How not to give your technology to competitors: advice from lawyer Igor Sofina

Ukrainian miltech is developing rapidly: companies are creating drones, software, control systems and other technologies. However, even a unique development does not mean that a business is automatically protected from copying it. How to properly register rights to a technology, whether it is worth patenting military developments and what to do if the product has already ended up with competitors, told Femida.ua partner of JSC “VERITY GROUP”, lawyer Igor Sofina.

The idea itself is not protected

One of the main mistakes of developers is to believe that the authorship of an idea automatically guarantees the right to it. In fact, the legal significance is not only who came up with something, but also how the creation of a particular product was recorded and formalized.

“The main rule is that the right arises from the one who first recorded this fact and formalized it, and not from the one who first came up with it. The idea itself is not protected, only its implementation is protected,” explains partner of JSC “VERITY GROUP”, lawyer Igor Sofina.

This is a specific technical solution, its form of expression, program code, design, appearance of the product and other development results. Therefore, simply walking around the market and telling potential partners about a promising idea is risky.

Before publicly demonstrating the technology, it is necessary to properly draw up internal documentation, record the creation of the development, and then — depending on the specific object — decide on its registration or patenting.

Is it necessary to patent a military development

A separate dilemma arises for miltech companies: a patent can provide legal protection, but at the same time the patenting procedure involves the disclosure of certain information about the invention.

According to Igor Sofina, this does not mean that defense developments should not be patented at all.

“It is necessary to patent, but a patent is a disclosure. First of all, internal documents need to be drawn up to protect this development at the internal level of the company,” the lawyer emphasizes.

There are special regimes for individual developments, in particular the possibility of patenting a secret invention or a secret utility model. At the same time, companies need to take special care of protecting information within the business.

NDA is not enough: access to technology must be delimited

Another important element is the trade secret regime.

Not every employee of the company should have access to the entire array of information about the product. For example, a marketer or sales manager does not necessarily need to know the features of the program code or the critical technical characteristics of a drone.

“There must be delimitation within the company, a document that regulates the degrees of access to information. A trade secret regime must be in place: an order, a list of information, limited access. And there must be non-disclosure agreements with everyone involved,” notes Igor Sofina.

Thus, technology protection is not just a signed NDA, but an entire internal system for working with confidential information.

The development was created by an employee: who owns the rights

A separate risk arises when the technology or software is actually created by a specific employee of the company.

According to the lawyer, it is important for a business to document that the employee received the task of creating the corresponding product specifically from the company.

To do this, an order to create the technology, a technical task, job descriptions and documents on the distribution of property rights can be drawn up.

“At each stage, it is necessary to form an appropriate document so that the owner of the technology can prove that the employee did not develop it at his own request, but that it is the property of the company and he received payment for the relevant work,” explains Sofina.

If the product is created by an individual entrepreneur, contractor or specialist under a gig contract, the contracts must also clearly state who the property rights are transferred to after the work is completed and the result is transferred.

An employee went to a competitor and took the technology: what to do

A situation where an employee quits, moves to a competitor, or even creates his own company using previously acquired experience is one of the risks for a technology business.

If this has already happened, Igor Sofina advises starting with an IP portfolio audit.

“First of all, I recommend auditing your IP portfolio, collecting documents confirming that this right belongs to you. After that, you need to record the fact that a competitor is using your invention, program, or other intellectual property object.”

Recording a violation may involve purchasing a competitor’s product, conducting an examination, comparing technologies, their functionality, or principles of operation.

The next step may be a written requirement to stop using the development. Another option is to conclude a license agreement under which the competitor will legally use the technology and pay royalties to the owner.

If an agreement cannot be reached, legal protection remains.

“The reality of the dispute itself depends on your evidence base. If the documents are there, everything is collected and correctly described, then you have a real evidence base to prove that your rights are being violated,” the lawyer emphasizes.

Does the Ukrainian law apply