In the event the employee identifies and claims ownership of intellectual property that has been created during the course of employment and with company resources, and claims ownership to such property, the company should immediately work to determine if the employee truly owns it or if it is owned by the company. If the agreement is executed after the commencement of employment (and sufficient consideration has been provided as noted above), the employer still should have the employee identify all intellectual property he or she believes to own. A dollar is not likely to constitute sufficient consideration.Īlso important to the agreement is the inclusion of an addendum, wherein the individual identifies all intellectual property in which he or she has an ownership interest prior to the commencement of his or her employment with the company. If entered into after the employment relationship has been established, the consideration must be more than a nominal amount in order to support the agreement. Such consideration can include, for example, a promotion, a one-time bonus, or, for example, a grant of restricted stock options. In the event the agreement was not entered into contemporaneous with the start of employment, the employer will need to provide additional, sufficient consideration to support the agreement. To avoid disputes over whether sufficient consideration exists to support the validity of the agreement, employers should require that the agreement is executed prior to the commencement of the employment relationship, and the agreement should reflect that but for the employee's execution of the agreement, the company would not employ the individual. Absent such an agreement, the employee may have ownership rights in the intellectual property he or she created while working for the company, even if the individual was specifically hired to invent a particular product or process. Such an agreement is often called an "assignment of inventions" or "ownership of discoveries" agreement. In fact, employers who mistakenly believe that they own such property automatically can pay an expensive price – monetarily and through the loss of inventions or improvements – for failing to protect such intellectual property or effectively securing the rights from employees.Ĭritical to an employer's ownership of intellectual property is a written agreement with the employee, one which specifically assigns to the company any and all intellectual property created by the employee during the course of his or her employment with the company. Intellectual property created during the course of an employee's employment does not equate to the employer's automatic and exclusive ownership of any and all intellectual property. Employers should not rely on assumptions of ownership These simple principles present challenges for employees and employers alike. However, intellectual property that is created by an employee, other than in the course of employment, is owned by the employee not the employer. With this investment, it should come as no surprise that employers generally own the intellectual property created by its employees in the course of their employment. Boyd, Barnes & Thornburg, LLPĬompanies often hire and invest in employees to develop new products, improve processes, create new technologies and develop new markets. December 2014 edition Employer and employee ownership of intellectual property: Not as easy as you think
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