It is very easy to make assumptions about who owns intellectual property you, your employees and others create, but it is not always as straightforward as you might think. So, in our latest blog, we look at who owns IP?
First owner of IP
In the UK, the first owner of most types of IP (e.g. design rights, copyright, patentable inventions) is the creator of the IP or, where there are multiple creators, they would jointly own the IP. The exception to this is where the creator(s) is/are employed in a position in which that IP could be reasonably expected to result from performing their normal duties. In that case, the employer is normally the first owner of the IP.
Employee Inventions
If, for example, you own an audiovisual tech company with an R&D department, then inventions and designs arising from the normal work by employees within that R&D department will normally be automatically owned by your company, irrespective of which R&D employee(s) created it. There is no need for a contract term to that effect and (in most cases) such a term would be redundant. But what about if one of those employees designs and develops a new wheelbarrow, say, in their garage and in their own time? Then, the IP in that new wheelbarrow would normally be owned by the employee, and no employment contract term could usually be used to negate that fact.
Of course, it is not always as straightforward as that, and difficulties can arise in cases where, for example, an employee (or an ex-employee) develops something themselves that could, if done during working hours, reasonably have been expected to arise from the performance of their normal duties. Such cases are decided (by the courts) on a case-by-case basis, so there is no hard and fast rule here, but in my experience, this issue is more often than not decided in favour of the employer (or ex-employer, especially if the employee has left very shortly before the new invention comes to light).
Directors and Shareholders
Another complication arises in the case of inventions created by non-employed directors and shareholders. Normally, the IP in those inventions would be deemed to be owned by the company because such officers have a duty to “further the interests of the company” but, in the absence of a directors/shareholders agreement, this can become a ‘messy’ issue. For that reason alone, it is wise to ensure that you have directors and shareholders agreements in place that very clearly state the IP ownership issue, both whilst they remain directors/shareholders and also if they leave, and we strongly recommend that you consult a commercial solicitor with experience in IP to draw up the necessary contract terms. Equally, if you are a non-employed director/shareholder of a company, make sure you clearly understand the situation in relation to IP ownership so that expensive arguments can be avoided if possible.
External Consultants
The creator or their employer are the only two “automatic” owners provided for in the IP laws. So, if there is to be any deviation from these two cases, then it is essential to have an agreement in place that sets out the intent of the parties in terms of IP ownership. This is especially relevant when you are using external consultants to create or do something for you, and this can occur in many different areas of your business.
So, for example, if you are using a product development company to create a product for you, unless you have an agreement to the contrary between you, the first owner of the IP in your product will be the product development company (if the designer is employed by them) or the designer (if they are freelance. Clearly, this is not ideal, and can certainly cause problems for you later on if you want to protect the IP and exploit the product. An agreement of this type would normally state that it is the intention of both parties that any IP created on your behalf will be assigned to you (because IP cannot be formally assigned until it has been created).
Similarly, if you are using a consultant to create content, photographs, copy, etc. for your website and marketing activities, the “first (automatic) owner” of the copyright in those assets will be the consultant, and the only way to ensure that you gain full control of those assets is to ensure that there is an agreement between you that states that the copyright will be assigned to you (often on completion of, and payment for, the project).
Sometimes, additional terms covering these types of agreement can be written into a fairly standard NDA, but in other cases, it may be wise to consult a commercial solicitor to have a dedicated contract drawn up.
Need Help?
I have given some fairly straightforward examples to illustrate some key points in relation to IP ownership, but each case is different, and can often be slightly more complex or nuanced than my examples allow for. If you have any questions about IP ownership, or indeed any other IP questions, please contact us for a free initial consultation by emailing vicki.strachan@strachanip.co.uk or visiting our website at https://strachanip.co.uk/contact/. Alternatively you can use this link to schedule a mutually convenient time to speak: https://calendly.com/strachan-ip-a-fresh-view-of-intellectual-property/30min
