Intellectual Property: Who Owns It?

One of the biggest sources of disputes in industries based on innovation is a difference of opinion about who owns the intellectual property (IP) created in terms of designs, software, processes and systems.

This is a general guide for businesses to the ‘who owns it?’ problem, but remember that it is a complex area over which many cases have been fought. The best way to make sure who owns what is understood is to have a clear and binding agreement. We will be happy to advise on these issues and prepare any necessary documentation.

One simple way to deal with IP protection and employees is to have the ‘who owns what’ bit set out in the terms of employment. It is also normally sensible for firms which create intellectual property assets to ensure that a non-disclosure agreement is also agreed by their employees.

  • If an employee creates something at work as part of their job, the IP probably belongs to their employer, unless there is a specific agreement to the contrary;
  • If an employee creates something at work, but not as part of their job (i.e. something which is not work related or which is done in their own time using their employer’s equipment), this is more complex. Strictly, the IP probably is the employee’s, although the employer may have a claim against them for using the firm’s equipment, breach of their employment contract (working on their own projects in the firm’s time) or if they have incorporated any of the employer’s IP in their own creation;
  • If your business produces something for someone else under contract – for example, you create a computer program for a specific application for a client who pays you for it - the contract is critical. If you want to reuse the computer code for other projects, make sure the contract specifies that any source remains with you, otherwise it could be held that the right to the program belongs to the client;
  • If you create a website or write an article for someone, again, the contract will determine the position. In the absence of an assignment of the copyright, any IP rights you create would normally remain your property. However, any elements provided by the organisation commissioning the work will remain their property. A 2014 court decision confimred that where IP is created by a contractor and the contract does not specifically give the IP right to the commissioning firm, it remians the property of the contractor.

The UK Intellectual Property Office offers much useful information for owners or prospective developers of designs, patents, trade marks or copyright.