Your guide to navigating the murky waters of intellectual property (IP) ownership
Hi, Simon from The Contract Company here—founder of the Contract Company. As one of Australia’s leading contractual experts, we live and breathe contract law every single day (and sometimes overnight).
Now we’re done with the introductions, let’s dive in, shall we?
So, who owns the IP between an employee and an employer? Good question…
How to Understand Who Owns the IP
Who owns the IP in an employee and employer relationship, exactly? Well, to seek the right answer, the first to do is examine the employment contract.
The employment contract, signed and sealed between the employer and the employee, must clearly state who owns the IP created during the employment period.
Now, you find that there is no official contract (or the employment contract has gone missing—very unlikely, but it has been known to happen), what do you do?
Well, if this is the case, the employer owns any IP created by an employee during their service with the company.
A Classic Example of IP Ownership
Let’s say you hire an in-house lawyer.. If you do hire an in-house lawyer, they will create a range of legal documents as well as templates—and offer invaluable legal advice.
Let’s say I’m the in-house lawyer, for instance…
As my services are to provide legal advice to the organization, any IP I create on the job officially belongs to the organization.
But, if I was developing software for a marketplace or a banking app after hours, for example—a project outside of my working hours or unrelated to my job as an in-house lawyer, my employer does not own any rights.
Here’s where it gets blurry: say the employee does something outside working hours that’s close to their job role as an employee. If, as an in-house lawyer, I was working on software to help draft contracts, who owns the IP to the software?
Interesting, no?
In this case, I believe that the employee would still own the IP rights to their work because the project their employer didn’t request the task-at-hand—and despite being similar in scope, the project is unrelated to the business itself.
Others may have a different view on this, but in many cases, this logic will hold up. Every business is different, but to avoid any confusion or ambiguity, drafting up a water-tight contract is essential.
So, Employer or Employee IP Ownership?
In summary, you should consult your contract to see if IP ownership is specified. If there is no clear cut contract, the general rule of thumb is that the employer owns the IP rights.
But, if the employee creates content, assets or project work out of office hours or outside their employment terms, something that isn’t directly related to their day job, the employee owns the IP rights.
I hope this helps. This is a complex branch of employment law and to avoid any unnecessary issues or conflict, drafting up a comprehensive contract is essential. And we can help.
Why you should choose The Contract Company for your contractual needs…
- We are fully trained, certified contract professionals with decades of collective experience. To date, we’ve handled thousands of contracts., literally.
- We are 100% professional and diligent yet approachable, personable and keen to help.
- We can tackle thousands of different contract styles, situations or types. Our nation-wide service is incredibly extensive.
- Our prices are competitive and tailored to your individual needs. We also offer a money-back guarantee if you are not happy with our service. (but, we highly doubt that will be the case).
If you found this advice helpful, please feel free to share this video with anyone you think could benefit from seeing it or hit the like button. And, if you have any IP-related questions, contact me via email at simon@contractcompany.com.au or call me on 1800-355-445. I look forward to hearing from you.
