When employees develop intellectual property (IP) while working for a company, sometimes its ownership can become a complex issue. Determining who holds the rights to employee-created IP depends on several factors, including employment agreements, state laws and federal regulations.
This potential legal complexity represents another compelling reason for businesses to address the legal side of company intellectual property. Here are some topics to consider.
Default ownership rules
Intellectual property created by an employee as part of their job or using company resources generally belongs to the employer. Whether the work involves inventions, creative assets or proprietary processes, courts typically consider factors like these amid disputes:
- The employee’s role
- The intended purpose of the creation
- The extent to which company time, tools and funding were used
Strong employment agreements and company policies can help businesses reinforce this ownership structure. They can help keep the control over IP developed in the workplace with the company.
Employment contracts and IP clauses
Many companies mitigate ownership disputes by including IP assignment clauses in employment contracts. They explicitly state that any intellectual property developed during employment belongs to the company.
For the ideal level of protection, these clauses should be clear, enforceable and compliant with state laws.
Trending: AI-generated content
A growing debate involves the ownership of and ability to protect AI-assisted creations. Courts are beginning to address how IP laws apply to AI-generated works, making this an evolving area of business law. Some companies use clauses in employment contracts to clarify ownership, particularly as AI tools are often used to create business materials.
As IP continues benefiting commercial enterprises, company owners need stringent protections. An ideal approach is having employment contracts regularly reviewed and updated to align with the latest business IP trends.
