Employees
More IP disputes arise around ownership of employee inventions than just about any other. What is worse, almost always they are complicated and time consuming to sort out - but would have been very simply prevented by good employment agreements and systems.
If an employee is an inventor of a company’s new invention, then who owns it? In New Zealand, and many other countries, the general rule is that an employer will own an invention which a full-time employee develops in the course of their work. However, several situations may arise which can muddy true ownership. What if the employee is only a casual worker? What if the employee was working outside of their normal work description? What if the employee was waged and provided significant input from out of hours work for which they were not paid? What if the inventor is a separate company hired to assist in the development project? What if it is an employee invention the employee did in their own time and outside of normal work hours?
These situations are all too common and can generally worked out on a case by case basis, though sometimes the employer may be left in a difficult situation. For instance, the United States places significant emphasis on inventor’s rights for patent applications and requires the application to at least be initially made in the name of the inventors and subsequently assigned to the employing company. The main problem is that it can be almost impossible to obtain signatures from a disgruntled employee feeling hard done by. The result is usually additional cost to the employer to resolve the situation.
Prevention is better than cure. The ideal practice is for employers to include Intellectual Property ownership clauses in their employment contracts. These need not be totalitarian in favour of the employer but may in fact provide some incentives for employee inventors. The important points are that it should define ownership, and ideally also address situations such as independently created employee inventions. Some also provide a degree of remuneration or partial ownership for an employee if the invention falls within a particular category. However with a suitable employment agreement, each party is aware of their obligations regarding ownership and their obligations in the signing of any documentation necessary to secure intellectual property rights.
Any clauses dealing with employee inventions should be fair. All too often lawyers add in a Draconian clause claiming everything and anything the employee invents. In reality a Court is unlikely to look kindly on such a clause and could invalidate sections of the agreement it considers offensive. It is possible that the employer could be worse off than if there had been no invention ownership and rights clause.
In most cases of seeking IP protection, there should also be a clear trail of assignments showing the transmission of IP rights from inventor to applicant, and any subsequent change in title. This can avoid difficult problems that may arise at a later date, particularly if an employee independently files their own application for essentially the same invention.
More IP disputes arise around ownership of employee inventions than just about any other. What is worse, almost always they are complicated and time consuming to sort out - but would have been very simply prevented by good employment agreements and systems.
If an employee is an inventor of a company’s new invention, then who owns it? In New Zealand, and many other countries, the general rule is that an employer will own an invention which a full-time employee develops in the course of their work. However, several situations may arise which can muddy true ownership. What if the employee is only a casual worker? What if the employee was working outside of their normal work description? What if the employee was waged and provided significant input from out of hours work for which they were not paid? What if the inventor is a separate company hired to assist in the development project? What if it is an employee invention the employee did in their own time and outside of normal work hours?
These situations are all too common and can generally worked out on a case by case basis, though sometimes the employer may be left in a difficult situation. For instance, the United States places significant emphasis on inventor’s rights for patent applications and requires the application to at least be initially made in the name of the inventors and subsequently assigned to the employing company. The main problem is that it can be almost impossible to obtain signatures from a disgruntled employee feeling hard done by. The result is usually additional cost to the employer to resolve the situation.
Prevention is better than cure. The ideal practice is for employers to include Intellectual Property ownership clauses in their employment contracts. These need not be totalitarian in favour of the employer but may in fact provide some incentives for employee inventors. The important points are that it should define ownership, and ideally also address situations such as independently created employee inventions. Some also provide a degree of remuneration or partial ownership for an employee if the invention falls within a particular category. However with a suitable employment agreement, each party is aware of their obligations regarding ownership and their obligations in the signing of any documentation necessary to secure intellectual property rights.
Any clauses dealing with employee inventions should be fair. All too often lawyers add in a Draconian clause claiming everything and anything the employee invents. In reality a Court is unlikely to look kindly on such a clause and could invalidate sections of the agreement it considers offensive. It is possible that the employer could be worse off than if there had been no invention ownership and rights clause.
In most cases of seeking IP protection, there should also be a clear trail of assignments showing the transmission of IP rights from inventor to applicant, and any subsequent change in title. This can avoid difficult problems that may arise at a later date, particularly if an employee independently files their own application for essentially the same invention.