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Do I own the invention that my employee created?


Employees


The employer owns the intellectual property created by an employee if it is related to the employer’s business, unless the employment contract stipulates otherwise.


However, intellectual property that is created by an employee, other than in the course of employment, is owned by the employee, not the employer.


An employee who creates intellectual property in the normal course of their duties cannot claim to own that intellectual property.


However, if the employee is not employed to create intellectual property, but does so, then the employee will own the intellectual property.


In order for the employer to own the intellectual property, the employer should have directed the employee's activities that led to the creation of the intellectual property.


The fact that an employee used the employer's equipment is not enough by itself to show that the employer should own the intellectual property created with the use of that equipment.


Employment contracts should:

  • claim ownership of any intellectual property created by the employee in the course of work;

  • contain restraints of trade to stop the employee from directly competing with the employer (for at least a limited period of time);

  • contain confidentiality provisions to prevent the employee from taking trade secrets and passing them onto others;

  • specify the categories of inventions that fall in the field of the employer’s business;

  • explain the employee’s obligation to notify the employer of inventions;

  • explain the employer’s procedures for handling such notifications; and

  • explain the remuneration that the employee may receive if they make an invention that benefits the business.

Contractors


The intellectual property created by a contractor is legally the property of the contractor unless otherwise stated in the contract. It is important that a contractor signs an agreement before commencing work regarding the ownership of the intellectual property that is created by them for the hirer.


Research and development organisations


If research and development (R&D) work is outsourced to a university of business, then an R & D agreement should be signed before the work is commenced. This agreement will need to include provisions for:

  • the transfer of any and all rights to the results of the work from the R&D team, including the right to retransfer the rights

  • rights to alter the works if the R&D project produces works or other materials eligible for copyright protection

  • provisions on the rights to know-how, copyright for the research reports and results, and rights over the physical material involved in research activities, such as micro-organisms or other biological material, as well as IP rights over any background information which is not within the public domain

  • a confidentially clause.

Questions?


If you require a contractor's agreement, a R & D agreement or a contractor's agreement, please contact Steve Davey on 0402519010 or by email at steve.davey@stellariplaw.com.


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