Who owns the IP – the employer or the employee?
Published 01.11.08 at 09:30
Many IP rights, for example copyright and design rights, are generally owned by the author of the work. However, this position changes when a work is made by an employee during the course of employment; in such cases, IP rights are normally owned by the employer, unless otherwise negotiated by the relevant member of staff.
It is not always clear what constitutes producing a work in the course of employment, but factors taken into consideration include: being instructed to undertake the specific work; undertaking it during office hours; using office equipment; undertaking work that falls within the type of activities that can be expected from the employee's line of employment, and so on. If the work falls within the scope of tasks that the creator was employed to carry out then the resulting IP can still belong to their employer even if the employee worked in his spare time and used his own equipment. An example is where a person employed to create computer programs produces a similar program at home and on his own computer for his own use. This program would still belong to the employer unless the employee had negotiated otherwise.
A particularly difficult area concerns the use of confidential information after an employee leaves a business. Usually employment contracts deal directly with this issue; however, even if they do not, employees still cannot make use of information which amounts to 'trade secrets'. Whether information amounts to trade secrets is usually judged by the level of trust between employer and employee, the specific nature of the information concerned and whether the employer told the employee, at any time, that this was confidential information.
Unlike copyright and design rights (see above), patent rights are usually owned by the employee except in two circumstances;
- Where an inventor is employed to invent or design something and while carrying out those duties they invent something of a similar description, the employer owns the patent.
- If the inventor is not employed to invent something, but is simply working as an employee in a very senior post in the company, then any invention that they make in the course of their duties will belong to the employer. This usually applies to directors and senior managers.
It is sensible to be clear in any employment or service contract about what counts as work made during employment and outside of employment. If you are an employee, and you wish to be able to produce separate work in your own time, you should try to limit the contract to allow you to do so, or you should ensure that the scope of the tasks within your employment does not cover work done for yourself in your free time; if you are an employer, you should consider trying to do the reverse.
Please note that this article discusses the legal position in the UK at the time of publication. It provides general information only but is not to be regarded as legal advice. You must take advice from a specialist lawyer in relation to your specific circumstances. Further, you should seek additional legal advice when dealing with parties based in other parts of the world or works originating from other parts of the world as the legal position may vary.