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Intellectual property (IP) will be important for any kind of business, and it is up to you what measures you take to protect your valuable IP assets. But what happens when your employees create work that qualifies as IP as their job? Employees will have rights as the original author of certain kinds of IP, but what if they were creating the IP for you as their employer? You need to ensure you clearly quantify your IP expectations with your employees and operate within the law when doing so. Therefore, this article will explain in what instances you own the IP your employees create as their employer in New Zealand.

Your Business’ IP Vs Your Employees’ IP

IP is the expression of a person’s idea in something that they make or create. IP rights are legal protections that establish that person owns their idea and grants them the exclusive property right to use or sell things using that idea. Different kinds of IP rights include:

You can register for IP rights to protect your business assets. For example, you can apply to register your business logo or name as a trade mark. When you do this, you prevent others from using them without your authorisation. 

The kind of IP your employees generate will not usually be the kind that they legally register. When your employees draft certain things for your business, they would usually get inherent copyright as the original owner of those works. Copyright applies to any:

  • literary, dramatic, musical, or artistic work;
  • communication works;
  • sound recordings;
  • films; and
  • typographical arrangements of published editions.

Following these specifications, copyright can apply to a variety of work, such as any:

  • writing;
  • documentation;
  • software;
  • music;
  • videos;
  • data compilations; or 
  • drawings.

Under copyright law, you only own the IP rights of a piece of work if your employee created it ‘in the course of employment’. Determining this depends on the context and the nature of your employee’s job.

What Does ‘Course of Employment’ Mean?

In most cases, when your employees create IP outside of work in their own time, they will keep any IP rights attached to their work. However, if they create IP while in the course of employment, then you own that work.

Generally, this refers to when employees create IP as a part of their job. For example, if it is an employee’s job to write articles for your newspaper or magazine, then your business usually has exclusive IP rights to those articles.

However, this can become difficult to discern if the situation becomes more complex. What if an employee creates IP  in their own time but uses resources and materials they gained from work? Examples could include using research permissions or equipment that they only had access to because they work for you.

In these cases, it highly depends on the context and what you hired the employee to do. If creating the IP is within their duties as your employee, then you would likely have the rights to that IP as their employer.

IP Rights When Working From Home

Many businesses now are increasingly letting their employees work from home, and your business may do so as well. However, this raises issues for IP content as technology becomes more advanced, and the divide between work and personal life becomes more flexible. In the past, it was easier to identify what work an employee did in the course of employment when they did it physically at work within working hours. Now, what qualifies as working hours when an employee works from home is more varied. 

For example, say that an employee downloads sound mixing software that your business has paid for onto their laptop to create audio pieces for your business. However, they also use this mixing software when working from home to create their own content. Depending on the circumstances, this can generate IP concerns.

Therefore, to allow for more certainty in cases such as this, it is crucial that you implement various measures to protect your business’ IP.

Protecting Your Business’ IP

There are many ways you can protect your business’ IP, and these vary according to what you want to protect. You can register different kinds of IP to get exclusive proprietary rights. 

However, you need to implement measures to easily distinguish between your business IP and your employees’ IP to avoid problems in the future. If a case involving these matters goes to court, they will look at the:

  • scope of your employment agreement;
  • employees’ job and duties; and
  • nature of the IP an employee already creates for your business.

To provide some clarity on the matter, and protect your own interests, include provisions about IP in your employment agreements. Clearly define in the contract what IP you own that an employee creates and your employees’ rights and obligations in specific contexts. Be sure to define how you treat an employee’s moral rights as well.

Key Takeaways

If an employee creates IP while doing their job, you would own this IP in most cases. However, context can change this. So, it is crucial that you define IP ownership in your employment contract. If you would like more information or help with employees’ IP at your business, contact LegalVision’s IP lawyers on 0800 005 570 or fill out the form on this page.

Frequently Asked Questions

Do I own my employees’ IP?

Generally, when a person creates something, they own that IP if copyright applies. However, if your employees create IP while in the course of employment, in most cases you own it as their employer.

What does in the course of employment mean?

This means that any IP that employees create while working for you is yours as the employer. The exact nature of this will depend on their duties as an employee, and the factual context.

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