What Organizations and In-House Counsel Need to Know for 2024
In Part 3 of L&A’s Intellectual Property Year-in-Review video series, associate Amanda V. Cardona covers trends in intellectual property law for organizations and in-house counsel, focusing on recent regulatory activity that may impact IP rights. Amanda provides updates regarding inventions arising out of federally funded research and proposed federal regulations on non-compete agreements.
In 2023 several federal regulations impacting intellectual property rights were proposed or enacted. Key areas include draft guidance on the exercise of march-in rights, new reporting requirements for federally funded research, and proposed regulations on non-compete agreements.
The Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights:
The Bayh-Dole Act grants recipients of federal funds ownership of inventions from federally funded research, but agencies retain the right to “march-in” and force licenses of this technology. The National Institute of Standards and Technology’s draft guidance on march-in rights seeks clarity on when these rights can be exercised. To this day, march-in rights have never been exercised by the federal government and practitioners are concerned that this new guidance will result in federal agencies inappropriately attempting to control or regulate market prices. The draft guidance is available on the Federal Register and is open for public comment until February 6, 2024.
New utilization reporting requirements for all federally funded research:
Recipients of federal funds related to research must use the iEdison platform to report subject inventions and new reporting requirements include an annual utilization questionnaire. The change raises concerns about the burden of collecting and reporting information, as well as the impact that recording and reporting this information could have on relationships with partners, licensees, and manufacturers.
The proposed federal ban on non-compete agreements:
In 2023, the Federal Trade Commission proposed regulations on non-compete agreements, viewed by some as an outright ban. Public opposition and uncertainty surround its implementation and, if enacted, it is expected to face challenges in court. Regardless of the final outcome, increased regulation activity at the state level raises concern on the enforceability of non-compete agreements.
IP implications of a potential ban on non-compete agreements:
Since non-compete agreements are used as a tool to protect trade secrets and know-how from reaching the hands of competitors, the potential implications of a ban could have a significant effect on how trade secrets and proprietary information can be protected. Given the potential for non-compete agreements to be deemed unenforceable in view of the proposed federal regulation, employers should also implement additional tools to help protect their trade secrets, such as confidentiality agreements, employee education tools about the protection of confidential information, and consider siloing different aspects of confidential information among different employees.
What’s in store for 2024?
Organizations and in-house counsel should closely monitor developments in the proposed march-in rights guidance and new utilization reporting of federally funded technology, and potential non-compete regulations at the federal level. In view of these proposals, organizations may want to pay particular attention to their commercialization and licensing efforts of inventions arising out of federally funded research as well as revisit their policies regarding employee agreements and education in support of trade secret protection. The legislative landscape impacting intellectual property rights remains a significant concern in 2024.
The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information, content, and materials are for general informational purposes only. Viewers should contact an attorney to obtain legal advice with respect to any particular legal matter.
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