Intellectual property in your business

Facts and issues about ownership of intellectual property in your business.

Intellectual property covers a wide range of assets including patents, trademarks, trade secrets, copyrights, and others. Each asset is protected in order to encourage employees to come forth with new ideas, content and end-products. The work your employees create adds essential value to your business and the people you serve. You trust workers to be experts at what they do and in exchange, you compensate them for their contributions. But sometimes, a dispute can arise over the rightful ownership of work an employee has created. In these situations, it’s important to know the facts, as well as the do’s and don’ts.

Let’s discuss one of the key components of intellectual property, Copyright, and how you can protect what belongs to your business while ensuring your employees’ rights are upheld to the highest degree.

The basics of copyright

Generally, ownership over a copyrighted work belongs to who is considered the author of the copyright. As the owner, an author is able to reproduce, distribute, adapt and display it at their discretion. The author is not necessarily the creator or the shaper of the copyrighted work, however. For example, if a business hires an independent contract worker, the creator of the work may or may not be the owner. Through advance written contract, the business and the independent contractor can agree whether the created work is “work made for hire” and whether the business or creator will be considered the author and owner of the copyrighted work.

Your employee is the author

There are several ways in which current employees can claim copyright, either fully or partially, on work they created at your company.

• Scope – If the employee’s creation falls outside of the scope of their specific role, that creation may be exempt from your ownership, in which case that the copyright belongs to them.
• Outstanding benefit – In a rare case where an employee’s creation is so impactful to the overall prosperity of the company that it creates an “outstanding benefit,” the creator may be entitled to claim some sort of additional compensation for their contribution.
• Inventions – Under historical intellectual property law, inventions are owned by their creators even when an employer facilitates their creation. However, drafting an inventorship agreement prior to employment can help to establish more protections for your business.

When an author leaves

Planning early in the employment is critical as it reduces many of the potential later disputes such as who owns what in terms of the work produced, trade secrets and protecting other sensitive information. (Trade secrets are a form of intellectual property that includes specific designs, formulas, or processes within a business/trade which hold inherent value.) For example, a noncompete clause baked early into the employment agreement may help to limit the spread of the company’s information. A good severance agreement in the wake of the employee/author’s announcement of department can be similarly impactful.

Navigating the logistics and getting the help you and your business needs through a copyright dispute may be overwhelming. Knowing where to find help can alleviate your worries. Your financial advisor is always here with helpful advice and to pull in the right resources you need to ride out the troubled spots.

Raymond James does not provide legal advice. Please discuss these matters with your legal professional.