have produced documented and dated Deposit Materials supporting the company’s case. This would have provided credible evidence from an independent source that corroborates the company’s case. The Deposit Materials could also have provided a back-up or replacement to lost, altered or sabotaged materials and facilitated a successful transition of the project to replacement employees.