Co-author: Jennifer O'Neil & Jane O'Grady

The way in which we work is always evolving but the changes required over the last two years have resulted in traditional ideas about the “workplace” being reimagined. With the increase in remote working, the question arises as to how this affects a business’s rights to exercise control over its intellectual property (“IP”)? In this article, Consultant with LK Shields Solicitors LLP Jennifer O'Neil & Senior Associate Jane O'Grady set out the situations where an employer owns the business IP, where a worker retains IP ownership and the need to pay close attention to how IP rights and obligations are dealt with in workers’ contracts.

Who owns your Business's IP? ⚓︎

Under Irish law, the ownership of intellectual property created by a worker in the course of their duties depends on the status of that worker.

Employees

Where a person is engaged as an employee working for their employer, the general position under Irish law is that IP created by the employee in the course of employment is owned by the employer.  This is the position set out in: the Patents Act 1992, the Copyright and Related Rights Act 2000 and the Industrial Designs Act 1992.The aforementioned legislation favours the employer’s ownership of IP created in the course of employment.

Independent Contractors

While many of your workers may be employees, some individuals may carry out work for your business as an independent contractor or consultant, effectively in business on a self -employed basis. Whilst Irish legislation governs an employer’s ownership of IP created in an employment relationship, the legislation does not apply to intellectual property created by an independent contractor. A common misperception among organisations is that the business owns the IP created by an independent contractor because the business has paid the independent contractor for the IP as part of their services.  However, a business will not automatically own IP created for it by an independent contractor.

The default legal position is that the independent contractor owns any IP rights they create in the course of providing their services to the business.  They will continue to own those IP rights unless there is a written contract in place assigning ownership of the IP rights to the business.

How Businesses Can Protct Ownership of IP? ⚓︎

Employees

Although employers automatically own any IP their employees create during the course of employment, it is still best practice to include an IP clause in the employment contract setting out the employee’s obligations in relation to that IP.  The IP clause in employment contracts should, at a minimum, include:

• an acknowledgement that any IP created or discovered by the employee is owned by the employer;
• an obligation that the employee disclose to the employer the details of any IP he/she creates or discovers in the course of their employment with the employer;
• a waiver of any moral rights that the employee has in the IP created in favour of the employer; and
• an obligation on the employee to keep the IP confidential and not to disclose details of the IP to any third party. This obligation should continue to apply after the employee’s employment.

Independent Contractors

Where a business hires an independent contractor, the independent contractor will own the IP they create for the business unless they assign ownership of the IP to the business.  This is the case even where a contractor is hired to produce a certain piece of work. A valid assignment of IP must be in writing and signed by the party assigning ownership of the IP to another party (the assignor).

It is therefore important that businesses have a written assignment with any contractor or consultant they hire. Ideally, this written assignment should form part of a larger consultancy agreement but even where there is no written contract in place for the contractor’s services, a written assignment is still required in order for IP ownership to pass to the business. At a minimum the IP assignment should contain the following provisions:-

• an assignment by the independent contractor of all IP rights created by them in the provision of any services and work product to the business;
• a waiver of any moral rights that the independent contractor has in the IP in favour of the business;
• an obligation on the independent contractor to assist the business in giving full effect to the business’s ownership of the IP; and
• an obligation on the independent contractor to keep the IP confidential and not to disclose details of the IP to any third party. This obligation should continue to apply after the engagement of the independent contractor by the business has ceased.

Be Aware of What Your Staff May Create Outside of Work ⚓︎

If an employee creates IP that is unrelated to their role, they may prefer that their employer does not own that IP.   Where IP is created in the workplace context it will most likely be deemed to be owned by the employer, not the employee. Therefore, the nature of the IP created and where it is created may be relevant in determining whether all of the IP created is owned by the employer or the employee.

The fact that employees are now more likely to be working in their own homes brings in to sharp focus the question of whether the IP created was created in the course of employment or if the work was something separate that the employee worked on at home in their spare time.

To avoid disputes over ownership of IP, employment contracts should be clear about employees’ duties and about when IP is considered to be created or discovered in the normal course of employment. It should also be clarified when employees are obliged to disclose to their employer any IP they create or discover either alone or with others and whether during or after normal hours of work.

As IP can be one of the core assets of a business, we recommend that employment contracts and agreements with contractors are carefully reviewed to ensure that they contain appropriate provisions that provide clear ownership for the business of all relevant IP created by employees or contractors.