Employers typically have the right to patent, trademark or copyright anything created by their employees during the course of their work. This is often known as the “shop right” doctrine.
The employees responsible for creating products or designs or coming up with new ideas are hired to do so. However, they can’t legally use or profit from them without their employer’s explicit permission, and employers aren’t obligated to give them a share of their profits from the idea or invention. They’re paid a regular salary or hourly wages instead.
The shop right doctrine is a pretty basic intellectual property (IP) concept. However, it’s still smart to codify it in your employment agreements.
What about work created by independent contractors?
It’s especially important to detail your IP rights when you hire an independent contractor, since by definition, they aren’t employees. The work they do for you is considered “work made for hire,” so it’s wise to have a clause in your independent contractors’ contracts addressing your IP rights to this work
Where employers (especially small business owners) can run into trouble is with more casual work relationships. Say you pay your fledgling songwriter nephew to come up with a jingle for your local television commercials. Maybe you hire an employee’s son or daughter to develop a new logo for your business or take photos for your website.
Without a contract in place with a “work for hire” clause, these creators could potentially sell or use that work any way they choose. This could “dilute” the work so that it’s no longer unique, and you could lose the association that you hoped customers would make with your business. It could be a messy and expensive situation – whether you end up in court or not.
This is one reason why it’s wise to have some kind of written contract in place with anyone who does work for your business. This will help clarify expectations and responsibilities for both sides. As with any contract, it’s smart to have legal guidance to craft the agreement. This will lessen the chances that you’ll have to end up in court trying to protect your IP rights.
