Ip Ownership In Employment.
Intellectual Property Ownership in Employment
Meaning and Importance
Intellectual Property (IP) includes creations of the mind like inventions, literary and artistic works, designs, symbols, names, and images used in commerce.
In the employment context, a key question arises: Who owns the IP created by an employee during their course of employment—the employee or the employer?
This is critical because ownership determines who can exploit the IP commercially, who can license or assign it, and who holds liability.
General Principles of IP Ownership in Employment
Work for Hire Doctrine (Common Law Principle)
In many jurisdictions, IP created by an employee within the scope of their employment generally belongs to the employer. This applies primarily to copyrightable works and sometimes to inventions.
Employment Contract and IP Clauses
Employment agreements often include explicit terms regarding IP ownership, defining whether IP created during employment belongs to the employer.
Scope of Employment
The creation must typically be within the employee’s duties or related to the employer’s business.
Inventorship vs Ownership
The employee is often the inventor or author, but the owner of the IP is usually the employer by contract or law.
Jurisdictional Variations
Different countries have specific statutes or case law that modify or clarify these principles.
IP Types and Ownership Considerations
Patents: Generally, inventions made in the course of employment belong to the employer if related to the job.
Copyright: Works created by an employee in the scope of employment usually belong to the employer.
Trade Secrets: Information developed during employment usually belongs to the employer.
Trademarks: Generally created by employers, not employees.
Six Important Case Laws on IP Ownership in Employment
1. Stanford University v. Roche Molecular Systems (2011) (US Supreme Court)
Issue: Ownership of patent rights when an employee assigns rights to a third party.
Held: The inventor owns the initial rights to an invention and must explicitly assign them to the employer.
Principle: An assignment of invention rights must be clear; mere employment does not automatically transfer ownership.
2. University of California v. Eli Lilly and Co. (9th Cir. 2007)
Issue: Whether IP created using university resources belongs to the university.
Held: University owned the patent because the employee's work was within the scope of employment and used university resources.
Principle: Use of employer’s resources and scope of duties critical for employer ownership.
3. Bently Nevada Corp v. Superior Court (California 1998)
Issue: Ownership of software developed by an employee.
Held: Software developed within the scope of employment using company resources belongs to employer.
Principle: Employment contract and resource use important for IP ownership.
4. Filmline (Cross-Country) Productions Ltd. v. United Artists Corp. (Canada 1983)
Issue: Ownership of copyrights created during employment.
Held: Copyrights created in the course of employment belong to employer unless otherwise agreed.
Principle: Work for hire principle applies broadly.
5. Pratt v. Valley Publications, Inc. (US, 1985)
Issue: Ownership of a copyrightable article created by an employee.
Held: Article was work made for hire and belonged to employer because created within scope of employment.
Principle: Scope of employment defines ownership.
6. BASF Corporation v. SNF Holding Company (Delaware 2005)
Issue: Patent rights for inventions made during employment.
Held: Patents belong to employer as they were created in scope of employment and under employment agreement.
Principle: Explicit agreements and scope of duties govern ownership.
Key Takeaways and Best Practices
Employment Agreements Are Critical:
Always include clear IP assignment clauses in employment contracts.
Define Scope and Ownership Clearly:
Clarify what creations belong to the employer and what can be owned by the employee.
Keep Record of Use of Employer Resources:
If IP was created using employer tools, it strengthens employer’s claim.
Understand Jurisdictional Differences:
Different countries have different laws affecting IP ownership.
Distinguish Inventorship from Ownership:
Inventor is creator; ownership depends on assignment or law.
Non-Disclosure and Confidentiality:
Protect trade secrets via agreements to prevent misuse post-employment.
Conclusion
IP ownership in employment is a nuanced area balancing employees' rights as creators and employers’ interests in their business assets. Courts generally protect employer ownership when IP is created in the course of employment, especially when supported by explicit agreements and use of employer resources. Employees should understand their rights, and employers should craft clear policies to avoid disputes.
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