IP Tech Knowledgy

Be certain to know if the company owns the intellectual property an employee creates.  Different types of IP are treated differently.  Ideally, an employer should provide certainty and have employees assign in writing to the employer all of their intellectual property rights created at work.  If there is no agreement, the employer may be surprised to find it does not own full rights in what the employee creates.  The following explanation of the default ownership rules assumes there is no written assignment from the employee.  

Patentable inventions are owned by the employee, not the employer.  However, if the employee was “hired to invent” what was specifically created, then the employer is entitled to own the patentable rights – but must still confirm that ownership with a written assignment.  An employer would also gain ownership if there is an implied obligation for the employee to assign the invention, such as clear language in an employee handbook.  Even if the employee retains ownership, the employer obtains a “shop right” to use the invention for the employer’s purposes.

If the employee develops a trade secret, rather than a patentable item, the ownership between an employer and employee can be murky.  The “hired to invent” theory often applies to trade secrets, giving the employer a decent claim of ownership of what the employer was specifically asked to devise.  Because a trade secret exists due the steps taken to maintain its secrecy, ownership may be determined by whether the employer or the employee is ultimately directing the protection of the confidentiality of the process or information that the employee originates. 

Under a similar theory, because the nature of a trademark relates to who is actually offering the goods and services in connection with a brand, it is likely that the employer owns any trademark developed by the employee.  This is because the employer, not the employee, is probably offering the goods and services to consumers – even if the employee conceives of all of the branding during development.  If the employee is somehow seen by consumers as being the purveyor, it may be that the employee could have some claim to ownership of the related trademark.

Copyrightable work created by an employee within the scope of employment is automatically owned by the employer under the “work made for hire” principle.  This addresses any writings, software, photographs and other creative work the employee may create.  For an employee who creates something unrelated to the employee’s usual job, the employee may own the creative work.

Every person has a “right of publicity” to control use of their name, image and likeness.  Employers do not control the employee’s right of publicity and the employees could validly request that their image be taken off the employer’s website and other materials.

To resolve any issues, it is prudent for the employer to have all employees who may be creating any asset for the company sign a document assigning all of their rights to the employer.   Similarly, because independent contractors initially own whatever they create, this type of assignment is very useful for the hiring party to own what the independent contractors create.

Ned T. Himmelrich
410-576-4171 • nhimmelrich@gfrlaw. com