Determining intellectual property ownership is crucial during the creative process. Danielle Middleton-Wren of Slater Heelis looks at who can claim ownership in different circumstances.

A guide to intellectual property in businesses

In a business context, intellectual property is a term for creations of the mind - particularly artistic and inventive works such as designs, images, symbols, and inventions - which are then exploited for commercial purposes. 

Such ideas can be protected by law through patents, copyrights, trademarks, and design rights where more often than not, the employer will automatically own the intellectually property created by their employees.

However, there are grey areas where it may not be clear who owns the intellectual property.

Types of intellectual property

For both employers and employees, it’s crucial that ideas are protected so that others cannot make unfair or illegitimate use of them. The most common ways to protect ideas are:  

• Patents to protect inventions 
• Trademarks to protect words, logos, and symbols that identify products or services
• Design rights to protect  the shape, configuration, and features of a product
• Copyright to protect artistic, literary, dramatic, and musical works once created and fixed or recorded in some way 

Some ideas constitute more than one type of intellectual property. Given that different types of intellectual property are protected in different ways, for different time periods, and make use of different legal remedies, it is important to understand which method of protection is most appropriate for a particular creation.

Job responsibilities 

Uncertainty over employees’ roles can have an effect on claims to intellectual property ownership. 

Inventions made or discovered in course of an employee’s usual or specifically assigned duties belong to the employer. Although in some circumstances the employee may be entitled to special compensation. However, an invention created outside of the course of an employee’s usual or specifically assigned duties may belong to the employee rather than the employer.  

Similarly, only copyright works created during the course of employment belongs to the employer and anything created outside the course of employment belongs to the employee.

In each case, the issue will turn on the specific facts but it is always advisable to record in an employment contract what their responsibilities are, and update this if they change.

Working hours and location

Further intellectual property disputes can arise when an idea occurs outside of usual working hours. The law is clear on this and working hours along with working location are not definitive factors for determining ownership, though they may be persuasive factors depending on the facts of any particular case.  

An example of this would be an architect employed to design a restaurant kitchen that allows for food to be served quickly, thinking of the key design feature one night after work. The employer would still own the intellectual property, as the developer had been employed to come up with the solution. Despite doing so outside of his usual working hours, he would have no claims to ownership. 

Work equipment 

The use of an employer’s equipment to create is also not, on its own, enough for an employer to claim ownership. 

For example, if a copywriter - who has been employed to write advertising copy - uses his company laptop to create a bestselling novel, the employer is not entitled to any royalties, despite having facilitated its creation. As the copywriter had been employed to write advertising copy, not produce a novel, it is not classed as part of his employment contract. 

What to do if your intellectual property is infringed

To prevent the wrongful claiming of intellectual property ownership in the workplace, all parties should have a clear understanding of their rights. Employers should also include provisions on intellectual property ownership and confidentiality in employment contracts.

Almost all businesses have some form of intellectual property – whether it is the goodwill in their name, their logo, website, or trade secrets – and it is important to identify it to protect it and maximise its value. Seeking advice from a legal specialist can help to ensure that the right steps are taken so that the intellectual property is kept safe both now and in the future. 

Danielle Middleton-Wren is a digital content writer for Slater Heelis, the Manchester-based law firm with expertise in a range of business law services.