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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’ ad 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:

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.

This IP clause can be difficult to write correctly, so seek an experienced IP lawyer’s help for drafting it. That way, you can protect your business’ important IP assets and avoid potential IP disputes.

3. 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, 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.

For example, you can have IP rights attached to unregistered trade marks. However, you have to prepare documentation that proves you are established in the market and have enough goodwill in the mark to get these rights. If you register your trade mark, you do not have to do this, as you have already proven your ownership.

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:

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.

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 would like more information or help to look after your IP in your employment relationships, contact LegalVision’s IP lawyers on 0800 005 570 or fill out the form on this page. 

Frequently Asked Questions

What does owning IP mean?

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.

Do I own the copyright my employees create?

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.

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