In Short
- Your employer typically owns the intellectual property (IP) you create during your employment, particularly if it’s part of your job.
- Employment contracts often include IP ownership clauses, so it’s crucial to understand your agreement.
- Negotiating IP rights upfront can help protect your personal creations.
Tips for Businesses
When hiring employees, clearly outline intellectual property ownership in employment contracts to avoid disputes. Ensure employees understand what IP they own versus what belongs to the business. If you’re unsure about IP rights, seek legal advice to safeguard your business and employee relationships.
If you are an innovator or a creator, it is crucial to understand your intellectual property rights. Whether you own your intellectual property (IP) can be particularly confusing if you are an employee. Generally, the intellectual property you create in the ‘course of employment’ will belong to your employer. This article will explain how to determine if your employer can claim ownership over your intellectual property and how to protect your IP.
What Does the ‘Course of Employment’ Mean?
The ‘course of employment’ may change depending on your work type. In relation to intellectual property, this refers to anything you create as part of your employment.
For example, suppose a company contracts or employs you to develop software. Accordingly, your employer will likely own the IP in any software you create. However, suppose creating software is not part of your employment duties. If so, you may own the intellectual property rights provided you did not use company resources to develop the intellectual property. Another factor to consider is when you begin and end your work day.
Working on a project or creating something outside your employment hours makes your employer less likely to successfully claim ownership over your IP. Of course, all of this will depend on your employment contract. Some key issues to consider are whether:
- your employment contract outlines your roles and responsibilities, and if so, whether creating IP (e.g. software or articles) falls under these roles and responsibilities; and
- your employer or any other staff member directed or contributed to creating the IP.
Your Employment Contract
Before signing an employment contract, it is essential to read it carefully. You might be signing over more than you think. For example, some contracts contain special clauses that give your employer rights over your ideas or inventions, even if they have nothing to do with your job. Although these restrictive clauses may ultimately be invalid, you should still read the clause carefully and flag any provisions that:
- do not make sense; or
- seem too restrictive.
While an overly extensive restraint clause can be taxing for an employer to enforce legally, the threat of litigation is genuine and could:
- drain your well-earned capital; or
- damage your reputation.
Fortunately, these clauses will not likely establish ownership over your intellectual property. This is particularly true if you create the idea or work in your spare time without using your employer’s resources. Nevertheless, to ensure such a clause does not bind you, look for any provisions dealing with intellectual property after employment.
Continue reading this article below the formWhat if I Am Working On My Personal Device?
Sometimes, the resources you use to create intellectual property can influence the question of ownership. Your employer’s right to claim intellectual property ownership can extend to works you create using their resources and materials. However, personal and professional lines may blur if you use your personal laptop or PC device for work. This is important as your employer’s right may extend to intellectual property outside work hours.
Avoid working on your personal device for work-related projects. This will reduce your risk of losing your intellectual property to your employer.
Moral Rights
Although your employer may own intellectual property created during your employment, you retain moral rights as the author. Moral rights are personal rights granted to the creators of copyrighted works and are separate from economic rights. In Australia, the Copyright Act 1968 (Cth) protects these rights.
Your moral rights include:
- right of attribution: you have the right to be identified as the author of the work;
- right against false attribution: you have the right to prevent others from being falsely attributed as the author; and
- right of integrity: you have the right to object to any derogatory treatment of the work that could harm your honour or reputation.
Employees may provide explicit consent to waive their moral rights under Australian law.
For example, a research associate at a university produces academic works including journal articles during their employment. The employment contract includes clauses about IP, stating that the university owns IP created during employment, or using university resources. The university can therefore, claim ownership of the copyright in the research associate’s academic works. If a dispute as to ownership of copyright arose, the following factors would be examined:
- when and where the work was created;
- whether it was related to the research associate’s duties as an employee;
- whether university resources were used; and
- the subject matter of the work in relation to the research associate’s role.
The research associate would retain moral rights in all works, regardless of copyright ownership. This means the university must ensure the research associate receives proper attribution in any use or publication of the works, and significant alteration of the works would require consideration of the research associate’s moral rights.
Ways to Protect Your Intellectual Property
Write it Down
Keeping written records of your invention or work can reduce the risk of legal battles over intellectual property ownership. For example, keeping a diary detailing the dates and stages of development of your intellectual property can be instrumental evidence.
Emails or electronic records are also helpful if they record a date and time.
Review Your Contracts
Look out for any clauses in your employment contract that discuss intellectual property. If you need clarification on the wording or the meaning of statements within a particular clause, flag it and raise it with your employer. This should be via email so their response is in writing for your records.
Choose Your Hours Carefully
Know when you start and finish work. This will help you determine when you are free to work on your projects without attracting a potential claim of ownership from your employer.
Use a Different Device
Keep your work device separate from your personal device. Avoid using the resources your employer provides.
Your business’ brand represents your values, identity and reputation. Learn how to create a successful brand and protect it.
Key Takeaways
If you create intellectual property as part of your work responsibilities, your employer will likely own it. If you create intellectual property outside the scope of your duties as an employee, however, subject to your employment contract, you will likely own the intellectual property rights. Therefore, you should read your contracts carefully, as a clause may claim ownership of your intellectual property created during or after your work period.
If your employer is attempting to claim ownership over your creation, our experienced IP lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
Frequently Asked Questions
Although it is assumed that the employer will own intellectual property (IP) created by employees, the same cannot be said for contractors. Generally, independent contractors own the IP they create unless otherwise intended by a contract. Therefore, whether you are a contractor or an employer, it is important to have a contract determining who should retain ownership. Otherwise, the default position will be that the contractor owns the intellectual property.
The details of your employment duties and what is expected of you as an employee are likely to be stated in your employment contract. A key tip is to look for clauses describing your role, your performance, how you should deliver work, and so on. That might give you a better idea of what would fall outside the definition of work completed ‘in the course of employment’.
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