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Your startup should have each of its consultants (no exceptions) enter into a Consultant Proprietary Information and Inventions Agreement. This agreement ensures that any intellectual property developed by that consultant while he or she provides services to your startup is wholly owned (by your startup) when those services cease. With the Consultant Proprietary Information and Inventions Agreement in place, all work produced by a consultant will be considered “work made for hire” rather than work done for personal gain (under the U.S. Copyright Act).

Sophisticated investors will ask if there are intellectual-property protections in place with respect to your startup’s consultants, and usually also with respect to your startup’s current and former officers and its critical employees. If some of these agreements do not exist, it can negatively affect a financing or the sale of your startup.

Notice that the Consultant Proprietary Information and Inventions Agreement generated by SmackDocs does not include a post-termination non-compete clause. This is because non-competes are rarely if ever enforceable in the State of California, the leading location of tech startups in the United States.

The Consulting Agreement generated by SmackDocs includes (as an exhibit) a Proprietary Information and Inventions Agreement. If the Consulting Agreement is used and the exhibit is signed by a consultant, your startup does not need to enter into a separate Consultant Proprietary Information and Inventions Agreement with said consultant.