Preventing business partners from opening another similar business that overlaps our certification education program

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Preventing business partners from opening another similar business that overlaps our certification education program

We are 4 owners and have 9 courses in our certification program. If I submit the entire program for copyright and mail it in, can one of the co-owners in question now be prevented from replicating any of the topics in a new business outside our business?

Asked on March 25, 2009 under Criminal Law, California

Answers:

S.B.A., Member, California and Texas Bar / FreeAdvice Contributing Attorney

Answered 12 years ago | Contributor

The only way you (all) would be assured that any co-owner would not replicate your business, is to have a well-drafted partnership agreement, signed by all, which includes a 'Non-compete Clause'.

You appear to be mixing up copyright law with the need for specific 'non-compete' clauses in contracts. It is unknown if your copyright would prevent competition from a similar business (with a few adjustments); however, you should have a partnership agreement which includes a non-compete clause, to prevent any of the partners to set up a competitive business down the block.

Non-compete clauses have to be well crafted in order to pass muster in court - it is, generally, considered unconstitutional to simply try to prevent someone from earning a living without such an agreement made in advance.  There are considerations which have to be carefully considered: in what geographic area are you agreeing to not compete, what types of 'products' are involved, etc.

Consult a Business Law attorney who will assist you in drafting a solid Partnership Agreement. You should include in the Agreement what arrangements you want if a Partner dies (who then owns his/her share), what happens if one of you declares bankruptcy, and other future possibilities which should be covered by the Agreement.


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