How to Protect Your Business’ IP in the Workplace

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Table of Contents

• Creating and Transferring Copyright
• Controlling Access to IP
• Restricting Abilities to Share IP
• Returning IP
• Restraint of Trade
• Key Takeaways

For many businesses, the intellectual property (IP) created on a day-to-day basis is one of their most important assets. Therefore, protecting your IP in the workplace should be a key consideration, particularly for businesses that produce unique work. Protecting IP is not only about preventing customers or competing business partners from imitating your work, but also preventing your employees from taking IP they create during the course of their employment elsewhere. This article will outline the ways that you can protect your business’ IP in the workplace.

Creating and Transferring Copyright

According to Australian copyright law, a person that creates IP will generally be the owner of the IP. IP can be a range of material, including:

• advertising text;
• building plans; or
• source code.

However, there are exceptions to this rule. One key exception arises in the context of employment. Two key questions need to be addressed when dealing with ownership in the employment context:

1. is the author an employee acting under a contract of service? If not, it is unlikely that the business will own the copyright of the author’s work; and
2. is the work created pursuant to the terms of the employment contract?

Answering these questions can sometimes be complex, so it is crucial that employment contracts deal comprehensively with the ownership of copyright created during the employment relationship. Having an employment lawyer draft the employment contract can help prevent any confusion about who does and does not own the work.

Controlling Access to IP

Legal agreements are beneficial for securing a business’ ownership of IP. However, this is sometimes not sufficient. Ideally, businesses should regulate employee access to any confidential IP.

Not every employee needs to know all development plans or trade secrets that the business has created or owns, so by restricting access to this information, the business can better protect itself. For example, if a business has different practice groups, each group should only have access to confidential IP necessary for the performance of their duties.

Examples of ways that businesses can control access to confidential IP include:

• digital restrictions, such as passwords; and
• locking away any printed IP in a secure location.

Restricting Abilities to Share IP

There are a range of online platforms where IP can be shared. Some of the obvious online platforms include social media networks or online directories. In addition to these, there are other third-party platforms where IP may shared, such as:

• email;
• cloud storage services; and
• image editors.

Consequently, it is vital that employees are aware of how quickly and easily IP may be shared both internally and externally. There are many ways that a business can regulate the sharing of IP by employees. For example, by:

• including a confidentiality clause in their employment contract;
• developing and distributing IP guidelines; and
• providing training to all employees on IP and how it is appropriately shared internally and externally.

Returning IP

In any business, it is inevitable that some employees will eventually leave. When employees go, they take a wealth of skills and information with them. It is possible that these employees will transfer this knowledge to their new business venture or employer.  

In this situation, having an employment agreement with robust IP clauses can be very beneficial. An IP clause can specify that an exiting employee return or destroy all IP or confidential information in their possession. Often you can enforce this through an exit interview, or by doing security scans of any computers that an employee may have used during their employment.

Restraint of Trade

For executive or senior employees, businesses should also consider whether including a restraint of trade clause in the employment agreement will be appropriate. Courts only enforce restraint of trade clauses when an employer can demonstrate that:

• it has a genuine interest to protect; and
• the restrictions in the clause are reasonably necessary to protect that interest.

The restraint is usually valid for a certain period after the employment agreement ends. As restraint of trade law is complex, it is best to speak to a lawyer to determine whether it will be necessary to include such a clause and if so, the best way to draft the clause.

Key Takeaways

For a business who values their IP, protection is vital. Protection of IP should start within the workplace, with the employees who are creating, accessing and sharing IP, either within the business or to third-parties, including customers or other service providers.

There are a range of ways that a business’ IP can protected. These can be set out in detail in an employment agreement and by a robust IP clause. If you have any questions, contact LegalVision’s IP lawyers on 1300 544 755 or fill out the form on this page.