You may have come up with systems and processes that you use for your business, such as a software program that makes your work more efficient. Or perhaps you have a client list that is the envy of your competitors. Either way, your business will have confidential information and intellectual property (IP) that you will want to protect. In this article, we discuss how to protect your valuable business information.

Business Information

Over the course of their employment, employees may have access to several types of materials. The table below lists these different types of business information.

Information Type Definition
Idea Generally, an idea does not attract IP protection. But the expression of an idea, like drawings, a prototype or system, can be legally protected.
Know-How This is a term used to describe what employees learn during their employment. It will usually be specific to the field your business is in.
Confidential Information This is a broad term that includes any business information that you do not want to make public. It can encompass:

  • know-hows;
  • systems;
  • procedures;
  • finances; 
  • documents; and
  • client information and records.
Trade Secret A trade secret is a particular system or method that you use in the operation of your business that you want to keep confidential.
IP IP describes the various exclusive proprietary rights to ‘creations of the mind‘. It includes copyright, trade marks, patents, trade secrets, and know-how.

 

IP Ownership During Employment

Generally, any IP that your employee creates during their employment will be owned by you as the employer. This is the case unless there is an agreement stating otherwiseHowever, it is still a good idea to make ownership terms very clear in your employment contracts.

If your worker is an independent contractor rather than an employee, the contractor will own any IP they create during the engagement, unless otherwise stated in the contract.

Obligations Around Confidential Information 

The Corporations Act 2001 (Cth) imposes legal responsibilities on employees in relation to confidential information. These will apply even if an employment contract is not in place. The Act states that an employee who obtains confidential information cannot use it to advantage themselves, or cause any detriment to their company, even after they stop working for the employer.

If you have a well-drafted employment contract and employment policies in place, these will also impose contractual obligations relating to confidential information on an employee.

How to Protect Your Business

1. Before Employment

Your employment contracts and policies should contain clauses about what your employees can do with your business’ confidential information. Make clear that these obligations continue after employment has ended.

These documents should also detail who owns the IP that an employer creates during their employment. Usually this will be you, as the employer, unless otherwise agreed upon. Your confidentiality and IP clauses will also work in conjunction with your restraint of trade clauses to limit how your employee can work after their employment ends.  

2. During Employment

It is recommended that you limit employees’ access to confidential information wherever possible. It is also helpful to remind employees that if they are creating new IP, it still belongs to the business.

3. Post-Employment

It is helpful to remind your employees of their post-employment obligations when they leave their job. They may not have read their employment contract since they started working at your business.

These obligations include restraint of trade, confidentiality and IP duties. You should also have a clause in their contract about the return of IP, property and confidential information. You can even include a checklist to ensure employees return or delete everything as appropriate.

Key Takeaways

It is important to have employment contracts and workplace policies in place to protect your business information. These documents will spell out exactly what your employees can do with the IP and confidential information that they access and create during their employment.

If you want help to ensure that your IP is kept and owned by your business, draft relevant policies  and contracts, as well as provide strategies for processes.. Contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

Jessica Anderson
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