While they work for you, your employees will use their knowledge and ideas to further your success. Depending on the nature of those ideas and what your employees create, there can be intellectual property (IP) rights at play. IP can refer to a variety of creations and ideas, and you can have various legal rights depending on the kind of IP. However, when an employee creates IP for your business, this may create confusion around ownership and who can benefit from that IP asset. Therefore, this article will go through five tips for looking after your IP in your New Zealand employment relationships.
1. Know What Employee Content Classifies as IP
IP is a broad concept but usually refers to new innovations and creations of the mind. At your business, this can range from your written content to your business’s jingle. Therefore, you can have various IP rights, which give you certain legal powers depending on the nature of the IP. These rights include those attached to:
- trade marks;
- designs;
- patents;
- trade secrets; or
- copyright.
For some IP rights, such as copyright, the owner is the creator in most cases. For others, such as trade marks, you usually have to register ownership. When an employee creates something for your business, this can raise questions as to whether your business is the IP owner or whether your employee is. This fact will depend on:
- the facts of the situation;
- the kind of IP at hand; and
- what contractual procedures you have in place.
IP ownership disputes with employees can be costly and time-consuming. Therefore, to make this process clearer, you need to know:
- what IP looks like;
- what content your employees create that are IP; and
- how you can determine IP ownership in this case.
2. Include an IP Clause in Your Employment Contract
The law specifies who owns some types of IP in an employment relationship. So, for example, if an employee creates a copyrighted work for their job while you employ them, you are usually the owner of that copyrighted work.
However, if you include a well-written and robust IP clause in your employment agreements, you can avoid or reduce potential IP disputes. This clause defines what work the employee does that qualifies as your IP and clarifies any ownership issues. In addition, be sure to include what happens to any relevant IP once an employee leaves your business.
Continue reading this article below the form3. Define Your IP Clause Carefully
IP problems can be complex, especially when determining employer ownership. For instance, if an employee creates software for their own personal use using their work laptop after hours, this may raise questions about whether your business owns that IP. Additionally, as more businesses allow their employees to work from home, this generates potential challenges in determining IP ownership.
Therefore, it is important that you define your ownership rights in your IP clause, especially where these situations are likely to occur. If employees work from home or are able to use business equipment after hours, you should clearly define your ownership rights on your IP clause or in a separate agreement.
4. Register and Protect Important IP
You can register your business as the owner of most kinds of IP through the Intellectual Property Office of New Zealand, which means you get to exercise the applicable IP rights. Therefore, for important IP assets that bring value to your business, you need to register this IP where possible. If you have a definitive legal right to own that particular IP, this can help your business in an employment dispute.
5. Protect Confidential Information
Certain kinds of confidential information, such as trade secrets, can qualify as intellectual property, which the law gives certain protections. Therefore, if an employee discloses highly sensitive trade secrets or other confidential information without your permission, then you may have legal options available to you.
However, as a preventative measure to avoid unauthorised disclosure, you should:
- have your employees sign a non-disclosure agreement; or
- include a confidentiality clause in their employment contract.
In this, you would define your confidential IP and what happens if an employee discloses this information. Be sure to make sure it covers after they leave your business as well.
Our free Trade Mark Essentials in New Zealand guide explains how to register and defend your trade mark registration.
Key Takeaways
As a part of their job, your employees will likely create IP assets for your business. For some kinds of IP, the law specifies that you are the owner, but you should include an IP clause in your employment contracts to establish your ownership, as well as other protections.
If you need help protecting your business’s IP in your employment relations, our experienced employment lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers who can answer your questions and draft and review your documents for a low monthly fee. Call us today at 0800 005 570 or visit our membership page.
Frequently Asked Questions
Owning IP is a similar concept to owning physical property, in that as the owner, you get to benefit from using and commercialising your property. However, the IP rights you gain function differently and how you determine ownership can vary.
If your employees create copyrighted work while working for you and doing their job, you would usually be the copyright owner. However, this can depend on various contextual factors, such as whether you asked them to create the copyrighted work.
Yes, this will give your business IP more protection as well as determine what is protected and confidential information.
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