Highlights:

1. Define that work created during employment belongs to the company, preventing disputes over ownership.
2. Safeguard confidential information and proprietary processes by incorporating non-compete and non-disclosure terms.
3. Make IP ownership explicit and applicable even after employment ends, and regularly update contracts to stay relevant.

 
To provide insights into the critical elements of employment contracts addressing intellectual property rights, we reached out to attorneys and directors. They shared five key strategies, from emphasizing work ownership in contracts to including detailed definitions of intellectual property. These insights will help you protect your organization's intellectual assets effectively.
 

• Emphasize Work Ownership in Contracts
• Include Non-Compete and Non-Disclosure Clauses
• Be Explicit and Comprehensive with IP Clauses
• Remember a Right of First Refusal Provision
• Incorporate Detailed Definitions of Intellectual Property

Emphasize Work Ownership in Contracts

As an attorney, I have represented engineering firms and other companies where protecting the company's intellectual property is important. Many clients ask for employment agreements that clearly state that work created as part of the employee's job belongs to the company. Depending on the situation, this may also include language relating to the assignment of copyrights and patents.

I had a situation just a few months ago where a former employee took plans and schematics with him that belonged to the company. I reached out to the employee and was able to get these items returned.

This gets trickier when an employee designs something on their own time that is related to their employer's field. A good employment agreement will touch on this area to prevent disputes down the road. Prospective employees looking to retain ownership of their side projects may need to carefully read the employment agreement they are offered to ensure their rights are protected.

Cameron Dugger, Attorney, Company Steps

---------------------------------------------------------------------------------------------------------------------------

Include Non-Compete and Non-Disclosure Clauses

Our employment agreements always include non-compete and non-disclosure terms to protect our confidential information and proprietary processes. The non-compete clause prohibits former employees from working for competitors or launching competing businesses for a specified period of time.

Confidential information, trade secrets, and proprietary data must be protected at all times, even after the employment relationship has ended, under the terms of the non-disclosure agreement.

An ex-employee once went to work for a rival firm immediately after leaving ours. We were able to get an injunction against them working with the competition and releasing our IP because of the non-compete provision. This move safeguarded our intellectual property and stopped potential harm to our company.

Tim Allen, Director, Oberheiden P.C.

---------------------------------------------------------------------------------------------------------------------------

Be Explicit and Comprehensive with IP Clauses

It's essential to protect your intellectual property (IP). The elements and clauses included in a contract will depend on the individual brand or business, but they must always be explicit and all-encompassing.

In general, it's advisable to clearly state that any IP generated during the course of a person's employment belongs to their employer. I've known businesses that have assumed this was the default legal situation, only to find themselves being challenged. Because they hadn't properly accounted for this when drawing up their documents, there was still room for interpretation. The contract should also clarify that the IP provisions are still applicable even if the employee no longer works there.

The IP landscape is ever-changing, and legislation has to evolve to keep up with emerging technologies, innovations, and developments. It's advisable to regularly review and update your policies and contracts to ensure they're still comprehensive, current, and relevant to your business.

Martin Gasparian, Attorney/Owner, Maison Law

---------------------------------------------------------------------------------------------------------------------------

Remember a Right of First Refusal Provision

We include a right-of-first-refusal provision that allows the company to buy any intellectual property the employee plans to sell or license. This aids in keeping our proprietary information out of the wrong hands.

In this case, a worker intended to market a piece of software they had created on their own time. We were able to buy the IP using our right of first refusal, preventing it from falling into the hands of a rival.

Tiffany Hafler, Marketing Coordinator, Blockchain Lawyer

 

Incorporate Detailed Definitions of Intellectual Property

In our contracts, we avoid uncertainty by providing detailed definitions of IP. All work-related materials, papers, software, and inventions developed by employees are to be regarded as the property of the company.

In this case, a software engineer's original algorithm forms the backbone of our offering. The precise definition of intellectual property assisted us in asserting ownership over the algorithm when the developer attempted to claim it as their own work.

Cindi Keller, Communications Coordinator, The Criminal Defense Firm

Author Bio

Brett Farmiloe is the Founder/CEO and currently the CHRO of Featured. Brett is an SHRM Influencer and has also been a keynote speaker at several state SHRM conferences around the topic of employee engagement.

Error: No such template "/CustomCode/topleader/category"!