Geoffrey Caesar, Solicitor

Intellectual property (IP) is something you create using your mind, such as a story, an invention, an artistic work or a symbol. IP rights allow you to make money from your IP or use it. IP rights include copyrights, patents, designs and trademarks.

In this blog post, I shall explore the default position of IP rights in English employment law and how employers and employees can protect their respective interests in IP.

The Default Position of IP Rights in Employment

The default position of IP rights in employment depends on the type of IP and whether the employee created it as part of their employment.

Copyright

The Copyright, Designs and Patents Act 1988, s. 11, provides:

Where a literary, dramatic, musical or artistic work, or a film, is made by an employee in the course of his employment, his employer is the first owner of any copyright in the work subject to any agreement to the contrary.

Unless a written agreement states otherwise, the employer owns the copyright in any work the employee creates as part of their job duties.

However, this does not apply to works that the employee creates outside the scope of their employment, such as personal projects or hobbies. In that case, the employee retains the ownership of their work.

Patents

The Patents Act 1977, s. 39, provides:

(1) Notwithstanding anything in any rule of law, an invention made by an employee shall, as between him and his employer, be taken to belong to his employer for the purposes of this Act and all other purposes if—

(a) it was made in the course of the normal duties of the employee or in the course of duties falling outside his normal duties, but specifically assigned to him, and the circumstances in either case were such that an invention might reasonably be expected to result from the carrying out of his duties; or

(b) the invention was made in the course of the duties of the employee and, at the time of making the invention, because of the nature of his duties and the particular responsibilities arising from the nature of his duties he had a special obligation to further the interests of the employer’s undertaking.

Unless there is a written agreement that states otherwise, the employer owns the patent in any invention that the employee makes as part of their regular or assigned duties or if they have a special obligation to further the employer’s interests.

However, this does not apply to inventions that the employee makes outside the scope of their employment or without using any confidential information or resources of the employer. In that case, the employee retains the ownership of their invention.

Designs

The Registered Designs Act 1949, s. 2, provides:

Where a design is created by an employee in the course of his employment, his employer shall be treated as the original proprietor of the design.

Unless there is a written agreement stating otherwise, the employer owns the design right in any design that the employee creates as part of their contract with the employer who carries on a qualifying undertaking, such as manufacturing, selling or supplying goods of any description.

However, this only applies to designs the employee creates outside the scope of their contract or without using the employer’s confidential information or resources. In that case, the employee retains the ownership of their design.

Trade Marks

The Trade Marks Act 1994, s. 2, provides:

A registered trade mark is a property right obtained by the registration of the trade mark under this Act and the proprietor of a registered trade mark has the rights and remedies provided by this Act.

Whoever applies for registration of a trade mark owns it,
regardless of whether they are an employer or an employee.

However, if an employee creates a trade mark as part of their employment, they may have a duty to assign it to their employer, depending on the terms of their contract and the nature of their job. They may be liable for breach of contract or fiduciary duty if they fail.

How can employers and employees protect their respective IP rights?

Employers and employees can protect their respective IP rights by:

• Having explicit and written agreements that specify the ownership and use of IP rights in employment, such as employment contracts, IP policies, confidentiality agreements and assignment deeds.
• Registering their IP rights with the relevant authorities, such as the UK Intellectual Property Office, the European Union Intellectual Property Office or the World Intellectual Property Organisation.
• Monitoring and enforcing their IP rights against any infringement or misuse by third parties, such as competitors, customers or former employees.
• Licensing or transferring their IP rights to others for a fee or other benefits, such as royalties, cross-licensing or collaboration.

Conclusion

IP rights are valuable assets that generate income and competitive advantage for employers and employees. However, they can also be a source of dispute and litigation if not properly managed and protected. Therefore, both parties need to understand the default position of IP rights in employment and to take appropriate steps to safeguard their interests in IP.

I regularly advise employers, employees and other parties on intellectual property law. If you need assistance with an IP matter, please get in touch with me using the enquiry form on gcaesar.com.